Case Digest (G.R. No. 254764)
Facts:
Playinn, Inc. v. Prudential Guarantee and Assurance, Inc., G.R. No. 254764, November 29, 2023, Supreme Court Third Division, Inting, J., writing for the Court.Petitioner Playinn, Inc. (Playinn), the project owner, contracted Furacon Builders, Inc. (Furacon) on December 2, 2016 for construction of a multi‑storey hotel for PHP 106,001,000.00. Furacon obtained from respondent Prudential Guarantee and Assurance, Inc. (Prudential) a Performance Bond and a Surety Bond (each PHP 21,200,200.00), both expressly stating that the Owner‑Contractor Agreement was attached and constituted an integral part of the bonds. The Construction Agreement included an arbitration clause and a liquidated damages provision.
Progress on the project was slow; by March 14, 2018 Furacon’s accomplishment was only 4.58%. Playinn terminated the contract by final notice dated March 15, 2018, demanded refunds and damages, and in the same date enforced claims against Prudential under the bonds. Playinn filed a Request for Arbitration before the Construction Industry Arbitration Commission (CIAC) against Furacon and Prudential (CIAC Case No. 27‑2018). Prudential filed a Motion to Dismiss before CIAC, asserting lack of arbitration agreement with it, improper service, and limits of liability under the bonds.
CIAC appointed an Arbitral Tribunal. The Tribunal deferred resolution of the jurisdictional motion (per Rule 2.4, Revised CIAC Rules) and proceeded to a final hearing. In a Final Award dated May 28, 2019, the Arbitral Tribunal awarded Playinn PHP 55,299,100.00 against Furacon and stated: “Respondent PGAI shall [be] solidarily liable to the extent of the performance bond it issued to Respondent Furacon.” Playinn moved for issuance of a writ of execution; on August 2, 2019 the Arbitral Tribunal granted the writ but its decretal language made Prudential solidarily liable “to the extent of the performance and surety bonds”; CIAC issued a Writ of Execution dated September 2, 2019. Prudential filed a Rule 43 petition (challenging the Final Award) in the Court of Appeals (CA‑G.R. SP No. 161151) but later withdrew it; it also filed a Rule 65 petition (CA‑G.R. SP No. 162597) seeking to annul the Arbitral Tribunal’s August 2 Order, September 5 Resolution, and the Writ of Execution, and obtained a temporary restraining order and subsequently a writ of preliminary injunction from the CA.
In CA‑G.R. SP No. 162597 the CA, in a Decision dated July 23, 2020 (and a Resolution of November 26, 2020 denying Playinn’s motion for partial reconsideration), granted Prudential’s Rule 65 petition: it held CIAC lacked jurisdiction over Prudential’s person (improper service) and over the subject matter because Prudential had not expressly agreed to arbitration, and concluded the Ar...(Pro-only)
Issues:
- Did the CIAC acquire jurisdiction over the person of Prudential despite Prudential’s contention of improper service?
- Did the CIAC (Arbitral Tribunal) have jurisdiction over the subject matter — i.e., were the performance and surety bonds sufficiently connected to the construction contract so as to vest CIAC jurisdiction?
- Did the Arbitral Tribunal improperly alter or modify the Final Award at the execution stage by making Prudential solidarily liable to the extent of both the performance and surety bonds?
- Did Prudential engage in forum shopping by filing both a ...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
- (Pro-only)