Case Digest (G.R. No. 199705)
Facts:
Republic of the Philippines, represented by the Department of Public Works and Highways (DPWH) v. Roguza Development Corporation (RDC), G.R. No. 199705, April 3, 2019, Supreme Court Second Division, Caguioa, J., writing for the Court.
RDC was awarded the Rosario-Pugo-Baguio Road Rehabilitation Project (Contract Package I) and received a Notice to Proceed on May 15, 1997; construction commenced May 24, 1997 but was suspended on June 4, 1997 for almost 32 months because the DPWH had not secured the Environmental Clearance Certificate and had unresolved right-of-way problems. The project resumed by Resume Order dated February 8, 2001 and was completed September 6, 2001. RDC claimed P93,782,093.64 for idle time of equipment and related expenses under the contract (FIDIC clauses), basing the equipment rental component on ACEL guidebook rates.
An Ad Hoc Committee of the DPWH recommended a reduced payment of P26,142,577.09 (using the lower bare rental rates found in RDC’s bid documents) and conditioned payment on RDC’s waiver of further claims; RDC accepted by a Letter dated November 14, 2006 (the Letter‑Waiver), allegedly because of financial distress. After DPWH later denied additional payment, RDC filed a collection complaint with the Construction Industry Arbitration Commission (CIAC) as CIAC Case No. 05‑2008.
On July 17, 2008 the CIAC Arbitral Tribunal rendered an Arbitral Award in RDC’s favor directing DPWH to pay P22,409,500.00 (the tribunal found the Letter‑Waiver inefficacious because RDC was under financial distress; it also computed entitlement using bare rental rates and concluded only four bulldozers were contracted). RDC’s motion for reconsideration of the award was denied by CIAC orders dated December 8, 2008 and January 26, 2009; those CIAC orders, however, bore the signature of only CIAC Chairman Alfredo Tadiar.
DPWH filed a petition for review with the Court of Appeals under Rule 43 (CA‑G.R. SP No. 104920) docketed in the 7th Division seeking reversal of the Arbitral Award. Independently, RDC filed its own petition for review with the Court of Appeals (CA‑G.R. SP No. 107412) before the Special Seventeenth Division, challenging (among other things) the timeliness and validity of the CIAC motions and the Arbitral Tribunal’s computation of equipment units and rates.
The CA 7th Division issued a Decision on October 29, 2010 granting DPWH’s petition and reversing the Arbitral Award; that decision’s denial of RDC’s motion for reconsideration became final on July 30, 2011. Meanwhile, on April 26, 2011 the CA Special Seventeenth Division issued the assailed Decision in RDC’s petition affirming the Arbitral Award but modifying it to require DPWH to pay RDC P61,748,346.00 (representing a larger balance of idle-time compensation), and set aside the First and Second CIAC Orders for lacking the signatures of the other two tribunal members. The CA Special Seventeenth Division later denied DPWH’s motion for reconsideration by Resolution dated December 14, 2011.
DPWH, through the Office o...(Pro-only)
Issues:
- Did the Court of Appeals Special Seventeenth Division err in directing DPWH to pay RDC additional compensation of P61,748,346.00, representing the difference between RDC’s original claim and the amount RDC previously accepted under the...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
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