G.R. No. 101083 - Oposa vs. Factoran Jr.

In 2004, during the term of then-incumbent Mayor Luvimindo C. Otic, the Municipality of Carranglan, Nueva Ecija, and Sunway Builders executed a Design-Build-Lease Contract for the construction of the municipality’s water supply system.
The project was financed through a loan from the Development Bank of the Philippines (DBP), with the municipality, represented by Mayor Otic, as the borrower.
Sunway commenced project works on August 8, 2005, with the original project completion date set for August 4, 2008; however, the date was later extended to September 2008.
Despite the extension, the project was not completed in full.

In 2011, the Sangguniang Bayan of Carranglan unilaterally terminated the contract while the construction remained incomplete.
Sunway Builders maintained that it had accomplished 59% of the project works and demanded payment for the actual work performed.
Following non-payment by the municipality, Sunway filed a complaint before the Construction Industry Arbitration Commission (CIAC) as CIAC Case No. 02-2015, seeking a total claim of P19,819,589.00 (comprising unpaid accomplishment, attorney’s fees, and other charges).
Carranglan participated partially in the arbitration process but failed to appear during a scheduled hearing, leading to a proceeding that largely involved Sunway’s presentation of its documentary evidence.

On August 25, 2015, the CIAC rendered an Award partially granting Sunway’s complaint in favor of an amount of P8,353,327.17, which included:

The CIAC based its determination on documents submitted by Sunway, including a Statement of Account, a Request for Payment dated September 4, 2007, a letter of the then Mayor Otic dated January 13, 2010, and a Statement of Work Accomplished dated April 30, 2008.
The computation of the unpaid work was supported by the mutually acknowledged total project cost (P18,211,760.00) and the 59% work completion rate confirmed by both parties though without cross-examination by the municipality.
Carranglan did not appeal the CIAC Award, allowing it to lapse into finality, and a Writ of Execution was issued on November 24, 2015.

Relying on the final and executory CIAC Award, Sunway filed a money claim before the Commission on Audit (COA) Proper for the amount of P10,166,654.90.
The computation of this claim included additional elements such as interest (at 6% per annum from the award’s date and 12% thereafter), retention money, attorney’s fees, and the cost of arbitration.
The COA Audit Team Leader (ATL) evaluated the money claim and found it lacked a legal basis, noting that the claim was for work performed beyond the original contract period and that Sunway should have incurred liquidated damages for the delay.
In the 1st Indorsement (May 25, 2017), the COA Regional Director agreed with the ATL’s findings, recommending the denial of the money claim on grounds including project delays, implementation lapses, non-observance of contract terms, and overpayment by the municipality.

On March 27, 2019, the COA Proper issued a Decision denying Sunway’s money claim in toto, directing further actions such as evaluation of differences in payments and the computation of liquidated damages.
The COA Proper also ordered administrative measures, including the potential forfeiture of Sunway’s performance security deposit and referral of the case to the Office of the Ombudsman for investigation.
Sunway filed a Petition for Review on Certiorari, contending that the COA Proper committed grave abuse of discretion by re-examining and effectively modifying the final CIAC Award.
Among its arguments, Sunway asserted that the COA Proper lacked authority to reverse or tamper with the final and executory CIAC Award, which was rendered within the exclusive jurisdiction of the CIAC in matters connected with construction contracts.

Whether the COA Proper had the power to re-examine, modify, or reverse the final and executory award rendered by the CIAC.
Whether the decision of the CIAC, given its exclusive jurisdiction over disputes arising from construction contracts, precludes the COA from relitigating the issues settled by the arbitration process.

Whether Sunway’s alleged failure to attach certain documents (e.g., the Design-Build-Lease Contract, Mayor Otic’s Letter, and its money claim filed before COA Proper) and to sign the explanation for service via registered mail should warrant dismissal of the Petition.

Whether the COA Proper’s alternative finding of only 36% work accomplishment—contrary to the CIAC’s 59% determination—constitutes a grave abuse of discretion, especially in light of the submitted documentary evidence.
Whether the COA’s re-examination of evidence already evaluated and accepted by the CIAC is permissible.