G.R. No. 163582 - William Golangco Construction Corp. vs. Ray Burton Development Corp.

On July 20, 1995, Ray Burton Development Corporation (RBDC) and William Golangco Construction Corporation (WGCC) entered into a contract for the construction of Elizabeth Place (an office/residential condominium).
The contract contained an arbitration clause specifying that any dispute arising from differences in interpretation of the contract documents should be submitted to a mutually agreed Board of Arbitrators, and as a last resort, to the Construction Industry Arbitration Commission (CIAC) under the provisions of the Construction Industry Arbitration Law (Executive Order No. 1008).

On March 18, 2002, WGCC (the private respondent, later petitioner before the Supreme Court) filed a complaint with CIAC seeking arbitration for a total claim amounting to P53,667,219.45 plus interest.

The claim comprised various components, including the unpaid balance on the contract price, labor cost adjustments, additive works, extended overhead expenses, materials cost adjustments, trade contractors’ utilities expenses, and interest on overdue billings.

On April 12, 2002, RBDC (the petitioner, later respondent before the Supreme Court) filed a Motion to Dismiss the arbitration complaint, arguing that the CIAC had no jurisdiction except for disputes arising solely from interpretative differences in the contract documents.

The CIAC based its ruling on the contractual provision (Clause 17.2 of Art. XVII) that allowed the Commission to have jurisdiction over “any dispute” arising under the construction contract.
The Order referenced Executive Order No. 1008, highlighting that the CIAC automatically acquires exclusive jurisdiction once the parties agree to submit disputes to arbitration.

Subsequently, RBDC filed a Motion to Suspend Proceedings, requesting that the CIAC suspend matter pending negotiations between the parties.

WGCC opposed this motion and filed a Counter-Motion to declare that RBDC had refused to arbitrate and to proceed ex parte with arbitration.

On May 24, 2002, the CIAC issued another Order denying the Motion to Suspend Proceedings and confirming the schedule for arbitration.

On June 3, 2002, RBDC elevated the dispute by filing a petition for Certiorari and Prohibition with the Court of Appeals (CA), coupled with requests for a temporary restraining order and a writ of preliminary injunction.

The petition asserted that the CIAC had acted without or in excess of its jurisdiction by issuing the contested orders despite the alleged lack of jurisdiction.

On December 19, 2003, the CA rendered a Decision granting the petition for certiorari on the ground that the CIAC did not have jurisdiction, arguing that the arbitration clause limited submission only to disputes involving contract interpretation, while the complaint sought collection of sums of money.
Later, on May 24, 2004, the CA issued a Resolution denying RBDC’s motion for reconsideration.

That the CA committed grave abuse of discretion by giving due course to the petition despite RBDC’s failure to file a motion for reconsideration and attach the relevant pleadings required by the rules.
That the CA erred in its ruling by denying the CIAC jurisdiction over WGCC’s claims, which arguably involved disputes arising from differences in contract interpretation as well as other contractual controversies.

Whether the Court of Appeals committed grave abuse of discretion in accepting the petition for certiorari despite RBDC’s failure to comply with the mandatory requirements for filing—specifically, not attaching the relevant pleadings (such as the Complaint before the CIAC, the Motion to Dismiss, the Comment and Opposition, and the Motion to Suspend Proceedings) as demanded by Section 1, Rule 65 in relation to Section 3, Rule 46 of the Revised Rules of Court.

Whether the Construction Industry Arbitration Commission (CIAC) properly exercised its jurisdiction over the dispute given the parties’ arbitration clause.
Whether the dispute, which involves claims for payments and issues of contractual interpretation, falls within the ambit of matters agreed to be arbitrated under the contract and by virtue of Executive Order No. 1008.
Whether a condition limiting arbitration solely to disputes involving interpretative differences is valid, or if the existence of an arbitration clause automatically vests jurisdiction in the CIAC for all related construction disputes.