Case Summary (G.R. No. 204423)
Factual Antecedents
PIRRA lodged a complaint for damages against PSHS regarding their contracts for Project A (Academic Building I, Phases IV and V, and Girls’ Dormitory Building I) and Project C (Academic Building II and Boys’ Dormitory Building I). PIRRA secured the contract for Project A at P24,290,854.10 after winning the bidding on October 27, 2008, followed by a Notice of Award on December 8, 2008, and a Notice to Proceed issued on December 20, 2008. The project was scheduled for 180 days, extended by 65 days until August 22, 2009. However, disputes arose regarding the completion status and payments related to Progressive Billings (PB) due to noted defects and incomplete works.
CIAC Final Award
On January 26, 2011, the Construction Industry Arbitration Commission (CIAC) ruled in favor of PIRRA, asserting that PSHS improperly delayed payments for PB No. 5 and unlawfully took over Project A without legal basis. The CIAC awarded PIRRA compensatory damages amounting to approximately P3.9 million due to wrongful termination of the contract for Project C and additional costs related to the projects.
Court of Appeals Ruling
Discontented with the CIAC ruling, PSHS appealed to the Court of Appeals (CA), arguing that it did not treat the project as substantially completed and that it validly terminated the contract for Project C due to PIRRA's abandonment of work. On January 20, 2012, the CA modified the CIAC’s award, ordering PSHS to pay a reduced residual amount of P706,077.28 for PB No. 5, as well as compensation for work done on Project C while negating moral and exemplary damages and reallocating attorney’s fees.
Supreme Court’s Review
PSHS sought further review from the Supreme Court, arguing misapprehensions in the CA’s findings regarding the status of Project A and the validity of the termination of Project C. The Supreme Court affirmed the CA’s findings, highlighting that PSHS had accepted Project A as substantially completed when it created an Inspectorate Team for inspections, and thus remained liable for PB No. 5. Furthermore, regarding Project C, the Court determined that PSHS legally termi
...continue readingCase Syllabus (G.R. No. 204423)
Decision Overview
- The case involves a Petition for Review on Certiorari filed by Philippine Science High School-Cagayan Valley Campus (PSHS) against Pirra Construction Enterprises (PIRRA).
- The Supreme Court's ruling is based on the decisions rendered by the Court of Appeals (CA) and the Construction Industry Arbitration Commission (CIAC).
- The core issues stem from disputes regarding two construction projects (Project A and Project C) and the respective obligations of both parties.
Factual Antecedents
- PIRRA is a licensed contractor engaged in general contracting, while PSHS is a government academic institution under the Department of Science and Technology (DOST).
- PIRRA filed a complaint with the CIAC against PSHS concerning construction contracts for Project A and Project C.
Project A Details
- PIRRA won the bidding for Project A with a contract price of P24,290,854.10 and received a Notice of Award from PSHS on December 8, 2008.
- The project commenced on December 20, 2008, with an original duration of 180 days, later extended by 65 days until August 22, 2009.
- PSHS paid PIRRA a mobilization fee and several partial billings during the course of the project.
- On July 29, 2009, PIRRA submitted a request for payment for its fifth partial billing (PB No. 5) but faced delays due to reported defects and the