Case Summary (G.R. No. 152545)
Applicable Law
The applicable laws in this case pertain to the provisions set forth in the 1987 Philippine Constitution, the Civil Code of the Philippines, and Presidential Decree (PD) No. 1594, which prescribes policies and guidelines for government infrastructure contracts.
Contractual Agreements and Relationship
R-II was contracted by BCDA for the construction of the project for ₱788,973,413.00, while Mivan was subsequently invited to enter into a sub-contract worth ₱459,000,000.00 for the construction of twenty-eight buildings. The sub-contract contained provisions for adjustment of contract prices in relation to extra work or variations, following PD No. 1594.
Performance and Issues Arising
During the project, R-II engaged Rigid Systems, Inc. to assist Mivan with formworks. Due to performance issues related to Rigid, Mivan had to address delays and rework, ultimately leading to a completion that was forty-nine days behind schedule. Mivan subsequently claimed additional costs totaling ₱129,522,612.44, including various claims for variations, escalation, and disruptions. R-II acknowledged some liability, admitting to amounts significantly lower than what Mivan claimed.
Arbitration and CIAC's Decision
Disputes over these claims led Mivan to file for arbitration with CIAC after unsuccessful negotiations. CIAC’s Sole Arbitrator Alfredo Tadiar awarded Mivan ₱50,339,421.16, which included amounts for variations, increased labor costs, and escalation costs, alongside interests. R-II subsequently sought a review of this arbitral decision in the Court of Appeals, which affirmed CIAC's rulings.
Court of Appeals and Subsequent Appeals
The Court of Appeals dismissed R-II's petition, leading R-II to appeal to the Supreme Court, raising issues regarding the evaluation of CIAC’s findings, the validity of Mivan’s claims, and the awarding of value-added tax (VAT) to Mivan.
Conclusions on Key Issues
The Supreme Court upheld the findings of the lower courts and CIAC, noting
...continue readingCase Syllabus (G.R. No. 152545)
Case Overview
- The case involves two consolidated petitions for review on certiorari under Rule 45 of the Rules of Court, filed by R-II Builders, Inc. (R-II) against the Construction Industry Arbitration Commission (CIAC) and Mivan Builders, Inc. (Mivan).
- The petitions seek to nullify and set aside decisions by the Court of Appeals and CIAC regarding the construction of the Philippine Army Officer's Quarters Project.
Background of the Case
- R-II and the Bases Conversion Development Authority (BCDA) entered into a construction agreement on September 3, 1997, for a project costing P788,973,413.00.
- R-II subcontracted part of this project to Mivan Builders, Inc., leading to a formal subcontract agreement executed on October 3, 1997.
- The subcontract included provisions for escalation and adjustment of the contract price based on variations in work.
Events Leading to Dispute
- Mivan faced delays and additional costs due to issues with an additional subcontractor (Rigid Systems, Inc.) and R-II’s request to expedite the completion of five buildings.
- By the end of the project, Mivan completed its work but 49 days past the original completion date, incurring additional claims totaling P129,522,612.44, which included variation, escalation, disruption claims, and VAT.
Proceedings Before CIAC
- Mivan pursued its claims through CIAC after R-II acknowledged on