METRO RAIL TRANSIT DEVELOPMENT CORPORATION,
Petitioner, v. GAMMON
PHILIPPINES
RULING:
This Court denies the Petition.
CIAC was created under Executive Order No. 100892 to establish an arbitral machinery
that will settle expeditiously problems arising from, or connected with, contracts in the
construction industry.93
Its jurisdiction includes construction disputes between or among parties to an
arbitration agreement, or those who are otherwise bound by the latter, directly or by
reference.94 Thus, any project owner, contractor, subcontractor, fabricator, or project
manager of a construction project who is bound by an arbitration agreement in a
construction contract is under CIAC's jurisdiction in case of any dispute.95
CIAC is a quasi-judicial body exercising quasi-judicial powers.
A quasi-judicial agency is a government body, not part of the judiciary or the legislative
branch, which adjudicates disputes and creates rules which affect private parties'
rights.96 It is created by an enabling statute, and thus, its existence continues beyond
the resolution of a dispute and is independent from the will of the parties. Its powers
are limited to those expressly granted or necessarily implied in the enabling law.97
Quasi-judicial or administrative adjudicatory power has been defined as the power: "(1)
to hear and determine questions of fact to which legislative policy is to apply, and (2) to
decide in accordance with the standards laid down by the law itself in enforcing and
administering the same law."98
Arbitration under a quasi-judicial body is similar to commercial arbitration in that its
factual findings are generally accorded respect and finality.
Thus, under the Construction Industry Arbitration Law, arbitral awards are binding and
shall be final and unappealable, except on pure questions of law:
Section 19. Finality of Awards. — The arbitral award shall be binding upon the parties.
It shall be final and inappealable except on questions of law which shall be appealable
to the Supreme Court.
Initially, CIAC decisions are appealable only to this Court. However, when the Rules of
Court were enacted, appeals from CIAC decisions became appealable to the Court of
Appeals under Rule 43:101
Section 1. Scope. — This Rule shall apply to appeals from judgments or final orders of
the Court of Tax Appeals and from awards, judgments, final orders or resolutions of or
authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions.
Among these agencies are the Civil Service Commission, Central Board of Assessment
Appeals, Securities and Exchange Commission, Office of the President, Land
Registration Authority, Social Security Commission, Civil Aeronautics Board, Bureau of
Patents, Trademarks and Technology Transfer, National Electrification Administration,
Energy Regulatory Board, National Telecommunications Commission, Department of
Agrarian Reform under Republic Act No. 6657, Government Service Insurance System,
Employees Compensation Commission, Agricultural Inventions Board, Insurance
Commission, Philippine Atomic Energy Commission, Board of Investments, Construction
Industry Arbitration Commission, and voluntary arbitrators authorized by law.
While Rule 43 petitions may pertain to questions of fact, questions of law, or both
questions of law and fact, it has been established that factual findings of CIAC may not
be reviewed on appeal.102 In CE Construction v. Araneta,103 this Court explained that
appeals from CIAC may only raise questions of law:
This is not to say that factual findings of CIAC arbitral tribunals may now be assailed
before the Court of Appeals. Section 3's statement "whether the appeal involves
questions of fact, of law, or mixed questions of fact and law" merely recognizes
variances in the disparate modes of appeal that Rule 43 standardizes: that there were
those that enabled questions of fact, there were those that enabled questions of law,
and there were those that enabled mixed questions fact and law. Rule 43 emphasizes
that though there may have been variances, all appeals under its scope are to be
brought before the Court of Appeals. However, in keeping with the Construction
Industry Arbitration Law, any appeal from CIAC Arbitral Tribunals must remain limited
to questions of law.
Thus, CIAC's factual findings on construction disputes are final, conclusive, and not
reviewable by this Court on appeal. The only exceptions are when:
(1) [T]he award was procured by corruption, fraud or other undue means; (2) there
was evident partiality or corruption of the arbitrators or of any of them; (3) the
arbitrators were guilty of misconduct in refusing to postpone the hearing upon sufficient
cause shown, or in refusing to hear evidence pertinent and material to the controversy;
(4) one or more of the arbitrators were disqualified to act as such under section nine of
Republic Act No. 876 and willfully refrained from disclosing such disqualifications or of
any other misbehavior by which the rights of any party have been materially
prejudiced; or (5) the arbitrators exceeded their powers, or so imperfectly executed
them, that a mutual, final and definite award upon the subject matter submitted to
them was not made.105 (Citation omitted)
Necessarily, before petitioner may raise any question of fact, it must prove that the
above circumstances exist in the case at bar.
DRS. REYNALDO ANG AND SUSAN CUCIO-ANG, PETITIONERS, VS. ROSITA DE VENECIA
RULING:
In their respective Comments,35 respondents Angel and Emma Caramat, Soto, and Vilvar assert
that the dispute is within the jurisdiction of the CIAC because the factual matters involved in the suit
pertain to building and engineering matters that require the technical expertise of the CIAC to
resolve; while the City Engineer of Makati concurred in the position of the spouses Ang.36
The jurisdiction of the CIAC is provided in Section 4 of Executive Order No. 1008, or the
Construction Industry Arbitration Law, viz.:
SECTION 4. Jurisdiction. — The CIAC shall have original and exclusive jurisdiction over disputes
arising from, or connected with, contracts entered into by parties involved in construction in the
Philippines, whether the dispute arises before or after the completion of the contract, or after the
abandonment or breach thereof. These disputes may involve government or private contracts. For
1a₩phi1
the Board to acquire jurisdiction, the parties to a dispute must agree to submit the same to voluntary
arbitration.
The jurisdiction of the CIAC may include but is not limited to violation of specifications for materials
and workmanship; violation of the terms of agreement; interpretation and/or application of
contractual time and delays; maintenance and defects; payment, default of employer or contractor
and changes in contract cost.
Excluded from the coverage of this law are disputes arising from employer-employee relationships
which shall continue to be covered by the Labor Code of the Philippines.
This provision lays down three requisites for acquisition of jurisdiction by the CIAC, first: a dispute
arising from or connected with a construction contract; second, such contract must have been
entered into by parties involved in construction in the Philippines; and third, an agreement by the
parties to submit their dispute to arbitration.
Respondent's claim is not even construction-related at all. Construction is defined as referring to all
on-site works on buildings or altering structures, from land clearance through completion including
excavation, erection and assembly and installation of components and equipment. Petitioner's
insistence on the application of the arbitration clause of the Trade Contract to respondent is clearly
anchored on an erroneous premise that respondent is seeking to enforce a right under the
same. Again, the right to the receivables of LMM Construction from petitioner w1der the Trade
Contract is not being impugned herein. In fact, petitioner readily conceded that LMM Construction
still had receivables due from petitioner, and respondent did not even have to refer to a single
provision in the Trade Contract to assert his claim. What respondent is demanding is that a portion
of such receivables an1ounting to P804,068.21 should have been paid to him first before the other
creditors of LMM Construction, which, clearly, does not require the CIAC's expertise and technical
knowledge of construction.
The adjudication of Civil Case No. 06-0200-CFM necessarily involves the application of pertinent
statutes and jurisprudence to matters such as obligations, contracts of assignment, and, if
appropriate, even preference of credits, a task more suited for a trial court to carry out after a full-
blown trial, than an arbitration body specifically devoted to construction contracts.57
Like the respondent in Fort Bonifacio Development, the spouses Ang do not seek to enforce a right
under the construction contract between the Caramats and respondents Soto and Vilvar. Rather, the
spouses are enforcing their right to be compensated from the alleged damage inflicted upon their
property by the construction activities of the Caramats. This right, while directly related to the
construction activities of respondents, is not a right under the construction contract entered into
among the respondents. Hence, the enforcement of such tight lies not with the CIAC but with the trial
courts.
PHILROCK, INC., petitioner,
vs.
CONSTRUCTION INDUSTRY ARBITRATION COMMISSION and Spouses VICENTE and NELIA
CID
RULING:
Petitioner avers that the CIAC lost jurisdiction over the arbitration case after both parties had
withdrawn their consent to arbitrate. The June 13, 1995 RTC Order remanding the case to the CIAC
for arbitration was allegedly an invalid mode of referring a case for arbitration.
We disagree. Section 4 of Executive Order 1008 expressly vests in the CIAC original and exclusive
jurisdiction over disputes arising from or connected with construction contracts entered into by
parties that have agreed to submit their dispute to voluntary arbitration. 8
It is undisputed that the parties submitted themselves to the jurisdiction of the Commission by virtue
of their Agreement to Arbitrate dated November 24, 1993. Signatories to the Agreement were Atty.
Ismael J. Andres and Perry Y. Uy (president of Philippine Rock Products, Inc.) for petitioner, and
Nelia G. Cid and Atty. Esteban A. Bautista for respondent spouses.9
Petitioner claims, on the other hand, that this Agreement was withdrawn by respondents on April 8,
1994, because of the exclusion of the seven engineers of petitioners in the arbitration case. This
withdrawal became the basis for the April 13, 1994 CIAC Order dismissing the arbitration case and
referring the dispute back to the RTC. Consequently, the CIAC was divested of its jurisdiction to hear
and decide the case.
This contention is untenable. First, private respondents removed the obstacle to the continuation of
the arbitration, precisely by withdrawing their objection to the exclusion of the seven
engineers. Second, petitioner continued participating in the arbitration even after the CIAC Order
had been issued. It even concluded and signed the Terms of Reference 10 on August 21, 1995, in
which the parties stipulated the circumstances leading to the dispute; summarized their respective
positions, issues, and claims; and identified the composition of the tribunal of arbitrators. The
document clearly confirms both parties’ intention and agreement to submit the dispute to voluntary
arbitration. In view of this fact, we fail to see how the CIAC could have been divested of its
jurisdiction.
Finally, as pointed out by the solicitor general, petitioner maneuvered to avoid the RTC’s final
resolution of the dispute by arguing that the regular court also lost jurisdiction after the arbitral
tribunal’s April 13, 1994 Order referring the case back to the RTC. In so doing, petitioner conceded
and estopped itself from further questioning the jurisdiction of the CIAC. The Court will not
countenance the effort of any party to subvert or defeat the objective of voluntary arbitration for its
own private motives. After submitting itself to arbitration proceedings and actively participating
therein, petitioner is estopped from assailing the jurisdiction of the CIAC, merely because the latter
rendered an adverse decision.11
Petitioner assails the monetary awards given by the arbitral tribunal for alleged lack of basis in fact
and in law. The solicitor general counters that the basis for petitioner’s assigned errors with regard to
the monetary awards is purely factual and beyond the review of this Court. Besides, Section 19, EO
1008, expressly provides that monetary awards by the CIAC are final and unappealable.
We disagree with the solicitor general. As pointed out earlier, factual findings of quasi-judicial bodies
that have acquired expertise are generally accorded great respect and even finality, if they are
supported by substantial evidence. 15 The Court, however, has consistently held that despite statutory
provisions making the decisions of certain administrative agencies "final," it still takes cognizance of
petitions showing want of jurisdiction, grave abuse of discretion, violation of due process, denial of
substantial justice or erroneous interpretation of the law. 16 Voluntary arbitrators, by the nature of their
functions, act in a quasi-judicial capacity, such that their decisions are within the scope of judicial
review.17
Petitioner protests the award to respondent spouses of P23,276.25 as excess payment with six
percent interest beginning September 26, 1995. It alleges that this item was neither raised as an
issue by the parties during the arbitration case, nor was its justification discussed in the CIAC
Decision. It further contends that it could not be held liable for interest, because it had earlier
tendered a check in the same amount to respondent spouses, who refused to receive it.
STRONGHOLD INSURANCE COMPANY, INC., Petitioner, v. SPOUSES RUNE AND
LEA STROEM
RULING:
On arbitration and the CIAC’s jurisdiction
Petitioner changed the theory of its case since its participation in the trial court
proceedings. It raised the issue of lack of jurisdiction in view of an arbitration
agreement for the first time.
Generally, parties may not raise issues for the first time on appeal.50 Such practice is
violative of the rules and due process and is frowned upon by the courts. However, it is
also well-settled that jurisdiction can never be waived or acquired by estoppel.51
Jurisdiction is conferred by the Constitution or by law.52 “Lack of jurisdiction of the
court over an action or the subject matter of an action cannot be cured by the silence,
by acquiescence, or even by express consent of the parties.”53 chanroblesvirtuallawlibrary
Section 4 of Executive Order No. 100854 is clear in defining the exclusive jurisdiction of
the CIAC: chanRoblesvirtualLawlibrary
SECTION 4. Jurisdiction – The CIAC shall have original and exclusive jurisdiction over
disputes arising from, or connected with, contracts entered into by parties involved in
construction in the Philippines, whether the dispute arises before or after the
completion of the contract, or after the abandonment or breach thereof. These
disputes may involve government or private contracts. For the Board to acquire
jurisdiction, the parties to a dispute must agree to submit the same to voluntary
arbitration.
his court has ruled that when a dispute arises from a construction contract, the CIAC
has exclusive and original jurisdiction.57 Construction has been defined as referring to
“all on-site works on buildings or altering structures, from land clearance through
completion including excavation, erection and assembly and installation of components
and equipment.”58 chanroblesvirtuallawlibrary
In this case, there is no dispute as to whether the Owners-Contractor Agreement
between Asis-Leif and respondents is a construction contract. Petitioner and
respondents recognize that CIAC has jurisdiction over disputes arising from the
agreement.
What is at issue in this case is the parties’ agreement, or lack thereof, to submit the
case to arbitration. Respondents argue that petitioner is not a party to the arbitration
agreement. Petitioner did not consent to arbitration. It is only respondent and Asis-
Leif that may invoke the arbitration clause in the contract.
This court has previously held that a performance bond, which is meant “to guarantee
the supply of labor, materials, tools, equipment, and necessary supervision to complete
the project[,]”59 is significantly and substantially connected to the construction contract
and, therefore, falls under the jurisdiction of the CIAC.60 To be clear, it is in the
chanroblesvirtuallawlibrary
Owners-Contractor Agreement that the arbitration clause is found. The construction
agreement was signed only by respondents and the contractor, Asis-Leif, as
represented by Ms. Ma. Cynthia Asis-Leif. It is basic that “[c]ontracts take effect only
between the parties, their assigns and heirs[.]”82 Not being a party to the construction
agreement, petitioner cannot invoke the arbitration clause. Petitioner, thus, cannot
invoke the jurisdiction of the CIAC.
Moreover, petitioner’s invocation of the arbitration clause defeats the purpose
of arbitration in relation to the construction business. The state has continuously
encouraged the use of dispute resolution mechanisms to promote party autonomy.8
