G.R. No. 187552 -53 and G.R. No. 187608-09, October 15, 2019.
Shangri-la Properties, Inc. (now known as Shang Properties, Inc.), Petitioner, v. BF Corporation, Respondent. / BF Corporation, Petitioner, v. Shangri-la Properties, Inc. (SLPI), now known as EDSA Properties Holdings, Inc.; The Panel of Voluntary Arbitrators (Engr. Eliseo I. Evangelista, Ms. Alicia Tiongson, and Atty. Mario Eugenio V. Lim), Alfredo C. Ramos, Rufo B. Colayco, Antonio B. Olbes, Gerardo O. Lanuza, Jr., Maximo G. Licauco III, and Benjamin C. Ramos, Respondents.

FACTS

The dispute arose from a construction agreement between Shangri-la Properties, Inc. (SLPI) as project owner and BF Corporation (BFC) as trade contractor for the EDSA Plaza Project. BFC filed a collection case against SLPI and its directors, which was stayed pending arbitration. The parties submitted their dispute to a voluntary Arbitral Tribunal. The issues included claims for fire damage repairs, unpaid progress billings, unpaid change orders, fixed and provisional attendances, damages by nominated sub-contractors, retention money, legal interest, and SLPI’s counterclaims for liquidated damages and other damages. The Arbitral Tribunal awarded BFC a total of P46,905,978.79 and SLPI a total of P8,387,484.06, resulting in a net award of P38,518,494.73 to BFC plus legal interest. Both parties appealed to the Court of Appeals (CA). The CA partially modified the arbitral award, affirming some awards and modifying others, including increasing BFC’s award for unpaid progress billings based on the original scope of work, reducing the award for unpaid progress billings on variation orders, and adjusting other claims. Both SLPI and BFC filed separate petitions for review before the Supreme Court.

ISSUE

The core issue is whether the Court of Appeals erred in modifying the factual findings and awards made by the Arbitral Tribunal.

RULING

The Supreme Court denied the petitions and affirmed the decision of the Court of Appeals. The Court held that as a rule, the factual findings of construction arbitrators are final and conclusive and not reviewable on appeal. Exceptions exist, such as when the CA’s findings are contrary to those of the arbitrators, which warranted a review in this case. The Court found no reason to disturb the factual findings of the Construction Industry Arbitration Commission (CIAC) arbitrators as affirmed by the CA, as they were supported by the evidence on record. The Court proceeded to review the CA’s modifications and found them to be in order. The CA correctly adjusted the awards based on the evidence, such as recomputing the unpaid progress billings for the original scope of work and variation orders, and properly addressed the claims for liquidated damages and interest. The Court emphasized the limited scope of judicial review over arbitral awards and that the CA did not commit reversible error in its modifications.