GR 242904 05; (February, 2021) (Digest)
G.R. Nos. 242904-05, February 10, 2021
DATEM INCORPORATED, PETITIONER, VS. ALPHALAND MAKATI PLACE, INC. AND/OR ALPHALAND SOUTHGATE TOWER, INC., RESPONDENTS.
FACTS
Petitioner DATEM Incorporated and respondents Alphaland Makati Place, Inc. and Alphaland Development Incorporated (collectively, Alphaland) entered into a construction agreement in May 2014 for the civil, structural, and architectural works on Towers 1, 2, and 3 of Alphaland Makati Place. During the project, DATEM submitted progress billings, but Alphaland left an amount of Php34,076,747.09 unpaid. DATEM also claimed that Alphaland refused to release retention money totaling Php121,930,996.35 and payment for extended preliminaries amounting to Php153,109,616.92. After DATEM terminated the balance of works on Tower 3 and Alphaland refused to settle its claims, DATEM filed a complaint before the Construction Industry Arbitration Commission (CIAC) based on an arbitration clause in their Construction Agreement. Alphaland moved to dismiss the case, challenging CIAC’s jurisdiction due to DATEM’s alleged non-compliance with a condition precedent under the arbitration clause. The CIAC denied the motion and later rendered a Final Award dated April 5, 2018, in favor of DATEM. Alphaland filed petitions for certiorari before the Court of Appeals (CA), which consolidated the cases and annulled the CIAC’s Final Award for lack of jurisdiction, ruling that the precondition for arbitration was not fulfilled.
ISSUE
Whether or not the Court of Appeals erred in finding that the CIAC lacked jurisdiction over the case.
RULING
The Supreme Court ruled that the CA erred. The CIAC’s jurisdiction is conferred by law and cannot be subjected to any condition, waived, or diminished by the stipulation, act, or omission of the parties, as long as the parties agreed to submit their construction contract dispute to arbitration or there is an arbitration clause in the construction contract. The Court found that the parties’ Construction Agreement contained a valid arbitration clause, which vested CIAC with jurisdiction over the dispute. Non-compliance with a contractual condition precedent for arbitration does not oust the CIAC of its jurisdiction, as its jurisdiction is determined solely by the existence of an arbitration agreement or clause in the construction contract. The Court reinstated the CIAC’s Final Award dated April 5, 2018.