G.R. No. 129169 November 17, 1999
NATIONAL IRRIGATION ADMINISTRATION (NIA), petitioner, vs. HONORABLE COURT OF APPEALS, CONSTRUCTION INDUSTRY ARBITRATION COMMISSION, and HYDRO RESOURCES CONTRACTORS CORPORATION, respondents.

FACTS

The National Irrigation Administration (NIA) awarded a construction contract to Hydro Resources Contractors Corporation (HYDRO) in 1978. The project was substantially completed in 1982 and finally accepted in 1984. In 1994, HYDRO filed a Request for Adjudication of a monetary claim with the Construction Industry Arbitration Commission (CIAC). NIA filed an Answer and later a Motion to Dismiss, challenging CIAC’s jurisdiction. NIA argued that the contract was executed and completed before the effectivity of Executive Order No. 1008 (the CIAC Law) in 1985, and that the arbitration clause in their contract did not specifically designate the CIAC. The CIAC denied the motion, ruling it had jurisdiction, and proceeded with the arbitration. NIA then filed a petition for certiorari and prohibition with the Court of Appeals, which was dismissed. NIA elevated the case to the Supreme Court via a special civil action for certiorari under Rule 65.

ISSUE

Whether the CIAC validly acquired jurisdiction over the dispute between NIA and HYDRO, considering the contract was executed and performed prior to the creation of the CIAC.

RULING

The Supreme Court dismissed the petition, upholding the CIAC’s jurisdiction. The Court clarified that the petition, being one under Rule 65, was improper as it raised questions of law more suitable for an appeal via Rule 45. On the substantive issue, the Court ruled that CIAC jurisdiction is conferred by law (E.O. No. 1008) and is not dependent on the parties’ agreement. The law grants 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 arbitration. The Court found that the contract contained a valid arbitration clause. The fact that the contract predated the CIAC’s creation is immaterial; the law applies to arbitration proceedings filed after its effectivity. The Court distinguished the cited case of Tesco, noting that in this instance, HYDRO had formally submitted its claim to the CIAC, thereby perfecting the submission to arbitration. The CIAC correctly assumed jurisdiction as the dispute fell within its legal mandate, and NIA’s participation in the arbitral process, including nominating an arbitrator, did not constitute a waiver but was a consequence of the CIAC’s properly acquired jurisdiction. The CIAC did not commit grave abuse of discretion in proceeding with the case.