G.R. No. 143108 -09, September 26, 2001
REPUBLIC OF THE PHILIPPINES, Represented by the DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS, petitioner, vs. THE HONORABLE COURT OF APPEALS (Eleventh Division), FISCHER ENGINEERING AND MAINTENANCE CO., INC. (FEMCO), SEO IL CONSTRUCTION CO., LTD., CONSTRUCTION INDUSTRY ARBITRATION COMMISSION AND REGULUS E. CABOTE, SOLE ARBITRATOR, respondents.

FACTS

This is a petition for certiorari under Rule 65 seeking to set aside the Decision of the Court of Appeals dated 15 March 2000, which affirmed the Decision of Sole Arbiter Regulus E. Cabote of the Construction Industry Arbitration Commission (CIAC). The CIAC decision ordered the petitioner, the Republic of the Philippines represented by the DPWH, to pay the private respondents, Fischer Engineering and Maintenance Co., Inc. (FEMCO) and SEO IL Construction Co., Ltd., the amount of PhP12,075,785.47 plus 6% interest per annum until fully paid. While the case was pending before the Supreme Court, the parties entered into a Compromise Agreement dated 21 December 2000. Under this agreement, the private respondents waived 40% of the Court of Appeals award and the interest due, agreeing to receive only 60% of the award, or PhP7,245,471.282. The private respondents also agreed to shoulder all taxes due on their claim. The parties agreed to waive all claims subject of the case, and the petitioner’s appeal would be deemed withdrawn upon the agreement’s approval. The private respondents subsequently filed a motion praying for the approval of the Compromise Agreement.

ISSUE

Whether the Compromise Agreement entered into by the parties should be approved by the Supreme Court.

RULING

The Supreme Court approved the Compromise Agreement. The Court found the agreement to be in order and not contrary to law, morals, good customs, and public policy. Consequently, judgment was rendered in accordance with the Compromise Agreement dated 21 December 2000. The parties were enjoined to comply strictly and in good faith with its terms and conditions.