GR 170732; (October, 2012) (Digest)
G.R. No. 170732 ; October 11, 2012
ATLANTIC ERECTORS, INC., Petitioner, vs. COURT OF APPEALS and HERBAL COVE REALTY CORPORATION, Respondents.
FACTS
Petitioner Atlantic Erectors, Inc. entered into a Construction Contract with respondent Herbal Cove Realty Corporation to build housing units for a total adjusted price of P16,726,745.19, with a 180-day completion period from the Notice to Proceed. The contract stipulated liquidated damages for delay. Petitioner commenced work on July 8, 1996. Due to initial site turnover delays and bad weather, petitioner requested and was granted time extensions, moving the completion deadlines to dates between March 7 and April 7, 1997. Petitioner still failed to complete the project within the extended periods.
Consequently, respondent terminated the contract on October 3, 1997, citing defective workmanship, delayed completion, and lack of commitment to finish. Respondent hired a new contractor to complete the work. Respondent then filed a Request for Arbitration with the Construction Industry Arbitration Commission (CIAC), seeking liquidated damages, costs to remedy defects, excess completion costs, and attorney’s fees. Petitioner counterclaimed for unpaid accomplishments, retention money, and the value of materials left on site.
ISSUE
Whether the Court of Appeals erred in affirming the CIAC’s award, which denied respondent’s claim for liquidated damages and instead granted a net monetary award in favor of petitioner.
RULING
The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. The CIAC’s factual findings, affirmed by the CA, are conclusive and not subject to review, as the Court’s role in a Rule 45 petition is limited to reviewing errors of law. The CIAC correctly ruled that respondent was not entitled to liquidated damages. While petitioner was initially delayed, the grant of time extensions by respondent constituted a waiver of the right to claim damages for the period of delay covered by those extensions. Liquidated damages could only be imposed for delays incurred after the new agreed-upon deadlines.
Furthermore, the CIAC validly exercised its expertise in adjusting the claims and counterclaims. It found that respondent’s termination of the contract was precipitate and that petitioner was entitled to payment for work accomplished, the release of retention money, and compensation for materials left at the jobsite, after deducting an unliquidated downpayment and the excess costs respondent incurred to complete the project. The net award of P1,087,187.80 in favor of petitioner, as computed by the CIAC, was based on a thorough evaluation of evidence and is binding. The arbitration clause in the contract vested the CIAC with original and exclusive jurisdiction, and its factual determinations are accorded finality.