GR 179628; (January, 2013) (Digest)
G.R. No. 179628 ; January 16, 2013
THE MANILA INSURANCE COMPANY, INC., Petitioner, vs. SPOUSES ROBERTO and AIDA AMURAO, Respondents.
FACTS
Respondent spouses entered into a Construction Contract Agreement (CCA) with Aegean Construction for a commercial building. Aegean secured performance bonds from petitioner Manila Insurance and another company. Due to Aegean’s failure to complete the project, the spouses filed a collection case against the sureties in the Regional Trial Court (RTC). The sureties moved to dismiss, citing an arbitration clause in the CCA requiring disputes to be submitted to the Construction Industry Arbitration Commission (CIAC). The RTC denied the motions, a decision affirmed by the Court of Appeals (CA). The CA ruled the arbitration clause was limited to interpreting specific contract documents and that the surety’s liability was direct and primary, making the court action proper.
ISSUE
Whether the RTC correctly assumed jurisdiction over the complaint against the surety despite the arbitration clause in the principal construction contract.
RULING
The Supreme Court ruled in the negative, reversed the CA, and dismissed the case for lack of jurisdiction. The Court held that the CIAC has original and exclusive jurisdiction over disputes arising from or connected with construction contracts. The arbitration clause in the CCA was comprehensive, covering “any dispute…arising from this Agreement,” not merely the interpretation of specific articles. Since the money claim against the surety is intrinsically connected to and dependent on the determination of the principal contractor’s (Aegean’s) liability under the construction contract, the dispute falls within the scope of the arbitration agreement. The CIAC’s jurisdiction is conferred by law and extends to all such disputes once the parties have agreed to arbitrate. Consequently, the RTC should have directed the parties to arbitration. The filing of the court case was premature, and the RTC committed grave abuse of discretion in taking cognizance of the suit. The surety, while not a signatory to the CCA, can invoke the arbitration clause as its obligation is accessory to the principal contract, and the resolution of the principal’s liability is a logical prerequisite to its own.