GR 195552; (April, 2016) (Digest)
G.R. No. 195552 April 18, 2016
ACS DEVELOPMENT & PROPERTY MANAGERS, INC., Petitioner, vs. MONTAIRE REALTY AND DEVELOPMENT CORPORATION, Respondent.
FACTS
Petitioner ACS Development & Property Managers, Inc. (ADPROM) and respondent Montaire Realty and Development Corporation (MARDC) entered into a Construction Agreement for townhouse units. The contract was amended to cover 11 units for P25,500,000.00. ADPROM commenced work and was paid for Progress Billing Nos. 1 to 8. A dispute arose over Progress Billing No. 9, where ADPROM demanded P1,495,345.24, but MARDC’s construction manager, Angel Lazaro & Associates (ALA), approved only P94,460.28. ADPROM insisted on full payment and initiated a work stoppage on March 18, 1997. MARDC served a notice of default and later terminated the contract on June 5, 1997, demanding a refund for alleged overpayments.
ADPROM filed a case for sum of money with the Construction Industry Arbitration Commission (CIAC). The CIAC ruled in favor of ADPROM, awarding unpaid billings and a refund of retention money, while dismissing MARDC’s counterclaims for overpayment and liquidated damages. The Court of Appeals (CA) modified the CIAC decision by deleting the award of interest on unpaid billings and holding ADPROM liable for liquidated damages due to unjustified work stoppage. ADPROM filed a Petition for Certiorari under Rule 65 before the Supreme Court.
ISSUE
Whether the CA committed grave abuse of discretion in modifying the CIAC award and whether ADPROM availed of the correct remedy.
RULING
The Supreme Court dismissed the petition. Initially, the Court held that ADPROM availed of the wrong remedy. A petition for certiorari under Rule 65 is improper for questioning a CA decision that reviewed an arbitral award. The correct remedy is a petition for review under Rule 45, which is a continuation of the appellate process. A Rule 65 petition is an independent action limited to correcting jurisdictional errors or grave abuse of discretion by a tribunal, not for reviewing factual or legal errors of a court in the exercise of its appellate jurisdiction.
On the merits, treating the petition as one for review, the Court affirmed the CA’s findings with modification on the interest rate. The CA correctly held ADPROM liable for liquidated damages. The work stoppage was unjustified because ADPROM ceased work despite the contract requiring continued performance pending resolution of billing disputes. The stoppage constituted a breach, warranting liquidated damages as stipulated. The CA properly computed these from the notice of default until MARDC engaged a new contractor. However, the Court modified the interest on monetary awards to 6% per annum from finality until full payment, consistent with prevailing jurisprudence, instead of the 12% imposed by the CIAC.