G.R. No. 202430 March 6, 2019
METRO BOTTLED WATER CORPORATION, Petitioner vs. ANDRADA CONSTRUCTION & DEVELOPMENT CORPORATION, INC., Respondent

FACTS

Petitioner Metro Bottled Water Corporation and respondent Andrada Construction & Development Corporation entered into a Construction Agreement for a manufacturing plant. Disputes arose regarding unpaid work accomplishments and alleged project delays and defects. Andrada Construction filed a Request for Arbitration before the Construction Industry Arbitration Commission (CIAC). The CIAC arbitral tribunal ruled in favor of Andrada Construction, ordering Metro Bottled Water to pay a specified amount for unpaid work, while denying Metro Bottled Water’s counterclaims for completion costs and liquidated damages. The Court of Appeals affirmed the CIAC arbitral award. Metro Bottled Water elevated the case via a Petition for Review on Certiorari, arguing that the CIAC committed grave abuse of discretion and reversible errors in its factual and legal determinations, particularly in awarding claims for change orders not strictly complying with the contract and in not awarding liquidated damages for delay.

ISSUE

Whether the Court of Appeals erred in affirming the CIAC arbitral award, thereby warranting the Supreme Court’s review and reversal of the award.

RULING

The Supreme Court denied the petition and affirmed the assailed Court of Appeals decision. Judicial review of arbitral awards is extremely limited. Under Republic Act No. 876 (The Arbitration Law) and the Special Rules of Court on Alternative Dispute Resolution, an arbitral award cannot be vacated or set aside merely for errors of fact or law. The court cannot substitute its judgment for that of the arbitral tribunal. For CIAC awards, an appeal is allowed only on pure questions of law, and even then, only egregious errors justify intervention. The CIAC, given its technical expertise, is afforded wide discretion to resolve issues fairly and expeditiously, including the equitable resolution of claims for unpaid work. The Court found that Metro Bottled Water’s petition essentially asked for a re-evaluation of factual evidence—such as the approval of change orders and the existence of delay—which is prohibited. The CIAC’s findings that Metro Bottled Water impliedly approved certain change orders by funding them and that the contractor was not liable for delay were factual conclusions binding on the Court. No exceptional circumstance was shown to warrant a departure from the strict policy of non-interference with arbitral awards.