CASE DIGEST : PHILROCK VS CONSTRUCTION INDUSTRY ARBITRATION COMMISSION (CIAC)

G.R. No. 132848-49 June 26, 2001  PHILROCK, INC., petitioner,  vs. CONSTRUCTION INDUSTRY ARBITRATION COMMISSION and Spouses VICENTE and NELIA CID, respondents.

FACTS : Private respondents, filed a Complaint for damages against Philrock and seven of its officers and engineers with the Regional Trial Court of Quezon City, Branch 82. The trial court issued an Order dismissing the case and referring the same to the CIAC because the Cid spouses and Philrock had filed an Agreement to Arbitrate with the CIAC. Preliminary conferences were held among the parties and their appointed arbitrators. At these conferences, disagreements arose as to:

1)  whether moral and exemplary damages and tort should be included as an issue along with breach of contract, and

2) whether the seven officers and engineers of Philrock who are not parties to the Agreement to Arbitrate should be included in the arbitration proceedings.

No common ground could be reached by the parties, hence, on April 2, 1994, both the Cid spouses and Philrock requested that the case be remanded to the trial court.

On June 13, 1995, The trial court declared that it no longer had jurisdiction over the case and ordered the records of the case to be remanded anew to the CIAC for arbitral proceedings. the CIAC resumed conducting preliminary conferences. On August 21, 1995, herein [P]etitioner Philrock requested to suspend the proceedings until the court clarified its ruling in the Order dated June 13, 1995

Petioner : Philrock argued that said Order was based on a mistaken premise that 'the proceedings in the CIAC fell through because of the refusal of Philrock to include the issue of damages therein,' whereas the true reason for the withdrawal of the case from the CIAC was due to Philrock's opposition to the inclusion of its seven officers and engineers, who did not give their consent to arbitration, as party defendants

Respondent : manifested that she was willing to exclude the seven officers and engineers of Philrock as parties to the case so as to facilitate or expedite the proceedings.

the Arbitral Tribunal denied Philrock's request for the suspension of the proceedings. The parties then proceeded to finalize, approve and sign the Terms of Reference. Philrock's counsel and representative, Atty. Pericles C. Consunji affixed his signature to said Terms of Reference which stated that 'the parties agree that their differences be settled by an Arbitral Tribunal

On September 12, 1995, [P]etitioner Philrock filed its Motion to Dismiss, alleging therein that the CIAC had lost jurisdiction to hear the arbitration case due to the parties' withdrawal of their consent to arbitrate. The motion was denied. public respondent ordered the parties to appear before it on November 28, 1995 for the continuation of the arbitral proceedings, and on February 7, 1996, public respondent directed [P]etitioner Philrock to set two hearing dates in the month of February to present its evidence and to pay all fees assessed by it, otherwise Philrock would be deemed to have waived its right to present evidence

Judgment is rendered in favor of the Claimant, directing Respondent to pay.

Before the CA, petitioner filed a Petition for Review, docketed as CA-GR SP No. 42443, contesting the jurisdiction of the CIAC and assailing the propriety of the monetary awards in favor of respondent spouses. This Petition was consolidated by the CA with CA-GR SP No. 39781, a Petition for Certiorari earlier elevated by petitioner questioning the jurisdiction of the CIAC.

ISSUE : Whether or not the CIAC could take jurisdiction over the case of Respondent Cid spouses against Petitioner Philrock after the case had been dismissed by both the RTC and the CIAC.

HELD : Section 4 of Executive Order 1008 expressly vests in the CIAC original and exclusive jurisdiction over disputes arising from or connected with construction contracts entered into by parties that have agreed to submit their dispute to voluntary arbitration. It is undisputed that the parties submitted themselves to the jurisdiction of the Commission by virtue of their Agreement to Arbitrate dated November 24, 1993. Signatories to the Agreement were Atty. Ismael J. Andres and Perry Y. Uy (president of Philippine Rock Products, Inc.) for petitioner, and Nelia G. Cid and Atty. Esteban A. Bautista for respondent spouses

Petitioner claims, on the other hand, that this Agreement was withdrawn by respondents on April 8, 1994, because of the exclusion of the seven engineers of petitioners in the arbitration case. This contention is untenable. First, private respondents removed the obstacle to the continuation of the arbitration, precisely by withdrawing their objection to the exclusion of the seven engineers. Second, petitioner continued participating in the arbitration even after the CIAC Order had been issued. Finally, as pointed out by the solicitor general, petitioner maneuvered to avoid the RTC’s final resolution of the dispute by arguing that the regular court also lost jurisdiction after the arbitral tribunal’s April 13, 1994 Order referring the case back to the RTC. After submitting itself to arbitration proceedings and actively participating therein, petitioner is estopped from assailing the jurisdiction of the CIAC, merely because the latter rendered an adverse decision.