1

REMEDIAL LAW-CIVIL PROCEDURE

FACTS:
The Republic of the Philippines, through the DPWH, and CMC/Monark/Pacific/Hi-Tri J.V. (the Joint
Venture) executed a “Contract Agreement for the Construction of Contract Package 6MI-9, Pagadian-Buug
Section, Zamboanga del Sur, Sixth Road Project, Road Improvement Component Loan No. 1473-PHI”
(Contract) for the total contract amount of P713,330,885.28. DPWH hired BCEOM French Engineering
Consultants to oversee the project.

While the project was ongoing, the Joint Venture’s truck and equipment were set on fire and a bomb
exploded at their batching plant which was caused by the MILF. The Joint Venture made several written
demands for extension and payment of the foreign component of the Contract. However, the DPWH failed
to pay, thus, the Joint Venture filed a complaint against the former before the Construction Industry
Arbitration Court. The Joint Venture also sent a “Notice of Mutual Termination of Contract” to DPWH
requesting for a mutual termination of the contract subject of the arbitration case. The DPWH accepted the
request.

After hearing, the CIAC directed DPWH to pay the Joint Venture its money claims plus legal interest. On
appeal, the CA sustained the CIAC’s award and remanded the case to the latter for the determination of the
number of days’ extension that the Joint Venture is entitled to.

ISSUE(S):
1. W/N the Petition suffers from a fatal defect in its certification against non-forum shopping.
2. W/N the case is premature due to Joint Venture’s non-compliance with the doctrine of exhaustion
of administrative remedies.
3. W/N the CA gravely erred in rendering the assailed decision because it completely ignored,
overlooked, or misappreciated facts of substance, which, if duly considered, would materially affect
the outcome of the case.
RULING:
1. NO, the lack of a certification against forum shopping, unlike that of verification, is not generally
cured by its submission after the filing of the petition. Nevertheless, exceptions exist, as in this
case, and it is more prudent to resolve the case on its merits than to dismiss it on purely technical
grounds.
2. NO, the case is not premature. The pertinent provision on available administrative remedies can be
found in Sub-Clause 67.1 of the Conditions of Contract.
3. NO, as a general rule, findings of fact of CIAC, a quasi-judicial tribunal which has expertise on
matters regarding the construction industry, should be respected and upheld.

RATIO:
1. The verification and certification against non-forum shopping was signed only by petitioner's
counsel, Atty. Mary Jean D. Valderama, from the Office of the Solicitor General. This Court has
long enforced the strict procedural requirement of verification and certification against non-forum
shopping. It is settled that certification against forum shopping must be executed by the party or
principal and not by counsel. It is clear in this case that counsel for petitioner, Atty. Valderama, was
not clothed with authority to sign on petitioner's behalf.
2
REMEDIAL LAW-CIVIL PROCEDURE
However, the Court granted the OSG’s motion to substitute and attach the petition signed by
DPWH Secretary Hermogenes Ebdane.

2. Under the doctrine of exhaustion of administrative remedies, the concerned administrative agency
must be given the opportunity to decide a matter within its jurisdiction before an action is brought
before the courts, otherwise, the action will be declared premature.

In this case, CIAC found and correctly ruled that respondent had duly complied with the contractual
obligation to exhaust administrative remedies provided for under sub-clause 67.1 of the Conditions
of Contract before it brought the case before the tribunal.

3. CIAC was created under Executive Order No. 1008, or the "Construction Industry Arbitration Law
CIAC’s specific purpose is the "early and expeditious settlement of disputes" in the construction
industry as a recognition of the industry's role in "the furtherance of national development goals."

CIAC's authority to arbitrate construction disputes was then incorporated into the general statutory
framework on alternative dispute resolution through Republic Act No. 9285, the "Alternative
Dispute Resolution Act of 2004." Section 34 of Republic Act No. 9285 specifically referred to the
Construction Industry Arbitration Law, while Section 35 confirmed CIAC's jurisdiction.

In National Housing Authority vs First United Constructors Corp. , the Court held that CIAC’s factual
findings, as affirmed by the CA, will not be overturned except as to the most compelling of reasons:

As this finding of fact by the CIAC was affirmed by the Court of Appeals, and it being
apparent that the CIAC arrived at said finding after a thorough consideration of the
evidence presented by both parties, the same may no longer be reviewed by this Court.
The all too familiar rule is that the Court will not, in a petition for review on certiorari,
entertain matters factual in nature, save for the most compelling and cogent reasons, like
when such factual findings were drawn from a vacuum or arbitrarily reached, or are
grounded entirely on speculation or conjectures, are conflicting or are premised on the
supposed evidence and contradicted by the evidence on record or when the inference
made is manifestly mistaken or absurd. This conclusion is made more compelling by the
fact that the CIAC is a quasi-judicial body whose jurisdiction is confined to construction
disputes. Indeed, settled is the rule that findings of fact of administrative agencies and
quasi-judicial bodies, which have acquired expertise because their jurisdiction is conned to
specific matters, are generally accorded not only respect, but finality when affirmed by the
Court of Appeals.

In distinguishing between commercial arbitration, voluntary arbitration under Article 219 (14) of the
Labor Code, and construction arbitration, Fruehauf Electronics Philippines Corporation v. Technology
Electronics Assembly and Management Pacific ruled that commercial arbitral tribunals are purely ad hoc
bodies operating through contractual consent, hence, they are not quasi-judicial agencies. In contrast,
voluntary arbitration under the Labor Code and construction arbitration derive their authority from statute in
recognition of the public interest inherent in their respective spheres. Furthermore, voluntary arbitration
under the Labor Code and construction arbitration exist independently of the will of the contracting parties.