SC issues rules for appeals in construction disputes


THE Supreme Court (SC) has issued new guidelines that limit the grounds that parties may appeal the findings and resolutions of construction disputes issued by the Construction Industry Arbitration Commission (CIAC) in an apparent bid to hasten the implementation of the latter’s awards.

The SC said the new guidelines with respect to the modes of judicial review of the CIAC should be applied prospectively and does not cover cases that are pending with the CA.

Under the new guidelines, if the issue raised in the appeal is a pure question of law, the petition should be filed directly and exclusively with the SC.

On the other hand, in cases where the petition takes issue on the integrity of the arbitral tribunal and its decision, such as allegations of corruption, fraud, misconduct, evident partiality, incapacity or excess of powers within the tribunal, or the unconstitutionality or invalidity of its actions in the arbitral process, the parties are directed to appeal the CIAC award before the CA under Rule 65, on grounds of grave abuse of discretion amounting to lack or excess in jurisdiction, where a factual review may be conducted by the CA.

“Under no other circumstances other than the limited grounds provided above may parties appeal to the CA a CIAC arbitral award,” the SC said.

The guidelines were issued by the Court in a 63-page decision penned by Associate Justice Benjamin S. Caguioa in the case of Ross Systems International Inc., (RSII) and Global Medical Center of Laguna Inc. (GMCLI), both assailing the decision dated October 28, 2016, of the CA’s Sixth Division which affirmed with modification the arbitral award dated May 10, 2016 of the CIAC.

The CIAC ruled that GMCLI has no authority to withhold and remit the two percent creditable withholding tax (CWT) on the cumulative amount of 15 progress billings of RSII; RSII was not entitled to the release of the amount of P4,884,778.92, equivalent to the two percent CWT withheld because at the time the same was remitted to the Bureau of Internal Revenue (BIR), RSII had not yet paid income taxes on the payments from progress billings nos. 1 to 15; and RSII was still entitled to the amount of P1,088,214.33, representing the balance due after deducting from P8,131,474.83 the two percent CWT on progress billings in the amount of P3,941,769.00 and the payment already made to RS II in the amount of P3,101,491.00.

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