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CA junks DOH petition vs payment of P299M to construction firm in Barangay Health Stations project in 2016
CA junks DOH petition vs payment of P299M to construction firm in Barangay Health Stations project in 2016
The Court of Appeals (CA) has dismissed the petition filed by the Department of Health (DOH) which challenged the more than P299 million awarded to JBros Construction Corporation in the P8.1 billion Barangay Health Stations (BHS) project in 2016.
In a decision written by Associate Justice Jaime Fortunato A. Caringal, the CA ruled that the Jan. 3, 2022 final award given by the Construction Industry Arbitration Commission (CIAC) to JBros, which undertook the project in a joint venture with Fujian Zhongma Construction Engineering, Ltd., has attained finality and “may no longer be modified, be it on errors of fact or law.”
In its decision, the CIAC awarded JBros P516.87 million as actual damages; P87.83 million as cost of materials ordered; and P245.61 million as unrealized profit.
The CIAC’s decision, however, ordered the deduction of the P551.23 million advance payment made by the DOH as mobilization fee. Thus, the total award amounted to more than P299.08 million.
The BHS project was awarded to JBros on Jan. 26, 2016 under a tripartite agreement signed by the DOH, the Department of Education (DepEd) and the Department of Interior and Local Government (DILG). BHS would have to be guilt in every barangay using public elementary school sites for the project.
On March 22, 2016, the DOH issued to JBros a notice to proceed for Phase II project.
Under the agreement, the DOH had until March 30, 2016 to deliver the possession of all 2,500 sites to JBros but it failed to do so.
JBros complained that it encountered several issues in the turnover of the sites for the project. It said there was lack of proper coordination between the DOH and DepEd to possess the 2,500 sites for the project.
Thus, the construction firm said that because of the failure of the DOH to deliver all the sites within the agreed period under the contract, they were constrained to request for a suspension of the Phase II Project and an extension of time to complete the same.
JBros sent a notice of termination of the project on Jan. 25, 2019 after the suspension of the construction activities for almost three years.
It sought the payment of the value of its completed units minus the mobilization fee that it had received. It then filed a complaint before the CIAC which ruled in its favor. DOH elevated the issue before the CA.
In its decision, the CA said:
“While the losing party (DOH) now has two options against an unfavorable CIAC award, and under the second option, has 60 days within which to file a petition for certiorari, the old rule that the award becomes executory after 15 days has been retained, subject to the losing party’s right to either secure a TRO/preliminary injunction from the Supreme Court or the Court of Appeals under Sec. 18.3, or to post a supersedeas bond to stay enforcement of the award.
“In this case, the respondents (JBros) received a copy of the Final Award on Jan. 4, 2022 while the petitioner (DOH) admitted to having received the same on Jan. 5, 2022 in its petition. Pursuant to the Section 18.1 of the CIAC Rules, a final arbitral award shall become executory upon the lapse of fifteen (15) days from receipt thereof by the parties and in case recourse is taken against the same either before the CA or the SC in appropriate cases and a TRO or a writ of preliminary injunction has been issued, the award will only be executory either upon entry of final judgment or upon the lapse or lifting of the TRO or the dissolution of the preliminary injunction.
“Thus, inasmuch as there was neither a timely appeal filed nor an injunctive relief granted by the Court or bond posted by the petitioner to stay the execution of the Final Award, and considering that the petitioner received the said award on Jan. 5, 2022, the same became final and executory on Jan. 21, 2022 or after the lapse of fifteen (15) days from its receipt.
“The records also show that as early as March 4, 2022, the CIAC Arbitral Tribunal had already declared that the Final Award had become final and executory in its Order granting the respondents’ motion for execution.
“The doctrine of immutability of judgments bars courts from modifying decisions that have already attained finality, even if the purpose of the modification is to correct errors of fact or law.”