PAULO JOSE S.

VILLARIN
CASE DIGEST FOR ALTERNATIVE DISPUTE RESOLUTION
UNDER ATTY. IRENE LAVARES

UNIWIDE SALES REALTY AND RESOURCE CORPORATION

vs.
TITAN-IKEDA CONSTRUCTION AND DEVELOPMENT CORPORATION
G.R. 126619 December 20, 2006

FACTS:

Titan-Ikeda filed and action for sum of money against Uniwide on the ground of the
latter’s non-payment of certain claims billed by Titan-ikeda for the 3 completed projects.
Thereafter, Uniwide filed a motion to dismiss/suspend proceedings and that Titan-
Ikeda’s complaint must be refiled with the Construction Industry Arbitration
Commission(CIAC). The CIAC found that in the first project between Uniwide and Titan-
Ikeda the Warehouse Club and Administration Bldg. was finished less than 2 months
before the agreed date of completion and was then turned over to Uniwide. Further,
the parties entered into the second project whereby Titan –Ikeda agreed to construct
additional floor and to renovate Uniwide’s warehouse. However, it was not made in
writing. The project was then completed. Thereafter, the parties entered with the 3 rd
project for the construction of a building in Caloocan City. It was completed and was
turned over.

After the parties submitted their respective memoranda, the Arbitral Tribunal rendered
its decision. With respect to the 1st and second project, Uniwide was absolved of any
liability against Titan, for VAT payment and on counterclaim for defective construction
but liable for the unpaid balance. Regarding the 3 rd project, was still liable for the unpaid
balance and for the payment of VAT.

Uniwide alleged that the ruling of the CA on the issue of liquidated damages goes
against the established judicial policy that a court should always strive to settle in one
proceeding for one controversy, leaving no root or branch to bear the seeds of future
litigations. Uniwide claims that the required evidence for an affirmative ruling on its
claim is already on the record. It cites the pertinent provisions of the written contracts
which contained deadlines for liquidated damages. Uniwide asserts that the CIAC should
have applied procedural rules with more liberality because it was an administrative
tribunal free from the rigid technicalities of regular courts.

The CIAC and the CA denied the motion for reconsideration of Uniwide.

ISSUE:

Are the rules of court applicable with the CIAC?

HELD:

NO.

Arbitration has been defined as “an arrangement for taking and abiding by the
judgement of selected persons in some disputed matter, instead of carrying it to
established tribunals of justice, and is intended to avoid the formalities, the delay, the
expense and vexation of ordinary litigation.

The basic objective is to provide a speedy and inexpensive method of settling disputes
by allowing the parties to avoid, delay, expense and aggravation. As an arbitration body,
the CIAC can only resolve issues brought before it by the parties through the TOR which
functions similarly as a pre-trial brief.

Thus, if Uniwide’s claim for liquidated damages was not raised as an issue in the TOR or
in any modified or amended version of it, the CIAC cannot make a ruling on it. The rules
of court cannot be used to contravene the spirit of the CIAC rules, whose policy and
objective is to provide a fair and expeditious settlement of construction disputes
through a non-judicial process which ensures harmonious and friendly relations
between or among parties.