CIAC CASE NO.

17-95

CIAC Case No. 17-95 is a case that involves a project in Negros Occidental. It
raises many critical issues that are related to project completion, imposition of liquidated
damages, subcontracting, payment disputes. Careful analysis of facts, findings, and
reasons were done. Reasonable determination is evidently made by the Construction
Industry Arbitration Commission (CIAC).
One of the issues presented are the Liquidated Damages and Time Extensions.
The Tribunal found that the contractor incurred unjustified delays of the project
completion despite the time extensions that were granted by the owner which are
supported by record. The contractor failed to meet the deadlines upon careful
examination of the various extension requests. The Tribunal decided to impose
reasonable liquidated damages in correspondent to a certain period of the project.
The contractor is entitled to the payment of billings and the release of retention
which is decided on by the CIAC upon grounds of contractual provisions. In order to
release the retention money, it is a prerequisite to accept the works from the owner.
This means the completion of the items within the punchlist prepared by the contractor’s
subcontractor, as acknowledged by the owner, is constituted as the “final acceptance of
the work” before releasing the retention money. CIAC made sure that the computation
of the calculated balance of the contract price and the release of retention money is fair
and is hereby aligned with the contractual obligations to both parties.
CIAC denied the claims for additive and deductive work for both parties. This is
reasonable for the fact that neither valuation provided enough and/or sufficient basis for
verification in order to approve of it. Both parties – the contractor and the owner – failed
to adhere to the contract’s procedure for additional and deductive work, and so, the
appeal to award the 12% consultation fee to the owner is not accredited and justified for
failing to substantiate the claim with enough sources.
It is practical approach for CIAC not to pass a serious judgement on the
subcontracting issue. This is given of the fact that works done by the subcontractor
were completed and the owner did not necessarily object to it. What makes the issue
academic is the absence of a clear contractual provision on subcontracting and the
owner’s acceptance of the subcontracted works.
It was reasonable for CIAC to declare that the owner taking over the project and
withholding payments due to the contractor is justified. It supports the owner’s actions
due to the contractor’s inability to complete the project within the extended completion
date with proper notification by the owner and subsequent subcontracting by the
contractor. The owner’s withholding of payments is justified, and the contractor is not
entitled to interest on the withheld amount.