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BELTRAN, Francheska P. GAMO, Anatoly M. OLALO, Leonardo T. PABLO, Paul Ian N. WONG, Otto Hongsan T.


Spouses Roberto and Evelyn David and Coordinated Group, Inc.

Spouses Narciso and Aida Quiambao

• Respondents spouses NARCISO and AIDA QUIAMBAO engaged the services of petitioner CGI to design and construct a five-storey concrete office/residential building on their land in Tondo. Manila .SUMMARY • Petitioner COORDINATED GROUP. INC. with petitioner: spouses ROBERTO and EVELYN DAVID as its President and Treasurer. (CGI) is a corporation engaged in the construction business. respectively.

materials and equipment.821.51 for the construction of the building. including the costs of labor.000.• Design/Build Contract: a) CGI shall prepare the working drawings for the construction project b) Respondents shall pay petitioner CGI the sum of P7.00 for the cost of the design c) Construction of the building shall be completed within 9 months after securing the building permit .309. and P200.

1998 – upon agreement of the parties • Petitioners . 1998 – paying 74.84% of the cost of construction . failed to follow the specifications and plans • Respondents demanded the correction of the errors but petitioners failed to act on their complaint – rescinded the contract on October 31.• Completion of construction: on or before July 16. 1998 – extended to November 15.CGI.

• RRA and Associates – inspect the project and assess the actual accomplishment of petitioners in the construction of the building – found that petitioners revised and deviated from the structural plan of the building without notice to or approval by the respondents • Respondents filed a case for breach of contract against petitioners before the Regional Trial Court (RTC) of Manila .

• Pre-trial Conference – parties agreed to submit the case for arbitration to the CONSTRUCTION INDUSTRY ARBITRATION COMMISSION (CIAC) • After conducting hearings and two (2) ocular inspections of the construction site. the arbitrator rendered judgment against Petitioners .

418.68 P 100.89 .500 Professional fees for engineers P 118.884.• Awards (in favor of the Quiambaos) Lost Rentals Cost to Complete.247. etc P 72.000 Professional fees for geodetic surveys.642.71 P 117.50 Bills for water and electricity. PLDT Attorneys fees Moral Damages Exemplary Damages TOTAL P 15.000 P 2. Rectification.000 P 250.000 P 250.028. etc Damages due to erroneous staking P 1.680.281.000 P 4.

847.857.• Awards (in favor of CGI) – Credited with 80% accomplishment having a total of P 5.20 – Value of the materials and equipment left at the site for P 238.372.75 .

94 with interest at 6% per annum from the date of the promulgation of this award Payments already made to CGI Amount awarded TOTAL P 5.418.89 P 10.159.857.Summary of Awards •CGI – ordered to pay P 4.086.884.75 P 6.89 80% accomplishment Costs of materials and equipment TOTAL P 5.299.20 P 238.275.041 P 4.847.459.95 .229.372.073.

inc. to allow respondents to unilaterally rescind the design/built contract.). In clear violation of the doctrine of separate juridical personality. . after petitioners have (sic) substantially performed their obligation under the said contract. • The honorable court of appeals erred in finding petitioners jointly and severally liable with co-petitioner coordinated (group.STATEMENT OF THE PROBLEM • There was no basis. in fact and in law.

STATEMENT OF THE FACTS • Deviations from plan: a) 2 concrete columns in the middle of the basement • obstructed the basement for the parking of vehicles b) 3 additional concrete columns were constructed from the ground floor to the roof deck • affected the overall dimension of the building .

• Building was constructed 1 m beyond the property line • Construction of cistern – Capacity was less than the design capacity (10 000 gallons) – No internal partition separating the cistern from the sump pit .

ugly discrepancies and gaps skewed walls to floors/landings low head clearances and truncated beams narrow and disproportionate stairs .• Defects (accdg to Mrs. Quiambao)  Building was not vertically plumbed  provisions for many architectural members were not provided for such as: • • • • • • • recesses for window plant boxes are lacking provisions for precast molding are lacking canopies are also lacking misaligned walls.

• • • 1 instead of 2 windows at the fire exit absence of water-proofing along the basement wall and at roof deck use of smaller diagonal steel trusses at the penthouse • Site inspection • • L-shaped kitchen counters instead of the required U-shaped counters failure to provide marble tops for the kitchen counters .

• installation of single-tub sinks where the plans called for double-type stainless kitchen sinks • installation of much smaller windows than those required • misaligned window easements to wall • floors were damaged by roof leaks .

mezzanine and 2nd floor – Subjected to concrete core test – 5 out of 9 samples failed the test • Deformed reinforcing steel bars – Subject to physical test : 8 out of 18 samples failed – Cold bend test : all passed .• Concrete samples – Basement. ground floor.

• Defense and comment of CGI: – These were punch list items which could have been corrected prior to completion and turnover of the Building had the Contract not been terminated by the Claimants. – CGI were already pin pointing these defects for punch listing before they were terminated illegally – They are willing to undertake the appropriate corrective works .

– The layout was based on the existing fence . Roberto David admitted that these represented a design change and implemented by CGI without the conformity of the owners – Reason: reduction of cost • CGI admitted that no relocation survey was made.• Regarding the additional columns at the basement – Engr.

.• Question of Fact – It is contended that petitioner-spouses David cannot be held jointly and severally liable with petitioner CGI in the payment of the arbitral award as they are merely its corporate officers.

except:  The award was procured by corruption. fraud or other undue means  There was an evident partiality or corruption of the arbitrators or any of them  The arbitrators were guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown or in refusing to hear evidence pertinent and material to the controversy .• Findings of CIAC are final and conclusive.

• The petition is dismissed for lack of merit. • Costs against petitioners . The rights of any party have been materially prejudiced  The arbitrators exceeded their powers or imperfectly executed them • CGI failed to show any of these exceptions.

favoring the Quiambaos. – Breaching of contract • • • • 2 concrete in the middle of the basement 3 addt’l column from the ground to roof deck 5 of 9 core samples failed 8 of 18 steel samples failed on physical test – Punchlist . made by the Court of Appeals was right.ANALYSIS • The decision.

ANALYSIS – No relocation survey – Cistern issues • Actual capacity was less than the designed capacity • No internal partition separating cistern from sump pit .

RECOMMENDATIONS • Communication • Regular inspection of the Owner to the construction • Always document changes of the project .