National Irrigation Administration v. Honorable Court of Appeals
REITERATIONFacts
The Antecedents: Hydro Resources Contractors Corporation (HYDRO) was awarded a contract by the National Irrigation Administration (NIA) for the construction of the Magat River Multi-Purpose Project. The contract was partly payable in Philippine pesos and partly in U.S. dollars. HYDRO substantially completed the project in 1982 and received final acceptance in 1984. HYDRO subsequently claimed an account receivable from NIA representing the dollar rate differential for price escalation. Procedural History: After exhausting administrative remedies with NIA, HYDRO filed a Request for Adjudication with the Construction Industry Arbitration Commission (CIAC) on December 7, 1994. NIA questioned CIAC's jurisdiction, alleging lack of cause of action, laches, and estoppel due to HYDRO's alleged failure to submit the dispute to arbitration within the prescribed period. NIA also filed a counterclaim for damages. The CIAC deferred the resolution of the motion to dismiss and proceeded with the hearing on the merits. NIA's motion for reconsideration was denied. NIA then filed a petition for certiorari and prohibition with the Court of Appeals, assailing the CIAC's orders for lack of jurisdiction. The Court of Appeals dismissed NIA's petition, finding no grave abuse of discretion. NIA's motion for reconsideration was also denied. The Petition: NIA filed a special civil action for certiorari with the Supreme Court, seeking to annul the resolutions of the Court of Appeals. NIA reiterated its arguments regarding CIAC's lack of jurisdiction, contending that Executive Order No. 1008 (EO 1008) had no retroactive effect and that the dispute should have been settled under laws in effect at the time of the contract's execution and termination.
Issue(s)
Whether the Supreme Court has jurisdiction over the petition for certiorari. Whether the Court of Appeals committed grave abuse of discretion in dismissing NIA's petition for certiorari and prohibition. Whether the Construction Industry Arbitration Commission (CIAC) has jurisdiction over the dispute between NIA and HYDRO. Whether the defenses of laches and prescription could be resolved in a motion to dismiss.
Ruling
The petition is dismissed. The Court of Appeals is directed to proceed with reasonable dispatch in the disposition of C.A. G.R. No. 44527 and include in the resolution thereof the issue of laches and prescription.
Ratio Decidendi
On the procedural defect: The Supreme Court held that the petition for certiorari under Rule 65 was procedurally defective because NIA failed to file a timely petition for review under Rule 45. The questioned resolutions of the Court of Appeals had become final and executory by reason of NIA's failure to appeal. The Court emphasized that certiorari under Rule 65 is an independent action and cannot be a substitute for a lost appeal, especially when the loss was occasioned by the petitioner's own neglect or error in the choice of remedies. The remedy of appeal was available, plain, speedy, and adequate, and its failure to be availed of barred recourse to certiorari. On the jurisdiction of CIAC: The Supreme Court affirmed that the CIAC has jurisdiction over the controversy. Executive Order No. 1008 vests CIAC with original and exclusive jurisdiction over disputes arising from or connected with construction contracts in the Philippines, whether the dispute arises before or after the completion of the contract. The complaint was filed on December 7, 1994, during the effectivity of EO 1008, thus falling within CIAC's jurisdiction. The Court clarified that jurisdiction is determined by the law in force at the time of the commencement of the action, and EO 1008's application to a contract executed before its enactment does not constitute retroactive application, as the jurisdiction pertains to the dispute itself, which arose after CIAC's constitution. On the arbitration clause and CIAC Rules: The Court found NIA's reliance on the Tesco Services, Inc. v. Vera case misplaced. The 1988 CIAC Rules of Procedure, applied in Tesco, had been amended. Under the current rules, an arbitration clause in a construction contract is deemed an agreement to submit to CIAC jurisdiction, even if a different arbitration institution is named. The law now requires only an agreement to submit to voluntary arbitration for CIAC to acquire jurisdiction, not necessarily an agreement to submit specifically to CIAC. Furthermore, NIA actively participated in the arbitration proceedings, thereby submitting itself to CIAC's jurisdiction. On laches and prescription: The Court ruled that laches and prescription are evidentiary in nature and cannot be established by mere allegations in the pleadings. These issues must be resolved at the trial on the merits, where both parties have ample opportunity to prove their claims and defenses. The deferment of the resolution of these issues by the arbitral body was therefore in order, as the complaint did not, on its face, clearly show that the action had already prescribed.
Main Doctrine
A special civil action for certiorari under Rule 65 is not a substitute for a lost appeal under Rule 45. Failure to file a timely appeal renders the decision final and executory, precluding recourse to certiorari, absent exceptional circumstances.