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Updated 22nd March 2025
Department of Environment and Natural Resources (DENR) vs. United Planners Consultants, Inc
DENR appealed the Court of Appeals’ (CA) dismissal of its petition to annul an arbitral award favoring UPCI for unpaid consultancy services. The Supreme Court affirmed the CA, ruling that DENR’s procedural lapses (including missing filing deadlines and filing prohibited motions) barred its claims, and emphasized that the Commission on Audit (COA) retains jurisdiction over monetary claims against government agencies.

Primary Holding

The CA correctly dismissed DENR’s petition for certiorari as it was filed out of time under the Special ADR Rules, and the confirmed arbitral award’s execution remains subject to COA’s approval.

Background

DENR entered a consultancy agreement with UPCI in 1993 but paid only 47% of the contract price. After UPCI sued for non-payment, the case was referred to arbitration, resulting in a monetary award. DENR challenged the award’s confirmation and execution but failed to follow procedural rules.

History

  • 1993: Consultancy Agreement signed.

  • 1994: COA flagged the contract price as excessive; UPCI completed work.

  • 2007: UPCI sued DENR for non-payment.

  • 2010: Arbitral Tribunal ruled for UPCI.

  • 2011: RTC confirmed the award.

  • 2012: DENR’s motion to quash execution denied; petitioned CA.

  • 2014: CA dismissed the petition.

  • 2015: Supreme Court affirmed CA.

Facts

  • 1. DENR refused full payment despite UPCI’s completed work. The Arbitral Tribunal awarded UPCI ₱2.28M in unpaid fees, interest, damages, and costs. DENR filed prohibited motions (e.g., reconsideration) and missed deadlines to challenge the award.

Arguments of the Petitioners

  • 1. DENR claimed denial of due process (untimely receipt of the award, unresolved motions).
  • 2. Asserted the arbitral award was excessive and prematurely executed.

Arguments of the Respondents

  • 1. UPCI argued DENR waived objections by failing to timely challenge the award.
  • 2. Stressed the award’s finality under CIAC and Special ADR Rules.

Issues

  • 1. Did the CA err in applying the Special ADR Rules to dismiss DENR’s petition?
  • 2. Was DENR’s certiorari petition procedurally defective?
  • 3. Must COA approve execution against a government agency?

Ruling

  • 1. Procedural Defects: DENR’s petition was filed 60 days late (15-day limit under Rule 19.28). Motions for reconsideration are prohibited under CIAC Rules.
  • 2. Due Process: DENR had ample opportunity to participate but failed to comply with deadlines.
  • 3. COA Jurisdiction: Execution against government funds requires COA approval under PD 1445.

Doctrines

  • 1. Party Autonomy in Arbitration: Parties’ agreement to adopt CIAC Rules governs proceedings.
  • 2. Finality of Arbitral Awards: No appeal on merits; only corrections allowed.
  • 3. Doctrine of Necessary Implication: Execution is integral to confirmation under ADR Rules.
  • 4. COA’s Primary Jurisdiction: All government monetary claims require COA settlement.

Precedents Cited

  • 1. Atienza v. Villarosa (2005): Supported interpreting statutes to include implied powers (e.g., execution after confirmation).
  • 2. University of the Philippines v. Dizon (2012): Affirmed COA’s authority over government monetary claims.

Statutory and Constitutional Provisions

  • 1. RA 9285 (Alternative Dispute Resolution Act): Confirmation and execution of arbitral awards.
  • 2. PD 1445 (Government Auditing Code): COA’s primary jurisdiction over government liabilities.
  • 3. CIAC Rules, Sec. 17.2: Prohibition on motions for reconsideration.
  • 4. Special ADR Rules, Rule 19.28: 15-day deadline for certiorari petitions.