Megaworld Globus Asia, Inc. vs. DSM Construction and Development Corporation

Findings of fact of quasi-judicial bodies like the CIAC, when supported by substantial evidence and affirmed by the Court of Appeals, are binding and final upon the Supreme Court.

Megaworld, as project owner, entered into three construction contracts with DSM Construction for the "The Salcedo Park" condominium project, with an adjusted total contract price of ₱240 Million. The contracts stipulated a 10% retention money to guarantee corrective works during the defect-liability period. Disputes arose over billings and project delays, prompting DSM Construction to seek compulsory arbitration before the CIAC.

• The Contracts: Megaworld and DSM Construction executed three contracts for architectural finishing, interior finishing, and kitchen cabinets/closets for "The Salcedo Park" condominium project. The total contract price was reduced from ₱300 Million to ₱240 Million. The contracts provided for a 10% retention money.
• The Interim Agreement: On February 21, 2000, the parties executed an Interim Agreement setting a new schedule for the turnover of units from the 26th to the 40th floor. The consideration was ₱53 Million, comprising an immediate release of ₱3 Million, installment payments, and half of the retention money.
• The Arbitration: DSM Construction filed a complaint before the CIAC, claiming approximately ₱97.7 Million for unpaid balances, variation works, labor escalation, preliminaries/loss and expense, and retention money. Megaworld countered with a claim of approximately ₱85.8 Million for loss of profits, liquidated damages, rectification costs, and other expenses.
• The Arbitral Award: The CIAC tribunal relied heavily on the evaluations of the project's independent surveyor, Davis Langdon & Seah (DLS). It found a 95.56% accomplishment rate, attributed delays to prior contractors and lack of coordination, and awarded DSM Construction ₱62,760,558.49 and Megaworld ₱9,473,799.46.

• Scope of Review: Petitioner argued that the Court of Appeals erred in ruling that only questions of law may be raised from a CIAC award, thereby disregarding Metro Construction, Inc. v. Chatham Properties, which allows review of questions of fact.
• Evidentiary Support: Petitioner maintained that the appellate court's finding of substantial evidence was fatally flawed because it merely adopted the tribunal's decision without independently reviewing the record or the attachments of DSM Construction.
• Due Process: Petitioner contended that the blanket approval of the tribunal's unfounded claims and conclusions violated its right to administrative due process.
• Grave Abuse of Discretion: Petitioner asserted that the highly partisan tribunal's findings lacked evidentiary basis, warranting the application of exceptions to the rule on the finality of factual findings.

• Level of Accomplishment: Respondent countered that petitioner's 90% accomplishment claim contradicted its own Project Manager, TCGI, whose computations were higher, and that the impartial evaluation of DLS (95.56%) should prevail.
• Delay: Respondent argued that delays were caused by the lack of coordination among trade contractors and the absence of a general contractor, not solely by DSM Construction, as supported by the contract terms and the Interim Agreement.
• Monetary Awards: Respondent maintained that the awards were justified based on actual work done and DLS evaluations, and that petitioner failed to controvert specific amounts such as the ₱7.1 Million balance.
• Variation Works: Respondent asserted that variation works were undeniably performed, and any lack of documentation was the fault of petitioner's project manager.
• Preliminaries: Respondent argued that petitioner waived the two-month filing deadline for preliminaries when DLS evaluated the claims despite late submission.

• Scope of Review: Whether the Court of Appeals erred in ruling that only questions of law may be raised from a CIAC award, contrary to Metro Construction.
• Factual Findings: Whether the findings of fact of the CIAC Arbitral Tribunal, as affirmed by the Court of Appeals, are supported by substantial evidence and thus binding.
• Due Process: Whether the Arbitral Tribunal denied petitioner administrative due process by allegedly giving blanket approval to respondent's claims.

• Scope of Review: The appellate court's initial pronouncement that only questions of law may be raised from a CIAC award was erroneous in light of Metro Construction and Rule 43, which allow factual review. However, the error was harmless because the appellate court actually reviewed the factual findings and found them supported by evidence.
• Factual Findings: The CIAC's factual findings, affirmed by the Court of Appeals, are binding and final. The tribunal's determinations on accomplishment level (95.56% based on DLS), delay (caused by prior contractors and lack of coordination per contract terms), contract balance, retention money, variation works, and preliminaries were all supported by substantial evidence, primarily the evaluations of DLS and the testimony of Engr. Arrojado. Petitioner failed to establish grave abuse of discretion, misapprehension of facts, or lack of evidentiary support.
• Due Process: No denial of due process occurred. The tribunal considered the arguments and evidence from both parties; according greater weight to one party's evidence does not constitute a due process violation.

• Finality of Quasi-Judicial Findings of Fact — Findings of fact of administrative agencies and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect, but finality when affirmed by the Court of Appeals. Exceptions exist where there is grave abuse of discretion, the judgment is premised on misapprehension of facts, or the findings are contradicted by the evidence on record. None of these exceptions were found to apply.
• Substantial Evidence Rule in Quasi-Judicial Proceedings — In administrative or quasi-judicial bodies like the CIAC, a fact may be established if supported by substantial evidence, or that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.

• "Findings of fact of administrative agencies and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect, but finality when affirmed by the Court of Appeals."
• "Grave abuse of discretion means the capricious or whimsical exercise of judgment that is so patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic manner by reason of passion or hostility."

• Metro Construction, Inc. v. Chatham Properties, Inc., G.R. No. 141897, September 24, 2001, 365 SCRA 697 — Followed. Established that CIAC awards may be appealed to the CA on questions of fact, law, or mixed, modifying the strict "questions of law only" rule of E.O. No. 1008.
• Public Estates Authority v. Uy, G.R. Nos. 147933-34, December 12, 2001, 372 SCRA 180 — Followed. Cited for the doctrine that findings of fact of quasi-judicial bodies affirmed by the CA are generally final and binding.
• Ang Tibay v. Court of Industrial Relations, 69 Phil. 63 (1936) — Followed. Cited for the definition of substantial evidence in quasi-judicial proceedings.
• Sinon v. Civil Service Commission, G.R. No. 101251, November 5, 1992, 215 SCRA 410 — Followed. Cited for the definition of grave abuse of discretion.

• Section 19, Executive Order No. 1008 (Construction Industry Arbitration Law) — Provides that the CIAC's arbitral award "shall be final and inappealable except on questions of law which shall be appealable to the Supreme Court." The Court noted this was modified by subsequent issuances, particularly Rule 43 of the Rules of Civil Procedure.
• Section 1, Rule 43 of the 1997 Rules of Civil Procedure — Expanded the scope of review of CIAC awards, expressly including the CIAC among quasi-judicial agencies whose awards are appealable to the Court of Appeals via petition for review.
• Section 5, Rule 133 of the Revised Rules on Evidence — Defines substantial evidence as "that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion." Applied to uphold the CIAC's factual findings.

Quisumbing (Acting Chairman), Austria-Martinez, and Callejo, Sr. (Puno, Chairman, on leave).