Shinryo (Philippines) Company, Inc. vs. RRN Incorporated

Factual findings of construction arbitrators are final and conclusive and not reviewable by the Supreme Court on appeal, and an action for unjust enrichment (accion in rem verso) does not lie where the claim arises from a contractual relationship, as it is merely an auxiliary action available only in the absence of any other remedy based on contract, quasi-contract, crime, or quasi-delict.

Petitioner Shinryo (Philippines) Company, Inc. and respondent RRN Incorporated entered into a subcontract agreement for the Phillip Morris Greenfield Project. Respondent failed to complete the works due to financial difficulties. Disputes arose over unpaid accounts, variation costs, equipment rentals, and material back charges, prompting respondent to seek arbitration before the CIAC.

• Subcontract Agreement: On June 11 and 14, 1996, the parties executed an Agreement and Conditions of Sub-contract. On June 11, 2002, they executed a "Supply of Manpower, Tools/Equipment, Consumables for the Electrical Works-Power and Equipment Supply, Bus Duct Installation" for the Phillip Morris Greenfield Project, covered by Purchase Orders totaling ₱25,000,000.00.
• Performance and Dispute: Respondent agreed to perform variation orders in the project, and petitioner supplied manpower chargeable to respondent. Respondent failed to finish the entire works due to financial difficulties. Petitioner paid respondent a total of ₱26,547,624.76. On June 25, 2003, respondent demanded payment of an unpaid balance amounting to ₱5,275,184.17. Petitioner claimed material back charges of ₱4,063,633.43, but respondent acknowledged only ₱2,371,895.33. Amicable settlement negotiations failed.
• Arbitration: Respondent submitted the dispute to the CIAC. During the preliminary conference, the parties agreed on a Terms of Reference framing eight issues for resolution, covering variation costs, equipment rental fees, cost of materials chargeable to respondent, value of remaining works left undone, validity of the claim for inventory of excess materials, overpayment, interest, and arbitration costs.
• CIAC Decision: The CIAC ruled in favor of respondent, ordering petitioner to pay ₱3,728,960.54 plus legal interest and arbitration costs. Petitioner accepted the ruling only on Issue No. 1, Sub-Issue No. 1.1, and partially on Issue No. 2 regarding the ₱440,000.00 awarded as back charges for the use of scaffoldings.

• Manlift Equipment Rental: The CA erred in denying the claim for ₱511,000.00 for manlift equipment rental; respondent actually used and benefited from the equipment, and should pay based on unjust enrichment even absent a specific agreement.
• Inventoried Materials: The CA erred in affirming the CIAC award for inventoried materials because respondent admitted the validity of deductions on account of material supply, failed to prove the materials originated from respondent, and the claim constitutes a double entry since respondent was already credited the full contract price and variation costs.
• Actual Cost of Completion: The CA erred in disregarding the subcontract provision allowing payment of actual costs incurred by petitioner for completing the remaining works, and in disregarding the evidence of actual costs.
• Interests and Costs: The CA erred in affirming the CIAC award for interests and arbitration costs.
• Question of Substance: The CA decided a question of substance not in accord with law or applicable Supreme Court decisions.

• Conclusiveness of Factual Findings: Respondent countered that the issues raised by petitioner regarding equipment rentals, inventories, and costs were purely factual and already settled by the CIAC, whose findings are conclusive and not reviewable by the Supreme Court.
• Contractual Basis for Equipment Use: Respondent maintained that its use of the manlift was with legal ground based on the provisions of their contract, negating an element of unjust enrichment.

• Review of Arbitral Findings: Whether the Supreme Court can review the factual findings of the Construction Industry Arbitration Commission regarding equipment rentals, inventoried materials, and actual costs of completion.
• Unjust Enrichment: Whether respondent is liable for the manlift equipment rental under the principle of unjust enrichment despite the absence of a specific agreement to charge for its use.

• Review of Arbitral Findings: Factual findings of construction arbitrators are final and conclusive and not reviewable by the Supreme Court on appeal, absent any recognized exception. Because none of the exceptions—such as corruption, fraud, partiality, or grave abuse of discretion resulting in loss of jurisdiction—were present, the issues regarding equipment rentals, inventories, and costs, being purely factual, cannot be reviewed under Rule 45. Recalibrating evidence before the Supreme Court would negate the objective of Executive Order No. 1008 to ensure the prompt and efficient settlement of construction disputes.
• Unjust Enrichment: Unjust enrichment does not lie simply because one party benefited from the efforts of another; it must be shown that the enrichment was without just or legal ground and that no other action based on contract, quasi-contract, crime, or quasi-delict exists. The third element was absent because the CIAC and CA found no proof that respondent's free use of the manlift was without legal ground under their contract. Furthermore, the fourth element was absent because petitioner's claim was based on contract, rendering the auxiliary action of accion in rem verso unavailable where another remedy exists.

• Finality of CIAC Factual Findings — Factual findings of quasi-judicial bodies with specific expertise are generally accorded respect and finality, especially when affirmed by the Court of Appeals. Factual findings of construction arbitrators are final and conclusive and not reviewable by the Supreme Court on appeal. Exceptions include: (1) award procured by corruption, fraud, or undue means; (2) evident partiality or corruption of arbitrators; (3) arbitrators guilty of misconduct in refusing to hear evidence; (4) arbitrators disqualified under Section 9 of Republic Act No. 876; (5) arbitrators exceeded their powers; (6) grave abuse of discretion resulting in lack or loss of jurisdiction; (7) Court of Appeals findings contrary to CIAC; and (8) deprivation of administrative due process.
• Accion in Rem Verso (Unjust Enrichment) — An auxiliary action available only when there is no other remedy based on contract, quasi-contract, crime, or quasi-delict. The elements are: (1) defendant enriched; (2) plaintiff suffered loss; (3) enrichment without just or legal ground; (4) plaintiff has no other action based on contract, quasi-contract, crime, or quasi-delict. If an obtainable action exists under any other institution of positive law, that action must be resorted to, and accion in rem verso will not lie.

• "It is settled that findings of fact of quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect, but also finality, especially when affirmed by the Court of Appeals. In particular, factual findings of construction arbitrators are final and conclusive and not reviewable by this Court on appeal."
• "An accion in rem verso is considered merely an auxiliary action, available only when there is no other remedy on contract, quasi-contract, crime, and quasi-delict. If there is an obtainable action under any other institution of positive law, that action must be resorted to, and the principle of accion in rem verso will not lie."
• "The Court will not review the factual findings of an arbitral tribunal upon the artful allegation that such body had 'misapprehended facts' and will not pass upon issues which are, at bottom, issues of fact, no matter how cleverly disguised they might be as 'legal questions.'"

• IBEX International, Inc. v. Government Service Insurance System — Cited for the general rule that factual findings of quasi-judicial bodies, particularly construction arbitrators, are accorded respect and finality.
• Uniwide Sales Realty and Resources Corporation v. Titan-Ikeda Construction and Development Corporation — Followed for the exceptions to the finality of arbitral factual findings and the rule against relitigating factual issues before the Supreme Court.
• David v. Construction Industry and Arbitration Commission — Cited for the five specific exceptions allowing the review of factual findings of construction arbitrators.
• University of the Philippines v. Philab Industries, Inc. — Applied for the elements and nature of unjust enrichment (accion in rem verso), establishing that it is an auxiliary action unavailable when a contractual remedy exists.
• Hanjin Heavy Industries and Construction Co., Ltd. v. Dynamic Planners and Construction Corp. — Followed for the principle that mathematical computations, propriety of arbitral awards, and claims for costs are factual questions, and for jurisprudence on interest and arbitration costs.
• Diesel Construction v. UPSI Property Holdings, Inc. — Cited for the rule that the Supreme Court is not a trier of facts.

• Article 22, Civil Code — Provides that a person who acquires possession of something at the expense of another without just or legal ground must return it. Applied to reject the unjust enrichment claim because the enrichment was not without legal ground (being governed by contract) and another action on contract was available.
• Executive Order No. 1008 — Created the CIAC to ensure the prompt and efficient settlement of disputes in the construction industry. Recalibrating evidence before the Supreme Court was held to negate this objective.
• Rule 45, Rules of Court — Governs petitions for review on certiorari, which are limited to questions of law.
• Section 9, Republic Act No. 876 — Referenced in the exceptions to the finality of arbitral awards regarding arbitrator disqualification.

Antonio T. Carpio, Presbitero J. Velasco, Jr., Teresita J. Leonardo-De Castro, Jose Catral Mendoza