Wyeth Philippines, Inc. vs. Construction Industry Arbitration Commission

Factual findings of a CIAC Arbitral Tribunal are final and conclusive and may not be reviewed on appeal absent exceptional grounds affecting the integrity of the arbitral tribunal itself; a party that appeals the award cannot move for execution pending appeal.

Wyeth Philippines, Inc. was the project owner of the “Dryer 3 and Wet Process Superstructure Works” at Canlubang Industrial Estate, Bo. Pittland, Cabuyao, Laguna; SKI Construction Group, Inc. was the contractor, and Mapfre Insular Insurance Corporation issued surety bonds in Wyeth’s favor. The contract contained an arbitration clause referring disputes to arbitration under the Construction Industry Arbitration Law, and the CIAC exercises original and exclusive jurisdiction over construction disputes by reason of its technical expertise.

In 2007, Wyeth invited bidders to submit proposals for the project through its consultant, Jacobs Engineering Singapore Pte. Ltd. SKI submitted its qualified proposal to undertake the project for P242,800,000.00. On June 29, 2007, SKI was awarded the bid provided it executed the superstructure works in accordance with a Notice to Proceed issued by Wyeth. The Notice to Proceed, conformed to by SKI President and CEO Albert Altura, provided for completion of the project on February 23, 2008 and possession of the site on June 29, 2007; it also designated Jacob Constructors Singapore Pte. Ltd. as Project Manager. After signing the Notice to Proceed, SKI was given an advance payment of P72,840,000.00. As required under the Contract, SKI caused Mapfre to issue the Payments Bond No. MAIC/G(25) 9995 in the amount of P48,560,000.00, the Advance Payment Bond No. MAIC/G(25) 9994 in the amount of P72,840,000.00, and the Performance Bond No. MAIC/G(13)4104 in the amount of P48,560,000.00.

On January 25, 2008, the Project Manager directed the cessation of all construction activities starting January 26, 2008 until further notice to give SKI ample time to address internal issues regarding its workforce. In a letter dated February 6, 2008, Wyeth notified Mapfre that it might need to call upon the bonds. On February 8, 2008, Wyeth, through its managing director, informed SKI of the termination of the contract. On February 11, 2008, SKI replied that the termination was done without giving it 14 days to address the problems under Clause 8 of the Conditions of the Contract; SKI claimed it essentially had only three days to complete the project from January 23, 2008, when it was informed of its default, until the Project Manager suspended all construction activities on January 26, 2008, even if it supposedly had until February 6, 2008 to complete the project. On February 19, 2008, Wyeth wrote Mapfre calling on the performance of the bonds. On February 29, 2008, Wyeth wrote another letter to Mapfre requesting confirmation that it would not be barred from claiming on the bonds pending settlement with SKI. On March 4, 2008, Mapfre confirmed that Wyeth would not be barred from pursuing its claims against the bonds, but stated that it would only act on the bonds after SKI’s liability had been clearly established. In a letter dated January 14, 2009, Mapfre refused to pay the amount under the Payments Bond. On February 10, 2009, Wyeth demanded payment of P47,371,855.91 representing the unrecouped amount from the advance payment of P72,840,000.00 given to SKI.

When the parties failed to arrive at an amicable settlement after various meetings, they agreed to refer the dispute to arbitration pursuant to Article 10 of their contract. Wyeth filed a Complaint before the RTC of Makati to recover the amount under the Payments Bond, but the parties eventually agreed to resolve the dispute through arbitration before the CIAC. On June 2, 2009, SKI filed a Complaint against Wyeth before the CIAC for the adjudication of its claims. On June 29, 2009, Wyeth filed an Answer with Compulsory Counterclaims, and on July 21, 2009, SKI filed a Reply to Counterclaim. In its Order dated July 23, 2009, the CIAC apprised the parties of the composition of the Arbitral Tribunal and the setting of the preliminary conference on August 6, 2010. During the preliminary conference, Wyeth filed an Omnibus Motion to implead Mapfre pursuant to the bonds it issued in favor of Wyeth. On October 19, 2009, Mapfre filed an Answer claiming that Wyeth was not entitled to recover anything; it claimed to have acted in good faith in rejecting Wyeth’s claim because the same had been extinguished by judicial compensation, but should it be held liable to Wyeth, Mapfre prayed to be indemnified by SKI. On November 6, 2009, Wyeth filed its Reply. On November 11, 2009, the CIAC denied Wyeth’s motion seeking to recall the appointment of two members of the tribunal. On November 17, 2009, SKI, Wyeth, and Mapfre signed the Terms of Reference. In its Order dated December 22, 2009, the Arbitral Tribunal granted Wyeth’s Motion for Reconsideration by recalling the appointment of Jose F. Mabanta from the tribunal and directing the two members to choose a replacement from the list of accredited arbitrators who is not a nominee of any of the parties. On February 1, 2010, the Arbitral Tribunal denied Wyeth’s prayer to declare all proceedings, including the conduct of preliminary conference, preparation, and signing of Terms of Reference, as vacated. On April 14, 2010, Wyeth filed a Manifestation and Motion on the Appointment of Felisberto G.L. Reyes, claiming that he was an original nominee of SKI. On April 19, 2010, Reyes resigned as member of the tribunal. On April 27, 2010, the CIAC appointed Salvador P. Castro, Jr. to replace Reyes.

After the conduct of hearings, submission of the parties’ memoranda and offers of exhibits, the Arbitral Tribunal issued its December 23, 2010 Award, finding that Wyeth validly terminated the contract because SKI incurred delay in the construction of the project. SKI was held liable for the payment of additional costs incurred by reason of the delay in the performance of its obligation, but the Arbitral Tribunal awarded SKI the cost of rebars, formworks, safety equipment, and repairs it had made. In finding SKI liable, the Arbitral Tribunal reasoned that the agreed commitments under various construction programs were not met; the notes from the project meetings and Wyeth’s letters raising causes of delays were not disputed and some were even acknowledged by SKI; and while SKI’s delays were justified, SKI failed to raise a timely objection to Wyeth’s Variation Order indicating that the problems it encountered had no time impact on the project’s completion. The Arbitral Tribunal further held that SKI was not entitled to an extension of time as its justifications were afterthoughts to escape liability for the delays, and its failure to assert its entitlement to damages within the period allowed under the contract barred it from claiming them. The Arbitral Tribunal held that Wyeth, as project owner, had a wide latitude in exercising its prerogative to terminate the contract and that the termination was valid because SKI could further prejudice the completion of the project should it be given another chance to discharge its contractual obligations. The Arbitral Tribunal awarded SKI the value of rebars, the value of safety harness used by Wyeth, the cost of repair of the damaged tower crane, and the value of the damaged tower crane collar, but denied SKI’s claims for additional labor costs, additional costs due to change in the formworks system, cost for complying with additional safety requirements, additional cost for a Load Moment Indicator, additional overhead expenses, loss of profit for undue termination, loss of profit for deleted items, standby cost of equipment and materials, and moral and exemplary damages.

On Wyeth’s counterclaims, the Arbitral Tribunal found the need to evaluate them because they far exceeded the value of the contract sum of the project in dispute. It held that Wyeth’s claim of payment to various contractors in the amount of P167,588,306.67 was questionable since the total contract sum was P214,944,802.30 and P108,326,018.64 had already been paid to SKI, leaving only P106,618,783.70 or 49.60% of the total contract sum. The Arbitral Tribunal held that while Wyeth suffered pecuniary loss, the evidence it submitted was not clear and convincing to establish actual damages; hence, it applied Article 2224 of the Civil Code and the parties’ agreement on liquidated damages as measure for temperate damages, awarding Wyeth temperate damages amounting to P24,280,000.00, the maximum amount permitted under the contract. It held that Wyeth failed to present clear and convincing evidence on the scope, details, costing, and reasonableness of some claims, but found Wyeth’s claim of payment to various suppliers in the amount of P6,852,678.71 as valid and undisputed. The Arbitral Tribunal further held that the unrecouped down payment was deemed included in Wyeth’s “global” or excess claim after lumping all the cost it allegedly incurred less the contract price, and granted the unrecouped amount of P42,293,679.02 in addition to the temperate damages. It ruled that the cost of arbitration should be equally shouldered by SKI and Wyeth, that Mapfre should shoulder its own costs, and that no party may recover attorney’s fees from each other. It further held Mapfre jointly and severally liable with SKI on its Advance Payment Bond for the unrecouped down payment, on its Payment Bond, and on its Performance Bond equal to the temperate damages awarded. It held that the right to file a claim on the Payment Bond was not time-barred and that the referral to arbitration was based on the agreement between Wyeth and Mapfre, without objection from SKI. Lastly, it held that Mapfre should be indemnified by SKI in case it is made to pay Wyeth.

The CA held that SKI was liable for the delay, as it was undisputed that SKI did not achieve the milestones stated in the Conditions of the Contract and failed to ask for an extension of time if the delays were indeed not attributable to it. The CA also affirmed the Arbitral Tribunal’s ruling that Wyeth validly terminated its contract with SKI because SKI did not proceed regularly and diligently with the project when it failed to supply equipment and materials, adequate manpower, and sufficient supervision over the project. The CA found that Wyeth served a Notice of Default to SKI on January 23, 2008 and that SKI had until February 6, 2008, or 14 days from notice, within which to remedy the defaults; however, when asked for an update on February 5, 2008, SKI said it was still addressing the issues with its workforce, prompting Wyeth to terminate the contract. The CA affirmed the Arbitral Tribunal’s findings that SKI’s claims for additional labor cost, additional cost due to change in formworks system, additional cost due to additional safety requirements, additional cost due to use of cranes with LMI, additional overhead expenses, loss of profit for undue termination, loss of profit for deleted items, standby cost, and moral and exemplary damages were baseless because SKI was responsible for the delays. It also held that while SKI was entitled to the value of rebars, formworks, and costs of repair, the amount could not be established with certainty. The CA found that Wyeth’s payments to various contractors and suppliers were proven only to the extent covered by official receipts, and that Wyeth’s claims for payment to Tetra Pak, additional project costs, and Unitan termination-related costs were not proven.

• Scope of Review: Petitioner argued that whether it was entitled to execution pending appeal was a question of law properly determinable under its Rule 45 Petition, while the factual issues fell under the exceptions because the Arbitral Tribunal and the CA had conflicting findings of fact and manifestly overlooked relevant and undisputed details; the CA’s findings were contradicted by the evidence on record.
• Monetary Claims: Petitioner argued that it proved and substantiated all of its monetary claims, entitling it to an additional award of P377,269,282.64 inclusive of VAT, through official receipts, unrefuted testimonies of witnesses, parole evidence, and tabular summaries; it also argued that SKI was not entitled to an award for the value of rebars, formworks, and costs of repair.
• Mapfre’s Liability: Petitioner maintained that Mapfre’s liability under the Advance Payment Bond should be P47,368,910.42 and P48,560,000.00 under the Payment Bond; it also posited that SKI and Mapfre should be solidarily liable to pay attorney’s fees and arbitration costs.
• Execution Pending Appeal: Petitioner claimed entitlement to execution pending appeal under the 2010 CIAC Revised Rules and countered that CIAC Resolution No. 06-2002 was not applicable because it dealt with entry of judgment and not execution of judgment, was not published in the Official Gazette, was expressly repealed under the 2005 Revised Rules, and was not part of the 2010 CIAC Revised Rules.
• Finality of CA Decision: Petitioner argued that since SKI and Mapfre did not appeal the CA decision, they were bound to pay at least the award ordered by the CA; the issue of Mapfre’s liability under the bonds was already settled, and the only remaining issue was the amount of its liability.

• SKI — Exemplary Damages: Respondent SKI claimed that it was entitled to exemplary damages, considering that there was substantial evidence that petitioner agreed to its other claims.
• SKI — Factual Review: Respondent SKI maintained that the SC, not being a trier of facts, was not expected to review the evidence, especially since a specialized body like the Arbitral Tribunal and the CA had already evaluated the evidence and ruled that the claims were not proven with a reasonable degree of certainty; petitioner’s claim of P417,845,459.62, almost twice the total contract sum, was neither substantiated by evidence nor proven with reasonable certainty.
• SKI — Execution Pending Appeal: Respondent SKI posited that both the Arbitral Tribunal and the CA correctly denied the motion for execution filed by petitioner, consistent with the standing policy of the CIAC of not granting motions for execution if parties appealed the decision.
• SKI — Attorney’s Fees and Costs: Respondent SKI argued that petitioner failed to justify why it should be awarded attorney’s fees and arbitration costs.
• Mapfre — Actual Damages: Respondent Mapfre averred that petitioner was not entitled to an award of actual damages considering that its claims were without proof of official receipts.
• Mapfre — Payment Bond: Respondent Mapfre maintained that it was not liable under the Payment Bond because when petitioner terminated the contract, it had already paid SKI P129,590,429.08, and any claim of petitioner for labor and materials should be deducted from the unspent balance.
• Mapfre — Advance Payment Bond: Respondent Mapfre argued that its liability under the Advance Payment Bond was extinguished by compensation because the unrecovered amount was applied as payment for unpaid billings of SKI.
• Mapfre — Variations and Rectification: Respondent Mapfre claimed that it was not liable for variations of work relayed to it only after February 23, 2008, and that it could not be liable for the alleged cost of rectification works and additional management costs because these were fraudulent.
• Mapfre — Execution and Attorney’s Fees: Respondent Mapfre maintained that petitioner was not entitled to execution pending appeal because it could not approve and reject parts of the award for temperate damages in its favor; as petitioner was not entitled to recover anything, it was likewise not entitled to recover attorney’s fees and costs of arbitration.

• Scope of Review: Whether the issues petitioner raised are properly determinable under the present Petition for Review before the SC.
• SKI’s Temperate Damages: Whether respondent SKI is entitled to temperate damages.
• Wyeth’s Additional Costs: Whether petitioner is entitled to a total of P327,127,827.49 as additional costs incurred to complete the construction project due to the delay of respondent SKI.
• Mapfre’s Bond Liability: Whether the CA correctly determined the amount of liability of respondent Mapfre under the Advance Payment Bond and Payment Bond.
• Execution Pending Appeal: Whether petitioner is entitled to an execution pending appeal of the Arbitral Tribunal’s Award.
• Attorney’s Fees and Arbitration Costs: Whether petitioner is entitled to attorney’s fees and arbitration costs.

• Scope of Review: No. Except for execution pending appeal, the issues are questions of fact; CIAC factual findings are final and reviewable only on exceptional grounds affecting the integrity of the arbitral tribunal, none of which Wyeth alleged or proved.
• SKI’s Temperate Damages: No, insofar as the CA’s temperate-damages award is concerned. The CIAC’s factual award of the value of rebars, formworks, and repair costs is reinstated because the CA disturbed CIAC factual findings without any legal or exceptional ground.
• Wyeth’s Additional Costs: No. Wyeth’s additional-cost claims are factual and were not proven with competent proof; the CIAC’s finding that Wyeth failed to prove actual damages and was entitled only to temperate damages based on liquidated damages is binding.
• Mapfre’s Bond Liability: No. The CA’s amounts are replaced by the CIAC’s findings; Mapfre is liable for P42,293,679.02 under the Advance Payment Bond, P6,852,678.71 under the Payment Bond, and P24,280,000.00 under the Performance Bond.
• Execution Pending Appeal: No. Under the 2019 CIAC Revised Rules, execution pending appeal may be granted unless the party seeking it appealed the award or any portion; Wyeth appealed the Award, so it cannot obtain execution pending appeal.
• Attorney’s Fees and Arbitration Costs: No. The Arbitral Tribunal properly held that Wyeth and SKI should equally shoulder arbitration costs and that no party may recover attorney’s fees, based on the CIAC Rules and the Terms of Reference.

• Scope of Review: The SC began with Section 4 of Executive Order No. 1008, which gives the CIAC original and exclusive jurisdiction over disputes arising from or connected with construction contracts, and Section 19, which makes an arbitral award binding, final, and inappealable except on pure questions of law appealable to the SC. The SC noted that the CIAC’s authority proceeds from its technical expertise, and that Republic Act No. 9184 and Republic Act No. 9285 affirm its jurisdiction. In Hi-Precision Steel Center, Inc. vs. Lim Kim Steel Builders, Inc., the SC held that questions of fact cannot be raised before the SC in respect of a CIAC arbitral award, and that the SC will not review factual findings upon the artful allegation that the arbitral tribunal misapprehended the facts. The SC also cited Spouses David vs. Construction Industry and Arbitration Commission, which enumerated the exceptions to the finality of construction arbitrators’ factual findings: (1) the award was procured by corruption, fraud, or other undue means; (2) there was evident partiality or corruption of the arbitrators or any of them; (3) 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; (4) one or more arbitrators were disqualified under Section 9 of Republic Act No. 876 and willfully refrained from disclosing such disqualifications or committed other misbehavior by which the rights of any party were materially prejudiced; or (5) the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made. The SC distinguished questions of law from questions of fact: a question of law arises when there is doubt as to what the law is on a certain set of facts, while a question of fact arises when there is doubt as to the truth or falsity of alleged facts, including when the probative value of the evidence must be examined. Except for the execution-pending-appeal issue, Wyeth’s issues required reexamination of the probative value of the evidence and were therefore factual. The SC held that Rule 45 exceptions, such as misapprehension of facts or conflicting factual findings, do not apply to reviews of CIAC awards; exceptions must pertain to the conduct and qualifications of the arbitrator, not to errors of fact and law, misappreciation of evidence, or conflicting findings of fact. Only when the most basic integrity of the arbitral process was imperiled may factual review be allowed, and Wyeth did not allege or prove this. The SC further relied on CE Construction Corp. vs. Araneta Center, Inc., which held that courts should defer to the CIAC Arbitral Tribunal’s technical competence and irreplaceable experience, and that there was no basis to cast aspersions on the integrity of the tribunal absent proof of undisclosed disqualification, prejudicial misdemeanor, corruption, fraud, manifest partiality, or abuse. The parties voluntarily submitted to arbitration under Article 6 of the Articles of Agreement and Clause 10.1 of the Conditions of the Contract, and the dispute was better left to the CIAC as a quasi-judicial body with technical expertise.

• SKI’s Temperate Damages: Both the Arbitral Tribunal and the CA held that SKI delayed in the fulfillment of its obligation and that Wyeth validly terminated the contract. Since SKI did not appeal the findings on termination and delay, those findings became final as to SKI. Under Clause 8.3.1 of the Conditions of the Contract, the owner may employ and pay other persons to carry out and complete the works and may use temporary buildings, plant, tools, equipment, materials, and goods intended for the works. Under Clause 8.5, the contractor shall allow or pay to the owner the amount of any direct loss and/or damage caused by the termination, but the contractor shall not be entitled to be paid more than the value of the work properly executed up to the date of termination. Both the Arbitral Tribunal and the CA found it undisputed that there were rebars and formworks left at the site and that the tower crane and tower crane collar were damaged. The Arbitral Tribunal found SKI entitled to the value of rebars because Wyeth agreed to SKI’s entitlement as evidenced by a signed-off document during their reconciliation meeting; it also found valid SKI’s claims for the value of formworks and the repair of the damaged tower crane and tower crane collar. The CA, however, held that SKI’s entitlement to rebars, formworks, and repair costs could not be established with certainty and awarded temperate damages instead. The SC held that the CA should not have disturbed the factual findings of the Arbitral Tribunal, because the CA based its modification on neither a legal question nor any exceptional ground requiring it to look into factual issues. The contract itself, particularly Clauses 10.5 and 10.6, gave the arbitrators power to direct measurements and valuations, to ascertain and award any sum, and to determine all matters in dispute, and provided that the award of the arbitrators shall be final and binding. The Arbitral Tribunal presided over the proceedings for 19 months, examined and cross-examined the evidence, and conducted an ocular inspection with proven experts. Any review by the SC would require its own ocular inspection, hiring its own experts, and providing its own interpretations of the findings of a highly technical agency. Absent proof that the integrity of the arbitral tribunal was compromised or that it arrived at its findings in a haphazard, immodest manner, the SC would not disturb the factual findings. Thus, the SC upheld the Arbitral Tribunal’s findings on SKI’s claims and reinstated the CIAC Award.

• Wyeth’s Additional Costs: Wyeth claimed that it proved and substantiated an additional P327,127,827.49 or P377,269,282.64 inclusive of VAT, broken down into payments to Tetra Pak, SMCC, Chittick, additional project management costs, Unitan termination-related costs, Cape East, and Freyssinet. It argued that aside from official receipts, it proved payment by unrefuted testimonies of witnesses, parole evidence, and tabular summaries. The SC held that a contract is the law between the parties and, absent any showing that its provisions are contrary to law, morals, good customs, public order, or public policy, it shall be enforced to the letter. Under Clause 8.5 of the Conditions of the Contract, Wyeth was entitled to adequate compensation for the amount of expenses incurred and the direct loss or damage caused by the termination of the project. However, the Arbitral Tribunal found that Wyeth failed to prove its actual damages with clear and convincing evidence; only Wyeth’s claim of payment to various suppliers in the amount of P6,852,678.71 was undisputed and valid. The Arbitral Tribunal therefore awarded Wyeth temperate damages based on the parties’ agreement on liquidated damages, and also granted the unrecouped advance payment of P42,293,679.02. The SC saw no reason to deviate from these factual findings. Article 2199 of the Civil Code provides that one is entitled to adequate compensation only for such pecuniary loss suffered as has been duly proved, while Article 2224 provides that temperate or moderate damages may be recovered when some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved with certainty. Actual damages must be proven with a reasonable degree of certainty, premised upon competent proof or the best evidence obtainable, such as official receipts and invoices; actual damages are never presumed or based on personal knowledge. Although official receipts are the best evidence of payment, the SC has acknowledged that actual damages may be proved by other forms of documentary evidence, including invoices. However, Wyeth’s testimonies and tabular summaries were not enough; the tabular summaries were self-serving because Wyeth prepared them, and Wyeth’s argument that the summaries merely established the general result of the entire cost it incurred was an argument raised and rejected in Filipinas (Pre-Fab Bldg.) Systems, Inc. vs. MRT Development Corporation. The SC held that it is not merely the general result of the evidence that is sought, but the fact of the cost itself, and evidence such as receipts must be adduced to support any claim. Because the Arbitral Tribunal found that Wyeth failed to prove its alleged substantial pecuniary loss with competent proof and there was no opportunity for SKI to assess the cost of the works awarded by Wyeth to the contractors, the Arbitral Tribunal aptly awarded Wyeth temperate damages based on the maximum amount of liquidated damages under the agreements voluntarily executed by the parties. Clause 6.2 of the Conditions of the Contract and Section 2.5 of the Notice to Proceed provided for liquidated and ascertained damages at the rate of one tenth of one percent of the Contract Sum per day or part thereof. The SC affirmed the Arbitral Tribunal’s findings.

• Mapfre’s Bond Liability: Under the bonds executed by SKI as principal and Mapfre as surety, they bound themselves to indemnify Wyeth: under the Advance Payment Bond, P72,840,000.00 for failure to recoup the advance payment granted to SKI; under the Payment Bond, P48.56 million to pay for claims for labor and materials used or reasonably required for use in the performance of the Contract; and under the Performance Bond, P48.56 million for any loss or damage that Wyeth may suffer as a consequence of SKI’s failure to perform its obligations. Both the Arbitral Tribunal and the CA held that Mapfre was jointly and severally liable with SKI under the Advance Payment Bond, Payment Bond, and Performance Bond. Mapfre did not appeal the CA decision, so its joint and several liability under the bonds was deemed final with respect to it, since issues not raised on appeal are already final and cannot be disturbed. Wyeth questioned the amount of Mapfre’s liability under the bonds and claimed that Mapfre should be liable for P47,368,910.42 under the Advance Payment Bond and P42,938,557.46 under the Payment Bond because the CA failed to include the 12% VAT in the amount it granted. The SC reinstated and affirmed the findings of the Arbitral Tribunal as binding, respected, and final; otherwise, it would set at naught the basic objective of voluntary arbitration and reduce arbitration to a largely inutile institution. Wyeth failed to allege that the case fell within the exceptional grounds warranting a review of the factual findings. Since the SC upheld the monetary claims of Wyeth as found by the Arbitral Tribunal, Mapfre was also jointly and severally liable with SKI to the extent awarded by the Arbitral Tribunal for P42,293,679.02 under the Advance Payment Bond, P6,852,678.71 under the Payment Bond, and P24,280,000.00 under the Performance Bond.

• Execution Pending Appeal: The 2010 CIAC Revised Rules, Rule 18, provided that a final arbitral award shall become executory upon the lapse of 15 days from receipt by the parties; that a petition for review may be taken within 15 days; that if a petition for review is filed and a temporary restraining order is issued by the appellate court, the award shall become executory only upon the issuance of the entry of judgment or upon the lapse or lifting of the TRO or preliminary injunction; that the petition for review shall not stay execution unless the CA directs otherwise; and that as soon as the award has become executory, the Arbitral Tribunal shall issue a writ of execution. The 2010 Revised Rules was subsequently amended, and Section 18.5, as amended by CIAC Resolution No. 04-2019, now provides: “As a general rule, and if no bond to stay execution is posted, the motion for execution pending appeal filed by the prevailing party may be granted, unless it appealed said award or any portion thereof.” Prior to the 2019 Revised Rules, there was no clear and categorical statement in the 2010 Revised Rules as to the effect of a pending appeal on a motion for execution filed by the prevailing party. The Arbitral Tribunal denied Wyeth’s motion for execution based on CIAC Resolution No. 06-2002, which expressed the policy against interim execution when both parties appealed from the decision of the arbitrator, and allowed interim execution only with respect to a party who had accepted the award by not appealing it. The CA agreed with the Arbitral Tribunal and added that Wyeth failed to state good reasons for allowing execution pending appeal. The SC held that the present 2019 Revised Rules is clear: the general rule is that the motion for execution pending appeal may be granted, and the exception is if the award or any portion of it is appealed by any party or both parties. A cardinal rule in statutory construction is that when the law is clear and free from doubt or ambiguity, there is no room for construction or interpretation, but only application. The present rule is consistent with the interpretation of the Arbitral Tribunal, as affirmed by the CA. When Wyeth appealed the Award, its case fell within the exception for when a motion for execution pending appeal cannot be granted. Furthermore, the 2019 Revised Rules, being procedural in nature, may be applied retroactively to all pending cases, such as this case; the old rules and all policies issued in connection with it, as well as policies inconsistent with it, are expressly repealed. Thus, Wyeth was not entitled to execution pending appeal.

• Attorney’s Fees and Arbitration Costs: Rule 16, Section 16.5 of the CIAC Revised Rules of Procedure Governing Construction Arbitration provides that in the case of non-monetary claims or where the parties agreed that the sharing of fees shall be determined by the Arbitral Tribunal, the Final Award shall, in addition to dealing with the merits of the case, fix the costs of the arbitration and decide which of the parties shall bear the costs or in what proportion the costs shall be borne by each of them. Rule 142, Section 1 of the Rules of Court provides that costs ordinarily follow the result of the suit, but the rules allow the costs to be divided as may be equitable. The Terms of Reference signed by the parties expressly provided that the costs of arbitration, including filing, administrative, arbitrators’ fees, and charges for the Arbitration Development Fund, including all incidental expenses, shall be on a pro rata basis, subject to the determination of the Arbitral Tribunal as to which of the parties shall eventually shoulder such costs or the mode of sharing. Based on the rules and the contract, the Arbitral Tribunal properly exercised its jurisdiction in holding that Wyeth and SKI should equally shoulder the arbitration costs. It likewise properly held that no party may recover attorney’s fees from each other. The SC upheld these rulings.

• Finality of CIAC arbitral awards — Under Section 19 of Executive Order No. 1008, an arbitral award is binding upon the parties and shall be final and inappealable except on pure questions of law appealable to the SC. The SC applied this to deny Wyeth’s factual challenges to the CIAC Award.
• Limited factual review of CIAC awards — CIAC factual findings are final and conclusive and generally not reviewable; courts defer because of the CIAC’s technical expertise and irreplaceable experience. Review is allowed only when the integrity of the arbitral tribunal itself is jeopardized. The SC found no such jeopardy.
• Exceptional grounds to review CIAC factual findings — The SC enumerated the exceptions from Spouses David vs. Construction Industry and Arbitration Commission: (1) the award was procured by corruption, fraud, or other undue means; (2) there was evident partiality or corruption of the arbitrators or any of them; (3) 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; (4) one or more arbitrators were disqualified under Section 9 of Republic Act No. 876 and willfully refrained from disclosing such disqualifications or committed other misbehavior by which the rights of any party were materially prejudiced; or (5) the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made. Wyeth did not allege or prove any of these.
• Question of law vs. question of fact — A question of law arises when there is doubt as to what the law is on a certain set of facts; a question of fact arises when there is doubt as to the truth or falsity of alleged facts, including when the probative value of the evidence must be examined. The SC held that Wyeth’s issues, except execution pending appeal, were factual.
• Actual damages — Under Article 2199 of the Civil Code, actual or compensatory damages require adequate compensation only for pecuniary loss duly proved with a reasonable degree of certainty, based on competent proof or the best evidence obtainable, such as official receipts or invoices; actual damages are never presumed. The SC held that Wyeth failed to prove its additional actual damages.
• Temperate damages — Under Article 2224 of the Civil Code, temperate or moderate damages may be recovered when some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved with certainty. The SC upheld the CIAC’s temperate damages to Wyeth based on the parties’ liquidated damages stipulation.
• Execution pending appeal under CIAC Rules — Under Section 18.5 of the 2019 CIAC Revised Rules, as a general rule and if no bond to stay execution is posted, the prevailing party may move for execution pending appeal, unless it appealed the award or any portion thereof. The SC applied this retroactively to deny Wyeth’s motion because Wyeth appealed the Award.
• Voluntary arbitration policy — Parties who voluntarily submit to arbitration and choose the arbitrators must abide by the award; courts will not relitigate factual issues or allow parties to subvert the objective of voluntary arbitration. The SC applied this to uphold the CIAC Award.

• When the award of the Construction Industry Arbitration Commission Arbitral Tribunal becomes the subject of judicial review, courts must defer to its factual findings by reason of its "technical expertise and irreplaceable experience of presiding over the arbitral process." — This states the standard of deference that controlled the SC’s refusal to review the CIAC’s factual findings.
• The general rule then is that the awards of the Arbitral Tribunal may be appealed only on pure questions of law, and its factual findings should be respected and upheld. — This summarizes the limited scope of review of CIAC awards under Section 19 of Executive Order No. 1008.
• In reviewing factual findings of the Arbitral Tribunal, exceptions must pertain to its conduct and the qualifications of the arbitrator, and not to its errors of fact and law, misappreciation of evidence, or conflicting findings of fact. — This distinguishes the narrow CIAC exceptions from the ordinary Rule 45 exceptions and explains why Wyeth’s factual challenges failed.
• As a general rule, and if no bond to stay execution is posted, the motion for execution pending appeal filed by the prevailing party may be granted, unless it appealed said award or any portion thereof. — This is the 2019 CIAC rule that the SC applied retroactively to deny Wyeth’s motion for execution pending appeal.

• CE Construction Corp. vs. Araneta Center, Inc., 816 Phil. 221 (2017) — Controlling precedent; followed for the rule that courts defer to the CIAC Arbitral Tribunal’s technical competence and irreplaceable experience, and that factual review requires exceptional grounds affecting the tribunal’s integrity.
• Hi-Precision Steel Center, Inc. vs. Lim Kim Steel Builders, Inc., 298-A Phil. 361 (1993) — Controlling precedent; followed for the rule that questions of fact cannot be raised before the SC in respect of a CIAC arbitral award and that the arbitral tribunal’s factual findings are final and unappealable.
• Spouses David vs. Construction Industry and Arbitration Commission, 479 Phil. 578 (2004) — Controlling precedent; followed for the enumeration of exceptional grounds allowing review of construction arbitrators’ factual findings.
• Metro Bottled Water Corp. vs. Andrada Construction & Development Corp., Inc., G.R. No. 202430, March 6, 2019 — Followed for the rule that exceptions to factual review must relate to the integrity of the arbitral process, not to errors of fact or law.
• Department of Public Works and Highways vs. CMC/Monark/Pacific/Hi-Trijointventure, 818 Phil. 27 (2017) — Followed for the rule that issues not raised on appeal are final and cannot be disturbed, and that the CA should not disturb the CIAC Arbitral Tribunal’s factual findings.
• Metro Rail Transit Development Corp. vs. Gammon Philippines, G.R. No. 200401, January 17, 2018 — Followed for the rule that actual damages must be proven with a reasonable degree of certainty, premised on competent proof or the best evidence obtainable.
• Filipinas (Pre-Fab Bldg.) Systems, Inc. vs. MRT Development Corporation, 563 Phil. 184 (2007) — Followed for the rule that tabular summaries and general results are insufficient to prove actual damages; receipts or other evidence must support the claim.
• Camp John Hay Development Corp. vs. Charier Chemical and Coating Corp., G.R. No. 198849, August 7, 2019 — Followed for the rule that construction disputes are better left to the CIAC as a quasi-judicial body with technical expertise.

• Section 4, Executive Order No. 1008 (Construction Industry Arbitration Law) — The CIAC has original and exclusive jurisdiction over disputes arising from or connected with construction contracts; applied to affirm CIAC jurisdiction over the Wyeth-SKI construction dispute.
• Section 19, Executive Order No. 1008 — The arbitral award is binding, final, and inappealable except on questions of law appealable to the SC; applied to limit review and deny Wyeth’s factual issues.
• Section 14, Executive Order No. 1008 — Arbitrators must be persons of distinction with competence, integrity, and leadership qualities to resolve construction disputes; applied to support deference to the CIAC’s technical expertise.
• Section 15, Executive Order No. 1008 — Technical or legal experts may be utilized in the settlement of disputes; applied to support the CIAC Arbitral Tribunal’s use of technical expertise.
• Section 59, Republic Act No. 9184 (Government Procurement Reform Act) — Disputes within the competence of the CIAC shall be referred thereto; applied to affirm CIAC jurisdiction.
• Section 35, Republic Act No. 9285 (Alternative Dispute Resolution Act of 2004) — The CIAC continues to exercise original and exclusive jurisdiction over construction disputes although the arbitration is commercial; applied to affirm CIAC jurisdiction.
• Article 6, Articles of Agreement; Clause 10.1, Conditions of the Contract — The parties agreed to refer disputes to arbitration under the Construction Industry Arbitration Law and the CIAC Rules; applied to affirm voluntary submission to CIAC arbitration.
• Clauses 8.3.1 and 8.5, Conditions of the Contract — The owner may employ others to complete the works and use materials, and the contractor shall pay direct loss or damage caused by termination, but the contractor is not entitled to more than the value of work properly executed; applied to uphold the CIAC’s awards to SKI and Wyeth.
• Clauses 10.5 and 10.6, Conditions of the Contract — The arbitrators have power to direct measurements and valuations, ascertain and award sums, and determine all matters in dispute, and their award is final and binding; applied to uphold the CIAC Award.
• Clause 6.2, Conditions of the Contract; Section 2.5, Notice to Proceed — Liquidated and ascertained damages are payable at one tenth of one percent of the Contract Sum per day or part thereof; applied to support the CIAC’s temperate damages award to Wyeth.
• Article 2199, Civil Code — Actual or compensatory damages require adequate compensation only for pecuniary loss duly proved; applied to deny Wyeth’s unproven additional actual damages.
• Article 2224, Civil Code — Temperate or moderate damages may be recovered when some pecuniary loss has been suffered but its amount cannot be proved with certainty; applied to uphold the CIAC’s temperate damages award to Wyeth.
• Rule 18, Sections 18.1–18.5, 2010 CIAC Revised Rules of Procedure Governing Construction Arbitration — A final award becomes executory after 15 days, a petition for review may be filed, and execution may issue as provided; applied to the execution-pending-appeal issue.
• Section 18.5, 2019 CIAC Revised Rules (as amended by CIAC Resolution No. 04-2019) — Execution pending appeal may be granted unless the party seeking it appealed the award or any portion; applied retroactively to deny Wyeth’s motion.
• Rule 16, Section 16.5, CIAC Revised Rules of Procedure Governing Construction Arbitration — The Final Award shall fix the costs of arbitration and decide which party shall bear them or in what proportion; applied to uphold equal sharing of arbitration costs.
• Rule 142, Section 1, Rules of Court — Costs ordinarily follow the result of the suit, but the rules allow equitable division; applied to uphold the costs ruling.