The Court of Appeals (CA) junked the petition filed by the Department of Health (DOH) on the court decision ordering the DOH to compensate a private contractor in the controversial P8.1 billion Barangay Health Stations (BHS) project.
The BHS project was implemented during the term of former President Benigno Aquino III.
In a 22-page decision penned by Associate Justice Jaime Fortunato Caringal, the CA’s Eight Division ruled that the final award issued by the Construction Industry Arbitration Commission (CIAC) Arbitral Tribunal on Jan. 3, 2022 in favor of JBros Construction Corporation in joint venture agreement with Fujian Zhongma Construction Engineering, Ltd. Co has attained finality and “may no longer be modified, be it on errors of fact or law.”
The appellate court explained that while the losing party now has two options against an unfavorable CIAC award, and under the second option has 60 days within which to file a petition assailing the decision, the old rule that the award becomes executory after 15 days has been retained, subject to the losing party’s right to either secure a temporary restraining order and/or a preliminary injunction from the Supreme Court or the Court of Appeals.
In this case, the CA noted that JBros received a copy of the final award on Jan. 4, 2022, while the DOH admitted to having received the decision a day after.
The appellate court stressed that under Section 18.1 of the CIAC Rules, a final arbitral award “shall become executory upon the lapse of 15 days from receipt thereof by the parties and in case recourse is taken against the same either before the CA or the SC in appropriate cases and a TRO or a writ of preliminary injunction has been issued, the award will only be executory either upon entry of final judgment or upon the lapse or lifting of the TRO or the dissolution of the preliminary injunction.”
Records show that as early as March 4, 2022, the CIAC Arbitral Tribunal had already declared that the final award had become final and executory in its order granting the JBros motion for execution
“The doctrine of immutability of judgments bars courts from modifying decisions that have already attained finality, even if the purpose of the modification is to correct errors of fact or law,” the appellate court held.
In its January 3, 2022 decision, the CIAC awarded JBros the net amount of P299.09 million.
In addition, the CIA also imposed interest at six percent per annum on the said amount until full payment has been made by the DOH.
The construction firm filed a claim last January 13, 2021 against the DOH before the CIA to settle their dispute in relation to the BHS Phase II Project which refers to the contract for the procurement of the construction of BHS-Tsekap with furniture and fixtures in 2,500 public school sites.
The award of the project to JBros was an offshoot of the January 26, 2016 tripartite memorandum of agreement signed by the DOH, the Department of Education (DepEd) and the Department of Interior and Local Government (DILG) to build functional BHS in every barangay, using public elementary school sites for the same.
The DOH issued on March 22, 2016 a notice to proceed to JBros for the Phase II Project.
Under the contract, the DOH had until March 30, 2016 to deliver the possession of all 2,500 sites to the respondents but failed to do so.
JBros alleged that when they visited the supposed sites to start commencing the works, they encountered several issues with the turnover of the possession of the sites.
The respondent blamed the same to lack of proper coordination between the DOH and DepEd as well as the lack of a Memorandum of Agreement for the BHS Phase II Project, which prevented them from possessing all 2,500 sites as required under the contract.
It further claimed that because of the failure of the petitioner to deliver all the sites within the agreed period under the contract, they were constrained to request for a suspension of the Phase II Project and an extension of time to complete the same.
On January 25, 2019, JBros was to send a notice of termination to the petitioner in view of the suspension of the construction activities for the BHS Phase II Project for almost three years.
The respondents also demanded the payment of the value of their completed works less the mobilization fee that they received.
In its decision, the CIAC awarded JBros the amount of P516.87 million as actual damages; P87.83 million as cost of materials ordered; and P245.61 million as unrealized profit.
But it deducted the P551.23 million advance payment made by the DOH as mobilization fee.