National Transmission Corporation v. Alphaomega Integrated Corporation

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari1 are the Decision2 dated April 8, 2008 and the Resolution3 dated August 27, 2008 of the Court of Appeals (CA) in CA-G.R. SP No. 99454 affirming with modification the Final Award4 of the Construction Industry Arbitration Commission (CIAC) Arbitral Tribunal in favor of respondent Alphaomega Integrated Corporation (AIC) by increasing petitioner National· Transmission Corporation's (TRANSCO) liability from Pl 7,495,117.44 to Pl 8,896,673.31. The Facts AIC, a duly licensed transmission line contractor, participated in the public biddings conducted by TRANSCO and was awarded six ( 6) government construction projects, namely: (a) Contract .for the Construction & Erection of Batangas Transmission Reinforcement Project Schedule III (BTRP Schedule III Project); (b) Contract for the Construction & Erection of Batangas Transmission Reinforcement Project Schedule I (BTRP Schedule I Project); (c) Contract for the Construction,Erection & Installation of 230 KV and 69 KV S/S Equipment and Various Facilities for Makban Substation under the Batangas Transmission Reinforcement Project (Schedule II) (Makban Substation Project); (d) Contract for the Construction, Erection & Installation of 138 & 69 KV S/S Equipment for Bacolod Substation under the Negros III-Panay III Substation Projects (Schedule II) (Bacolod Substation Project); (e) Contract for the Construction, Erection & Installation of 138 & 69 KV Substation Equipment for the New Bunawan Switching Station Project (Bunawan Substation Project); and (f) Contract for the Construction, Erection & Installation of 138 and 69 KV Substation Equipment for Quiot Substation Project (Quiot Substation Project).5 In the course of the performance ofthe contracts, AIC encountered difficulties and incurred losses allegedly due to TRANSCO's breach of their contracts, prompting it to surrender the projects to TRANSCO under protest.

In accordance with an express stipulation in the contracts that disagreements shall be settled by the parties through arbitration before the CIAC, AIC submitted a request for arbitration before the CIAC on August 28, 2006, and, thereafter, filed an Amended Complaint against TRANSCO alleging that the latter breached the contracts by its failure to: (a) furnish the required Detailed Engineering; (b) arrange a well-established right-of-way to the project areas; (c) secure the necessary permits and clearances from the concerned local government units (LGUs); (d) ensure a continuous supply of construction materials; and (e) carry out AIC's requests for power shut down. The aforementioned transgressions resultedin protracted delays and contract suspensions for each project,6 as follows: Contract Original Contract Duration Duration of Transco-Approved Suspension and/or Extensions Percentage (%) of Original Contract Duration 1) BTRP Schedule III 560 days 711 days 127% 2) BTRP Schedule I 270 days 406 days 170% 3) Makban Substation 365 days 452 days 124% 4) Bacolod Substation 360 days 289 days 80% 5) Bunawan Substation 330 days 130 days 39% 6) Quiot Substation 300 days 131 days