Justin Grace Gallego

Constitutional Law 1
Atty. Jose Edmund Guillen

NIA vs. CA
G.R. No. 129169, 214 SCRA 35 (November 17, 1999)

FACTS:
In a competitive bidding held by Petitioner NIA, Respondent Hydro
Resources Contractors Corporation (HYDRO) was awarded with the Contract for
the construction of the Magat River Multi-Purpose Project. As sited on the contract,
HYDRO was to be paid partly in Philippine pesos and partly in U.S dollars. In 1982,
HYDRO completed the works under the contract and the final acceptance by NIA
was made on 1984. Thereafter, HYDRO determined that it still had an account
receivable from NIA representing the dollar rate differential of the price escalation
for the contract.
On December 7, 1994, HYDRO filed with CIAC a Request for Adjudication
of the aforesaid claim against NIA. NIA filed an answer questioning the jurisdiction
of the CIAC alleging lack of cause of action, laches, and estoppel in view of
HYDRO’s alleged failure to avail its right to submit the dispute to arbitration within
the prescribed period in the contract.
Alleging lack of jurisdiction over the disputes, NIA filed a Motion to Dismiss.
Furthermore, NIA argued that records show that it had not voluntarily submitted
itself to arbitration by CIAC. The arbitral body issued an order which resolved to
proceed with the hearing of the case as the grounds cited by NIA did not seem to
be “indubitable”. NIA filed a motion for reconsideration which was denied by the
CIAC on the premise that it has jurisdiction over HYDRO’s claim over NIA pursuant
to E.O 1008 and that the hearing should proceed as scheduled.
On May 26, 1996 NIA filed an original action of certiorari to the Court of
Appeals and a prayer for restraining order against CIAC.

ISSUE:
Whether or not the CIAC has jurisdiction over the contract between NIA
and HYDRO before its creation on 1985.

RULING:
Yes. Executive Order No. 1008 or the “Construction Industry Arbitration
Law”, vests upon CIAC original and exclusive jurisdiction over disputes arising from, or
connected with contracts entered into by parties involved in construction, whether the
dispute arises before or after the completion of the contract. The disputes may involve
government or private contracts. For the board to acquire jurisdiction, both parties must
agree to voluntary arbitration. Moreover, it is undeniable that NIA agreed to submit the
dispute for arbitration to CIAC through its counsel’s active participation, its nomination of
arbitrators to the proposed panel and participation on the deliberations and formulation
of the Terms of Reference of the arbitration proceedings. Whereof, the instant petition
by NIA was dismissed for lack of merit.