G.R. No.
198849
CAMP JOHN DEVELOPMENT CORPORATION
vs.
CHARTER CHEMICAL AND COATING CORPORATION
FACTS
A construction dispute between Camp John Hay Development Corporation and
Charter Chemical and Coating Corporation.
Camp John Hay Development is the investment arm of a consortium engaged in
the construction of the Camp John Hay Manor in Baguio City.
In January 2001, Camp John Hay Development entered into a Contractor's
Agreement with Charter Chemical, the company awarded to complete the interior
and exterior painting works of unit 2E of the Camp John Hay Manor for the
contract price of ₱15,500,000.00, inclusive of the price of two (2)-studio type
units at Camp John Hay Suites
In 2003, Charter Chemical completed the painting works. Charter Chemical
demanded the execution of the deed of sale and delivery of the titles of the two
(2) units in September 2004, with a follow-up in April 2005. In June 2005, Camp
John Hay Development and Charter Chemical executed contracts to sell.
In August 2005, Camp John Hay Development issued certifications to Charter
Chemical that the two (2) units were fully paid under their offsetting scheme.
However, the units were not delivered because the construction was not yet
complete.
Camp John Hay Development filed before the Court of Appeals a Petition for
Review. In its May 13, 2011 Decision, the Court of Appeals affirmed the arbitral
tribunal's award.
On June 3, 2011, Camp John Hay Development filed a Motion for
Reconsideration, but it was denied by the Court of Appeals in its September 30,
2011 Resolution.
On November 23, 2011, Camp John Hay Development filed a Petition for Review
on Certiorari. The Petition is denied.
ISSUES
First, whether or not the Court of Appeals erred in ruling that the Construction Industry
Arbitration Commission has jurisdiction over the dispute despite the existence of a
dispute resolution clause;
Second, whether or not the Court of Appeals correctly rescinded the obligation under
Article 1191 of the Civil Code and whether or not a period should be fixed under Article
1197 of the Civil Code; and
Finally, whether or not the Court of Appeals erred in affirming the award of attorney's
fees to respondent Charter Chemical and Coating Corporation.
COURT RULING
1. The supreme court rules that the CIAC has indeed a jurisdiction over the dispute.
2. The supreme court affirmed the recission under the article 1191 because of the
failure to deliver the units despite the demands, and ruled that there is no reason
to fix a period under article 1197 of the civil code.
3. The supreme court affirmed that the amount claimed for the attorney’s fees was
justified, and that camp john hay development’s refusal to deliver the unit urged
charter chemical to file a complaint which resulted to the expenses.
