TESCO SERVICES, INCORPORATED, PETITIONER, VS. THE HONORABLE ABRAHAM P. VERA, PRESIDING JUDGE OF THE REGIONAL TRIAL COURT NATIONAL CAPITAL JUDICIAL REGION, QUEZON CITY, BRANCH 90…

In this petition for Certiorari and Prohibition with
Prayer for a Temporary Restraining Order, petitioner questions the jurisdiction
of the Regional Trial Court of Quezon City, Branch 90 (instead of the
Construction Industry Arbitration Commission) in taking cognizance of the
Petition* for Injunction with Prayer for Issuance of a Writ
of Preliminary Injunction and a Temporary Restraining Order filed by private
respondent in SP Case No. Q-91-8948 entitled LAROSA CONSTRUCTION AND MANAGEMENT
CORPORATION v. TESCO SERVICES, INCORPORATED” and for issuing a temporary
restraining order.

The facts as culled from the records of the case are as follows:

On June 2, 1990, petitioner Tesco Services, Incorporated (TESCO,
for brevity) and private respondent Larosa Construction and Management
Corporation (LAROSA, for brevity) entered into a sub-contract agreement with
the former as contractor and the latter as the sub-contractor, for the
execution of the Civil Works under the PLDT’s 5th Expansion Program
(hereinafter referred to as the Project).

During the course of the Project pursuant to the Sub-contract, a
dispute arose. TESCO alleged that
LAROSA failed to perform the work required of the latter within the time frame
set out in the Sub­contract agreement. LAROSA disputed the allegation of non-performance and alleged that the
delay, if any, to complete the Project was due to petitioner TESCO’s failure to
fulfill its obligations under the Sub-contract agreement.

On May 13, 1991, TESCO sent to LAROSA a thirty (30) day notice of
termination of the Sub-contract agreement pursuant to Article 25 of the said
contract stating as ground therefor non-compliance with the project
schedule. The letter states among others
that “(u)pon the expiration of this 30-day notice or at an earlier date
that may be agreed upon by the parties TESCO will take over direct control and
supervision on all remaining works subject to the provisions of Article
25” (Annex “1”).

On May 17, 1991, TESCO again sent to LAROSA a letter-request
“for the early termination of our contract with you pursuant to our notice
of termination dated May 13, 1991 instead of waiting for the 30-day
expiration” (Annex “2”).

LAROSA replied to the aforesaid letters of termination in a
letter dated May 21, 1991 disputing and opposing the termination of the
Sub-contract agreement and demanding that the status
quo be maintained until the issues are
resolved (Annex “3”).

On May 30, 1991, LAROSA filed a Petition for Injunction with
Prayer for Issuance of a Writ of Preliminary Injunction and a Temporary
Restraining Order with the Regional Trial Court of Quezon City, Branch 90
(Rollo, p. 17; Annex “A”).

A temporary restraining order enjoining TESCO from proceeding
with its intended termination of the Sub-­contract agreement and taking direct
control and supervision of all remaining work under the sub-contract agreement
was issued by the court a quo in its Order dated May 31,
1991. Likewise a hearing on the prayer
for a writ of preliminary injunction was set on June 13, 1991 at 1:30 o’clock
in the afternoon (Rollo, p. 8; Petition; Annex “B”).

Hence, TESCO filed with this Court a petition for Certiorari
and Prohibition with Prayer for a Temporary Restraining Order on June 6, 1991
questioning the jurisdiction of the court a quo in taking
cognizance of the petition for injunction and henceforth issuing a temporary
restraining order. It also asked this
Court to enjoin respondent judge from enforcing the Order dated May 31, 1991
requiring TESCO to answer the petition for injunction.

On June 13, 1991, without a temporary restraining order from this
Court, the court a quo proceeded with the hearing of the petition
for injunction. TESCO through its
lawyers entered a special appearance solely to contest the jurisdiction of the
court a quo.

On June 14, 1991, in holding that the interest of justice will be
better served if the status quo is maintained, the court a quo
granted LAROSA’s application for preliminary injunction (Rollo, p. 60).

On September 23, 1991, the Second Division of this Court resolved
to give due course to the petition (Rollo, p. 85).

The main issue in this case is whether or not it is the Regional
Trial Court or the Construction Industry Arbitration Commission which has jurisdiction
over the subject matter of this case.

TESCO contends that since the parties bound themselves under
Article 26 of the Sub-contract agreement to settle any dispute, claim or
difference of opinion arising out of or relating to the Sub­-contract or breach
thereof through arbitration, it is the Construction Industry Arbitration
Commission (CIAC) which has exclusive and original jurisdiction over
construction disputes pursuant to Section 4 of Executive Order No. 1008.

Article 26 of the Sub-contract agreement
provides as follows:

ARTICLE 26

ARBITRATION

“In the event of any dispute, claim or
difference of opinion arising out of or relating to this Sub-contract or breach
thereof, the parties hereto shall do their best to settle such dispute, claim
or difference amicably by negotiation.

“In the event,
however, such dispute, claim or difference is not settled by negotiations
within thirty (30) days after its occurrence, such dispute, claim or
differences shall be settled by arbitration by a panel of three (3)
arbitrators, one to be named in writing by each party to this Sub-Contract and
the third to be chosen by those two arbitrators, or if they should fail to
select a third arbitrator within fifteen (15) days, then he shall be appointed
by the chairperson of the National Bar Association of the Philippines. No one shall be nominated or act as an
arbitrator who is in any way financially interested in this Sub-contract or in
the business affairs of either LAROSA, TESCO, ETSI and PLDT.

“If either party hereto is
dissatisfied with the decision of the
arbitrators as provided for in the preceding paragraph, it shall, within ten
(10) days after receiving notice of such decision, notify the arbitrators that
it disputes the same and the matter shall thereupon be settled under the Rules
of Conciliation and Arbitra­tion of the International Chamber of Commerce by
one or more arbitrators appointed in accordance with the said rules. The resulting award shall be final and
binding on both parties.” (Rollo, p. 30; Petition; Annex “D”).

The above-quoted article merely prescribes the procedure to be
followed by the parties in the event of any dispute, claim or difference of
opinion which may arise out of or relates to the Sub-contract or breach
thereof. Nowhere in said article does
it mention the CIAC, much less vest jurisdiction with the CIAC.

It is true that under Executive Order No. 1008 otherwise known as
the Construction Industry Arbitration Law, the Construction Industry
Arbitration Commission shall have original and exclusive jurisdiction over
disputes arising from, or connected with, contracts entered into by parties
involved in the construction industry in the Philippines, whether the dispute
arises before or after the completion of the contract or after the abandonment
or breach thereof. However, for the
Board to acquire jurisdiction, the parties to a dispute must first agree to
submit the same to voluntary arbitration (Section 4, E.O. No. 1008).

Under the Rules of Procedure governing Construction Arbitration,
a party to a construction contract wishing to have recourse to arbitration by
the Construction Industry Arbitration
Commission (CIAC) shall submit its Request for Arbitration in sufficient copies
to the Secretariat of the CIAC (Section 1 of said Rules).

The records do not show that the parties agreed to submit the
disputes arbitration by the CIAC. Neither was there a Request for Arbitration filed with the Secretariat
of the CIAC. Hence, CIAC did not
acquire jurisdiction over the disputes arising from the Sub?contract
agreement between petitioner TESCO and private respondent LAROSA. While both parties in the Sub?contract
had agreed to submit the matter to arbitration, this was only between
themselves, no request having been made by both with the CIAC. Hence, as already
stated, the CIAC has no jurisdiction over the dispute.

The petition for injunction filed by LAROSA is a civil action in
which the subject of the litigation is incapable of pecuniary estimation,
hence, the Regional Trial Court has exclusive original jurisdiction over it
(Section 19, B.P. Blg. 129). Clearly,
the respondent court did not abuse its discretion in taking cognizance of the
case.

PREMISES CONSIDERED, the petition for certiorari
and prohibition with prayer for a temporary restraining order is hereby
DISMISSED for lack of merit.

SO ORDERED.

Narvasa, C.J., (Chairman), Padilla, Regalado, and Nocon, JJ., concur.

* Penned by Judge Abraham P. Vera