MCWD ordered to pay supplier P12M

CEBU, Philippines - The Supreme Court has affirmed the decision of the appellate court directing the Metropolitan Cebu Water District to pay P12.1 million to its water supplier.

Associate Justice Jose Catral Mendoza denied the petition for review on certiorari filed by the MCWD citing the appellate court did not make a mistake in affirming the decision of the Construction Industry Arbitration Commission.

On March 15, 2004, the Mactan Rock Industries Inc. (MRII), a potable water supplier filed a complaint before CIAC against MCWD. MRII sought for the reformation of the Clause 17 of the Contract or the Price Escalation/De-Escalation Clause in order to include Capital Cost Recovery.

The MRII likewise, sought for the payment of the unpaid price escalation/adjustment and the payment of unpaid variation/extra work order and interest/cost of money since December 31, 2003.

On April 27, 2004 MCWD filed their answer attaching their motion to dismiss complaint for lack of jurisdiction.

However, CIAC denied their motion and proceeded with the preliminary conference.

MCWD did not attend the hearing and failed to submit evidence other than the annex of its answer.

On April 14, 2005, the CIAC directed MCWD to pay P12,126,296.70 plus legal interest of six percent per annum from March 15, 2004 the date of filing of the complaint under the reformed Clause 17 of the Water Supply Contract.

The reformation of Clause 17 of the Contract includes the Capital Cost Recovery with 40 percent.

Appeal

MCWD filed a petition before the Court of Appeals citing the CIAC has no jurisdiction over the case.

However, the CA denied its petition citing the CIAC has jurisdiction over the case which was affirmed by the SC.

“Very clear, the CIAC has jurisdiction over a broad range of issues and claims arising from construction disputes. Therefore, because the CIAC has been held to have jurisdiction over the contract, it follows that it has jurisdiction to order the reformation of the contract as well,” the decision read.

Meanwhile, Mendoza said their office cannot reverse the ruling of the CA which was declared final and executory.

“This court has held time and again that a final and executory judgment, no matter how erroneous, cannot be changed, even by this court. Nothing is more settled in law than that once a judgment attains finality, it hereby becomes immutable and unalterable,” decision reads.

Mendoza added “such decision having become final, it is beyond the jurisdiction of this court, or any court or body, for that matter, to review or modify, even, supposing for the sake of argument, that it is indeed erroneous.”

MCWD spokeswoman Charmaine Rodriguez said they can only comment on the issue once they receive a copy of the decision. For now she said their lawyer is considering filing a motion for reconsideration.

MCWD supplies water to the cities of Cebu, Talisay, Mandaue and Lapu-Lapu and the municipalities of Compostela, Liloan, Consolacion and Cordova in the Province of Cebu.

It entered into a water supply contact with MRII and agreed that the latter would supply MCWD with potable water starting May 19, 1997. — with Niña G. Sumacot/BRP (FREEMAN)