CA: Stop P95M dues payment

CEBU, Philippines - The Court of Appeals 19th Division has  stopped  the  Capitol from paying P95-million in dues to contractors whose contracts they entered into with the previous administration did not have Cebu Provincial Board approval.

“In order that no irreparable injury may be visited upon petitioner by reason of an implementation of the assailed CIAC (Construction Industry Arbitration Commission)  Final Consolidated Award, the issuance of a writ of preliminary injunction is in order,” read the March 20 CA resolution.

The decision, penned by Associate Justice Ma. Luisa C. Quijano-Padilla, was referring to the  CIAC’s November 21, 2014 for the execution of a final consolidated award in favor of the contractors.

CIAC directed the Capitol to pay the P95 million in claims, including interests and other charges made by Duros Development Corporation (DDC).

In a statement released by the Capitol Public Information Office, Provincial Legal Officer Orvi Ortega said “the obligation came from the 25 contracts executed by former Governor Gwendolyn Garcia and DDC from 2006 to 2012.”

Governor Hilario Davide III, who succeeded Garcia, had issued an order stopping all payments of these claims after noticing that the contracts were not approved by the PB, making them “illegal”.

After Davide made the order, DDC, which was one of the many private contractors that were affected, raised the matter before CIAC, a quasi-judicial body which exercises jurisdiction over disputed contracts.

After CIAC dismissed the Capitol’s contention that it (CIAC) has no jurisdiction over the case and made a final consolidation award, the Capitol then filed a petition for review with the CA, which issued on January 14 a temporary restraining order against the enforcement of the CIAC order.

Ortega said “the Capitol questioned the jurisdiction of CIAC over the case. The contracts contained arbitration clauses, which authorized CIAC to settle contract-related disputes.”

The Capitol lawyer said Garcia was not given any authority by the PB to enter into any agreements, making the contracts invalid.

Section 22 (c) Republic Act No. 7160 (“Local Government Code of 1991” expressly states that “no contract may be entered into by the local chief executive in behalf of the local government unit without prior authorization by the sanggunian concerned.”

The preliminary injunction, according to the CA, is for it to ascertain “if the CIAC really had jurisdiction to arbitrate the subject claims of respondent,” which means it will last “until further orders from this Court.”

 Meanwhile, both parties are given until April 23 to submit their respective arguments with regards to the petition. — /RHM (FREEMAN)