Kenette Diane L.
Cantuba
II – Special Section
Alternative Dispute Resolution
Atty. Cleo Sabado – Andrada
HI-PRECISION STEEL CENTER, INC., vs.
LIM KIM STEEL BUILDERS, INC., and CONSTRUCTION INDUSTRY ARBITRATION COMMISSION
G.R. No. 110434 December 13, 1993
I. LAW:
Executive Order No. 1008 Construction Industry Arbitration Law, Sec. 19.
Sec. 19. Finality of Awards. —
The arbitral award shall be binding upon the parties. It shall be final and unappealable except on
questions of law which shall be appealable to the Supreme Court.
II. FACTS:
Hi-Precision (Petitioner) entered into a contract with Steel Builders (Private Respondent) under
which the latter as Contractor was to complete a 21 Million Pesos construction project owned by Hi-
Precision with a period of 153 days. The said completion of the project was then moved to November
4, 1990, however, when the date came, only 75.8674% of the project was actually completed.
Contention of Petitioner: Non completion was due to Steel Builders delay both during the original
contract and period of extension.
Contention of Respondent: Non-completion of the project was either excusable or was due to Hi-
Precision’s own fault and issuance of change orders.
Steel Builders filed a “Request for Adjudication” with the CIAC (Public Respondent) and sought
payment of its unpaid billings, alleged unearned profits and other receivables. Hi-Precision on the other
hand claimed for damages and reimbursement of alleged additional costs. The CIAC formed an Arbitral
Tribunal with 3 members and such tribunal rendered a decision in favor of Steel Builders Inc ordering
Hi-Precision to pay Steel Builders their claim.
Hi-Precision now asks the Court to set aside the Award, contending basically that it was the
contractor Steel Builders who had defaulted on its contractual undertakings and so could not be the
injured party and should not be allowed to recover any losses it may have incurred in the project.
Petitioner Hi-Precision insists it is still entitled to damages, and claims that the Arbitral Tribunal
committed grave abuse of discretion when it allowed certain claims by Steel Builders and offset them
against claims of Hi-Precision.
2 basic arguments of Hi Precision:
i. Petitioner asks this Court to correct legal errors committed by the Arbitral Tribunal, which at the same
time constitute grave abuse of discretion amounting to lack of jurisdiction on the part of the Arbitral
Tribunal; and
ii. Should the supposed errors petitioner asks us to correct be characterized as errors of fact, such factual
errors should nonetheless be reviewed because there was "grave abuse of discretion" in the
misapprehension of facts on the part of the Arbitral Tribunal.
III. ISSUE:
Whether the arbitral award can be reviewed by Supreme Court
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IV. HELD:
The arbitral award in the case at bar cannot be reviewed by the SC. Section 19 of Executive
Order 1008 as amended says, “The arbitral award shall be binding upon the parties. It shall be final
and unappealable except on questions of law which shall be appealable to the Supreme Court.
Section 19 makes it crystal clear that questions of fact cannot be raised in proceedings before
the Supreme Court — which is not a trier of facts — in respect of an arbitral award rendered under the
aegis of the CIAC. Consideration of the animating purpose of voluntary arbitration in general and
arbitration under the aegis of the CIAC in particular, requires us to apply rigorously the above principle
embodied in Section 19 that the Arbitral Tribunal's findings of fact shall be final and unappealable.
Voluntary arbitration involves the reference of a dispute to an impartial body, the members of
which are chosen by the parties themselves, which parties freely consent in advance to abide by the
arbitral award issued after proceedings where both parties had the opportunity to be heard.
The basic objective is to provide a speedy and inexpensive method of settling disputes by
allowing the parties to avoid the formalities, delay, expense and aggravation which commonly
accompany ordinary litigation, especially litigation which goes through the entire hierarchy of courts.
Executive Order No. 1008 created an arbitration facility to which the construction industry in the
Philippines can have recourse. The Executive Order was enacted to encourage the early and
expeditious settlement of disputes in the construction industry, a public policy the implementation of
which is necessary and important for the realization of national development goals
Aware of the objective of voluntary arbitration in the labor field, in the construction industry,
and in any other area for that matter, the Court will not assist one or the other or even both parties in
any effort to subvert or defeat that objective for their private purposes.
The Court will not review the factual findings of an arbitral tribunal upon the artful allegation
that such body had "misapprehended the facts" and will not pass upon issues which are, at bottom,
issues of fact, no matter how cleverly disguised they might be as "legal questions."
The parties here had recourse to arbitration and chose the arbitrators themselves; they must
have had confidence in such arbitrators. The Court will not, therefore, permit the parties to relitigate
before it the issues of facts previously presented and argued before the Arbitral Tribunal, save only
where a very clear showing is made that, in reaching its factual conclusions, the Arbitral Tribunal
committed an error so egregious and hurtful to one party as to constitute a grave abuse of discretion
resulting in lack or loss of jurisdiction.
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