Federal Builders v. Power Factors · G.R. 211504

Petitioner: Federal Builders
Respondent: Power Factors
Citation: G.R. No. 211504
Court: Supreme Court
Division: Third Division
Ponente: Bersamin, J.
Decided: March 8, 2017

Summary

Federal Builders Inc. engaged Power Factors Inc. as subcontractor for electrical works under an unsigned Contract of Service containing an arbitration clause. When Power claimed unpaid fees of P11,444,658.97, Federal disputed the amount and challenged CIAC's jurisdiction, arguing the unsigned contract was invalid. The Supreme Court affirmed the CA's decision upholding CIAC jurisdiction, ruling that written agreements to arbitrate need not be signed under CIAC Revised Rules, and that the parties' conduct established a valid contract. The Court emphasized the liberal policy favoring alternative dispute resolution and affirmed the modified award of P7,540,231.93, rejecting claims for labor cost escalation due to lack of written agreement. This case clarifies that CIAC jurisdiction depends on written agreement to arbitrate, not on formal contract execution, promoting expeditious construction dispute resolution.

Statutes applied

Civil Code, Art. 1724

Related cases

Other Philippine cases on the same provisions and issues.

Victoria Ong v. Ernesto Bogñalbal G.R. No. 149140
Uniwide Sales Realty v. Titan-Ikeda Construction G.R. No. 126619
Filinvest Alabang v. Century Iron Works G.R. No. 213229
R.G. Palanca Construction v. Dr. Francis C. Solco G.R. No. 168284
The President of the Church of Jesus Christ of Latter Day Saints v. Btl Construction Corporation G.R. No. 176439
Licomcen v. Engr. Salvador Abainza G.R. No. 199781
Spouses Victoriano Chung v. Ulanday Construction G.R. No. 156038
Leighton Contractors Philippines v. Cnp Industries G.R. No. 160972

By the Intellegal Editorial Board · March 8, 2017

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