The Consortium of Hyundai Engineering Co. v. National Grid Corporation of the Philippines

Summary

Hyundai, a Korean consortium, entered into a construction contract with TransCo (National Transmission Corporation) for the Maramag-Bunawan transmission project containing an arbitration clause. When NGCP (National Grid Corporation) took over TransCo's transmission business through a Concession Agreement and imposed liquidated damages on Hyundai for project delays, Hyundai filed arbitration against both entities. NGCP argued the Construction Industry Arbitration Commission (CIAC) lacked jurisdiction since it wasn't party to the original contract. The Court of Appeals agreed, but the Supreme Court reversed, ruling that NGCP is bound by the arbitration clause as TransCo's assignee under the Concession Agreement and as construction manager under Republic Act 9285. The Court emphasized that specialized arbitration tribunals like CIAC should resolve construction disputes efficiently, and that NGCP cannot selectively honor only beneficial contract provisions while disclaiming the arbitration obligation. The case reinforces the broad jurisdiction of CIAC over construction disputes involving various industry participants.