Supreme Court awards P52M to builders of EDSA-Shangri-La

MANILA, Philippines – The Supreme Court (SC) has ordered Shangri-La Properties, Incorporated to pay construction firm BF Corporation over P52 million worth of unpaid progress billings for the construction of the EDSA-Shangri-La in Mandaluyong.

"The Court partially grants the petition...to the effect that Shangri-La Properties, Inc. shall pay BF Corporation the net amount of P52,635,679.70, plus legal interest of 6% per annum reckoned from July 31, 2007, the dare of the arbitral tribunal's decision," said the SC en banc in a resolution penned by retired chief justice Lucas Bersamin promulgated October 15, 2019, but made public only on Tuesday, January 14.

The SC also said that "until this decision becomes final and executory; and, thereafter, the principal amount due, plus the interest of 6% per annum, shall likewise earn interest of 6% per annum until full satisfaction."

The SC upheld a 2007 decision of the Construction Industry Arbitration Commission (CIAC).

The P52 million already accounted for the amount entitled to Shangri-La Properties "for liquidated damages for the delays incurred in finishing the project."

After the arbitral tribunal handed down its ruling in 2007, both Shangri-La and BF Corporation appealed before the Court of Appeals (CA). The CA set aside the arbitral award to BF Corporation.

"The SC agreed with the findings of the Arbitral Tribunal when it considered the specific variation orders with the conformity of the Shangri-La Properties. It therefore reinstated the arbitral award in favor of BFC, which the CA previously disregarded," the SC's Public Information Office (PIO) said.

BF Corporation made a claim for fire damage and repair works, but that the Supreme Court denied it "as there was no proof that Shangri-La Properties received any fire insurance proceeds."

"Moreover, the CIAC and the CA both found that BFC assumed the sole risk for damages or losses sustained due to fire," the SC PIO added.

The dispute dates all the way back to the 1990s when Shangri-La hired BF Corporation to build EDSA-Shangri-La. – Rappler.com

Lian Buan

Lian Buan covers justice and corruption for Rappler. She is interested in decisions, pleadings, audits, contracts, and other documents that establish a trail. If you have leads, email lian.buan@rappler.com or tweet @lianbuan.

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