CA upholds ruling on CICC payments

THE Court of Appeals (CA) has affirmed the lower court’s ruling directing the Cebu Provincial Government to pay a private contractor P257.4 million for more work done on the Cebu International Convention Center (CICC).

The appeals court denied the appeal filed by Capitol, which questioned the order of the Cebu City Regional Trial Court (RTC) finding them liable to pay WT Construction Inc. (WTCI) for the extra construction cost.

“The Province of Cebu, in failing to promptly pay WTCI and attempting to evade its liability, acted maliciously and in bad faith,” read the decision written by Associate Justice Ramon Paul Hernando for the CA’s 20th Division.

Acting Governor Agnes Magpale’s office has yet to receive a copy of the CA decision.

Lawyer Czareem Joseph Estella, Magpale’s consultant, declined from commenting on the decision until they receive the notice from the CA.

Without pre-empting Magpale’s move, Estella assured that there are legal remedies available to the Province, such as filing a motion for reconsideration or appealing it before the Supreme Court.

WTCI filed a civil case for sum of money against Capitol for its refusal to pay for works made on Phase 2 of the CICC in 2006.

On Feb. 26, 2006, WTCI won the bidding for the construction of the CICC, which was used as one of the venues of the 12th Association of Southeast Asian Nations (Asean) Summit.

When the construction of Phase 1 of the CICC was completed, the Province requested WTCI to complete Phase 2 of the project.

When Phase 2 was nearing completion, Capitol later contracted WTCI to perform additional works such as site development, structural, architectural, electrical and plumbing works. When all the works were completed, the contractor said Capitol refused to pay.

Replying to the suit, the Province argued that the additional works being claimed by WTCI were not acknowledged and did not pass the bids and awards committee (BAC) of the Province.

Since there was no contract for additional works, the Province said payment to WTCI would be questionable and illegal.

On May 20, 2009, Judge Ester Veloso of the RTC Branch 6 ordered Capitol to pay WTCI P263,263,261.41 for the site development, structural, architectural, plumbing and electrical work done by the contractor.

The Province was also directed to pay 12 percent legal interest per year from Jan. 22, 2008 and P50,000 as lawyer’s fees.

Judge Veloso ruled that an “oral contract” was perfected between WTCI and Capitol for the additional works.

Denying payment to WTCI would be tantamount to “unjust enrichment” on Capitol’s part, the judge said.

The Province filed a motion for reconsideration and contested the awarded amount.

Veloso partially granted Capitol’s appeal and reduced the liability from P263,263,261.41 to P257,413,911.73.

In the decision, the appeals court upheld with modification the trial court’s ruling, saying the awards were “definitely justified.”

“Concededly, it has already been established that the Province of Cebu is obligated to pay WTCI for the additional construction work, which it satisfactorily rendered,” the CA said.

The CA reduced legal interest per year from 12 percent to six percent, to be computed from Jan. 22, 2008 until full payment is made.

Earlier, Ombudsman Conchita Carpio-Morales has approved the filing of formal criminal and administrative cases against suspended governor Gwendolyn Garcia and six Capitol officials for allegedly giving WTCI unwarranted benefits, advantage or preference.

The six co-accused in the case, who compose the Bids and Awards Committee (BAC), are identified in the final evaluation report as chairman Eduardo Habin, vice chairman Marino Martinquilla, and members Roy Salubre, Emmy Hingoyon, Ernesto Biernes and Eulogio Pelayre.

The respondents are facing charges for alleged violation of the Anti-Graft and Corrupt Practices Act.
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