SC orders Shang Properties to pay construction firm P52.6M over EDSA property

The Supreme Court ordered Shang Properties, Inc. (SPI) to pay a construction firm BF Corporation (BFC) P52.6 million in relation to the construction of two phases and the carpark of its EDSA property.

Made public Tuesday, the October 15, 2019 SC en banc ruling agreed with the findings of a Construction Industry Arbitration Commission (CIAC) arbitral tribunal, which, in 2007, recognized BFC's right to recover its claims for unpaid progress billings, as well as SPI's entitlement to liquidated damages for construction delays.

The arbitral tribunal had thus ordered SPI to pay BFC P38.5 million plus legal interest. However, it also awarded more than P8 million to the property developer for delays and the costs of repairing BFC's defective work.

Both parties appealed. The CA modified the monetary awards in 2008, prompting the elevation of the case to the High Court.

In a decision penned by then-Chief Justice Lucas Bersamin, the SC reinstated the arbitral award in favor of BFC but denied the construction firm's claim for fire damage "as there was no proof that Shangri-La Properties received any fire insurance proceeds," according to the SC Public Information Office (PIO).

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

The SC considered "final and conclusive" the CIAC and the CA's findings that BFC had completed the original scope of work, but reinstated the arbitral tribunal's granting of the BFC's claim for variation works.

BFC was also found liable for delays in the completion of the project.

"Considering that both parties have money obligations to each other, on offsetting of obligations was in order," the SC PIO said.

The P52,635,679.70 award to BFC comes with legal interest of six percent per annum reckoned from the date of the arbitral tribunal's decision in 2007. — DVM, GMA News