G.R. No. 160215
Hydro Resources Contractors Corporation, petitioner
VS.
National Irrigation Administration, respondent
Facts:
NIA conducted bidding for a project and the contract was awarded to Hydro. Part of
the contract was a US $ component allocation for the purpose of purchasing
equipments, spare parts and construction materials and is agreed to have a fixed
exchange rate of P7.3735 to the dollar. During the period of the execution of the
contract, the foreign exchange value of the peso against the US dollar declined and
steadily deteriorated. Whenever Hydro’s availment of the foreign currency
component exceeded the amount of the foreign currency payable to Hydro for a
particular period, NIA charged interest in dollars based on the prevailing exchange
rate instead of the fixed exchange rate. Yet, when Hydro received payments from
NIA in Philippine Pesos, NIA made deductions from Hydro’s foreign currency
component at the fixed exchange rate of P7.3735 to dollar instead of the prevailing
exchange rate.
Upon completion of the project both parties made a joint computation for the
foreign exchange differential. It turned out Hydro was still entitled to a foreign
exchange differential; Hydro presented its claim to NIA but the latter refused to
honour the same. Hydro made several claims but NIA turned it down with finality on
January 6, 1987.
Hydro then filed a request for arbitration with the CIAC. NIA filed their compulsory
counterclaim and defended that CIAC has no jurisdiction over the case but it was
denied by CIAC and moved for hearing the case. NIA then filed at the Court of
Appeals and was dismissed by the CA and elevated to the SC challenging the
decision of the CA but it was later on dismissed by the SC. CIAC promulgated its
decision of the case and was in favour of Hydro, and NIA elevated the case to the
Court of Appeals.
The CA was in favour of NIA claiming that Hydro’s claim has prescribed, the
exchange rate should be the fixed rate agreed by both parties, assuming that Hydro
is entitled to the foreign exchange rate differential and that NIA is not guilty of
forum shopping. Hence, it was brought to the Supreme Court.
Issue/s:
Has Hydro’s claim prescribed?
Is NIA not guilty of forum-shopping?
Ruling:
Supreme Court ruled that Hydro’s claim has not prescribed because the 30-day rule
is only applicable to controversies that arise while projects are still ongoing. NIA has
also clearly waived the prescriptive period when it continued to entertain Hydro’s
claim regarding new matters raised by the latter in its letters to NIA and then
issuing rulings thereon.
NIA was guilty of forum-shopping, because of availing of several judicial remedies in
different courts, the Court of Appeals and the Supreme Court. The Supreme Court
granted Hydro’s petition and the decision of the Court of Appeals are reversed and
set aside. The decision of the Construction Industry Arbitration Commission (CIAC) is
reinstated.