Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No.

148318 November 22, 2004

;eother,al Po er Plant !9oton) area" in 9acon, Sorso)on !9*CM*N II". 1he total contract price for the t o schedules is P#(+,0&-,&<<.-(, bro5en do n as follo s7

SC=ED3>E

# 8 Ca a%an area

P ?',(+#,0'#.((

NATIONAL POWER CORPORATION, petitioner, vs. HON. ROSE MARIE ALON O!LEGASTO, "# Pre#$%$&' ()%'e, RTC o* +)e,o& C$-., /r"&01 22, (OSE MARTINE , 3e4)-. S1er$**, RTC o* +)e,o& C$-., CARMELO 5. SISON, C1"$rm"&, Arb$-r"-$o& /o"r%, "&% 6IRST UNITE3 CONSTRUCTORS CORPORATION, respondents.

#* 8 9oton) area

P ?<,0#',?0?.-(

P #(+,0&-,&<<.-( *ppended ith the Contract is the contract price schedule hich as sub,itted b% the respondent 23CC durin) the biddin). 1he price for )radin) e/cavation as P@<.(( per cubic ,eter. Construction activities co,,enced in *u)ust #&&'. In the latter part of Septe,ber #&&' and after e/cavatin) ?.( ,eters above the plant elevation, 23CC reAuested NPC that it be allo ed to blast to the desi)n )rade of 0&? ,eters above sea level as its doBers and rippers could no lon)er e/cavate. It further reAuested that it be paid P#,-0<.(( per cubic ,eter si,ilar to the rate of NPC6s pro4ect in Palinpinon. .hile blastin) co,,enced on October <, #&&', NPC and 23CC ere discussin) the propriet% of an e/tra or5 order and if such is in order, at hat price should 23CC be paid. So,eti,e in March #&&-, NPC Vice President for En)ineerin) Construction, =ector Ca,pos, created a tas5 force to revie 23CC6s blastin) or5s. 1he technical tas5 force reco,,ended that 23CC be paid P0?+.(@ per cubic ,eter as such bein) the price a)reed upon b% 23CC. 1he ,atter as further referred to the Depart,ent of Public C.Dor5s and =i)h a%s !DP.=", hich in a letter dated Ma% #&, #&&-,

DECISION TINGA, J.7 National Po er Corporation !NPC" filed the instant Petition for Revie # dated $ul% #&, '((#, assailin) the Decision' of the Court of *ppeals dated Ma% '+, '((# hich affir,ed ith ,odification the Order - and .rit of E/ecution0 respectivel% dated Ma% '', '((( and $une &, '((( issued b% the Re)ional 1rial Court. In its assailed Decision, the appellate court declared respondent 2irst 3nited Constructors Corporation !23CC" entitled to 4ust co,pensation for blastin) or5s it undertoo5 in relation to a contract for the construction of po er facilities it entered into ith petitioner. 1he Court of *ppeals, ho ever, deleted the a ard for attorne%6s fees havin) found no basis therefor. 1he facts culled fro, the Decision of the Court of *ppeals are undisputed7 On *pril #0, #&&', NPC and 23CC entered into a contract for the construction of po er facilities !civil or5s" 8 Schedule # 8 #/'( M. 9acon:Manito II Modular ;eother,al Po er Plant !Ca a%an area" and Schedule #* 8 #/'( M. 9acon:Manito II Modular

reco,,ended the price ran)e of P?((.(( to P<((.(( per cubic ,eter as reasonable. It further opined that the price of P&+-.@? per cubic ,eter proposed b% >auro R. 3,ali, Pro4ect Mana)er of 9*CM*N II as hi)h. * cop% of the DP.= letter is attached as *nne/ ECE, 23CC6s E/hibit EEE:*rbitration. In a letter dated $une '+, #&&-, 23CC for,all% infor,ed NPC that it is acceptin) the proposed price of P0?+.(@ per cubic ,eter. * cop% of the said letter is attached as *nne/ EDE, 23CC6s E/hibit > *rbitration. In the ,eanti,e, b% March #&&-, the or5s in 9oton) area ere in considerable dela%. 9% Ma% #&&-, civil or5s in 9oton) ere 5ept at a ,ini,u, until on Nove,ber #, #&&-, the entire operation in the area co,pletel% ceased and 23CC abandoned the pro4ect. Several ritten and verbal arnin)s ere )iven b% NPC to 23CC. On March #0, #&&0, NPC6s 9oard of Directors passed Resolution No. &0:<- approvin) the reco,,endation of President 2rancisco >. Vira% to ta5e over the contract. President Vira%6s reco,,endation to ta5e over the pro4ect as co,pelled b% the need to stave:off hu)e pecuniar% and non:,onetar% losses, na,el%7 !a" ;eneration loss P'<,?0<,0((F,onthG esti,ated to be at

Preli,inar% In4unction and 1e,porar% Restrainin) Order before 9ranch &&, Re)ional 1rial Court, HueBon Cit%. 3nder para)raph #& of its Co,plaint, 23CC ad,itted that it a)reed to pa% the price of P0?+.(@ per cubic ,eter. On *pril ?, #&&0, $ud)e de ;uB,an issued a te,porar% restrainin) order and on *pril '#, #&&0, the trial court resolved to )rant the application for issuance of a rit of preli,inar% in4unction. On $ul% @, #&&0, NPC filed a Petition for Certiorari ith Pra%er for 1e,porar% Restrainin) Order and Preli,inar% In4unction before the 2irst Division of the Court of *ppeals assertin) that no in4unction ,a% issue a)ainst an% )overn,ent pro4ects pursuant to Presidential Decree #+#+. On $ul% +, #&&0, the Court of *ppeals throu)h then *ssociate $ustice 9ernardo Pardo issued a te,porar% restrainin) order and on October '(, #&&0, the said court rendered a Decision )rantin) NPC6s Petition for Certiorari and settin) aside the lo er court6s Order dated *pril '#, #&&0 and the .rit of Preli,inar% In4unction dated Ma% ?, #&&0. =o ever, not ithstandin) the dissolution b% the Court of *ppeals of the said in4unction, on $ul% #?, #&&?, 23CC filed a Co,plaint before the Office of the O,buds,an a)ainst several NPC e,plo%ees for alle)ed violation of Republic *ct No. -(#&, other ise 5no n as the *nti:;raft and Corrupt Practices *ct. 1o)ether ith the co,plaint as an 3r)ent E/:Parte Motion for the issuance of a cease and CdDesist CoDrder to restrain NPC and other NPC officials involved in the 9*CM*N II pro4ect fro, cancelin) andFor fro, ta5in) over 23CC6s contract for civil or5s of said pro4ect. 1hen on Nove,ber #<, #&&0, 23CC filed before the Supre,e Court a Petition for Revie assailin) the Decision of the Court of C*Dppeals dated October '(, #&&0. In its Co,,ent, NPC raised the issue that 23CC resorted to foru, shoppin) as it applied for a cease and desist order before the National O,buds,an despite the dissolution of the in4unction b% the Court of *ppeals.

!b" Pa%,ent of stea, penalties to PNOC:EDC the a,ount esti,ated to be at P#(,'(<,(0+.((F,onthG !c" Pa%,ent of liAuidated da,a)es due to the standb% of electro,echanical contractorG !d" >oss of )uaranteed protection ! arranties" of all delivered plant eAuip,ent and accessories as Mitsubishi Corporation, electro,echanical contractor, ill not be liable after si/ ,onths of deliver%. 1o prevent NPC fro, ta5in) over the pro4ect, on March '+, #&&0, 23CC filed an action for Specific Perfor,ance and Da,a)es ith

Pendin) the petition filed b% 23CC before the Supre,e Court, on *pril '(, #&&? the NPC and 23CC entered into a Co,pro,ise *)ree,ent. 3nder the Co,pro,ise *)ree,ent, the parties a)reed on the follo in)7 #. Defendant shall process and pa% the undisputed unpaid billin)s of Plaintiff in connection ith the entire pro4ect fifteen !#?" da%s after a reconciliation of accounts b% both Plaintiff and Defendant or thirt% !-(" da%s fro, the date of approval of this Co,pro,ise *)ree,ent b% the Court hichever co,es first. 9oth parties a)ree to sub,it and include those accounts hich could not be reconciled a,on) the issues to be arbitrated as hereunder providedG '. Plaintiff accepts and ac5no led)es that Defendant shall have the ri)ht to proceed ith the or5s b% re:biddin) or ne)otiatin) the pro4ect i,,ediatel% upon the si)nin) of herein Co,pro,ise *)ree,entG -. 1his Co,pro,ise *)ree,ent shall serve as the Supple,ental *)ree,ent for pa%,ent of plaintiff6s blastin) or5s at the 9oton) siteG 0. 3pon approval of this Co,pro,ise *)ree,ent b% the Court or Plaintiff6s receipt of pa%,ent of this undisputed unpaid billin)s fro, Defendant hichever co,es first, the parties shall i,,ediatel% file a $oint Manifestation and Motion for the ithdra al of the follo in) Plaintiff6s petition fro, the Supre,e Court, Plaintiff6s Co,plaint fro, the National O,buds,an, the Co,plaint and *,ended Co,plaint fro, the R1C, 9r. && of HueBon Cit%G ?. 3pon final resolution of the *rbitration, as hereunder prescribed, the parties shall i,,ediatel% e/ecute the proper docu,ents ,utuall% ter,inatin) Plaintiff6s contract for the civil or5s of the 9*CM*N II Pro4ect !Contract No. Sp&(D>M:&#+ !I I *"G <. Such ,utual ter,ination of Plaintiff6s contract shall have the follo in) effects andFor conseAuences7 !a" the

construction or5s of Plaintiff at the Ja a%an and 9olon) sites, at its present sta)e of co,pletion, shall be accepted andFor dee,ed to have been accepted b% defendantG !b" Plaintiff shall have no ,ore obli)ation to Defendant in respect of the 9*CM*N II Pro4ect e/cept as provided in clause !e" belo G !c" Defendant shall release all retention ,one%s of plaintiff ithin a ,a/i,u, period of thirt% !-(" da%s fro, the date of final Resolution of the *rbitrationG !d" no retention ,one% shall thenceforth be ithheld b% Defendant in its pa%,ent to Plaintiff under this Co,pro,ise *)ree,ent, and !e" Plaintiff shall put up a one:%ear )uarant% bond for its co,pleted civil or5s at the Ja a%an site, retroactive to the date of actual use of the plant b% defendantG @. Plaintiff6s blastin) or5s clai,s and other unresolved clai,s, as ell as the clai,s of da,a)es of both parties shall be settled throu)h a t o sta)e process to it7 S1*;E # @.# Plaintiff and Defendant shall e/ecute and si)n this Co,pro,ise *)ree,ent hich the% ill sub,it for approval b% this Court. 3nder this Co,pro,ise *)ree,ent both parties a)ree that7 /// /// S1*;E ' @.# 1he parties shall sub,it for arbitration to settle7 !a" the price of blastin), !b" both parties6 clai,s for da,a)es, dela%s, interests, and !c" all other unresolved clai,s of both parties, includin) the e/act volu,e of blasted roc5sG @.' 1he arbitration shall be throu)h a three: ,e,ber co,,ission to be appointed b% the =onorable Court. Each part% shall no,inate one ,e,ber. 1he Chair,an of the *rbitration 9oard shall be CaD person ,utuall% acceptable to both parties, preferabl% fro, the acade,eG

@.- 1he parties shall li5e ise a)ree upon the ter,s under hich the arbitrable issues shall be referred to the *rbitration 9oard. 1he ter,s of reference shall for, part of the Co,pro,ise *)ree,ent and shall be sub,itted b% the parties to the =onorable Court ithin a period of seven !@" da%s fro, the si)nin) of the Co,pro,ise *)ree,entG @.0 1he *rbitration 9oard shall have a non: e/tendible period of three !-" ,onths ithin hich to co,plete the arbitration process and sub,it its Decision to the =onorable CourtG @.? 1he parties a)ree that the Decision of the *rbitration 9oard shall be final and e/ecutor%G @.< 9% virtue of this Co,pro,ise *)ree,ent, e/cept as herein provided, the parties shall ,utuall% aive, for)o and dis,iss all of their other clai,s andFor counterclai, in this case. Plaintiff and defendant arrant that after approval b% the Court of this Co,pro,ise *)ree,ent neither part% shall file Cri,inal or *d,inistrative cases or suits a)ainst each other or its 9oard or ,e,ber of its officials on )rounds arisin) fro, the case. 1he Co,pro,ise *)ree,ent Court on Ma% '0, #&&?. as subseAuentl% approved b% the

clai,ant the re,ainin) su, of P+',#-#,-'+.'+ for attorne%6s fees and e/penses of liti)ation. Pursuant to the Co,pro,ise *)ree,ent approved b% this =onorable Court, the parties have a)reed that the decision of the *rbitration 9oard shall be final and e/ecutor%. SO ORDERED. On Dece,ber #(, #&&& plaintiff 23CC filed a Motion for E/ecution hile defendant NPC filed a Motion to Vacate * ard b% the *rbitration 9oard on Dece,ber '(, #&&&. On Ma% '', '((( Presidin) $ud)e Rose Marie *lonBo >e)asto issued an order the dispositive portion of hich states7 E.=ERE2ORE, the *rbitration * ard issued b% the *rbitration 9oard is hereb% *PPROVED and the Motion for E/ecution filed b% plaintiff hereb% ;R*N1ED. 1he Motion to Vacate * ard filed b% defendant is hereb% DENIED for lac5 of ,erit. *ccordin)l%, let a *rbitration * ard. rit of e/ecution be issued to enforce the

SO ORDERED.E? !9rac5eted ords supplied" NPC ent to the Court of *ppeals on the lone issue of hether respondent 4ud)e acted ith )rave abuse of discretion in issuin) the Order dated Ma% '', '((( and directin) the issuance of a .rit of E/ecution. In its assailed Decision, the appellate court declared that the court a Auo did not co,,it )rave abuse of discretion considerin) that the *rbitration 9oard acted pursuant to its po ers under the Co,pro,ise *)ree,ent and that its a ard has factual and le)al bases. 1he Court of *ppeals )ave pri,ac% to the court:approved Co,pro,ise *)ree,ent entered into b% the parties and concluded that the% intended the decision of the arbitration panel to be final and e/ecutor%. Said the court7 2or one, hat the price a)reed to be sub,itted for arbitration are pure issues of fact !i.e., the price of blastin)G both parties6 clai,s for

1he case as subseAuentl% referred b% the parties to the arbitration board pursuant to their Co,pro,ise *)ree,ent. On Dece,ber &, #&&& the *rbitration 9oard rendered its rulin) the dispositive portion of hich states7 .=ERE2ORE, clai,ant is hereb% declared entitled to an a ard of P##+,<+#,-'+.'+ as 4ust co,pensation for blastin) or5s, plus ten percent !#(K" thereof for attorne%6s fees and e/penses of liti)ation. Considerin) that pa%,ent in the total a,ount of P-<,??(,(((.(( had previousl% been ,ade, respondent is hereb% ordered to pa%

da,a)es, dela%, interests and all other unresolved clai,s of both parties, includin) the e/act volu,e of blasted roc5s". *lso, the ,anner b% hich the *rbitration 9oard as for,ed and the ter,s under hich the arbitrable issues ere referred to said 9oard are specified in the a)ree,ent. Clearl%, the parties had left to the *rbitration 9oard the final ad4udication of their re,ainin) clai,s and aived their ri)ht to Auestion said Decision of the 9oard. =ence, the% a)reed in clear and uneAuivocal ter,s in the Co,pro,ise *)ree,ent that said Decision ould be i,,ediatel% final and e/ecutor%. Plaintiff relied upon this stipulation in co,pl%in) ith its various obli)ations under the a)ree,ent. 1o allo defendant to no )o bac5 on its ord and start Auestionin) the Decision ould be )rossl% unfair considerin) that the latter as also a part% to the Co,pro,ise *)ree,ent entered into part of hich dealt ith the creation of the *rbitration 9oard.< 1he appellate court li5e ise held that petitioner failed to present evidence to prove its clai, of bias and partialit% on the part of the Chair,an of the *rbitration 9oard, Mr. Car,elo V. Sison !Mr. Sison". 2urther, the Court of *ppeals found that blastin) is not part of the unit price for )radin) and structural e/cavation provided for in the contract for the 9*CM*N II Pro4ect, and that there as no perfected contract bet een the parties for an e/tra or5 order for blastin). Nonetheless, since 23CC relied on the representation of petitioner6s officials that the e/tra or5 order ould be sub,itted to its 9oard of Directors for approval and that the blastin) or5s ould be paid, the Court of *ppeals ruled that 23CC is entitled to 4ust co,pensation on )rounds of eAuit% and pro,issor% estoppel. *nent the issue of 4ust co,pensation, the appellate court too5 into account the esti,ate prepared b% a certain Mr. >auro R. 3,ali !Mr. 3,ali", Pro4ect Mana)er of the 9*CM*N II Pro4ect, hich ite,iBed the various costs involved in blastin) or5s and ca,e up ith P#,-#(.+' per cubic ,eter, consistin) of the direct cost for drillin), blastin) e/cavation, stoc5pilin) and haulin), and a -(K ,ar5 up for overhead, contractor6s ta/ and contin)encies. 1his esti,ate as later chan)ed to P&+-.@? per cubic ,eter to hich 23CC a)reed. 1he Court of *ppeals, ho ever, held that 4ust co,pensation should cover onl% the direct costs plus #(K for overhead e/penses. 1hus, it declared that the a,ount of P@<-.((@ per cubic ,eter is sufficient. Since the total volu,e of blasted roc5s as co,puted b% Dr. 9en4a,in 9uensuceso, $r.+ of the 3.P. Colle)e of En)ineerin) is &@,(-'.#< cubic ,eters, 23CC is entitled to the a,ount of P@0,(-?,?(-.?( as 4ust co,pensation.

*lthou)h the Court of *ppeals ad4ud)ed 23CC entitled to interest, & the dispositive portion of the assailed Decision #( did not provide for the pa%,ent of interest. Moreover, the a ard of attorne%6s fees as deleted as there as no le)al and factual )round for its i,position. Petitioner, represented b% the Office of the Solicitor ;eneral in the instant Petition, rehashes its sub,issions before the Court of *ppeals. It clai,s that the appellate court failed to pass upon the follo in) issues7 #. 1he Chair,an of the *rbitration 9oard sho ed e/tre,e bias in pre4ud)in) the case. '. 1he Chair,an of the *rbitration 9oard )reatl% e/ceeded his po ers hen he ,ediated for settle,ent in the court of arbitration proceedin)s. -. 1he Chair,an of the *rbitration 9oard co,,itted serious irre)ularit% in hastil% convenin) the 9oard in t o da%s, hich thereafter released its report. 0. 1he *rbitration 9oard Co,,itted ,anifest in4ustice pre4udicial to petitioner based on the follo in)7 a. It rendered an a ard based on eAuit% despite the ,andator% provision of the la . b. 1he 9oard6s decision to 4ustif% that eAuit% applies herein despite the fact that 23CC never sub,itted its o n actual costs for blastin) and P=ESCO, INC., the succeedin) contractor, did not e,plo% blastin) but used ordinar% e/cavation ,ethod at P@?.?& per cubic ,eter hich is appro/i,atel% the sa,e unit price of plaintiff !23CC". c. It )ravel% erred hen the 9oard clai,ed that an a ard of 4ust co,pensation ,ust be )iven to respondent 23CC for hat it has actuall% spent and %et instead of usin) as basis P0?+.(@ hich is the price a)reed upon b% 23CC, it chose an esti,ate ,ade b% an NPC e,plo%ee. d. It )ravel% erred hen it relied heavil% on the purported letter of NPC Pro4ect Mana)er >auro R. 3,ali, hen the

sa,e has not been identified nor ere the hand ritten entries in *nne/ ii established to be ,ade b% hi,. ?. 1he *rbitration 9oard )ravel% erred in co,putin) interest at #'K and fro, the ti,e of plaintiff6s e/tra4udicial clai, despite the fact that herein case is an action for specific perfor,ance and not for pa%,ent of loan or forbearance of ,one%, and despite the fact that it has resolved that there as no perfected contract and there as no bad faith on the part of defendant. 8. O& ()&e 29, 2000, NPC %$#0overe% -1e S)b!Co&-r"0A'reeme&- o* 6UCC :$-1 " )&$- 4r$0e o* o&;. P430<4er 0)b$0 me-er.## CE,phasis in the ori)inalD Specificall%, petitioner asserts that Mr. Sison e/hibited bias and pre4ud),ent hen he e/horted it to pa% 23CC for the blastin) or5s after concludin) that the latter as allo ed to blast. Moreover, Mr. Sison alle)edl% atte,pted to ,ediate the conflict bet een the parties in violation of Section '(,#' para)raph ' of Republic *ct No. +@< !R.*. +@<" other ise 5no n as the *rbitration >a . Petitioner also Auestions the abrupt ,anner b% hich the decision of the *rbitration 9oard as released. Petitioner avers that 23CC6s clai, for blastin) or5s as not approved b% authoriBed officials in accordance ith Presidential Decree No. #?&0 !P.D. #?&0" and its i,ple,entin) rules hich specificall% reAuire the approval of the e/tra or5 b% authoriBed officials before an e/tra or5 order ,a% be issued in favor of the contractor. 1hus, it should not be held liable for the clai,. If at all, onl% the errin) officials should be held liable. 2urther, 23CC did not present evidence to prove the actual e/penses it incurred for the blastin) or5s. .hat the *rbitration 9oard relied upon as the ,e,orandu, of Mr. 3,ali hich as neither identified or authenticated durin) the arbitration proceedin)s nor ,ar5ed as evidence for 23CC. Moreover, the fi)ures indicated in Mr. 3,ali6s ,e,orandu, ere alle)edl% ,ere esti,ates and ere reco,,endator% at ,ost. Petitioner li5e ise clai,s that its succeedin) contractor, Phesco, Inc. !Phesco", as able to e/cavate the sa,e roc5 for,ation ithout blastin). 2inall%, it asserts that the a ard of P@<-.(( per cubic ,eter has no factual and le)al basis as the sub:contract bet een 23CC and its blastin) sub: contractor, D%na,ic 9lastin) Specialists of the Philippines !D%na,ic", as onl% P0-(.(( per cubic ,eter.

In its Co,,ent#- dated October #?, '((#, 23CC points out that petitioner6s ar)u,ents are e/actl% the sa,e as the ones it raised before the *rbitration 9oard, the trial court and the Court of *ppeals. Moreover, in the Co,pro,ise *)ree,ent bet een the parties, petitioner co,,itted to abide b% the decision of the *rbitration 9oard. It should not no be allo ed to Auestion the decision. 23CC li5e ise notes that *tt%. $ose ;. Sa,onte !*tt%. Sa,onte", one of the ,e,bers of the *rbitration 9oard, as no,inated b% petitioner itself. If there as an% irre)ularit% in its proceedin)s such as the bias and pre4ud),ent petitioner i,putes upon Mr. Sison, *tt%. Sa,onte ould have co,plained. *s it is, *tt%. Sa,onte concurred in the decision of the *rbitration 9oard and dissented onl% as to the a ard of attorne%6s fees. *s re)ards the issue of interest, 23CC clai,s that the case involves forbearance of ,one% and not a clai, for da,a)es for breach of an obli)ation in hich case interest on the a,ount of da,a)es a arded ,a% be i,posed at the rate of si/ percent !<K" per annu,. 2inall%, 23CC asserts that its sub:contract a)ree,ent ith D%na,ic is ne l%:discovered evidence. Petitioner6s la %ers alle)edl% had a cop% of sub:contract in their possession. In an% event, the unit price of P0-(.(( cubic ,eter appearin) in the sub:contract represents onl% a fraction of costs incurred b% 23CC for the blastin) or5s. not the per the

Petitioner filed a Repl%#0 dated March #+, '((' reiteratin) its earlier sub,issions. 1he parties in the present case ,utuall% a)reed to sub,it to arbitration the settle,ent of the price of blastin), the parties6 clai,s for da,a)es, dela% and interests and all other unresolved clai,s includin) the e/act volu,e of blasted roc5s.#? 1he% further ,utuall% a)reed that the decision of the *rbitration 9oard shall be final and i,,ediatel% e/ecutor%.#< * stipulation sub,ittin) an on)oin) dispute to arbitration is valid. *s a rule, the arbitrator6s a ard cannot be set aside for ,ere errors of 4ud),ent either as to the la or as to the facts. Courts are )enerall% ithout po er to a,end or overrule ,erel% because of disa)ree,ent ith ,atters of la or facts deter,ined b% the arbitrators. 1he% ill not revie the findin)s of la and fact contained in an a ard, and ill not underta5e to substitute their 4ud),ent for that of the arbitrators. * contrar% rule ould ,a5e an arbitration a ard the co,,ence,ent, not the end, of liti)ation. Errors of la and fact, or an erroneous decision on ,atters sub,itted to the 4ud),ent of the

arbitrators, are insufficient to invalidate an a ard fairl% and honestl% ,ade. $udicial revie of an arbitration a ard is, thus, ,ore li,ited than 4udicial revie of a trial.#@ =o ever, an arbitration a ard is not absolute and ithout e/ceptions. .here the conditions described in *rticles '(-+, '(-& and '(0( of the Civil Code#+ applicable to both co,pro,ises and arbitrations are obtainin), the arbitrators6 a ard ,a% be annulled or rescinded. #& *dditionall%, 4udicial revie of an arbitration a ard is arranted hen the co,plainin) part% has presented proof of the e/istence of an% of the )rounds for vacatin), ,odif%in) or correctin) an a ard outlined under Sections '0 and '? of R.*. +@<, viB7 Section '0. ;rounds for vacatin) an a ard. L In an% of the follo in) cases, the court ,ust ,a5e an order vacatin) the a ard upon the petition of an% part% to the controvers% hen such part% proves affir,ativel% that in the arbitration proceedin)s7 !a" 1he a ard as procured b% corruption, fraud, or other undue ,eansG or !b" 1hat there as evident partialit% or corruption in the arbitrators or an% of the,G or !c" 1hat the arbitrators ere )uilt% of ,isconduct in refusin) to postpone the hearin) upon sufficient cause sho n, or in refusin) to hear evidence pertinent and ,aterial to the controvers%G that one or ,ore of the arbitrators as disAualified to act as such under section nine hereof, and illfull% refrained fro, disclosin) such disAualifications or of an% other ,isbehavior b% hich the ri)hts of an% part% have been ,ateriall% pre4udicedG or !d" 1hat the arbitrators e/ceeded their po ers, or so i,perfectl% e/ecuted the,, that a ,utual, final and definite a ard upon the sub4ect ,atter sub,itted to the, as not ,ade. .hen an a ard is vacated, the court, in its discretion, ,a% direct a ne hearin) either before the sa,e arbitrators or before a ne arbitrator or arbitrators to be chosen in the ,anner provided in the sub,ission or contract for the selection of the ori)inal arbitrator or

arbitrators, and an% provision li,itin) the ti,e in hich the arbitrators ,a% ,a5e a decision shall be dee,ed applicable to the ne arbitration to co,,ence fro, the date of the court6s order. .here the court vacates an a ard, costs not e/ceedin) fift% pesos and disburse,ents ,a% be a arded to the prevailin) part% and the pa%,ent thereof ,a% be enforced in li5e ,anner as the pa%,ent of costs upon the ,otion in an action. Section '?. ;rounds for ,odif%in) or correctin) an a ard. L In an% one of the follo in) cases, the court ,ust ,a5e an order ,odif%in) or correctin) the a ard, upon the application of an% part% to the controvers% hich as arbitrated7 !a" .here there as an evident ,iscalculation of fi)ures, or an evident ,ista5e in the description of an% person, thin) or propert% referred to in the a ardG or !b" .here the arbitrators have a arded upon a ,atter not sub,itted to the,, not affectin) the ,erits of the decision upon the ,atter sub,ittedG or !c" .here the a ard is i,perfect in a ,atter of for, not affectin) the ,erits of the controvers%, and if it had been a co,,issioner6s report, the defect could have been a,ended or disre)arded b% the court. 1he order ,a% ,odif% and correct the a ard so as to effect the intent thereof and pro,ote 4ustice bet een the parties. In this case, petitioner does not specif% hich of the fore)oin) )rounds it relies upon for 4udicial revie . Petitioner avers that Eif and hen the factual circu,stances referred to in the provisions afore,entioned are present, 4udicial revie of the a ard is arranted.E '( 2ro, its presentation of issues, ho ever, it appears that the alle)ed evident partialit% of Mr. Sison is sin)led out as a )round to vacate the board6s decision. .e note, ho ever, that the Court of *ppeals found that petitioner did not present an% proof to bac5 up its clai, of evident partialit% on the part of Mr. Sison. Its aver,ents to the effect that Mr. Sison as biased and had pre4ud)ed the case do not suffice to establish evident partialit%. Neither does

the fact that a part% as disadvanta)ed b% the decision of the arbitration co,,ittee prove evident partialit%.'# *ccordin) to the appellate court, ECpDetitioner as never deprived of the ri)ht to present evidence nor as there an% sho in) that the 9oard sho ed si)ns of an% bias in favor of 23CC. *s correctl% found b% the trial court, this Court cannot find its a% to support petitioner6s contention that there as evident partialit% in the assailed * ard of the *rbitrator in favor of the respondent because the conclusion of the 9oard, hich the Court found to be ell: founded, is full% supported b% substantial evidence.E'' 1here is no reason to depart fro, this conclusion. =o ever, e ta5e e/ception to the arbitrators6 deter,ination that based on pro,issor% estoppel per se or alone, 23CC is entitled to 4ust co,pensation for blastin) or5s for the reasons discussed hereunder. Section & of P.D. No. #?&0, entitled Prescribin) Policies, ;uidelines, Rules and Re)ulations for ;overn,ent Infrastructure Contracts, provides7 SEC1ION &. Chan)e Order and E/tra .or5 Order.L* chan)e order or e/tra or5 order ,a% be issued onl% for or5s necessar% for the co,pletion of the pro4ect and, therefore, shall be ithin the )eneral scope of the contract as bidCdedD and a arded. *ll chan)e orders and e/tra or5 orders shall be sub4ect to the approval of the Minister of Public .or5s, 1ransportation and Co,,unications, the Minister of Public =i)h a%s, or the Minister of Ener)%, as the case ,a% be. 1he pertinent portions of the I,ple,entin) Rules and Re)ulations of P.D. #?&0 provide7 CI : Contract I,ple,entation7 1hese Provisions Refer to *ctivities Durin) Pro4ect Construction, i.e., *fter Contract * ard 3ntil Co,pletion, E/cept as Ma% Other ise be Specificall% Referred to Provisions 3nder Section II. I9 : Instructions to 9idders. CI # : Variation Orders : OrderFSupple,ental *)ree,ent Chan)e OrderFE/tra .or5

0. *n E/tra .or5 Order ,a% be issued b% the i,ple,entin) official to cover the introduction of ne or5 ite,s after the sa,e has been found to strictl% co,pl% ith Section CI:#:# and approved b% the appropriate official if the a,ount of the E/tra .or5 Order is ithin the li,its of the for,er6s authorit% to approve ori)inal contracts and under the follo in) conditions7 a. .here there are additional or5s needed and necessar% for the co,pletion, i,prove,ent or protection of the pro4ect hich ere not included as ite,s of or5 in the ori)inal contract. b. .here there are subsurface or latent ph%sical conditions at the site differin) ,ateriall% fro, those indicated in the contract. c. .here there are dul% un5no n ph%sical conditions at the site of an unusual nature differin) ,ateriall% fro, those ordinaril% encountered and )enerall% reco)niBed as inherent in the or5 or character provided for in the contract. d. .here there are dul% approved construction dra in)s or an% instruction issued b% the i,ple,entin) officeFa)enc% durin) the ter, of contract hich involve e/tra cost. M <. * separate Supple,ental *)ree,ent ,a% be entered into for all Chan)e Orders and E/tra .or5 Orders if the a))re)ate a,ount e/ceeds '?K of the escalated ori)inal contract price. *ll chan)e ordersFe/tra or5 orders be%ond #((K of the escalated ori)inal contract cost shall be sub4ect to public biddin) e/cept here the or5s involved are inseparable fro, the ori)inal scope of the pro4ect in hich case ne)otiation ith the incu,bent contractor ,a% be allo ed, sub4ect to approval b% the appropriate authorities. @. *n% Variation Order !Chan)e Order, E/tra .or5 Order or Supple,ental *)ree,ent" shall be sub4ect to the escalation for,ula used to ad4ust the ori)inal contract price less the cost of ,obiliBation. In clai,in) for an% Variation Order, the contractor shall, ithin seven !@" calendar da%s after such or5 has been co,,enced or after the circu,stances leadin) to such condition!s" leadin) to the e/tra cost, and ithin '+ calendar da%s deliver a ritten co,,unication )ivin) full and detailed particulars of an%

e/tra cost in order that it ,a% be investi)ated at that ti,e. 2ailure to provide either of such notices in the ti,e stipulated shall constitute a aiver b% the contractor for an% clai,. 1he preparation and sub,ission of Chan)e Orders, E/tra .or5 Orders or Supple,ental *)ree,ents are as follo s7 a. If the Pro4ect En)ineer believes that a Chan)e Order, E/tra .or5 Order or Supple,ental *)ree,ent should be issued, he shall prepare the proposed Order or Supple,ental *)ree,ent acco,panied ith the notices sub,itted b% the contractor, the plans therefore, his co,putations as to the Auantities of the additional or5s involved per ite, indicatin) the specific stations here such or5s are needed, the date of his inspections and investi)ations thereon, and the lo) boo5 thereof, and a detailed esti,ate of the unit cost of such ite,s of or5, to)ether ith his 4ustifications for the need of such Chan)e Order, E/tra .or5 Order or Supple,ental *)ree,ent, and shall sub,it the sa,e to the Re)ional Director of officeFa)enc%Fcorporation concerned. b. 1he Re)ional Director concerned, upon receipt of the proposed Chan)e Order, E/tra .or5 Order or Supple,ental *)ree,ent shall i,,ediatel% instruct the technical staff of the Re)ion to conduct an on:the:spot investi)ation to verif% the need for the or5 to be prosecuted. * report of such verification shall be sub,itted directl% to the Re)ional Director concerned. c. 1he Re)ional Director concerned after bein) satisfied that such Chan)e Order, E/tra .or5 Order or Supple,ental *)ree,ent is 4ustified and necessar%, shall revie the esti,ated Auantities and prices and for ard the proposal ith the supportin) docu,entation to the head of officeFa)enc%Fcorporation for consideration. d. If, after revie of the plans, Auantities and esti,ated unit cost of the ite,s of or5 involved, the proper officeFa)enc%Fcorporation co,,ittee e,po ered to revie and evaluate Chan)e Orders, E/tra .or5 Orders or Supple,ental *)ree,ents reco,,ends approval thereof, the head of officeFa)enc%Fcorporation, believin) the Chan)e Order, E/tra .or5 Order or Supple,ental *)ree,ent to be in order, shall approve the sa,e. 1he li,its of approvin) authorit% for an% individual, and the a))re)ate of, Chan)e Orders, E/tra .or5 Orders or Supple,ental *)ree,ents for an% pro4ect of the head of officeFa)enc%Fcorporation shall not be )reater than those )ranted for an ori)inal pro4ect.

CI - : Conditions under hich Contractor is to Start .or5 under Variation Orders and Receive Pa%,ents #. 3nder no circu,stances shall a contractor proceed to co,,ence or5 under an% Chan)e Order, E/tra .or5 Order or Supple,ental *)ree,ent unless it has been approved b% the Secretar% or his dul% authoriBed representative. E/ceptions to the precedin) rule are the follo in)7 a. 1he Re)ional Director, or its eAuivalent position in a)enciesFofficesFcorporations ithout plantilla position for the sa,e, ,a%, sub4ect to the availabilit% of funds, authoriBe the i,,ediate start of or5 under an% Chan)e or E/tra .or5 Order under an% or all of the follo in) conditions7 !#" In the event of an e,er)enc% here the prosecution of the or5 is ur)ent to avoid detri,ent to public service, or da,a)e to life andFor propert%G andFor !'" .hen ti,e is of the essenceG provided, ho ever, that such approval is valid on or5 done up to the point here the cu,ulative increase in value of or5 on the pro4ect hich has not %et been dul% full% approved does not e/ceed five percent !?K" of the ad4usted ori)inal contract price, or P?((,((( hichever is lessG provided, further, that i,,ediatel% after the start of or5, the correspondin) Chan)eFE/tra .or5 Order shall be prepared and sub,itted for approval in accordance ith the above rules herein set. Pa%,ents for or5s satisfactoril% acco,plished on an% Chan)eFE/tra .or5 Order ,a% be ,ade onl% after approval of the sa,e b% the Secretar% or his dul% authoriBed representative. b. 2or a Chan)eFE/tra .or5 Order involvin) a cu,ulative a,ount e/ceedin) five percent !?K" of the ori)inal contract price or ori)inal ad4usted contract price no or5 thereon ,a% be co,,enced unless said Chan)eFE/tra .or5 Order has been approved b% the Secretar% or his dul% authoriBed representative. CE,phasis suppliedD It is petitioner6s sub,ission, and 23CC does not den%, that the clai, for pa%,ent of blastin) or5s in 9oton) alone as appro/i,atel% P#@(,(((,(((.((, a fi)ure hich far e/ceeds the ori)inal contract price of P+(,(((,(((.(( for t o !'" pro4ect sites. 3nder the fore)oin) i,ple,entin) rules, for an e/tra or5 order hich e/ceeds ?K of the ori)inal contract

price, no blastin) or5 ,a% be co,,enced ithout the approval of the Secretar% or his dul% authoriBed representative. Moreover, the procedure for the preparation and approval of the e/tra or5 order outlined under Contract I,ple,entation !CI" #!@" above should have been co,plied ith. *ccordin)l%, petitioner6s officials should not have authoriBed the co,,ence,ent of blastin) or5s nor should 23CC have proceeded ith the sa,e. 1he follo in) events, culled fro, the decision of the *rbitration 9oard and the assailed Decision, are ,ade the bases for the findin) of pro,issor% estoppel on the part of petitioner7 #. *fter clai,ant Crespondent hereinD encountered hat it clai,ed to be ,assive hard roc5 for,ation !1esti,on% of itness Du,alian), 1SN, '+ October #&&<, pp. 0#:0'G 1esti,on% of itness >ataAuin, '+ Nove,ber #&&<, pp. ':-G '(:'-G E/h. E$$$E and sub:,ar5in)s" and infor,ed respondent Cpetitioner hereinD about it, respondent6s o n )eolo)ists ent to the 9oton) site to investi)ate and confir,ed the roc5 for,ation and reco,,ended blastin) !Cf. Me,orandu, of Mr. Petronilo E. Pana, *ctin) Mana)er of the ;eoscience Services Depart,ent and the report of the )eolo)ists ho conducted the site investi)ationG E/hs. E2E and E2:#E". '. Clai,ant as5ed for clearance to blast the roc5 for,ation to the desi)n )rade !>etter dated '+ Septe,ber #&&'G E/h. E33E". 1he en)ineers of respondent at the pro4ect site advised clai,ant to proceed ith its su))ested ,ethod of e/traction !OrderFInstruction )iven b% Mr. Reuel R. Declaro and Mr. 2rancis *. Paderna dated '& Septe,ber #&&'G E/h. ECE". -. Clai,ant reAuested that the intended blastin) or5s be confir,ed as e/tra or5 order b% responsible officials of respondent directl% involved in the 9*CM*N II Pro4ect !i.e., then 9*CM*N II Pro4ect Mana)er, Mr. >auro R. 3,ali and Mr. *n)elito ;. Sen)a, Section Chief, Civil En)ineerin) Desi)n of respondent6s Desi)n Depart,ent hich bidded the pro4ect". 1hese officials issued verbal instructions to the effect7 !a" that clai,ant could blast the roc5 for,ation do n to the desi)n )rade of 0&? ,aslG !b" that said blastin) or5s ould be an e/tra or5 orderG and !c" that clai,ant ould be paid for said blastin) or5s usin) the price per cubic ,eter for si,ilar blastin) or5s at Palinpinon, or at P#,-0<.(( per cubic ,eter.

0. Clai,ant sent t o !'" confir,ator% letters to respondent, both addressed to its President, one dated -( Septe,ber #&&', and sent throu)h Mr. *n)elito Sen)a, Chief Civil Desi)n 8 1her,al, the other dated (' October #&&', and sent throu)h Mr. >auro R. 3,ali, Pro4ect Mana)er89acMan II !E/hs. EDE and EEEG 1esti,on% of itness Du,alian), 1SN, '+ October #&&<, pp. 0-:0&". 1he identical letters read7 .e ish to confir, %our instruction for us to proceed ith the blastin) of the 9oton) Plant site to the desi)n )rade pendin) issuance of the relevant variation order. 1his is to avoid dela% in the i,ple,entation of this critical pro4ect due to the ur)ent need to blast roc5s on the plant site. .e are confir,in) further %our state,ent that the said blastin) or5s is an e/tra or5 order and that e ill be paid usin) the price established in %our Palinpinon contract ith Phesco. 1han5 %ou for %our ti,el% action and e loo5 for ard to the i,,ediate issuance of the e/tra or5 order. .e are no ,obiliBin) eAuip,ent and ,anpo er for the said and hope to start blastin) ne/t ee5. or5

?. Respondent received the letters but did not repl% thereto nor counter,and the earlier instructions )iven to clai,ant to proceed ith the blastin) or5s. 1he due e/ecution and authenticit% of these letters !E/hs. ED:#E and EE:#E" and the fact of receipt !E/hs. ED:'E and EE:'E" ere dul% proved b% clai,ant !1esti,on% of itness Du,alian), 1SN, '+ October #&&<, 0-:0&". <. In ,id:October #&&', three !-" Vice:Presidents of respondent visited the pro4ect site and ere infor,ed of clai,ant6s blastin) activities. .hile respondent clai,s that one of the Vice:Presidents, Mr. Rodri)o 2alcon, raised ob4ections to clai,ant6s blastin) or5s as an e/tra or5 order, the% instructed clai,ant to speed up the or5s because of the po er crisis then houndin) the countr%. Stipulation no. '0 of the $oint Stipulation of 2acts of the parties hich reads7 E'0. In ,id:October #&&', three !-" Vice:Presidents of respondent, na,el%7 Mr. =ector N. Ca,pos, Sr., of En)ineerin) Construction, Mr. C.*. Pastoral of En)ineerin) Desi)n, and Mr. Rodri)o P. 2alcon, visited the pro4ect site and ere li5e ise apprised of clai,ant6s blastin) activities. 1he% never co,plained

about the blastin) or5s, ,uch less ordered its cessation. In fact, no official of respondent ever ordered that the blastin) or5s be stopped.E @. *fter visitin) 9oton), Mr. =ector N. Ca,pos, Sr., then Vice President of En)ineerin) Construction, instructed Mr. 2ernando *. Ma)allanes then Mana)er of the >uBon En)ineerin) Pro4ects Depart,ent, to evaluate clai,ant6s blastin) or5s and to sub,it his reco,,endations on the proper price therefor. In a ,e,orandu, dated #@ Nove,ber #&&' !E/h. E;E and sub:,ar5in)s", Mr. Ma)allanes confir,ed that clai,ant6s blastin) or5s as an e/tra or5 order and reco,,ended that it be paid at the price for si,ilar blastin) or5s at Palinpinon, or at P#,-0<.(( per cubic ,eter. Mr. Ca,pos concurred ith the findin)s and reco,,endations of Mr. Ma)allanes and instructed Mr. >auro R. 3,ali, then Pro4ect Mana)er of 9acMan II, to i,ple,ent the sa,e as sho n b% his instructions scribbled on the ,e,orandu,. +. Mr. 3,ali and the pro4ect tea, prepared proposed E/tra .or5 Order No. ' 8 9lastin) !E/h. EDDDE 8 Me,orandu, of Mr. 3,ali to Mr. Ca,pos dated '( $anuar% #&&- for ardin) proposed E/tra .or5 Order No. '", reco,,endin) a price of P&+-.@? per cubic ,eter for clai,ant6s blastin) or5s. Clai,ant a)reed to this price !1esti,on% of itness Du,alian), @ Nove,ber #&&<, p. 0+". &. On #& 2ebruar% #&&-, clai,ant brou)ht the ,atter of its unpaid blastin) or5s to the attention of the then NPC Chair,an Calso Secretar% of the Depart,ent of Ener)% thenD Delfin >. >aBaro durin) a ,eetin) ith the ,ulti:sectoral tas5 force ,onitorin) the i,ple,entation of po er plant pro4ects, ho as5ed then NPC President Pablo 9. Mali/i hat he as doin) about the proble,. President Mali/i thereafter convened respondent6s vice:presidents and ordered the, to Auic5l% docu,ent the variation order and pa% clai,ant. 1he vice:president, and specificall% Mr. Ca,pos, pled)ed that the variation order for clai,ant6s blastin) or5s ould be sub,itted for the approval of the NPC 9oard durin) the first ee5 of March #&&-. Clai,ant thereafter sent respondent a letter dated '' 2ebruar% #&&- !E/. EJE" to confir, this pled)e !1esti,on% of itness Du,alian), @ Nove,ber #&&<, pp. '+:-(". #(. Mr. Ca,pos created a tas5 force !i.e., the 1echnical 1as5 2orce on the Stud% and Revie of E/tra .or5 Order No. 'G E/h. E222E" to revie clai,ant6s blastin) or5s. *fter several ,eetin)s ith the

tas5 force, clai,ant a)reed to the lo er price of P0?+.(@ per cubic ,eter, in e/chan)e for Auic5 pa%,ent !1esti,on% of itness Du,alian), @ Nove,ber #&&<, p. -(". ##. =o ever, no variation order as issued and no pa%,ent ca,e, althou)h it appears fro, t o !'" radio)ra,s sent b% Mr. Ca,pos to Mr. Paderna at the pro4ect site that the variation order as bein) processed and that pa%,ent to clai,ant as forthco,in) !E/hs. E***E and E999E". #'. Respondent as5ed the Depart,ent of Public .or5s and =i)h a%s !DP.=" about the standard prices for blastin) in the pro4ects of the DP.=. 1he DP.= officiall% replied to respondent6s Auer% in a letter dated #& Ma% #&&- but the tas5 force still failed to see5 9oard approval for clai,ant6s variation order. 1he tas5 force eventuall% reco,,ended that the issue of )radin) e/cavation and structural e/cavation and the unit prices therefor be brou)ht into voluntar% arbitration !1esti,on% of itness Du,alian), @ Nove,ber #&&<, pp. -(:?@". #-. Clai,ant thereafter sa Mr. 2rancisco >. Vira%, the ne NPC President, ho proposed that clai,ant accept the price of P0?+.(@ per cubic ,eter for its blastin) or5s ith the balance of its clai, to be the sub4ect of arbitration. Clai,ant accepted the offer and sent the letter dated '+ Septe,ber #&&- !E/h. EOE" to for,aliBe said acceptance. =o ever, no variation order as issued and the pro,ised pa%,ent never ca,e. !1esti,on% of itness Du,alian), @ Nove,ber #&&<, p. ?+". #0. *fter so,e ti,e, clai,ant ,et Mr. Vira% on #& October #&&- at the pro4ect site, and ith so,e NPC officers in attendance, particularl% Mr. ;ilberto *. Pastoral, Vice:President for En)ineerin) Desi)n, ho as instructed b% Mr. Vira% to prepare the necessar% ,e,orandu, !i.e., that clai,ant ould be paid P0?+.(@ per cubic ,eter ith the balance of its clai, to be the sub4ect of arbitration" for the approval of the NPC 9oard. Clai,ant for,aliBed hat transpired durin) this ,eetin) in its letter to Mr. Pastoral dated '' October #&&- !E/hibit ERE". 9ut no action as ta5en b% Mr. Pastoral and no variation order as issued b% respondent !1esti,on% of itness Du,alian), @ Nove,ber #&&<, pp. ?@:?+".'- CE,phasis supplied and brac5eted ordsD

Pro,issor% estoppel E,a% arise fro, the ,a5in) of a pro,ise, even thou)h ithout consideration, if it as intended that the pro,ise should be relied upon and in fact it as relied upon, and if a refusal to enforce it ould be virtuall% to sanction the perpetration of fraud or ould result in other in4ustice.E'0 Pro,issor% estoppel presupposes the e/istence of a pro,ise on the part of one a)ainst ho, estoppel is clai,ed. 1he pro,ise ,ust be plain and una,bi)uous and sufficientl% specific so that the court can understand the obli)ation assu,ed and enforce the pro,ise accordin) to its ter,s.'? In the present case, the fore)oin) events clearl% evince that the pro,ise that the blastin) or5s ould be paid as predicated on the approval of the e/tra or5 order b% petitioner6s 9oard. Even 23CC ac5no led)ed that the blastin) or5s should be an e/tra or5 order and reAuested that the e/tra or5 order be confir,ed as such and approved b% the appropriate officials. Notabl%, even as the e/tra or5 order alle)edl% pro,ised to it as not %et forthco,in), 23CC co,,enced blastin). 1he alle)ed pro,ise to pa% as therefore conditional and up to this point, pro,issor% estoppel cannot be established as the basis of petitioner6s liabilit% especiall% in li)ht of P.D. #?&0 and its i,ple,entin) rules of hich both parties are presu,ed to have 5no led)e. In MendoBa v. Court of *ppeals, supra, e ruled that ECaD cause of action for pro,issor% estoppel does not lie here an alle)ed oral pro,ise as conditional, so that reliance upon it as not reasonable. It does not operate to create liabilit% here it does not other ise e/ist.E Petitioner6s ar)u,ent that it is not bound b% the acts of its officials ho acted be%ond the scope of their authorit% in allo in) the blastin) or5s is correct. Petitioner is a )overn,ent a)enc% ith a 4uridical personalit% separate and distinct fro, the )overn,ent. It is not a ,ere a)enc% of the )overn,ent but a corporate entit% perfor,in) proprietar% functions. It has its o n assets and liabilities and e/ercises corporate po ers, includin) the po er to enter into all contracts, throu)h its 9oard of Directors. In this case, petitioner6s officials e/ceeded the scope of their authorit% hen the% authoriBed 23CC to co,,ence blastin) or5s ithout an e/tra or5 order properl% approved in accordance ith P.D. #?&0. 1heir acts cannot bind petitioner unless it has ratified such acts or is estopped fro, disclai,in) the,.'< =o ever, the Co,pro,ise *)ree,ent entered into b% the parties, petitioner bein) represented b% its President, Mr. ;uido *lfredo *. Del)ado, actin)

pursuant to its 9oard Resolution No. &?:?0 dated *pril -, #&&?, is a confir,ator% act si)nif%in) petitioner6s ratification of all the prior acts of its officers. Si)nificantl%, the parties a)reed that ECtDhis Co,pro,ise *)ree,ent shall serve as the Supple,ental *)ree,ent for the pa%,ent of plaintiff6s blastin) or5s at the 9oton) siteE '@ in accordance ith CI #!<" afore:Auoted. In other ords, it is pri,aril% b% the force of this Co,pro,ise *)ree,ent that the Court is constrained to declare 23CC entitled to pa%,ent for the blastin) or5s it undertoo5. Moreover, since the blastin) or5s ere alread% rendered b% 23CC and accepted b% petitioner and in the absence of proof that the blastin) as done )ratuitousl%, it is but eAuitable that petitioner should ,a5e co,pensation therefor, pursuant to the principle that no one should be per,itted to enrich hi,self at the e/pense of another.'+ 1his brin)s us to the issue of 4ust co,pensation. 1he parties proposed in the ter,s of reference 4ointl% sub,itted to the *rbitration 9oard that should 23CC be ad4ud)ed entitled to 4ust co,pensation for its blastin) or5s, the price therefor should be deter,ined based on the pa%,ent for blastin) or5s in si,ilar pro4ects of 23CC and the a,ount it paid to its blastin) subcontractor. '& 1he% a)reed further that Ethe price of the blastin) at the 9oton) site . . . shall ran)e fro, Defendant6s position of P@<.(( per cubic ,eter as per contract to a ,a/i,u, of P#,#00.((E-( Petitioner contends that the *rbitration 9oard, trial court and the appellate court undul% relied on the ,e,orandu, of Mr. 3,ali hich as alle)edl% not ,ar5ed as an e/hibit. .e note, ho ever, that this ,e,orandu, actuall% for,s part of the record of the case as E/hibit EDDD.E-# Moreover, both the *rbitration 9oard and the Court of *ppeals found that Mr. 3,ali6s proposal is the best evidence on record as it is supported b% detailed cost esti,ates that ill serve as basis to deter,ine 4ust co,pensation. .hile the *rbitration 9oard found that 23CC did not present evidence sho in) the a,ount it paid to its blastin) sub:contractor, it did present testi,on% to the effect that it incurred other costs and e/penses on top of the actual blastin) cost. =ence, the a,ount of P0-(.(( per cubic ,eter indicated in 23CC6s Contract of *)ree,ent ith D%na,ic is not controllin). Moreover, 23CC presented evidence sho in) that in t o !'" other pro4ects here blastin) or5s ere underta5en, petitioner paid the contractors P#,-0< per cubic ,eter for blastin) and disposal of solid roc5s in the

Palinpinon pro4ect and P#,#00.?# per cubic ,eter for roc5 e/cavation in the =er,osa 9alinta a5 pro4ect. 9esides, hile petitioner clai,s that in a contract ith .ilper Construction for the construction of the 1a%abas sub: station, the price a)reed for blastin) as onl% P&<.#-, petitioner itself did not present evidence in support of this clai,.-' Parentheticall%, the point raised b% petitioner that its subseAuent contractor, Phesco, did not underta5e blastin) or5s in e/cavatin) the sa,e roc5 for,ation is e/traneous and irrelevant. 1he fact is that petitioner allo ed 23CC to blast and undertoo5 to pa% for the blastin) or5s. *t this point, e hear5en to the rule that the findin)s of the *rbitration 9oard, affir,ed b% the trial court and the Court of *ppeals and supported as the% are b% substantial evidence, should be accorded not onl% respect but finalit%.-- *ccordin)l%, the a,ount of P@<-.(( per cubic ,eter fi/ed b% the *rbitration 9oard and affir,ed b% the appellate court as 4ust co,pensation should stand. *s re)ards the issue of interest, hile the appellate court declared in the bod% of its Decision Ethat interest hich ould represent the cost of the ,one% spent be i,posed on the ,one% actuall% spent b% clai,ant for the blastin) or5s,E-0 there is no pronounce,ent as to the pa%,ent of interest in the dispositive portion of the Decision even as it specificall% deleted the a ard of attorne%6s fees. Despite its 5no led)e of the appellate court6s o,ission, 23CC did not file a ,otion for reconsideration or appeal fro, its Decision. In failin) to do so, 23CC allo ed the Decision to beco,e final as to it. In Ed ards v. *rce,-? e ruled that in a case decided b% a court, the true 4ud),ent of le)al effect is that entered b% the cler5 of said court pursuant to the dispositive part of its decision. 1he onl% portion of the decision that ,a% be the sub4ect of e/ecution is that hich is ordained or decreed in the dispositive portion. .hatever ,a% be found in the bod% of the decision can onl% be considered as part of the reasons or conclusions of the court and serve onl% as )uides to deter,ine the ratio decidendi.-< Even so, the Court allo s a 4ud),ent hich had beco,e final and e/ecutor% to be clarified hen there is an a,bi)uit% caused b% an o,ission or ,ista5e in the dispositive portion of the decision.-@ In Reinsurance Co,pan% of the Orient, Inc. v. Court of *ppeals,-+ e held7

In Republic Suret% and Insurance Co,pan%, Inc. v. Inter,ediate *ppellate Court, the Court appl%in) the above doctrine said7 E/// .e clarif%, in other ords, hat e did affir,. .hat is involved here is not hat is ordinaril% re)arded as a clerical error in the dispositive part of the decision of the Court of 2irst Instance, hich t%pe of error is perhaps best t%pified b% an error in arith,etical co,putation. *t the sa,e ti,e, hat is involved here is not a correction of an erroneous 4ud),ent or dispositive portion of a 4ud),ent. .hat e believe is involved here is in the nature of an inadvertent o,ission on the part of the Court of 2irst Instance ! hich should have been noticed b% private respondent6s counsel ho had prepared the co,plaint", of hat ,i)ht be described as a lo)ical follo :throu)h of so,ethin) set forth both in the bod% of the decision and in the dispositive portion thereof7 the inevitable follo : throu)h, or translation into, operational or behavioral ter,s, of the annul,ent of the Deed of Sale ith *ssu,ption of Mort)a)e, fro, hich petitioners6 title or clai, of title e,bodied in 1C1 #--#?flo s.E !Italics supplied"-& In this case, the o,ission of the a ard of interest as obviousl% inadvertent. Correction is therefore in order. =o ever, e do not a)ree ith the *rbitration 9oard that the interest should be co,puted at #'K. Since the case does not involve a loan or forbearance of ,one%, )oods or credit and court 4ud),ents thereon, the interest due shall be co,puted at <K per annu, co,puted fro, the ti,e the clai, as ,ade in #&&' as deter,ined b% the *rbitration 9oard and in accordance ith *rticles ''(& and ##<& of the Civil Code. 1he actual base for the co,putation of le)al interest shall be on the a,ount finall% ad4ud)ed.0( 2urther, hen the 4ud),ent a ardin) a su, of ,one% beco,es final and e/ecutor%, the rate of le)al interest shall be #'K per annu, fro, such finalit% until its satisfaction, this interi, period bein) dee,ed to be b% then an eAuivalent to a forbearance of credit.0# .=ERE2ORE, the petition is ;R*N1ED in part. 1he appealed decision is MODI2IED in that the a,ount of P@0,(-?,?(-.?( shall earn le)al interest of si/ percent !<K" fro, #&&'. * t elve percent !#'K" interest, in lieu of si/ percent !<K", shall be i,posed on such a,ount upon finalit% of this decision until the pa%,ent thereof. SO ORDERED. Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur.