SC orders Shangri-La to pay in EDSA Plaza case

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THE Supreme Court (SC) ordered Shangri-La Properties, Inc to pay BF Corp. up to P52.6 million over the construction of the first and second phases, and the car parking structure of the EDSA Plaza project n Mandaluyong City.

The case stemmed from the contract between Shangri-La Properties, now known as Shang Properties, Inc., and the BF Corp. for the project. A trial court has directed them to pursue the case before the Construction Industry Arbitration Commission (CIAC).

The court also imposed a legal interest of 6% from the date of an arbitral tribunal’s decision until the decision becomes final and executory in 2007, and a 6% interest per annum until full satisfaction.

In its 25-page petition dated Oct. 15 released Tuesday, the court partially granted the petition filed by BF Corp.

It upheld the award granted by the CIAC in 2007 on unpaid progress billings on specific variation works that was reversed by the Court of Appeals (CA).

The court said that the arbitral tribunal has correctly ruled that BF Corp. complied with the requirements under the Civil Code.

“The Court upholds that Arbitral Tribunal. In our view, the CA wrongly disregarded the specific variation orders that carried the conformity of SLPI, which, when coupled with the letter dated may 9, 1991, satisfied the requisites under Article 1724,” it said.

“Accordingly, the Court reinstates the Arbitral Tribunal’s awards in favor of BFC for variation orders included in progress amounting to P9,513,987.91 and for change orders not included in progress billings amounting to P6,201,278.50,” it added.

The court also said that both the CA and the arbitral tribunal found that the original work scope was completed, and upheld the award of P24.5 million of unpaid progress billings.

The SC, on the other hand, denied that BF Corp.’s claim for fire damage and repair works due to lack of proof that Shangri-La received fire insurance proceeds.

The court also denied for lack of merit the petition of Shangri-La Properties.

The court also upheld the appellate court’s reduction of liquidated damages for Shangri-La Properties due to incurred delays to P780,000 from P7.6 million.

The court said that as BF Corp. is also liable to Shangri-La Properties due to the delays in the project, the money obligations were offset, it said in the statement. — Vann Marlo Villegas