Metropolitan Cebu Water District v. Mactan Rock Industries (G.R. No. 172438)

Facts:

Petitioner Metropolitan Cebu Water District (MCWD), a government-owned and controlled corporation, entered into a Water Supply Contract with herein respondent, Mactan Rock Industries, Inc. (MRII), wherein the latter would supply MCWD with potable water with a minimum guaranteed annual volume. Respondent filed a complaint against MCWD with the CIAC citing the arbitration clause of the contract and seeking the reformation of Clause 17 of the Contract or the Price Escalation/De-Escalation Clause in order to include Capital Cost Recovery in the price escalation formula. MCWD filed its Answer, including a motion to dismiss the complaint on the ground that CIAC had no jurisdiction over the case, as the contract was not one for construction or infrastructure. Petitioner then filed two petitions before the CA which were both denied, hence this petition.

Issues:

(1) Whether or not CIAC may exercise jurisdiction over disputes arising from a water supply contract; and if so,

(2) Whether or not CIAC have a jurisdiction over a complaint praying for a reformation of a water supply contract.

Ruling:

(1) The Court finds in the affirmative. The motion for reconsideration was denied by CA and MCWD never appealed the case. Thus, the decision of the CA became final and executory. The Court has held time and again that a final and executory judgment, no matter how erroneous, cannot be changed even by this Court. The CA affirming the CIAC’s jurisdiction and it becoming final, is now beyond the jurisdiction of the Court to review or modify, even supposing for the sake of argument, that it is indeed erroneous.

(2) Where the law does not delineate, neither should we. Neither the provisions of the Civil Code on reformation of contracts nor the law creating CIAC exclude reformation in its jurisdiction. Therefore, because the CIAC has been held to have jurisdiction over the contract, it follows that it has jurisdiction to order the reformation of the contract as well.

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