Contractors decry Megaworld ‘SOP’

The absence of an arbitration clause was the common denominator in development contracts of property giant Megaworld Corp. which has proven to have placed contractors in a disadvantage.

A spokesperson of Datem Corp. said not paying their suppliers or contractors is already their standard operating procedure, or SOP."

Yet, Megaworld's standard form of contract has a "No arbitration clause," which Datem has been attempting to negotiate to revise for the past few years.

"Yes, arbitration is the ideal venue to settle any disputes," Datem legal counsel Rufino Policarpio said.

"Arbitration is a special way of settling disputes, which in the Philippines is done through the Construction Industry Arbitration Commission, or CIAC," he added.

The lawyer said Datem had asked "for an arbitration clause but were repeatedly denied."

Other Megaworld contractors have sought the same provision in their contracts which expedites disputes since filing cases with courts take excruciatingly long to settle.

Monocrete Construction Philippines Inc., which wrote the giant company and issued an invitation for it to submit "the foregoing dispute (on a P185 million claim)… with the CIAC for the confidential resolution of this matter."

"Kindly inform us of Megaworld's decision on this request within fifteen (15) days from receipt of this letter. Should Megaworld fail to respond within the said period, Monocrete shall interpret it as Megaworld's unwillingness to confidentially resolve this matter with the CIAC and Megaworld's preference to undergo a public trial on its scheme to defraud one of its contractors for a Project that it has been enjoying the fruits thereof since 201," it explained.

Big suppliers of the company will file similar claims against the real estate firm following Daily Tribune's story about the Quezon City Regional Trial Court's issuance of a writ of preliminary attachment to cover P873 million in Megaworld obligations, the Datem spokesperson said.

The pattern of deceit is apparent in the demand letters of Monolith Construction and Development Corp. and Monocrete with Megaworld.

In the demand letter of Monocrete for debts related to the Iloilo Center Mall Project, the contractor said "did not even have the decency to reply to the aforesaid letter in order to amicably resolve this matter."

"The continued indifference to our demand is an obvious indication that Megaworld, and its corporate officers, do not intend to clear and discuss this matter with Monocrete," the company said. It added, "In fact, the inordinate silence on the valid claims of Monocrete is a conscious effort of Megaworld to unlawfully evade its obligations."

Megaworld, through its officers and directors, has been systematically deceiving and defrauding Monocrete, the company's counsel said.

Monolith which is trying to collect P439 million from Megaworld said "despite compliance with all the requirements and proper procedures for the release of payments… you have continuously refused and continue to refuse to pay your outstanding obligations."

Monolith's contract, signed 7 April 2016, with Megaworld was for the construction of the World Commerce Place Project.

Several unpaid contractors

The Datem spokesman said Megaworld "has a lot of unpaid contractors" which are afraid of collecting from the influential company.

"Contractors have to run after Megaworld to halt the practice" of not paying their contractors when a project is about to be completed.

"Their public image differs from what they actually practice with their contractors and subcontractors," according to the Datem official.

"Hopefully there would be a bandwagon effect among those with collectibles from Megaworld," he explained.

"The suppliers are also getting together to consolidate their legal action against Megaworld," the spokesperson added. "It will have an industry-wide effect."

In a statement, Datem said it is "seeking justice in the proper forum by filing a legal case to enforce unpaid accomplished work arising from completed projects with Megaworld Corporation."

The company said it arrived at the decision following "years of patient negotiations unfair treatment."

"The case is now before the Courts of Law, and we want to assure our partners and stakeholders that we are committed to pursuing justice in accordance with due process," it said.

Datem said that in upholding the principle of integrity, it "honors contractual commitments to clients, vendors, and employees. Financially strong, we remain steadfast in our commitment to building a better and stronger nation."

"Datem tried to exhaust all remedies to collect the arrears without resorting to a court case, including the signing of a mutual agreement with Megaworld."