Datem challenges Megaworld: Arbitrate

The absence of a clause for arbitration in the Megaworld contracts to quickly resolve conflicts instead of going through a tedious court process should not prevent the feuding construction firm Datem and property giant Megaworld to settle through the usual process, Datem president Lesley Villanueva said.

"That was what we wanted from the start," Villanueva told Daily Tribune. Datem had sued over P873 million in arrears on five Megaworld projects.

Villanueva cited a column of Megaworld independent director Jess Varela that appeared 20 November on the Money page of Daily Tribune suggesting an arbitration path.

"We completely agree with the statement of Varela, 'Datem could have opted to go on arbitration whereby both parties can thresh out claims and counterclaims outside of the courtroom rendering a more neutral space for negotiations'," Villanueva said.

"Yes, arbitration is the ideal venue to settle any construction disputes. Arbitration is a special way of settling disputes, which in the Philippines is done through the Construction Industry Arbitration Commission. However, 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," she explained.

"The standard construction contract of major developers and project owners conforms to the international practice which has a common provision of settlement of disputes through arbitration," according to Atty. Rufino Policarpio, Datem counsel, said.

"Arbitration is a special way in the construction industry to settle disputes. There's a special law that created an arbitration commission that takes the place of regular courts."

"The people who comprise the special body are actually technical people like engineers and architects that will look into the cases."

"Resolution of disputes through these bodies is very fast unlike the regular courts."

"In the regular courts, the judges normally do not have the expertise in appreciating the cases," he said.

"Of all the Datem clients, only Megaworld and probably one or two more but the property giant is consistent in not including an arbitration clause," Policarpio noted.

Incidentally, Megaworld president Andrew Tan was in Xiamen, China for a business trip to promote the company's projects on 14 November, the day that the Quezon City Regional Trial Court issued the WPA on Uptown Parksuites Towers 1 and 2, Eastwood Global Plaza corporate tower and luxury residences, One Le Grand Tower, 18 Avenue De Triomphe, and Clark Green Frontier.

Tan said in his visit that he intended to invest in the Xiamen area.

What Megaworld wants

"Megaworld wanted disputes to be settled through the regular judicial process that is why we have to go to Quezon City regional trial court because that is what the contract provided," Policarpio indicated.

"Normally the venue of dispute settlement would be the Construction Industry Arbitration Commission, or CIAP, which is very expeditious because it comprises technical people who know their way in the industry," the Datem representative said.

"So their usual timetable is fast at an average of three months and people abide," he said.

"In usual court cases, you have to go through the docket system so it takes years to settle a case," he added.

The arbitrator is usually a three-man panel, one representative is picked by the disputing parties and the third and they then hto agree on a third member, or if not the CIAC chairperson makes the choices has been working in about three or four decades.

Megaworld has not embraced such a process. Datem has completed projects with the Andrew Tan company since 2010 without any issue.

Datem and Megaworld had engaged in a dispute over its last four projects.

"My point is, if you're a company and the contractor is not good, would you give them repeat orders. Will you award them projects over a span of 10 years," according to Policarpio.

Datem said it is currently seeking justice in the proper forum by filing a legal case to enforce unpaid accomplished work arising from completed projects with Megaworld Corp.

Upholding principles of integrity, Datem said it honors contractual commitments to clients, vendors and employees.

"Financially strong, we remain steadfast in our commitment to building a better and stronger nation," according to the much-sought contractor.