Vol. XXI, No. 240 [ BusinessWorld Online ]
Tuesday, July 8, 2008 | MANILA, PHILIPPINES
THE OWNERS of Edsa Shangri-La Hotel owe BF Corporation about P31 million for construction work done at its five-star hotel in Mandaluyong City, the Supreme Court ruled.
In an 18-page decision penned by Associate Justice Presbitero J. Velasco, Jr., the high court affirmed the findings of a lower court, and later by the Court of Appeals, that the hotel chain owner had unpaid obligations worth P24.78 million representing construction work plus P5.81 million in retention sum.
It also ordered the firm to pay its construction partner P3 million in moral and exemplary damages and lawyers’ fees.
The Edsa Shangri-La Hotel is operated by Rufo B. Colayco, Rufino L. Samaniego, Kuok Khoon Chen and Kuok Khoon Tsen, among others.
"The factual findings of the trial court, as affirmed by the [appellate court], that there was delay on the part of Edsa Shangri-La, that there was no proof that BF Corp.’s work was defective, and that the petitioners were guilty of malice and bad faith, ought to be affirmed," the tribunals said.
Construction of the five-star hotel started on May 21, 1991. BF Corporation was contracted and paid based on work accomplished according to monthly progress billings. The firm submitted 19 progress billings until the project was completed on June 30, 1992.
While it was paid P86.5 million for the 13 progress billings without hitches, BF had a hard time collecting the remaining sum. It sued the hotel before a Pasig City trial court in July 1993.
On Sept. 23, 1996, the trial court dismissed the hotel’s claims that it had overpaid BF Corp. for the 13 billings. It also junked claims that the construction firm should not receive additional payment for inferior work.
The Shangri-La management immediately filed a stay order with the appellate court when the lower court issued a motion for execution despite its pending appeal.
While it had initially prevented the trial court from executing the order, the appellate court later reversed itself and granted BF’s claims. — Ira P. Pedrasa
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