THE Cebu Provincial Board (PB) has authorized Gov. Hilario Davide III to enter into a compromise agreement with Duros Development Corporation to settle the P89.5 million that is owed to the construction firm for projects undertaken during the Garcia administration.
The compromise settlement would be for 25 separate contracts, according to the resolution approved by the PB last March 21.
“Once the compromise agreement is signed, the two parties will submit a joint motion to the Court of Appeals asking to approve the motion and render a decision based on the motion,” Provincial Legal Officer Orvi Ortega told Cebu Daily News.
This was in relation to a claim filed by Duros for road rehabilitation and construction projects implemented in the province as early as 2006 during the term of then Gov. Gwendolyn Garcia.
On Nov. 21, 2014, the Construction Industry Arbitration Commission (CIAC) awarded Duros its principal claim of P91.1 million for the 25 unpaid contracts plus legal interest of six percent per annum, attorney’s fees and arbitration costs that brought the total to around P95.5 million.
The provincial government filed a petition for review before the Court of Appeals with a prayer of a temporary restraining order and/or writ of preliminary injunction on Dec. 22, 2014.
But the PB, acting on a resolution authored by Boar Member Peter Calderon, last Monday found merit in entering into a compromise agreement with Duros because the company had manifested before the CA its intention to submit the case for mediation.
Before the resolution was approved, Duros and the provincial government had also engaged in exploratory discussions “under the principles of justice, equality and fairness,” noted Calderon in his resolution.
The contractor was willing to forgo the entire legal interests, attorney’s fees and arbitration costs awarded to it. Duros also further agreed to deduct P1.54 million from the principal claim.
“The Province of Cebu finds the foregoing terms and conditions as just and fair, considering that the resultant remaining amount of P89 million is smaller than the original award of the CI,” Calderon said in his resolution.