DEPARTMENT OF PUBLIC WORKS v.

CMC

Facts: DPWH and (the Joint Venture) entered into an Agreement for the construction of Contract Package
6MI-9. However, sometime in 2003 while the project was ongoing, Joint Ventures hatching plant was
bomb by the MILF. As a result, Joint Ventures made several (17) written demands for the extension and
payment of the foreign component of the contract. DPWH did not reply.

On March 2004, (JV) filed a complaint against DPWH before the CIAC.

CIAC promulgated an award directing DPWH to pay Joint Ventures their money claims. The C.A.
sustained CIAC’s decision.

According to petitioner, the filing of the claim before CIAC was premature, since under CIAC rules, there
must be an exhaustion of administrative remedies first before government contracts are brought to it for
arbitration.

Issue: W/N the case is premature due to JV’s noncompliance with the Doctrine of Exhaustion of
Administrative Remedies?

Ruling: No, the case is not premature. Sub- clause 67.1 of the Conditions of Contract provides that “the
matter in dispute shall, in the first place, be referred in writing to the Engineer; with a copy to the other
party such statement shall be made pursuant to this clause.”

In this case, CIAC found and correctly ruled that respondent had duly complied with the Contractual
Obligations to exhaust administrative remedies under sub-clause 67. A total of 17 demand letters were
sent to petitioner to no avail.

Hence, even assuming that sub-clause 67 is not applicable, the case would still fall within the exceptions
to the doctrine of exhaustion of administrative remedies since strict application of the doctrine will be set
aside when requiring it would only be unreasonable under the circumstance.