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More woe for Hanjin Heavy in Mindanao

More woe for Hanjin Heavy in Mindanao

Manila: South Korean firm Hanjin Heavy Industries and Construction Co., Ltd. owes a local subcontractor P352.163 million, excluding interest, for building work done at the Davao International Airport, the Supreme Court has ruled. This comes as Hanjin Heavy is embroiled in a bribe scandal at its proposed shipbuilding yard on the same southern Philippine island.
In a 33-page decision penned by Associate Justice Presbitero J. Velasco, Jr., the high court's second division chided the Korean company for forcing subcontractor Dynamic Planners and Construction Corp. out of the project at a time when the latter's work was 94% complete.
"In net effect, Hanjin accepted the benefits arising from the subcontract agreement without as much asking Dynamic to finish its part of the bargain," the court said.
Following the contract award from the government to build the P1.7- billion airport in Davao, Hanjin entered into a subcontract deal with Dynamic Planners to implement the project.
The contract contained provisions on progress billings or payment for works accomplished and retention money to ensure that the project was deficiency-free.
Court documents showed the Korean firm had not followed its part of the bargain, paying the subcontractor in installments and hampering Dynamic from meeting its April 2002 deadline.
Hanjin finally took over eight months after, claiming that Dynamic had abandoned the project. At some point, it claimed the local firm's structural work had been poorly implemented. An engineering team later discovered that Dynamic had not deviated from the design plan.
Dynamic sued Hanjin before the Construction Industry Arbitration Commission, which awarded it P125.995 million in claims. Both parties later appealed the case to resolve the amount. The appellate court modified the award and increased Hanjin's liabilities to P258.543 million.
Upon final appeal, the high court recomputed and set the award at P352.163 million, excluding interest.
Hanjin Heavy is also under pressure at its proposed Mindanao shipbuilding yard with bribe claims creating a national scandal that has led Hanjin Heavy to suggest it might bail out from that project.  [7/5/08]

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