Megaworld to file multibillion-peso lawsuit vs Datem

MANILA, Philippines — Real estate giant Megaworld yesterday announced that it will file a multibillion-peso lawsuit against construction firm DATEM Inc. for alleged gross negligence and abandoning its commitment to finish several projects.

“They have to be accountable for their gross negligence to project timelines as well as their poor on-ground support and below standard workmanship, which we have had to augment with more reputable, professional and better quality contractors,” Kevin Tan, chief executive officer of Megaworld’s parent company Alliance Global Group, said in a statement.

“DATEM is deceiving the public in hiding the truth for their very poor performance. In fact, they have already been previously blacklisted, not just with Megaworld, but also our other Group of Companies,” Tan added.

ACCRALAW, the country’s largest law firm, will represent Megaworld.

A document obtained by The STAR showed that in one of Megaworld’s projects in Pasig City, DATEM only completed five levels of a tower from October 2019 to August 2022, prompting Megaworld to reassign the project to another contractor, EEI Corp., in October 2022.

In just a year, EEI Corp. managed to finish up to 38 floors of the project.

Meanwhile, DATEM alleged that Megaworld was involved in fraudulent activities and ignored its request for payment.

Judge Rochelle Yvette Galano of the Quezon City Regional Trial Court Branch 105 issued a Writ of Preliminary Attachment on Megaworld and said that the evidence submitted by DATEM demonstrated “sufficient grounds to support the claim that defendant (Megaworld) engaged in fraudulent activities in contracting the debt and in fulfilling its obligations.”

The court froze five Megaworld projects as DATEM sought to collect around P873 million in alleged unpaid dues.

“What is considered fraudulent is demanding payments for the projects they failed to deliver excellently and on time,” Megaworld said.

A construction industry source told The STAR that DATEM has been “financially bleeding” and many of their projects with other developers are delayed or unfinished.

International Chamber of Commerce-Philippines director general Jess Varela said that DATEM’s allegations are “preposterous.”

“It is unthinkable for a giant and prestigious firm like Megaworld to renege on a contractual obligation, especially when... the firm has several ongoing projects which are proceeding smoothly with other contractors,” Valera said. 

Megawide Construction Corp. said it has “no commercial or collection issues with Megaworld.”

“Our business relationship has been that of a true and lasting partnership and mutuality in business dealings fostered by decades of cooperation and professionalism,” said Universal Steel Smelting Co. Inc. president Joseph Lim.

DDT Konstract, Inc. said its relationship with Megaworld “has been based on mutual respect.”

“(The firm) is issuing this statement in its resolve to stress the practice of mutual respect that prevails between our organizations,” it added.