You are on page 1of 5

Due to the ever growing and popular clamor for the solution of increasing unsettled disputes in the

construction industry causing long drawn-out litigations over contractual claims, the Government
prompted the creation of an arbitration machinery in the construction industry./
Let me introduce to you EXECUTIVE ORDER NO. 1008,/ also known as the CONSTRUCTION
INDUSTRY ARBITRATION LAW.
SEC.2 It is the policy and objective of this law to provide a fair and expeditious resolution of
construction disputes as an alternative to judicial proceedings, with the aim to restore the
harmonious relationships among the parties.
Arbitration is considered a more reasonable alternative to court action. Only persons who are
knowledgeable of the construction business are appointed as arbitrators to act upon the cases.
Hence, this guarantees that prompt decisions can be easily reached.
These have always been the aim of the earlier topics we had, from the ADR to the Domestic
Arbitration, the bottom line is, to avoid the corridors of the courts waiting for maybe 2, if not, 3, or
so on and so forth years just to finally put an end to a dispute./
SEC.3 On February 4, 1985, Executive Order No. 1008, creating the CIAC and vesting it with
original and exclusive jurisdiction over claims and disputes arising from or connected with public
and private construction contracts in the Philippines, was signed by Pres. Ferdinand E. Marcos. And
CIAC shall be under the administrative supervision of the PDCB./
PDCB is PHILIPPINE DOMESTIC CONSTRUCTION BOARD, created on November 28, 1980 under P.D.
1746.
The PDCB is tasked, among others, to “adjudicate and settle claims and disputes in the
implementation of public construction contracts” and to “formulate and recommend rules and
procedures for the adjudication and settlement of claims and disputes in the implementation of
contracts in private construction”./
SEC.4 The CIAC shall have original and exclusive jurisdiction over construction/ disputes,/ which
arose from,/ or is connected with/ contracts/ entered into by parties involved in construction in the
Philippines whether the dispute arose before or after the completion of the contract, or after the
abandonment or breach thereof./
These disputes/ may involve government/ or/ private contracts.
The jurisdiction of the CIAC may include but is not limited to/ violation of specifications for
materials and workmanship;/ violation of the terms of agreement;/ interpretation and or
application of contractual provisions;/ amount of damages and penalties;/ commencement time
and delays;/ maintenance and defects;/ payment default of employer or contractor/ and changes
in contract cost.
Construction dispute shall include those between or among parties to, or who are otherwise bound
by, an arbitration agreement, directly or by reference, whether such parties are/ project owner/,
contractor,/ subcontractor/, fabricator,/ project manager,/ design professional/, consultant,/
quantity surveyor,/ bondsman or issuer of an insurance policy in a construction project./
Excluded from the coverage of this Rules are disputes arising from employer-employee
relationships, which shall continue to be covered by the Labor Code of the Philippines./
HOW DOES THE CIAC ACQUIRES JURISDICTION?
It is an essential requisite for the exercise of jurisdiction by the CIAC over construction disputes
that the parties thereto are bound by an arbitration agreement in their contract/

or does not cover the particular dispute sought to be arbitrated. telexes./ the CIAC SECRETARIAT will then notify the RESPONDENT within 3days from the submission of the COMPLAINT whether or not he is willing to have the dispute be resolved by arbitration. In here. However. if a COMPLAINT was filed without the aforementioned condition./ However.-But what if there is no arbitration clause in the contract? Well./ Jurisdictional challenge – A motion to dismiss based on lack of jurisdiction shall be resolved by the appointed arbitral tribunal. emails. And. the presence of the required arbitration clause or the subsequent submission. If said RESPONDENT agrees. or any other mode of communication. It is important that the Complaint shall carry with it such evidence of communication. as long as the intent is clear that the parties agree to submit to arbitration. . it must be clearly expressed in his ANSWER. it shall be deemed a refusal to submit the dispute to arbitration. He shall have full authority to resolve all issues raised in the Motion to Dismiss for lack of jurisdiction on the grounds that the dispute is not a construction dispute. even if unsigned by the parties. telegrams.A party does not waive its right to challenge the jurisdiction of CIAC by any of the following acts: a) participating in the nomination process including challenging the qualifications of a nominee. I have just mentioned a while ago that a condition for the exercise of jurisdiction by the CIAC is either by the existence of an arbitration agreement in the contract of the parties or a subsequent submission agreement. as long as the intent is clear that the parties agree to submit to arbitration. d) filing of a motion to dismiss/suspend. b) praying for extension of time to file appropriate pleading/motion to dismiss. or other issues of interpretation or non-fulfillment of preconditions to arbitration that are raised therein. even if unsigned by the parties. the COMMISSION has no option other than to dismiss the COMPLAINT. telegrams. emails. the disputing parties may sign a joint statement of issues of the dispute(s) and/or a voluntary agreement to undertake construction arbitration. and for this. does not amount to an automatic dismissal of the complaint. telexes. we could see that the absence of the documents in a COMPLAINT filed with the CIAC which is important for it to acquire jurisdiction. The submission agreement may be evidenced by an exchange of communication in any form by the parties which can be understood that they have mutually consented to submit their dispute to arbitration. c) opposing an application for interim relief. if the/ RESPONDENT refuses to answer the complaint or if he files a MOTION TO DISMISS the complaint on the ground of lack of jurisdiction. or that the Respondent was represented by one without capacity to enter into a binding arbitration agreement. Said arbitration agreement or subsequent submission must be alleged in the COMPLAINT. Any written agreement or submission to arbitration in the form of exchange of letters (by post or telefax). in spite of the failure of the COMPLAINANT to set forth the important documents in his COMPLAINT. or that said agreement or submission is not valid for some other reasons. it will be without prejudice to its refiling in the future if the parties will finally agree for its submission. but further gives the parties the chance to avail of the machinery by confirming it with the RESPONDENT. Non-waiver of jurisdictional challenge . Any written agreement or submission to arbitration in the form of exchange of letters (by post or telefax). or any other mode of communication.

Construction contract. attaching thereto a copy of the complaint and the Request for Arbitration together with the annexed documents. what about if the CLAIM is against the government. and h. absent a showing of justifiable reasons. in a government construction contract.An arbitration clause in a construction contract or a submission to arbitration of a construction dispute shall be deemed an agreement to submit an existing or future controversy to CIAC jurisdiction. c. d. The Claimant in a private construction contract has the same obligation as the above to show similar good faith compliance with all preconditions imposed therein or exemptions therefrom. CIAC shall appoint the arbitrator/s in accordance with these Rules. In such case. In case of non-compliance with the precondition contractually imposed. transmit to the Respondent a request for his Answer. the tribunal shall suspend arbitration proceedings pending compliance therewith within a reasonable period directed by the Tribunal. The claimant against the government. or 2) there is unreasonable delay in acting upon the claim by the government office or officer to whom appeal is made. What shall accompany the documents required? a. In case of government contracts. exhaustion of administrative remedies is not practicable. The list of nominees for arbitrator(s) in order of preference. are there any conditions? Well. So. The issues of the case. notwithstanding the reference to a different arbitration institution or arbitral body in such contract or submission. Agreement to arbitrate. When a contract contains a clause for the submission of a future controversy to arbitration. The CIAC Secretariat shall within three (3) days from filing. or a waiver thereof. b. Submission to CIAC jurisdiction. f. exemption. A statement of the case/narration of the facts. What if the RESPONDENT fails or refuses to arbitrate? . Arbitration proceedings shall continue. the claim against the government can now be properly made through the CIAC.Any party to a construction contract who desires to avail of the arbitration shall file its REQUEST FOR ARBITRATION in the prescribed form and number of copies to the SECRETARIAT of the CIAC. there are PRECONDITIONS before CIAC can take cognizance of the claim. and the award shall be made after receiving the . shall not stay the proceedings notwithstanding the absence or lack of participation of the Respondent.Where the jurisdiction of CIAC is properly invoked by the filing of a Request for Arbitration in ac cordance with these Rules. But. if any of the aforementioned preconditions have taken place. The names and addresses of the parties. communications made with the highest authority for exhaustion of administrative remedies. g. the failure despite due notice which amounts to a refusal of the Respondent to arbitrate. it is not necessary for the parties to enter into a submission agreement before the Claimant may invoke the jurisdiction of CIAC. Documents establishing the circumstances of the case. or 3) due to the application for interim relief. e. shall state in the complaint/request for arbitration that 1) all administrative remedies have been exhausted.

the arbitration shall proceed in accordance with these Rules. Respondent may apply to CIAC for an extension of time to file its answer. Transmittal of answer . reopen the proceedings. and allow him to present his evidence. or cannot be found at. sworn statements. What are the instances wherein arbitration can not proceed? . where required under these Rules. documentary and testimonial evidence. file its answer thereto including such counterclaim/s as it may assert. The term “arbitration proceedings” shall include communications to or from CIAC. the Commission shall dismiss the case without prejudice to its refiling once the whereabouts of Respondent/s are known to Claimant/s. pay the fees. appears and offers to present his evidence. within fifteen (15) days from receipt of the Request for Arbitration/Complaint.The Respondent shall. with limited right to cross examine witnesses already presented in the discretion of the Tribunal. Evidence already admitted shall remain. before award. Notification or communication shall be deemed to have been effected on the date when actually or constructively received. . reports and minutes taken of the proceedings. the Respondent who had not earlier questioned the jurisdiction of the Tribunal. applications and other papers filed with CIAC. In the event that. The Tribunal shall decide the effect of such controverting evidence presented by the Respondent on evidence already admitted prior to such belated appearance. Time to answer .Where the contract between the parties does not provide for arbitration and the parties cannot agree to submit the dispute(s) to arbitration. decision. the last known address provided by the Claimant.evidence of the Claimant. the CIAC Secretariat shall inform the Claimant of the nondelivery/non-receipt of the notice and require Claimant to provide CIAC with Respondent’s correct/new address within fifteen (15) daysfrom receipt of the advice. Confidentiality of proceedings – The arbitration proceedings shall be considered confidential and shall not be published except (i) with the consent of the parties. For justifiable reason/s. for reasons that justifies the failure to appear. If Claimant fails to comply. or (ii) when necessary in case resort to the Court is made under the Rules of Court. the pleadings. Notifications or communications from the Secretariat and/or the Arbitrator(s) shall be validly made if they are delivered against receipt or forwarded by registered mail to the address or last known address of the party/ies for whom the same are intended as notified by the party/ies in question or the other party/ies as appropriate. If Respondent fails to do so. and other orders. require him to file his answer with or without counterclaims. the arbitration cannot proceed and the Claimant/s shall be informed of that fact.A copy of the answer shall be transmitted in sufficient copies to the Claimant and to CIAC. the Arbitral Tribunal may. If the Notice to Respondent/Request to Answer the complaint is not received by Respondent due to wrong address or because Respondent has moved out from.

and fixing and receiving the necessary fees and costs. FUNCTIONS OF THE COMMISSION: refer to the slide The Commision shall have the authority to lay down its rules and regulations to be followed along with the discharge of its duties. It shall like wise be the duty of the EXECUTIVE DIRECTOR to notify the parties of the awards made by the arbitrators. That of the ommission members first appointed. Violation of confidentiality – Any person who violates the immediately preceding confidentiality provision shall be subject to the following sanctions: If the violator is a lawyer. however. without prejudice to suspension or disbarment action before the Integrated Bar of the Philippines (IBP). who shall be responsible in receiving requests for arbitration. QUORUM. If the violator is a duly licensed and registered professional. all of them are to be appointed by the CIAP Board upon recommendation by the members of the PDCB. Any important matter that needs to be tackled and resolved by the Commission shall be decided upon by the majority vote of the Commission. The decisions of the Commission shall be arrived at by majority vote. He appointment to any vacancy in the Commission shall only be for the unexpired portion of the term of the predecessor. notifying parties thereto. and the third. The presence of a majority of the members of the Commission shall constitute a quorum for the transaction of business. The Commission shall have a Secretariat which shall be headed by the EXECUTIVE DIRECTOR. the Chairman shall hold office for 6 years.award or resolution issued by the Arbitrator(s). . for inhibition or prohibition from appearing as counsel for any party in any arbitration case before CIAC for a period not exceeding six (6) months. DELIBERATIONS. and other pleadings. with proper notice and hearing. at the instance of CIAC. TERM. The Commission shall consist of a Chairman and 2 members. The term of office of the members of the Commission shall be 6 years. the other member for 4 years. administrative action or proceeding to be conducted by CIAC. The members of the Commission shall receive such per diems and allowances as may be fixed by the CIAP from time to time. SECRETARIAT. COMPENSATION. Provided. at the instance of CIAC. for 2 years. administrative/ disciplinary action before the Professional Regulation Commission (PRC). COMPOSITION OF THE BOARD.