Alternative Dispute

Resolution

The Construction
Industry
Arbitration
Commission and
Other ADR
Forms

A report by: Portugueza, Kirsten

C.
Construction Industry Arbitration Commission (CIAC)
The Construction Industry Arbitration Commission (CIAC) is the primary
agency with the original and exclusive jurisdiction over arbitration of construction
disputes pursuant to Executive Order No. 1008, s. 1985, otherwise known as the
"Construction Industry Arbitration Law". It shall promulgate the Implementing
Rules and Regulations governing arbitration of construction disputes,
incorporating therein the pertinent provisions of the ADR Act.
What are the other ADR forms?
The following are the other ADR forms:
1) early neutral evaluation;

2) neutral evaluation;

3) mini-trial;

4) mediation-arbitration;

5) a combination thereof; or

6) any other ADR form.

What rules shall govern the conduct of other ADR forms?
The rules and procedures agreed upon by the parties shall govern the
conduct of other ADR forms. In the absence of said agreement, the provisions in
Chapter 7 of the Implementing Rules and Regulations of the Alternative Dispute
Act of 2004 shall apply and supply the deficiency in the agreement of the parties
for matters involving the other ADR forms.
Suppletory Application of Mediation and Domestic Arbitration Provisions to the
Rules and Procedures of Other ADR Forms
Suppletory Application of Mediation Provisions
 If the other ADR form/process is more akin to arbitration (i.e., the neutral
third-person merely assists the parties in reaching a voluntary agreement), Chapter
3 governing Mediation shall have suppletory application to the extent that it is not
in conflict with the agreement of the parties or Chapter 7 of the IRR.
Suppletory Application of Domestic Arbitration Provisions
If the other ADR form/process is more akin to arbitration (i.e., the neutral
third-person has the power to make a binding resolution of the dispute), Chapter
5 governing Domestic Arbitration shall have suppletory application to the extent
that it is not in conflict with the agreement of the parties or Chapter 7 of the IRR.

Motion to Refer Motion to Suspend Settlement

the Parties to or Dismiss Agreement
Other ADR Forms
When to file Before and during At any time during Following a
pre-trial if a court proceedings, neutral or an
dispute is already even after pre-trial early neutral
before a court evaluation,
mini-trial or
mediation-
arbitration
Who may file Either party Joint motion of the Either party
parties
Neutral or Early Neutral Evaluation
• An ADR process wherein parties and lawyers are brought together early in a
pre-trial phase to present summaries of their cases and receive a non-
binding assessment by an experienced neutral person, with expertise in the
subject in the substance of the dispute

Submission and
Exchange of Evaluation
Position Papers

EARLY
NEUTRAL
Selection of a EVALUATION Issuance of a
Neutral Third- Written Evaluation
Person or Assessment

Selection of a Neutral Third-Person

If the parties cannot agree on, or fail to provide for:
a) The desired qualification of the neutral third person;

b) The manner of his/her selection;

c) The appointing authority (not IBP) who shall have the authority to make the
appointment of a neutral third person; or
If despite agreement on the foregoing and the lapse of the period of time
stipulated for the appointment, the parties are unable to select a neutral third
person or appointing authority, then, either party may request the default
appointing authority, as defined under paragraph C1 of Article (Definition of
Terms), to make the appointment taking into consideration the nature of the
dispute and the experience and expertise of the neutral third person.
Appointing Authority as used in the Model Law shall mean the person or
institution named in the arbitration agreement as the appointing authority; or the
regular arbitration institution under whose rules the arbitration is agreed to be
conducted. Where the parties have agreed to submit their dispute to institutional
arbitration rules and unless they have agreed to a different procedure, they shall
be deemed to have agreed to the procedure under such arbitration rules for the
selection and appointment of arbitrators. In ad hoc arbitration, the default
appointment of an arbitrator shall be made by the National President of the
Integrated Bar of the Philippines (IBP) or his /her duly authorized representative.

Submission and Exchange of Position Papers

Contents of the Position Papers:

The parties shall submit and exchange position papers:
(a) containing the issues and statement of the relevant facts

(b) appending supporting documents and affidavits of witnesses.

The neutral third person may request either party to address additional
issues that he/she may consider necessary for a complete evaluation/assessment
of the dispute.

Evaluation
The neutral third person may structure the evaluation process in any manner
he/she deems appropriate. He may:

1) identify areas of agreement;

2) clarify the issues;

 3) define those that are contentious;

4) encourage the parties to agree on a definition of issues and stipulate on facts

or admit the genuineness and due execution of documents.

Written Evaluation or Assessment

When is it issued?
The neutral third person shall issue a written evaluation or assessment
within thirty (30) days from the conclusion of the evaluation process.

Is it binding?
No. The opinion shall be non-binding and shall set forth how the neutral
third person would have ruled had the matter been subject to a binding process.

What are the contents of the written evaluation?

The evaluation or assessment shall indicate the relative strengths and
weakness of the positions of the parties, the basis for the evaluation or
assessment, and an estimate, when feasible, of the amount for which a party may
be liable to the other if the dispute were made subject to a binding process.

Ex-Parte Communication
There shall be no ex-parte communication between the neutral third person
and any party to dispute without the consent of all parties.

Confidentiality of the Early Neutral Evaluation

All papers and written presentations communicated to the neutral third
person, including any paper prepared by a party to be communicated to the
neutral third person or to the other party as part of the dispute resolution process,
and the neutral third person’s written non-binding assessment or evaluation, shall
be treated as confidential.
Mini-Trial
A structured dispute resolution method in which the merits of a case are
argued before a panel comprising senior decision makers with or without the
presence of a neutral third-person after which the parties seek a negotiated
settlement

Ways of Conducting
Mini-Trial

Separate dispute Continuation of

resolution process other ADR process

Neutral Third Person

The parties may agree that a mini-trial be conducted with or without the
presence and participation of a neutral third person. If a neutral third person is
agreed upon and chosen, he/she shall preside over the mini-trial. The parties may
agree to appoint one or more (but equal in number per party) senior executive/s,
on its behalf, to sit as mini-trial panel members.
In cases where a neutral third person is appointed, the neutral third person
shall assist the proceedings shall be governed by Chapter 3 of Mediation.
 Submission of a Presentation
Brief Executive
Summary of Cases

MINI-TRIAL
Appointment of Negotiation
Mini-Trial Panel
Members of Settlement

Mini-Trial Members
The senior executive/s chosen to sit as mini-trial panel members must be
duly authorized to negotiate and settle the dispute with the other party. The
appointment of a mini-trial panel member/s shall be communicated to the other
party. This appointment shall constitute a representation to the other party that
the mini-trial panel member/s has/have the authority to enter into a settlement
agreement binding upon the principal without any further action or ratification by
the latter.

Brief Executive Summary

Each party shall submit a brief executive summary of the dispute in
sufficient copies as to provide one copy to each mini-trial panel member and to the
adverse party. The summary shall identify the specific factual or legal issue or
issues. Each party may attach to the summary a more exhaustive recital of the
facts of the dispute and the applicable law and jurisprudence.
Mini-Trial Proper
Duration of the Mini-Trial
Unless the parties agree on a shorter or longer period, the presentation-in-
chief shall be made, without interruption, for one hour and the rebuttal or sur-
rebuttal shall be thirty (30) minutes.
Who shall present the cases?
The lawyer of each party and/or authorized representative shall present
his/her case starting with the claimant followed by the respondent. The lawyer
and/or representative of each party may thereafter offer rebuttal or sur-rebuttal
arguments. At the end of each presentation, rebuttal or sur-rebuttal, the mini-trial
panel member/s may ask clarificatory questions from any of the presentors.

Mediation-Arbitration
• A two-step dispute resolution process involving mediation and then
followed arbitration
How?
Chapter 5 on Mediation shall first apply and thereafter, Chapter 5 on Domestic
Arbitration
Can a mediator in the failed mediation act as arbitrator in the same dispute?
No person shall, having been engage and having acted as mediator of a
dispute between the parties, following a failed mediation, act as arbitrator of the
same dispute, unless the parties, in a written agreement, expressly authorize the
mediator to hear and decide the case as an arbitrator.
The mediator who becomes an arbitrator pursuant to Rule 4, Chapter 7 of
the IRR shall make an appropriate disclosure to the parties as if the arbitration
proceeding had commenced and will proceed as a new dispute resolution process,
and shall, before entering upon his/her duties, executive the appropriate oath or
affirmation of office as arbitrator in accordance with Rule 4, Chapter 7 of the IRR.

Costs and Fees

How to determine the costs and fees of the ADR procedure
General Rule:
Before entering his/her duties as ADR Provider, he/she shall agree with the
parties on the cost of the ADR procedure, the fees to be paid and manner of
payment for his/her services.
Exceptions:
In the absence of such agreement:
• If ADR procedure is conducted under the rules and/or by an institution
Schedule of fees approved by such institution
• Ad hoc ADR
Schedule of fees approved by the OADR
• If there is no schedule of fees
Determined either by the ADR institution, or by the OADR, as the case
may be, taking into consideration the complexity of the process, the amount
in dispute and the professional standing of the ADR professional
Contingency Fees
A contingency fee arrangement shall not be allowed. The amount that may
be allowed to an ADR professional may not be made dependent upon the success
of his/her effort in helping the parties to settle their dispute.