CONSTRUCTION

DISPUTE
Group X

ABENDAŇO
BAUTISTA
GONZALES
TARUN
 TOPIC
OUTLINE
01 Construction Dispute

02 Role of Governement

03 Role of Court

04 Role of Contract
 DISPUTE
Dispute occur when there is a disagreement
or conflict between two parties

"Technically, a dispute indicates that one party has

made a claim and the other has denied it."
 CONSTRUCTION DISPUTE
It is only natural for there to be arguments between parties
because of the uncertainties associated with the construction
project, the magnitude of the obligations, and the financial
commitments involved. In other situations, most daily
disagreements may be settled peacefully. However, there are
scenarios when it is not possible to settle disputes in this
manner. In such circumstances, construction and legal laws
may become helpful for resolving disputes.
CAUSES OF DISPUTE
Depending on the situation and the issue or concern shared
by the two parties, conflicts can occur for a variety of reasons.
COMMON CAUSES OF
DISPUTES
Lack of effective contract administration
Poorly written and unsupported assertion
Lack of understanding and compliance with
a contractual commitment by a contractor
or employer
Errors in the contract document
Incomplete design information and contract
requirements
CAUSES OF CONSTRUCTION
DISPUTE BY CONTRACTORS

Delay suspension of work

Lack of communication and agreement in
the contracting process
Inadequate scheduling and update
requirement
Failure to organize and carry out a work
order
Failure to analyze and accurately estimate
the cost of the work
CAUSES OF CONSTRUCTION
DISPUTE BY CLIENT &
CONSULTANT
Poor communication
Discrepancies in contract document
Inadequate project supervision
Failing to comprehend the responsibilities
of the project management team
Failure to respond on time
 DISPUTE
RESOLUTION
The process of resolving a dispute or
disagreement between various parties.
Importantly, conflict resolution can be a means
to settle a dispute without going to court.
 NEGOTIATION MEDIATION ADJUDICATION

The process of resolving A third party can be In adjudication, a third

a disagreement involved in a dispute party is involved in settling
through conversation through mediation disputes without any legal
and reasoning is called without any kind of consequences, although
negotiation. legal constraints being the other parties are still
placed on them. required to abide by the
ruling.
 EXPERT
ARBITRATION LITIGATION
DETERMINATION

A dispute resolution It is a procedure in Litigation is the process

process in which which professional of seeking legal counsel
parties seeking resolve assistance is obtained from a court to resolve
are legally bound to for resolving disputes. a conflict.
comply with the third
party's decision
 THE ROLE OF
GOVERNMENT
 ARBITRATION

It is a way of settling dispute(s) between parties who agree to

submit such dispute(s) for resolution by their chosen judges or
arbitrators.
Arbitration is considered a more reasonable alternative to court
action.
BASIS OF CONSTRUCTION
ARBITRATION

Construction arbitration is based on the consent

of the disputing parties, unless made
compulsory by law.
Consent can be manifested in three ways:
1. An arbitration clause in the construction
contract
2. A joint statement and/or a voluntary agreement
to undertake construction arbitration.
3. Any written agreement to submit to arbitration
EXECUTIVE ORDER NO. 1008

SECTION 1. Title - This Executive Order shall be known as the

"Construction Industry Arbitration Law".

SECTION 2. Declaration of Policy - There is hereby declared to be the

policy of the State to encourage the early and expeditious settlement
of disputes in the Philippine construction industry.

SECTION 3. Creation - There is hereby established in the CIAP a body

to be known as the Construction Industry Arbitration Commission
(CIAC). The CIAC shall be under the administrative supervision of the
Philippine Domestic Construction Board (PDCB).
 CONSTRUCTION
INDUSTRY ARBITRATION
COMMISSION

The CIAC shall have original and exclusive

jurisdiction over disputes arising from, or
connected with, contracts entered into by parties
involved in construction in the Philippines

R.A. 9285 (the Alternative Dispute Resolution Act of

2004) provides for the dismissal by a Regional Trial
Court, of a construction dispute filed before it upon
becoming aware that the parties had entered into
an arbitration agreement. The court shall then refer
the parties to arbitration by CIAC.
FUNCTIONS OF CIAC
1. To formulate and adopt an arbitration
program for the construction industry;
2. To enunciate policies and prescribe rules
and procedures for construction arbitration;
3. To supervise the arbitration program, and
exercise such authority related thereto as
regards the appointment, replacement or
challenging of arbitrators; and
4. To direct its officers and employees to
perform such functions as may be assigned
to them from time to time.
 ARBITRATORS
People from the government and the
private sectors who meet the
technical requirements set by the
CIAC shall be accredited and
appointed by the CIAC as arbitrators.
A single arbitrator or an arbitral
tribunal of three (3) arbitrators may
settle a dispute.
ARBITRATORS
Construction arbitration shall cover, among
others, dispute(s) arising from:
1. Violations of specifications for materials
and workmanship
2. Violations of terms of agreement
3. Interpretation and/or application of
contractual provisions
4. Commencement time and delays
5. Maintenance and defects
6. Payment defaults of employer or
contractor
7. Changes in contract costs
REQUIREMENTS &
PROCEDURES
1. The interested party shall submit to the CIAC a request for arbitration
which shall include the following:
The names and addresses of the parties;
A statement of the case/narration of the facts;
The issues of the case;
The list of nominees for arbitrator(s)in order of preference;
Construction contract;
Agreement to arbitrate;
Documents establishing the circumstances of the case; and
In case of government contracts, communications made with the
highest authority for exhaustion of administrative remedies.
2. The CIAC shall evaluate the documents submitted to determine if there
is a sufficient ground for arbitration.

3. If the contract does not contain an arbitration clause, the parties shall
be required to submit a duly accomplished "Agreement to Arbitrate".

4. After the complaint has been filed together with the payment of the
required deposits, CIAC shall notify the respondent and give him fifteen
(15) days from receipt to file his answer with or without a counterclaim.

5. CIAC shall appoint the Sole Arbitrator or the members of the Arbitral
Tribunal, as the case may be, pursuant to the Rules.
6. The appointed arbitrators(s) shall call the
parties to a Preliminary Conference to make
the Terms of Reference (TOR) based on the
documents and/or personal accounts of the
parties. The TOR shall include the following:
A summary of the parties' respective
claims;
The issues involved; and
Other particulars as may be relevant to
make the arbitral award enforceable.

7. The Terms of Reference shall be signed by

the parties and the arbitrator(s).
 ARBITRAL AWARD
The award shall be in writing and signed by the
arbitrator(s). If decided by an arbitral tribunal, the decision
of the majority shall prevail.
Generally, the award shall contain the issues involved, a
brief statement and discussion of the facts, and the
authority relied upon to resolve the issues.
The arbitral award shall be binding upon the parties.
THE ROLE
OF COURT
 ROLE OF
COURT

In accordance with Section 5 of Article

VIII of the Constitution, the Supreme
Court hereby adopts and promulgates
rules governing the protection and
enforcement of constitutional rights,
pleading, practice, and procedure in all
courts, admission to the practice of law,
the Integrated Bar, and legal aid to the
underprivileged.
CHALLENGE ON THE INTEGRITY OF THE
ABITRAL TRIBUNAL

the award was procured by corruption, fraud or other undue means

there was evident partiality or corruption of the arbitrators or of any
of them
the arbitrators were guilty of misconduct in refusing to postpone the
hearing upon sufficient cause shown, or in refusing to hear evidence
pertinent and material to the controversy
one or more of the arbitrators were disqualified to act as such under
Section 9 of R.A. 87679 or "The Arbitration Law", and willfully refrained
from disclosing such disqualifications or of any other misbehavior by
which the rights of any party have been materially prejudiced
the arbitrators excedeed their powers, or so imperfectly executed
them, that a mutual, final and definite award upon the subject
matter submitted to them was not made
ALLEGATION OF THE ARBITRAL TRIBUNAL'S VIOLATION OF THE
CONSITUTION OR POSITIVE LAW

the Court here discerns the merit in adding the otherwise

forgotten presumption that factual findings of the CIAC arbitral
tribunal may also be revisited by the Court upon an allegation
that the arbitral tribunal committed an act that is violative of the
Constitution or other positive law.
no way plausibly allow for a situation wherein the Court's hand is
stayed from correcting a blatant constitutional or legal violation
because the autonomy of the arbitral process in paramount.
Court underscores that the contracted grounds are still
principally tethered to the courts' primary duty of upholding the
Constitution and positive laws.
THE COURT MUST INESCAPABLY RE-WEIGHT
THE APPLICABLE LAWS AND HARMONIZE
THEM IN ORDERE TO MAKE PERTINENT
RULES CONSISTENT WITH THE SPIRIT OF THE
LAW THAT GAVE FROM TO THE CIAC
APPELLATE JURISDICTION OF THE COURT

Article VIII of the 1987 Constitution outlines the powers of the Judiciary

SECTION 5. THE SUPREME COURT SHALL HAVE THE FOLLOWING POWERS:

Review, revise, reverse, modify, or affirm on appeal or certiorari, as fue law or the Rules of Court
may provide, final judgements and orders of lowers courts in:

1. All cases in which the constitutionality or validity of any treaty, international or executive
agreement, law, presidential decree, proclamation, order, instruction, ordinance, or
regulation is in questions.
2. All cases involving fue legality of any tax, impost, assessment, or toll or any penalty
imposed in relation fuereto.
3. All cases in which fue jurisdiction of any lower court is in issue
4. All cirminal cases in which the penalty imposed is reclusion perpetua or higher.
5. All cases in which only an error or question of law is involve.
 ROLE OF
CONTRACT
 CONSTRUCTION
CONTRACT

IS A LEGAL DOCUMENT THAT ESTABLISHES THE

SCOPE AND PARAMETERS OF A CONSTRUCTION
PROJECT. IT IS A CONTRACT BETWEEN THE
CONSTRUCTION COMPANY AND THE INDIVIDUAL
OR COMPANY WHO HIRED THEM TO COMPLETE
THE JOB
 CONTRACT PARTIES

THE PARTIES INVOLVED IN A CONTRACT ARE:

OWNER (DEVELOPER)
&
COTRACTORS (BUILDER)
MULTIPLE CONTRACT
PARTIES
CONSISTENCY

FLOW DOWN

TIERS
WRITTEN CONTRACT VS ORAL
CONTRACT
IT IS HARDER TO PROVE THE EXISTENCE OF AN ORAL
CONTRACT

THE EXISTENCE OF THE TERMS

MUST BE PROVED BY MEMORY OF
THE PARTIES AND OTHER EVIDENCE
 VALUE OF WRITTEN
CONSTRUCTION CONTRACT
THE WRITTEN TERMS OF A WELL-CRAFTED
CONTRACT ESTABLISH THE PARTIES' AGREEMENT,
THEIR EXPECTATIONS, AND THEIR RESPECTIVE RISKS AND
OBLIGATIONS CAREFULLY AND UNAMBIGUOUSLY

LARGE CONTRACTS DO WRITTEN CONTRACTS

 CONTRACT DEFAULT
PROVISIONS IN THE
LAW
THE LAW MAY PROVIDE A DEFAULT TERM IF A
PROBLEM ARISES BY REDUCING SUCH TERMS TO
WRITING. THE PARTIES CAN HAVE MORE CONTROL
OVER HOW THE ISSUE IS HANDLED AND PREVENT
HAVING AN UNFAVORABLE DEFAULT TERM IMPOSED
ON THEM
 ECONOMIC EFFECT
OF CONTRACTS

MOVE OR ALLOCATE RISKS SINCE

EVERY PROVISION IN A
CONSTRUCTION CONTRACT CAN BE
VIEWED AS A TOOL FOR SHIFTING OR
ALLOCATING RISK
EXAMPLES OF RISKS ON
CONTRACTS

FUNDS
TIME

DESIGN
PROVIDES DUTIES, OBLIGATIONS AND
RESPONSIBILITIES

PROVIDES CLARITY AND REMOVES

CONFUSION

SERVES AS PROTECTION

REDUCES CONSTRUCTION DISPUTES

Thank you for
listening!