Alangilan Campus

College of Architecture, Fine Arts and Design

PROGRAM: Architecture
SUBJECT: Specialization – Project Management

FINALS

Section: ARC547 - ARC 5101

Time / Date: 1pm to 6pm / December 9, 2023
“Dispute Avoidance” Understanding Construction Ordeals
on a Wider Perspective (WEBINAR)

Submission : On or before 10am / December 10, 2023

Instruction: Answer the following questions based on the attended

on-line seminar attended.

1. What is the difference between Construction Arbitration and

Litigation?

Construction arbitration (CA) and litigation offer distinct

methods for resolving contractual disputes in the construction
industry. CA requires the inclusion of a specific clause in the
construction contract (CC) or a separate agreement (CAA),
involving an Arbitral Tribunal (AT) and resulting in a monetary
award, potentially subject to higher court review. In contrast,
litigation entails bringing disputes to regular and higher courts
when no CA clause or separate CAA is present, relying on a
judicial process for resolution. Unlike both CA and litigation,
Dispute Avoidance (DA) aims to prevent disputes by embedding a
Dispute Board (DB) member in the project from the start,
providing technical services. DA and Dispute Resolution (DR),
facilitated through a constituted DB, serve as tools to
circumvent construction arbitration or litigation, with DB
decisions binding on both the project proponent/owner and the
constructor. The choice among DA, DR, CA, or litigation hinges on
the project's embedded mechanisms and contractual framework.
For example, if you're building a house and have a
disagreement with the builder. If your contract includes an
arbitration clause, it's like agreeing to bring in a neutral
judge to decide the issue. Without such a clause, going to court
(litigation) means presenting your case to a regular judge. It's
all about choosing in advance how you want to settle disputes in
the construction process.

GCH Alangilan, Batangas City, Philippines +63 43 425 - 0139 loc. 2121

www.batstate-u.edu.ph ceafa@g.batstate-u.edu.ph
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2. What is dispute avoidance and why it its important?

Dispute avoidance in construction is a proactive approach to
conflict prevention that includes clear communication,
comprehensive documentation, effective project management, and
collaborative problem-solving. These measures reduce disputes
while also ensuring project efficiency, cost reduction, and the
preservation of contractor-client relationships.
Contractual strategies, such as clearly defining terms,
specifying a scope of work, and implementing risk allocation, are
critical. Contracts should include mechanisms for resolving
disputes, such as negotiation or arbitration, as well as robust
change management procedures for reviewing and resolving change
requests. Performance monitoring and reporting are critical for
identifying issues early and adhering to contractual
requirements, reducing the risk of disputes, and promoting
successful project outcomes.
3. How does Dispute Avoidance differ from Dispute Resolution,
Construction Arbitration and Litigation?
To maintain efficiency and relationships, Dispute Avoidance
(DA) in construction entails preventive methods to avoid
conflicts throughout project phases, emphasizing clear
communication, documentation control, and collaborative problem-
solving. Dispute Resolution (DR), as opposed to Dispute
Avoidance, employs dispute boards to resolve contractual
conflicts during or after project execution. Construction
Arbitration (CA) refers to adjudicatory processes that take place
outside of the project, necessitating specific clauses in
contracts or separate agreements. In the absence of arbitration
provisions, the final option is litigation. Dispute Avoidance, on
the other hand, seeks to avoid conflicts entirely, focusing on
efficient project completion and mutual benefits for contractors
and clients.

4. What is the main requirement of a Contract Agreement between

contracting parties with respect to arbitration?
The main requirement of a Contract Agreement concerning
arbitration between contracting parties is the inclusion of a
clear and enforceable arbitration clause. This clause outlines
the agreed-upon process for resolving disputes through
arbitration rather than litigation. Typically, it specifies the
conditions under which arbitration may be invoked, the number of
arbitrators involved, the selection process for arbitrators, the
governing rules, and the place or venue for the arbitration
proceedings. Crucially, the arbitration clause ensures that both
parties commit to resolving disputes in a private and alternative
forum, emphasizing efficiency and a more streamlined process
compared to traditional court litigation.
Additionally, the arbitration clause may address other key
elements, such as the governing law, the language of the
arbitration, and the specific issues subject to arbitration.
Clarity and specificity in drafting the arbitration clause are

GCH Alangilan, Batangas City, Philippines +63 43 425 - 0139 loc. 2121

www.batstate-u.edu.ph ceafa@g.batstate-u.edu.ph
 Alangilan Campus

College of Architecture, Fine Arts and Design

paramount to avoid ambiguity and potential disagreements later

on. Overall, the inclusion of a well-crafted arbitration clause
in the Contract Agreement serves as a fundamental requirement to
provide a structured and agreed-upon framework for resolving
disputes between the contracting parties.

5. How to avoid Construction Litigation? (30points)

To avoid construction litigation, it is crucial to

proactively incorporate effective dispute resolution mechanisms
into the contract. A well-drafted contract serves as the law
between contracting parties, but it should not violate any valid
laws, standards, or accepted regulations. To prevent the
escalation of disputes to litigation, the contract must clearly
specify provisions for alternative dispute resolution (ADR), as
mandated by local laws such as R.A. No. 9285 and its implementing
rules and regulations. The ADR methods, such as negotiation,
mediation, conciliation, or arbitration, should be explicitly
stated, providing a structured framework for resolving disputes
outside the courtroom.
Anticipatory measures like Dispute Avoidance (DA) and
Dispute Resolution (DR) mechanisms, particularly through the
establishment of a Dispute Board (DB), can be instrumental in
preventing disputes from reaching the litigation stage. DB
members, preferably involved from the project's start, act
independently, and are jointly vetted/contracted by both the
project proponent/owner and the constructor, ensuring that their
decisions are binding on both parties. By addressing conflicts
early and utilizing ADR methods, such as negotiation, mediation,
or arbitration, construction projects can circumvent the need for
litigation, saving time and costs associated with traditional
court proceedings.

Prepared By:

Ar.Augusto C. Sison Jr.

ARC547 – Instructor

GCH Alangilan, Batangas City, Philippines +63 43 425 - 0139 loc. 2121

www.batstate-u.edu.ph ceafa@g.batstate-u.edu.ph