Group 9

Chapter 12 CONSTRUCTION
ARBITRATION

DISPUTE

Construction all on-site works on buildings or

altering structures, from land clearance through
completion including excavation, erection, and
assembly and installation of components and
equipment.

2. To enunciate policies and prescribe rules and

procedure 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.
Nature and character of CIAC

CONSTRUCTION ARBITRATION under the

ADR Act of 2004
The Construction Industry Arbitration Commission
(CIAC) has the original and exclusive jurisdiction
over construction disputes, but also strengthened it
to include those between or among parties to, or
who are otherwise bound by, an arbitration
agreement, directly or reference whether such
parties are project owner, contractor, sub-contractor,
quantity surveyor, bondsman or issuer of an
insurance policy in a construction project, and
even if the arbitration is commercial in character.
RTC motu proprio or upon motion made not later
than pre-trial, not just to dismiss but also to refer the
parties to arbitration by the CIAC, unless all parties
submit to the court a written agreement making the
court the body the will resolve the dispute.
The
Construction
Commission (CIAC)

Industry

Arbitration

E.O No. 1008 otherwise known as

Construction Industry Arbitration Law
Quasi-judicial agency
Agency under the Construction Industry
Authority of the Philippines
Administratively attached to DTI
Policy and Objective of the CIAC
To provide a fair and expeditious settlement of
construction disputes through a non-judicial process
which ensures harmonious and friendly relations
between or among the parties.
Functions of the CIAC
1. To formulate and adopt an arbitration
program for the construction industry;

It is a quasi-judicial agency or instrumentality to

adjudicate claims and/or determine rights in
accordance with procedures set forth in E.O. 1008.
JURISDICTION OF THE CIAC
Sec. 4. Jurisdiction. 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, whether the dispute arises before or
after the completion of the contract, or after the
abandonment or breach thereof. These disputes may
involve government or private contracts. For the
Board to acquire jurisdiction, the parties to a dispute
must agree to submit the same to voluntary
arbitration.
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 time and delays; maintenance and
defects; payment, default of employer or contractor
and changes in contract cost.
Excluded from the coverage of this law are disputes
arising from employer-employee relationships
which shall continue to be covered by the Labor
Code of the Philippines.
The doctrine of primary jurisdiction dicates prior
recourse to the CIAC for construction disputes and
parties over which it has acquired jurisdiction. The
same doctrine precludes courts from resolving
construction disputes over which jurisdiction has
been initially lodged with the CIAC by reason of its
special knowledge, experience and services to
determine technical and intricate matters of fact.

Two acts which vest the CIAC

1. Presence of an arbitration clause in a
construction contract
2. Agreement of the parties to submit the
dispute to the CIAC
- Must be in writing need not be signed by the
parties.
Once jurisdiction has been acquired by the CIAC,
the refusal of one party to participate in the
proceedings will not prevent the CIAC from
proceeding with the case and issuing an award in
favor of one of the parties.
Even after failing to appear, a respondent is still
given the opportunity, under the CIAC Rules, to
have the proceedings reopened and be allowed to
present evidence, although with qualification that
this is done before an award is issued.
In fact, it has been held that the CIAC may continue
with the arbitration even though only one of the
parties requested for arbitration or even if both
parties have withdrawn their consent to arbitrate.
RULES OF PROCEDURE in the CIAC
1.
2.
3.
4.
5.
6.

Complaint
Answer
Reply
Appointment and acceptance of arbitrators
Challenge to arbitrators
Preliminary conference and terms of
preference
7. Arbitration Proceedings
8. Award
9. Execution of Award
Challenge to arbitrator shall be based in the
following grounds:
a) Relationship by blood or marriage within the
sixth degree of either party to the
controversy, or counsels within the fourth
degree, computed according to the rules of
civil law;
b) Financial, fiduciary or other interest in the
controversy;
c) Partiality or bias;
d) Incompetence or professional misconduct;
and

e) Other just and valid reasons affecting

independence, integrity, impartiality and
interest.
Arbitration Proceedings include
a) Venue, date and time
b) Quorum
c) Presentation of Evidence
d) Draft decision or final memorandum
e) Closing of the hearings
JURISDICTIONAL
REVIEW
OF
CIAC
DECISIONS
A petition for review from a final award of the CIAC
may be taken by any of the parties to the court of
appeals within 15 days. The petition shall not stay the
execution of the final award unless the Court of
Appeals issues a temporary restraining order and/or
writ of preliminary injunction.
In the absence of any showing of grave abuse of
discretion, courts must sustain the factual findings of
the CIAC arbitrator.
Factual findings of construction arbitrators may be
reviewed by the Supreme Court when the petitioner
proves affirmatively that:
1. The award was procured by corruption, fraud
or other undue means;
2. There was evident partiality or corruption of
the arbitrators of any of them;
3. The arbitrators were guilty of misconduct in
refusing to hear evidence pertinent and
material to the controversy;
4. One of the arbitrators were disqualified to act
as such under sec.9 of RA 876 and willfully
refrained
from
disclosing
such
disqualifications or of any other misbehavior
by which the rights of any party have been
materially prejudiced; or
5. The arbitrators exceeded their powers , or so
imperfectly executed them, that a mutual, final
and definitive award upon the subject matter
submitted to them was not made.
COSTS OF ARBITRATION
SECTION 16.5
Decision as to costs of arbitration - In the case of nonmonetary claims or where the parties agreed that
the sharing of fees shall be determined by the
Arbitral Tribunal, the Final Award shall, in addition
to dealing with the merits of the case, fix the costs of
the arbitration, and/or decide which of the parties shall
bear the cost(s) or in what proportion the cost(s) shall
be borne by each of them.