Copyright 2022-2023 SRMO
Republic Act 9285, otherwise known as the Alternative Dispute Resolution Act of 2004, or ADR Law, provides the legal framework for alternative dispute resolution in the Philippines, including arbitration.
While construction contracts are considered as commercial in nature, the ADR Law recognizes that arbitration of construction disputes shall be governed by Executive Order No. 1008, otherwise known as the Constitution Industry Arbitration Law.
Thus, unlike ordinary commercial arbitrations – where the parties have the option to have either institutional or ad hoc arbitration, agree on the rules that will govern the arbitration, or full freedom to set rules on the choice of arbitrators – construction arbitration in the Philippines is restricted by the Constitution Industry Arbitration Law. The said law created the Construction Industry Arbitration Commission (CIAC), which is vested with 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.
In the landmark case of China Chang Jiang Energy v Rosal Infrastructure Builders (1996), the Supreme Court enunciated the principle that mere existence of an arbitration clause in the construction contract or agreement is considered by law as an agreement by the parties to submit their existing or future controversies to CIAC jurisdiction.
Thus, there are three requisites for acquisition of jurisdiction by the CIAC:
Relative to the foregoing, construction has been defined under Philippine jurisprudence as referring to 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.
For construction arbitration under CIAC, the Revised Rules of Procedure Governing Construction Arbitration (“Revised CIAC Rules”) approved in January 2023 shall be applied. Below are some notable provisions under the Revised CIAC Rules:
Based on the Revised CIAC Rules and the Global Case, recourse against a final award may only be taken through either of the following modes:
This article is only for informational and educational purposes. It is not intended as a legal advice or opinion.
As part of Siguion Reyna Montecillo and Ongsiako Law Offices’ (“SRMO”) general dispute resolution practice, SRMO provides specialized representation in commercial and construction arbitration. SRMO has represented clients in both ad hoc arbitrations as well as institutional arbitrations administered by the Philippine Dispute Resolution Center, Inc. (“PDRCI”) and the Construction Industry Arbitration Commission (“CIAC”).
Under the auspices of PDRCI, SRMO handled commercial disputes, including international and local investment disputes as well as the interpretation, enforcement or termination of equipment supply agreements, procurement agreements, and other commercial contracts.
In the CIAC, SRMO represented clients in disputes involving, among others, termination of construction contracts, EOT claims, delays, variation costs, payments/progress billings, quality of works issues, liquidated damages, completion costs, and others. Post arbitration, our firm has also handled cases for recognition, vacation, and/or enforcement of arbitral awards.
Our ADR team is headed by and/or composed of lawyers trained by and who are members of the PDRCI.
Copyright 2022-2023 SRMO