Due to the ever growing and popular clamor for the solution of increasing unsettled disputes in the

construction industry causing long drawn-out litigations over contractual claims, the Government
prompted the creation of an arbitration machinery in the construction industry./
Let me introduce to you EXECUTIVE ORDER NO. 1008,/ also known as the CONSTRUCTION
INDUSTRY ARBITRATION LAW.
SEC.2 It is the policy and objective of this law to provide a fair and expeditious resolution of
construction disputes as an alternative to judicial proceedings, with the aim to restore the
harmonious relationships among the parties.
Arbitration is considered a more reasonable alternative to court action. Only persons who are
knowledgeable of the construction business are appointed as arbitrators to act upon the cases.
Hence, this guarantees that prompt decisions can be easily reached.
These have always been the aim of the earlier topics we had, from the ADR to the Domestic
Arbitration, the bottom line is, to avoid the corridors of the courts waiting for maybe 2, if not, 3, or
so on and so forth years just to finally put an end to a dispute./
SEC.3 On February 4, 1985, Executive Order No. 1008, creating the CIAC and vesting it with
original and exclusive jurisdiction over claims and disputes arising from or connected with public
and private construction contracts in the Philippines, was signed by Pres. Ferdinand E. Marcos. And
CIAC shall be under the administrative supervision of the PDCB./
PDCB is PHILIPPINE DOMESTIC CONSTRUCTION BOARD, created on November 28, 1980 under P.D.
1746.
The PDCB is tasked, among others, to adjudicate and settle claims and disputes in the
implementation of public construction contracts and to formulate and recommend rules and
procedures for the adjudication and settlement of claims and disputes in the implementation of
contracts in private construction./
SEC.4 The CIAC shall have original and exclusive jurisdiction over construction/ disputes,/ which
arose from,/ or is connected with/ contracts/ entered into by parties involved in construction in the
Philippines whether the dispute arose before or after the completion of the contract, or after the
abandonment or breach thereof./
These disputes/ may involve government/ or/ private contracts.
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 provisions;/ amount of damages and penalties;/ commencement time
and delays;/ maintenance and defects;/ payment default of employer or contractor/ and changes
in contract cost.
Construction dispute shall include those between or among parties to, or who are otherwise bound
by, an arbitration agreement, directly or by reference, whether such parties are/ project owner/,
contractor,/ subcontractor/, fabricator,/ project manager,/ design professional/, consultant,/
quantity surveyor,/ bondsman or issuer of an insurance policy in a construction project./
Excluded from the coverage of this Rules are disputes arising from employer-employee
relationships, which shall continue to be covered by the Labor Code of the Philippines./
HOW DOES THE CIAC ACQUIRES JURISDICTION?
It is an essential requisite for the exercise of jurisdiction by the CIAC over construction disputes
that the parties thereto are bound by an arbitration agreement in their contract/

-But what if there is no arbitration clause in the contract?

Well, the disputing parties may sign a joint statement of issues of the dispute(s) and/or a
voluntary agreement to undertake construction arbitration.
Any written agreement or submission to arbitration in the form of exchange of letters (by post or
telefax), telexes, telegrams, emails, or any other mode of communication, even if unsigned by the
parties, as long as the intent is clear that the parties agree to submit to arbitration.
Any written agreement or submission to arbitration in the form of exchange of letters (by post or
telefax), telexes, telegrams, emails, or any other mode of communication, even if unsigned by the
parties, as long as the intent is clear that the parties agree to submit to arbitration.
Said arbitration agreement or subsequent submission must be alleged in the COMPLAINT. The
submission agreement may be evidenced by an exchange of communication in any form by the
parties which can be understood that they have mutually consented to submit their dispute to
arbitration. It is important that the Complaint shall carry with it such evidence of communication.
I have just mentioned a while ago that a condition for the exercise of jurisdiction by the CIAC is
either by the existence of an arbitration agreement in the contract of the parties or a subsequent
submission agreement.
And, if a COMPLAINT was filed without the aforementioned condition, the presence of the required
arbitration clause or the subsequent submission,/ the CIAC SECRETARIAT will then notify the
RESPONDENT within 3days from the submission of the COMPLAINT whether or not he is willing to
have the dispute be resolved by arbitration. If said RESPONDENT agrees, it must be clearly
expressed in his ANSWER.
In here, we could see that the absence of the documents in a COMPLAINT filed with the CIAC which
is important for it to acquire jurisdiction, does not amount to an automatic dismissal of the
complaint, but further gives the parties the chance to avail of the machinery by confirming it with
the RESPONDENT, in spite of the failure of the COMPLAINANT to set forth the important documents
in his COMPLAINT./
However, if the/ RESPONDENT refuses to answer the complaint or if he files a MOTION TO DISMISS
the complaint on the ground of lack of jurisdiction, it shall be deemed a refusal to submit the
dispute to arbitration, and for this, the COMMISSION has no option other than to dismiss the
COMPLAINT. However, it will be without prejudice to its refiling in the future if the parties will finally
agree for its submission./
Jurisdictional challenge
A motion to dismiss based on lack of jurisdiction shall be resolved by the appointed arbitral
tribunal.
He shall have full authority to resolve all issues raised in the Motion to Dismiss for lack of
jurisdiction on the grounds that the dispute is not a construction dispute, or that the Respondent
was represented by one without capacity to enter into a binding arbitration agreement, or that
said agreement or submission is not valid for some other reasons, or does not cover the particular
dispute sought to be arbitrated, or other issues of interpretation or non-fulfillment of preconditions to arbitration that are raised therein.
Non-waiver of jurisdictional challenge
- A party does not waive its right to challenge the jurisdiction of CIAC by any of the following acts:
a) participating in the nomination process including challenging the qualifications of a nominee;
b) praying for extension of time to file appropriate pleading/motion to dismiss;
c) opposing an application for interim relief;
d) filing of a motion to dismiss/suspend.

Any party to a construction contract who desires to avail of the arbitration shall file its REQUEST
FOR ARBITRATION in the prescribed form and number of copies to the SECRETARIAT of the CIAC.
What shall accompany the documents required?
a. The names and addresses of the parties; b. A statement of the case/narration of the facts; c.
The issues of the case;
d. The list of nominees for arbitrator(s) in order of preference; e. Construction contract; f.
Agreement to arbitrate;
g. Documents establishing the circumstances of the case; and h. In case of government contracts,
communications made with the highest authority for exhaustion of administrative remedies.
But, what about if the CLAIM is against the government, are there any conditions?
Well, there are PRECONDITIONS before CIAC can take cognizance of the claim.
The claimant against the government, in a government construction contract, shall state in the
complaint/request for arbitration that
1) all administrative remedies have been exhausted, or
2) there is unreasonable delay in acting upon the claim by the government office or officer to
whom appeal is made, or
3) due to the application for interim relief, exhaustion of administrative remedies is not
practicable.
So, if any of the aforementioned preconditions have taken place, the claim against the government
can now be properly made through the CIAC.
The Claimant in a private construction contract has the same obligation as the above to show
similar good faith compliance with all preconditions imposed therein or exemptions therefrom.
In case of non-compliance with the precondition contractually imposed, absent a showing of
justifiable reasons, exemption, or a waiver thereof, the tribunal shall suspend arbitration
proceedings pending compliance therewith within a reasonable period directed by the Tribunal.
The CIAC Secretariat shall within three (3) days from filing, transmit to the Respondent a request
for his Answer, attaching thereto a copy of the complaint and the Request for Arbitration together
with the annexed documents.
Submission to CIAC jurisdiction- An arbitration clause in a construction contract or a submission to
arbitration of a construction dispute shall be deemed an agreement to submit an existing or future
controversy to CIAC jurisdiction, notwithstanding the reference to a different arbitration institution
or arbitral body in such contract or submission.
When a contract contains a clause for the submission of a future controversy to arbitration, it is
not necessary for the parties to enter into a submission agreement before the Claimant may
invoke the jurisdiction of CIAC.
What if the RESPONDENT fails or refuses to arbitrate?
- Where the jurisdiction of CIAC is properly invoked by the filing of a Request for Arbitration in ac
cordance with these Rules, the failure despite due notice which amounts to a refusal of the
Respondent
to arbitrate, shall not stay the proceedings notwithstanding the absence or lack of participation of
the Respondent. In such case, CIAC shall appoint the arbitrator/s in accordance with these
Rules. Arbitration proceedings shall continue, and the award shall be made after receiving the

evidence of the Claimant.

In the event that, before award, the Respondent who had not earlier questioned the jurisdiction of
the Tribunal, appears and offers to present his evidence, the Arbitral Tribunal may, for reasons that
justifies the failure to appear, reopen the proceedings, require him to file his answer with or
without counterclaims, pay the fees, where required under these Rules, and allow him to present
his evidence, with limited right to cross examine witnesses already presented in the discretion of
the Tribunal. Evidence already admitted shall remain. The Tribunal shall decide the effect of such
controverting evidence presented by the Respondent on evidence already admitted prior to such
belated appearance.
What are the instances wherein arbitration can not proceed?
- Where the contract between the parties does not provide for arbitration and the parties cannot
agree
to submit the dispute(s) to arbitration, the arbitration cannot proceed and the Claimant/s shall be
informed of that fact.
Time to answer
- The Respondent shall, within fifteen (15) days from receipt of the Request for
Arbitration/Complaint, file its answer thereto including such counterclaim/s as it may assert. For
justifiable reason/s, Respondent may apply to CIAC for an extension of time to file its answer. If
Respondent fails to do so, the arbitration shall proceed in accordance with these Rules.
Transmittal of answer
- A copy of the answer shall be transmitted in sufficient copies to the Claimant and to CIAC.
Notifications or communications from the Secretariat and/or the Arbitrator(s) shall be validly made
if they are delivered against receipt or forwarded by registered mail to the address or last known
address of the party/ies for whom the same are intended as notified by the party/ies in question or
the other party/ies as appropriate.
If the Notice to Respondent/Request to Answer the complaint is not received by Respondent due to
wrong address or because Respondent has moved out from, or cannot be found at, the last known
address provided by the Claimant, the CIAC Secretariat shall inform the Claimant of the nondelivery/non-receipt of the notice and require Claimant to provide CIAC with Respondents
correct/new address within fifteen (15) daysfrom receipt of the advice.
If Claimant fails to comply, the Commission shall dismiss the case without prejudice to its refiling
once the whereabouts of Respondent/s are known to Claimant/s.
Notification or communication shall be deemed to have been effected on the date when actually or
constructively received.
Confidentiality of proceedings
The arbitration proceedings shall be considered confidential and shall not be published except (i)
with
the consent of the parties, or (ii) when necessary in case resort to the Court is made under the
Rules of Court. The term arbitration proceedings shall include communications to or from CIAC,
the pleadings, applications and other papers filed with CIAC, sworn statements, documentary and
testimonial evidence, reports and minutes taken of the proceedings, and other orders, decision,

award or resolution issued by the Arbitrator(s).

Violation of confidentiality Any person who violates the immediately preceding confidentiality
provision shall be subject to the following sanctions:
If the violator is a lawyer, administrative action or proceeding to be conducted by CIAC, with
proper notice and hearing, for inhibition or prohibition from appearing as counsel for any party in
any arbitration case before CIAC for a period not exceeding six (6) months; without prejudice to
suspension or disbarment action before the Integrated Bar of the Philippines (IBP), at the instance
of CIAC.
If the violator is a duly licensed and registered professional, administrative/ disciplinary action
before the Professional Regulation Commission (PRC), at the instance of CIAC.
COMPOSITION OF THE BOARD.
The Commission shall consist of a Chairman and 2 members, all of them are to be appointed by
the CIAP Board upon recommendation by the members of the PDCB,
FUNCTIONS OF THE COMMISSION: refer to the slide
The Commision shall have the authority to lay down its rules and regulations to be followed along
with the discharge of its duties.
COMPENSATION. The members of the Commission shall receive such per diems and allowances
as may be fixed by the CIAP from time to time.
TERM. The term of office of the members of the Commission shall be 6 years; Provided, however,
That of the ommission members first appointed, the Chairman shall hold office for 6 years, the
other member for 4 years, and the third, for 2 years. He appointment to any vacancy in the
Commission shall only be for the unexpired portion of the term of the predecessor.
QUORUM. The presence of a majority of the members of the Commission shall constitute a
quorum for the transaction of business.
DELIBERATIONS. The decisions of the Commission shall be arrived at by majority vote.
Any important matter that needs to be tackled and resolved by the Commission shall be decided
upon by the majority vote of the Commission.
SECRETARIAT. The Commission shall have a Secretariat which shall be headed by the EXECUTIVE
DIRECTOR, who shall be responsible in receiving requests for arbitration, and other pleadings,
notifying parties thereto, and fixing and receiving the necessary fees and costs. It shall like wise be
the duty of the EXECUTIVE DIRECTOR to notify the parties of the awards made by the arbitrators.