CONSTRUCTION DISPUTE ARBITRATION

a. CONCEPT: Face to Face

b. CHARACTERS:
Host – H
Petitioner – P
Respondent – R
Lawyer – L
Audience 1 – A1
Arbitrator – A2

H: A pleasant evening to all of you and welcome to FACE TO FACE!! In this episode, we have Mr/Ms.
Petitioner who believes that he/she has been wronged by the construction company represented by its
President, Ms/Mr. Respondent. Let me first introduce the first party, Mr/Ms. Petitioner.

(applause)

H: So how are you, Ms/Mr. Petitioner? May I call you Ms./ Petitioner? *in a humble manner*

P: I am stressed. I haven’t slept for days. I can’t stop thinking about the money I spent. I paid millions for
my dream building that ended up being a TRASH! *in a furious manner* I used the money I saved from
my numerous investments and it went all for nothing. I demand a refund! I demand damages! *slams the
table*

H: Maam/ Sir, just be calm. We will get to the bottom of this. If I may ask, did you submit it to the CIAC?
To explain further about the CIAC, here is our resident lawyer, Mr/Ms Lawyer.

L: Ladies and Gentlemen, just to inform you the CIAC stands for Construction Industry Arbitration
Commission which is under the Construction Industry Authority of the Philippines and is administratively
attached to the Dept. of Trade and Industry. It is a quasi judicial agency accorded with the jurisdiction to
resolve disputes arising from contracts involving construction in the Philippines. Its functions are the
following:

1. To formulate and adopt an arbitration program for the construction industry.

2. To enumerate policies and prescribed 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.
4. To direct its officers and employees to perform such functions as may be assigned to them
from time to time.

So Ms/Mr. Petitioner, did you submit it to the CIAC?

P: Yes. There is an arbitration clause in our construction contract and we both agreed to the submission
of a dispute to the CIAC. I know that all that is required for the CIAC to acquire jurisdiction is for the parties
to a construction contract to agree to suit their dispute to arbitration. When we were already with the
CIAC, at first, Mr/Ms. Respondent even refused to participate in the proceedings but 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 case and issuing an award in favor of one of the parties.

L: Yes. This is in accordance with Section 4.2 of the Revised Rules of Procedure Governing Construction
Arbitration.

H: Moving on, let us now introduce our other party to the contract, the President of the construction
company, Mr/Ms. Respondent. *Mr/Ms. Respondent enters**applause from the crowd* So, Mr/Ms.
Respondent, what can you say about the allegations of Ms/Mr. Petitioner?

R: You should check his/her mental state! He/she belongs to the mental institution! *pointing at Petitioner
in an angry manner* How you dare! First of all, I did not refuse to participate. I just failed to appear! And
according to Section 4.2.1 of the Revised Rules of Procedure, I am still given the opportunity to have the
proceedings reopened and be allowed to present evidence with the qualification that this is done before
the award is issued. Also! The balance you gave me is insufficient! You wanted a 3-storey building but the
budget you gave me was only enough for one room! What do you think of me?! A magician?!

P: Excuse me, Mr/Ms. Respondent!! That was not our agreement! The design was different! The budget
allocated was enough but you mishandled the money! I know you have a gambling addiction and most
likely you used the funds ----

R: Excuse you! My gambling has no relevance with our case!! You don’t have any basis for your accusation!
For your information, I am up by 50,000!

*Petitioner and Respondent saying things both at the same time* *Both of them stand up and accuse
each other of some thing* *audience starting to get rowdy and instigate the parties fight*

A: Suntukan! Suntukan! Tapusin! Tapusin! Iiyak na yan! Hawakan nga kayo tenga!!

H: Wait a minute!! *trying to pacify everyone* Things are heating up! Let’s first go to a commercial break!
Stay tuned and we will back to FACE TO FACE!!

*COMMERCIAL BREAK 1*

H: And we’re back! To recap what happened earlier, it was already established that both parties are under
the jurisdiction of the CIAC which can be found under E0 No. 1008 Section 4, which states Mr. Lawyer.

L: E.O. No. 1008, Section 4:

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.

H: Now, we go into the rules and procedure in the CIAC. Mr/Ms. Petitioner, if I may ask to
whom did you submit your complaint?
P: I submitted it to the Secretary of the CIAC.

H: And what did your complaint allege?

P: It alleged the existence of the arbitration agreement which was attached to the complaint.

H: Mr/Ms. Respondent, did you receive a copy of the complaint and its supporting
documents?

R: Yes, Host. It was transmitted by the Secretariat within 3 days from the filing of that lunatic
beside you. *Petitioner stares at Respondent with demonic eyes* I also submitted a
counterclaim within the period required to answer or within 15 days from the receipt of the
request for arbitration or complaint. Did you receive that Ms/Mr. Lunatic? *looking to
Petitioner*

P: Yes, I received your useless answer. And why do you keep on calling me a lunatic, you
addict??? *Petitioner says more things* *Host butts in to prevent further argument* *sees
Audience 1 raising his/her hand*

H: Be calm be calm both of you. I believe we have a question from our audience. Yes A1?

A1: I have a question for Mr/Ms. Lawyer. What will happen if there is an absence of arbitration
agreement or subsequent submission or the respondent’s statement of willingness to
undergo arbitration? And if Respondent failed to file an answer or refused to arbitrate?

L: The failure of the respondent to file an answer or his refusal to arbitrate shall not stay the proceedings
as long as jurisdiction of the CIAC has been properly invoked by the filing of the request for arbitration in
accordance with CIAC Revised Rules, and there is an arbitration agreement providing for arbitration by
the CIAC, or there is subsequent submission agreement therefor. In such case, the CIAC shall appoint the
arbitrators, continue with the proceedings, receive the evidence of the claimant and render an award
based thereon. If, before the award, the respondent appears and offers to present this evidence, the
arboreal tribunal may , for justifiable reasons, repent he proceedings, require the respondent to file his
answer with or without counterclaims, allow him to present evidence, and grant him a limited right to
cross examine.

H: Moving forward, we now go to the appointment and acceptance of arbitrators. Mr/Ms. Lawyer, can
you give us a brief background on this.

L: So the process is like this. Both parties shall submit not more than 6 nominees from the CIAC-accredited
arbitrators in the order of their preference. The CIAC may appoint one or 3 arbitrators depending on the
agreement of the parties, or the CIAC’s discretion if there was no such agreement.

If there is a sole arbitrator, the CIAC shall appoint the common nominee provided by the parties if is he
available and not disqualified. If the parties failed to submit, the CIAC shall appoint the sole arbitrator.

If there are 3 arbitrators, the CIAC shall appoint the parties’ common nominees.
If there is no common nominee, the CIAC shall choose one arbitrator and one from each parties’
nominees.
If there is only one common nominee, the CIAC shall appoint that arbitrator and appoint two others from
the list of the parties’ nominees. One from each side.

H: Thank you, Mr/Ms. Lawyer. Now, I believe that there was a motion for inhibition or a request for
disqualification or replacement filed by you Ms/Mr. Petitioner. Can you tell us more about this?

P: Yes, Host. I filed a motion for inhibition because one of the arbitrators appointed from the list of that
gambler broke every ground provided by law. The arbitrator had a relationship within the 6th degree of
the his/her party. He/She had a financial interest in the controversy which shows partiality or bias. And I
heard from my circle of friends that, that arbitrator is incompetent and has a professional misconduct. I
also stated just and valid reasons affecting independence, integrity, impartiality and interest in my motion.

R: Ms/Mr. Petitioner, is it my fault that he/she was appointed?? You say that as if its my fault? Besides,
it’s already moot and academic. When the arbitrator was given an opportunity to be heard which was
subject to the approval of the CIAC, he/she was removed and a replacement was appointed by the CIAC.
So stop your yapping over a lost cause, you stingy human being. You’re even lucky I acknowledged your
request of construction. Did you know that I am already a successful contractor? I can buy you and your
family!!

P: You’re only rich because you trick your clients! You ask for so much but do a less than subpar job! Even
the one room you built was defective! There was no door! How am I supposed to enter!?

R: There was a door! You just couldn’t fit it (insert an offensive statement pertaining to size of Petitioner)!!

*crowd gets rowdy again and repeats the offensive remark of Respondent, teasing Petitioner*

H: Everyone please calm down!! *pacifying the crowd* We now tackle the preliminary conference and
terms of reference of the parties. This is similar to a pre-trial and shall be set no later than 15 days after
the appointment. Mr/Ms. Respondent, how did this go? I am aware that the considerations of the
preliminary conference are the possibility of amicable settlement—

R: Host, there was no possibility. I couldn’t settle with a stupid person.

H: How about the necessity or desirability of amendment to pleadings?

R: There was no such necessity since I was able to state everything in my answer. I don’t know about
Mr/Ms. Petitioner since maybe she needed to amend his/her pleading since it is of his/her attitude to
change his/her mind and can’t decide properly. We also had admissions of facts and documents in this
stage of the proceedings to avoid unnecessary proof submitted by THAT person. We also, limited the
number of witnesses, formulation of issues, and application for interim relief, appointment of experts and
necessity of site inspection and other matters to aid the just and speedy disposition of the case.

*Host sees another hand raised from the audience*

H: We have another question raised by the audience.

A1: Host, you said earlier Terms of Reference. May I ask what is that?
L: I can answer that. A terms of reference is a draft copy of document which functions as pre-trial order.
This shall be signed by the parties, their counsels, and the arbitrator after finalization. Arbitration shall
proceed even in the absence of TOR on the basis of the formulated pleadings filed by the parties. Its
contents are:

a. Full names of parties and their counsels

b. Their addresses and contact numbers
c. Summary of parties’ respective claims
d. Full statement of admitted facts and documents
e. The issues to be resolved in question form
f. The arbitrators’ full names
g. The place where the arbitration proceedings shall be held
h. The breakdown, schedule of payments, and sharing of arbitration fees
i. Other particulars as may be required

H: So Ms/Mr. Petitioner, how did the arbitration proceedings go?

P: Firstly, we couldn’t agree on the venue date and time since I cannot anymore agree with anything that
liar says. So it was decided by the arbitral tribunal. We had 3 arbitrators. We also had the presentation of
evidence which adopted the most expeditious procedure available. I first presented my evidence since I
was the one that enforced my right. Thereafter, he/she *pointing at Respondent* presented his/her
evidence and we were directed to make brief oral summation.

R: The pieces of evidence you presented were all nonsense! I even think you manipulated some of it! I
don’t recall issuing a receipt of the 500,000! 50,000 maybe because you’re a cheap person!

P: Who are you calling cheap?! I invested so much into this project! You were the one who were distracted
and absent all the time! You’re like my gf/bf! I gave everything and yet I receive nothing! You’re all the
same! At first you make it seem that you’re interested and put your best foot forward and when I’m finally
into the plans, you run off! You’re all the same!

R: It’s not my fault your bf/gf left you! I thought I can give my suggestions but you made it clear it was
only YOUR plan and not ours!

H: Are we still talking about the construction of the building or some other else? Since we are getting
personal, let’s have another commercial break! We will back with FACE TO FACE!

COMMERCIAL BREAK

H: And we’re back! We are nearing our conclusion since we’ve already heard that both parties have
submitted their oral summations. I believe what happens after is within 10 calendar days from the
termination of the hearing, parties may draft decision or final memorandum of arguments. The hearing is
now closed after the submission of such but can be reopened when? Mr/Ms. Lawyer?

L: A hearing can be reopened by the request of the parties or the arbitral tribunal before the award is
rendered and for a good cause. When the hearing is reopened, the date of closing shall be the date of the
closing of the reopened hearing.
H: Thank you, Mr/Ms. Lawyer. We now move on the final stage of the arbitration which is the award.
Because this is a special edition of Face to Face, the decision of the arbitral tribunal will be announced
here! Live at the studio! Let me call on Mr/Ms. Arbitrator!!! *Arbitrator enters* So, what was the decision
of the arbitral tribunal?

A2: I would first like to disclose to the audience that this does not happen in real life. Anyway, I have here
the decision of the arbitral tribunal. The award was submitted within the timeframe provided by the law
which is within 30 days from the time the case is submitted for resolution but not more than 6 months
from the date of signing of the Terms of Reference or from the last preliminary conference. As you can
see, *shows the award* it is in writing and signed by the arbitral tribunal or majority of its members. There
is also a dissent which is also in writing and signed by the dissenting member. This award shall also be
executed upon lapse of the 15 days from receipt of the parties, unless a motion for correction is filed. In
the execution of the award, the arbitral tribunal, any or its members, or the CIAC itself shall issue a writ
of execution of a final and executor decision or requiring officer to execute said decision, order or final
award. If the decision is appealed, the execution may be stayed upon approval of the arbitral tribunal, or
any of its members with the concurrence of CIAC, of a bond posted in an amount equal to the award,
conditioned upon the performance of the judgment in the appellate court.

Let me inform the parties, that a motion for reconsideration and new trial are prohibited. And as a general
rule, the arbitral tribunal is terminated upon the finality of the decision. With the exceptions of :

a. Timely motion for correction has been filed

b. Arbitral tribunal retains jurisdiction to exercise executor powers, which includes:
- determination of the sufficiency of the bond
- approval of the surety or bonding company
- satisfaction of the award
- quashal of the execution
- issuance of alias writs
- assessment of properties levied
- appointment of a quantity surveyor or assessor
- examination of banks
- debtors of the judgment debtors and any person holding properties or assests of the
judgment debtor
- issuance of subpoena ad testificandum and subpoena ducestecum

The arbitral tribunal have decided to rule in favor of the…….Petitioner!

P: YES! *stands up and mocks the Respondent*

R: Unacceptable! I know the decision of the CIAC can be reviewed by the Court of Appeals! I WILL APPEAL!
We will still meet in court!! There is clearly an error of fact, law or even mixed! I will ask for a TRO since
you cheater might push on the execution of the award! Mr/Ms. Lawyer! What more do I need to know
about appealing!?

P: Just accept that you lost! Sore loser!!

L: Let’s see. The availability of a petition for review under Rule 43 precludes the remedy of a petition for
certiorari under Rule 65, and the filing of an erroneous petition for certiorari will not toll the 15-day period
to file a petition for review. The factual finding of the CIAC shall not be disregarded, unless there was
grave abuse of discretion. This is under the principle that the peculiar technical expertise of an
administrative agency, must be accorded great respect, if not finality by the courts. The court shall not
interfere in matters under the special technical knowledge and training of administrative agencies.

With the exception of the following:

a. The award was procured by corruption, fraud, or undue means

b. There was evident partially or corruption of the arbitration
c. The arbitrators were guilty of misconduct for refusing to hear evidence pertinent and
material to the controversy
d. One of the arbitrators is disqualified under Sec. 9 of R.A. 876 and willfully refrained from
disclosing it prejudicing one of the parties
e. The arbitrators exceed their powers, or so imperfectly executed them, that a mutual, final
and definitive award upon the subject matter submitted to them was not made
f. When there is a very clear showing of grave abuse of discretion resulting in lack or excess
of jurisdiction
g. When the findings of the Court of Appeals are contrary to those findings of the CIAC
h. When a party is deprived of administrative due process

But the costs of this arbitration, as a general rule, Sec. 5 of Article XV of CIAC Rules of procedure states
that non-monetary claims or where the parties agreed that the sharing of fees shall be determined by the
arbitrators, the award shall, in addition of dealing with the merits of the case, shall fix the cost of
arbitration, and/or decide which of the parties shall bear the cost or in what proportion the cost shall be
borne by each. Moreover, Rule 142 of the Rules of Court states that Unless otherwise provided, costs shall
be allowed to the prevailing party as a matter of course, but the court shall have the power for special
reasons, to adjudge that either party shall pay the cost of an action, or that the same shall be divided, as
may be equitable.

R: I will continue this! I will see you in the Court of Appeals!

P: *continues on mocking Respondent*

H: And that concludes this episode of FACE TO FACE. We again have not contributed in the reconciliation
of the parties. Tune in next time for further ruining of the lives of our guests. Good night!