Amending Sections 2.3 and 2.4, Rule 2 of the Revised CIAC Rules

July 21, 2006

CIAC RESOLUTION NO. 15-06

AMENDING SECTIONS 2.3 AND 2.4, RULE 2 (JURISDICTION) OF THE REVISED CIAC RULES

WHEREAS, Sections 6 and 21 of Executive Order No. 1008 empowers the CIAC "to enunciate policies and prescribe rules and procedures for construction arbitration" and "to formulate and adopt necessary rules and procedures for construction arbitration", respectively;

WHEREAS, Section 2.3, Rule 2 of the Revised CIAC Rules provides that for the CIAC to acquire jurisdiction, the parties to a dispute must be bound by an arbitration agreement in their contract or subsequently agree to submit the same to voluntary arbitration;

WHEREAS, on the other hand, Section 2.4, Rule 2 of the Revised CIAC Rules provides that a motion to dismiss based on lack of jurisdiction shall be resolved by the appointed arbitral tribunal;

WHEREAS, in a memorandum dated 11 July 2006, Atty. Victor P. Lazatin, President of the Philippine Institute of Construction Arbitrators, Inc. (PICA), raised the following concerns:

1. If there is no agreement to arbitrate and a motion to dismiss is filed, should the parties wait for the arbitral tribunal to be appointed or constituted so as to rule on the jurisdictional issue despite the fact that the case is clearly not cognizable by CIAC and the CIAC, likewise, will not acquire jurisdiction?

2. While Section 2.4 apparently answers the above query in the affirmative, the subsequent questions must be addressed, to wit: [a] Does lack of jurisdiction contemplate a situation wherein an arbitration agreement is totally absent "[b] What issues concerning the arbitration agreement shall be deemed cognizable by the arbitral tribunal"

WHEREAS, to address the aforementioned concerns, the memorandum contained proposed revisions/amendments to the CIAC Rules which the Commission discussed and found to be necessary in its 88th Regular Meeting held on 21 July 2006;

NOW, THEREFORE, WE THE UNDERSIGNED COMMISSIONERS, by virtue of the powers vested in us by law, hereby RESOLVE, as it hereby resolved, to amend Section 2.3 and 2.4, Rule 2 of the Revised CIAC Rules, as follows:

1. Incorporation of the following provisions under Section 2.3:

"Section 2.3.1 Such arbitration agreement or subsequent submission must be alleged in the Complaint. Such submission may be an exchange of communication between the parties or some other form showing that the parties have agreed to submit their dispute to arbitration. Copies of such communication or other form shall be attached to the Complaint.

Section 2.3.2 If the Complaint is filed without the required arbitration clause or subsequent submission, the CIAC Secretariat shall within three (3) days from such filing, notify the Respondent that, if he/it is willing to have the dispute be resolved by arbitration, such agreement must be clearly expressed in the Answer. cEaACD

Section 2.3.3 Respondent's refusal to Answer the Complaint or the filing of a Motion to Dismiss for lack of jurisdiction shall be deemed a refusal to submit to arbitration. In either case, the Commission (CIAC ) shall dismiss the Complaint without prejudice to its re-filing upon a subsequent submission".

2. Inclusion of the following provision under Section 2.4:

"Section 2.4.1. The Arbitral Tribunal 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 pre-conditions to arbitration that are raised therein."

The foregoing amendments shall take effect fifteen (15) days from receipt of a copy hereof by the Office of the National Administrative Register, U.P. Law Center, pursuant to Memorandum Circular No. 11 from the Office of the President.

UNANIMOUSLY APPROVED.

Adopted: 21 July 2006

(SGD.) SEDFREY A. ORDONEZChairman

(SGD.) ISAAC S. DAVIDMember

(SGD.) SAMSON C. LAZOMember