Rules of Procedure Governing Construction Arbitration

August 23, 1988

CIAC RESOLUTION NO. 01-88

RULES OF PROCEDURE GOVERNING CONSTRUCTION ARBITRATION

Pursuant to Section 21 of Executive Order No. 1008 creating the Construction Industry Arbitration Commission (CIAC), the following Rules of Procedure governing Construction Arbitration are hereby promulgated.

ARTICLE I

Policy and Objectives

SECTION 1. Statement of Policy and Objectives. — It is the policy and objective of these Rules to provide a fair and expeditious settlement of construction disputes through a non-judicial process which ensures harmonious and friendly relationships between or among the parties.

SECTION 2. Applicability of Rules. — These Rules are applicable to proceedings in arbitration either before a single Arbitrator or an Arbitral Tribunal.

SECTION 3. Technical Rules Not Binding. — In any proceeding before a single Arbitrator or Arbitral Tribunal, the rules of evidence prevailing in courts of law or equity need not be controlling and it is the spirit and intention of the Construction Industry Arbitration Commission that Arbitrators shall use every and all reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law or procedure, all in the interest of substantive due process.

ARTICLE II

Request for Arbitration

SECTION 1. Submission to Arbitration. — Any party to a construction contract wishing to have recourse to arbitration by the Construction Industry Arbitration Commission (CIAC) shall submit its Request for Arbitration in sufficient copies to the Secretariat of the CIAC; PROVIDED, that in the case of government construction contracts, all administrative remedies available to the parties must have been exhausted within 90 days from the time the dispute arose. TADIHE

SECTION 2. Contents of Request. — The Request of Arbitration shall, inter alia, contain the following information:

a. Names in full, description, and addresses of the parties;

b. A statement of the claimant's case;

c. Copy of the construction contract in question;

d. The relevant agreements, and in particular the agreement to arbitrate, and such documentation or information as will serve clearly to establish the circumstances of the case;

e. All relevant particulars concerning the number of Arbitrator/s and their possible choice.

SECTION 3. Notice to Respondent. — The CIAC shall within three (3) days from filing transmit a copy of the Request of Arbitration and of the documents annexed to the Respondent for his Answer.

ARTICLE III

Effect of the Agreement to Arbitrate

SECTION 1. Application of the Rules. — When the parties have agreed to submit the dispute/s to arbitration by the CIAC, they shall be deemed thereby to have submitted ipso facto to these Rules and any amendments thereto.

SECTION 2. Failure or Refusal to Arbitrate. — Agreement to arbitrate may be embodied in the contract between the parties, in an agreement to arbitrate, in an exchange of letters or of telexes or of telegrams, or other modes of written communication.

ARTICLE IV

Absence of Agreement to Arbitrate

SECTION 1. When Arbitration Cannot Proceed. — When the contract between the parties did not provide for arbitration and the parties cannot agree to submit the dispute/s to arbitration, the Claimant/s shall be informed that the arbitration cannot proceed.

ARTICLE V

Choice/Selection of Arbitrators

SECTION 1. Number of Arbitrators. — A sole Arbitrator or an Arbitral Tribunal of three Arbitrators may settle a dispute.

SECTION 2. Sole Arbitrator. — Where the parties have agreed that the dispute(s) shall be settled by a sole Arbitrator, they may, by agreement nominate him for appointment by the Construction Industry Arbitration Commission (CIAC). If the parties fail to nominate a sole Arbitrator within fifteen (15) days from the date of respondent's answer to claimant a sole arbitrator shall be appointed by the CIAC. cCaSHA

SECTION 3. Arbitral Tribunal. — Where the parties agree that the dispute shall be settled by an Arbitral Tribunal, each party may nominate one (1) Arbitrator from the list of Arbitrators accredited by the CIAC for appointment and confirmation. The third Arbitrator, shall be agreed upon by the two Arbitrators first chosen and who shall be the Chairman thereof. In case of failure to agree on the third member, within fifteen (15) days from the date of submission, the CIAC shall appoint the Chairman within fifteen (15) days from the date the parties could not agree as to the third member.

SECTION 4. Challenge. — An Arbitrator may be challenged upon proof of his partiality, bias, incompetence, professional misconduct by any one of the parties at any time during the proceedings but before award. The CIAC shall, within fifteen (15) days from receipt of the challenge, rule upon the grounds therefor and shall make a final resolution which shall be final.

ARTICLE VI

The Arbitrators

SECTION 1. The Arbitrators shall be men of distinction in whom the business sector and the government can have confidence. They shall be technically qualified to resolve any construction dispute expediently and equitably. The Arbitrators shall come from different professions. They may include contractors, engineers, builders, architects, businessmen familiar with the construction industry and lawyers who are experienced in construction disputes. They shall not be permanently employed with the CIAC. Instead, they shall render service only when called upon to arbitrate.

ARTICLE VII

Appointment and Acceptance of Arbitrators

SECTION 1. Communication of Appointments. — After the parties have agreed on the choice of their Arbitrator/s from the list of accredited Arbitrators of the Construction Industry Arbitration Commission (CIAC), the Secretariat shall communicate the proposed appointment to the Arbitrator(s).

SECTION 2. Disclosure by Arbitrator of Disqualification. — Prior to accepting the appointment, Arbitrator(s) shall disclose to the parties any circumstance likely to create a presumption of bias or which he believes might disqualify him as an impartial Arbitrator.

SECTION 3. Acceptance or Refusal. — The Arbitrator must communicate to the Construction Industry Arbitration Commission (CIAC) and to the parties the acceptance or refusal of his appointment within five (5) working days from receipt thereof.

SECTION 4. Vacancies. — If any Arbitrator should resign, be incapacitated, refuse or be unable, or be disqualified for any reason to perform the duties of his office, the CIAC shall, within five (5) working days from the occurrence of a vacancy or refusal/inability to accept appointment, appoint a substitute(s) to be chosen from a list of alternatives previously agreed upon by the parties. In the absence of such a list, the CIAC shall fill the vacancy from the list of accredited arbitrators.

ARTICLE VIII

Preliminary Conference

SECTION 1. Preliminary Conference. — In any construction dispute, after the respondent has filed his Answer, the Arbitrator/Arbitral Tribunal shall set the case for preliminary conference and a notice to the parties thereof shall be sent at least five (5) days before the date set but not later than 15 days after appointment of arbitrator to consider the following: cIEHAC

1. possibility of amicable settlement;

2. necessity or desirability or amendments to pleadings;

3. possibility of obtaining stipulations or admission of facts and or documents to avoid unnecessary proof;

4. limitation of the number of witnesses;

5. simplification of the issues;

6. and such other matters as may aid in the just and speedy disposition of the case.

ARTICLE IX

Terms of Reference

SECTION 1. Contents. — Before proceeding with the hearing of the case, the Arbitrator/s shall formulate the Terms of Reference on the basis of the documents submitted. These document/s shall include the following particulars:

a) the full names of the parties and their personal circumstances;

b) the addresses of the parties to which notifications or communications arising in the course of the arbitration may validly be made;

c) a summary of the parties' respective claims;

d) definition of the issues to be determined;

e) the Arbitrators' full names, and addresses;

f) the place of arbitration;

g) such other particulars as may be required to make the arbitral award enforceable in law, or may be regarded as helpful by the CIAC or the Arbitrator/s.

SECTION 2. Signing of the Terms of Reference. — The Terms of Reference mentioned in Section 1 hereof shall be signed by the parties and the Arbitrator/s, within fifteen (15) days from the preliminary conference. The same shall then be transmitted to the CIAC Secretariat within three (3) days after the signing.

Upon the Arbitrator's request, the Commission through the Secretariat may in exceptional circumstances, extend this time limit.

ARTICLE X

Answer to the Request

SECTION 1. Time to Answer. — The Respondent shall, within fifteen (15) days from the receipt of the Request for Arbitration and of the documents referred to in Section 2 of Article II, set out his defense in an Answer, and submit relevant documents. In exceptional circumstances, the Respondent/s may apply to the CIAC for an extension of time for the filing of his defense and his documents. If the Respondent/s fails to do so, the Commission shall proceed with the arbitration in accordance with these Rules. HCDAcE

SECTION 2. Transmittal of Answer. — A copy of the Answer and the documents attached thereto, if any, shall be transmitted in sufficient copies to the Claimant/s and to the Commission.

ARTICLE XI

Counter-claim/s

SECTION 1. Statement of Counterclaim. — If the Respondent/s wishes to make a counter-claim/s, the same shall be included in the Answer, as provided for in Article VIII.

SECTION 2. Reply to Counterclaim. — The Claimant/s shall file a reply in sufficient copies with the Commission and shall furnish the Respondent/s a copy thereof within fifteen (15) days from date of receipt of the counter-claim/s.

ARTICLE XII

Pleadings and Written Statements, Notifications or Communications

SECTION 1. Number of Copies. — All pleadings and written statements submitted by the parties, as well as all documents attached thereto, shall be in sufficient copies to provide one copy for each party, plus one for each Arbitrator, and one for the Secretariat.

SECTION 2. Notices. — 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 by the other party/ies as appropriate.

Notification or communication shall be deemed to have been effected on the date when received.

ARTICLE XIII

Venue and General Matters

SECTION 1. Venue, Date and Time of Hearing. — The venue, date and time of the arbitral proceedings shall be mutually agreed upon by the parties and the Arbitrator/s or an Arbitral Tribunal. In the event there is disagreement, the choice of the Arbitrator/s shall prevail.

SECTION 2. Stenographic Notes. — In all proceedings before an Arbitrator or an Arbitral Tribunal, official stenographic notes shall be taken and which shall be made available to the parties for a nominal fee.

SECTION 3. Control Over Proceedings. — The Arbitrator or the Chairman of the Arbitral Tribunal shall exercise complete control over all proceedings to insure a speedy, adequate and justifiable disposition of the disputes and cases submitted to them for resolution.

SECTION 4. Extent of Power of Arbitrator. — The Arbitrator or the Arbitral Tribunal shall decide only such issues and related matters as are submitted to them for adjudication. They have no power to add, to subtract from, modify, or amend any of the terms of the contract or any supplementary agreement thereto, or any rule, regulation or policy promulgated by the CIAC.

SECTION 5. Appointment of Experts. — The service of technical or legal experts may be utilized in the settlement of disputes if requested by any of the parties or by the Arbitral Tribunal. If the request for an expert is done by either or by both of the parties, it is necessary that the appointment of the expert be confirmed by the Arbitral Tribunal. TADCSE

Whenever the parties request for the services of an expert, they shall equally shoulder the expert's fees and expenses, half of which shall be deposited with the Secretariat before the expert renders service. When only one party makes the request, it shall deposit the whole amount required.

SECTION 6. Interpretation and Application of Rules. — The Sole Arbitrator or the Arbitral Tribunal shall interpret and apply these Rules in so far as they relate to his/its powers and duties. Where there is an Arbitral Tribunal, and a difference arises among the Arbitrators concerning the meaning or application of these Rules, the same shall be decided by a majority vote.

SECTION 7. Attendance of Hearings. — Persons having direct interest in the arbitration are entitled to attend the hearings. It shall be discretionary upon the Arbitrator/Arbitral Tribunal to determine the propriety of the attendance of any other person. The Arbitrator/Arbitral Tribunal shall have the power to require the exclusion of any witness.

SECTION 8. Adjournments. — The Arbitrator/Arbitral Tribunal for good cause shown, may adjourn the hearing upon his/its own initiative or upon the request of one of the parties. Adjournment shall not be more than five (5) working days.

SECTION 9. Arbitration in the Absence of the Party. — The Arbitration may proceed despite the absence of any party who after due notice, fails to be present or fails to obtain an adjournment. An award, however, shall not be made solely on the default of a party. It shall be made on the basis of evidence submitted and proven.

SECTION 10. Waiver of Rules. — Any party who proceeds with the arbitration after knowledge that any provision or requirement of these Rules has not been complied with and fails to state his objection thereto in writing, shall be deemed to have waived his right to object.

SECTION 11. Expenses and Deposit. — Arbitration expenses shall include the filing fee; administrative charges, arbitrator's fees, fee and expenses of the expert, and others which may be imposed by the CIAC.

The administrative charges and arbitrator's fees shall be in accordance with the Table of Administrative Charges and Arbitrator's Fees.

The CIAC Secretariat shall charge a deposit equivalent to the expected arbitration expenses upon filing of the claim against the Claimant, or where permissible, against the Respondent.

SECTION 12. Freedom to Settle. — The parties shall be free to settle the dispute/s anytime even if the same is under arbitration. In such case, the actual expenses incurred for arbitration shall be charged against the deposit.

ARTICLE XIV

Arbitration Proceedings

SECTION 1. Order of Proceedings. — A hearing shall be opened by person to give testimony at any proceedings for arbitration.

SECTION 9. Oral Evidence. — Oral Evidence shall be given by direct testimony of the witnesses, who after having been apprised of the nature of the hearing shall be allowed to present testimony according to his own knowledge. aTADCE

Direct and redirect examination of the witnesses through questions and answers shall be adopted only as supplementary to direct testimony, or when the witness has difficulty making the same.

SECTION 10. Examination by Arbitrator/Arbitral Tribunal. — The Arbitrator/Arbitral Tribunal may direct any question to the witness/es at any time of the proceedings.

SECTION 11. Documentary Evidence. — All documentary evidence/s presented and offered shall be admitted, unless the Arbitrator/Arbitral Tribunal finds them to be irrelevant or without any bearing to the case.

SECTION 12. Offer of Documents. — All documents not offered with the Arbitrator/Arbitral Tribunal at the hearing but which are arranged at the hearing subsequently by agreement of the parties to be submitted, shall be filed within five (5) days from the termination of the hearing. All parties shall be afforded opportunity to examine such documents.

SECTION 13. Ocular Inspection. — The Arbitrator/Arbitral Tribunal may at any time during working hours, after notice to the parties who may, if they so desire, be present, conduct an ocular inspection of any building, place or premises, including any work, material, implement, machinery, appliance or any object therein, and ask any employee or laborer, or other person, as the case may be, for any information or data concerning any matter, or questions relative to the object of the investigation.

SECTION 14. Interim Measures. — In the course of the proceedings, the Arbitrator/Arbitral Tribunal may upon the request of either or both parties or upon its own initiative may issue orders as is necessary for the enforcement of the award.

SECTION 15. Closing of the Hearings. — The Arbitrator/Arbitral Tribunal shall inquire from all parties whether they have any further proofs to offer or witnesses to be heard. Upon receiving negative replies, the Arbitrator/Arbitral Tribunal shall declare the hearing closed and the minutes thereof shall be recorded.

SECTION 16. Reopening of Hearing. — The hearing may be reopened by the Arbitrators on their own motion or upon the request of any party, upon good cause shown, at any time before the award is rendered. When hearings are thus reopened, the effective date for the closing of the hearing shall be the date of closing of the reopened hearing.

SECTION 17. Summation. — The parties may make a brief oral summation and arguments at the end of the hearing.

SECTION 18. Submission of Memoranda. — If any or both of the parties so desire, written memoranda may be submitted within five (5) working days from the termination of the hearing or from the date of the filing of additional documents as previously agreed upon, whichever is later.

If both parties agree to submit memoranda, the filing shall be simultaneous.

SECTION 19. Award or Decision of the Pleadings. — Instead of a formal hearing, the parties may agree to submit the issues for resolution after the filing of pleadings, documents, evidences, or memoranda.

SECTION 20. Period to Make Award. — The number of days within which an award shall be made will start from the date of the termination of the hearing, or from the filing of additional documents, or from the submission date of memoranda, pleadings, documents or evidences whichever is later. HcSDIE

ARTICLE XV

The Arbitration Award

SECTION 1. Time of Award. — The award shall be rendered promptly by the Arbitrator/Arbitral Tribunal as agreed upon by the parties, but in no case longer than thirty (30) days from the time the case is submitted for resolution but not more than 6 months from the time the claim was filed. There shall be no extensions of time unless approved by the CIAC.

SECTION 2. Form of Award. — The Award shall be in writing and signed by the Arbitrator/s. If there is an Arbitral Tribunal, each Arbitrator must indicate his/her concurrence or dissent, and the decision of the majority shall prevail.

SECTION 3. Contents of the Award. — Generally, the Award shall contain the issues involved, a brief statement and discussion of the facts, and the authority relied upon for the resolution or disposition of the issues.

SECTION 4. Award Upon Settlement. — If the parties settle their dispute/s during the course of the arbitration, the Arbitrator/Arbitral Tribunal, upon their request, may set forth the agreed settlement as an Award.

SECTION 5. Decision as to Costs of Arbitration. — The Award of the Arbitrator/Arbitral Tribunal shall, in addition to dealing with the merits of the case, fix the costs of the arbitration, and decide which of the parties shall bear the cost/s or in what proportion the cost/s shall be borne by the parties.

The CIAC may fix the Arbitrators' fees at a figure higher or lower than that which would result from the application of the annexed scale if in the exceptional circumstances of the case, the same appears to be necessary.

SECTION 6. Termination of Jurisdiction. — The jurisdiction of the Arbitrator or Arbitral Tribunal over the dispute is terminated upon the finality of the Award or Decision. cEaCAH

SECTION 7. Notification of Award to Parties. — Once an award has been made, provided that the costs of the arbitration have been fully paid to the Secretariat by the parties or by one of them, the Secretariat shall notify the parties of the text signed by the Arbitrator or Arbitral Tribunal.

Additional copies certified true by the Executive Director of the Secretariat shall be made available, on request and at any time, to the parties or their counsel but to no one else.

SECTION 8. Deposit of Award. — An original of each Award made in accordance with these Rules shall be deposited with the Secretariat.

The Arbitrators and the Secretariat shall assist the parties in complying with whatever further formalities may be necessary.

ARTICLE XVI

Finality and Enforceability of Award

SECTION 1. Finality of Award. — The arbitral award shall become final and executory upon the lapse of thirty (30) days from receipt of notice thereof.

SECTION 2. Appeals. — Pursuant to Section 19 of Executive Order No. 1008 dated 4 February 1985, arbitral awards are final and inappealable except on questions of law which shall be appealable to the Supreme Court before the award becomes final. An appeal shall not stay the award unless the Supreme Court shall direct otherwise upon such terms as it may deem just. An appeal from an arbitral award or an order/decision of the CIAC shall be perfected by filing with the CIAC a notice of appeal and with the Supreme Court twelve (12) copies of a petition for review of the award, order, or decision complained of within 30 days from notice of such award, order, or decision.

SECTION 3. Execution and Enforcement of Awards. — As soon as a decision, order or award has become final and executory, the Arbitral Tribunal or the single Arbitrator with the concurrence of the CIAC shall motu proprio, or on motion of any interested party, issue a writ of execution requiring any sheriff or other proper officer to execute said decision, order or award.

ARTICLE XVII

General Rule

In all matters not expressly provided for in these rules, the CIAC and the Arbitrators shall act in the spirit of these rules and shall make every effort to make sure that the award is enforceable at law.

The foregoing rules shall take effect immediately.

DONE in the Municipality of Makati, Metro Manila, this 23rd day of August in the Year of Our Lord, Nineteen Hundred and Eighty Eight.

 

(SGD.) ANTONIO W. DIOKNOChairman

 

(SGD.) ANTON C. KHOMember

 

(SGD.) BERNARDO O. ARMENAMember