why go arbitration than litigation? -...

Why Go

Arbitration

Than Litigation?

Construction Industry Arbitration Commission

Arbitration Fastest Resolution of Construction Disputes

What is Arbitration? - The process by which the parties to a dispute submit their differences to the judgment of an impartial person or group appointed by mutual consent or statutory provision. In the Philippines it’s CIAC (Construction Industry Arbitration Commission). - Among the available dispute resolution alternatives to the courts, arbitration is by far the most commonly used. - Arbitration is faster and less expensive than litigation in the courts.


- Arbitration offers the parties the flexibility to set up proceedings that can be conducted as quickly and economically as the circumstances allow. -Arbitration hearings are not public, and only the parties themselves receive copies of the awards.


- Judicial systems do not allow the parties to a dispute to choose their own judges. In contrast, arbitration offers the parties the unique opportunity to designate persons of their choice as arbitrators, provided they are independent. -This enables the parties to have their disputes resolved by people who have specialized competence in the relevant field.

-Above all, it helps ensure the parties will not subsequently be entangled in a prolonged and costly series of appeals.


- It is commonly said that an arbitration is no better than the arbitrators. Selection of the Arbitral Tribunal is, therefore, one of the most critical steps in arbitration.Under the CIAC Rules, one arbitrator or an Arbitral Tribunal is composed 1- 3- arbitrators, respectively.

- When three arbitrators are to be designated, each party

nominates an arbitrator; the third arbitrator, who chairs the tribunal, is appointed either with the agreement of the parties or co-arbitrators.


- Arbitration offers the parties the flexibility to set up proceedings that can be conducted as quickly and economically as the circumstances allow. In this way, a multi-million Pesos construction disputes under arbitration is estimated completed in just over two months.

- Arbitration hearings are not public, and only the parties

themselves receive copies of the awards.

The

Arbitration

Process

Construction Industry Arbitration Commission

PROCEDURES

1. Define Claim or Cause of Action

2. File Claim (Request for Arbitration) with CIAC

3. Notice to Respondent

4. Answer and Counter-claim

6. Appointment of Arbitrator/Tribunal

7. Terms of Reference

8. Hearings

9. Award

5. Reply

10. Execution

Define Claims / Causes of Action

Check if Arbitration Clause is Provided for in Contract

Effect of the Arbitration Clause: - Submission to CIAC Jurisdiction even if Respondent fails to file Answer or refuses to arbitrate

If none, Agreement to Arbitrate should be executed by the parties

MODEL ARBITRATION CLAUSE

“Any dispute arising out of or in connection with

this contract, including any question regarding its existence, validity or termination shall be referred to and finally resolved by arbitration under the Rules of Procedure Governing Construction Arbitration promulgated pursuant to Executive Order 1008 (the Construction Industry Arbitration Law) by (indicate number: one or three arbitrator/s) to be appointed in accordance with such Rules.”

AGREEMENT TO ARBITRATE

We,________________________________________

(Name of Claimant)

and

____________________________________________

(Name of Respondent)

notwithstanding our contract for the construction of

____________________________________________

(Name of Project)

stipulating for the settlement of dispute distinct from

what is provided for in Executive Order No. 1008,

hereby submit ourselves to the jurisdiction of the

Construction Industry Arbitration Commission (CIAC)

and request the CIAC to arbitrate our dispute in said

project.

_________________ ____________________

(Name of Claimant) (Name of Respondent)

By: By:

___________________ ___________________

Signature over Printed Signature over Printed

Name of Authorized Name of Authorized

Representative Representative

Define Claims / Causes of Action

Arbitration cannot proceed, when:

No arbitration clause or agreement to arbitrate (for

private contracts only) and Respondent refuses to

Answer Complaint or files a Motion to Dismiss for lack

of jurisdiction

The Arbitral Tribunal grants Motion to Dismiss for

lack of jurisdiction:

- dispute is NOT a construction dispute

- arbitration agreement not binding or not valid

- other grounds

Filing of Claims with CIAC

Request for Arbitration

Mode of Arbitration

Choice of Arbitrators

Sum in Dispute

Documents Required

Arbitration Fees

Schedule of Payment of Fees


- Submission to Arbitration

- In Case of Government Contracts

exhaust all administrative

remedies

unreasonable delay on the part of

the government agency

exhaustion of administrative

remedies not practicable

Request for Arbitration Form

A.6%20Request%20For%20Arbitration%20(RFA).pdf


Contents of Request

Name in Full, Description and Addresses

of the Parties

Statement of the Claimant’s Case

Relevant Agreements or Contract

Documentations and Information to

establish circumstances of the Case

CEBU%20-Presentation%5CA.6%20Request%20For%20Arbitration%20(RFA).pdf





Mode of arbitration

Number of Arbitrators

Sole Arbitrator

Arbitral Tribunal

Choice / Selection of Arbitrators

At most 6 nominees

In order of preference

CIAC - accredited

Qualifications of CIAC Arbitrators

Men of Distinction

Technically Qualified

Trained and Accredited by CIAC

Professionals with Experience in Construction Disputes and nuances thereof

ACCREDITATION OF CONSTRUCTION ARBITRATORS

1. MINIMUM REQUIREMENTS:

1.2 Holder of Bachelor’s degree in Engineering,

Architecture, Law or Accountancy or any other course

relevant to any field of construction or construction

activity;

1.3 Licensed to practice his/her profession ;

1.1 At least 40 years of age at the time of application ;


1.4 At least ten (10) years in the practice of his/her

profession and ten (10) years of work experience in

construction management-related activities or in

handling of contractual disputes and/or contract

negotiations ;

1.5 In full enjoyment of his/her civil rights, must not have

been convicted of a crime involving moral turpitude or

of any other crime for which the penalty imposed upon

him/her is over six (6) months of imprisonment.


1.6 Willing to undergo all screening requirements

1.7 Willing to undergo training to be conducted by the CIAC.

2. EXCEPTIONS :

2.1 Exceptional professionals who have substantially

complied with the minimum requirements 1.1 to 1.6,

and who by reason of trainings or experiences in

construction, conducted lectures on accreditation

courses upon invitation by the CIAC.

Roster of CIAC–Accredited Arbitrators and Mediators

1. Academia, Tomasito Z. * - Mechanical Engineer, Environmental

Planner, Real Estate Broker (Active)

2. Alikpala, Federico. Y - Lawyer (Active)

3. Allado, Ramon F. ** - Civil Engineer (Active)

4. Alli, Armando N. (M) - Architect, Urban/Regional

Planner(Active)

5. Altura, Claudio B. - Civil/Sanitary Engineer (Active)

6. Andamon, Eugenio S. - Civil Engineer (Active)

7. Andrada, Danilo T. (M) - Electrical/Mechanical/Industrial

Engineer (Inactive)

8. Avenido, Rogelio M. - Electrical Engineer (Active)

9. Balde II, Antonio Yulo - Architect, Master Plumber (Active)

Roster of CIAC - Accredited Arbitrators and Mediators

10. Battad, Ernesto J. (M) - Civil/Sanitary Engineer, Master Plumber

(Inactive)

11. Borja, Julius D. ** - Civil Engineer (Active)

12. Butalid, Jacinto M. (M) - Lawyer, Civil Engineer (Active)

13. Cabote, Regulus E. - Lawyer (Active)

14. Cal, Primitivo C. - Civil/Transportation Engineer,

Lawyer, Environmental Planner (Active)

15. De Castro, Ernesto S. - Civil/Structural Engineer (Active)

16. Castro, Salvador Jr. P. (M) - Civil Engineer (Active)

17. Castro, Tomas Jr. M. - Civil Engineer (Active)

18. Ceniza, Eduardo R. - Lawyer (Active)

19. Chua, Elvira P. ** - Architect (Active)


20. Claridad, Guillermo G. ** - Electrical Engineer (Active)

21. Cosico, Manuel M. - Lawyer (Active)

22. Cuison, Felipe T. - Lawyer (Active)

23. David, Romeo C. (M) - Civil Engineer (Active)

24. Decampong, Alano C. ** - Civil Engineer (Active)

25. Dickina, Carmen Theresa V.** - Architect (Active)

26. Dio, Roberto N. - Lawyer (Active)

27. Escuadra, Luciano D. ** - Civil Engineer (Active)

28. Espinosa, Lourdes J. - Lawyer (Active)

29. Evangelista, Eliseo I. (M) - Civil/Structural Engineer

(Active)

30. Fajardo, Beda G. (M) - Lawyer (Active)

31. Firme, Wenfredo A. (M) - Mechanical Engineer (Active)

32. Florentino, Edilberto F. (M) - Architect (Active)


33. Guerzon, Wilfredo H. ** - Civil Engineer (Active)

34. Gutierrez, Estelita Y. - Civil/Sanitary Engineer

(Active)

35. Joaquin, Joven B. (M) - CPA (Active)

36. Jovellanos, Jose U. - Civil Engineer (Inactive)

37. Lagmay, Ariel A.** - Civil Engineer (Active)

38. Lazatin, Victor P. - Lawyer (Active)

39. Leoncio, Potenciano - Civil Engineer (Active)

40. Lim, Mario Eugenio V. - Lawyer (Active)

41. Mabanta, Jose F. - Civil Engineer (Active)

42. Mambulao, Gilbert S. Sr.** - Civil Engineer (Active)

43. Mansueto, Guadalupe O.* (M) - Civil/Structural/

Geodetic/Sanitary Engineer

(Active)


44. Mansueto, Antonio O. II* - Mechanical Engineer (Active)

45. Morallos, Jesusito G. - Lawyer/Civil Engineer

(Active)

46. Noto, Paulino M. (M) - Lawyer (Active)

47. Ocampo, Lamberto Un - Civil/Sanitary Engineer (Inactive)

48. Paderon, Rosauro S. - Architect (Inactive)

49. Parlade, Custodio O. - Lawyer (Active)

50. Pasicaran, Danilo R.* - Civil/Mechanical Engineer

(Active)

51. Peñalosa, Rodolfo R. - Electrical Engineer (Active)

52. Pinoy, Ray Anthony O. - Lawyer (Active)

53. Pio Roda, Felicitas A. (M) - Architect (Active)

54. Reyes, Felisberto GL. - Civil/Structural Engineer

Quantity Surveyor (Active)


55 .Reyes, Jesus M. - Architect (Active)

56. Reyes, Rommel S.** - Architect/LLB (Active)

57. Salazar, Doroteo M. * - Civil/Geodetic Engineer (Active)

58. San Juan, Ricardo B. (M) - Civil/Industrial Engineer (Active)

59. Sang Tian, Anselmo L. ** - Civil Engineer (Active)

60. Tadiar, Alfredo F. (M) - Lawyer (Active)

61. Tankeh-Asuncion, Maria Clara B. (M) - Lawyer (Active)

62. Tiongson, Alicia A. (M) - Statistician, Environmental

Planner (Active)

63. Tiu, Kian Hun T. * - Civil Engineer (Active)

64. Tompar, Antonio Camelo P. * - Mechanical Engineer (Active)

65. Trinidad, Leonardo P. - Mechanical Engineer (Inactive)

66. Valderrama, Mario E. - Lawyer (Active)


67. Villafranca, James S. - Lawyer (Active)

68. Viloria, Leandro A. - Environmental/Urban &

Regional Planner (Active)

69. Viray, Reynaldo T. - Civil Engineer (Active)

70. Yee, Gregorio C. ** - Civil Engineer (Active)

* - Visayas-based

** - Mindanao-based

(M) - Mediator

Selection of Arbitrators

Choice/Selection of Arbitrators

- availability, case load, nature of case

- was not previously conciliator/mediator of the dispute

Challenge:

● Relationship (blood or marriage) within 6th

degree of a party or 4th degree of a counsel

● Financial, fiduciary or other interest

● Partiality or bias

● Incompetence, or professional misconduct

Claims/ Causes of Action

Sum in Dispute

- Claim of Claimant

- Counter-claim of Respondent

- Others (cross-claim, 3rd party claim, etc.)

Claims / Causes of Action

Monetary Claim

0 Non-payment of Claims/Billings

0 Unreasonable imposition of LD

0 Change-orders and Extra Work

0 Liquidated damages

Non-monetary claims

0 Illegal take-over of Works

0 Interpretation of Contract Documents

CIAC TABLE of ADMINISTRATIVE CHARGES and ARBITRATOR’S FEES

A. FOR MONETARY CLAIMS I. SCHEDULE OF FILING AND ADMINISTRATIVE FEES

SUM IN DISPUTE FILING FEE ADMINISTRATIVE FEE

Less than P 100,000.00 P 3,600.00 P6,000.00 P 100,000.00 to P 1M P 3,600.00 + 0.36% of P 6,000.00 + 0.24% of

excess over 100,000 excess over 100,000

P 1.0M to P 10.0M P 6,840.00 + 0.12% of P 8,160.00 + 0.12% of

excess over P 1.0Mexcess over P 1.0M P 10.0M to P 50.0M P 17,640.00 + 0.06% of P 18,960.00 + 0.06% of

excess over P 10.0M excess over P 10.0M More than P 50.0M P 41,640.00 + 0.03% of P 42,960.00 + 0.03% of

excess over P 50.0M excess over P50.0M * Pursuant to CIAC Resolution No. 2-96, a special assessment fee, for the establishment of

Arbitration Development Fund, equivalent to 1/10 of 1% of the Sum in Dispute (SID) shall be

imposed on SID over P 1 Million.


II. ARBITRATOR’S FEES

Base Amount x Overall Adjustment Factor (for complexity of the case, number of disputants and

number of arbitrators) + 1.0

1. Sum in Dispute (SID) BASE AMOUNT ≤ P1M - 2% of the Sum in Dispute over 1M - 5.0 M - P20,000.00 + 1.00% in excess of 1.0 M over 5M - 10.0 M - 60,000.00 + 0.75% in excess of 5.0 M over 10M - 20.0 M - 97,500.00 + 0.50% in excess of 10.0 M over 20M - 50.0 M - 147,500.00 + 0.20% in excess of 20.0 M over 50M - 100.0 M - 207,500.00 + 0.10% in excess of 50.0 M over 100M - 500.0M - 257,500.00 + 0.05% in excess of 100.0 M

over 500M - 1Billion - 457,500.00 + 0.035% in excess of 500.0 M

Above 1 Billion - 632,500.00 + 0.025% in excess of 1 Billion

As amended by CIAC Resolution No. 05-2009 (Approving Additional Ranges and Base

Amounts for Arbitrator’s Fees); Effective 04 July 2009

______________________________________________________________________________


III. SCHEDULE OF PAYMENTS

A. Upon filing of the Request for Adjudication (RFA)

100% Filing Fee

25% Administrative Fee

Initial Deposit for Arbitrator’s Fees

25% of arbitrator’s fees based on amount of

claim

Respondent to deposit similar amount based on

his counterclaim, if any 25% Special Assessment Fee under CIAC Res. No. 2-96, if

claim is P1M and above


B. Upon signing of the Terms of Reference (TOR):

50% of the Administrative Fee 50% of the Arbitrator’s Fee

Balance of the Special Assessment Fee

C. At the Penultimate Hearing / Meeting: 25% of the Administrative Fee 25% of the Arbitrator’s Fee

* If no hearing is held, the last two tranches (B & C) shall be due upon

TOR signing

CIAC Table of Administrative Charges and Arbitrator’s Fees

B. For Non-Monetary Claims

(Approved in the 23rd CIAC Regular Meeting held on July 14, 1993)

B.1 Purely Non-Monetary Award Involved Schedule of Payments

1. Filing Fee - P3,000 upon filing of the RFA

P3,600 + 6% of total arbitrator’s Fees - 8.0% of the estimated total arbitrator’s

fees upon signing of the TOR

- Balance of the filing fee based on actual

total arbitrator’s fees upon award

2. Administrative Fees

P6,000 plus 6% of total arbitrators’ Fees - P6,000 upon signing of the TOR plus

6% of estimated total arbitrators’ fees

- Upon award, balance of administrative

fees based on actual total arbitrators’

fees


ARBITRATION FEES FOR NON-MONETARY CLAIMS

(Approved in the 23rd CIAC Regular Meeting held on July 14, 1993)

3. Arbitrators’ Fee

3.1 Acceptance Fee - P10,000 upon filing of the


3.2 Fees per session

For a Tribunal

Chairman:

● Minimum of P4,500 per session of 3 hours - Upon signing of TOR, 50% of

or less plus P1,500 in excess of 3 hours the estimated arbitrator’s fees


Members:

● Minimum of P3,000 per session of 3 hours -- Upon award, balance of

less plus P1,500 in excess of 3 hours arbitrator’s fees based on actual

number of sessions

For Sole Arbitrator:

● Minimum of P7,500 per session of 3 hours or

less plus P2,500 per hour in excess of 3 hours

4. AWARD DRAFTING

● P10,000 - Upon Award

B.2 For Non-Monetary Claims but with Monetary Award Involved

● Fees will be based on the schedule of monetary claims

PRELIMINARY CONFERENCE - Matters to be discussed

n Possibility of Amicable Settlement

n Necessity of Amendments to Pleading

n Stipulations and admissions of facts

n Limitation on the number of Witnesses

n Formulation of Issues

n Other Matters (interim relief, appointment of

experts, need for site inspection, & others as

may aid in just & speedy case disposition)

Terms of Reference (TOR)

* Contents

n Full names of Parties and counsel, if any

n Addresses and contact numbers

n Summary of Respective Claims n Admitted Facts and Documents n Issues to be resolved n Place where proceedings will be held n Arbitrator/s’ full name/s n Schedule of Payment of Fees; sharing

n Other particulars required for the proper and

speedy adjudication of the case

TERMS OF REFERENCE (TOR)

• Arbitration to Proceed even without TOR

- If Respondent failed to file an Answer or even in the absence/lack of participation of Respondent - If one of the parties refused to sign or to participate in the preliminary conference/proceedings - No factual issue being in dispute, case may be deemed

submitted for resolution without oral hearing and on the basis of documentary evidence already submitted.

What to be ready with

Well Prepared Complaint/ Narration of Facts

Complete and Proper Documentations

Technically Correct

Logically Presented

Credible Witnesses

What to Expect

Integrity

Speed

Fairness

Writ of Execution

THANK YOU!