why go arbitration than litigation? -...
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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 Fastest Resolution of Construction Disputes
- 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.
Arbitration Fastest Resolution of Construction Disputes
- 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.
Arbitration Fastest Resolution of Construction Disputes
- 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 Fastest Resolution of Construction Disputes
- 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.
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
Request for Arbitration
- 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
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
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 ;
ACCREDITATION OF CONSTRUCTION ARBITRATORS
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.
ACCREDITATION OF CONSTRUCTION ARBITRATORS
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)
Roster of CIAC - Accredited Arbitrators and Mediators
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)
Roster of CIAC - Accredited Arbitrators and Mediators
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)
Roster of CIAC - Accredited Arbitrators and Mediators
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)
Roster of CIAC - Accredited Arbitrators and Mediators
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)
Roster of CIAC - Accredited Arbitrators and Mediators
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.
CIAC TABLE of ADMINISTRATIVE CHARGES and ARBITRATOR’S FEES
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
______________________________________________________________________________
CIAC TABLE of ADMINISTRATIVE CHARGES and ARBITRATOR’S FEES
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
CIAC TABLE of ADMINISTRATIVE CHARGES and ARBITRATOR’S FEES
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
CIAC Table of Administrative Charges and Arbitrator’s 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
Request for Arbitration
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
CIAC Table of Administrative Charges and 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