PHILIPPINES Trends and Developments Contributed by: Ricardo Ma P G Ongkiko, John Christian Joy A Regalado and Ma Patricia B Paz-Jacoba, SyCip Salazar Hernandez & Gatmaitan
SyCip Salazar Hernandez & Gatmaitan SyCipLaw Center 105 Paseo de Roxas Makati City 1229 Philippines
Tel: +63 2 8982 3500 Fax: +63 2 8848 2030 Email: sshg@syciplaw.com Web: www.syciplaw.com
Clarifications on the Scope of CIAC Jurisdiction in Construction Arbitration in the Philippines The Philippines has a specialised body that resolves construction disputes. Established in 1985 through Executive Order No 1008 (the “Construction Industry Arbitration Law”), the Philippine Construction Indus - try Arbitration Commission (CIAC) exercises 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”. Among these disputes are: • violations of specifications for materials and work - manship specifications; • violations of the terms of agreement; • interpretation and/or application of contractual time and delays; • maintenance and defects; and • payment, default of employer or contractor and changes in contract cost. The CIAC acquires jurisdiction over a dispute when: • the dispute arose from or is connected with a con - struction contract; • such contract was entered into by parties involved in a construction project in the Philippines; and • the parties agreed to submit their dispute to arbi - tration. In this regard, the Philippine Supreme Court has interpreted the Construction Industry Arbitration Law to mean that despite the parties’ agreement to refer
their dispute arising from a construction project in the Philippines to arbitration under the rules of a particu - lar arbitral institution, they would not be precluded from referring their dispute to the CIAC for arbitration because this right has been vested by law. Almost 40 years after its creation, the body of rules and jurisprudence governing the CIAC’s jurisdiction continues to grow. In Karen Baldovino Chua v Jose Noel B De Castro (G.R. No 235894, 5 February 2024), the Philippine Supreme Court emphasised that there must be a written arbitration agreement between the parties before a dispute arising from a construction project in the Philippines can be referred to the CIAC for arbitration. Meanwhile, in Fleet Marine Cable Solu- tions, Inc v MJAS Zenith Geomapping & Surveying Services, et al (G.R. No 267310, 4 November 2024), the Supreme Court adopted a narrow interpretation of what would constitute a construction dispute that may be referred to CIAC arbitration. The existence of an arbitration agreement In Chua, Karen Chua and her husband engaged the services of Jose Noel De Castro, her first cousin, to build a two-storey residential building. They did not execute a written contract due to De Castro’s years of experience and their family ties. Chua and her hus - band approved the building plans, designs and mate - rial specifications and delivered De Castro’s funding requirements for the project. The residential building was eventually completed. When the Chuas moved in, Karen Chua discovered several structural and architectural defects. After sub - sequent repairs and inspections by third-party con -
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