Philconstruct Visayas continues to build — not just structures, but stronger communities as it returned for the 14th year of its construction show and exhibition last June 19 to 21, 2025 at the Waterfront Cebu City Hotel & Casino.
This year’s Philconstruct Visayas Technoforum hosted a dialogue for legal awareness on construction disputes titled, “Basics on Construction Law, Arbitration Processes and Contract Claims,” with speakers coming from the esteemed Cruz, Marcelo & Tenefrancia law firm.
In construction projects, it is more than common that disputes arise over issues on contract costs, delays, violations of contract terms, defects and maintenance, among others. When these problems arise, there is, fortunately, a framework in construction law and arbitration that helps resolve conflicts efficiently and fairly, without or even before resorting to prolonged litigation. The seasoned practitioner-speakers during the forum discussed the essence of arbitration, including strategies and reliefs.
This is where Executive Order 1008, or the Construction Industry Arbitration Law comes in, as it created the Construction Industry Arbitration Commission (Ciac), which is a specialized quasi-judicial body under the Department of Trade and Industry. It is tasked to resolve disputes exclusively arising from or connected to construction contract whether between developers, contractors, subcontractors, consultants, or suppliers. The Ciac’s rulings are final and binding, subject only to judicial review via Rule 43 of the Rules of Court.
The speakers mentioned that the foremost strategy to de-escalate conflicts before reaching arbitration is to draft effective arbitration clauses. A lot of the issues can be mitigated by clear contract drafting, especially with standard forms like those from the Philippine Domestic Construction Board and the international organization Fédération Internationale Des Ingénieurs-Conseils, which translates to International Federation of Consulting Engineers in English.
As emphasized during the seminar, the arbitration agreement must be clearly set out and written in the contract—defining the scope and which disputes are subject to arbitration. In the arbitration agreement, it is essential to specify an established arbitration institution like the American Arbitration Association, International Chamber of Commerce, Ciac and their applicable rules.
On another note, it was highlighted that early settlement efforts are well-appreciated. Many arbitration clauses, especially in construction, incorporate a principled dispute resolution mechanism. This often mandates a period of good-faith negotiation, amicable settlement discussions, or formal mediation before a party can initiate arbitration. These mechanisms help save effort, time, and resources.
In the event arbitration becomes necessary, it usually starts with the Claimant filing a Request for Arbitration with the arbitration institution, commonly, the Ciac. It includes the submission of the arbitration agreement, a statement of claims sought, and the payment of the corresponding filing fees. Ciac then notifies the Respondent. Then follows the formation of the Arbitral Tribunal. Depending on the contract or the size of the claim, the dispute may be heard by a sole arbitrator, or a panel of three arbitrators.
The pre-arbitration conference follows (almost likened to that of a judicial court’s pre-trial), where the parties agree on timelines and procedures, and submit documentary evidence and identify witnesses and expert reports at this stage. Next would be the hearing which is a little less formal than court litigation but still carries out the substantive process of presenting the evidence, the cross-examination of witnesses, and if necessary, the introduction of expert witnesses. Hearings in Ciac arbitration are efficient and technically-informed procedures that are designed to resolve construction disputes quickly and fairly. Lastly, the tribunal issues a final award that includes the decision on the claims and counterclaims and the corresponding monetary awards and fees to be paid by the parties. Ciac awards are final and executory after 15 days, unless elevated to the Court of Appeals.
Reflecting on the seminar, I understood that arbitration should not be seen merely as a last resort in a crisis. Instead, it must be embraced as a deliberate and planned safeguard, especially in contract management related to construction.
When contracts are clear, parties are informed, and the arbitral process is understood, the construction industry can keep building, free from unnecessary clashes and roadblocks.