WEEK 7: CREATING AN ARBITRATION MACHINERY FOR THE PHILIPPINE CONSTRUCTION INDUSTRY

Executive Order No. 1008

WHEREAS, the construction industry provides vested in me by law, do hereby authorize the creation of
employment to a large segment of the national labor force an arbitration machinery in the construction industry
and is a leading contributor to the gross national product; of the Philippines, and do hereby order and ordain:
WHEREAS, it is of vital necessity that continued growth SECTION 1. Title - This Executive Order shall be known
towards national goals shall not be hindered by problems as the "Construction Industry Arbitration Law".
arising from, or connected with, the construction
SECTION 2. Declaration of Policy - There is hereby
industry;
declared to be the policy of the State to encourage the
WHEREAS, there is a need to establish an arbitral early and expeditious settlement of disputes in the
machinery to settle such disputes expeditiously in order Philippine construction industry.
to maintain and promote a healthy partnership between
SECTION 3. Creation - There is hereby established in
the government and the private sector in the furtherance
the CIAP a body to be known as the Construction
of national development goals;
Industry Arbitration Commission (CIAC). The CIAC shall
WHEREAS, Presidential Decree No. 1746 created the be under the administrative supervision of the PDCB.
Construction Industry Authority of the Philippines (CIAP)
SECTION 4. Jurisdiction - The CIAC shall have original
to exercise centralized authority for the optimum
and exclusive jurisdiction over disputes arising from, or
development of the construction industry and to
connected with, contracts entered into by parties involved
enhance the growth of the local construction industry; in construction in the Philippines, whether the disputes
arises before or after the completion of the contract, or
WHEREAS, among the implementing agencies of the
after the abandonment or breach thereof. These disputes
CIAP is the Philippine Domestic Construction Board
may involve government or private contracts. For the
(PDCB) which is specifically authorized by Presidential
Board to acquire jurisdiction, the parties to a dispute
Decree No. 1746 to "adjudicate and settle claims and
must agree to submit the same to voluntary arbitration.
disputes in the implementation of public and private
The jurisdiction of the CIAC may include but is not
construction contracts and for this purpose, formulate
limited to violation of specifications for materials and
and adopt the necessary rules and regulations subject to
workmanship; violation of the terms of agreement;
the approval of the President";
interpretation and/or application of contractual
NOW, THEREFORE, I, FERDINAND E. MARCOS, provisions; amount of damages and penalties;
President of the Philippines, by virtue of the powers commencement time and delays; maintenance and

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defects; payment default of employer or contractor and and allowances as may be fixed by the CIAP from time to
changes in contract cost. Excluded from the coverage of time.
this law are disputes arising from employer-employee
SECTION 8. Term - The term of office of the members of
relationships which shall continue to be covered by the
the Commission shall be six (6) years ; provided,
Labor Code of the Philippines.
however, that of the Commission members first
SECTION 5. Composition of the Board - The
appointed, the chairman shall hold office for six years;
Commission shall consist of a Chairman and two (2)
the
members, all to be appointed by the CIAP Board upon
recommendation by the members of the PDCB. other member for four (4) years; and the third for two (2)
years. The appointment to any vacancy in the
SECTION 6. Functions of the Commission - The
Commission shall perform, among others that may be Commission shall only be for the unexpired portion of the
conferred by law, the following functions: term of the predecessor.
1. To formulate and adopt an arbitration program for the SECTION 9. Quorum - The presence of a majority of the
construction industry; members of the Commission shall constitue a
2. To enunciate policies and prescribe rules and quorum for the transaction of business.
procedures for construction arbitration;
SECTION 10. Deliberations - The decisions of the
3. To supervise the arbitration program, and exercise Commission shall be arrived at by a majority vote.
such authority related thereto as regards the
SECTION 11. Secretariat - The Commission shall have
appointment, replacement or challenging of arbitrators; a Secretariat to be headed by an Executive Director who
and shall be responsible for receiving requests for arbitration
and other pleadings; for notifying the parties thereto; and,
4. To direct its officers and employees to perform such
for fixing and receiving filing fees, deposits, costs of
functions as may be assigned to them from time
arbitration, administrative charges, and fees. It shall be
to time. the duty of the Executive Director to notify the parties of
the awards made by the arbitrators.
SECTION 7. Compensation of the Commission - The
members of the Commission shall receive such per diems The Secretariat shall have among others a Publication
and a Training Division.

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SECTION 12. Authority to Appoint - The Commission confidence. They shall not be permanently employed with
is hereby authorized to appoint the Executive Director, the CIAC. Instead, they shall render services only when
the consultants, the arbitrators, as well as personnel and called to arbitrate. For each dispute they settle, they shall
staff. be given fees.
SECTION 13. Authority to Collect Fees - The SECTION 15. Appointment of Experts - The services of
Commission is empowered to determine and collect fees, technical or legal experts may be utilized in the settlement
deposits, costs of arbitration, as well as administrative of disputes if requested by any of the parties or by the
and other charges as may be necessary in the Arbitral Tribunal. If the request for an expert is done by
performance of its functions and responsibilities. The either or by both of the parties, it is necessary that the
CIAC is authorized to use its receipts and deposits of appointment of the expert be confirmed by the Arbitral
funds to finance its operations subject to the approval of Tribunal. Whenever the parties request for the services of
the PDCB, the provisions of any law to the contrary an expert, they shall equally shoulder the expert's fees
notwithstanding. and expenses, half of which shall be deposited with the
Secretariat before the expert renders service. When only
SECTION 14. Arbitrators - A sole arbitrator or three
one party makes the request, it shall deposit the whole
arbitrators may settle a dispute. Where the parties agree
amount required.
that the dispute shall be settled by a sole arbitrator, they
may, by agreement, nominate him from the list of SECTION 16. Arbitration Expenses - Arbitration
arbitrators accredited by the CIAC for appointment and expenses shall include the filing fee, administrative
confirmation. If the parties fail to agree as to the charges, arbitrator's fees; fee and expenses of the expert,
arbitrator, the CIAC taking into consideration the and others which may be imposed by the CIAC. The
complexities and intricacies of the dispute/s has the administrative charges and the arbitrator's fees shall be
option to appoint a single arbitrator or an Arbitral computed on the basis of percentage of the sum in
Tribunal. If the CIAC decides to appoint an Arbitral dispute to be fixed in accordance with the Table of
Tribunal, each party may nominate one (1) arbitrator Administrative Charges and Arbitrator's Fees.
from the list of arbitrators accredited by the CIAC for
SECTION 17. Deposit to Cover Arbitration Expenses -
appointment and for confirmation. The third arbitrator
The CIAC shall be authorized to fix the amount to be
who is acceptable to both parties confirmed in writing
deposited which must be equivalent to the expected
shall be appointed by the CIAC and shall preside over the
arbitration expenses. The deposit shall be paid to the
Tribunal. Arbitrators shall be men of distinction in whom
Secretariat before arbitration proceedings shall
the business sector and the government can have

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commence. Payment shall either be shared equally by the and if any provision on the application hereof is held
parties or be paid by any of them. If one party fails to invalid or unconstitutional, the validity of the remaining
contribute his share in the deposit, the other party must provision not otherwise affected shall remain in full force
pay in full. If both parties fail to tender the required and effect.
deposit, the case shall be considered dismissed but the
SECTION 23. Repealing Clause - All provisions of
parties shall still be liable to pay one half (1/2) of the
existing laws, proclamations, decrees, letters of
agreed administrative charge.
instructions and executive orders contrary to or
SECTION 18. Reports - The Commission shall, within inconsistent herewith are hereby repealed or modified
three (3) months after the end of the fiscal year, submit accordingly.
its annual report to the CIAP. It shall, likewise, submit
SECTION 24. Effectivity of Clause - This Executive
such periodic report as may be required from time to time.
Order shall take effect immediately.
SECTION 19. Finality of Awards - The arbitral award
Done in the City of Manila, this 4th day of February in
shall be binding upon the parties. It shall be final and
the Year of our Lord, Nineteen Hundred and Eighty-Five
unappealable except on questions of law which shall be
appealable to the Supreme Court.
SECTION 20. 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
propio 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.
SECTION 21. Rule-Making Power - The CIAC shall
formulate and adopt necessary rules and procedures for
construction arbitration.
SECTION 22. Separability Clause - The provisions of
this Executive Order are declared to be separable

Miguel Tejero – 11/19/2020