QuestionsQuestions (CIAC Resolution NO. 11-2005)
The CIAC promulgated the rules pursuant to Sections 9.01 and 16(a) of the CIAP IRR under P.D. 1746, specifically the CIAC’s authority to establish procedures for fair and expeditious settlement of construction disputes through a non-judicial process that ensures harmonious relations among parties.
They apply to mediation of construction disputes, with the term “construction disputes” having the same meaning as in E.O. No. 1008 (Construction Industry Arbitration Law), as amended by R.A. 9285 (ADR Act of 2004). It also covers a construction dispute even without a mediation clause if the parties wish to submit it to mediation.
The clause requires disputes to be first referred to CIAC for settlement by mediation under the CIAC Mediation Rules in effect at the commencement of mediation. If mediation fails, either party may resort to arbitration under E.O. 1008, as amended by R.A. 9285.
Parties may choose any person accredited by CIAC from its roster. If parties cannot agree on a common mediator from the roster (or the proposed mediator is unwilling), they may agree on a mediator outside the roster provided the mediator agrees to be bound by the CIAC Mediation Rules; if parties still cannot agree, CIAC appoints the mediator.
A party initiates mediation by delivering a written Request for Mediation (RFM) to the other party and a copy to CIAC. The RFM should include a brief statement of the dispute, amount in dispute (if any), relief sought, nomination of mediator(s), contract details, and contact details of the parties/representatives.
The receiving party must notify the other party and CIAC within five (5) calendar days whether it consents to mediate and whether nominated mediator(s) are acceptable.
CIAC will notify the initiating party that mediation cannot proceed.
CIAC appoints a mediator from the roster by asking the parties to complete an Application Form (Annex J), considering their suggestions as to expertise. CIAC informs the proposed mediator, checks conflict of interest, availability, and willingness, then informs parties and allows reasonable objections. The selection repeats up to three times; if still unresolved, parties are told to proceed to arbitration, re-examine previously rejected mediators, or appoint a mediator outside the roster.
The mediator shall use best efforts to conclude within thirty (30) calendar days of appointment. The appointment will not extend beyond that period without the written consent of the parties.
The mediator must prepare appropriately, abide by the mediation agreement, CIAC mediation rules, and mediator code of conduct. The mediator facilitates communication and negotiation, assists parties in drafting a written settlement agreement, may determine the manner of mediation considering the case circumstances, parties’ wishes, and the need for speedy settlement.
Each party may be represented or assisted by persons of their choice, whose names and roles must be notified in advance. Each party must identify a person with full authority to settle and confirm such authority in writing. Except as otherwise provided by law, a party may designate a lawyer (or other person) to provide assistance, and a waiver must be in writing and may be rescinded.
Mediation ends upon: (a) signing of the settlement agreement; (b) mediator’s written advice after consultation that further mediation attempts are not justified; (c) written notification by either party (after consultation with the mediator) terminating mediation; or (d) expiration of the Section 14 time limit without written extension.
No. It is not binding until reduced to writing and signed by or on behalf of the parties.
The parties may stipulate in the settlement agreement that in case of default, CIAC shall appoint the mediator as sole arbitrator for purposes of enforcing the settlement agreement as an arbitral award subject to execution under CIAC arbitration rules. If the mediator is not a CIAC-accredited arbitrator, the parties (or CIAC if they cannot agree) must appoint a duly accredited CIAC arbitrator.
Mediation sessions are private. Negotiations, statements, and documents prepared for mediation are confidential and covered by legal privilege attendant to a settlement agreement. There is no formal record except the settlement agreement. Documents/information produced for or arising from mediation are privileged and not admissible or discoverable in arbitration or litigation related to the dispute, except materials that would be admissible/discoverable anyway. Mediators’ and parties’ mediation admissions/proposals/views are not relied upon or introduced as evidence.
Unless otherwise agreed, each party bears its own cost. Witness expenses are paid by the party producing the witness. Other expenses (mediator fees, CIAC administrative fees, expert witness fees at the mediator’s direct request, etc.) are borne equally unless the parties agree otherwise. Mediation fees are computed and paid per the CIAC fee schedule.
The mediator cannot be appointed—without parties’ consent—to act as arbitrator, adjudicator, representative, counsel, or witness in any subsequent adjudication/tribunal/judicial proceedings related to the dispute or any other disputes connected with the same contract. The mediator also cannot be called as a witness by either party.
Mediators are not civilly liable for acts done in performance of official duties except upon clear showing of bad faith, malice, or gross negligence, as provided in Section 38(1), Chapter 9, Book 1 of the Administrative Code.
The fee schedule provides mediation fees based on tiers of SID, expressed as a percentage of SID with fixed additions per tier. The breakdown states 10% filing fee, 30% administrative fee, and 60% mediator’s fee. Payment is 20% upon filing of the RFM, 30% upon appointment of the mediator, and 50% upon formulation of the settlement agreement or termination.