The extent of judicial review of CIAC arbitral awards
If the issue to be raised by the parties only involves a pure question of law, the proper remedy is to appeal the same with the Supreme Court via a petition for review under Rule 45 of the Rules of Court
Published in Daily Tribune on January 6, 2022
by: Migmar Bernped S. Francisco
Black’s Law dictionary defines arbitration as “a method of dispute resolution involving one or more neutral third parties who are usually agreed to by the disputing parties and whose decision is binding.”
As an alternative mode of dispute resolution, arbitration may be resorted to by contending parties before resorting to the courts of law which is more rigid and lengthy with its processes. In the Philippines, the arbitration machinery for settling construction disputes is established through Executive Order (EO) 1008 otherwise known as the “Construction Industry Arbitration Law.”
Under Section 4 of the EO, the Construction Industry Arbitration Commission (CIAC) shall have original and exclusive jurisdiction over disputes arising from, or connected with, contracts entered into by parties involved in construction in the Philippines.
However, there may be instances when a party is not satisfied with the CIAC’s decision or arbitral award, thus begging the question: What are the proper modes of appealing an arbitral award?
In the May 2021 case of Global Medical Center of Laguna Inc. vs Ross Systems International Inc. (G.R. 230112/G.R. 230119), the Supreme Court took the liberty of reexamining the pertinent laws governing the extent of judicial review of CIAC arbitral awards.
Prior to the said case, an appeal via Rule 43 under the Rules of Court before the Court of Appeals was the indicated remedy, the CIAC being included among the quasi-judicial agencies the decisions of which may be appealed with respect to questions of fact, law, or both.
For a clearer understanding, questions of law involve a doubt or controversy as to what the law is on a certain state of facts. Questions of fact, on the other hand, involve a doubt or difference that arises as to the truth or falsehood of facts.
The Court has subsequently noted, however, that a review under Rule 43 in appealing questions of fact is not in accord with section 19 of EO 1008 which provides that an arbitral award is final and unappealable except to questions of law which shall be appealable to the Supreme Court. As pointed out by the Court, the factual review under Rule 43 constitutes the CIAC as a mere “additional layer in the process, and its resolution of construction disputes no longer the alternative to litigation, but only the beginning.”
Accordingly, the Supreme Court, in this case, introduced several guidelines providing for the correct application of the laws governing appeals of arbitral awards in construction cases.
First, if the issue to be raised by the parties only involves a pure question of law, the proper remedy is to appeal the same with the Supreme Court via a petition for review under Rule 45 of the Rules of Court.
Second, and only by way of exception, if any or both of the parties will appeal factual issues, it may still be appealed with the Court of Appeals through a petition for certiorari under Rule 65 of the Rules of Court. However, the factual issues to be resolved shall only be limited to either a challenge on the integrity of the CIAC arbitral tribunal or, an allegation that the tribunal violated the Constitution or positive law in the conduct of the arbitral process.
The Supreme Court also maintained that under no circumstances other than the aforementioned limited grounds may a party appeal an arbitral award to the Court of Appeals.
With these recent pronouncements, CIAC’s authoritative power over construction disputes is further enabled. The present ruling gives due recognition to the CIAC’s industry-specific technical expertise in resolving disputes and its factual findings are given greater weight, considering that Rule 43 has been discredited as a mode of appealing CIAC’s arbitral awards and that an appeal on the factual issues may only be had via Rule 65 with a narrower scope. This is in keeping with the policy of providing an avenue for expeditious construction dispute resolution in furtherance of national development goals.
