SCENE 12 (PRELIMINARY CONFERENCE)

Atty. Pascual : (Greetings) In accordance with the stipulations in your contract, there
are three of us who will act as your arbitrators.
Let me introduce myself, I am Bruce Pascual, a practicing lawyer and duly
accredited by the CIAC as one of its Arbitrators. I am also an active member of the
Philippine Institute of Construction Arbitrators and Mediators (PICAM).
(Arbitrator 2)
I am Greco Palma, a Civil Engineer who has been in the practice of mediation and
arbitration proceedings for 5 years already.
(Arbitrator 3)
I am Bong Pardo, also a Civil Engineer and an advocate of Alternative Dispute
Resolutions particularly in construction industry. I have been accredited by the
Construction Industry Arbitration Commission (CIAC) for a decade already.
Atty. Pascual: May I now request the party who initiated this arbitration proceeding
to introduce themselves.
(Request the other party thereafter.)
Atty. Pascual: May I request Engr. Palma to briefly apprise the parties of the general
rules of procedure of this Arbitral Tribunal.
Palma: For the information of the parties, the following are the general rules
governing the procedure of the CIAC in adjudicating cases:
1. CONFIDENTIALITY OF PROCEEDINGS. In accordance with Sec. 7.1 of the E.O
1008, the Arbitration proceedings are CONFIDENTIAL and shall not be
published except:
a. When the parties consent thereto; or
b. When necessary in case resort to Court is made under the Rules of Court.

If the violator is lawyer, an administrative action or proceeding may be had at

the instance of the CIAC, without prejudice to suspension or disbarment
action before the Integrated Bar of the Philippines.

If the violator is a duly licensed and registered professional, an administrative

or disciplinary action may also be instituted before the Professional
Regulation Board (PRC) at the instance of the CIAC.
2. EXEMPTIONS FROM CIVIL LIABILITY. Arbitrators shall not be civilly liable for
acts done in the performance of their official duties except in a clear case of
bad faith, malice or gross negligence. (Sec. 8.4)
3. CHALLENGE. An Arbitrator may be challenged by a party at any time after his
appointment but before the lapse of the original 10-day period for submission
of memoranda or draft decision. However, the challenge must be based upon
the following grounds:
 a. Relationship by blood or marriage within the sixth degree of either party
to the controversy, or to counsels within the fourth degree, computed
according to the rules of civil law;
b. Financial, fiduciary or other interest in the controversy.
c. Partiality of bias;
d. Incompetence, or professional misconduct.
4. TERMS OF REFERENCE. This document functions like a pre-trial order in
judicial proceedings and controls the arbitration proceedings unless corrected
for manifest errors by motion filed not later than the hearing date.
5. ARBITRATION WITHOUT TERMS OF REFERENCE. An arbitration proceeding
may proceed even without a Terms of Reference should the Arbitral Tribunal
found it proper and just under the given circumstance.
6. SUBMISSION FOR DECISION. The case may be deemed submitted for decision
without an oral hearing if there are no factual issue being in dispute.
Pardo: In addition to what my colleague has just mentioned, this Arbitral Tribunal
will prepare a Terms of Reference at the end of this Preliminary Conference, if it is
necessary, which shall contain the following:
a. The full names of the parties, and their respective counsels;
b. The addresses and contact numbers of the parties and counsels;
c. A summary of the parties respective claims;
d. Full statement of admitted facts and documents;
e. The issues to be resolved in question form;
f. The Arbitrators full name;
g. The place where the arbitration proceedings shall be held;
h. Such other particulars necessary for the proper and speedy adjudication of
the case
Atty. Pascual: Let us now hear the facts surrounding the claim of Don Rodrigo
Facundo. (Counsel will summarily narrate the facts)
Portion of the facts:
Averments: Reyes Construction Firm committed a breach to the contract agreement
it entered into with my client. They stipulated in their contract that the mansion will
be completed in 6 months, but it did not materialize. In fact, the construction was
delayed for 3 months and the materials used were not in accordance with the
choices of my client.
Claim:
Thus, we are instituting this action to claim for Liquidated Damages equivalent to
1/10 of 1% per day of the value or cost of the works delayed or Php900,000.00
(10,000,000.00 x 1/10 of 1% x 3 mos. or 90 days); Deduction from the contract
amount of 1,000,000.00 for the cost of materials used other than what was agreed;
and Attorneys fees of 1,000,000.00;
(Counsel for the Construction Firm to follow)
Averments:
xxxxx
The project has been delayed for 3 months, but the very reason for the delay was
the unavailability of materials in the market. The high end light stream colored glass
tile for the swimming pool of Ms. Fantasha is very rare in the market. This material
has to be ordered from Manila. Unfortunately, that kind of tilhe run out of stock in
view of its low production because only very few can afford to buy the material.
The design and kind of marble tiles for the bathroom and CR which are being
required by Ms. Fantasha were also very uncommon in the market. In truth and in
fact, my client has communicated it to Don Facundo and Ms. Fantasha. On October
15, 2016, my client asked Ms. Fantasya if it is ok to change the tiles for the
swimming pool, bathroom and CR to expedite the completion of the construction
but the latter insisted. Its only in November 15, 2017 that Ms. Fantasha agreed. In
sum, the delay was caused not by the neglect of my client, but due to causes
beyond the control of my client.
Counter Claim:
My client is, therefore, praying for the denial of the claim of Don Facundo with his
fiance based on the grounds earlier mentioned. On the other hand, my client is
interposing his counter claim for the cost of roofing materials bought by him which
were rejected by Ms. Fantasya even said materials conform to the specifications in
the BOQ. Thus, he is also praying that he shall be reimbursed by Don Facundo in the
amount of Php 500,000.00, plus nominal damages of Php 1,000,000.00 and
attorneys fees of Php1,000,000.00.
Atty. Pascual: After hearing the facts concerning your claims and in the light of
speedy adjudication of cases, we shall now proceed with the admission of facts.
(Engr. Palma to facilitate admission of facts by Engr. Reyes)
(Engr. Pardo to facilitate admission of facts by Don Facundo)
(Both parties will admit the facts)
Atty. Pascual: There being no factual issues to be resolved, the Tribunal shall
dispense with the hearing in the interest of time. Consequently, the Terms of
Reference may no longer be necessary. We shall now terminate this conference.
However, both parties are ordered to submit within 5 days from today all
documentary evidences which the parties may offer to support their respective
claims. 15 days thereafter, both parties are enjoined to come to this office for the
pronouncement of judgement.
This preliminary conference is hereby terminated.
(Climz to present in the PowerPoint that the parties have submitted their evidences)
Scene 13 (PRONOUNCEMENT OF JUDGEMENT)
Atty. Pascual: (Greetings!)
(Engr. Palma will read the selected portion of the judgment)
Based on the admission of facts during the Preliminary Conference, the signed
Contract of Agreement, and the respective documentary evidences submitted by
both parties, the Arbitral Tribunal resolved that the Liquidated Damages being
claimed by Don Facundo in the amount of Php900,000.00 is unavailing under the
circumstance. Engr. Reyes has substantially supported his claim as to the
unavailability of the materials by submitting affidavits from big hardware stores
across the country stipulating therein the unavailability of said stocks. Furthermore,
the completion of the construction one (1) month after Ms. Fantasha agreed to
change the materials is not questionable. The delay is, therefore, excusable.
xxxxxxx
On the claim of Don Facundo to deduct the amount of 1,000,000.00 from the
contract price, the Tribunal found it to be excessive. The records show that the cost
difference between the original materials and the replacement is only Php
500,000.00.
On the other hand, the claim of the Construction Firm with regard to the cost of
roofing materials bought but were not accepted by Ms. Fantasha was found by the
Tribunal to be in order. The roofing materials which were purchased by the
Construction Firm are exactly the materials indicated in the Bill of Quantities. The
arbitrary refusal by Ms. Fantasha of the materials warrants the reimbursement for
the expenses incurred by the Firm.
xxxxxxx
WHEREFORE, premises considered, judgment is hereby rendered declaring:
1. That Don Facundo is entitled for an amount of Php 500,000.00 representing
the difference between the cost of original materials and the replacement;
2. That Construction Firm is likewise awarded the total sum of Php 500,000.00
for the cost of roofing materials which were purchased by the Firm but were
arbitrarily rejected by Ms. Fantasha;
3. That both parties are ordered to offset their respective judgement award;
provided, however, that the Construction Firm shall turn-over the roofing
materials to Don Facundo.
No pronouncement as to cost.
SO ORDERED.