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Ciac Agreement

Since Philippine courts have the interest of making arbitration or other forms of out-of-court dispute settlement (ADR) a staple in the internal settlement of disputes, parties who regularly enter into different contracts may consider a standard arbitration clause or reference to another document containing such a compromise clause or contractual provision regarding the agreement between the parties to submit to one of the ADRs. , to record. In the event of a dispute, the existence of such a clause would be more beneficial to the parties in particular and the judicial system in general. Referring to Executive Order No. 1008 (19) or construction and arbitration industry law and Section 35 of Republic Act No. 9285 or the Alternative Dispute Resolution Act of 2004, the Supreme Court has ruled that, as in Heunghwa Industry Co., Ltd. v. DJ Builders Corporation, two acts have been committed that give the CIAC jurisdiction over a construction dispute. The existence of an arbitration clause in a construction contract; and second, the parties` agreement to submit the dispute to the ICAC. Contrary to the known doctrine of separation or autonomy, the doctrine of separation indicates that the arbitration agreement is treated as a separate agreement, regardless of the main contract, even if it is contained in a compromise clause. The doctrine states that the invalidity of the main contract does not affect the validity of the arbitration agreement.

For example, Cargill Philippines, Inc. v. San Fernando Regala Trading, Inc. (No. 175404, January 31, 2011, 641 SCRA 31) found that even a party who refused the main contract is not prevented from enforcing its arbitration agreement. As a stand-alone contract, the arbitration agreement can therefore be invoked regardless of the nullity or invalidity of the main contract. Indeed, the model law on international commercial arbitration adopted by the United Nations Commission on International Trade Law states that “[a] decision of the Court of Arbitration to cancel the contract will not result in ipso swearing the invalidity of the compromise clause.” Referring to Prudential Guarantee and Assurance, Inc. v. Anscor Land, Inc., 630 SCRA 368 (2010), the Supreme Court found that a performance obligation is significantly and substantially linked to the work market and therefore falls within the jurisdiction of the ICAC. As the commitment of benefits is a kind of guarantee agreement, it must be read in its entirety at the same time as the main agreement (the doctrine of complementary contracts to the construction together).