In 2025, the Philippine Supreme Court reaffirmed the importance of respecting arbitration agreements while also clarifying the limits of CIAC’s jurisdiction. While the CIAC’s authority is statutory under Executive Order No. 1008, the Court emphasized that it remains confined to disputes arising from construction contracts, broadly construed but not beyond their intended scope. In Fleet Marine Solutions, Inc. v. MJAS Zenith Geomapping & Surveying Services (G.R. No. 267310, 2025), the Court held that agreements for preparatory surveys and studies, though related to an infrastructure project, do not qualify as construction contracts and thus fall outside CIAC’s reach.
Case Background
Fleet Marine Solutions, Inc. (FMCS) was contracted to assist in the planned construction of a domestic fiber-optic submarine cable network. To carry out preparatory tasks, it subcontracted MJAS Zenith Geomapping & Surveying Services (MJAS) for marine surveys and related studies.
When disputes arose over delays and alleged abandonment, FMCS terminated the agreement, demanded reimbursement of its downpayment, and sought to enforce surety and performance bonds through a complaint before the CIAC. MJAS and its surety, Travellers Insurance and Surety Corporation, opposed, arguing that the contract involved only survey and consultancy services, not construction works.
Ruling of the Supreme Court
The CIAC dismissed the complaint for lack of jurisdiction, ruling that the agreement did not involve construction activities. On review, the Supreme Court affirmed. It explained that for CIAC jurisdiction to attach, three elements must be present: first, the dispute must arise from or be connected with a construction contract; second, the contract must be entered into by parties involved in construction in the Philippines; and third, the parties must have agreed to submit disputes to arbitration.
The Court found that the FMCS–MJAS Services Agreement did not satisfy these requirements. The contract involved only marine surveys and desktop studies and did not cover the actual execution of construction works. The reference in the agreement to a future submarine cable project was not sufficient to establish the existence of a construction contract. The Court stressed that extending CIAC jurisdiction to survey and consultancy agreements would improperly expand its mandate beyond its intended scope. Accordingly, the case was dismissed, without prejudice to its refiling in the proper tribunal.
Legal Significance
The decision reaffirms the principle of party autonomy and competence-competence in arbitration but makes clear that CIAC’s jurisdiction is limited by law to construction disputes. Contracts for feasibility studies, surveys, or consultancy—even if preparatory to a construction project—do not automatically fall within CIAC’s scope.
This ruling serves as a caution to corporations engaged in multi-phase projects. Each contract must be properly classified and carefully drafted with appropriate dispute resolution clauses. Claims on performance and surety bonds linked to non-construction agreements must be pursued before the appropriate courts or arbitral bodies.
This guide provides a general overview of the above case at the time of writing only and is not intended to be a comprehensive legal advice. This should also not be taken as an opinion on the topic. For more details and information, you may coordinate with any GVES Law Partner regarding the matter.
Atty. Ludanielle N. Legarde is a Partner, GVES Law