Arbitration in general
Arbitration is one of the alternative dispute resolution mechanisms that we have. When we say it is part of the Alternative Dispute Resolution (ADR) mechanism, we do not forget the controversy behind arbitration and the categorization of the same as Alternative Dispute Resolution mechanism. Some, taking arbitration by its outcome, resist accepting that it is really an alternative since it does not give the chance to the parties as to its execution.
Effects of Non-Performance
The general effects of non-performance are dealt with when we discuss generally “non-performance of administrative contracts”. Non-performance of contracts of public works occurs when parties default in different ways. The section dealing with non-performance in our civil code magnifies the contractor as the only defaulting party. However, because of the nature of the obligation that the contractor assumes, a special section for non-performance is important.
Unilateral Modification: The Contractor
The right to unilaterally modify the contract is not a privilege operative in favor of the contractor. In the strict sense our civil code does not provide such a right i.e. a right to unilaterally modify a contract to the contractor. Even under normal course of things, a contract can be varied only by a court of law (Art 1763). What we have under Art 3268 is not unilateral modification of the contract. Rather the contractual right extends only to requiring the revision of the contract. Even this right of requiring revision is conditional upon other issues mentioned under Art. 3286(1). Hence, the contractor should encounter material difficulties of an absolutely abnormal nature, unforeseeable at the time of the contract.
Administrative contracts highly involve the public interest. The quality of the service that we have to provide to the public really matters. The inverse relation oftentimes, between quality and price makes attaining quality a difficult task. The basic consideration of our law is quality. That is why under Art. 3246 competition will be waged among skilled persons or among specialized undertakings. Skill and specialization are therefore the ground rules for picking up possible contractors.