ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
CHAPTER 1: INTRODUCTION
HISTORICAL NOTE
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June 19, 1953, the Philippine Legislator enacted RA 876 known as "The
Arbitration Law". RA 876 did not revoke and instead supplemented the
provisions of the NCC on arbitration.
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May 10, 1965, another milestone in Philippine ADR was achieved when the
Philippine Senate passed Resolution No. 7 adhering the UN Convention on the
Recognition and Enforcement of Foreign Arbitrak Awards of June 10, 1958.
This convention gave reciprocal recognition and allowed enforcement of
international arbitration agreements beteeen the parties of different
nationalities.
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The Philippine was a signatory to UN Commission on International Trade
Law NY convention of June 21, 1985.
JUDICIARY's ACTION
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The SC passed administrative issuances encouraging the use of ADR through
thd Philippine Mediation Center or through Judicisl Dispute Resolution.
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To emphasize the judiciary’s resolve in strengthening the system of ADR, the
SC, speaking through Justice Vitug said that “in an effort to declog the courts
of an increasing volume of work load and most importantly in order to accord
contending parties with expeditious alternative for settling disputes, the law
authorizes, indeed encourages out of court settlements or adjudications.
Compromises and arbitrations are widely known and used as such acceptable
methods of resolving adversarial claims.” (LA NAVAL DRUG
CORPORATION VS. CA 236 SCRA 78, 1994).
-
ADR methods like arbitration, mediation, negotiation and conciliation, are
encouraged by the SC.
THE ADR ACT OF 2004
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On February 04, 2004, the consolidation of senate bill no. 2671 and house bill
no. 5564 was enacted as the first comprehensive ADR law in the Philippines –
RA No. 9285.
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It was promulgated on April 2, 2004 and became effective on April 28, 2004
after its publication on April 13, 2004.
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The SC, in (Korea Technologies vs. Lerma 542 SCRA 1, 2008) enumerated
and explained the salient features of RA 9285 applying and incorporating the
UNCITRAL Model namely:
a. The RTC must refer to arbitration in proper cases
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!
b.
c.
d.
e.
Under sec. 24, the RTC has jurisdiction over disputes that are
properly the subject of arbitration pursuant to an arbitration
clause.
Foreign arbitral awards must be confirmed by the RTC
! Foreign arbitral awards while mutually stipulated by the parties
in the arbitration clause to be final and binding are not
immediately enforceable.
The RTC has jurisdiction to review foreign arbitral awards
! Sec. 42 in relation to Sec. 45 of RA9285 designated and vested
the RTC with specific authority and jurisdiction to set aside,
reject or vacate a foreign arbitral award on grounds provided.
Grounds for judicial review different in domestic and foreign
arbitral awards.
! For foreign and international arbitral awards, which must be
confirmed by RTC, the grounds setting aside, rejecting or
vacating the award by the RTC are provided under art. 34(2) of
the UNCITRAL Model Law; for final domestic awards, may be
assailed pursuant to sec. 23 of RA876.
RTC decision of assailed foreign arbitral award appealable.
! Sec. 46 of RA9285 provides for an appeal before the CA as the
remedy of an aggrieved party.
ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
CHAPTER 2:
RESOLUTION
FUNDAMENTALS
OF
ALTERNATIVE
DISPUTE
ALTERNATIVE DISPUTE RESOLUTION
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ADR, is a system, using means and methods allowed by law and approved by
the parties, for the purpose of resolving or facilitating the resolution of
disputes and controversies between them, in an expeditious and speedy
manned, without resorting to court adjudication.
-
As defined in ADR Act of 2004, any purpose or procedure used to resolve a
dispute or controversy, other than adjudication of a presiding judge of a court
or an officer of government agency.
PRINCIPLES OF ADR
1. Promotion of party autonomy and self-determination in the resolution disputes.
a. Parties are given the freedom to chiose the form of ADR they desire to
avail of.
2. Recognition of ADR as an efficient tool and an alternative procedure for the
resolution of cases.
b. It does not altogether do away with Court trial system. It merely
provides the parties with an alternative means of settlinh their disputes
in a manner that is different , separate and independent from trial court
system.
3. Enlisting of private sector participation.
c. It usually requires the participation of third parties who do not
necessarily dispense public service.
OBJECTIVES and BENEFITS of ADR
1. Speedy and Impartial Justice
2. Declogging of Court Dockets
FEATURES of ADR
1. ADR is a means used to resolve a dispute or controversy.
- The objective of ADR is to resolve or facilitate the resolution dispute or
controversy in a speedy, amicable and inexpensive manner.
- ADR should not be resorted to when the motive is to delay or suspend the
proceedings rather than to put an end or facilitate the conclusion of the
controversy.
2. ADR utilizes means and methodss allowed by law.
ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
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ADR act did not limit the forms of ADR. Any means or methods aim at
resolving disputes outside the court trial system may be recognized as an ADR
form provided it is not contrary to law, morals, good customs, public order or
public policy.
3. ADR is contractual in nature.
- Parties to a dispute are given the freedom to agree to resolve their dispute and
decide on the procedure.
- Any form of ADR that satisfies the essential requisites of a contract, which is
not a contrary to law, morals, good customs, public order or public policy is
allowable as form of ADR.
- The consent to undergo ADR may be:
a. PRE-CAUSAL CONSENT as when the parties to a contract stipulate
that any dispute that will arise from the contract shall be resolved by
arbitration.
b. PRESENT-CAUSAL CONSENT as when the parties to an existing
controversy voluntarily submit themselves either to an arbitration or
mediation.
4. ADR avoids court trial.
- Conducted outside of the court trial system. It is in lieu of and conducted
precisely to avoid trial.
- JDR (Judicial Dispute Resolution) although not governed by ADR Act of
2004, requires judges to conduct mediation between the parties as part of the
pre-trial and prior to start of trial stage.
5. ADR usually involves the participation of neutral third party.
- Third party participant may either be the arbitrator/s, mediator, conciliator or
neutral evaluator. It is imperative that the third party participant observe
neutrality at all times.
SOURCES OF ADR
1. Domestic laws anc rules which may either be general or special.
2. Acts of the executive branch.
3. Decisions of SC.
4. International Laws
5. General Principles of law and equity.
FORMS OF ADR
1. Arbitration
- Is an arrangement for taking and abiding by the judgment of selected persons
in some disputed manner, instead of carrying it to established tribunals of
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justice and is intended to avoid the formalities, the delay, the expense and
vexation of ordinary litigation.
For purpose of ADR Act of 2004, it is a voluntary dispute resolution process
in which one or more arbitrators, appointed in accordance with the agreement
of the parties.
2. Mediation
- A voluntary process in which a mediator, selected by the disputing parties,
facilitates communication and negotiation and assists the parties in reaching a
voluntary agreement regarding the dispute.
- The basic distinction between arbitration and mediation is that in arbitration an
arbitral tribunal or arbitrator evaluates the evidence and the merits of the case
and renders an arbitral award based on his appreciation; whereas in mediation
the parties to controversy are convinced by a mediator to settle their
controversy through voluntary agreement of the parties themselves.
3. Conciliation
- The adjustment and settlement of a dispute in a friendly, unantagonistic
manner.
4. Neutral and early neutral evaluation
- An ADR process wherein the parties and their lawyers are brought together to
present summaries of their cases and receive a non-binding assessment by an
experienced neutral person with expertise in the subject.
5. Mini-trial
- Is a structured dispute resolution method in which the merits of a case are
argued before a panel of composed of senior decision makers, with or without
the presence of a neutral third person, after which the parties seek a negotiated
settlement.
6. Any combination of the foregoing
- Any combination of the foregoing ADR forms, approved by the parties, not
contrary to law, good customs, morals, public order or public policy, may be
implemented.
7. Any other ADR form
- Any arrangement agreed upon by the parties that satisfies the requisites of
ADR, complies with the essential requisites of a valid contract and is not
contrary to law, morals, good customs, public order or public policy is an
acceptable form of ADR.
CLASSIFICATION OF FORMS OF ADR
1. As to the number of parties
- May be bilateral or bi-party, or multilateral or multi-party.
2. As to the number of issues involved
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Simple when only a single issue is involved, or complex if there are two or
more issues involved.
3. As to the extent of conclusion
- Complete when all issues involved are resolved or partial if only one or some
but not all issues are resolved.
4. As to the role of evidence in the proceedings
- Evidentiary or merit-based when the resolution of the dispute involved
requires the presentation of evidence and evaluation of the merits of the case;
and it is non-evidentiary or non-merit based if the merits of the case is not
indispensable in the resolution of the dispute as in the case of mediation.
5. As to the pendency of a court case
- ADR is case-related if conducted in connection with or as a pre-requisite to
trial as in the case of court annexed mediation or court-referred mediation; and
it is independent if conducted irrespective of any pending court case involving
the issue.
6. As to the applicable law
- Domestic if the parties’ places of business, place of arbitration and place of
performance of the obligation involved or subject matter of the dispute are
located in the Philippines; international if the parties’ places of business are in
different states or the place of arbitration is outside the Philippines.
7. As to the permanence of the ADR provider
- Either ad hoc if the existence of the ADR provider is only temporary for
purpose of particular dispute; institutional if the ADR provider’s existence is
permanent in character and is not dependent on any dispute.
COMPONENTS OF ADR
1. Contending parties who are involved in a dispute.
2. Dispute, which is susceptible of being subjected to ADR.
3. Form of ADR, which may either, be arbitration, mediation, conciliation, early
neutral evaluation, mini-trial or any combination of the foregoing.
4. ADR provider is an institution of person accredited as mediator, conciliator,
arbitrator, neutral party evaluator or any person exercising similar functions;
or practitioner is an individual acting as mediator, conciliator, arbitrator etc.
SUBJECT MATTERS OF ADR
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In line with the policy to encourage the use of ADR, in general all adversarial
disputes can be subject matter of ADR, except those, which by law or reasons
of public policy are declared not capable of being subjected to ADR. The
following issues are not susceptible of ADR:
a. Civil status of persons – matter determined by law and is not subject
to the discretion of the parties.
ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
b. Validity of Marriage or any ground for legal separation – matters
over which the State has a keen interest to protect.
c. Jurisdiction of the courts – jurisdiction over the subject matter of a
case is determined by law and is not dependent upon the allegations of
parties except in the case of jurisdiction by estoppel.
d. Future legitime – future legitime is inexistent and cannot be waived.
e. Criminal Liability – not susceptible of ADR.
f. In general, those, which, by law, cannot be compromised –
examples of law, which cannot be, compromised article 2035 of New
Civil Code; it is against public policy to waive or enter into
compromise regarding future support.
BASIC CONCEPTS
1. Concluding Acts or Agreements
- ADR is completed upon the execution of concluding act or agreement.
a. Mediated Settlement agreement – a contract executed by the
mediating parties with the assistance of their respective counsel,
certified by the mediator, evidencing a successful mediation.
b. Compromise agreement – a contract whereby the parties making
reciprocal concessions, avoid litigation or put an end to one already
existing.
c. Arbitral award – partial or final decision by an arbitrator in resolving
the issue in a controversy.
d. Waiver or quitclaim – a statement renouncing any right or claim
involved in a controversy by one party in favor of the other.
2. ADR Providers and Practitioners
- Acts in a quasi-judicial capacity.
- Decisions or awards are generally reviewable in a special civil action for
certiorari under rule65 of the civil procedure.
- In a domestic arbitration, if the arbitral tribunal in the exercise of its authority
to resolve or defer the resolution of the preliminary issue on its jurisdiction
over the arbitration agreement.
- Motions for reconsideration, appeals and petitions for certiorari are not
available to challenge the decision of the arbitral tribunal to defer the
resolution of preliminary jurisdictional issue.
- The remedy of an aggrieved party is to proceed with the arbitration and
petition the court for the settling aside of the arbitral award on the ground that
the arbitral tribunal exceeded its powers.
3. Preference for ADR
- There is a clear preference for the use of ADR methods over court trial system
even before the advent of ADR Act of 2004, article 2030 of the civil code of
the Philippines already instructs the court to suspend proceedings if the
possibility of settlement through the different modes of ADR
ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
CHAPTER 3: MEDIATION UNDER THE ADR ACT OF 2004
MEDIATION IN GENERAL
Court-annexed
Mediation =
mediation process
under the
supervision of the
court!
!
Court-referred
mediation =
mediation ordered
by a court to be
conducted in
accordance with the
agreement of the
parties when an
action is
prematurely
commences in
violation of such
agreement
-
-
Among the forms of ADR, mediation and arbitration are the most common
and popular.
Defined as voluntary process in which a mediator, selected by the disputing
parties, facilitates communication and negotiation and assists the parties in
reaching a voluntary agreement regarding a dispute.
Excluded from the coverage of ADR act are the court-annexed mediation,
which is a mediation process conducted under the auspices of the court, and
court-referred mediation, which is a mediation ordered by a court to be
conducted in accordance with the agreement of the parties.
Likewise excluded from the coverage is the conciliation conducted by Pangkat
ng Tagapagkasundo and JDR.
CLASSIFICATION OF MEDIATION
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Mediation is non-evidentiary or non-merit based.
a. Mediation focuses on the facilitation of communication and
negotiation between the parties in order to encourage them to
voluntarily settle their dispute.
b. A mediator must refrain from giving legal or technical advise or
otherwise engaging in counselling advocacy and must abstain from
expressing his personal opinion on the rights and duties of the parties
and the merits of any proposal made.
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Mediation is either institution when administered by, and conducted under the
rules of mediation and ad hoc if it is other than institutional.
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An agreement to submit a dispute to a mediation by an institution shall include
an agreement:
a. To be bound by the internal mediation and administrative policies of
such institution;
b. To have such rules govern the mediation of the dispute and for the
mediator, the parties and their respective counsels and non-party
participants to abide by such rules.
PLACE OF MEDIATION
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Parties to mediation are given the freedom to agree on the place of mediation.
In the absence of such agreement, place of mediation shall be any place
convenient and appropriate to all parties.
STAGES IN MEDIATION
In general, the mediation process consist of the following stages:
1. Opening statement of the mediator;
2. Individual narration by the parties;
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3.
4.
5.
6.
Exchange by the parties;
Summary of issues;
Generalization and evaluation of options;
Closure
The foregoing stages are not obligatory and the parties under the principle of selfdetermination and party autonomy may choose the procedure that will govern their
mediation.
Mediation process shall be held in private unless the parties consent to the presence of
persons other than themselves, their representatives and the mediator.
Mediation shall be closed and concluded by:
a. Execution of settlement agreement by the parties; or
b. By the withdrawal of any party from mediation; or
c. By the written declaration of the mediator that any further effort at
mediation would not be helpful.
ADVANTAGES OF MEDIATION
1. Confidentiality in the mediation process;
2. Prompt, economical and amicable resolution of disputes; and
3. The decision-making authority rests in the parties.
CONFIDENTIAL AND
COMMUNICATION
PRIVILEGED
NATURE
OF
MEDIATION
ADR act of 2004 maintains the confidentiality of the mediation process by declaring
that all information obtained through mediation proceedings are privileged and
confidential in nature.
- One way guaranteed by ADR act of 2004 is by declaring information as
confidential.
- Another way of ensuring the privilege is by declaring the privileged
information inadmissible in evidence.
a. Confidential information includes:
! Communication, oral or written, made in a dispute resolution
proceeding
! An oral or written statement made or which occurs during the
mediation
! Pleadings, motions, manifestation, written statements, reports
filed or submitted in arbitration or for expert evaluation.
LEGAL EFFECTS OF CONFIDENTIAL AND PRIVILEGED NATURE
a. Party, mediator or non-party participant may refuse to disclose and may
prevent any other person from disclosing confidential nature.
b. Information shall not be subject to discovery and shall be inadmissible in
any adversarial proceeding.
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c. The following person involved or previously involved in mediation may
not be compelled to disclose confidential information obtained:
i. Parties to the dispute;
ii. Mediator/s;
iii. Counsel for the parties;
iv. Non-party participants;
v. Any person hired or engaged in connection with mediation as secretary,
stenographer, clerk or assistant; and
vi. Any person who obtains or possesses confidential information by reason
of his profession.
d. Protection under ADR act shall continue to apply even if a mediator is
found to have failed to act impartially.
e. Mediator may not be called to testify to provide information gathered in
mediation.
EXCPETIONS BASED ON AGREEMENT, NATURE OF PROCEEDINGS,
CRIME OR SOCIAL JUSTICE
a. Those contained in an agreement evidenced by a record authenticated by
all the parties to the agreement.
b. Those available to the public or made during a session of mediation, which
is open, or is required by law to the public.
c. A threat or statement of a plan to inflict bodily injury or commit a crime of
violence.
d. Communication intentionally used to plan, attempt to commit, or commit,
a crime, or conceal an on-going crime or criminal activity.
e. Communication sought or offered to prove or disprove abuse, neglect,
abandonment or exploitation in a proceeding in which, a public agency is
protecting the interest of an individual protected by law.
f. Communication sought or offered to prove or disprove a claim or
complaint of professional misconduct or malpractice filed against a
mediator in a proceeding.
g. Communication sought or offered to prove or disprove a claim or
complaint of professional misconduct or malpractice filed against a party,
non-party participant or representative of a party based on conduct
occurring during mediation.
LIMITED USE OF EVIDENCE
Admission of the evidence for the limited purpose of the exception
does not render the evidence admissible for any other purpose.
PRIVILEGE OF THE MEDIATOR
GR: A mediator may not be compelled to provide evidence of
mediation communication.
EXCEPT: a mediator may not make report to a court or agency that
will make a ruling on dispute that is subject of mediation except with the
following cases:
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a. Where the mediation occurred or has terminated or where a
settlement was reached;
b. Permitted to be disclosed under Section 13 of the ADR Act.
WAIVER OF CONFIDENTIALITY
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The protection of confidentiality is susceptible of waiver.
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Waiver can either be expressed such as when it is contained in record or
implied by failing to timely object to objectionable questions or by testifying
or presenting a witness to testify on confidential and privileged information.
-
Waiver can also come by way of estoppel.
THE MEDIATOR
-
The mediation parties are given the freedom to select their mediator and they
may request the Office of ADR to provide them with a list or roster of its
certified mediators.
-
The role of the mediator is very crucial that his presence and competence must
be ensured. A mediator who refuses to act as such may withdraw or may be
compelled to withdraw from mediation proceedings under any of the
following circumstances:
a. If any of the parties requests the mediator to withdraw.
! This promotes and strengthens party autonomy and selfdetermination in the selection of the mediator.
b. The mediator does not have the qualifications, training and experience
to enable him to meet the reasonable expectations of the parties.
! No special qualification by background or profession is
required. However, if a mediator is selected by the parties on
account of his special qualifications which turn out to be false
or inaccurate, the mediation parties may ask for his withdrawal.
c. The mediator’s impartiality is in question.
d. The continuation of the process will violate an ethical standard.
e. The safety of any one of the parties will be jeopardized.
f. The mediator is unable to provide effective services.
g. In case of conflict of interest.
h. Other instances for under the IRR.
DUTIES AND FUNCTIONS OF MEDIATORS
Apart from the general duty of mediators to conduct mediation, mediators are
required to perform the following:
1. Prior to Mediation
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a. On competence – a mediator should maintain and continually
upgrade his professional competence in mediations skills.
b. On impartiality – before accepting a mediation, the mediator
should make an inquiry that is reasonable under the circumstances
to determine whether there are known facts that a reasonable
individual would consider likely to affect his impartiality.
2. During the Mediation
a. Confidentiality
b. On consent and self-determination – a mediator shall exert
reasonable efforts to ensure that each party understands the nature
and character of the mediation proceedings.
c. On promotion of respect and control of abuse of process – the
mediator shall encourage mutual respect between the parties.
MEDIATOR’S COST AND FEES
A mediator is allowed to charge costs, reasonable fees and charges against the
parties but he is under obligation to fully disclose and explain the basis.
In ad hoc mediation, the parties are free to make their own
arrangements as to mediation costs and fees
In institutional mediation, costs shall include the administrative
charges of the mediation institution, fees and associated expenses.
If mediator withdraws from the mediation, he shall return any
unearned fee and unused deposit.
MEDIATED SETTLEMENT AGREEMENTS
-
The concluding argument in a successful mediation is called the mediated
settlements agreement or settlement agreement.
-
The following principles apply to these concluding arrangements
a. Settlement agreement following a successful mediation shall be
prepared by the parties with the assistance of a lawyer.
b. Parties and their respective counsels, shall sign the settlement
agreement and shall certify the contents.
c. If the parties agree, settlement may be jointly or deposited
d. When there is a need to enforce the settlement agreement
e. Parties may agree In the settlement agreement that mediator shall
become a sole arbitrator for the dispute and shall treat the agreement as
an arbitral award which shall be subject to enforcement.
THE ROLE OF CONUNSEL IN MEDIATION
A party may designate a lawyer or any other person to provided assistance in
the mediation. This right may be waived but the waiver must be in writing and can be
rescinded at any time.
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The lawyer or counsel shall have the following roles:
a. Collaborate with the other lawyer in working together
towards the common goal of helping their clients resolve
their indifferences to their mutual advantage.
b. Encourage and assist the client to actively participate in
positive discussions and cooperate in crafting an agreement
to resolve their dispute.
c. Assist the client to comprehend and appreciate the
mediation process and its benefits.
d. Confer and discuss with the client the mediation process
and substance.
ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
CHAPTER 4: ARBITRATION IN GENERAL
CONCEPT OF ARBITRATION
As defined, arbitration is a voluntary dispute resolution process in which one
or more arbitrators, appointed in accordance with the agreement of the parties or rules
promulgated pursuant to the ADR Act, resolve a dispute by rendering an award.
An arrangement for taking and abiding by the judgment of selected persons in
some disputed matter, instead of carrying it to established tribunals of justice and is
intended to avoid formalities, the delay, the expense and vexation of ordinary
litigation (Uniwide Sales Realty vs. Titan-Ikeda Construction 511 SCRA 335,
2006)
As to the role of evidence and merits of the case, arbitration is a merit
evidence based form of ADR.
KINDS OF ARBITRATION
Generally, there are two types of arbitration namely:
a. Voluntary Arbitration – involves the reference of a dispute to an
impartial body, the members of which are chosen by the parties
themselves, which parties freely consent in advance to abide by the
arbitral award issued after the proceedings where both parties had
the opportunity to be heard.
b. Compulsory Arbitration – process of settlement of disputes by a
government agency which has the authority to investigate and to
make an award which is binding on all parties and as a mode of
arbitration where the parties are compelled to accept the resolution
of their dispute through arbitration by a 3rd party.
Under the classification, arbitration is either:
a. Domestic – if the components of parties’ places of business. Place
of arbitration, place of performance of a substantial part of the
obligation and place where the subject matter of the dispute is most
closely connected, are all located in the Philippines.
b. International – if any of the following instances occur.
i. Parties’ places of business, which at the time of the
arbitration, is in different states.
ii. Place of arbitration provided in the arbitration
agreement and in which the parties have their places
of business, is outside the Philippines.
iii. Place where a substantial part of the obligation is to
be performed or the place with which the subject
matte of the dispute is most closely connected, and
in which the parties have their places of business, is
outside the Philippines
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iv. The parties have expressly agree that the subject
matter of the arbitration agreement relates to more
than one country.
Arbitration is commercial if it covers matters arising from all relationships of a
commercial nature, whether contractual or not.
POLICY ON ARBITRATION
Being an inexpensive, speedy and amicable method of settling disputes
arbitration – along with mediation, conciliation and negotiation – is encouraged by SC.
Aside from unclogging judicial dockets, arbitration also hastens the resolution of
disputes, especially of the commercial kind. It is thus regarded as the “wave of the
future” in international civil and commercial disputes. Brushing aside a contractual
agreement calling for arbitration between the parties would be a step backward.
(Korea Technologies Ltd. Vs. Lerma 542 SCRA 1, 2008)
OBJECTIVES OF ARBITRATION
The basic objective of arbitration is to provide a speedy and inexpensive
method of settling disputes by allowing the parties to avoid formalities, delay,
expense and aggravation which commonly accompany ordinary litigation, especially
litigation which goes through the hierarchy of courts.
ARBITRATORS
Is the person appointed to render an award, alone or with others, in a dispute
that is the subject of an arbitration agreement.
Voluntary arbitrators act in a quasi-judicial capacity, such that their decisions
are within the scope of judicial review.
ARBITRATION AGREEMENT
An arbitration agreement is the agreement by the parties to submit to
arbitration all or certain disputes which have arisen or which may arise between them
in respect of a defined legal relationship.
By nature, an arbitration agreement is contractual. It should have the essential
elements of a contract. The SC explained the contractual nature of an arbitration
agreement in the case ORMOC SUGARCANE PLANTERS’ ASSOCIATION VS.
CA (596 SCRA 630, 2009) an agreement to arbitrate is a contract, the relation of the
parties is contractual and the rights and liabilities of the parties are controlled by the
law of contracts. In an agreement to arbitrate some specific thing, and an agreement to
abide by the award, either in express language or by implication.
There are two modes of submitting dispute or controversy to arbitration
depending on the existence or pendency of the dispute or controversy to be submitted
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for resolution, namely: a. agreement to submit to arbitration and b. a submission
agreement.
Arbitration agreement is a formal contract; its validity is dependent on the
contract being executed in a particular form. An arbitration agreement shall be in
writing and subscribed by the parties charged or by his lawful agent.
An arbitration agreement may be included in the container contract in which
case, it is referred to as an arbitration clause or a compromissoire or may be
constituted in a separate contract.
DOCTRINE OF SEPARABILITY
Also known as DOCTRINE OF SEVERABILITY, enunciates that an
arbitration agreement is independent of the main contract even if it is contained in an
arbitration clause. This is to be treated as a separate agreement such that even the
validity of the main contract is challenged, the arbitration agreement or clause
remains valid and enforceable.
DUE PROCESS IN ARBITRAL PROCEEDINGS
In line with the principle that ADR providers and practitioners, including
arbitrators, act in quasi-judicial capacity and that they are quasi-judicial agencies or
instrumentalities, the principles of administrative due process equally apply to arbitral
proceedings.
JUDICIAL REVIEW AND COURT INTERVENTION
The decisions of an arbitral tribunal are subject to judicial review. The
inclusion of an arbitration clause in a contract does not ipso facto divest the courts to
pass upon the findings of arbitral bodies.
In case of ABS-CBN BROADCASTING CORP. VS WINS JAPAN LTD
(544 SCRA 308, 2009) enumerated the judicial remedies an aggrieved party to an
arbitral award may take, namely:
1. A petition in the proper RTC to issue an order to vacate the award on the
grounds provided in Section 24 or RA876;
2. A petition for review in the CA under Rule 43 of ROC on questions of fact,
of law or mixed questions of fact and law;
3. A petition for certiorari under Rule 65 of ROC should the arbitrator have
acted without or in excess of his jurisdiction or with grave abuse of
discretion amounting to lack or excess of jurisdiction.
In domestic arbitration, if the arbitral tribunal decides to defer such ruling until
the rendition of the arbitral award, none of the parties can seek judicial relief from the
deferment.
Arbitration and court action are not incompatible. They may proceed at the
same time and independently of each other. They may even complement each other.
ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
Under the ADR Act and IRR, the court is directed to refer to arbitration those
who are parties to the arbitration agreement and proceed with the court action as to
those who are not bound by such arbitration agreement.
The declaration under the law that a decision of the appointing authority or
arbitrator or arbitral tribunal for that matter is immediately executory and not subject
to appeal or motion for reconsideration does not foreclose the possibility of judicial
review. The remedy of the aggrieved party under the situation is to avail of a petition
for certiorari under Rule 65 of ROC.
INTERIM MEASURES IN ARBITRATION
Complementation between the arbitration and court action is best exemplified
in the area of interim measures. Interim measures, otherwise referred to in the ADR
Act as “interim measure of protection” or “provisional reliefs” are ancillary remedies
intended for the protection of the subject matter of the disputes.
As a rule, interim measures are applied with and secured from the arbitral
tribunal. However, there are instances when the arbitral tribunal cannot grant the
interim measures such as when the arbitral tribunal is not yet constituted, or when the
arbitral tribunal already constituted has no power to act or is unable to act effectively.
A provisional remedy under the ROC cannot exist without a principal cause of
action. However, this principle is not true for interim measure under the ADR Act and
IRR. A court cannot refuse to grant, implement or enforce a petition for interim
measure on the sole ground that the petition is merely an ancillary relief and the
principal action is pending with the arbitral tribunal.
ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
CHAPTER 5:
INTERNATIONAL COMMERCIAL ARBITRATION
UNDER THE ADR ACT OF 2004 AND ITS IMPLEMENTING RULES AND
REGULATION
The ADR act of 2004 adopted the UNCITRAL model law on International
Commercial Arbitration and by operation of Article 19 of the ADR Act, made the
Model Law the governing statute for international commercial arbitration.
The ADR Act of 2004 has previous dealings with legal representation in
international arbitration, confidentiality of arbitral proceedings, referral of court
action to arbitration, definition and function of the appointing authority, the grant of
interim measures of protection, governing law, and the place and language of
arbitration.
INTERNATIONAL COMMERCIAL ARBITRATION
Arbitration is international if any of the following instances occur:
1. The parties’ place of business, which at the time of the conclusion
of the arbitration agreement, is in different states;
2. The place of arbitration provided in the agreement and in which the
parties have their places of business, is outside the Philippines;
3. The place where a substantial part of the obligation is to e
performed outside the Philippines;
4. Parties have expressly agreed that the subject matter of the
arbitration agreement relates to more than one country.
Arbitration is commercial if it covers matters arising from all relationships of a
commercial nature, whether contractual or not. An international commercial
arbitration proceeding conducted in the Philippines under the auspices of ADR Act is
domestic and international in character. An international arbitration conducted outside
the Philippines is a foreign arbitration.
COVERAGE OF IRR PROVISIONS ON ICA
The provisions of the IRR on international arbitration are default rules, they
are applicable only in the absence of or in default of applicable provisions contained
in:
1. An agreement, in force between the Philippines and other states;
and
2. An agreement between the parties on the applicable rules.
RULES OF INTERPRETATION
The following are the rules in the interpretation of the ADR Act of 2004,
Model Law and IRR:
1. Interpretation of the ADR Act.
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2. Interpretation of the Model Law – should be regard that the said law is of
international origin and there is a need for uniformity in its interpretation.
3. Interpretation of the IRR
RULES ON RECEIPT OF WRITTEN COMMUNICATIONS IN ICA
Written communications, electronic or otherwise, therefore, play a vital role in
international arbitration. The IRR devoted provisions on the delivery and reception
thereof. In line with the policy of party autonomy, the GR on the receipt of
communications in ICA are those provided for by the parties in their arbitration
agreement. In default of such rules, communication is deemed received:
1. If it is delivered to the addressee personally or at his places of business,
habitual residence or mailing address;
2. If there is none, if it is delivered by registered letter or any other means.
WAIVER OF THE RIGHT TO OBJECT IN ICA
The ADR act and IRR limited the application of the rules on waiver in
mediation proceedings to waivers of confidentiality and privilege only. In case of ICA,
the IRR expanded the application of the rules on waiver to include non-compliance
with rules or requirements.
Objections to non-compliance with the rules or any requirement under the
arbitration agreement must be raised without undue delay or within the time
prescribed failing which, the right to object is deemed waived based on the equitable
doctrine of estoppel. An admission or representation cannot be denied or disproved as
against the person relying on it. Estoppel in pais happens when one, by his acts,
representations or admissions or by his own silence when he ought to speak out,
intentionally or through culpable negligence, induces another to believe certain facts
to exist and such other person relies and acts on such belief in manner that he will be
prejudiced if the former is permitted to deny the existence of such facts.
**The records and evidence and award in ICA are confidential and shall not
be disclosed except:
1. With the consent of the parties;
2. For the limited purpose of disclosing to the court relevant documents in
cases where resort to the court is allowed.
** As an assurance of impartiality and due process in the arbitral proceedings,
the IRR mandates that the parties shall be given a full opportunity to present their
sides.
COMMENCEMENT OF ICA PROCEEDINGS
The date of commencement of ICA is to be determined by the parties. The
default date of commencement of arbitration is the date on which a request for that
dispute to be referred to arbitration is received by the respondent.
APPLICABLE LAW IN ICA
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The governing law, generally refers to substantive law – is the law or legal
system applicable to the complete resolution of the dispute. Conflicts of law or
private international law – that part of the municipal law of a state which, directs
courts and administrative agencies, when confronted with a legal problem involving a
foreign element involving a foreign element, whether or not they should apply a
foreign law; is the set of domestic laws that determines which between the domestic
laws of two or more states should apply to the resolution of a dispute involving
foreign elements.
APPOINTING AUTHORITY IN ICA
The appointing authority in an ICA is the person or institution named in the
arbitration agreement or regular arbitration institution under whose rules the
arbitration is agreed to be conducted, authorized to make the default appointment of
arbitration or sole arbitrator. In addition, the appointing authority in an ICA has the
following functions:
a. Take the necessary measures to appoint an arbitrator in case any party or
the arbitrators already appointed or any third party fails to perform any
function necessary for the appointment of the arbitrator.
b. Decide on the challenge against an arbitrator if arbitral tribunal rejects the
challenge.
c. Consider the qualifications of an arbitrator, the necessity of ensuring
impartiality and independence of the arbitrator, and the advisability of
appointing an arbitrator who is of nationality different from those of the
parties.
In an ad hoc arbitration, unless the parties have agreed upon a different
procedure, the default appointment of an arbitrator shall be made by the national
president or IBP or his duly designated representative.
ARBITRATORS AND ARBITRAL TRIBUNALS IN ICA
In line with the principle of party autonomy and self-determination, the parties
in an ICA are free to determine the number of arbitrators and procedure for
appointment. The default number of arbitrators is 3 and the following is the default
procedure for appointing:
1. In arbitration with 3 arbitrators each party shall appoint one arbitrator and
both appointed arbitrators shall appoint the 3rd arbitrator, failing which the
appoinment shall be made by the appointing authority.
2. In arbitration with sole arbitrator, the arbitrator shall be appointed, upon
request of a party, by the appointing authority.
The decision of the appointing authority on this matter shall be immediately
executory and shall not be subject to a motion for reconsideration or appeal.
If any party is not satisfied with the appointment of any, some or all of the
arbitrators, he may file a petition in court challenging the appointment of the
arbitrators.
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The arbitral tribunal is deemed constituted when the sole arbitrator or the 3rd
member of the panel of arbitrators who has been nominated has accepted his
nomination and written communication of said nomination and acceptance has been
received by the party making the request.
GROUNDS FOR CHALLENGE OF ARBITRATORS IN ICA
An arbitrator may be challenged only if circumstances exist that give rise to a
justifiable doubt as to his 1. Impartiality or independence; or 2. Possession of the
qualifications agreed upon by the parties. A party who appointed an arbitrator shall
not be allowed to challenge that arbitrator, grounded on the rule of estoppel. However,
estoppel does not apply where the act of appointing was performed without the
knowledge, actual or constructive of the actual facts and except for reasons, which the
appointing party became aware of after the appointment was made.
Procedure for the Challenge in ICA
1. Challenging party shall send written statement of the reasons for
the challenge to arbitral tribunal within 15 days after becoming
aware of the circumstance constituting the ground for challenge.
2. If the challenge before the arbitral tribunal is not successful, the
challenging party may request the appointing authority within
30days from notice of the decision rejecting the challenge, to
decide the challenge, which decision shall be immediately
executory and not subject to a motion for reconsideration or appeal.
A party may file a petition in court questioning the decision in the challenge
against an arbitrator in accordance with the Special Rules of Court on ADR.
After a successful challenge, a substitute arbitrator will have to be appointed.
The appointment of the substitute arbitrator shall be governed by the same rules
applicable to the appointment of the replaced arbitrator.
PROCEDURE IN CASE THE ARBITRATOR FAILS TO ACT IN ICA
If an arbitrator in ICA becomes de jure or de facto unable to perform his
functions or fails to act without undue delay, his mandate terminates [i] if he
withdraws or [ii] if the parties agree on the termination. The withdrawal of the
arbitrator does not carry with it an implied acceptance of the existence or veracity of
the ground for termination.
If the controversy remains, any party may request the appointing authority to
decide on the termination of the arbitrator, which decision shall be immediately
executory and not subject to a motion for reconsideration of appeal.
JURISDICTION OF ARBITRAL TRIBUNAL IN ICA
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Jurisdiction is the right to act or the power and authority to hear and determine
a cause. In the case of an arbitral tribunal, it is the authority by virtue of which it can
resolve disputes in an arbitration proceeding by rendering an award thereon.
Jurisdiction over the subject matter
Law confers the jurisdiction of an arbitral tribunal over the subject
matter of the controversy.
There are two instances when the court, a quasi-judicial agency or
arbitral tribunals acts without jurisdiction, namely: 1. When it has no
jurisdiction in the first place, in which case there is lack of jurisdiction; or 2.
When it went beyond its jurisdiction, which it had in the first place, in which
case it acted in excess of jurisdiction. In the case of courts, lack or excess of
jurisdiction are the proper grounds for a petition for certiorari as a SCA under
Rule 65 of the 1997 Rules of Civil Procedure.
Lack of Jurisdiction
The jurisdiction of an arbitral tribunal includes the authority to rules on
its own jurisdiction in the same way that courts have the power to rule on
motions to dismiss complaints or petitions based on lack of jurisdiction.
In determining the jurisdiction of an arbitral tribunal, the arbitration
agreement or arbitration clause should be treated as an independent and
separate agreement from the container agreement and the invalidity of the
latter does not automatically result in the nullity of the former. It is only in the
event that the arbitration clause or agreement is itself void, inexistent or
inoperative that the arbitral tribunal’s jurisdiction may be questioned.
The issue of jurisdiction may be raised at any stage of the proceedings,
even on appeal and is not lost by waiver or estoppel.
The rule is different in a challenge against the jurisdiction of arbitral
tribunals in an ICA. The challenge should be raised not later than the
submission of the statement of defense in the answer or in motion to dismiss,
otherwise objections are deemed waived.
Judicial review of Jurisdictional issue
The decision of a court or quasi-judicial agency without jurisdiction
over the subject matter is null and void ab initio. In the same manner, the
award of arbitral tribunal which does not have jurisdiction is also null and void
ab inition unless there is a waiver of the absence of jurisdiction.
If the arbitral tribunal renders a preliminary ruling on the jurisdictional
issue, an aggrieved party may elevate the ruling for review by the RTC within
30days from receipt of the ruling and the decision of the court shall be
immediately executory and not subject to a motion for reconsideration or
appeal.
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The arbitration proceedings may proceed notwithstanding the
pendency of a judicial action with the RTC unless the court issues in the
meantime a TRO or writ of PI enjoining the conduct of the ICA during the
pendency of the court action or petition.
Jurisdiction over the Parties
Jurisdiction of an arbitral tribunal over the person of the parties in
arbitration is conferred by the consent of the parties to submit to arbitration.
This consent may be contained in an agreement to submit to arbitration (precausal consent) which is entered into at the time of the execution of an
arbitration agreement or a contract which includes an arbitration clause or in a
submission agreement (present causal consent) between the parties to who do
not have an arbitration agreement or a contract with an arbitration clause but
who nonetheless agree to submit an existing dispute or controversy to
arbitration.
INTERIM MEASURES IN ICA
The procedures for granting interim measures in ICA are as follows:
1. After the arbitral tribunal has been constituted, any party may request for
the grant of interim measure from the arbitral tribunal against the adverse
party. This request shall be in writing transmitted by reasonable means to
the arbitral tribunal and the adverse party, describing the precise relief in
appropriate detail, the ground and the evidence supporting the request.
2. The relief may be granted in order to prevent irreparable loss; to provide
for security for the performance of an obligation; to produce or preserve
evidence; to compel any other appropriate acts or omissions.
3. The grant of interim measure may be conditioned upon the provision
security or any act or omission specified in the order.
4. The order either granting or denying the request for interim measure shall
be binding upon the parties and either party may apply with the courts for
assistance in implementing or enforcing it.
5. A party who refuses to comply with the order for an interim measure shall
be liable for damages resulting from non-compliance including all
expenses and reasonable attorney’s fees paid in obtaining judicial
enforcement. The party who refuses to comply with the court order
compelling compliance with an interim measure may be cited for indirect
contempt of court.
6. Before the constitution of the arbitral tribunal, or to the extent that the
arbitral tribunal already constituted has no power to act effectively, the
interim measure may be requested from the court in accordance with the
Special Rules of Court on ADR.
LEGAL REPRESENTATION IN ICA
As a rule, only lawyers accredited by SC can practice law in the Philippines.
In an ICA conducted in Philippines, a party may be represent by a person of his
choice even if non-lawyer. However, if a non-lawyer is so appointed, he shall not be
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authorized to appear as counsel in any Philippine Court or any quasi-judicial body
even if such appearance is in relation to the arbitration, which he appears.
RULES OF PROCEDURE IN ICA
The general rule is that the parties in an international commercial arbitration
are free to determine the rules that will govern their arbitration proceedings.
In default, the arbitral tribunal shall apply the “UNCITRAL Arbitration Rules”
adopted by the UNCITRAL on 28th of April 1976, unless the tribunal finds said rules
inappropriate.
The procedures in ICA in default of an agreement of the parties are as follows:
1. Statement of claims – within the period agreed upon by the parties, the
claimant shall state the facts supporting his claim; the issues and relief or
remedy sought and shall be submit or refer to relevant documents.
2. Statement of Defenses – respondent shall state his defenses.
3. Default of the parties – failure of the claimant or respondent to
communicate their statements of claims or defenses during the period or
their failure to appear at a hearing or to produce documentary evidence,
results in the default of the failing party. Default of the claimant for failure
to communicate his statement of claims results in termination of
proceedings. Default of the respondent to communicate his statement of
defenses shall not terminate the proceedings and instead shall proceed
without such failure being considered as an admission of claimant’s
allegation.
4. Amendment of claims or defenses – parties may amend or supplement
their claims or defenses as the case may be unless the tribunal considers
amendment inappropriate.
5. Hearings – the tribunal shall determine whether to hold oral hearings only,
oral arguments only or just require the submission of documents during the
appropriate stages of arbitral proceedings.
a. Court assistance in taking evidence – the tribunal or any party
with the approval of the tribunal, may request from the courts
assistance in taking evidence.
b. Subpoena – the tribunal has the power to issue subpoena in order
to compel the attendance of witnesses and/or the production of
documents. ARBITRAL TRIBUNAL DOES NOT HAVE
CONTEMPT POWERS.
c. Expert – the tribunal may appoint experts to report to it on specific
issues, require the parties to provide the expert with relevant
information or access to documents. The expert sought by the
tribunal is similar to an amicus curiae or friend of the court except
that the expert’s field of specialization is not limited to law.
6. Conclusion/Closure – an ICA may be concluded or closed in either of two
ways:
a. By an award or settlement
b. Termination – tribunal shall issue an order for termination of
arbitration when: 1. The claimant withdraws his claim unless the
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respondent objects on the basis of legitimate interest in obtaining a
final settlement; 2. The parties agree to terminate proceedings in
writings; or 3. Tribunal finds that the continuation of the
proceedings has become unnecessary or impossible.
In both instances, the mandate of the arbitral tribunal ends except if the
conclusion of the proceedings is by way of an award or settlement, the tribunal’s
mandate extends: 1. To correct and interpret the award; 2. To set aside an exclusive
recourse against the arbitral award; or 3. When reserved, to the quantification of costs
and the determination of the party liable therefore, or the division.
The arbitral tribunal retains jurisdiction until the award becomes final and
executory.
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COSTS IN ICA
Costs in an ICA include only the: 1. Fees of the arbitral tribunal; 2. Travel and
other expenses; 3. Costs of expert advise; 4. Travel and other expenses of witnesses; 5.
Costs for legal representation and assistance; and 6. Fees and expenses of the
appointing authority.
In principle, the costs shall borne by the unsuccessful party. However, the
arbitral tribunal may apportion the costs if unreasonable under the circumstance of the
case.
The SC held that, where the petitioner had a valid reason to institute the
arbitral proceedings as it believed that it was entitled to its claim, and the respondent
cannot be faulted for defending itself for perceived wrongful acts and conditions, it is
only fitting that both parties should share in the burden of the cost of arbitration, on a
pro rata basis so as not to put a price on the right to litigate (Keppel Cebu Shipyard vs.
Pioneer Insurance and Surety Corp. 601 SCRA 96 [2009])
CORRECTION AND INTERPRETATION OF ICA AWARD
The arbitral award in an ICA does not become executory until after the lapse
of the period for its amendment.
The arbitral award may be amended in any of the following manners:
1. Quantification of the costs and the determination of the party liable or
the division between the parties – provided that a reservation for such
hearing and quantification has been made by the tribunal.
2. Correction of typographical and similar errors initiated by a party –
parties may ask the tribunal for the correction of the award within 30days
from receipt of the award and with notice to the other party, for any error
in computation, clerical or typographical error. An error is typographical
or clerical in nature and therefore correctible even after the decision has
become executory, if the error is occasioned by a mistake in copying or
typing does not alter the substance of the decision and does not affect or
prejudice substantial rights.
3. Interpretation of the award – within the same period for the correction
of typographical errors initiated by the parties, the parties may agree to
request the tribunal to give an interpretation of a specific point or part of
the award. If the tribunal finds the request for correction justified, it shall
make the correction or give the interpretation within 30days from receipt
of the request and the interpretation or correction shall form part of the
award.
4. Correction of typographical error initiated by the arbitral tribunal –
within 30days from the date of award, the tribunal may motu propio
correct any typographical error.
5. Additional award – within 30days from receipt of the award, a party, with
notice to the other party, may request the tribunal to make an additional
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award as to claims presented in the arbitral proceedings but omitted in the
award.
SETTING ASIDE AN ICA AWARD*
An ICA award may be set-aside through the courts, particularly the RTC
provided that:
1. The petitioner furnishes proof that there was:
a. Defect in the arbitration agreement – party was under some
incapacity or agreement is not valid under applicable law;
b. Violation of due process – petitioner was not given proper notice
of the appointment of an arbitrator or proceeding or otherwise
unable to present his case;
c. Lack or excess of jurisdiction on the part of arbitral tribunal –
the award deals with a dispute not contemplated by or not falling
within the terms of submission to arbitration, subject to the
application of the doctrine of severability/separability;
d. Violation of arbitration agreement – the composition of tribunal
or process was not in accordance with the agreement, unless such
agreement was in conflict with a provision of the ADR act
2. Or the court finds that:
a. The subject of the dispute is not capable of settlement under the
laws of RP
b. The award is in conflict with the public policy of the RP.
In an ICA, the venue of setting aside proceedings, as well as for the
recognition and enforcement of awards and any application for assistance and
supervision except appeal, shall be with RTC where: 1. The arbitration took place; 2.
The asset to be attached or levied upon, or the act to be enjoined is located; 3. Any of
the parties to the dispute resides or has his place of business; or 4. In the NCR, at the
option of the applicant.
TIME FOR FILING THE PETION FOR SETTING ASIDE
The petition for setting aside must be filed within 3 months (90 days) from the
date on which the party making that application received the award or from the date
on which a request for correction, interpretation or additional award has been
disposed of by the tribunal.
RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS
Recognition is the means by which a Philippine court gives legal
acknowledgement to a foreign arbitral award and confers upon it the capability to be
enforced under the Philippine law through legal processes.
Confirmation is the judicial affirmation of a domestic arbitral award.
*
Grounds for refusing recognition (article 4.36[A], IRR)
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Enforcement meant the execution and implementation of the foreign arbitral
award through Philippine legal processes.
A foreign arbitral award is one made in a country other than the Philippines.
They must go through the process of recognition in order to be entitled to enforcement
in the Philippines.
Domestic arbitral award is one conducted in the Philippines. While not
requiring recognition, domestic arbitral awards have to go through the process of
confirmation prior to their implementation.
On the treatment of ICA awards, there is greater kinship between an ICA
award and a foreign arbitral award. Inferring from the fact that the rules on
recognition of foreign arbitral awards are contained in chapter 4 of IRR, which
governs the ICA, there exists legal basis to require recognition instead of just
confirmation for ICA awards.
A distinction must be made between an ICA award rendered in the Philippines
and an ICA award rendered outside the Philippines. While both require recognition by
RP courts similar to a foreign arbitral award, an ICA award rendered in the RP is
susceptible of vacation or setting aside by RP court. An ICA award rendered outside
the RP is not and can only be recognized or refused recognition, it being strictly a
foreign arbitral award.Once recognition is accorded by a Philippine court to foreign judgment, it is the decision, order or writ of the
Philippine court that is enforced. An ICA award or foreign arbitral award when extended recognition by the RTC
shall be enforced in the same manner as final and executory decisions of courts of law of the Philippines.
JURISDICTION, VENUE AND NATURE OF PROCEEDINGS
Jurisdiction over proceedings for the recognition and enforcement of a foreign
arbitral award, vacating or setting aside and any application with a court for
arbitration assistance is vested by the ADR act on RTC.
The venue of the proceedings shall be:
1. Where the arbitration proceedings are conducted;
2. Where the asset to be attached or levied upon or the act to be enjoined is
located;
3. Where any of the parties to dispute resides or his place of business; or
4. In the NCJR at the option of the applicant.
Except for appeal, the foregoing proceedings shall be deemed as special
proceedings. They shall also be summary in nature.
In recognition and enforcement of foreign arbitral awards susceptible of
recognition, the court shall send notice to the parties at their addresses of record in
arbitration. The notice shall be sent at least 15days before the date set for initial
hearing.
GROUNDS FOR REFUSING RECOGNITION AND PROCEDURE
RECOGNITION OF CONVENTION AND AS-IN CONVENTION AWARDS
FOR
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In general, the conditions and requisites for the recognition and enforcement
of foreign judgments in the Philippines are:
1. Proof of foreign judgment;
2. The judgment must be on a civil or commercial matter;
3. There must be no lack of jurisdiction, no want of notice, no collusion, no
fraud, no clear mistake of law or fact;
4. The judgment must not contravene a sound and established public policy
of the forum; and
5. The judgment must be res judicata in the state that rendered it.
A convention award is a foreign arbitral award made in a state, which is a
party to the NY Convention. Its recognition and enforcement shall be governed by the
NY convention as implemented by the IRR.
A non-convention award is a foreign arbitral award rendered in a stated, which
is not a party to NY convention. It cannot be recognized or enforced under ADR act
but it shall be deemed as a presumptive evidence of a right as between the parties in
accordance with section 48 rule39 of the rules of civil procedure.
As as-in convention award us one which is rendered in a state which is not a
party to NY convention but which, by reason of comity and reciprocity, may be
recognized and enforced as if it is a convention award.
Procedure for recognition of convention and as-in convention awards
The procedure for the recognition and enforcement of convention and
as-in convention awards are as follows:
1. Filing of application – party relying upon an awards or applying for its
enforcement shall file with the RTC the original or duly authenticated
copy of the award and the original arbitration agreement.
2. Confirmation – once confirmed, the foreign arbitral award shall be
enforced in the same manner as final and executory decisions of the courts
of law of the RP.
3. Consolidation/concurrent hearings – the parties and tribunal may agree
on 1. Consolidation of proceedings; or 2. The conduct of concurrent
hearings with other related arbitration proceedings.
4. Rejection/suspension – the RTC, upon application for rejection or
suspension of the enforcement of the award, may vacate or suspend the
enforcement, order the party seeking rejection or suspension to provide
appropriate security like a bond for example. In the case of as-in
convention award, the court may also remit the award to the arbitral
tribunal of the objections raised may be cured or rectified.
5. Appeals – the decision of RTC recognizing, enforcing, vacating or setting
aside an arbitral tribunal awards may be appealed to the CA in accordance
with the special rules on ADR, which shall require the appealing party to
post a counter-bond in favor of the prevailing party in the amount of the
award. The right to appeal may be validly waived by the agreement or
stipulation of the parties without prejudice to judicial review by certiorari
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under
rule65
of
the
rules
of
court.
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LEGAL EFFECTS OF NON-CONVENTION AWARDS
Non-convention awards, unless they qualify to be as-in convention awards, are
not entitled to recognition or enforcement under the ADR act. They may be given
legal effect in the Philippines on the basis of section48, rule39 of the rules on civil
procedure.
Under article 4.37(a) of the IRR, in conjunction with section48, rule39 of the
rules of civil procedure, a non-convention award which does not qualify as an as-in
convention award is either “conclusive upon the title to a thing” or at best, is a
“presumptive evidence of a right as between the parties and their successors in
interest by subsequent title,” provided there is no want of jurisdiction, no want of
notice, no collusion, no fraud and no clear mistake of fact or law.
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CHAPTER 6:
DOMESTIC ARBITRATION
DOMESTIC ARBITRATION
In general, arbitration is domestic if conducted in the Philippines. Specifically,
arbitration is domestic if the components of parties’ places of business, place of
arbitration, place of performance of substantial part of the obligation and place where
the subject matter of the dispute is most closely connected, are all located in the RP.
The ADR act of 2004 devoted only 2 sections to domestic arbitration namely:
section32 which distinguished domestic arbitration from international arbitration and
declared that the “arbitration law” (RA876) remains to be applicable to domestic
arbitration and section33, which adopted certain provisions of the Model Law and the
ADR act on ICA to domestic arbitration.
DISPUTES COVERED BY RULES ON DOMESTIC ARBITRATION
Unlike the provisions of the ADR act on ICA and the rules corresponding
thereto which cover only disputes arising from relationships of a commercial nature,
the provisions and rules on domestic arbitration cover both commercial and noncommercial disputes provided they are susceptible of arbitration and do not fall within
the exclusive original arbitration jurisdiction of quasi-judicial agencies.
DUE PROCESS IN DOMESTIC ARBITRATION
The parties to a domestic arbitration, like in the case of international
commercial arbitration, are entitled to be treated equally and with due process. On due
process in a case involving a domestic arbitral proceeding, the SC held that “the wellsettled rule is that administrative agencies exercising quasi-judicial powers shall not
be fettered by the rigid technicalities of procedure, albeit they are, at all times required,
to adhere to the basic concepts of fair play.
“Submission of position papers may be sufficient as long as the parties are
given the opportunity to be heard. In administrative proceedings, the essence of due
process is simply an opportunity to seek a reconsideration of the action or ruling
complained of. This constitutional mandate is deemed satisfied if a person is granted
an opportunity to seek reconsideration of an action or ruling. It does not require trialtype proceedings similar to those in courts of justice.” (Equitable PCIB vs. RCBC,
574 SCRA 858, [2008])
PLACE OF ARBITRATION
The place of domestic arbitration is to be determined by the parties. If there is
no such agreement, then the arbitration shall be conducted in Metro Manila, unless the
arbitral tribunal shall decided on a different place taking into account the
circumstances of the case and the convenience of the parties.
LANGUAGE
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The rule in the determination of the language that will be used in the
arbitration proceedings is the same for domestic and ICA, including the prerogative of
the arbitral tribunal to require a translation of documentary evidence if not in the
official language, except that Filipino is added to English as a default language in
domestic arbitration.
CONFIDENTIALITY
The arbitration proceedings, records, evidence and other confidential
information are privileged and shall not be published except 1. With the consent of
the parties; or 2. For the limited purpose of disclosing to the court relevant documents
where resort to the court is allowed.
RULES ON RECEIPT OF WRITTEN COMMUNICATIONS
The general rule on receipt of communications in ICA as well as domestic
arbitration is that provided for by the parties in their arbitration agreement. In the
absence of such an agreement, written communications among the parties and the
arbitrators shall be delivered personally, by registered mail or courier service and
shall be deemed to be received on the date it is delivered ar the addresse’s address of
record, place of business, residence or last know address.
The use of electronic mail, facsimile transmission or other electronic means is
permitted as long as there is a record of the sending and receipt of the communication
at the recipient’s mail box, and such electronic communication shall be deemed to
have been received on the same date of its transmittal.
WAIVER OF OBJECTION
Same rule applies with domestic arbitration as with the ICA. A party may be
estopped from questioning non-compliance or is deemed to have waived his objection
if he fails to raise the objection without delay or within the time prescribed (30days)
provided that he knows of such non-compliance. The act, omission, or silence giving
rise to waiver or estoppel must be unequivocal and intentional.
EXTENT OF COURT INTERVENTION
No court shall intervene except in the instances allowed by the Arbitration
Law, ADR Act and Special ADR Rules.
Pursuant to IRR, among these instances are when, 30days having elapsed from
receipt of the request for arbitration, the appointing authority fails to perform
functions imposed under Article 5.10(c) and (d); article 5.11(a) and article 5.13, in
which cases the applicant may apply with courts for the same relief.
Interim measures may also be requested or enforced through the courts. “As a
fundamental point, the pendency of arbitral proceedings does not foreclose resort to
the courts for provisional reliefs. The rule of ICC, which governs the parties’ arbitral
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dispute, allows the application of a party to a judicial authority for interim or
conservatory measures. Section 14 of RA876, the Arbitration Law, recognizes the
rights of any party to petition the court to take measures to safeguard and/or conserve
any matter, which is the subject of the dispute in arbitration. In addition, RA9285
known as the ADR Act of 2004, allows the filing of provisional or interim measures
with the courts whenever the arbitral tribunal has no power to act” (Transfield
Philippines Inc. vs. Luzon Hydro Corporation 490 SCRA 14 [2006])
If the arbitral tribunal in the exercise of its authority to resolve or defer the
resolution of the preliminary issue its jurisdiction over the arbitration agreement,
decides to defer the resolution until the rendition of the arbitral award, none of the
parties can seek judicial relief from the deferment. MR, appeals and petition for
certiorari are not available to challenge the decision of the arbitral tribunal to defer the
resolution of the preliminary jurisdictional issues.
To justify the vacation of an arbitral award on account of ‘manifest disregard
of law’ the arbiter’s findings must clearly and unequivocably violate an established
legal precedent. Anything less would suffice (Equitable PCI Bank vs. RCBC 574
SCRA 858 [2008])
REPRESENTATION
The same rule on representation in ICA obtains in domestic arbitration. A
party may represent himself orbe represented or assisted by any person of his choice,
provided that such representative, unless admitted to the practice of law in the RP,
shall not be authorized to appear as counsel in any RP court or quasi-judicial body.
ARBITRAL AGREEMENT
An agreement to arbitrate is a contract and as such the arbitration agreement
must satisfy the essential requisites of a valid contract.
Similar with mediation and ICA, the consent to arbitrate can either be precausal consent (agreement to submit to arbitration) when the parties agree in a
contract to settle by arbitration a controversy that will arise between them; or present
causal consent (submission agreement) when the controversy already exist between
the parties at the time of the submission to arbitration. The submission and contract
shall be valid, enforceable and irrevocable except upon grounds provided by law for
the revocation of contracts.
An arbitration agreement must be in writing and subscribed by the party
sought to be charged or by his lawful agent/s.
A court before which an action is brought on a matter which is the subject of
an arbitration agreement shall, if at least one party requests not later than the pre-trial
conference, or upon the request of both parties, refer to arbitration unless it finds that
the arbitration agreement is null and void, inoperative or incapable of being
performed. If the parties request in the same manner the court may stay the
proceedings during the pendency of the arbitration (Ormoc Sugarcane Planters Assoc.
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vs. CA). In such case, the court does not lose its jurisdiction over the case and the
proceedings are merely stayed to await the rendition of the arbitral award, which shall
be enforced by the court (Benguet Corp. vs. DENR-Mines and Adjudication Board,
545 SCRA 196 [2008])
When the court action is multi-party and one or more but not all of them are
parties to an arbitration agreement, the court shall refer those who are parties to the
arbitration agreement to arbitration and proceed with the court action as to those who
are not bound by such arbitration agreement.
DETERMINATION OF APPLICABLE RULES OF PROCEDURE
Except for the reference to UNCITRAL Arbitration Rules, the determination
of the applicable rules of procedure is the same for domestic arbitration and ICA. The
parties are free to agree on the applicable rules of procedure, in the absence of which,
the arbitral tribunal may conduct the arbitration in the manner it considers appropriate.
COMMENCEMENT OF ARBITRAL PROCEEDINGS
In general, the commencement of arbitral proceedings is determined by the
prior arbitration agreement between the parties. Up to the extent, there is similarity
between ICA and domestic arbitration on the commencement of arbitral proceedings.
The following are the specific rules for the commencement of domestic
arbitration:
1. In an institutional arbitration where there is no prior arbitration agreement,
it is commenced in accordance with the arbitration rules of the institutional
arbitrator.
2. In an ad hoc arbitration, where there is a prior arbitration agreement, it is
commence upon the delivery by the claimant to the respondent of a
demand for arbitration. The demand for arbitration shall be in any form
and shall state the name, addresses and description of the nature and
circumstances of the dispute giving rise to the claim; the relief sought
including the amount of the claim; the relevant agreements including the
arbitration agreement, a copy of which shall be attached.
Where there is no prior agreement, it is initiated by one party through a
demand upon the other to submit their dispute to arbitration, and
arbitration is deemed commenced upon the agreement by the other party to
submit the dispute to arbitration, and arbitration is deemed commenced
upon the agreement by the other party to submit the dispute to arbitration.
The demand shall also require the respondent to name his arbitrator within
a period, which shall not be less than 15days from the receipt of demand.
The default rule in the case of ICA is that it is commenced on the date on
which a request for the dispute to be referred to arbitration is received by the
respondent, while for domestic arbitration where there is no prior agreement is
reckoned from the date when the other party agreed to submit the dispute to
arbitration.
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ARBITRATORS AND ARBITRAL TRIBUNAL
Number of Arbitrators
Unless the parties have agreed otherwise, there shall be 3 arbitrators
for domestic arbitration.
Qualifications and Disqualifications
An arbitrator must be:
1. Of legal age;
2. Be in full employment of his civil rights; and
3. Know how to read and write.
The foregoing qualifications are prescribed in the Arbitration Law and
in the IRR. However, they are not similarly required for ICA except
that an arbitrator in ICA may be challenged if he does not possess the
qualifications agreed to by the parties.
No person shall serve as an arbitrator in any proceedings if:
1. He is related by blood or marriage within the 6th degree to
either party to the controversy;
2. He has or has had financial, fiduciary or other interest in the
controversy or cause to be decided, or in the result of the
proceeding;
3. He has personal bias which might prejudice the right of any
party to a fair and impartial award; or
4. He has been selected to act as champion or to advocate a
party’s cause.
Procedure for the Appointment of Arbitrators
The parties in a domestic arbitration are free to agree on the procedure
for the appointment of arbitrators except that, in order to prevent undue
advantage, an agreement or clause giving a party the power to choose more
arbitrators than the other is void. The parties may agree to empower the
arbitrators already appointed to select and appoint additional arbitrators who
shall sit with the original arbitrators.
If there is no agreement for the appointment, the following are the
default rules:
1. Appointment by the parties – in an arbitration with 3arbitrators,
each party shall appoint one and the 2 arbitrators appointed shall
appoint the 3rd arbitrator within 30days from receipt of request,
failing of which, the appointment shall be made by the appointing
authority.
2. Default appointment by appointing authority – the appointing
authority in ad hoc domestic arbitration, in the absence of an
agreement of the parties, is the National President of IBP or his
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authorized representative. In an institutional arbitration, there is no
need for an appointing authority for purposes of appointing
because the parties have already designated the institutional ADR
provider under whose rules the arbitrator or arbitrators to be
selected.
The appointing authority mat make the appointment or give the
appointing party who objects to a default appointment time to make
the appointment but not more than 30days.
3. Request for appointment – the request for appointment with
proof of delivery to the adverse party shall be filed with the
appointing authority. Within 7days from the receipt of the request,
the adverse party may file his objections to request or ask for an
extension not exceeding 30days to appoint an arbitrator.
4. Acceptance of appointment – in accepting the appointment, shall
submit an acceptance letter, which shall include statements that 1.
He agrees to comply with the applicable law and rules of
arbitration; 2. He accepts the applicable arbitrator’s fees; and 3. He
agrees to devote much time and attention to the arbitration as
required.
5. Oath of arbitrators – arbitrators shall take an oath to faithfully
and fully hear and examine the matters in controversy and to make
a just award according to the best of their ability and understanding.
Grounds for Challenge
An arbitrator may be challenged only if:
1. Circumstances exist that give rise to a justifiable doubt as to his
impartiality or independence;
2. He does not possess the qualifications provided for under the law or
agreed to by the parties;
3. He is disqualified to act as an arbitrator;
4. He refuses to respond to questions by a party regarding the nature
and extent of his professional dealings with a party or counsel.
The party appointing an arbitrator may challenge that arbitrator for reasons,
which the party became aware of after the appointment, was made. Otherwise, he is
already estopped from challenging the appointment he made.
If an arbitrator appointed discovers the existence of any circumstance that
would create presumption of bias or would render him a partial arbitrator, he shall
immediately disclose such information to the parties.
Procedure for the Challenge
The procedure for the challenge against an arbitrator in a domestic arbitration
is similar to that provided for in ICA. The general rule is that the procedure that is
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agreed upon by the parties for challenging an arbitrator shall be applied. In default the
following procedure shall govern:
1. The challenging party shall send a written statement of the reasons for
challenge to the arbitral tribunal within 15days after becoming aware of
the constitution of the arbitral tribunal or after becoming aware of the
circumstances surrounding the ground for challenge. A request for
inhibition shall be deemed a challenge.
2. Within 15days from receipt of a challenge, the challenged arbitrator may
either accept or reject the challenge. If he accepts it, he shall voluntarily
withdraw as arbitrator.
3. If he rejects the challenge, he shall communicate within the same period of
15days his rejection of the challenge and state the facts and arguments
relied upon. He shall be given opportunity to be heard on the matter.
4. Notwithstanding the rejection of the challenge by the challenged arbitrator,
within the same period of 15days the parties may agree to the challenge
and replace the challenged arbitrator.
5. If the challenged arbitrator does not accept the challenge or does not
withdraw from his office and the parties do not agree to the challenge, the
arbitral tribunal shall decide the challenge within 30days from receipt of
the notice of the decision rejecting the challenge.
6. If the challenge before the arbitral tribunal is not successful or a party or
tribunal shall decline to act, within 30days from notice of the decision
rejecting the challenge, the challenging parties may request the appointing
authority to decide the challenge.
7. If the appointing authority shall fail to act on the challenge within 30days
from the date of its receipt, the requesting party may with the notice to the
parties, renew the request with the court.
8. Until a decision is made by the challenged arbitrator, the parties, arbitral
tribunal or the appointing authority, the arbitration proceeding shall
continue notwithstanding the challenge and the challenged arbitrator shall
continue to participate as arbitrator. Once the challenge is elevated to the
court, the arbitration proceeding shall be suspended until after the court
shall have decided the incident.
9. The decision of the parties, the arbitral tribunal, the appointing authority pr
the court, to accept or reject a challenge shall be immediately executory
and is not subject to appeal or MR.
10. The appointment of a substitute shall be made pursuant to the procedure
applicable to the appointment of the arbitrator being replaced.
Procedure in case the arbitrator fails to act
As in the case of ICA, if an arbitrator in a domestic arbitration becomes de
jure or de facto unable to perform his functions or fails to act without undue delay, his
mandate terminates if 1. He withdraws, or 2. The parties agree on the termination.
If the controversy remains, any party may request the appointing authority to
decide on the termination of the arbitrator, which decision shall be immediately
executory and shall not be subject to a MR or appeal.
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ARBITRAL PROCEEDINGS
The default procedure in domestic arbitration is as follows:
1. Statement of Claims – the claimant in domestic arbitration is required to
submit within the time agreed upon by the parties or determined by the
arbitral tribunal his statement of claims including the supporting facts,
points at issue and the relief sought.
2. Statement of defense – in the same manner and period, the respondent
shall state his defenses.
3. Amendment of claims – the parties may amend or supplement their
claims or defenses, as the case maybe, unless the arbitral tribunal considers
the amendment appropriate or dilatory.
4. Hearing and written proceedings – in an ad hoc domestic arbitration, the
procedure determined by the arbitrator with the agreement of the parties
shall be followed. In an institutional arbitrator shall be followed which has
been impliedly accepted by the parties on account of the designation of the
institutional arbitral tribunal.
There is a slight variance between the default procedure for ICA and domestic
arbitration. In the case of the latter, the following procedure will be followed:
a. Pre-hearing conference – the parties in domestic arbitration are required
to undergo a pre-hearing conference within 30days from the appointment
of the arbitrator or the constitution of an arbitral tribunal during which they
shall discuss the venue of the arbitration.
The possibility of a compromise is not among those that the parties and the
arbitral tribunal are supposed to discuss during the pre-hearing conference.
No arbitrator shall act as mediator in any proceeding where he is acting as
an arbitrator except where, under a settlement agreement, the parties agree
to constitute the mediator as an arbitrator.
b. Threshold issues – issues on the jurisdiction of the arbitral tribunal over
the claims and counterclaims or the arbitrability of the claims or
counterclaims, shall be resolved by the arbitral tribunal as threshold issues
if the parties so request, unless the issues are intertwined with the factual
issues that they cannot be resolve ahead of the hearing on the merits.
c. Hearing dates and postponements – arbitral tribunal shall in consulation
with the parties fix the date and time of hearings. The hearings shall not be
postponed except with the conformity of the arbitrator and for good and
sufficient cause.
d. Default of the party – if the claimant fails to communicate his statement
of claims, the tribunal shall terminate the proceedings. If it is the
respondent who fails to communicate his statement of defenses, the
arbitral tribunal shall continue the proceedings without treating such
failure in itself as an admission of the claimant’s allegation. If any party
fails to appear or produce evidence, he shall have deemed waived them.
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e. Decision on interlocutory – the arbitral tribunal may authorize its
chairman to issue or release its decision on interlocutory matters.
f. Consolidation or concurrent hearings – they may agree to consolidate
the arbitration proceedings with other arbitration proceedings or hold
concurrent hearings.
g. Closure of hearing – no further motion, manifestation or submission
maybe allowed except for post-hearing briefs and reply briefs, unless the
tribunal, motu propio or upon the request of a party allows the reopening
of the hearing.
5. Rules on taking evidence – the following rules on reception as well as the
processes that the tribunal may employ in taking evidence:
a. Testimonial evidence – witnesses shall be required to take an oath
or affirmation to tell the truth. The parties may also agree in
writing to submit their dispute to arbitration other than by oral
hearing.
b. Documentary evidence – the tribunal may require the parties to
submit or produce such other necessary documents.
c. Subpoena – the tribunal shall have the power to issue subpoena.
d. Expert – the tribunal may appoint one or more experts to report to
it on specific issues, may require the parties to submit relevant
information or grant access to such expert and may grant the
parties opportunity to ask questions of the expert and present their
own experts to testify on the points at issue. However in domestic
arbitration, upon the agreement of the parties, the finding of the
expert engaged by the tribunal shall be binging upon them and the
tribunal.
e. Court assistance in taking evidence – the provisions of IRR on
domestic arbitration specified some of the modes.
6. Decision – the decision of the tribunal shall be made by the sole arbitrator
or unless otherwise agreed upon by the parties, by the majority of the
arbitrators in multi-arbitrator proceedings. However, questions of
procedure may be decided by the chairman of the tribunal if authorized by
the parties or by all members of the tribunal. The tribunal shall render its
written award within 30days after the closing of the hearing, submission of
the parties’ briefs.
7. Form and content of the award – the award in domestic arbitration shall
be in writing, signed by the arbitrator, and shall state the rendition and the
place of arbitration. The award need not be acknowledged or sworn to
unless required by the parties. The parties may require the tribunal to
supply the omission within 30days from receipt of the award.
8. Settlement – the proceedings will be terminated by the execution of an
arbitral award on agreed terms.
9. Termination of the claim – unless the respondent objects for the purpose
of prosecuting his counterclaim or the tribunal recognizes a legitimate
interest on his part in obtaining a final settlement of the dispute.
INTERIM MEASURES
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The parties to a domestic arbitration may seek from the arbitrator or tribunal
interim measures including preliminary injunction, appointment of receiver, detention
of property and preservation and inspection. Either party may also secure assistance
from the courts for the implementation of interim measures. (Refer to p.122 of the
book for more interim measure)
MULTI-PARTY ARBITRATION
In a multi-party domestic arbitration, the tribunal is empowered to implement
procedural modifications, as it shall deem to appropriate to address the complexities
of the multi-party arbitration.
FEES AND COSTS
The general rule is that the fees of the arbitrator in a domestic arbitration shall
be determined by the agreement of the parties in writing prior to the arbitration. In
default, the arbitrators’ fees shall be determined in accordance with the applicable
rules of the regular arbitration institution.
CORRECTION, INTERPRETATION AND ADDITIONAL AWARD
Article5.32 (d) of the IRR emphatically states that, “no MR, correction and
interpretation of award or additional award shall be filed with the tribunal.” This is
premised upon the principle that when tribunal renders its final award, it loses
jurisdiction over the dispute and the parties to the arbitration. However, section 17 of
RA876 specifically allows the continuation of the arbitral proceedings motu propio by
the arbitrators or upon motion of party, upon good cause shown.
The IRR provided for the amendment or modification of the award in the
following instances as exceptions to the GR:
1. Under the arbitration agreement – if provided, the tribunal may cause
the amendment.
2. Failure to resolve the issue – if the tribunal failed to resolve an issue,
parties may ask for the resolution.
3. Quantification of costs – if the tribunal made reservation in the final
award, it may supplement the award by such quantification, determination
or apportionment.
4. Correction of typographical error and similar errors initiated by a
party – a party may ask the tribunal for the correction of the award within
30days from the receipt of the award and with notice to the other party.
5. Interpretation of the award – within the same period, the parties may
agree to request the tribunal to give an interpretation on a specific point or
part of the award.
6. Correction of the typographical errors initiated by the tribunal –
within 30days from the date of the award, the tribunal may motu propio
correct any typographical error
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7. Additional award – within 30days from receipt of the award, a party with
notice to the other, may request the tribunal to make an additional award as
to claims presented in the arbitral proceedings but omitted in the award. If
justified, the tribunal shall make the additional award within 60days from
the receipt of the request.
Unless the parties have granted upon any period of time, the parties may ask
for correction, interpretation or the rendition of an additional award within 30days
from the receipt of the award.
The foregoing grounds for amendment or modification of an arbitral award by
the tribunal should be distinguished from the grounds for the amendment or
modification of an arbitral award by the court. A court may amend or modify a
domestic arbitral award in the following instances:
1. Where there is an evident miscalculation of figures or an evident mistake
in the description of any person, thing or property referred to in the award;
2. Where the arbitrators have awarded upon a matter not submitted to them,
not affecting the merits of the decision upon the matter submitter;
3. Where the award is imperfect in a matter of form not affecting the merits
of the controversy and if it has been a commissioner’s report, the defect
could have been amended or disregarded by the court.
If the award upon a matter not submitted for arbitration, or if the imperfect
form of the award, affects the merits of the decision or controversy, the award should
be vacated instead of merely being amended or modified by the court.
The notice of a motion to vacate, modify or correct an award must be served
upon the adverse party within 30days after the award is filed or delivered.
The judgment of RTC rendered in a motion to confirm, modify, correct or
vacate an award shall have the same force and effect as judgment in an action and
may be enforced as if it had been rendered in the court in which it is entered.
SETTING ASIDE AN ARBITRAL AWARD
A domestic award may be set-aside through the courts only on the following
grounds:
1. The arbitral award was procured by corruption, fraud or other undue
means;
2. There was evident partiality or corruption in the tribunal or any of its
members;
3. The tribunal was guilty of misconduct or any form of misbehavior that has
materially prejudiced the rights of any party;
4. One or more of the arbitrators was disqualified to act as such and wilfully
refrained from disclosing such disqualification;
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5. The arbitral tribunal exceeded its powers or so imperfectly executed them
such that a complete, final and definite award upon the subject matter
submitted to it was not made.
Compare the foregoing grounds with those applicable to the setting aside of
ICA to wit:
1. The petitioner furnishes proof that there was:
a. Defect in the arbitration agreement because a party was under some
incapacity or agreement is not valid under applicable law;
b. Violation of due process because the petitioner was not given
proper notice of the appointment of an arbitrator or the proceeding
or unable to present his case;
c. Lack or excess of jurisdiction on the part of the tribunal because
the award deals with a dispute not contemplated by or not falling
within the terms of the submission to arbitration, subject to the
application of doctrine of severability/separability;
d. Violation of the arbitration agreement because the composition of
the arbitral tribunal or the arbitral process was not in accordance
with the agreement of the parties unless such agreement was in
conflict with a provision of the ADR act from which the parties
cannot derogate or failing such agreement, was not in accordance
with the ADR act,
2. Or the court finds that:
a. The subject of the dispute is not capable of settlement under the
laws of RP;
b. The award is in conflict with public policy of RP.
The court before which the petition for setting-aside a domestic arbitral award
is filed has the prerogative and option to suspend the court proceedings in the
following instances:
1. The court may suspend the setting aside proceedings to give the tribunal an
opportunity to resume the arbitral award proceedings or take such action
which will eliminate the grounds for setting aside an award;
2. The petitioner or the oppositor may petition the court to remit the case to
the same tribunal for the purpose of making new or revised final and
definite award or to direct a new hearing before the same or new tribunal;
or
3. If the ground for vacating an arbitral award does not affect the merits of
the case and may be cured or remedied, the adverse party may oppose the
petition and instead request the court to suspend the vacation or setting
aside proceedings to give the arbitral tribunal an opportunity to cure or
remedy the award or resume the arbitration proceedings or take such
action as will eliminate the grounds for vacation or setting aside.
In the foregoing instances, opportunity is being given to the tribunal to cure
any defect in its proceedings and award.
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CONFIRMATION OF DOMESTIC ARBITRAL AWARDS
Recognition of a domestic arbitral award is made by filing a motion for
confirmation and securing an entry of judgment from the court. An award in domestic
arbitration is rendered by a Philippine arbitral tribunal applying RP law. All that is
required in order to enforce a domestic award is to have it confirmed through a
motion filed in court. Similar to ICA, proceedings for recognition and enforcement,
vacation or setting aside an award and any application for arbitration assistance,
except appeal, shall be deemed as special proceedings.
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CHAPTER 7:
OTHER FORMS OF ADR
Among the various forms of ADR, arbitration and mediation are undoubtedly
the most common and popular. Be that as it may, parties are allowed to avail of other
forms of ADR for the amicable resolution of their disputes. These forms of ADR are
the following:
1. Early neutral evaluation
2. Neutral evaluation
3. Mini-trial
4. Mediation-arbitration
5. Combination
6. And any other ADR form
The principle of party autonomy and self-determination, the provisions of the
IRR on the foregoing forms of ADR apply only in the absence of an agreement
between the parties.
If the ADR form is akin to mediation than arbitration, the specific provisions
of the IRR on mediation (chapter3) shall have suppletory application to the extent that
they are not in conflict with the agreement of the parties or the specific provisions of
the
chosen
ADR
form.
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NEUTRAL AND EARLY NEUTRAL EVALUATION
Neutral Evaluation is an ADR process wherein the parties and their lawyers
are brought together to present summaries of their cases and to receive a non-binding
assessment by an experienced neutral person, with the expertise in the subject matter
or substance of the dispute. Early neutral evaluation is availed of early in the pre-trial
phase.
The agreement of the parties shall govern the conduct of neutral or early
neutral evaluation. In default, the provisions of IRR on neutral or early neutral
evaluation shall apply.
Essentially, this kind of ADR is akin to mediation and hence, in the absence of
an agreement between the parties or specific provisions of the law or rules applicable
to them, the rules on mediation shall apply suppletorily. However, the parties may, in
the exercise of their right to party autonomy and self-determination, empower the
neutral 3rd person to render a binding assessment in which case, these two becomes
akin to domestic arbitration, in which case, the rules on arbitration shall apply
suppletorily.
If the parties cannot or fail to agree on the qualifications of the neutral 3rd
person, the manner of his selection, or the appointing authority or if the parties are
unable to make the selection despite their agreement on the foregoing, either party
may request the default appoint to authority to make the appointment.
In neutral evaluation, the parties are required to submit and exchange position
papers containing the issues and statements of the relevant facts an append there
supporting documents and affidavits of witnesses. In order to maintain impartiality of
the neutral third person, there shall be no ex parte communication between him and
any party to the dispute. Confidentiality of the proceedings, communications and
assessments shall also be maintained.
The neutral 3rd person shall issue a written evaluation or assessment within
30days from the conclusion of the evaluation.
MINI-TRIAL
Mini-trial is a structured dispute resolution in which the merits of a case are
argued before a panel composed of senior decision-makers, with or without the
presence of a neutral 3rd person before, which the parties seek a negotiated settlement.
The agreement of the parties shall govern the conduct of the proceedings, in the
absence of which, the provisions of the IRR on mini-trial shall be applicable.
A mini-trial may be conducted either as: 1. A separate dispute resolution
process; or 2. As a continuation of mediation, or neutral or early neutral evaluation or
any ADR process. In either case, the presence of a neutral 3rd person can be dispensed
with, otherwise he shall preside over the mini-trial.
ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
The parties shall appoint the panel of senior executive or decision-makers.
They may choose one or more for each party provided that the parties shall appoint an
equal number of senior executives or decision-makers.
The parties shall submit a brief summary of the dispute, identifying the
specific factual or legal issues, after which they shall appear before the mini-trial
panel members before whom their lawyers shall present their respective cases starting
with the claimant. Thereafter, the lawyers or representatives may offer rebuttal or surrebuttal arguments. The presentation-in-chief shall be made without interruption for
1hour, and the rebuttal and sur-rebuttal shall be for 30minutes unless a different
period is agreed upon by the parties. Parties may ask clarificatory questions after each
presentation.
After the mini-trial, the panel members, with the assistance of neutral 3rd party
shall negotiate a settlement dispute.
MEDIATION-ARBITRATION
This kind of ADR is a 2step dispute resolution process involving mediation
then followed by arbitration.
The proceedings shall be governed by the agreement of the parties, in the
absence of an agreement, and in view of its dual nature, its proceedings shall be
governed by the rules on mediation first and thereafter, by the rules on domestic
arbitration.
As a rule, no arbitrator shall act as mediator and no mediator shall act as
arbitrator, at the same time in any proceeding. The mediator appointed is precluded
from acting as arbitrator of the same dispute, unless the parties have agreed in writing.
A mediator is precluded from discussing with the parties the merits of the dispute.
During the dispute stage, the mediator is authorized in writing to act, as
arbitrator shall make an appropriate disclosure as if the arbitration proceeding had just
commenced. Likewise, he shall take the appropriate oath or affirmation as an
arbitrator.
COMBINATION AND INNOMINATE FORMS OF ADR
The parties are allowed to avail any combination of ADR forms. The parties
may even come up with their own forms or methods, which innominate, may be
allowed by law as long as they satisfy the requisites of ADR, comply with the
essential requisites of a valid contract and are not contrary to law, morals, public
policy, public order and good customs.
As in the case of the nominate ADR forms, combinations and innominate
ADR forms are governed principally by the agreement of the parties. In the absence
of agreement, the rules and procedures for mediation are suppletorily applicable of the
combination or innominate ADR form is akin to mediation. Otherwise, apply the rules
of arbitration.
ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
CHAPTER 8:
SPECIAL RULES OF COURT ON ALTERNATIVE
DISPUTE RESOLUTION
GENERAL PROVISIONS
The ADR act of 2004, RA876, the Model Law, and the IRR of ADR Act,
deferred to the SC’s authority to enact special rules of procedure applicable in courts
for specific areas and aspects of ADR. The above-mentioned substantive laws, as well
as the other sources of ADR rules are not the source of the authority of the SC to
enact the special rules on ADR. Under the Constitution, the SC has the exclusive
power and authority to promulgate rules of practice and procedure subject to the
constitution that they shall not diminish, increase or modify substantive rights.
The special rules on ADR was passed and approved on 1st of September 2009
and took effect after the completion of its publication as required under Rule 26.1.
SUBJECT MATTER AND COVERAGE
The special rules on ADR govern the following process and proceedings:
1. Relief on the issue of existence, validity and enforceability of the
arbitration agreement;
2. Referral to ADR;
3. Interim measures of protection;
4. Appointment of arbitrator;
5. Challenge to appointment of arbitrator;
6. Termination of mandate of arbitrator;
7. Assistance in taking evidence;
8. Confirmation, correction or vacation of award in domestic arbitration;
9. Recognition and enforcement or setting-aside of an award in ICA;
10. Recognition and enforcement of foreign arbitral award;
11. Confidentiality or protective orders; and
12. Deposit and enforcement of mediated settlement agreements.
The foregoing proceedings under the special ADR rules are summary in nature,
except 1. Those pertain to the confirmation or recognition and enforcement of arbitral
awards, whether domestic, ICA, or foreign which are non-summary proceedings; and
2. The deposit of mediated settlement agreements, which is not a judicial proceeding.
SPECIAL PROCEEDINGS
Except for the deposit of mediated settlement agreements, the foregoing
procedures are “special proceedings.” Jurisdiction over the persons of the parties is
acquired by the court, not through the service of summons, but upon proof of
compliance with jurisdictional requirements that the respondent was furnished a copy
of the petition.
The petitioner is required to serve copies of the petition upon the respondent
before it is filed in court. Service of petition shall be made through personal service or
by courier proof of which shall be attached to the petition.
ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
SUMMARY PROCEEDINGS
The proceedings under the special ADR rules are generally summary and are
conducted by way of submission of verified pleadings, affidavits and supporting
documents, except for the proceedings involving confirmation, recognition and
enforcement of arbitral awards which are generally non-summary and the deposit of
mediated settlement agreements which is not a judicial proceeding.
The following pleadings, motions or petitions are not allowed and shall not be
accepted for filing and if inadvertently accepted, should not be considered by the
court:
1. Motion to dismiss (any ground for a motion to dismiss must be pleaded in
the answer to opposition to the petition or motion);
2. Motion for bill of particulars;
3. Motion for new trial or for reopening of trial;
4. Petition for relief of judgment;
5. Motion for extension, except in cases where an ex parte TRO of protection
has been issued (in which case the adverse party is amply protected from
any delay that may be caused by the extension)
6. Rejoinder to reply (the reply is the last pleading to be filed)
7. Motion to declare a party in default
8. Any other pleading specifically disallowed under any provision of the
Special ADR rules.
If inadvertently accepted for filing, any of the foregoing motions or pleadings
may be expunged from the records of the case.
NON-SUMMARY PROCEEDINGS
The proceedings under the special ADR rules, which are general nonsummary, are the following:
1. Confirmation, correction or vacation of award in domestic arbitration;
2. Recognition and enforcement of an award in an ICA; and
3. Recognition and enforcement of a foreign arbitral award.
The technical rules on the service of summons ordinarily applicable to regular
court proceedings are not applicable under the special ADR rules. The special rules
require that the initiatory pleading be filed directly with the court, which will then
serve a copy to the respondent, by personal service or courier. If the court action is
already pending, the initiatory pleading or motion shall be served by personal service
or courier service upon the respondent before it is filed in court. In the event that
courier service is not available, resort may be had to service by registered mail. The
special ADR rules is one of the rules where filing and service of pleadings by
electronic means may be allowed by agreement of the parties. Proof of filing shall be
made in accordance with the rules on Electronic Evidence.
ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
FUNDAMENTAL PRINCIPLES ADOPTED BY THE SPECIAL ADR RULES
The special rules took into account the following fundamental, principles and
objectives of ADR:
1. Self-determination, party autonomy and promotion of ADR as means
of resolving disputes – took into account the objective of ADR of
achieving for a speedy and efficient resolution of disputes, impartial
justice, curbing a litigation and to declogging court dockets.
2. Preference for arbitration – The special rules requires courts to refer to
arbitration parties who have agreed to submit their disputes to arbitration
and precludes courts from refusing the referral for any of the following and
similar reasons:
a. The referral tends to oust a court of its jurisdiction;
b. The court is in a better position to resolve the dispute subject of
arbitration;
c. The referral would result in multiplicity of suits;
d. The arbitration proceeding has not commenced;
e. The place of arbitration is in foreign country;
f. One or more of the issues are legal and one or more arbitrators are
not lawyers;
g. One or more of the arbitrators are not Philippine nationals;
h. One or more of the arbitrators are alleged not to possess the
required qualification under the arbitration agreement or law.
3. Doctrine of separability/severability – the arbitration clause shall be
treated as an agreement independent of the contract of which it forms part
and a decision that the contract is null and void shall not entail ipso jure
invalidity of the arbitration clause.
4. Freedom to agree on the procedure to be followed n the conduct of
arbitral proceedings – only in the absence of an agreement may the
arbitral tribunal conduct arbitration in the manner it considers appropriate.
5. The competence-competence principle – the tribunal shall be accorded
the first opportunity or competence to rule on the issue whether o r not it
has competence or jurisdiction to decide a dispute submitted to it for
decision, including any objection with respect to the existence or validity
of the arbitration agreement.
6. No arbitrator shall act as mediator in any proceeding in which he is
acting as arbitrator – however, the parties to mediation have agreed in
the written settlement agreement that the mediator shall become the sole
arbitrator for dispute or that the settlement agreement shall become an
arbitral award, the mediator-arbitrator shall issue the settlement agreement
as an arbitral award which shall be subject to enforcement under the law.
ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
CHAPTER 9:
SPECIAL RULES OF COURT ON ADR
SPECIFIC COURT RELIEFS
JUDICIAL RELIEF INVOLVING THE ISSUE OF EXISTENCE, VALIDITY AND
ENFORCEABILITY OF THE ARBITRATION AGREEMENT
The judicial relief referred to in Rule3 of the Special ADR rules is a petition
for judicial determination of the existence, validity and/or enforceability of an
arbitration agreement. The issues involved in these proceedings are:
1. Existence of the arbitration agreement – whether or not there is an
arbitration agreement;
2. Validity of the arbitration agreement – whether or not the arbitration
agreement complies with all the requisites for a valid contract;
3. Enforceability of the arbitration agreement – whether or not the
arbitration agreement is enforceable in accordance with article1403 of the
civil code;
The rules on judicial relief are applicable only to arbitration proceedings
conducted in the Philippines and the nature of such proceedings is summary.
“There it was held that RA876 explicitly confines the court’s authority only to
the determination of whether or not there is an agreement in writing providing for
arbitration. In the affirmative, the statute ordains that the court shall issue an order
‘summarily directing the parties to proceed with the arbitration in accordance with the
terms.’ (La Naval Drug Corp. vs. CA)
“Since there obtains a written provision for arbitration as well as failure on
respondent’s part to comply therewith, the court a quo rightly ordered the parties to
proceed to arbitration in accordance with the terms of their agreement. Respondent’s
arguments touching upon the merits of the dispute are improperly raised. They should
be addressed to the arbitrators. This proceeding is merely a summary remedy to
enforce the agreement to arbitrate. The duty of the court in this case is not to
resolve the merits of the parties’ claims but only to determine if they should
proceed to arbitration or not” (Mindanao Portland Cement Corp. vs. McDonough
Construction Corp. of Florida)
JUDICIAL RELEIF BEFORE COMMENCE OF ARBITRATION
The rules on judicial relief prior to the commencement of arbitration apply
when the following circumstances are present:
1. The arbitration proceeding has not yet commenced; and
2. There is between the parties a dispute regarding the existence, validity or
enforceability of the arbitration agreement.
The procedural rules are as follows:
ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
1. Petition – the initiatory pleading for judicial relief before the
commencement of arbitration is a petition filed with the RTC where any of
the parties resides or has his principal place of business.
2. Comment/opposition – within 15 days from service of the petition, the
respondent must file his comment or opposition.
3. Court action – in resolving the petition, the court must exercise judicial
restraint and defer to the competence or jurisdiction of the tribunal to rule
on its competence and jurisdiction.
4. Relief against court action – the determination by the court upholding the
existence, validity or enforceability of the arbitration agreement under
these proceedings is merely prima facie. Such prima facie determination
shall not be subject to a MR, appeal or certiorari, but shall be without
prejudice to the right of any party to raise the same issues before the
tribunal or the court in a petition to vacate or set aside the arbitral award,
which shall be resolved in accordance with the standards set for such
proceedings.
JUDICIAL RELIEF AFTER ARBITRATION COMMENCES
While the sub-title of rule3 of the Special ADR rules state that the judicial
relief sought from the court pertains to the “existence, validity or enforceability” of
the arbitration agreement, that is accurate only for judicial relief prior to the
commencement of the arbitration or at the latest, prior to the rendition by the arbitral
tribunal of preliminary ruling on its jurisdiction. After the commencement of the
arbitration and the constitution of the arbitral tribunal and after the tribunal has
rendered preliminary ruling on its jurisdiction, the proper issue for judicial relief is
whether or not the arbitral tribunal has jurisdiction over the proceedings.
The rules on judicial relief after the commencement of arbitration apply under
the following circumstances:
1. The arbitration proceeding has already commenced, the tribunal has been
constituted and has rendered preliminary ruling on its jurisdiction; and
2. A party desires to challenge the tribunal’s ruling on the issue of
jurisdiction.
The commencement of arbitration is determined by the agreement of the
parties, in the absence of which it is commenced on accordance with the rules of the
institutional arbitrator or upon the delivery by the claimant to the respondent of a
demand for arbitration or when there is no prior arbitration agreement, upon the
agreement of the respondent to submit the dispute to arbitration after being served a
demand to arbitrate. The procedural rules are:
1.
Petition – within 30days form the receipt of the notice of ruling from
an arbitral tribunal, an aggrieved party may file a petition with the RTC.
2.
Comment/opposition – respondent should file his comment or
opposition within 15days from the date of service of petition.
3.
Court action – court shall render judgment on the basis of the
pleadings filed and evidence submitted, within 30days from the petition is
submitted for resolution. The filing and pendency of the petition for judicial
ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
relief shall not be a cause for the court to enjoin the arbitration and the tribunal
may proceed with the arbitration and render the award.
4.
Relief against court action – the aggrieved party may file a MR of the
order of the court, which shall not be subject to appeal. An order affirming the
jurisdiction of the tribunal shall not be subject to a petition for certiorari, but
an order denying jurisdiction may be the subject of such petition.
In a petition for judicial relief, the arbitrator or the members of the tribunal
shall be nominal parties.
The circumstances that not all of the parties to the civil action are bound by
the arbitration agreement or that referral to arbitration would result in multiplicity of
suits are not grounds to deny the referral of a pending action to arbitration. The
included parties are necessary parties to the arbitration proceedings because their noninclusion, while not affecting the validity of the arbitration, will result in an
incomplete determination or settlement of the claim subject of arbitration.
REFERRAL TO ADR
While the subtitle of rule4 of the Special ADR rules is “Referral to ADR” this
rule actually pertains to the referral of a pending court action to arbitration rather than
any other form of ADR. The situation contemplated by this rule is that where:
1. There is already pending court action.
2. There is either a pre-action agreement – if executed prior to the filing of an
action, or a present action agreement – if executed after the filing of the
action.
3. And one or both parties desire to undergo arbitration.
If there is a pre-action agreement, which may either be an agreement to submit
to arbitration or a submission agreement, the request for referral to arbitration may be
made by any one of the parties not later than the pre-trial conference. A requeset made
after the pre-trial conference must be with the agreement of both parties.
In the case of a present-action arbitration agreement, which is necessarily a
submission agreement, the parties may request the referral to arbitration at any time
during the proceedings.
Hereunder are the rules:
1. Request/Motion
2. Comment/opposition
3. Court action
4. Relief against court action
In accordance with the principle of preference for ADR, courts are prohibited
from denying for the request for referral of some or all of the parties to arbitration for
any of the following reasons:
1. Not all of the disputes subject of the civil action may be referred to
arbitration;
ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
2. Not all of the parties to the civil action are bound by the arbitration
agreement and referral to arbitration would result in multiplicity of suits;
3. The issues raised in the civil action could be speedily and efficiently
resolved in its entirety by the court rather than in an arbitration;
4. Referral to arbitration does not appear to be the most prudent action; or
5. The stay of the action would prejudice the rights of the parties to the civil
action who are not bound by the arbitration agreement.
INTERIM MEASURES OF PROTECTION
The rules on judicial issuance of interim measures of protection contemplate
the situation:
1. Either: a. before the commencement of arbitration, or b. after the
commencement of the arbitration but prior to the constitution of the
arbitral tribunal, c. after the tribunal’s constitution but it has no power to
act or is unable to act effectively; and
2. Where a party desires to secure interim measures of protection.
A measure of protection may either be interim or temporary.
INTERIM MEASURES OF PROTECTION
The parties may request from the court, the following interim measures:
1. Preliminary injunction directed against a party to arbitration;
2. Preliminary attachment against property or garnishment of funds in the
custody of a bank or third person;
3. Appointing of a receiver
4. Detention, preservation, delivery or inspection of property;
5. Assistance in the enforcement of an interim measure of protection granted
by the arbitral tribunal, which it cannot enforce effectively.
The following rules are the rules of procedure for the application for interim
measures of protection with the court:
1. Petition
2. Comment/opposition
3. Court action
4. Relief against court action
TEMPORARY ORDER OF PROTECTION OR TEMPORARY PROTECTIVE
MEASURE
A TPM or TOP, is an injunctive relief the office of which is to preserve the
property subject matter of the arbitration, prevent the disposition or concealment or
prevent the relief prayed for from becoming moor and academic, during the period
that the court is resolving the application for interim measure. A TOP or TPM is
applied for ex parte, is immediately executory and has a lifetime of only 20days. The
court under the following conditions may issue a TOP or TPM:
ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
1. There is an urgent need to a. preserve the property; b. prevent the
respondent from disposing of, or concealing the property; or c. prevent the
relief prayed for from being illusory because of prior notice.
2. The petitioner shall post a bond to answer for any damage that the
respondent may suffer;
3. It shall be valid only for 20days from the service on the party required to
comply unless extended but not for more than 20days;
4. During the 20day period and any extension the court shall determine the
propriety of issuing the principal interim protective measure requested;
and
5. It can be lifted by the respondent by posting an appropriate counter-bond
as determined by the court.
A TPM or TOP is similar to a TRO in that these measures are temporary in
character, intended to ensure the efficacy of the principal relief and have as a general
rule, a lifetime of 20days. They are, however, different in the following respects:
1. The effectivity of TOP or TPM is susceptible of extension for not more
than 20days, while TRO is non-extendible and becomes functus officio
after the lapse of 20days from the service.
2. A bond is required for TOP/TPM, unlike a TRO which does not generally
required the posting of a bond. Instead, a bond is required for the issuance
of a writ of preliminary injunction.
3. And A TOP/TPM may be lifted through the posting of a counter-bond,
which is not true of TRO. Instead, a counter-bond may lift a writ of
preliminary injunction.
PREFERENCE FOR ARBITRATION
The rules on interim measures of protection recognize the principle of
preference for arbitration over judicial proceedings. The following instances illustrate
this principle:
1. Any court order granting or denying an interim measure of protection is
without prejudice to the subsequent grant, modification, amendment,
revision, or revocation by the arbitral tribunal.
2. An interim measure of protection issued by the arbitral tribunal shall upon
its issuance be deemed to have ipso jure modified, amended, revised, or
revoked an interim measure of protection issued by the court to the extent
that it is inconsistent with the subsequent interim measure of protection
issued by the arbitral tribunal.
3. Any question involving a conflict or inconsistency between an interim
measure of protection issued by a court and one issued by an arbitral
tribunal shall be immediately referred by the court to the arbitral tribunal,
which shall have the authority to decide such question.
4. The court shall defer action on any pending petition for an interim measure
of protection filed by a party to an arbitration agreement arising from or in
connection with a dispute there under upon being informed that an arbitral
tribunal has been constituted pursuant to an agreement.
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5. And the court shall assist in the enforcement of an interim measure of
protection issued by the arbitral tribunal, which the latter is unable to
effectively enforce.
APPOINTMENT OF ARBITRATORS
The rules on judicial appointment of arbitrators apply if:
1. There is failure to appoint an arbitrator under the following circumstances:
a. Where any of the parties in an institutional arbitration failed or
refused to appoint an arbitrator or the parties have failed to reach
an agreement on the sole arbitrator or when the two designated
arbitrators have failed to reach an agreement on the third or
presiding arbitrator and the institution under whose rules arbitration
is to be conducted fails or is unable to perform its duty as
appointing authority within a reasonable time from receipt of the
request for appointment.
b. Where the arbitration is ad hoc and the parties failed to provide a
method for appointing or replacing an arbitrator or substitute
arbitrator or the method agreed upon is ineffective and the National
President of IBP or his duly authorized representative fails or
refuses to act within period as may be allowed under the pertinent
rules of the IBP or within the absence of such request for
appointment;
c. Where the parties agreed that their dispute shall be resolved by 3
arbitrators but no method of appointing those arbitrators has been
agreed upon and the parties and subsequently, the appointing
authority fails or refuses to appoint the arbitrator within reasonable
time from receipt of the request to do so; and
2. Any party or the appointed arbitrators request the court to act as the
appointing authority and appoint the arbitrator or 3rd arbitrator as the case
may be.
Hereunder the rules of procedure for the judicial appointment or arbitrators:
1. Petition
2. Comment/opposition
3. Court action
4. Relief against court action
CHALLENGE TO APPOINTMENT OF ARBITRATOR
The rules on judicial challenge to the appointment of arbitrators apply to the
following situation:
1. The challenge to the appointment of an arbitrator before the arbitral
tribunal is not successful and the appointing authority fails or refuses to act
on the challenge within period of time as may be allowed under the
applicable rule or in the absence, within 30days from receipt of the request;
and
2. The aggrieved party want to secure judicial action on the challenge.
ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
The procedure for the challenge to the appointment of an arbitrator before the
court is as follows:
1. Petition
2. Comment/opposition
3. Court action – the court has any of the following options in resolving the
petition: a. grant the petition by removing the challenged arbitrator; b.
dismiss the petition if there is no merit; c. allow the challenged arbitrator
to withdraw; d. accept the challenge and remove the arbitrator if: 1. The
party or parties who named and appointed the challenged arbitrator agree
to challenge and withdraw the appointment; 2. The other arbitrators in the
tribunal agree to the removal of the challenged arbitrator; or 3. The
challenged arbitrator fails or refuses to submit his comment on the petition
or the brief of legal arguments as directed by the court or he fails to object
to his removal
4. No relief against court action – any order of the court resolving the petition
shall be immediately executor and shall not be subject to MR, appeal or
certiorari.
TERMINATION OF MANDATE OF ARBITRATOR
The rules on the judicial termination of mandate of an arbitrator apply when:
1. An arbitrator becomes de jure or de facto unable to perform his functions
or for other reasons fail to act without undue delay;
2. The arbitrator, upon request of any party, fails or refuses to withdraw from
his office;
3. The appointing authority fails or refuses to decide on the termination of the
mandate of the arbitrator within the period of time as may be allowed
under the applicable rule or in the absence, within 30days from the time
the request is brought before him;
4. Any party seeks judicial action in terminating the mandate of an arbitrator.
The procedure for the judicial termination of the mandate of an arbitrator is as follows:
1. Petition
2. Comment/opposition
3. Court action
4. No relief against court action
ASSISTANCE IN TAKING EVIDENCE
The rules on judicial assistance in taking evidence apply in the following
situation:
1. There is pending arbitration, whether domestic or foreign;
2. A party desires to present evidence or the arbitral tribunal ordered the
taking of evidence, necessitating court assistance, and
3. The evidence is sought from a person, including a representative of a
corporation, association, partnership or other entity other than a party to
the arbitration or its officers found in the RP.
They correspond to the different classes of evidence under the Rules of Court thus:
ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
1. On testimonial evidence:
a. To comply with a subpoena ad testificandum;
b. To appear as witness before an officer for the taking of his
deposition upon oral examination or written interrogatories.
2. On documentary:
a. To comply with a subpoena duces tecum;
b. To allow the examination and copying of documents.
3. On real evidence:
a. To allow the physical examination of the condition of persons or
the inspection of the things or premises and when appropriate to
allow the recording or documentation of the conditions of persons,
things, or premises.
The foregoing enumeration of the types of court assistance in taking evidence
under rule9.5 of the Special ADR rules is not exclusive.
The arbitral tribunal is not clothed with the authority to cite parties in
contempt. However, the court may impose sanctions, including the citation for
contempt, against the persons who violate its orders issued in assisting arbitral
tribunal in taking evidence.
The procedure for judicial assistance in taking evidence is as follows:
1. Petition
2. Comment/opposition
3. Court action
4. Relief against court action.
CONFIDENTIALITY/PROTECTIVE ORDER
The protective order referred to under the rules on judicial enforcement of
confidentiality is different from the interim protective measures under rule5 of the
special rules. The protective order under rule10 of the special ADR rules refers to the
judicial enforcement of the confidential nature of information disclosed or obtained
during an ADR proceeding.
The rules on confidentiality and protective orders apply when:
1. An ADR proceeding is pending;
2. A party, counsel or witness disclosed information or was otherwise
compelled to disclose information;
3. The disclosure was made under circumstances that would create a
reasonable expectation on behalf of the source, that the information shall
be kept confidential;
4. The source of the information or the party who made the disclosure has the
right to prevent such information from being disclosed;
5. The source of the information or the party who made the disclosure has not
given his express consent to any disclosure; and
6. The applicant would be materially prejudiced by an unauthorized
disclosure of the information obtained or to be obtained during the ADR.
ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
The benefit of the rules is available not just for arbitration proceedings, but
also for all other forms of ADR. The procedure for the judicial enforcement of
confidentiality or protective measures:
1. Petition
2. Comment/opposition
3. Court action
4. Relief against court action
CONFIRMATION, RECOGNITION, ENFORCEMENT, CORRECTION, VACATION
OR SETTING ASIDE OF ARBITRAL AWARDS
Rules 11 to 13 of the special ADR rules govern the confirmation, recognition,
enforcement, correction, vacation or setting aside of arbitral awards. The
circumstances covered by theses rules are as follows:
1. An arbitral award has been rendered either in a 1. Domestic arbitration; 2.
ICA conducted in the Philippines; or 3. Foreign arbitration resulting in a
convention award or non-convention award but with comity and
reciprocity.
2. A party seeks to 1. Confirm, correct or vacate the domestic arbitral award;
2. Recognize and enforce or set aside the ICA award rendered in the RP; 3.
Recognize and enforce the foreign convention award or the foreign as-in
convention award.
CONFIRMATION, CORRECTION
ARBITRAL AWARDS
OR
VACATION
OF
DOMESTIC
The special ADR rules clarify that judicial affirmation of a domestic arbitral
award is done through “confirmation” and not “recognition.” Recognition pertains to
the grant of legal effect by Philippine Courts to an arbitral award with foreign
elements or the basis of the authority rendering the award is an international
convention treaty or agreement.
A domestic arbitral award carries with it the presumption that it was rendered
in due course of the arbitration and is entitled to confirmation by the court. This
presumption may be rebutted by evidence of the existence to any of the grounds for
vacating or setting aside the arbitral award.
CAUSES OF ACTION AND GROUNDS
Three principal causes of action are covered by rule11 of the special ADR
rules, namely:
1. Confirmation of the domestic award, the petition for which can be filed at
any time after the lapse of 30days from receipt by the petitioner of the
arbitral award. The petition shall be granted unless there exist grounds to
vacate the award.
2. Correction or modification of the domestic arbitral award, the petition for
which must be filed not later than 30days from receipt of the arbitral award.
The grounds are as follows:
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a. Where there was an evident miscalculation of figures or an evident
mistake in the description of any person, thing or property referred
to in the award;
b. Where the arbitrators have awarded upon a matter not submitted to
them, not affecting the merits of the decision upon the matter
submitted;
c. Where the arbitrators have omitted to resolve an issue submitted to
them for resolution;
d. Where the award is imperfect in a matter of form not affecting the
merits of the controversy and if it had been a commissioner’s
report, the defect could have been amended or disregarded by the
court.
3. Vacation of the domestic arbitral award, the petition for which must also
be filed not later than 30days from receipt of the arbitral award. The
grounds are as follows:
a. The arbitral award was procured through corruption, fraud or other
undue means;
b. There was evident partiality or corruption in the tribunal or any of
its members;
c. The tribunal was guilty of misconduct or any form of misbehavior
that has materially prejudiced the rights of any party;
d. One or more of the arbitrators was disqualified to act as such under
the law and wilfully refrained from disclosing disqualification;
e. The tribunal exceeded its powers or so imperfectly executed them,
such that a complete, final and definite award upon the subject
matter submitted to them was not made;
f. The agreement did not exist or is invalid for any ground for the
revocation of a contract or unenforceable; or
g. A party to the arbitration is a minor or a person judicially declared
to be incompetent, in which case, the petition shall be filed only on
behalf of the minor or the incompetent person, and shall allege that
1. The other party had knowingly entered into a submission or
agreement with minor or incompetent; and 2. The submission to
arbitration was made by a guardian or guardian ad litem who was
not authorized to do so by a competent court.
The foregoing grounds are exclusive and the court cannot consider any other
ground.
COMBINATION OF CAUSES OF ACTION
The principle of combined reliefs is available in proceedings allowing
vacation or setting aside or correction of the arbitral award. These are the proceedings
involving domestic arbitral awards and ICA awards rendered in the Philippines, but
not for foreign arbitral awards, which cannot be vacated or set aside. The principle
allows the combination of two or more reliefs to be pleaded in the same proceeding.
The initiatory relief is that which is pleaded in the initiatory petition, while the reliefin-opposition is that prayed for in order to oppose the initiatory relief. A relief may
also be supplementary relief as in the case of a prayer for correction of an arbitral
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award in support of or in opposition to either a petition for confirmation or for the
setting aside of domestic arbitration.
Specifically, the following combinations are possible:
1. Confirmation/vacation
2. Confirmation/correction
3. Vacation/correction
The foregoing combinations may come into play in a single petition, the rules
do not allow the filing of petitions-in-opposition to vacate or correct a domestic
arbitral award beyond the reglementary period for the filing of the petition had it been
filed in the first instance. A petition for confirmation filed more than 30days from
receipt of the arbitral award and filed within the reglementary period for petitions, can
no longer be opposed via a petition-in-opposition to vacate or correct the award. This
does not prevent the oppositor from filing an opposition to the petition except that he
can no longer seek the affirmative relief of vacating or modifying the award on the
grounds provided.
A petition for vacation of a domestic arbitral award filed beyond the
reglementary period shall be dismissed but the dismissal will not render dismissible a
petition-in-opposition seeking to confirm the arbitral award. While the petition to
vacate the award was filed beyond the reglementary period has not been filed on time
and is not dismissible. Instead, the petition-in-opposition for confirmation will be
considered a petition for confirmation filed in the first instance.
Combination is possible only in the following:
1. If the petition to vacate, with a filing period of 30days from receipt of the
arbitral award, is filed first as it can be opposed by a petition-in-opposition
for confirmation, which can be filed after 30days from receipt of the
arbitral award.
2. Or if the arbitral award is received ahead by the party intending to confirm
it and it is received later by the party intending to vacate it, in which case,
the filing period for the petition to set aside the award will overlap with the
filing period for the petition for confirmation.
The rules prohibit forum shopping and multiplicity of suits. If a petition for
confirmation is already pending before a court, no petition-in-opposition seeking to
vacate the same award may be filed with any court. Any subsequent petition may be
dismissed for being violative of the rule against forum shopping or consolidated with
the petition filed earlier. If the petitions were filed simultaneously, upon motion of
either party, the cases may be consolidated in either court.
The procedural rules for the judicial confirmation, correction or vacation of
domestic arbitral awards:
1. Petition
2. Comment/opposition/petition-in-opposition
3. Reply
4. Hearing
5. Court action
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6. Relief against court action
RECOGNITION, ENFORCEMENT OR SETTING ASIDE OF ICA AWARDS
Rules 12 of the special rules govern the recognition and enforcement or setting
aside of an ICA award rendered in the RP. If the ICA award was rendered in an
arbitral proceeding conducted outside the RP, it shall be treated as a foreign arbitral
award, which in turn, may either be a convention award, as-in convention award or
non-convention award.
CAUSES OF ACTION
The following are the exclusive causes of action covered by rule12 of the
special ADR rules:
1. Recognition and enforcement of an ICA award.
2. Setting aside an ICA award
Judicial correction or modification is not available for an ICA award. Any
other judicial recourse against an ICA award, such as an appeal, petition for review or
petition for certiorari are disallowed and shall be dismissed.
The same principle allowing combinations of reliefs and dismissal of petitions
or petition-in-opposition seeking reliefs filed beyond the reglementary period
applicable to the confirmation, enforcement or setting aside of domestic arbitral
awards, are applicable to ICA award.
The proscription against forum shopping is also strictly observed in the filing
of these petitions.
GROUNDS
The grounds for setting aside an ICA award or to resist its enforcement are as
follows:
1. The party making the application furnishes proof that:
a. A party to arbitration agreement was under some incapacity or the
said agreement is not valid under the law to which the parties have
subjected to it or, failing any indication under the Philippine Law;
b. The party making the application to set aside or resist enforcement
was not given proper notice of the appointment of an arbitrator or
of the arbitral proceedings or was otherwise unable to present his
case;
c. The award deals with a dispute not contemplated by or not falling
within the terms of the submission to arbitration, or contains
decisions on matters beyond the scope of the submission to
arbitration.
d. The composition of the arbitral tribunal or the procedure was not in
accordance with the agreement of the parties unless such
agreement was in conflict with the provision of Philippine law
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from which the parties cannot derogate or failing such agreement
was not in accordance with the Philippine law.
2. Or the court finds that:
a. The subject matter of the dispute is not capable of settlement by
arbitration under the law of the Philippines; or
b. The recognition or enforcement of the award would be contrary to
public policy.
The foregoing grounds are similar to the grounds for the non-recognition of
foreign arbitral awards, while ICA proceedings in the RP are domestic arbitral
proceedings, ICA awards are treated more like foreign arbitral awards; hence, the
requirement for the recognition, rather than mere confirmation, of ICA awards.
If the party to the ICA is a minor or person judicially declared to be
incompetent, the petition to set aside the ICA award shall be filed only on behalf of
the minor or incompetent person and shall allege that 1. The other party had
knowingly entered into a submission or agreement with such minor or incompetent;
and 2. The submission to arbitration was made by a guardian or guardian ad litem
who was not authorized to do so by competent court.
Procedural Rules:
1. Petition
2. Notice, opposition and reply
3. Hearing
4. Suspension of the proceedings
5. Judgement
6. Relief from court action
RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS
A foreign arbitral award is one that is made in a other country. It includes an
ICA award rendered outside the RP. The recognition and enforcement of foreign
arbitral awards governed by the 1958 NY Convention on Recognition and
Enforcement of Foreign Arbitral Awards.
Rule13 of the special rules is applicable only to convention and as-in
convention awards. A convention award is a foreign arbitral award made in a state,
which is a party to the NY Convention. And as-in convention award is one, which,
although rendered in a state, which is not a party to NY Convention, may be enforced
and recognized by RP courts by reasons of comity and reciprocity as if it is a
convention award.
Rule13 is not applicable to foreign arbitral awards rendered in a nonconvention country, which does not extend comity or reciprocity to the RP.
Philippine courts do not have the authority to set aside, correct or modify
foreign arbitral awards they having been rendered under the authority and jurisdiction
of another state. This is rooted in the international law principle of equality among
states. Thus, no state can exercise the power to review, revise, amend, modify,
ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
supplant, set-aside, alter, revoke or cancel the decision of a foreign court or tribunal.
All that RP courts may do is to recognize them or refuse to recognize the. There is no
rule or proceeding for the vacation or setting aside of foreign arbitral awards.
The RP courts may refuse recognition and enforcement to foreign arbitral
awards on any of the following grounds:
1. The party making the application refuse recognition and enforcement
furnishes proof that:
a. A party to arbitration agreement was under some incapacity or the
said agreement is not valid under the law to which the parties have
subjected it or failing any indication, under the law of the country
where the award was made;
b. The party making the application was not given proper notice of
the appointment of an arbitrator or of the arbitral proceedings or
was unable to present his case;
c. The award deals with a dispute not contemplated or not falling
within the terms of the submission to arbitration, or contains
decisions on matters beyond the scope of the submission to
arbitration; provided that, if the decisions on matters submitted to
arbitration can be separated from those not so submitted, only that
party of the award which contains decisions on matters no
submitted to arbitration may be refused recognition;
d. The composition of the tribunal or proceedings was not in
accordance with the agreement of the parties, or, failing agreement,
was not in accordance with the law of the country where arbitration
took place;
e. The awards has not yet become binding on the parties or has been
set aside or suspended by a court of the country in which that
award was made;
2. Or the court finds that:
a. The subject matter of the dispute is not capable of settlement by
arbitration under the RP law; or
b. The recognition or enforcement of the award would be contrary to
public policy.
NO OTHER GROUND SHALL BE CONSIDERED BY THE COURT.
Procedural rules:
1. Petition
2. Notice and opposition
3. Hearing
4. Decision
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CHAPTER 10:
SPECIAL RULES OF COURT ON ADR
PROVISIONS SPECIFIC TO MEDIATION
The general rules is that the rules of procedure for court proceedings relative
to arbitration are also applicable to mediation, to a dispute subject to construction
arbitration and to other forms of ADR if more akin to arbitration than mediation,
whenever appropriate or are not inconsistent with the specific rules
The special rules govern the situation where the parties to mediation entered
into and executed written mediated settlement agreements. The parties may require
any of the following process or proceeding regarding the mediated settlement
agreements:
1. Deposit of mediated settlement agreement; and
2. Enforcement of the mediated settlement agreements.
These rules do not cover mediated settlement agreements or compromise
agreements arrived at in court-annexed mediation where the agreement is subject to
the approval of the court and is made of the judgment based on compromise.
DEPOSIT OF MEDIATED SETTLEMENT AGREEMENTS
In order for the mediated settlement to be enforceable by judicial action, it
must be deposited with the proper Clerk of Court of the RTC. At any time after a
mediated settlement agreement has been reached in a proceeding which is not courtannexed the agreement may be deposited by the parties jointly or by one of them with
notice to the other with the COC of the RTC.
The clerk of every RTC is required to keep a registry book wherein to list or
enrol chronologically all the mediated settlement agreements or settlement awards
that are deposited with the court. He shall issue a certificate of deposit to the party
making the deposit.
ENFORCEMENT OF MEDIATED SETTLEMENT AGREEMENTS
Any parties to a mediated settlement agreement, which was deposited, upon
breach, file a verified petition to enforce the agreement with the court where the
agreement was deposited. If the agreement has not been deposited, the petitioner has
to deposit the agreement first before the filing the petition in court.
The petition should contain an authentic copy of the mediated settlement
agreement and the certificate of deposit.
The adverse party may file an opposition to the petition within 15days from
receipt of notice or the service of petition.
The court shall conduct a summary hearing to determine whether or not the
mediated settlement agreement is valid and the respondent has breached the
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agreement in whole or in part, and render judgment accordingly by either enforcing
the agreement or dismissing the petition.
PROVISIONS SPECIFIC TO OTHER FORMS OF ADR
The special rules apply to early neutral evaluation, neutral evaluation, minitrial, mediation-arbitration, and any combination of the foregoing or any other ADR
form.
The general rule is that the rules of procedure applicable to the foregoing
forms of ADR shall be those agreed upon by the parties. In the absence of an
agreement, the specific rules on the foregoing forms of ADR shall be applicable. In
default, the rules on mediation or arbitration shall be applied.
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CHAPTER 11:
SPECIAL RULES OF COURT ON ADR
MOTION FOR RECONSIDERATION, APPEAL AND CERTIORARI
The SC included the special rules specific provisions on MR, appeals, SCA for
certiorari and petitions for review on certiorari. The inclusion of these provisions was
occasioned by the public policy to promote ADR and make ADR as expeditious,
inexpensive, least adversarial and effective as possible in resolving disputes and
controversies.
Special rules cover the remedies available to parties for challenging the orders,
decisions or judgments rendered by the RTC on matters relating to ADR. These
remedies are:
1. MR
2. Appeals to CA
3. SCA for certiorari
4. Appeal by certiorari to SC
All allowable and applicable remedies from judicial issuances of the RTC and
CA in ADR related cases have been enumerated in special rules. It is submitted that,
following the statutory construction principle of expressio unios est exclusion
alterious unless an intended judicial remedy is provided for in the special rules that
remedy cannot be availed.
The judicial remedies provided for should be distinguished from those
available against an order, action, inaction or award of an arbitrator, tribunal or
mediator as the case may be which have been discussed previously.
In the case of ABS-CBN BROADCASTING CORP VS. WINS JAPAN CO. (544
SCRA 308, 2009), the SC, citing INSULAR SAVINGS BANK VS. FAR EAST BANK
AND TRUST COMPANY (492 SCRA 145 2006), outlined several judicial remedies a
party aggrieved by a domestic arbitral award may take namely:
1. A petition in the proper RTC to issue an order to vacate the award on the
grounds provided for in Section 24 of RA876;
2. A petition for review in CA under rule 43 of ROC on questions of fact, of
law or mixed questions of fact and law; and
3. A petition for certiorari under rule 65 of ROC should the arbitrator have
acted without or in excess of his jurisdiction or with grave abuse of
discretion amounting to lack or excess of jurisdiction.
MOTION FOR RECONSIDERATION
A MR under rule37 of ROC may be filed on the grounds that the findings or
conclusions of the judgment or final order are not supported by evidence; more so are
contrary to law.
A party aggrieved by a ruling of the RTC in an ADR related proceeding, may
file with the same RTC in an ADR related proceeding, may file with the same RTC,
MR from the following orders or rulings within 15days from receipt of:
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1.
2.
3.
4.
5.
6.
7.
The arbitration agreement is inexistent, invalid or unenforceable;
Upholding or reversing the tribunal’s jurisdiction;
Denying a request to refer the parties to arbitration;
Granting or denying a party an interim measure of protection;
Denying a petition for the appointment of an arbitrator;
Refusing to grant an assistance in taking evidence;
Enjoining or refusing to enjoin a person from divulging confidential
information;
8. Confirming, vacating or correcting a domestic arbitral award;
9. Suspending the proceedings to set aside an ICA award and referring the
case back to the arbitral tribunal;
10. Setting aside an ICA award;
11. Dismissing the petition to set aside an ICA award even if the court does
not recognize and/or enforce the same;
12. Recognizing and/or enforcing, or dismissing a petition to recognize and/or
enforce an ICA award;
13. Declining a request for assistance in taking evidence;
14. Adjourning or deferring in a ruling on a petition to set aside, recognize
and/or enforce an ICA award;
15. Recognizing and/or enforcing a foreign arbitral award or refusing
recognition and/or enforcement of the same; and
16. Granting or dismissing a petition to enforce a deposited mediated
settlement agreement.
No MR shall be allowed from the following rulings and orders of the RTC:
1. A prima facie determination upholding the existence, validity and
enforceability of an arbitration agreement;
2. An order referring the dispute to arbitration;
3. An order appointing an arbitrator;
4. Any ruling on the challenge to the appointment of an arbitrator;
5. Any order resolving the issue of the termination of the mandate of an
arbitrator;
6. An order granting assistance in taking evidence.
The motion shall be in writing, filed with the court and served upon the other
party who shall have a non-extendible period of 15days from receipt which to file an
opposition or comment. The opposition or comment is the last pleading allowed to be
filed. The court shall resolve the motion for reconsideration within 30days from
receipt of the opposition or comment of the expiration of the period to file the same.
GENERAL PROVISIONS ON APPEAL AND CERTIORARI
The modes of review by the CA and SC of decisions or orders of the RTC are:
1. Ordinary appeal by notice of appeal on errors of fact, law or mixed fact
and law;
2. Petition for review to CA on errors of fact, law or mixed fact and law;
3. Appeal by certiorari such as:
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a. The court a quo has decided a question of substance, not therefore
determined by the SC or has decided it in a way probably not in
accord with the applicable decision SC;
b. The court a quo has so far departed from the accepted and usual
course of judicial proceedings, or so far sanctioned such departure
by a lower court as to call for an exercise of the power of
supervision;
4. SCA for certiorari when there is no appeal on any plain, speedy and
adequate remedy under the ordinary course of law;
In the allowable appeal or review in ADR related cases, the appellate or
reviewing court must take into account the following principles which should have
been observed by the RTC whose order or decision is under review:
1.
A party is precluded from filing an appeal or a petition for certiorari
questioning the merits of an arbitral award.
2.
Appeals from decision of the RTC are exceptional remedies. They
shall be allowed only on the instances provided under the special
rules and only in the manner provided.
3.
As a general rule, the grounds and infirmities provided for the
vacation or setting aside of a domestic arbitral award or ICA award
are exclusive. No other ground can be raised except if it amounts to
a violation of public policy.
4.
The court can deny recognition and enforcement of a foreign
arbitral award only upon the grounds provided for in article VI of
NY Convention. The court does not have the power to vacate or set
aside a foreign arbitral award because it was rendered by an entity
outside the RP.
APPEAL TO THE CA
Similar to rule 42 petitions, the allowed appeal to the CA from the decisions of
RTC in ADR related cases is not based on rule42 or 45 but on section 26 of ADR act
of 2004.
Under the special rules, the petition for review to the CA shall be allowed only
from the following orders of RTC:
1. Granting or denying an interim measure of protection;
2. Denying a petition for appointment of an arbitrator;
3. Denying a petition for assistance in taking evidence;
4. Enjoining or refusing to enjoin a person from divulging confidential
information;
5. Confirming, vacating or correcting/modifying a domestic arbitral award;
6. Setting aside an ICA award;
7. Dismissing the petition to set aside an ICA award even if the court does
not decide to recognize or enforce award;
8. Recognizing and/or enforcing an ICA award;
9. Recognizing and/or enforcing foreign arbitral award;
10. Refusing recognition and/or enforcement of a foreign arbitral award;
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11. Granting or dismissing a petition to enforce a deposited mediated
settlement agreement; and
12. Reversing the ruling of the arbitral tribunal upholding its jurisdiction.
The appeal shall be file within 15days from notice of the decision of RTC or
the denial of the petitioner’s MR, by filing a verified petition for review.
The CA may give due course to the petition if it finds prima facie that the RTC
committed an error that would warrant the reversal or modification of the judgment,
final order or resolution sought to be reviewed.
The filing of the appeal under this rule shall not stay the award, judgment,
final order or resolution sought to be reviewed unless the CA directs otherwise. This
rule is different from the ROC except in certain instances such as in cases governed
by the rules on summary procedure or when the prevailing party avails of the remedy
of execution pending appeal, the special rules provides one instance when the law and
the rules specifically proscribe the stay of the judgment, award, final order or
resolution subject of appeal.
Another distinction of the appeal is that the party appealing the decision or
final order or the RTC under the special rules shall be required to post a bond in favor
of the prevailing party equal to the amount of the award.
SCA FOR CERTIORARI
The availability of a SCA for certiorari under rule65 as a remedy from
decisions of RTC in ADR related cases has been settled in the case of CARGILL
PHILS. VS. SAN FERNANDO REGALA TRADING 641 SCRA 31 2011
Unlike a petition for certiorari under rule65 of ROC which can cover all kinds
of grave abuse of discretion committed by a tribunal, the SCA for certiorari under the
special rules is limited to grave abuse of discretion in the following orders of the RTC
in ADR related proceedings:
1. Holding that the arbitration agreement is inexistent, invalid or
unenforceable;
2. Reversing the arbitral tribunal’s preliminary determination upholding its
jurisdiction;
3. Denying the request to refer the dispute to arbitration;
4. Granting or refusing an interim relief;
5. Denying a petition for the appointment of an arbitrator;
6. Confirming, vacating or correcting domestic arbitral award;
7. Suspending the proceedings to set aside an ICA award and referring back
to the tribunal
8. Allowing a party to enforce an ICA award pending appeal
9. Adjourning or deferring a ruling on whether to set aside, recognize and/or
enforce an ICA award;
10. Allowing a party to enforce a foreign arbitral award pending appeal;
11. Denying a petition for assistance in taking evidence.
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Unless specifically required by the reviewing court, the public respondent
shall not appear in or file an answer or comment to the petition any pleading therein.
In petitions involving the recognition and enforcement of a foreign arbitral
award, the tribunal shall not even be included as a nominal party, but it shall be
notified of the proceedings and to be furnished with court processes.
The filing of SCA for certiorari under the special ADR does not stay the
proceedings of the lower court or arbitral tribunal. The proceedings and award under
this situation is subject to the final outcome of the pending petition for certiorari.
APPEAL BY CERTIORARI TO THE SC
The petition is not a matter of right and may be granted only for serious and
compelling reasons resulting in grave prejudice to the aggrieved party.
Rule45 of the ROC illustrated the instances when an appeal by certiorari to the
SC is warranted there under, to wit:
1. When the court a quo has decided a question of substance not determined
by the SC or has decided it in a way probably not in accord with law or
with the applicable decisions of the SC; or
2. When the court a quo has so far departed from the accepted and usual
course of judicial proceedings or sanctioned such departure by lower court
as to call for an exercise of the power of supervision.
The special rules also deemed it best to illustrate instead of enumerate the
instances when a petition for review on certiorari of the decision of the CA to SC may
be granted namely:
1.
Failed to apply the applicable standard or judicial review prescribed
in these special rules in arriving at its decision resulting in
substantial prejudice to the party;
2.
Erred in upholding a final order or decision despite the lack of
jurisdiction of the court
3.
Failed to apply any provision, principle or policy or rule contained
in these special rules;
4.
Committed an error so egregious and harmful to a party as to
amount to an undeniable excess of jurisdiction.
The SC may motu propio deny the petition on the ground that it is without
merit, or is prosecuted manifestly for delay, or that the questions raised are too
insubstantial to require consideration.
The special rules provide for petitions for review on certiorari from the
resolutions and decisions of the CA to the SC, it is silent on the availability of a
petition for review on pure questions of law direct form RTC to SC. Only judgments,
final orders, or resolutions of the CA as being reviewable in a petition for review on
certiorari.
Hence, a petition for review direct to the SC from a judgment, final order or
resolution of the RTC in the ADR related cases enumerated in rule1.1 is not available.
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CHAPTER 12:
CONSTRUCTION DISPUTE ARBITRATION
CONSTRUCTION DISPUTE
Refers to all on-site works on buildings or altering structures, from land
clearance through completion including excavation, erection and assembly and
installation of components and equipment.
Construction dispute shall include those between or among parties to, or who
are otherwise bound by an arbitration agreement, directly or by reference, whether
such parties are project owner, contractor, subcontractorm fabricator, project manager,
design professional, consultant, quantity surveyor, bondsman or issuer of an insurance
policy in construction project.
CONSTRUCTION ARBITRATION UNDER ACT 2004
The ADR act of 2004 not only affirmed the original and exclusive jurisdiction
of CIAC over construction disputes, but also strengthened it to include those between
or among parties to, or who are otherwise bound by an arbitration agreement, directly
or by reference whether such parties are project owner, contractor, subcontractor,
quantity surveyor, bondsman or issuer of an insurance policy in a construction project
and even if the arbitration is commercial in character.
The ADR act directs the RTC before which, is presented a construction
dispute for resolution, upon becoming aware that the parties had entered into an
arbitration agreement, motu propio or upon motion made not later than the pre-trial,
not just to dismiss the case, but also to refer the parties to arbitration by the CIAC,
unless all the parties to the arbitration, assisted by their counsels, submit to the court a
written agreement making the court the body that will resolve the dispute.
The request for the dismissal of the action and the referral to the CIAC for
arbitration shall be made through a verified petition.
The other party may file an opposition to the motion on or before the dare set
for the hearing of the motion.
An order dismissing the case and referring the dispute to arbitration by the
CIAC is immediately executory.
CONSTRUCTION INDUSTRY ARBITRATION COMMISSION
It is the quasi-judicial agency accorded with the jurisdiction to resolve
disputes arising from contracts involving construction in the Philippines.
The CIAC is an agency under the Construction Industry Authority of the
Philippines (CIAP) and is administratively attached to DTI.
The CIAC has the following functions:
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1. To formulate and adopt an arbitration program for the construction
industry;
2. To enunciate policies and prescribe rules and procedures for construction
arbitration;
3. To supervise the arbitration program, and exercise such authority related
as regards the appointment, replacement, or challenging of arbitrators; and
4. To direct its offices and employees to perform such functions as may be
assigned to them from time to time.
The CIAC has undergone various reorganizations and its rules of procedure
have been revised a number of times. Its first rules of Procedure governing
construction were promulgated in August 1988.
JURISDICTION OF THE CIAC
The jurisdiction of the CIAC is conferred by EO 1008, specifically section 4
provides that:
“SECTION 4. Jurisdiction – the 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, whether the dispute arises before
or after the completion of the contract or after the abandonment or breach.”
The jurisdiction of the CIAC may include but is not limited to the violation of
specifications for materials and workmanship; violation of the terms of agreement;
interpretation and/or application of contractual provisions; amounts of damages and
penalties; commencement time and delays; maintenance and defects; payment default
of employer or contractor and changes in contract cost”
Excluded from the CIAC’s jurisdiction are disputes arising from employeremployee relationships, which are covered by the Labor Code. Also claims for moral
damages, exemplary damages, opportunity or business losses in addition to liquidated
damages and attorney’s fees which are non-arbitrable unless the parties acquiesce or
mutually agree to submit these issues for arbitration and to abide by the decision of
the arbitrator thereon.
EO 1008 is a special law. Hence, it takes precedence over BP 129 a general
law which vests jurisdiction to MTC and RTC over certain civil actions, including
those breach of contract. Thus, while ordinarily, civil actions for breach of contract
are within the jurisdiction of the regular courts, complaints for construction disputes,
including the breach of construction contracts, must be filed with the CIAC, provided
that the parties agree to submit their dispute to arbitration.
The doctrine of primary jurisdiction dictates prior recourse to the CIAC for
construction disputes and parties over which it has acquired jurisdiction. The same
doctrine precludes courts from resolving construction disputes over which jurisdiction
has been initially lodged with the CIAC by reason of its special knowledge,
experience and services are generally accorded great respect if not finality by the
courts having been rendered by an agency in a better position to pass judgment.
ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
For the CIAC to acquire jurisdiction, the parties to dispute must be bound by
an arbitration agreement in their contract or subsequently agree to submit the same to
voluntary arbitration. The jurisdiction of CIAC is dependent on the agreement and
consent of the parties to the construction contract, to submit their dispute to arbitration
and that, absent consent, the CIAC cannot validly proceed against a party for lack of
jurisdiction.
An arbitration agreement or a submission to arbitration must be in writing but
it need not be signed by the parties, as long as the intent is clear that the parties agree
to submit a present or future controversy arising from a construction contract to
arbitration.
In the event that a party has already filed a complaint before the regular courts
involving a dispute within the jurisdiction of the CIAC, the proper procedure to
enable the CIAC to decide on the dispute is to request the stay or suspension of the
judicial action as provided under the arbitration law. The court is directed by the ADR
act not just to dismiss the complaint falling within the CIAC’s jurisdiction, but also to
refer the case to the CIAC.
The principle of Jurisdiction by estoppel is equally applicable to the CIAC.
When a party to an arbitration conducted by the CIAC has actively participated in the
proceedings before the CIAC, even going to the extent of seeking affirmative relief,
active participation is tantamount to an invocation of, or at least an acquiescence to
CIAC’s jurisdiction notwithstanding that party initially assailed the CIAC’s
jurisdiction.
RULES OF PROCEDURE IN THE CIAC
In the proceedings before the CIAC, judicial rules of evidence are not
controlling and the technicalities of law or procedure may be disregarded in order to
ascertain the facts in each and every case by every reasonable means. The arbitral
tribunal of the CIAC is mandated to act according to justice and equity and merits of
the case without regard to the technicalities or legal forms and need not be bound by
any technical rule of evidence.
The following are the procedural rules in the CIAC:
1. Complaint/request for arbitration – the initiatory pleading which must
be filed with the Secretariat of the CIAC.
2. Answer – within 3days from filing, transmit to the respondent a request
for his answer. Without prejudice to extensions of time if warranted, the
respondent has 15days from receipt of the request for arbitration or
complaint within which, to file his answer. Failure of the respondent to file
an answer or his refusal to arbitrate shall not stay the proceedings as long
as the jurisdiction of the CIAC has been properly invoked by the filing of
the request for arbitration in accordance with CIAC revised rules. If,
before the award, the respondent appears and offers to present his evidence,
the tribunal may, for justifiable reasons, reopens the proceedings, require
him to file his answer and allow him to present evidence.
3. Reply – claimant may file a reply to the counterclaim within 15days.
ALTERNATIVE DISPUTE RESOLUTION BY: ATTY. GABRIEL ROBENIOL
4.
5.
6.
7.
8.
9.
Appointment and acceptance of arbitrators –
Challenge to arbitrators –
Preliminary conference and terms of reference –
Arbitration proceedings –
Award –
Execution of the award –
JUDICIAL REVIEW OF CIAC DECISIONS
A petition for review from a final award of the CIAC may be taken by any of
the parties to the CA within 15days from receipt in accordance with rule43. The
petition is based on errors of fact, law or mixed.
The petition shall not stay the execution of the final award unless the CA
issues a TRO and/or writ of preliminary injunction.
In the absence of any showing of grave abuse of discretion, courts must
sustain the factual findings of the CIAC arbitrator this being in accordance with the
established principle that the determination of certain questions of fact falling within
the peculiar technical expertise of an administrative agency, must accorded great
respect, if not finality by courts. The court will not interfere in matters which are
addressed to the sound discretions of government agencies entrusted with the
regulation of activities coming under the special technical knowledge and training of
such agencies.