THE
ALTERNATIVE DISPUTE
RESOLUTION
AND
THE ARBITRATION LAW
(With Allied Laws, Rules and Regulations)
DEAN GEMY LITO L. FESTIN, LL.M.
2.
.,.I
Al
· %me
z
Doan, Polytechnic University of the Philippmos, College ot Law;
Master of Laws. San Sehastinn CollegeRecoletos,
(confer1cd with recognition bene meritus»
Author; Spacial Praceedinge: A fresight
to the bar exam
o
(2006, 2011. and 2015 editions):
Special Penal Laws: A foresight to the bar oxam sores, Volume I [2018 edition)
ad Volume II (2014 edition). Bar Review Guide in Criminal Law (215 edition)
to-author, The Judicial Affidavit Rule: Insights aud Features (2013 edtion)
Professor af Law handling Special P&ceedings and other Remedial Law suhjocts,
Criminal Law Review, Criminal Law I and II, Special Penal Laws
at Folyts&hnic University of the Philippines
and San Sebastian College--Recoletos
I'rofosor of Master ot Laws handling It~national Law and Comparative Law
nt. an Sahoastinn CollegeRecoletos, Institute of Graduate Studios;
Mu.nlatury Continuing Legal Education (MCL) Lecturer at U.E. Law Center,
Philippine Law School and
Center for Global Best Practices;
Special Lecturer. atonal Burcau of Investigation Academy;
Memnber, 2013 Criminal Law Expart Committee, U.P. Law Contor;
Former President, Integrated Ba of he Philippines, Manila I Chapter;
Former Asorinte Dann.
f) ('llze f Ia-
Philippine Copyright 2016
by
呸
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PREFACE TO THE FIRST EDITION
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The rlensa af this hook is timely ns rveent trend in the world
settle the parties' conflicting disputes is to avail of the alternative
fipute resolution and arbitration proceedings rather than through
the regular court. proceedings. As in the other hooks that the author
lad wrirten, the style is simplified yet comprehensive, and updated
with relevant derisions of the Supreme Court,
Io
ISBN 978-971-23-8267-3
No portion of this book may be copicd or
. i....-.,..k._
,.ampb.b:lts '» outlmes Ol' notes,
Do0Mb,
d d 1n
roprotlucet
·iecd
typewritten, cpi
mimeographed,
whether printed,
1o"
in different electronic devices or in any other
or
sale,
without
the
written
distribution
permission o
of
the
publisher
except
the authorized representative
legal
iu
books,
articles,
reviews.
paper,
brief passages
and judicial or ther official proceedings with proper
citation.
form.
'The author hoes bat this humble book will serve ns n guide
to tudonts ns well as to all those who find interest in altrnative
lute resolution and arbitration proceedings. May they discover
th meaningful value these approuchos offer in resolving presentls contliets.
GEMY LITO L. FESTIN
Any copy of this book without the corres-
ponding number and the authorized signature of the
author on this page either proceeds from nn illegitimate source or is in possession af one who hs no
uauthority Lo dispose of the same.
ALL RIGHTS RESERVED
109
No,኏
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typography
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CONTENTS
Part I
thapter One - Alternative Dispute Resolution
Act of 2004
,................................................................
t'hapter
1
Two - Special Rules of Court on Alternative
Dispute Resolution......................0...................-................
A. In General .......................................•........................... ._.
• Judicial Relef Before Arbitration Commences ...........
(', Judicial Relief Afler Arbitration Commences........6.
D Referral to ADR......·.s..............+8.....................
h, Interim Measures of Protection.......................0.......
' Appointment af Arbitrators.........80....80.00........0...........,
t; Challenge to Appointment of Arbitrator......................
H 'Termination of Mandate of Arbitrator........................
I. ·Assistance in 'Taking Evidence.............................0.....
.I
Confidentiality/Protective Orders............................
I Confirmation, Correction or Vacation of Award .........
n Domestic Arbitration....-.--.....8........88...8...+..3806a.....
1, Recognition and Enforcement or Setting Aside
of an International Commercial Arbitration Award...
M Recognition and Enforcement of a Foreign
\rhital Award........9·+·+86,5.· +· · .· ...,,,6+· .0..066·.· ..
N Provisions Specific to Mediation ................so...sos..
t
Referral to CIA\C.........8..............................
I'
uvisiors Specific to Other Forms of ADR.................
Motion lr Reconsideration, Appeal and Certiorari....
«)
t'apt«r 'Three Implementing Rules and Regulations
ol the Alternative Dispute Resolution At of 2004...........
t'hpter I General l'rovisions........8.8.......................
32
32
38
89
4l
41
4
44
45
45
47
4
49
Bl
51
52
52
52
56
56
56
Part II
Rule 1 -Offiee for Alternative Dispute Resolution
(QADR)
+‡‡āāā Rule 2 - The Advisory Council.............so.........%.
ƇƇ
‡
Chapter 3 Medintion .......sssrossosssss.sos.so......so....
Rule 1 -- General Provisions ......sos.s
·sos..sos.sos.%.
0኏
68
68
68
Rule - Selection RIn Medintor......................... ...Rule 3 - Ethical Conduct of n Mediator...................-.
5 XOH 4 Role of Parties and their Counsels............--.
5 XOH 5 - Conduct af Mediation.....sssssssssssss«om«..»as.+,
69
70
Rule 6 Place nf Mediation ......
Rule Effect of Agreement to Submit Dispute to ...
76
so.s..
Mediation Under Institutional Rules ......ass..
Rule -- Enforcement of Mediated Settlement
Agr0t1menl
āāāā‡‡+‡‡āāāāāāāāāāāāāāāāā
Rule 9 -- Confidentiality of Infurmation ................-.,
Rule 10 -- Fees and Cost of Mediation..........................
Chapter 4 -- International Commercial Arbitration ........
Rule I -- General Provisions........-.......+.so.so..s.,,,
Rule 2Arbitration Agreement...............-..........,,
Rule 3 -- Composition of' Arbitrl 'Tribunal.................
Rule 4 -- Jurisdiction af Arbitral Tribunal..-.....s..s....
Rule 5 - Conduct RIArbitral Proceedings........... ...,
Rule Hcogmton and Enfrcement
o
of Awards......
& KDSWHU<Domestic Arbitration.....................-.....0.......,
Rulo 1 ·General Provisions ......ssssasssss.sos»sos.-.
Rule Arbitration Agreement...........so..so..ass........
Rule 3 - Composition of $UELWDOTribunal...............,
Rule 4 - Jurisdiction of Arbitral Tribunal......s..as..
Rule 5 - Conduct of Arbitral Proceedings............80...
Rule 6 - Recognition and Enfarcement of Awards . .
Chapter 6 - Arbitration of Construction Disputes ...........,
Chapter 7 - Other ADR Forms..........................................
Rule 1 - General Prosisions ......ss ......................
Rule 2- Neutral or Early Neutral Evaluation............
Rule 3 - Mini- Trial......s.sos.sos.sos.sos.o.dos...,
5 XOH 4 - Mediation-Arbitration......s.sos.-sos........
Rule h --Costs DQG Fees.....sos. sos.ss·. ·sos-o.......
Chapter Four - Collective Bargaining; nnd
rvenwnt .....
lri-lent.l Jeers No 442... ..Artsel $ f 7LWOH 9,/RV
N
78
7.
76
77
'78
80
8!
8l
$4
85
89
91
100
toe ^H The Arbitration /DZ
KDSWHU'Two •
....es· sos+-sos.sass,ssss.ore
158
Construction Industry Arbitration Law......
,
· +apter Three Construction Industry Arbitration
''omrissin & ,$& 5 HYLVHGRules RIProcedure
' =ring Construction Arbitration.......-..ss..ss.ssss·.ssssss»
Rulo I - 3ROH\and Ohjextive9......-sos.so... ª
Rule; - Jurisdiction....sos.....+.+.++.+·+·sss++sass++»··
Rule ' +HWXHVWfor Arbitration:Complaint ........sos
Rule 4 -- Efteet of Agreement to Arbitrate...........·s»+so
Rule 5 - Answer'Counterclaim........-.·
»...........
ltule 6 - Sub:ssion nrd Communications/Notices....
Rule 7 - Confidentiality....--oossssss.sos.sos...s.«.
lRule 8 -- Gualit\cation of Arbitrators ........s»· .»·sos..
Rule 9 Nomination and $SSRLQWPHQW
of Arbitrators ule 10-- Appointment DQG Acceptance
of Arbitrators...........· s..so..»
=us.
·»sires»oms++
176
176
180
181
187
Rule 11 3 UHOLPLQDU\Conference/Terms
R/ Refei•ence
O^OH l
HQXH
ª
--·
.
+...+.............»· s++· ++++sos+· +++· ++
189
191
196
125
142
148
Rule 13 -- Arbitration Proceedings.........................»8
ltul 14 Interim Relief ....-...... •. s· so· sos+..+.s+lo Appointment of Experts........-........... ...,,,
Ile 16 -- The Arbitration ward... . .so.................s.
,QW17 lost-Award Proreeding......-..»...so+,,,,,
ate I Executive of Final Award...........................ale 19 Relief Not & RYHUHG by the Hules..................
le =5 6 PXOOClaims ....oos.sos.-· ..............6, ·
14
I44
{le-1
,4le )}
¼UQUQ@ Matter.....»ass· s-· sos· moss· s.....+..
202
10%+
11l
114
123
150
I5l
1,l
,OO
Rt
KW
UV ª
199
201
2.02
Pare III
, $6 ( '( &,'( ' IY 7 +( 6 83 5 ( 0( COURT
sol, Ie
U,5 N. dmiintrntin
WSOLāVHHā
VR
196
HR
Makati lot.ary Club Foundatinn, lnr,
@
ZSWHPKHU 013.........ss..· sos.ss..-+,-.-
Iw· lame·nt t'orpuralion v. Utility
ones· ojurtion, ;lt. Na. 196i50J,
us ''4, '/1[.A..as.
205
I I'l
215
c
3
Puromnes, Ine v. C'our of Appeals, GR. No, 91228,
March
8.
9.
z
19
....s· .ss+.es+.· 6866»+.+0»»+,
11.
呸`
12.
1.
14.
15.
16.
17.
18
•
o..
Chung Fu Industries (Philippines), Inc. v. Court
of Appeals, G.R. No, 96283, February 25, 1992...........
California nd Hawaiian Dugar Company, et al. v.
Pioneer Insuranee and Surety Corporation,
G.R. No. 139273, November 28, 2000........................-Asset Privatization 'T'rust v Court of Appeals,
G.RR No. 121171, December 29, 1998.......sass...as......
Agan, Jr., et al. v. Philippine International Air
Terminals Co., Inc., et al., G.. No. 155001,
May 5, 2003...
.
·· ············· .. ···· .. --Associated Bank v Court of Appeals, GK. No. 107918,
hue 14,199d................. +us+s·+coo+so+sos··+
Heirs of Augusto La. Salas, Jr. v. Laperal Realty
Corporation, et al, GR. No, 185862, Decombor 13,
1999 ... • ••• ••, ...... •, •• •••" •• ••-•,.. t
u• ••• • • • ., •,, ••,.,. •
Coca-Coca Bottlers Philippines, Inc. Sales Force
Union- PTCWO.-BALAIS v. Coca-Cola Bottlers
Philippines, Inc., G.RR. 1R 155651, July 2005 .........
National Steel Corporation v, 7 & /DQQRdel Norte
Branch 2, Iigan City, G.R. No. 127004, March 11,
t •• Ƈ
•-4
10.
•••
• • • ••• • ••.,
, •• •
B
Del Monte Corporation-USA v. CA, G.R. No. 136154,
February 7, 2200l ........................................o
Jorge Gonzales and lanel of Arbitrators Y Ghmax
Mining Ltd., et al., G.R. No. 161957, January 22,
2007
.
Oil and Nntural Gas Commission Y CA and Pacific
Cement Company, Inc, G.R. No. 114823, - XO\
呸
DFA and BSP • Hon. Franco 7 Falcon, residing
Judge of RTC Br. 71 RIPasig City, G.R. No. 176657,
Septemnber l, 2DD .....---.--·.--......·.......,+· .so·+.s·+».+
Korea Technologies Co., Ltd. (KGIES) v. Hon. Alberto
A. /HUPD Presiding Judge of Br. 256, RTC Muntinlupa,
G.R. No. 143368), January 7, 2008..... ..............8..........
MCC Industrial Sales Corporation v. SHsangyong
Corporation, G.R. No. 170633, October 17, 2007........--Magellan Capital Management Corporation 0& 0& - and Magellan Capital Holdings Corp«ration 0& 7,& • Rolando M Zosn mnd Hon. Jose P Sobernna, Ar.,
G.R No. 129916, March 26, 2001..................LL
219
221
223
225
2::9
232
285
238
241
244
247
Tran#field Philippines, Inc. (TPI) • Luzon Hydro
Corporation (LHC), Australia and New Zealand
Banking Grap Limited and Security Bank
Corporation, GR. No. 146717, May 19, 2006 . . .......
20. Hutama-sea doint Operation, Inc. v. Ctra Metre
Manila Tollways Corporation, G.R. No. 180640,
April 24, 2009 ...................sos-.so.sos..sos
21
Hi-precision Steel Center, Inc. v. Lim Kim Steel
Builders, Inc. and CIAC, GR. No. 110434,
December 13, 1993.................................so........»..
22. Ruben N Barrameda, et al. v. Romeo Atienza, et al.,
C.R. No. 129175, November 19, 2001............................23. Eduardo J Marino, Jr., et al. • Gil Camilla, et al.,
U.RH. No. 132400, January 31, 2005.........s.................
24, A.D. Gothong Manufacturing Corporation Employees
Union-ALU (The Union) v. Hon. Nieves Confessor.
Secretary of DOLE and A.D. GothongManufaturing
Corporation (The Compan)y , G.. No. 113638,
November 16, 199,..............................-...............,,
25. Capitol Medical Center, Inc. (T'he Company) v. NLRC,
et al., GR. No, 147080, April 26, 2005......................
19.
263
265
270
278
276
278
Appendices
Revised Rules of Procedure Governing Construction
,'\ rl,i tration . .. .. .. . . . . . .. .. ······-···
··-·
.
285
l'executive Order No, 008..
...· sos.......sos.sos...sos· doss· ..ss»
313
epublic Act No, Bi6 ,~...,+·ssss»sos·sss.·sos+sss++· so+so%++-..
318
{IN(IT'RAJ Model Law on International Commercial
1rltration ............................-..«..............-......-..-.....
250
253
256
261
4l
e
PART I
CHAPTER ONE
ALTERNATIVE DISPUTE RESOLUTION
ACT OF 2004
REPUBLIC ACT NO. 9285
1.00 WHAT IS THE POLICY OF THE STATE REGARDING ALTERNATIVE DISPUTE RESOLUTION (ADR)?
It is the declared policy of the State to actively promote party
autonomy in the resolution of disputes or the freedom of the party to
make their ownarrangements tor~solve their disputesTowards this
end, the State shall encourage and actively promote the use of AlterratiyeDispute Resolution (ADR) as an important means to achieve
speed and impartial justice and dclog
dockets.'As such, the
St~e sball provide means for the use of ADR as an efficient tool and
court
an alternative procedure for the resolution of appropriate cases.
Likewise, the State shall enlist active private sector participation in
the settlement of disputes through ADR.
1.01 DOES R.A. NO. 9285 LIMIT THE POWER OF THE SUPREME
COURT TO ADOPT ANY ADR SYSTEM?
No, this Act shall be without prejudice to the adoption by the
Supreme Court of any ADR system, such as mediatio;n <onciliation,?
arbitration, vs any combination thereof as a me~ms of
achievingspeedy
and efficient means of resolving cases pending before all courts in the
Philippines which shall be governed by such rules as tho Supreme
Court may approve from time to time. (Section 2)
AT I
Chapter One - Alternative Dispute esolution At of 20-4
THE ALTERNATIVE DIP'UTE ILES0LUTTON
ANT THE ARBITRATION LAW
court or an officer of n government ageney, as defined in this Act, in
which a neutrul third party participates to ussist in the resolution of
issues, which includes arbitration, mediation, conciliation, early neural evaluation, mni-trial, or any combination hereof. (Section )
B) ADR Provider ; 3)
{ADR Provider; means (stitutions af persons accredited as
mediator, con@liator arbitrator, neutral evaluator, or any person
exercising similar functions in any Alternative Dispute Resolution
system. This is without prejudice to the rights of tho parties to choose
on-accredited individuals to at as mediator, conciliator, arbitrator,
or neutral evaluator af their dispute, (Section 3)
Whenever referred to in this Act, the term ADR practitioners"
hall refer ta individuals acting ass mediator, conciliator, arbitrator or
neutral evaluator. (Section )
C)
Court-Annexed Mediation
ducted under the auspices of the court, after such court has acquired
jurisdiction of the dispute, (Section 3}
Court-Referred Mediation
"Court-Referred Medint ion' means medintion ordered by a
court to ba conducted m accordance with the agreement of the parties when as action is prematurely commenced in violation of sucb
agreement. (Section $)
E)
are
Convention Award
"Convention Award means n foreign arbitral award made in n
Convention State. {Section 3)
G)
Convention State
@nvwntion Stnti" mwm n Stnts thnl
York tone# o, (Sertio •
Court as referred ta in Article 6 of the Model Law shall mean a
Regional Trial Court. (Section 3)
Mediation
I)
• means a voluntary process in which a mediator,
Mediation
selected
bywthedisputing parties, facilitates communication and negotation, and usist the parties in renching a voluntary agreement
regarding a dispute. (Section )
Mediation-Arbitration
J)
"Mediation-Arbitration" or Med-Arh is a step dspute resolution
process involving both mediation and arbitratiou. (Section 3)
)
Mini-Trial
"Mini-Trial"means a structured dispute resolution method
senior decision makers with or without the presence of a neutral
third person after which tbe pnrties seek a negotiated settlement.
(Section 3)
L)
n momhwr ofthe New
Model Law
"Model Law" means the Model Law on lnternational Commer
cial Arbitration adopted by the United Nations Commission on International Trade Law on 21 June 195 (Section 3)
M) New York Convention
"New York Conventio" means the United Nations Convention
on
R
ogiton
~
Enforcement of Foreign Arbiral Awards
approved in 158 and ratified by the Philippine Senate under Senate
Resolution Na. 71. (Section )
the
Early
. Neutral Evaluation
"Farly Neutral Evaluation" mneane an ADR procos wherein
brought together early in ua pre-trial
parties an their lawyers
phase to present summaries of their cases and receive a nonbinding
assessment by an experienced, neutral person, with cxpertiso in the
subject in the substance of the dispute. (Section)
')
The "Court" referred to in Article 6of the Model Law
H)
in which the merits of a cnse are argued before a panel comprising
r'Court-Annexed Mediation" means any mediation process con-
D)
3
N)
and
The proceeding under R.A. No, 9285
"Proceeding"means a judicial, administrative, ar other adjudictive process, incluthing related pre-hearing motions, conferences
nut discovery (Section )
1.03 ARE THE PROVISIONS OF ELECTRONIC SIGNATURES IN
GLOBAL AND E-COMMERCE ACT APPLICABLE?
Yes, the pruvions o!' the lertronic Signatures in Global and
, (omwrer Awl, ad its tplemenumn Rules
d Ryultions shall
thi et (rvtiu A)
pply t pew+wwh eo+platesl
THE ALTERNATIVE DISPUTE SOLUTION
AND THE ARBITRATION LAW
PART I
et af 2:004
5
thpter One Altrrative Dispute Keeelution
1.04 WHAT IS THE LIABILITY OF ADR PROVIDER AND PRACTTONER?
,
.6
1.07 WHAT ARE THE GUIDELINES REGARDING INFORMATION
OBTAINED THROUGH MEDIATION?
__The AD providers nnd practitioners shall have the same civil
liability for the Acts done in the performance of their duties as that
of
public officer as provided in Section 38 (1). Chapter 9, Book of the
Administrative Code of 1987. (Sectiun 5)
Information obtained through mediation proceedings shall be
subject to the following principles and guidelines.
1.05 WHAT ARE THE EXCEPTIONS TO THE APPLICATION OF THIS
ACT?
(h) A party, n mediator, or a nonparty participant may
refuse to disclose and may prevent any other person from dis.
closing n mediation communication
The provisions or this Aet shallpot appl yto resolution Gr«ele.
ment of tle following.
(a) labor disputes covered by .D, No. 44, otherwise
known as the Lnbor Code of the Philippines, ns amended ant
its Implementing Rules and Regulations;
'_
€
t?)
the civil status of persons,
I
t)
the validity of a muriae;
I -
td)
any ground for legal separation;
."
l)e
the jurisdiction of courts;
«0
future legitime;
g)
criminal liability; and
.h)
tho which bylawcannot bwcompromised.(Section 6)
V
t
,
t
¢
•
w
1.06 GIVE THE CONSIDERATIONS IN APPLYING THE PROVISIONS
ON MEDIATION.
In applyig and construing the provisions of this Chapter, considoration must. be given to:
C
j
(l) the need to promote candor of parties and meuialos
through confidentinlity of the mediation process;
(
the policy af fostering prompt, economical, nud amicable resolution of disputes in accordance with the principles of
integrity of determination by the parties; and
() the policy that the decision-mak; authority in the
rnwditinn process rot swith tle part
('ievtion )
(a) Information obtained through mediation shall be
privileged and confidential.
() Confidential Information shall not be subject tu discovery nnd shall be inadmissible in any adversarial proceeding,
whether judicial or qunsi-judicial. However evidence or information that is otherwise admissible or subject to discovery docs
not. become inadmissible or protected from discovery solely by
reason of its use in n mediation,
preceding:
tad) In such an adversarial
the following persons involved pr previously involved in a mediation
not be
confidential
obtained
during
information
to,disc
ose
l
compelled
mediation:{1) jho parties to the dispute, {2)the mediator or mediators; (3) the counsel tor the parties: {4)the nonparty participants;;(any persons hired or engaged in connection with the
mediation as secretar,y stenographer, clerk or assistant; and (6))
any other person who obtains ur possesses confidential inforration by reason of his/her profession
may
(e) The protections of rhis Act shall continue to apply
even if a mediator is fund
o
to have failed to st impartially.
•.
.
(D)
A mediator
not be called totestfy
ta provide inlormatism gathered in medi~ton. Amediator who is wrongfully
ubpuenaed shall be reimbursed the full cost of hie attorney's
fees nd related expenses. (Section 9)
may
1.08 AS A RULE, THE CONFIDENTIALITY OF INFORMATION IS
PRIVILEGE. MAY THE SAME BE WAIVED?
Yes. n privilege arising from the confidentiality of information
mny hw· waived under the following circumstanus:
pwlee rising from the confidentiality of inf'or
hw wnivutl in n reorul, or orally drin n proceedn hy th mulintqir ad the me«lintiun purl«
1)
mutt.ion ray
ll
THE ALTERNATIVE DISPUTE RESOLUTION
AND THE ARBITRATION LAW
b)
A privilege arising from the confidentiality of information may likewise be waived by a non-party participant if
the information is provided by such non-party participant.
A person who discloses confidential information
c)
shall be precluded from asserting the privilege under Section 8
of this Act to bar disclosure of the rest of the information
necessary to a complete understanding of the previously dis.
closed information. If a person suffers loss or damages as a
result of the disclosure of the confidential information, he shall
be entitled to damages in a judicial proceeding against the
person who made the disclosure.
d)
A person who discloses or makes a representation
about a mediation is preclude from asserting the privilege under
Section 9 of this Act, to the extent that the communication
prejudices another person in the proceeding and it is necessary
for the person prejudiced to respond to the representalion of
disclosure. (Section 10)
1.09 WHAT ARE THE INSTANCES WHEREIN THERE IS NO
PRIVILEGE AGAINST DISCLOSURE UNDER SECTION 97
(a) There is no privilege against disclosure under Section 9 if mediation c~mmunicntion is:
(l)
(2)
in an agreement evidenced by a rcord authenticated by all parties tu the agreement;
available to the public or that is made during
a session of a mediation which is open, or is
required by law to be open, to the pubbc;
(3)
a threat or statement of a plan ta inflict bodily
·<injury or commit a crime of violence;
(4)
(5)
internationally used to plan n erime, attompt
to commit, or commit a crime, or conceal an ongoing crime or criminal activity;
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 individuul protected by law;
but this exception doe not upply where a child
protection matter in rfrred to mediation by
n tnurt or
puhlir neuey p»rt.ieipntow in the
child pt«wt inn moltfw,
PAN'T I
Chapter One
I
Alternative Di+put= Resolution Art nt U04
(6)
Bought or offered tu prove or disprove claim
or complaint of profssional
e
misconduct or malpractice filed ugainst modiatox in a proceeding;
or
(7)
Bought or offered to prove or disprove a claim
of complaint of professional misconduet of malpractice filed against n party, nonparty participnnt., or representative of a party based on
conduct. oreurring during a mediation.
(b) There is no privilege uder Sectin
o 9 if a court or
administrative agency, tinds, after n hearing in camera, that
the party seeking discovery af the proponent of the evidence
has shown thnt the evidence is not otherwise available, that
there is a need for the evidence that substantinlly outweighs
the interest in protecting confidentiality and the mediaticn
communication is sought or offered in;
(l)
n court proceeding involving a crime or felony; ar
(22)
a proceeding to prove n claim or defense that
under the law is sufficient to reform or avoid a
liability on a contract arising out of the media-
Lion.
1.10 MAY A MEDIATOR BE COMPELLED TO PROVIDE MEDIATION
COMMUNICATION?
No, a mediator may not be compelled to provide evidence of n
mediation communication or testify in such proceeding.
1.11 WHAT MAY BE ADMITTED WHEN A MEDIATION COMMUNICATION IS NOT PRIVILEGED UNDER AN EXCEPTION IN
SUBSECTION (a) or (b)?
If a mediation communication is not privileged under an
wept.ion in subsection (a) or (b), only the portion of the communicatu necessary for the application of the exception for nondiaclosure
nay be admitted. The admission of particular evidence for the
luitel purpose of an exception does not render that evidence, or any
dlsr mw«dmtion communication, au\missible for
uther purpose
ertte 1t)
any
2.00 AS A RULE, A MEDIATOR MAY NOT MAKE A REPORT,
ASSESSMENT, EVALUATION, RECOMMENDATION, FINDING,
OR OTHER COMMUNICATION REGARDING A MEDIATION
.2
PAR'T I
TLIE ALTERNATIVE DISPUTE RESOLUTION
AND TH ARBITRATION LAW
TO A COURT OR AGENCY OR OTHER AUTHORITY THAT
MAKES A RULING ON A DISPUTE THAT IS THE SUBJECT OF
A MEDIATION. ARE THERE ANY EXCEPTIONS?
Yes, a mediator may nat make a report, assessment, evaluation,
recommendation, finding, or other communication regarding a
diation to a court or agency or other authority that makes a ruling
on a dispute that is the subject of a mediation, except:
me-
(a) Where the mediation occurrod or has terminated, or
where a settlement was reached
(b) As permitted ta be disclosed under Section 13 of this
Chapter. (Section 12)
2.01 WHAT ARE THE OPERATIVE PRINCIPLES ON MEDIATION?
The mediation shall be guided by the following operative
principles:
Before accepting a mediation, an individual who is
(a)
requested to serve as a mediator shall:
(1 make an inquiry that is reasonable under the
circumstances to determine whether there are
any known facts that a reasonable individual
wold consider 'likely to affect the impartiality
of the mediator, including a financial or personal
interest in the outcome of the mediation and
apy existing or past relationship with a party
or foreseeable participant in the mediation; and
t2)
3
Chapter One - Alternative Dispute esolutun Act. of 2Du4
disclose to the mediation parties any such fact
known or learned as soon as is practical before
accepting a mediation.
i ed in paragraph
(hb) If a mediation learns any fact descrb
of
this
section
after
accepting
u
mediation,
the mediator
(a) (1)
shall disclose it as soon as practicable.
At the request of u mediation party, an individual who is
requested to serve as mediator shall disclose his/her qualifications to
mediate a dispute
2.02 IS IT REQUIRED THAT A MEDIATOR HAS SPECIAL QUALIFICATIONS BY BACKGROUND OR PROFESSION?
qualifications of a mediator are required in the mediation agreement
r by the mediation parties. (Section 13)
2.03 MAY A PARTY WAIVE HIS RIGHT TO PARTICIPATE IN
MEDIATION?
Yes, except as otherwise provided in this Act, a party may
designate a lawyer or any other person to provide assistance in the
mediation. A lawyer of this right shall be made in writing by the
arty waiving it. A waiver of participation or logal representation
may be rescinded at any time. (Section t)
2.04 WHERE IS THE PLACE OF MEDIATION?
The parties sro frae to agree on the place of mediation. Failing
ch agreement, the place of mediation shall be any place convenient
d appropriate ta all parties.
2.05 WHAT IS THE EFFECT IF THERE IS AN AGREEMENT TO
SUBMIT DISPUTE TO MEDIATION UNDER INSTITUTIONAL
RULES?
An agreement to submit a dispute to mediation by any inst:tutun +hall include an agreement to be bound by the internal mediaion and administrative policies of such institution.
'urther, an agreement to submit a dispute to mediation under
ternational mediation rule shall be deemed iw include an agreewnt to have such rules govern the mediation of the dispute and
for the mediator, the parties, their respective counsel, and nonparty
participants to abide by such rulos
2.06 IN CASE OF CONFLICT BETWEEN THE INSTITUTIONAL
MEDIATION RULES AND THIS ACT, WHICH WILL PREVAIL?
In rna of conflict. bet ween the institutional mediation rules and
the- provisions of this Ac~,he lutter shall prevail ]Section 16)
2.07 WHAT ARE THE DUTIES OF THE PARTIES UPON SETTLEMENT AGREEMENT?
'T'he fullowing are tho duties of the parties upon settlement
+y'rewrnl
n.
A settlement greement following successful modintion shall bn prepared hy thu pnrtie with th· assistance of
THE ALT'RNATIVE DISPUTE RERSOLUTTON
AND THE ARBITRATION LAW
10
b.
The parties and their respective counsels shall endeavor tu make the terms and condition thereof complete and
make adequate provisions for the contingency of breach to
avoid conflicting interpretations of the agreement.
e.
'The parties and their respective counsels, if any,
shall sign the settlement agroament. (Section 17)
2.08 WHAT IS THE DUTY OF THE MEDIATOR AFTER A SETTLEMENT AGREEMENT HAS BEEN MADE?
The mediator shall certify that h/she explained the contents
of the settlement agreement to the parties in a language known to
them. (Section 17)
2.09 MAY THE PARTIES DEPOSIT THE SETTLEMENT AGREEMENT
WITH THE COURT?2
Yes. If tho parties so desire, they mny deposit such settlement
agreement with the appropriate Clerk of a Regional Trial Court of
the place wlere one of the parties resides. (Section 17
2.10 WHEN AND WHERE MAY A PARTY FILE A PETITION TO
ENFORCE THE SETTLEMENT AGREEMENT?
Where there is a need to enforce the settlement agreement,
a petition may he filed hy any of the parties with the same court
wherein the agreement was deposited, in which case, the court shall
proceed summarily to hear the petition, in accordance with such
rules of procedure as may be promulgated by the Supreme Court.
(Section 17)
2.11 MAY A MEDIATOR BECOME THE SOLE ARBITRATOR FOR
THE DISPUTE?
Yes, the parties may agree in the settlement agreement that
the mediator shall become a snle arbitrator for the dispute and shall
treat the settlement agreement as an arbitrnl award which shall be
subjeet to enforcement under R.A. No. 876, otherwise known as the
Arbitration Law, notwithstanding the provisions of E.O. No. 1008 far
mediated dispute outside of the CIAC. (Section 17)
PART I
Chapter One - Alternative Dispute Resolution At f 204
11
The parties may agree to refer one or more or all issues arising
i a dispute or during its penency to other forms of AD sach es but
uot limited to:
(a)
the evaluation of a tbird person or
(d)
a mini-trial,
(e)
mediation-arbitration, or a combination thereof.
For purposes of this Act, the use of other AD forms slzll be
v:verned by Chapter 2 of this Act except where it is combined with
titration in which case it shall likewise be governed by Chapter b
of this Act. (Section 18)
JOO WHAT LAV GOVERNS INTERNATIONAL COMMERCIAL ARBI-
TRATION?
International commercul arbitration shell be governed by the
Model Law on International Commercial Arbitration (the "Model
l.w") ndopted by the United Nations Commission on International
T'rude Law on June 21, 1985 (United Natons Document A/40/17) and
+e+omended approved on December ll, 1985. (Section 19)
O1 HOW SHOULD THE MODEL LAW BE
INTERPRETED?
l interpreting the Model law, regard shall be had to its
rrnntional origin nnd to the need fro uniformity in its interpretaton nd resort may be made to the travaux preparatories and the
+rt «f tho Secretary General of the United Nations Commission
·n International 'Trade Law dared March 25, 1985 entitled, "Internttl Commercial Arbitration: Analytical Commentary on Draft
'Tile identified by reference number A'CN. 9/264." (Section 20)
1 u2 WHAT IS COMMERCIAL ARBITRATION?
n rbitrntion is "commercial" if it covers matters arising from
all +ltiunsbimps of n commercial mature, whether contractual or not.
ttionhips of truusactions: any trade transaction for the supply or
whe of goods or services; distribution agreements; construction
of' work, vommereinl repwoentnt.on or g;ency: factoring; leasing,
volt in, vgesrim; lier, vwslmunt; financing; bnking;
.
PART I
THE ALTERNATIVE DMSPUTRESOLUTION
12
Chupter One
AND THE ARBITRATION LAW
3.03 WHO MAY REPRESENT A PARTY IN AN INTERNATIONAL
ARBITRATION?
In an mternational arbitration conducted in the Philippines,
a party may be represented by any person of his chice.
o
Provided,
that such representative, unless admitted o the practice of law in
the Philippines, shall not be authorized to appear as counsel in any
Philippine court, or any other quasi-judicial body whether or not
such appearance is in relution to the arbitration in which he appears.
(Section 22)
3.04 WHAT IS THE NATURE OF ARBITRATION PROCEEDINGS7
The arbitration proceedings, including the records. evidence
and the arbitral award, shnll be considered confidential
~nd shall not
呸 . ..
be published.
3.05 WHEN MAY THE PROCEEDINGS BE ALLOWED TO
BE PUB-
LISHED?
'I'he proceedings may be allowed to be published on the following
conditions:
(l)
with the consont of the partioa, or
() for the limited purpose of disclosing to the court
of relevant documents in cases where resort to the court is
allowed herein. Provided, however, 'T'hat the court in which the
action or tho appeal is pending may issue a protective order
to prevent or prohibit disclosure of documents or information
containing secret processes, developments, research and
other information where it is shown that the applicant shall
he materially prejudiced by an authorized disclosure thereof.
(Section 2)
3.06 WHEN MAY A COURT REFER THE PARTIES TO ARBITRATION?
A court before which an action is brought in a matter which
is the subjeet matter of n arbitration agreement shall, if at least
one party so requests not later that the pre-trial conference, or upon
the request of both parties thereafter, refre thc parties to arbitration
unless it finds that the arbitration agreement is pull nod void,
4'#
1'¥
Alternti DspatRel»non Aet of 'a04
3J.07 HOW SHOULD THE COURT INTERPRET THE ACT?7
In interpreting the Act, the court shall have due regard to the
policy of tho law in favar of arbitration. Whore notion is commenced
hiy or against multiple parties, one or more of whom are parties who
are hound by the arbitration agreement although the civil action
my continue as to those who nre not bound by sueh arbitration
:recment. (Section 25)
4 00 WHAT IS MEANT BY "APPOINTING AUTHORITY"?
- .. .
..,.__,_
Appointing Authority ~s
used i the Model Law shall mean
or institution named in the arbitration agreement as the
pointing authority; or the regular arbitration institution under
whue rules the arbitration is agreed to be conduw:ted. Where tho
rt is have agreed to submit their dispute toinstitutonnl rbit.ration
le, nd unless they have agreed to a different procedure, they
.hall tw hemmed to have agreed to procedure undor such arbitration
lesn for the selection and appointment o!' arbitrators. In ad hoc
arltrnt ion, the default appointment of nn arbitrator shall be made
h the National President of tho Integrated Bar of the Philippines
II'» « his duly authorized representative. (Section 26)
tle person
THE FUNCTIONS THAT MAY BE PERFORMED BY
APPOINTING AUTHORITY?
«01 WHAT ARE
I'he functions referred to in Articles 11(3), 11(4). 136, and 14(1)
Model Law shall be performed by the Appointing Authority,
nlu the ltt.er shall fail or refuse to act within 30 days from receipt
t th
·t
the
rvquet in which case the applicant may
27)
renew
the application
wth the (ourt. (Section
Article
I1(9), 11(4), 1363), and 14(1) of the Model Law refer to
he· lllowmy;
Arte!e l1. Appointment of arbitrator s
Article 11()
"Walin such agreement,
(nu in ens arbitration unth thre arbitrators each part
ht!l appont one arhitrutor, and the two arbitrators thus
punter! hull appoint the third arhnrator; it a party fails tu
ppwnt the «nbitratur within thuty «drys of receipt nf a request to
to o [rou th ther purtv, r f th· t a hitrows {it to agree
• tle thr«d whitrtor within thirty hys f their ppntment.
o
4Au
t.
val-othh.tf
e.
+
•
t
-a
•
.
TIE AMIE.NAT!VE DISPU'T RESOLUTION
AND THE ARBITRATION LAW
PART I
Chapter One - Alternative Dispute Resolution Aet of 2004
(is,) in an arbiratun with n sole arbitratur, if the parties
are unable to agree on the arbitrator, he shall be appointed, por
request of prrty, by the court or other authority specified in
4.03 WHEN MAY A REQUEST FOR INTERIM MEASURE BE MADE?
4
Article 6.
Article 11(4) "Where, under an appointment procedure
agreed upon hy the parties,
(a)
apurtyfailslouct«+required under surh prordure, or
(b) the parties, or two arbitrators, are unable to reach an
agreement expected of them urder suwh pruwrdur, or
a third part. including an institution, fails to
perform any function entrusted to it under such procedure, any
party ray request the court or other authority specified in Article
6 to take the necessary tasture, unless the agreement on the
appointment procedure prouides other means for securing the
appointment.
(c)
Article 13, Challenge procedure
Artiele 13()
"If a challenge under any procedure
agreed upon by the parties or under the procedure of paragraph
42) of tis article is mot successful, the challenging party may
request, within thirty days after hating received rotie of the
decision rejectg the challenge, the court or other authority
p+ ificet in Article 6 ta deride or the challenge, which dcciion
hail he hject tu no appeal: white such a request is pending.
he arbitral tribunal, including the challenged arbitrator, may
eontine the arbitral proceedings and make an auurd,"
After constitution of the arbitral
.
"If an arbitrator becomes de jure or
de faeto urable to perform his functions or for other reasons
fails to act withot undue delay, his mandate terminates
if he withdraws from his office or if the parties agree on the
termination. Otherwise, if a controversy remains concerning
uny of these grounds, nay par!y muy request the court or other
authority specified in Article to decde on the termination of
~
the mandate, which decision shall be subject to no appeal,"
4.02 MAY A PARTY REQUEST FOR AN INTERIM MEASURE OF
PROTECTION?
n
Yes It is not incompatible with an arbitration agreement for
party to
request, before constitution of the tribunal, from a Court
..
during arbitral
roceedings, a request for an interim measure of protection ormodiieation thereof, may be made with the arbitral tribunal or to the
p
·rtent that the arbitral tribunal has no power to act or is unable to
et effectively, the request may be made with the Court. (Section 28)
4.04 WHEN IS THE ARBITRAL TRIBUNAL DEEMED CONSTITUTED?
'T'he arbitral tribunal is deemed constituted when the sole arbirator or the third arbitrator who has been nominated, has accepted
he nomination and written cornmunication of said nomination and
weptance has been received by the party makingrequest. (Section 28)
405 WHAT ARE THE RULES ON INTERIM OR PROVISIONAL
RELIEF?
'I'he following rules on interim or provisional relief shall be
·hew·rved:
(1) Any party may request that provisional relief be
ranted against the adverse party.
(2)
Suh relief may be granted:
(i)
to prevent irreparable loss or injury;
(ii)
to provide security for the performance of any
obligation;
Artale i4. Falure or impossibility to act
Article 14(1)
tribunal and
15
(iii) to produce or
(iv)
preserve any evidence; or
to compel any other appropriate act or omission
(8) 'The order granting provisional relief may be condiiuel upon the provision of' security or any act or omission
pwwified in the order.
(4) Interim or provisional relief is requested by written
appliet.ion transmitted by reasonable means to the Court or
rlrit.rl tribunal as the case may be and the party against
who the relief is ought, describing in appropriate detail the
pr@rise relief, the party ngainst whom the relief is requested,
tl rounds for tle rehof, md evidence supporting the request.
j
TIE AI 1ARNN'W DISPLTTE RESOLUTION
At» TH, AMIITRATION LAW
16
PART I
17
Chapter One Alternative Dispute Resolution Act f 2I0M
Either pnrty my apply with the Court for assistance
in implementing or onforcing an interirn measure ordered by
(6)
an arbitral trbuul
.-a
to be used shall tie. Englishin internatiora] arbitration, and English
or Filipin~ for domestic arbitration; unless the arbitral tribunal shall
detern~ne different another language or languages to be used in
or
A party who loss not comply with tbe order shall be
liable for all damages resulting from noncompliance, including
all expenses, and reasonable attorney's lees, paid in obtaining
the order's judicial enforcement. (Section 28)
the proceeding. This agreement or determination, unless otherwise
specified therein, shall apply to any written statement by a party,
ny hearing and any award, decision or other communication by the
nrbtral tribunal.
4.06 WHAT OTHER INTERIM MEASURE MAY AN ARBITRAL
'T'he arbitral tribunal may order that any documentary evidence
hall be aeeonpanied by a translation into the language or languages
reed upon by the pnrties or determined in accordance with para:raph 1 of this section. (Section 3I)
(7)
TRIBUNAL GRANT?
Unless otherwise agreed by the parties, the arbitral tribunal
may, at the request of a party, order uny party to tuke such interim
measures of protection as the arbitral tribunal ma y consider
necessary in respect of tbe subject mater of the dispute following
tho rules in Section 28, paragraph 2. Such intorim measuros may
include but shall not be limited to preliminary injunction directed
against a party, appointment of receivers or detention, preservation,
inspection of property thnt. is the subect of tho dispute in arbitration.
Either party may apply with the Court for assistance in implementing
or enforcing an intorim measures ordered by an arbitral tribunal.
(Section 2)
4.07 WHAT IS THE RULE ON THE VENUE OF THE ARBITRATION
PROCEEDINGS?
The parties are free to agree on the plHce af arbitration. Failing
such agreement, the place of arbitration sball be in Metro Manila,
unless the arlitral tribunal, having regard to the circumstances of
the cnse, including the convenience of the parties shall decide on n
different place of arbitration. (Section 30)
4.08 WHERE SHOULD THE MEMBERS OF
NAL HOLD THEIR MEETING?
THE ARBITRAL TRIBU-
Domestic arbitration shall continue ta be governed by R.A. No.
76, otherwise known as "The Arbitration Law' ns amended by this
t'hapter. The term "domestic arbitration" as used herein shall mean
w arbitration that is not international as defined in Article (3) of the
Madel Law. (Section 32)
5.01 IS THE MODEL LAW APPLICABLE TO DOMESTIC ARBITRATION?
8,
Yes. Articles 10, 11, 12, 13, 14. 18. and 19, and 29 to 32 of the
Model Law and Sections 2 to 1 of the Chapter 4 of the Act shall
·ppl to domestic arbitration. (Section 33)
Articles 8, 10, 11. 12, 13, 14, 18, 19, 29, 30, 31, 32 of theModel
law provide that:
Article 8. (1) A curt befre whch ar etioat is brought in
or matter which is the au~ject of an arbitration agreement shall,
if a puriy au requeats ot later than when submitting hi first
statement on the substance of the dispute, refer the partes to
rbitratoe wntess it {rads that the agreement is nail an! uuad,
o
The urbitral tribunal may, unless otherwise agreed by the
parties, moot at any place it considers appropriate for consultation
among its members, for hearing witnesses, expert, or the parties,
ur for inspection of goods, other property or documents. (Section 30)
4.09 WHAT IS THE LANGUAGE TO BE USED IN THE
PROCEEDINGS?
5.00 WHAT LAW GOVERNS DOMESTIC ARBITRATION?
ARBITRAL
inoperative? or incapable of being performed.
(2)
Where an action referred to in paragraph () of this
heen hruught, arbitral procasdingta may neverthelasa
hw· rammeneed or continued, and an award may be made, while
hr sue
wudig be[are ihe court
rtwele hu
Article [0. {'The purtie are {roe t determine the amber
of utuwt,
THE ALTERNATIVIL DISPUTE RESOLUTION
ART I
AND THE ARBITRATION LAW
Chapter One Altrive Dispnte Resoiuton Act of 2001
Article 11, {1) No person shall be precluded by reason of
his nationality from acting ae an arbitrator, unless otherwise
agreed by the parties.
apointment
p
of an independent and impartial arbitrator and, in
the case of a sole or third arbitrator, shall take into account as
well the advisability of appoiu:ing an arbitrator of a nationality
other than those of the parties.
I8
The parties are free to agree on a procedure of
(2}
cppointing the arbitrator or arbitrators. subjet
r to the prouisions
af paragraphs (4) urd (5) of this article.
(3)
Failing such agreement,
(a}
(b)
Article 12. (1) When a person is approached in connectiur
with his possible appointment as an arbitrator, he shall disciose
any circumstances likely to giwe rise ta justifiable doubts as io
his impartiality or independence. An @rhtrator from the tne of
in an arbitraton uth three arbitrators, each
party shall appoint ore arbitrator, and the
two arbitrators thus appointel shall appoint
the third arbitrator;: if a party fils
a to appoint
the arbitrator within thirty days of receipt of a
request to do so from the other party, or if the tuo
arbitrators fail to agree on the third arbitrator
within thiriy days of their appointment, the
appointment shall be made, upon request af n
party, by her curt or ather authority specifed
in Article 6;
his appointment and throughout the arbitral proceedings, shall
without delay disclose any such circumstances to the parties
an arbitration ith a sole arbitrator, if he
Article I3. (1) Te perties are free tu agree o a procedure
for challenging an arbitrator, subject to the provisions of
paragrup (3) of this article.
in
parties are unable tu agree on the arbitrator, he
shall be appointed, upon rqe uest of a party, by
the curt or other authonty specified in Article 6.
Were, under an appointment procedure cgreed
(1)
upon by the parties,
(a)
a party fils
a to art as requind nnder such procadre, or
(h
the parties, or two arbitrators, are unable to
receh an agreement expected of them uder
suc procedure, or
{e)
19
a third party, including an instituton, fails tu
perform any function emrusted to it under sch
procedure, any party may request the court ur
other ethority specified in Article 6 to take the
necessary measure, unleas the agreement an the
appointment procedure provides other means
for securig the appointment.
(5)
A dreinon on a matter entrste! by parugraph ()
ur (4} af this rtile tu tie tot or other authority specified
in Awtiele
shall h hjer! t nu pent 'Th· rourt or other
fhrit, t ppouutun
rb#mfr, halt hue «de rt'garul to
unless they haue already been informed of them by him.
(2) An arbitrator may bechalienged orly if circumstances
exist that give rise to justifiable doubts as to his itnpcrtiality or
independence, or if he does nat possess qualifications agreed to
by the parties. l party may challenge an arbitrator appointed
by him, or in whose appointment he has participated, only for
reasons of which he becomes aware after the appointment has
been made
(2)
Failing sch agrement,
e
party who intends to
day after heroaing
«care of the constitution of the arbitral tribunal ar after
becoming aware of any cireurstance referred to in Artele 1(2)
a
challenge an arbitrator shall, within fftecn.
send wntten statement uf the reasons for tie challenge to the
arhtral tribunal. Unless the challenged arbitrator withadraus
from his office or the other party agrees to the challenge, the
arbitrul tribunal shalt decide on the ehalieng.
If a clallarge antler any procedure agreed upon by
(3)
the parties or under the procedure of paragraph (2) of this articie
is not successful, the challenguus party may request, within
thirty uya after uing received notice of the decision rejecting
the challenge, the court or other authority sperife! in Article 6
tu decide on the challenge, which decision shall be subject to no
appeal; while such a request is perdirg, the arbitral tribunal,
ineludmg the challenged arbitrator, may tontine the arbitral
prorelings and make an award.
Article 14, (1) If an arbitrator bcoes de jure or de facto
utblv tn perfort ht [urn or for ti reasons fails to art
ithul ml delv, hiss note twrmates if he rithadraus
TIE ALTERNATIVE DISPUTE RESOLUTION
4NT THF ARBITRATION LAW
PART I
Chaptor Ce Alternative Dispute Reoltion Act f 200t
any pry
(3) The awarad shall sate its date and the place of
arbitration as determined in accordance with Article 20(I). The
award shall be deemed to have been made at that place
() If, under this Article or Article 18(2), an arbitrator
withdraws from his office or a party agrees to the termination
nut mply acceptance
of the mandate of un arbitrator, this
of the validity of any ground referred to in thin Article or Article
trators in accordance with paragraph (l) of thia article shall be
delivered to each party.
mnay request the euuwt or ther authority spevifei rt in
Article to decicie on the termination of the mandate, which aleci8ion shall be styect ta no uppeul,
oea
2r
Article I8. The parties shall be treated with equality and
euch party skt be giver a full opportuit of presenting hs
cu8e.
Article 19. ( Subject to the provisions of this Law, the
agree on the procedure tu he fallowed by he
awbitral tribunal in conducting the proceedings
(4)
After the award ts made, a copy signed by the arbi.
Article 32. (1) The arbitral proceedings are terminated
by the final award or by an order oaf the arbitrcl tribunal in
accorduuce with paragraph () of this artcie.
(2)
The arbitral tribunal shall issue an order for the
termiaton of the arbitrn! proceedings when:
(a)
pries are free
(2) Failing such agreement, the arbitral tribunal ma,
subjeet to the pratios uf this lat, cundei the arbitriion in
such manner as it considers appropriate. The power conferred
upon the arbitrl tr!bra! ineles the power to determine the
art misstbilty, relevance, materiality and weight of any evidence.
Article 29. In arhitral provevding
bunal reoogizes a legitimate imterest on his part
i obtaining a final settlement of the dispute;
(b)
the purties agree on the termination of the
proceeding8;
(e)
the arbitral tribunal finds that the continuation
pf the proceedings has for any other reason
become unnecessary or impoible.
ith more thon one
rbrator, any decaon or the arbitral triaual shall be made,
Pless otherwise agreed by the urties, by a zuajority of all its
members. Hou«er questions of procadur may be decided by
rt presidg
arbitrator, if so authorized by the parties ar all
i
nrrbers of le arbitral tribunal,
Article 30. (i) If, during arbutru! proceedings, he parties
settle the dispute, the arbitrai tribunal shall terminate the
proceedings and, if requested tny the parie nnd not objected ta
hy the arbitral tbuul, record the settlement in the form of am
arbtral award ·an agreed terms,
An award on agreed terms shall he made tn
(3)
accordance with tie provisions of Article 3l and shal! state that
it is an award. Such an uward has the same status and effect as
urotler aurd on the marts of the case.
Article 1. t1) The auart shal! be made in uriting and
shai be signed by the arbitrator or rbttratars. In arbitrcl pro
ceedngs wth more than one arbitrator, the signatures of he
mnjarity of al! members of the arbitrul tribunal sail suffice,
worded that the reason tor any omitted gnatre is stated.
t??)
Tte auuarrt shall state the rraan up wlish it ia
ii, news the uses lwr tu+wa tu n» ewuou re to bw
vtl ts tn rm«l rt «grew+l tr+u+ noter Arlee ltl
yr'et st h
the claimant withdraws hia claim, unless the
reapondent objects thereto and tle arbitral tri-
{3) The mandate of the arbitral tribunal terminates
with the termination of he arbitral proceedings, subject to the
prousion of Articles 3 and 34(4).
Sections 22 to 31 of Chapter 4 of R.A. No. 9285
provide that:
Section 22. Legal Reprevsentation in International
Arbitration.
In international arbitratinn orducted in the
Philippes, a party may be presented by any person of his
choice. Provided, That such representatiue, unless admitted to
the practice of luu in the Philippines, ehall not be authorized to
appear as counsel in any Philippine court, or any other quasijudicial body whether or not such appearance is in relation to the
arbitration in which he appears.
Section 23. Confidential of Arbitration Proceedings.
The arbitration proceedings, including the records, evidence
and the urhitral award, ahall be considered confidential and
shall not be publushed except (1) uith the consent of the parties,
or (2) for the limited purpose of disclosing to the court of relevant
lacunentw in cues where rrrort to the evurt is allowed herein
lruteri, however, 'T'hot the curt in heh the ruin or the
tune et pro·ts ti and to urrvent tr
etppeof ta pending u
21
t
22
THE AI'T'ENATIVJMFITE REOLA'TI1ON
PART
AND T'HE ARBITRATION LAW
Chapter One - Alternative Duupute Reoltton Act of 204
prohibit disclosure of documents or infornution containing seeret
processes, «developments, reseaneh and other information where
it is shouun that the applicant skal! be materially prejudiced by
ah corizd dsclosuure thereof
protection or modification thereof, may be made with the arbitra!
tribunal or to the extent that the arbitrta! tribunal ha no power
to act or is uable to act etfertied, the reques may be made th
the Cort. Te arbitral tnbunal is deemed eunsatuted uhen the
sole arbitrator or the third arbitrator who has been nominated,
has accepted the nomination and written communcntion of
said nomination and acceptance las been received by the party
making request
Section 24. Referral to Arbitration.
A tort be'ore
which an action ia brought in a matter which is the subjecr
matter nf an arbitration ugrvereru hall, if at lest one purl,y
su requests not later than the pre-trial conference, or upon the
rqest of both parties thereafter, refer the partes to arbitration
unless it find thau the arbitration agreement is mull and vod,
inoperative or incapable of being performed,
Section 2. Interpretation of the Aet. In interpretng
the Act, the court shall hae due regard to the policy of the
law ir favor of arbtratin. Where ac!ion is commenced by or
against muitipie parties, one or more of whom are parties he
fb)
The following rules
shall be abs&rued'
[i) Any party may request that provision relief he
granted against the adverse party:
(2)
are bound by the arbitration agreement although the citi action
muy continue a to those trha are xot bound by such arbtrator
agreement
Section 27. What Functions May be Perfurmed by
Appointing Authority. 7'he functions refarred ta in Article
!1(), 1164), 136) and 1461 af theModel La shall be performed
by the Appointing Authority, unless the latter shall fail or refuse
to act wthi thirty (39) days from receipt of the request in hih
case the applieunt may renew the application with the Court.
Section 2, Grant ofInterim Measure of Protection
-
(a)
It is rat incompatible with an arbitration agreement
for a party to request, before constitution of the tribunal, from a
Court an irtnrim muuaure ofprotection and fur {he Court o grunt
uh nwnure. After tonsdttiun of the arbitral tribnmul rul
turn? rhral prueei, rvwurst for an interim mun+ nf
Such relief may be granted:
(l)
to prevent irreparable lusss or injury:
(ii)
to prouide security for the performance of
any obligation;
(ii) to produce or preserve any evidence; or
Seetlon 26. Meaning of Appointing Authority."
"Appointing Authority"as used in the Mode Lau shail mean the
person or institution named tn the arbitration agreement as the
s
under
appointing authority; or tie regular arbitration intitii
whose rules the arbitration s agreed to be conducted. Where
the parties hane agreed to submit their dispute to institutional
arbitration rules, and unless they have agreed to a different
procedure, they «hail be deemed tu haze agreea ta procedure
unuer sue! arbitration rules for the selection and ppoit muent
of arbitrators. In ad hoc arbitration, the default appointment
of an arbitrator shall be made ty the atonal President of the
Integrated Bar of the Philippines (IBP) or his duty authorized
representatite
on interim or pro~atonal relief
(iu) to compel any other appropriate art ar
mission
(a) The order grunting provisional relief may be
conditioned upon the prauision of security ur any art or
omission specified in the urder.
(4) Iterim or provisional relief is requested by
written application transmitted by reasonable means ta the
Court or arbitrl tribunal as the case may be and the party
against whom the relief is aught, describing in appropriate detail th precise relief, he party against uhom the
relief is requested, the grounda far the relief, and evidence
supporting the request,
(5)
The order shall be binding upon the paria.
(6) Either party may apply with the Court for
assistance in implementing or enforcing an interim
measure ordered by an arbitral tribal.
(7) Apart who does not comply with the order shall
be liable for all damages resulting from noncompliance,
eluding all expenses, and reasonable attorneys fees, paid
n obtaintng tr order 'as judctul enfrcement.
o
Ntlon 9. Farther Authority for Arbitrator to Grant
Interlmt AM'rare of Protection.
I'tear there agretl iry
the purtir, the nhitral tribal muv, at the rrueut nf « rte,
23
.'
'TIU,
AMT'ERNA'TV+ ANTWI#, I;Am
NI T'TH. AHT'TON 1AW
1l+t
«n the
rrter anuy party to take sch inarimnt measures of protest
rbltral tribunal may consider necessary in respect uf the subj!
muter cf the dispute folloumg the rules in Section 2, paragraph
! 'ch interim musres may include bt hall rot be limited tu
rlninnry n;unction directed against a party, appointment of
reeeiuers or deitenton, preservation, inspection of properly that is
the subject of the dispute iarbitration. Either party may apply
with the Court far assistance in implementing or en/uwcing an
imerm measures ordered hy aarhiral tribunal
Section 30. Place of Arbitration. - The partes are
free to agree on the place of arbitration. Failing such agreement,
tie place of arbitration hall be in Metro Maniia, nless the
arbirnl tribunal, having regard ta the circumstances of th
case, including the convenience of ile parties shall decide on u
«different place of arbitration.
Te arbtral tribuai may, uric otherwise agreed by the
aiderappropriate for cursultatior
parties, mueet ct any place it ron
umang its members, far teuring witnesses. experts, or tie parties,
or {ar inspection of goods, other property ar documents.
Section 31. language of the Arbitration. - The parties
ate free to gres on the language or languages to le used in the
•bird procerings. Fihngg such agreement, the language ta he
uet shall he English in international arbitration, and English
, Flinn@ fr domestic arhlration, unless the arbitral tribunal
abull etrrmime t different or another language or language! 10
lw used in the proceedings. This agreement or determination,
antes therwise specified therein, shall apply tu any written
statecnt h a party, any heuring and any ward. decision ur
nther communication by the urbiral tribunal.
The arbitrul tribunal may order that any documentary
evidence shall be accompanied by a trzaslation into the languge
or ianguges reed upon by the parties or determined in
awvordance rith paragraph l sf this section
5.02 WHAT LAW GOVERNS ARBITRATION OF CONSTRUCTION
DISPUTES?
I.0.
'T'he arbitration of construction disputes shall be governed by
Ne. 1008, otherwise known nus the Constitution Industry ArbiLrtan lw.
5.03 WHAT ARE THE CONSTRUCTION DISPUTES THAT FALL
WITHIN THE ORIGINAL AND EXCLUSIVE JURISDICTION OF THE
CONSTRUCTION INDUSTRY ARBITRATION COMMISSION?
'At"
I hpiter
he
Ater nnl+rs
el
_.,
I
,t le+ltut w
f 'M}]
Contretiun diputcss which tall within the original and
· swlave jarts«diction of the Construction Industry Arhirntion C'omu«ion (the "Commission") shall include those between or among
pnrties Lo, or who are otherwise bound by, an arbitration agreement,
·meetly or by reference whether such parties are project owner, conretor, subcontractor, quantity surveyor, bondsman or isuer of an
uuranee policy in a construction project
'he Commission shall continue to exercise original and exclualthough the arbitration
u "ummercial" pursuant to Section 1 of this Aet. (Section 35)
·ave jurisdiction over construction disputes
.04 WHEN MAY AN ARBITRATOR ACT AS MEDIATOR AND A
MEDIATOR AS AN ARBITRATOR ?7
agreement of the
to
ispui, an arbitrator
By wiitten
parties
y act asmeditor and a mediator may act as arbitrator. 'The parties
oey also agree in writing that. following a successful mediation. the
wliator shall issue the settlement agreement in the form of an
bttral award. (Section 36)
a
5.05 WHEN MAY A FOREIGN ARBITRATOR BE APPOINTED?
The Construction Industry Arbitration Commission (CIAC)
hnll promulgate rules to allow for the appointment of n foreign
rhitrator or co-arbitrator or chairman of a tribunal a person who
hu not been previously accredited by CIAC: Provided, That:
(a) the dispute is a construction dispute in which one
party is an international party;
(b) the person to be appointed agreed to abide hy the
arbitration rules and policies of CIAO;
(c) he/she is either co-arbitrator upon the nominatiun of
the international party; or he/she is the common choice ct the
two CIAC-accredited arbitrators first appointed one of whom
was nominated by the international party; and
(d) the foreign arbitrator shall he of different rationality
from the international parry. (Section 37)
5.06 WHAT PROVISIONS OF R.A. NO. 9285 ARE APPLICABLE TO
ARBITRATION OF CONSTRUCTION DISPUTES?
The provisions of Section 17(d of Chapter , and Sections 28
and 29 of this Act shall apply to arbitration of construction disputes
covered by this Chapter. (Section 38)
i
PAR'TI
THE ALTERNATIVE DISPUTE RESOLU'TIUN
Chapter (One
AND TH ARB!'TATTON LAW
()
Section 17(d) of Chapter , and Sections 28 and 29 of this Act
refer to the following:
Section 17. Enforcement of Mediated Settlement
The mediation shall be guided by the following
Agreement.
operative principles:
(a)
xx
fb)
xx
(c)
Nr
Section 28. Grant of interim Measure of Protection.
--· (a) It is not incompatible wih an arbitration agreement far a
party to request, before constitution of the tribunal, from a Court
an interim measure ofprotection and for the Court to grant such
measure, After constitution of the arbitral tribunal and during
arbitral proceedings, a request for an interim measure of
tection or modifcatior thereof, may be made with the arbital
tribunal or to the extent that the arbitral tribunal has no power
ta act or is unable to aet etfectiely, the requeut may be made with
the Court, The arbitral tribunal is deemed constituted uhen the
sole arbitrator or the third arbitrator who has been nominated,
has accepted the nomination and written communication of
said nomination and acceptance has beer received hy thew party
making request.
(i)
to prevent irreparahle loa or injury,
(ii)
u provide security for the performance of
amy obligation;
(iii) ta produce or pnesere any evidence; or
The order shall be binding upon he pariie.
(6)
Either party may apply uith the Court for assistance in implementing or etoreing an interim
measure ordered by an arbitral tribunal.
(7)
A party who does not comply with the order
shali he liable for all damages resulting from
noncompliance, including all expenses, and
reasonable attorney 's fes,
e paid in obtaining the
Section 29. Further Authority for Arbitrator to Grant
Interim Measure of Protection• Unless otherwise agreed by
the parties, the arbtral tnbuna! may, at the request of a party,
order any party to take such interim measures of protection as the
arbitrul tribunal may consider necessary in respect of the subject
matter of the dispute fallowing the rules in Section 28, paragraph
Such interim measures may include but shell not be limited to
preliminary injunction directed against a party, appointment of
receivers or detention, preservation, insnaction of property that is
the subject of the dispute in arbitration. Either pariy may apply
with the Court for assistance in implementing or enforcing an
interim measures ordered by an arbitral tribunal.
2.
(b) The following rules on mterim or provisional relief
shall be observed.:
Such relief may be granted:
(5)
oder s judicial enforcement
pro-
(2)
The order granting provisional relief may be
conditioned upon the prouision of security or
any art or omission speeifiat in the order.
(4) Interim or provisioral relie fis requested by
written application transmitted by reasonable
means to the Court or arbitrl tribunal as the
case may be and the party against whom the
relief is soght, describing i appropriate detail
the precise relief, the party against whom the
relief is requested, the grounds for the relief,
and the evidence supporting the request
(d) The parties may agree in the settlement agreement
that the mediator shall become n sole arbitrator for the dispute
and shall treat the settlement agreement as an arbitral award
which shall be subject to enforcement under Republic Act No.
876, otherwise knoun as the Arbitration Law, notwithstanding
the provisions of Executive Order No. 1003 for mediated dispute
outaide of the CLAC
(!) Any party may request that provisional relief he
granted against the aderse party:
27
Alternative Dispute Resolution Act. of 200M
5.07
WHEN MAY A COURT
TRUCTION DISPUTE?7
DISMISS A CASE INVOLVING CONS-
A Regional Trial Court which a construction dispute is filod
hll, upon becoming ware, not later than the pre-trial conference,
thut the pnrtes hnd entered inta an arbitration agreement. dismiss
t.lw cme nnd refer the pnrties to nrltrution to be conducted by the
t'IA(', unlo Iwth prtirs, assist+d hy their rswwtiva counsel, shall
uhmit.t the enl''il tort n writ
tement exclusively for
2
TH. ALTERNATIVE DISPUTE RESOLUITI0N
AND THE ARBITRATION LAW
5.08 WHAT LAW GOVERNS THE CONFIRMATION
PART I
Captor One Alternative Dispute Resolution Art af 20&4
2
OF DOMESTIC
(@)
Where there wus an evielen scalctulation of fgures,
or an evident mistake in the description of cay person, thing or
property referred t in the wurd; or
ARBITRAL AWARD?
The confirmation of n domestie rbitral award shall be governed
by Section 3 af R.A No, 876. (ection
S
40)
(b)
Where the arbitrators have awarded pr matter
not submitted a them, not affecting the merits of the decision
upon the matter submitted; pr
Section 2of R.A. No. 876 provides that "At any time wthin
one month after the uword ts made, any party to the controversy
which uas arbitrated nay apply to the vourt hang jurisdiction,
aa provided in suwtinn went-eight, fro an order confirming the
award; cnad thereupon the court must grant surh order unless
the award is tacatead, modified or corrected, as prescribed herein.
'otice of 8eh motion must be served upon the aduerse party or
his attorney as prescribed iy law for the serice of such note
po an attorney in acun in the same court."
(c)
Where the award is imperfect in a matter af form
affecting the merit» of the controversy, and if it hcd been a
commissioner's report, the defect cold have been amended or
disregarded by the court
5.09 HOW SHOULD THE CONFIRMED DOMESTIC ARBITRAL
6.00 WHAT LAW GOVERNS THE RECOGNITION AND ENFORCE-
AWARD BE ENFORCED?
A domestic arbit.ral award when confirmed shall be enforced
n the same manner gs final and executory decisions of the Regional
'T'rial Court. (Section 40)
5.10 WHAT COURT CONFIRMS DOMESTIC AWARD?
The confirmation of a domestic award shall be made by the
Regional '[rial Court in accordance with the Rules of Procedure to be
promulgated by the Supreme Court.
A CLAC arbitral award need not be confirmed by the Regional
'Trial Court to be executory as provided under E.O. No. 1008. (
ection
S
40)
5.11 MAY A PARTY TO A DOMESTIC ARBITRATION QUESTION
hot
The order may modify end correct the card so as to effect
the intent thereof and promote justice between the partes
MENT OF ARBITRAL AWARDS COVERED BY THE NEW YORK
CONVENTION?
'The New York Convention shall govern the recognition and
·nlorcement of arbitral awards coorod by the sid Convention.
tction 42
6.O1 WHERE MAY A PARTY FILE THE RECOGNITION
FORCEMENT OF ARBITRAL AWARDS?
T'he recognition and enforcement of such arbitral awards shall
helled with the Regional 'Trial Court in aeordance with the rules
of procedure to be promulgated by the Supreme Court. (Section 42)
6.02 WHAT ARE THE DOCUMENTS THAT A PARTY APPLYING FOR
THE ENFORCEMENT OF THE AWARD SHOULD PRESENT?
THE ARBITRAL AWARD?
Yes, a party to a «domestic arbitration may question the arbitrnl
award with the pproprinte Regional Trial Court in accordance with
the rules of procedure to be promulgated by the Supreme Court only
or those grounds enumerated in Suction 25 of R.A. No. 876. Any other
ground raised against a domestic arbitral award shall be disregarded
by the Regiona} Trial €ourt. (Section 41)
Section 25 refers to "Grounds for modifying or correcting award."In any one of he flioing
cases, the court must
o
rake on order modifyig or correcting the award, tupun the
anrEieatio of any part to the controversy which was arhtrted
AND EN-
l'he party relying on tbe award or applying for its enforcement
court the:
hell file with the
original or authenticated copy of the award; and
the arbitratian agreement.
If' the nward or agreement is not made in any of the official
rug, the perty shall supply n duly certified translation thereof
ti ny ol wh luguat,
vlt
'Tho ppient. nlll v+.tnhiesh thut. tho country in whih foreign
· t
fun nwart wnn mhu· i
party tu th Nus 'url t 'ventiut
+4.
di
d
TIIE ALTERNATIVE DISPUTE RESOLUTION
AND TH AHUI'TRATION LAW
Chup:er One - Alternative Dispute Resolution Art of 2of
6.03 WHEN MAY THE REGIONAL TRIAL COURT VACATE ITS
DECISION?
appealed to the Court of Appeals in accordance with the rules of'
procedure to be promulgated by the Supreme Court.
If' the application for rejection or suspension of enforcement of
an award has been made, the Regional Trial Court may, if it considers
it proper, vacate its decision and may also, on the application of the
party claiming recognition or enforcement of the award, order the
party to provide appropriate security. (Section 42)
The lasing party who appeals from the judgment of the court
confirming an arbitral award shall be required by the appellant court
30
6.04 WHAT RULES WILL GOVERN THE RECOGNITION AND EN-
FORCEMENT OF FOREIGN ARBITRAL AWARDS THAT ARE
NOT COVERED BY THE NEW YORK CONVENTION?
The recognition and enforcement of foreign arbitra awards not
covered by the New York Convention shall be done in accordance
with the procedural rules to be promulgated by the Supreme Court.
The Court may, on grounds, of comity and reciprocity, recognize and
enforce a non-convention award as a convention award. (Section 43)
6.05 IS A FOREIGN ARBITRAL AWARD CONSIDERED AS A
FOREIGN JUDGMENT?7
No, n foreign arbitral award when confirmed by a court of a
foreign country, shall be recognized and enforced as a foreign arbitral
award and not a judgment of a foreign court.
Also, a foreign arbitral award, when confirmed by the Regional
Trial Court, shall he enforced as a foreign arbitral award and not as
a judgment of a foreign court.
A foreign arbitrnl award, when confrmod by the Regional Trial
Court, shall be enforced in the same manner as final and exocutory
decisions of courts of law of the Philippines, (Section 44)
6.06 MAY A PARTY OPPOSE AN APPLICATION FOR RECOGNITION AND ENFORCEMENT OF THE ARBITRAL AWARD?
Yes, a party to a foreign arbitration proceeding may oppose an
application for recognition and enforcement of the arbitral award
in accordance with the procedural rules to be promulgated by the
Supreme Court only mn those grounds enumerated under Article V
of the New York Convention. Any other ground raised shall be disregarded by the Regional Trial Court. (Section 45)
6.07 WHERE MAY A PARTY APPEAL THE COURT DECISIONS ON
ARBITRAL AWARDS?7
PART I
31
to post coumter-band exerted in fvor
a
of the prevailing party equal
to the amount of the award in accordance wit.h thr rile to be promulgated by the Supreme Court. (Section 46)
6.08 WHAT IS THE NATURE OF THE PROCEEDINGS FOR RECOGNITION AND ENFORCEMENT OF AN ARBITRATION AGREEMENT OR FOR VACATION, SETTING ASIDE, CORRECTION
OR MODIFICATION OF AN ARBITRAL AWARD, AND ANY
APPLICATION WITH A COURT FOR ARBITRATION ASSIS-
TANCE AND SUPERVISION7
Proceedings for recognition and enforce;net of an arbitration
greement or for vacation, settingside, correction or modification af
'u arbitral award, and any application wirh n court for arbitration
·resistance and supervision shall be deemed as special proceedings.
t.09 WHERE SHALL THESE PROCEEDINGS BE FILED?
tt shall be filed with theegin«i
Cary) where arbitro Ti
proceedings are conductod; {ij where tlc asset to be attached or
le·vied upon, or tho act to be onjoined ie located; (iii whore any of the
parties to the dispute resides or has his place of business; or (iv) in
th National Judicial Capital Region, at tbe option of the applicant,
'
6 10 WHEN AND WHERE SHALL THE COURT SEND THE NOTICE
OF PROCEEDINGS TO THE PARTIES?
ln n special prweuering tro recognition nnd enforcement of nn
ltrnl awari, the Court shall send notice to the parties at thoir
vhtress of record in the arbitration, or if any parly cannot be served
tire at Buch address, at such party's last known address. The
sot iwe stall be sent at least 15 days before the date set for the initial
he· rim of the application. (Section 48)
11 DOES R.A. NO. 9285 REPEAL THE JURISDICTION OF THE
KATARUNGAN PAMBARANGAY UNDER
R.A. NO.
7160?
t.A. Na, 925 shall not he interpreted to repeal, amend or .
fv I/w
rnalielsn al lle·
trunvn I'nharnuv ndor R A
PART 1
33
Chaptar 'Two - Special Rutrs af Court an Alternative Dispute evolution
1.01 WHAT IS THE NATURE OF THE ADR PROCEEDINGS?
All proceedings under the Specinl ADR Rules are special po.
redings. (Rude 1.2)
CHAPTER TWO
SPECIAL RULES OF COURT ON ALTERNATIVE
DISPUTE RESOLUTION
A.M. NO. 07-11-08 SC
A. IN GENERAL
1.02 WHAT MUST BE DONE BY THE PETITIONER PRIOR TO THE
FILING OF THE PETITION IN COURT7
The petitioner shall serve, either by personal service or courier,
vopy of the petition upon the respondent befre
o the tiling thereof.
I'rnf of service shall be attached to thpetition fled in court. 'lRuie 1.3)
1.03J WHAT CONSTITUTE PROOF OF SERVICE?
n.
For personnl service, proof of srvice of the petition
consists af the affidavit of the person who effected serviu
stating the time, plate nnu manner of the service on the
-·1.00 WHAT ARE THE SUBJECT MATTERS COVERED BY SPECIAL
ADR RULES?7
Tha Special Rules of Court on Alternative Dispute Resolution
(the "Special ADR Rules") shall apply to and govern the following
respondent.
h.
For service by courier, proof of service consists af the
sigred courier prof o! delivery.
a.
Relief on the issue of Fxistenee, Validity, or Enforceability of the Arbitration Agreement;
b.
Referral to Alternatise Dispute Resolution ("ADR");
c.
Interim Measures of Protection;
d.
Appointment of Arbitrator;
e.
£
Challenge to Appointment of Arbitrator;
Termination of Mandate of Arbitrator:
Assistance in Taking Evidence;
g.
h.
Confirmation, Correction or Vacation of Award in
Domestic Arbitration;
Recognition and Enforcement or Setting Aide of an
Award in International Commercial Arbitration;
i,
j.
Recognition and Enforcement of a Foreign Arbitral
Award;
k.
I
c
If service is refused or has failed, the affidavit or
delivery receipt must state the circumstances of the attempted
+er&e und refusal or failure thereat (Rule 1.)
1 04 HOW MANY DAYS DOES THE COURT HAVE TO RESOLVE
THE MATTER?
o
'The court shall resolve tho matter within a period of 30 day»
the day of the hearing. (Rule 1.3)
I05 ARE PLEADINGS FILED UNDER THE SPECIAL ADR RULES
NEED TO BE VERIFIED?
Ye. Any pleading, motion, opposition, comment, defense or
filed under the Special AD Ries by the proper party shall
l.· pported hy verified statements that the affiant has rend the
me zut that the factual allegations the.rein re true ard corret of
hr; own pwrsal knowlele or based on authentic records and chnil
·tin n new· the snporting duwuments, (nude 1.4)
• n
Confidentiality/Protective Orders; and
Deposit and Enforcement of Mediated Settlement
Agreements. (Rule 1.1)
L06 WHAT MAY BE INCLUDED IN THE ANNEXES TO THE
PLEADINGS7
'l'le tue·en t th
l·tweet +Hum hilel I
help,
thw prowr
wt ion, ojrif mi, +nwnl,
nit' min
iwhh,
le;l rwf,
'HE. AL.TEI{N'TTWI, IW!J'T Int.it
SNITH, AM&II'TR'T'(Ot4
w
'+-4
duly verified by the lawyer submitting it, stating the pertment facts,
the applicable law and jurisprudence to justify the necessity for the
court to rule upon the issue raised, (Rule 1.1)
1.07 IS A CERTIFICATION AGAINST FORUM SHOPPING REQUIRED?
Yes, a Certification Against orum Shopping shall be appended
to all initiatory pleadings except n Motion to Refer the Dispute to
Alternative Dispute Resolution.
A Certifeatin Against Forum Shopping is one made under
oath by the petitioner or movant: (a) that he has not theretofore
commenced any action or filed any claim involving the same issues
in any court, tribunal or qust-judicial agency and, to the best of his
knowledge, no such other action or claim is pending therein; (b) if
there is such other pending action or claim, a complete statement of
the present status thereof; and (e) if he should thereafter learn that
the same or similar action or claim has boon flod or is pending, he
shall report. that fact within five days therefrom tu the court. wherein
his aforementioned petition or motion has been filed. (Rule 1.5)
1.08 WHAT ARE THE PROHIBITED PLEADINGS IN THE CASES
GOVERNED BY THE SPECIAL ADR RULES?
The following pleadings, motions, or petitions shall not be
allowed in the cases governed by the Special ADR Rules, and shall
not be accepted for filing by the Clerk of Court.
Motion to dismiss;
b.
Mation for bill of particulars;
Motion fur new trial or tor renpcning of trial;
Petition tor relie! from judgment;
d.
e.
Motion for cxtension, except in cses where an exparte temporary order of protection has been issued;
f.
Rejoinder to rep!:
g.
Motion to declare a party in default, and
h.
Any other pleading specifically disallowed under
any provision of the Special ADR Rules.
The court eball motuu proprio order a pleading/motion that it has
determined to he dilatory in nature be expunged from the records.
(Rule 1.6)
+At'I t
'·l Huls n t uni
is
llr+Awe
u:wt,· eltiw
I U9 I THE FILING AND SERVICE OF PLEADINGS BY ELECTRONIC
TRANSMISSION ALLOWED UNDER THE ADR RULES?
filing ud service uf' pleadinga hy eleetronit transmissiou
nllowed by the agreement of the parties approved by the
r· rt.. I the filing or service of a pleading or motion was done by
electronic transmission, proof of filing and serviwe shall be mnatde in
· or«dance with the Rules on Electronic Evidence. (Rule 1.8)
Yes,,
a
he
I I0 ARE THE TECHNICAL RULES ON SERVICE OF SUMMONS
APPLICABLE TG THE PROCEEDINGS UNDER THE SPECIAL
ADR RULES?
No, the technical rules on service of summons do not apply to
proceedings under the Special ADR Rules. In mstances where
l respondent, whether n natural or a juridical person, was not
the
rally served with a copy of the petition and notice of hesring in
the proceedings contemplated in the first paragraph of Rule 1.3(),
the motion in proceedings contemplated in the second paragraph
I Ile 1.3(B), the method of service resorted to must be such as to
ten0ably ensure receipt thereof by the respondent to satisfy the
+[rement of due process.
I I1 WHAT ARE THE REQUIRED CONTENTS OF THE PETITION?
I'he initiatory pleading in the form of u verifiod petition or
mot ion, in the approprinte case whore court proceodmgs have already
rotmenced, shall inelde the names of the pties, their addresses,
the necessary allegetions supporting the petition and the reliefts)
g;ht (Rule 110)
1.12 WHAT IS MEANT BY "ADR LAWS?
ADR Laws" refers to the whole body of ADR laws in the Phihippies. (Rule 1.II)
1.13 WHAT IS "FOREIGN ARBITRAL AWARD"7
the
"Foreign Arbitral wrd" is one made in a country ather than
Philippines. (Rule 1.11)
1.14 WHAT RULE WILL APPLY IN SITUATIONS WHEREIN NO
SPECIFIC RULE IS PROVIDED UNDER THE SPECIAL ADR
RULES?
In situations where no specific rule
is
provided under the
{et.id ADR Rues. the court shall resolve surh matter summarilv
TH AL'!UN'TINE II!I'I'I IR+'4it 4w1!1
A NI 'TJ AKHA'T'ION 1AW
and be guided by the spirit and intent of the Special ADR Rules and
the ADR Laws. (Rle 1.13)
1.15 WHAT IS THE POLICY OF THE STATE REGARDING ALTER-
NATIVE DISPUTE RESOLUTION?7
It is thc policy of the State to actively promote the uso of various
modes of ADR and to respect party autonomy or the freedom of the
parties tu make their ow arrangements in the resolution of disputes
with the greatest cooperation of and the least intervention from the
courts. 'To this end, the objectives of the Special AD Rules are to
encourage and promote the use uf ADR, particularly arbitration and
mediation, as an important means to achieve speedy nnd offiemt
resolution of disputes, impartial jurrin, curb n litigious culture and
to de-clog court dockers.
The court shall exercise the power of judicial review as provided
by these Special ADR Rules. Courts shall intervene only in the cases
allowed by law or these Special ADR Rules.
1.16 WHAT SHOULD THE COURT DO WHEN THE PARTIES HAVE
AGREED TO SUBMIT THEIR DISPUTE TO ARBITRATION?
Where the parties have agreed to submit their dispute ta arhitration, court shall refer the purtics to arbitration pursuant ta R.A.
No. 9285 bearing in mind that such arbitration agreement i the law
between the parties and that they are expected t abide hy it in gourd
faith. Further, the courts shall not refuse ta rfer parties ta arbitration for reasons including, but not limited to, the following:
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.
'Tha refrral
e
would result in multiplicity of suits:
The arbitration proceeding has not couuenced;
e.
'The place of arbitration is in a foreign country,
f
One or more of the issues are legal and one or more
of the arbitrators are not lawyers;
g.
Gne ar mnre of the arbitrators are not Philippine
d.
nationals; or
h.
One or more of the arbitrators sre alleged not to
possess the required qualification under the arbitration agree-
! WHAT IS MEANT BY THE PHRASE "THE SPECIAL ADR
RULES RECOGNIZE THE PRINCIPLE OF COMPETENCECOMPETENCE" ?
'I'he Special ADR Rules recognize the principle of competence· ·· potence, which means that the arbitral tribunal may initially rule
it own jurisdiction, mcluding any objections with respect tu the
· mtunce or validity of the arbitration agreernent or any condition
· evident to the filing of a request for arbitratio.n
I 18 HOW IS THE COMPETENCE-COMPETENCE PRINCIPLE"
IMPLEMENTED?
'The arbitral tribunal shall be accorded the first opportunity or
· ·.petence to rule on the issue f whetheror not ithas the competence
o
risdietion to tdecido a dispute submitted to it for decision,
wluding any cbjetion with respect to the existence or validity of
l arbitration agrecment, When a court is asked to rule upon issue's
Alerting the competence or jurisdiction of an arbitral tribunal in a
·hpute brought before it, either before or nfter the arbitral tribunal
constituted, the court must exercise judiciai restraint and defer to
the vorupetenee or jurisdiction of the arbitral tribunal by allowing th¢
hitral tribunal the first opportunity to rule upon such issues.
Where the court is asked to make a determination of whether
he arbitration agreement is null and void, inoperative or incapable
ol beng performed, under this policy of judicial restraint, the court
must make no more than a prima facie determination of that iasue.
Urless the court, pursuant to such prma fce
a determination,
rocludes that the arbitration agreement. is null and void, inoperative
r incapable of boing performed, the court must suspend the
wtion before it and refre the parties to arbitration pursuant to the
arbitration agreement.
1.19 IS THE SPECIAL ADR RULES APPLICABLE TO COURTANNEXED MEDIATION?
No, the Special ADR Rules do not apply to courtannexed mediation, which shall be governed by issuances of the Supreme Court
Where the parties have agreed to submit their dispute to mediaion, a court before which that dispute was brought shall suspend
the pmcodings nnd direct the parties to submit their dispute to pri
vnte mediation. If the parties subsecuentl aree however. te
h
mn
IT'E Rial rT1I
ANI THE ARBITRATION 1AW
'IHI AM 'TRNA''IWI
'p
ul Hulse st 4 mt on Matye l
sis - lust um
urt of the plnwe where any of the petitioners or respontents has his
plwo of busies ur residence.
1.20 MAY AN ARBITRATOR ACT AS MEDIATOR ?
No arbitrator shall act as a mediator in any proceeding in which
he is acting as arbitrator; and all negotiations towards settlement of
the dispute must take place without the presence of that arbitrator.
Conversely, no mediator shall act as arbitrator in uny proceeding in
which he acted as mediator.
'+!
'AM&Tl
t hni+· Ten
rep
) 03 ON WHAT GROUNDS MAY THE PETITION BE GRANTED?
A petition may be ganted only if it is shown that the arbitration
o,ye+ment is, under the applicable law, ivaid, void, unenforceable
·• existent.
1.21 MAY A SETTLEMENT AGREEMENT BE CONVERTED AS AN
» 04
ARBITRAL AWARD?
Yes, where the parties to mediation have agreed in the written settlement agreement that the mediator shall become the sole
arbitrator for the dispute or that the settlement agreement shall
become ar arbitral award, the sole arbitrator shall issue the settlement agreement as an arbitral award, which shall be subject to
enforcement under the law.
B. JUDICIAL RELIEF BEFORE ARBITRATION
COMMENCES
2.00 WHO MAY FILE A PETITION TO DETERMINE ANY QUESTION
CONCERNING THE EXISTENCE, VALIDITY AND ENFORCEABILITY OF ARBITRATION AGREEMENT?
Any party to an arbitration agreement may petition the approprinto court to dotorminc any queetion concerning tho existonco,
validity and enforceability of such arbitration agreement serving a
copy thereof on the respondent in accordance with Rule .4(A)
IS FORUM SHOPPING ALLOWED?
No, n petition for judicinl relief under this Rule may not be cormunred when the existence, validity or enforceability of an arbitra
'on agreement has been raised as one af the issues in a prior action
ta
fire the same or nnother court.
C. JUDICIAL RELIEF AFTER ARBITRATION
COMMENCES
n0 WHO MAY FILE A PETITION FOR JUDICIAL RELIEF FROM THE
RULING OF THE ARBITRAL TRIBUNAL ON A PRELIMINARY
QUESTION UPHOLDING OR DECLINING ITS JURISDICTION?
Any party to arbitration may petition the appropriate conrt fr
lieial relief from he ruling of the arbitral tribunal on a preliminary
estion upholding or declining its jurisdiction. Should the ruling
of the arbitral tribunal declining its jurisdiction he reversed hy tho
urt, the parties shall be free to replace the arbitrators ar any one
al' them in accordance with the rules that were applicable for the
ointment of arbitrator sought to be replaced.
2.01 WHEN MAY THE PETITION FOR JUDICIAL DETERMINATION
OF THE EXISTENCE, VALIDITY AND/OR ENFORCEABILITY
OF AN ARBITRATION AGREEMENT BE FILED?
LO1
WHAT IS THE PERIOD FOR FILING THE PETITION?
The petition zy be filed within 3 days after having received
otice of that ruling by the arbitral tribunal
The petition for judicial determiation of the existence, validity
and/or enfrceability
o
of an arbitraton agreement may be filed at any
time prior to the commencement of arbitration
1.02 WHERE MAY THE PETITION BE FILED?
Despite the pendeney of the petition provided herein, arbitral
proceedings may nevertheless be commerced
continue to the
rendition of an award, while the issue is pending before the court.
The petition may be filed hefore the Region»l Trinl Court of the
place where arbitration is taking place,ur where any of the petitioners
r respondents has his principal place of business or residence.
2.02 WHERE IS THE FILING OF THE SAID PETITION?
3.03 ON WHAT GROUNDS MAY THE PETITION BE GRANTED?
an
' petition questioning the existence, validity and enforceability
......
The petition may be granted when the court finds that the
PARTI
THE ALTERNATIVE DISPUTE RESOLUTION
AND 'THE ARBITRATION LAW
Chaptar Tn -Spei! Rule al Court on Altrauuive Dispur Resolution
result af which the srbitral tribunal has no jurisdiction to rocolve the
dispute.
D. REFERRAL TO ADR
4.00 WHO MAY MAKE A REQUEST TO REFER THE PARTIES TO
ARBITRATION?
3.04 WHAT ARE THE REQUIRED CONTENTS OF THE PETITION?
The petition shall state the following:
a.
The fnets showing that the person named as pettioner or respondent has legal capacity to sue or be sued;
41
A party to a pending action filed in violation of the arbitration
agreement, whether vontainpd in an arbitrtion cluse or in a
bmission agreement, may request the court to refer the parties to
arbitration in accordance with such agreement
The nature and substance of the dispute between
b.
the parties;
4.01 WHEN SHOULD THE REQUEST BE MADE?
'The grounds and the circumstances relied upon by
c.
the petitioner; and
d.
The relief's sought.
In addition to the submissions, the petitioner shall attach to
he petition a copy of the request for arbitration and the ruling of the
arbitral tribunal.
The arbitrators shall be impleaded es nominal parties to the
case and shall be notified of the progress of the case.
3.05 MAY THE COURT ISSUE INJUNCTION OVER ARBITRATION
(A) Where the arbitration agreement exists before the action is
filed. -The request for referral shall be mace not later thnn the prou1al conferenee. After the pre-trial conferenwe, tho court will only act
wn the request for referral if it is made with the agreement of all
parties to the case.
Submission agreement.
If there is no existing arbitrao agreement st the time the case is filed but the prties sbe
s gently enter into an arbitration agreement, they may request. the
surt. to rofer their dispute to arbitration at anv ime during the pro(B)
rv+lugs,
PROCEEDINGS?
No. 'The court shall not enjoin the arbitration proceedings
during the pendency of the petition.
Judicial recourse to the court shall not prevent the arbitral
tribunal from continuing the proceedings and rendering its award.
3.06 WHEN IS THE DISMISSAL OF THE PETITION APPROPRIATE?
The court shall dismiss the petition if it fails to comply with
Rule 3.16; or if upon consideration of the grounds alleged and the
legal briefs submitted by the part is, the petition does not appear to
be prima facie meritorious.
3.07 WHAT IS THE REMEDY OF THE AGGRIEVED PARTY ON THE
ORDER OF THE COURT?
The aggrieved party may file s motion for reconsideration of
the order of the court. The decision of the court shall, however, not
be subject to appeal. The ruling of the court affirming the arbitral
tribunal's jurisdiction shall not be subject to a petition for certiorari.
ii.ii
4
.4
.id
•
+
·4.02 IS THE ORDER REFERRING THE DISPUTE TO ARBITRATION
SUBJECT TO A MOTION FOR RECONSIDERATION, APPEAL
OR PETITION FOR CERTIORARI?
No, at order referring the dispute to arbitration shall be imme·
·hatlv executory and shall not be subject to a motion for reconsideraon, appeal or petition for cerhiorar
1 0
WHAT IS THE PROPER REMEDY TO AN ORDER DENYING
THE REQUEST TO REFER THE DISPUTE TO ARBITRATION?
An order denying the request to refer the dispute to arbitration
hall wt le subject tu an appeal, but mny he the suhjeet uf motion
tor rerwswert1on nnd/or a petition fr
u certiorari.
E. INTERIM MEASURES OF PROTECTION
'no
WHO MAY ASK FOR INTERIM MEASURES OF PROTECTION?
5.01 WHEN IS THE FILING OF THE PETITION
MEASURES OF PROTECTION?
FOR
t'hepit+
INTERIM
A petition foe an interim measure of protection may he made:
a.
before arbitration is cummencvd;
afterrbitrtion is commenced, but before the onnstitution of the arbitral tribunal; or
b,
any
4:5
II
THE, AM'TRNA'T[VJ, DINE'T'; It;IL 1IT1»1N
ND THE AI&TIRA ION I,\W
c.
after the constitution of the arbitrai tribunal and at
tie during arhitral proceedings but. at this stnge, only to
the extent thnt the arbitra! tribunal has no power to act or is
unable tn aet effectively.
5.02 WHERE IS THE FILING OF THE PETITION?
A petition for an interim measure of protection may be filed
with the Regional Trial Court. which has jurisdiction over any of the
following places:
a.
Where the principal plaee of business of av of the
parties to arbitration ia located;
T'
g
st tnl.
v+at
+'or
us
le-rtlvr 4pt I{ttin
.04 WHAT ARF THE INTERIM MEASURES OF PROTECTION THAT
A COURT MAY GRANT?
[The fllowing,
o
among others, aro the interim measures oi protwtion that a court may grant;
a.
Preliminary injunction directed against n party to
rbtration;
h,
Prehminary attachment aginst property or garnishment of funds in the eustcd of s bank or a third person;
c.
Appointment of a receiver;
Detention, preservation, delivery or inspection of
property or
e.
Assistance in the enforcement of an interim measure
of protcction granted by the arbitral tribunal, which the latter
cannot enforce effectively.
5.05 WHAT SHOULD THE RESPONDENT DO IF HE WANTS TO LIFT
THE TEMPORARY ORDER OF PROTECTION?
Where any of the parties who are individuals resides;
The respondent has» the option of having the temporary order
of protection lifted by posting nn appropriate connter-bond as determined by the court.
c,
Where any of the acts sought to be enjoined are being
performed, tlreateaed to be perlrned or not bcing perfarmed;
ur
5.06 IS THE ORDER OF THE COURT GIVING RESPONDENT AN
OPPORTUNITY TO BE HEARD IMMEDIATELY EXECUTORY?
b.
d.
Where the real property subject of arbitration. or a
portion thereof is stunted
5.03 WHAT ARE THE GROUNDS THAT THE COURT MAY CONSIDER
certiorari.
IN GRANTING THE RELIEF?
'The following grounds, whil nat limiting the reasons for the
court to grant an interim measure af protection, indicate the nature
af the reasons that the vourt shall consider n granting the relief:
or injury;
a.
'T'he need to prevent irreparable loss
b.
'The need to provide security for the performance of
any obhpat.ion:
e.
Yes, if respondent was given nn opportunity to be heard on a
petitio for an interim measure of protection, any order by the court
shall be immediately executory, but may be the subjert uf a motion
for reconsierntian and/ar appeal or, if warranted, a petition fro
l'he need to produce or preserve evidence; or
d.
'The need to compel any other appropriate at or
omission,
F. APPOINTMENT OF ARBITRATORS
6.00 WHO MAY REQUEST TO ACT AS APPOINTING AUTHORITY?
Any party to an arbitration may request the court tn act as an
nppointing authority in the instances specified in Rule 6.I above.
6.01 WHERE IS THE FILING OF THE PETITION FOR APPOINTMENT
OF ARBITRATOR?
I'he petition for appointment of arbitrator may be filed, at the
option of the petitioner in the Regional Trial Court ta) where the
principal place of busincse of any of the parties is lorated, (b) if any of
PARTI
THE. ALTERNATIVE DISPUTE RESOLUTION
AND 'THE ARBITRATION LAW
the parties are individuals, where those individuals reside, or (c) in
the National Capita! Region.
41
Chapter Two - Special Rules of Court on Alternative Iipute IR
solution
H. TERMINATION OF THE MANDATE OF ARBITRATOR
8.00 WHO MAY REQUEST FOR THE TERMINATION OF THE MANDATE OF AN ARBITRATOR AND ON WHAT GROUNDS?
6.02 IS THE ORDER APOINTING AN ARBITRATOR IMMEDIATELY
EXECUTORY?
Yes, if the tour appoints an arbitrator, the order appointing
un arbitrator sh he immediately executory and shall not be the
subject of a motion for reconsideration, npponl or certiorari.
Any of the parties to an arbitration may request for the termination of the mandate of an arltrator whore an arbitrator becomes
de jure or de facto unable to perform hie function or for other reasons
fails to act without undue delay and that arbitrator, upon request of
any party, fails or refuses to withdraw from his office.
6.03 WHAT ABOUT THE ORDER DENYING THE PETITION FOR
8.01 WHERE IS THE FILING OF THE PETITION TO TERMINATE
APPOINTMENT?
An order of the court denying the petition for appointment of an
arbitrator may, however, be the subject of a motion fr reconsider
tion, appeal or certiorari.
G. CHALLENGE TO APPOINTMENT OF ARBITRATOR
7.00 WHO MAY CHALLENGE THE APPOINTMENT OF AN ARB-
TRATOR?
Any of the parties to anrbitration may challenge an arbitrator.
7.01 WHERE IS THE FILING OF CHALLENGE TO AN ARBITRATOR?
The challenge shall bo filed with the Regional Trial Court (e)
where the principal place of business ofany of the parties is located,
(b) if many at tho parties are individuals, where those individuals
reside, or (e) in the National Gapitu] egion.
7.02 WHAT ARE THE GROUNDS TO CHALLENGE AN ARBITRATOR?
An arbitrator may be challenged or any of the grounds fro
challenge provided for in R.A. No. 9285 and its implementing rules,
R.A No. 87& or the Model Law.
'The nationality or professional qualification of an arbitrator is
not a ground to challenge an arbitrator unless th parties ave speel
fed in their arbitration agreement a nationality and/or professional
qualification for appointment as arbitrator.
7.03 IS AN ORDER OF THE COURT RESOLVING THE PETITION
IMMEDIATELY EXECUTORY?
Ye, nnv ardor of the vnut resolving the petitian +hal he
---'-... ·..d uhll mot hw [lw
ljgwt nf n ultuni uir
THE MANDATE OF AN ARBITRATOR?
A petition to termate the mandate of an arbitraur may, nt
that petitioner's option, be filed with the Regional Trial Court (a)
where the principal place of business of nny of the parties is located
(b) where any of the parties who are individuals resides, or (c) in the
National Capital Region
8.02 IS THE ORDER OF THE COURT RESOLVING THE PETITION
IMMEDIATELY EXECUTORY?
Yes, any order of the court resolving the petition shall be irmediately executory and shall not subject of a motion for reconsideration, appeal or petition for certiorari.
be
I, ASSISTANCE IN TAKING EVIDENCE
9.00 WHO MAY REQUEST THE COURT FOR ASSISTANCE IN
TAKING EVIDENCE?
Any party to an arbitration, whether domestic or foreign, may
request the court to provide assistance in taking evidence
9.01 WHEN MAY ASSISTANCE BE SOUGHT?
Assistance may be sought nt nny time during the course of the
arbitral proceedings when the need arises.
9.02 WHERE IS THE FILING OF THE PETITION?
A petition for assistance in taking evienwe mny, at the option
ot' the petitioner, le· lied with Regional Tal Court wlee:
(n)
nrhit rntiot pr«wv«lings rs· taking platv,
THE ALTERNATIVE DISPUTE RESOLUTION
4ND THE ARBITRATION LAW
(h)
the witnesses reside ar may be found, or
(c)
where the evidence may
be
found.
9.03 WHAT IS THE GROUND FOR GRANTING
ASSISTANCE IN TAKING EVIDENCE?
THE REQUEST FOR
9.04 FOR WHAT ACTS MAY A PARTY REQUIRING ASSISTANCE IN
THE TAKING OF EVIDENCE PETITION THE COURT?
A party requiring assistance in tho taking of evidence may
petition the court to direct any person, including a representative of
n corporation, association, partnership or other entity (other than a
party to the ADR proceedings or its officers) found in the Philippincs,
for any of the following:
To comply with a subpoena ad testificandnm and/or sub-
poera duces terumn;
b)
e)
47
J. CONFIDENTIALITY/PROTECTIVE ORDERS
10.00 WHO MAY REQUEST CONFIDENTIALITY?
The court may grant or execute the request fro assistance in
taking evidence within its competence and acoording to the rules of
evidence
a)
PARTI
Chaptar Two --- Spegal Rules of Cur en Alternative Di»puts essoluton
To appear as a witness before an officer for the taking of
his deposition upon oral examination or hy written interrogatories;
To allow the physical examination of the condition of persons. ur the inspection oft things or premises and, when
ppvoprint¢, tz allow the recording and/or documentation of
condition of persons, things or premises (i.e., photographs,
video, and other means of recording/documentation);
d)
To allow the examination and copving of documents; and
e)
To perform any similar acts,
A party, counsel or witness who disclosed or who was compelled
to disclose information relative to the subject of ADR under
cirumstancos that would create a reasonable expectation, an behalf
of the source, that the infrmation
o
shall be kept confidential has
the right to prevent such formation from being further disclosed
without the epress
x
written cunsent of the source or the party who
made the disclasure.
10.01 WHEN IS THE PROPER TIME TO MAKE A REQUEST FOR A
PROTECTIVE ORDER?
A party may request a protective order at anytime there is a
need to enforce the confidentiality of the information obtained, or to
be obtained, in ADR proceeding3.
10.02 WHAT ARE THE GROUNDS FOR GRANTING A PROTECTIVE
ORDER?
protective order may bo granted only if it is shown that
the upplicunt would be materially prejudiced by an unauthorized
disclosure of the information obtained, or to be obtained. during an
ADR procccding.
K. CONFIRMATION, CORRECTION OR VACATION
OF AWARD IN DOMESTIC ARBITRATION
11.00 WHO MAY REQUEST CONFIRMATION, CORRECTION OR
VACATION OF AN AWARD IN DOMESTIC ARBITRATION?
Any party to n domestic arbitration may petition the court to
cunfirm, correct. or vacate dorostie arhitral award.
11.01 WHAT ARF THE PERIODS TO REQUEST CONFIRMATION,
9.05 WHAT IS THE AVAILABLE RELIEF TO A PARTY WHEN THE
COURT DECLINES TO GRANT ASSISTANCE IN TAKING
EVIDENCE?
CORRECTION/MODIFICATION AND VACATION?
'T'he following are the periods:
The order granting assistance in taking evidence shall be im.mediately executory and not subject to reconsideration or appeal.
(A) Confirmation.
At any time after the lapse of 30 days
from receipt. by the petitioner of the nrbitral award. he muy petition
the court to confirm that award
I! the court deelines to grant assistance in taking evidence, the
petitioner may file a notion for reconsideration or appoal.
rev1pt. of
C'·rrertun/Modufication.
Not later than 30 days from
the· rltrnl nw:rid, n party may petition th: court to correct!
wtlly thl nwrsl
(I)
I'HI M I'IRA'T!
VI "Ht
'tr, u&rt+
WT''rutN 1AW
Vacation.
Not lter th
AR days frat revipt of the
urbitral award. a party may pottion the court. lo vcute that aw:rd.
it)
(D) A petition to vacate the arbitral award ray be filed, in
opposition to a petition to confirm the arbitral award, not later than
30 day from receipt of the award by the petitioner. A petition to
vacate the nrbitral award fled beyond the reglementary period shail
he dismissed.
(E) A petition ta confirm the nrhitral award may be filed, in
opposition to a petition tu vacate the nrltral award, at any time after
the petition to vacate sul arbitral award is fled. The dismissal of the
petition to vacate the arbitral award for having been filed beyond the
reglemeutary period shall nor result in the disznissal of the petition
for the confirmation of such arbitral award.
(F)
The fling of a petition to confirm an arbital award shall
not authorize the ~ling of n bulated petition to vacate or sot aside
such award in opposition thereto
(G) A petition to correct an arbitrel award may he included
as part of a petition to confirm the arbitral award ar as a petition to
confirm that award.
11.02 WHAT ARE THE GROUNDS FOR FILING THE PETITION?
(A)
To vacate an arbitral award.
The arbitral award may
be vacated on the fllowing
o
grounds:
a,
'The arbitral award was procured through corruption,
fraud ur other undue men3;
b.
There was evident partiality or corruption in the
urbitra! tribunal or any of its members;
c.
The arbitral tribunal was guilty of misconduct or any
form of misbehavior that has materially prejudiced the rights of
any party such es refusing to postpone a hearing upon sufficient
cause shown or to hear evidence pertinent and material to the
controversy;
d
One or more of the arbitrators was disqualified to act
as such under the law and willfully refrained from disclosing
such disqualification; or
The nrbitral tribunal exceeded its powers, or so
_e.
imperfectly executed them, such that a complete, final and
definite award upon the subject matter submittod tn them was
not made.
Ir'
T'%»
Lot.
'eel lKnl al tvt
'Flo zwarl my also
I»
I
4olive
[Ji-qt
He·-hut
le v:tenteat on any or all of the following
trout:
±
:
:
-
'The arbitration agreement did nor exist, or is invalid
for any ground for the revocation of a contract or is otherwise
unenforcenble; r
b.
Aparty tonrhitration is a minor or a person judicially
declared to be incompetent.
the ground that
The petition to vacate an arbitral award
judicially
is
a
minor
or
a
declared t
arbitration
to
person
the party
be
tiled
only
on
behalf
of
the
or 1ncom
shall
minor
be incompetent
that:
(a)
the
other
party
to
arbitration
had
petent, and shall allege
knowingly entered inta z submission or agreement with uch nor
or incompetent, or (h) the submission to arbitration was made by a
guardian or guardian ad liem who was not authorized to do su by
competent ourl.
In deciding the petition to vacate the nrbitral award, the court
shall disregard any ether ground than those enumerated above.
a.
on
To correct/modify an arbitral award. -The Court ma5
correct'modify or order the arbitral tribunal to corract/nodly h
arbitral award in the following cases:
i ures
Where there was an evident miscalculation of fg
a.
in
the
description
of
any
person,
thing
OT
mistake
evident
an
or
property referred to in the award;
Where the arbitrators have awarded upon a matter
h.
net submitted to them, not affecting the merits of the decision
upon the matter submitted:
Where the arbitrators have omitted to resolve an
e.
issue submitted tu them for resolution; Dr
Where the award is imperfect in a matter of farm
d.
not affecting the merits of the controversy, and if it had been a
cGmmissioner's report, the defect could have been amended or
disregarded by the Court
(B)
L. RECOGNITION AND ENFORCEMENT OR SETTING
ASIDE OF AN INTERNATIONAL COMMERCIAL
ARBITRATION AWARD
12.00 WHO MAY REQUEST RECOGNITION AND ENFORCEMENT
OR SETTING ASIDE OF AN INTERNATIONAL COMMERCIAL
ARBITRATION AWARD?
ttl1
tt#
any part t an useful tommereial arbitration in the
ilipt my pwltiu Ile prop· r court. to recognize and enforce or
set.
'AMII
I tr rt,t pt '1I', 4' 'AM'TN
Ii+ I'i, AK't.TIN 1,w
aside an arbitraul wrd
rte 'I
l
I
呸
12.01 WHEN IS THE FILING OF THE PETITION TO RECOGNIZE
AND ENFORCE OR SET ASIDE AN INTERNATIONAL COMMERCIAL ARBITRATION AWARD?
(A) Petit
lo recognize and enforce. The petition for enfocerent and recognition of an abitral uward may be filed anytune
from receipt of the award. If, however, a timeiy petition ta set aside
un arbitral award is filed, the opposing party must file therein and in
opposition thereto the petition tor recognition and enforcement of the
same award within the period for filing an opposition,
() Petition tu set aside. The petition ta set. aside an arbitral
award mny only be tiled within three months fro the time the
petitioner receives a copy thereof. lf n timely request is made with the
arbitral triburuul for correction, interpretation or additional award.
the three-month period shall be counten from the time the petitioner
receives the resolution by the arbitral triburnl of that request.
A petition to set aside can no longer bc fled after the lapse of
the three-month period. The dismissal of a pettiwn to set aside an
arbitrl award for being time-burred shnil not automatically result
in the appron! of the petition filed therein and in opposition thereto
for recognition and enfrcement
o
of the same award Failure to file a
petitian to set aside shall preclude a party from raising grounds to
resit tnfurcement f the award.
12.02 WHERE IS THE FILING OF THE PETITION TO RECOGNIZF
AND ENFORCE OR SET ASIDE AN ARBITRAL AWARD?
A petition to recognize nnd enforce nr set asiule un arbitral
award may, at the option of the petitioner, he filed with the Regional
Trial Court; (a) where arbitration proceedings were conducted; (b
where any of the nssets to be attached or levied upon is located; (c)
where the act to be enjoined will be or is being performed, (d) where
any of the parties tu arbitration resides or ha its place af business,
or (e) in the National Capital Judicial Region.
j
I
• +al Bile-a 4
'mer4
+s
l
runuivw Ii+put Llwdtut
lion nv otlwr rs+re from the arbitrnl nwnrd, such as by appeal
ar petiltun for review or petition for certiorari or otherwise, shall be
«tu»missed by the cvuurt.
12.04 WHAT IS THE PRESUMPTION WITH RESPECT TO AN ARBITRAL AWARD?
It is presumed that an arbitral award was made and released
in due course and is subject to enforcement by the court, unless the
advurse party is able u establish a ground for setting aside or not
enforcign an arbitral award.
M. RECOGNITION AND ENFORCEMENT OF A FOREIGN
ARBITRAL AWARD
13.00 WHO MAY REQUEST RECOGNITION AND ENFORCEMENT
OF A FOREIGN ARBITRAL AWARD?
party to a foreign arbitration ray petition the court tu
recognize and entare n foreign arbitral award.
Any
13.01 WHEN IS THE FILING OF THE PETITION TO RECOGNIZE
AND ENFORCE A FOREIGN ARBITRAL AWARD?
At any time after receipt of a foreign arbitral award, any party to
arbitration may petitinn the proper Regional Trial Court to recognize
and enforce such award
13.02 WHERE IS THE FILING OF THE PETITION TO RECOGNIZE
AND ENFORCE A FOREIGN ARBITRAL AWARD?
The petition to recognize and enforce a foreign arbitral award
shall be filed, nt tbe option of the petitioner, with the Regional Trial
Court: (a) where the aasets to be attached ur levied upan is located,
tb) where the act ta b enjoined is being performed, ic) in the principal
place of business m the Philippines of any of the parties (d if any af
the parties is an individuai, where any of those individuals resides,
or (e) in the National Capital Judicial Region.
N. PROVISIONS SPECIFIC TO MEDIATION
12.03 WHAT IS THE RECOURSE AGAINST AN ARBITRAL AWARD?
14.00 WHAT RULES SHALL BE APPLIED IN MEDIATION?
Recourse tu a court agaunst an arbitral award «hall be made
only through a petition to set aside the arbtrs! award and on grounds
prescribed by the law that governs international commercial arbitra-
Whenever applicable and appropriate, the pertinent rules on
arbitration shall be applied in proceedings before the court relative
to a dispute subject to mediation
i,
·t.'
I. A'TRNA'TWI I:'T
IRED\Ar\'IN
NI THE, II'I&ATON 1.w
O. REFERRAL TO CIAC
15.00 MAY THE COURT DISMISS A CONSTRUCTION DISPUTE
BEFORE IT?
_A Regional Trial Court before which a construction dispute is
fled shall, upon becoming aware that the parties have entered into
an arbitration agreement, mot proprio or upon motion made not
later than the pre-rial, dismiss the case and refre the parties to
arbitration to be conducted by the Construction Industry Arbitraion Commission (CIAC), unless all parties to arbitration, assisted
by their reapeetive counsel, submit to he court a written agreement
making the court, rather than the CIAC, the body that would exclusively resolve the dispute
P. PROVISIONS SPECIFIC TO OTHER FORMS OF ADR
16.00 IS THIS RULE APPLICABLE TO OTHER FORMS OF ADR?
Tbis
Yes.
rule governs the procedure for matters brought before
the court involving the following frms
o
of ADR:
a. Farly neutral evaluation;
b.
c.
d.
e.
f.
Neutral evaluation;
Mini·trial:
Mediation-arbitration:
A combination thereof;, or
Any other ADR form.
'seil Huls
oA
I'Ai?TI
mitt
.l
Alternt.lu
pnte ltenlut inn
18.01 HOW SHOULD AN APPEAL BE TAKEN?
Appel shall be taken by filing a verifcd petition for review in
wven legible copies with the Court of Appeals, with proof of service of
n copy thereof on the adverse party and on the Regional Trial Court
'I'he original copy of the petition intended for the Court of Appeals
hall be marked original hy the petitioner.
Upon the fling of the petition and unless otherwise prescribed
by the Court of Appeals, the petitioner shall pay to the clerk of
court of' the Court of Appeals docketing fees and other lawtul fees of
P3.500.00 and deposit the sum of P500.DO for costs.
Exemption from payment of docket and other lawful fees and
the deposit for costs muy be grunted by the Court of Appals upon
verified motion setting farth valid grounds therefor. If the Court
of Appeals denies the motion, the petitioner shall pay the docketing
and other lawful fees and deposit. for costs within 15 days from the
notice of the denial.
Special Civil Action for Certiorari
19.00 MAY A PARTY FILE A SPECIAL CIVIL ACTION FOR CERTIORAR/?
Q. MOTION FOR RECONSIDERATION, APPEAL
AND CERTIORARI
Motion for Reconsideration
17.00 WHEN IS THE FILING OF A MOTION FOR RECONSIDERA-
TION?
A motion for reconsideration may he filed with the Regional
Trial Court within a non-extendible period of i5 dnys from receipt of
the questioned ruling or order.
Appeals to the Court
t 'hptr'Two
of Appeals
Yes. When the Regional Trial Court, in making a ruling
under the Special ADR Rules, has acted without or in excess of its
jurisdiction, or with grave abuse of discretion amounting to lack or
excess of jurisdiction, aud there is no appeal or any plain, speedy,
and adequate remedy in the ordinary course of lnw, a party may file
a special civil action for certiorari to annul or set aside a ruling of
the Regional Trial Court.
A special civil action for certiorari may be fled against the
following orders of the court:
a.
Holding that the arbitration agreement is inexistent,
invalid or unenforceable;
b.
Reversing the arbitral tribunal's preliminary determiration upholding its jurisdiction;
18,00 WHEN IS THE FILING OF APPEAL?
c.
Denyingtherequosttoreferthe dispute to arbitration;
'The petition for review shall be filed within 15 days from
notice of the decision of the Regional Trial Court or the denial oft the
petitioner's motion for reconsideration.
d.
Granting or refusing an interim relief;
e.
trator;
Denying a petition for the appointment of an arbi-
1d
TI! A
FER,TI'E TH'TIT'E
'I 'TH
l'Mr'
t'huts
·
ohhrming,
va&ti
£
tw'al award;
u
'Mt4tu
AMIT1A'THIN 1,
'r
or correiip
' il
4
g
a
«unwute arb
g.
S
di
Den« ng the proceedings to set aside ar internations
a1 commercial arbitrnl award and referring tbs. .p
the arbitral tribunal;
'
e Dack to
h, Allowing
a party
to en!;%1
'S
't
'Tioret I International turnmcr.
,
),
c±at arbitral award pending appenl;
,'
Adjourning or deferring a ruling on whether to set
ete. recognize and or enforce an international comrnercial
arbitral nward;
d?'
Alowing a part .Y to ኏JUCJl'l•t..1
peneng appeal; an~i
k.
fi
i.)r኏኏
ru•bit.rnT sward
Denying a petition [or assistance in toking evidence
20.00 IS REVIEW BY THE SUPREME COURT A MATTER OF RIGHT?
ors~,"""" by
te supreme Court is not a matter of might, hue
Uieial discretion, which will be granted vnl)' far serious
anu <l compelling reason
lt :
r
t,
tip+al lHule. 4 4out in Alt+rt· lhwput: lluewlatun
The more fact that the petitioner disagrees with the Court of
4pals' determmation of questions of fact, of law or both questions
f' fact nd law, shall not warrant the exercise of the Supreme Court's
lawretionary power. 'The error imputed to the Court of Appeals must
he rounded upon any of the above prescribed grounds fro review or
be closely analogous thereto.
o
A mere general allegation that the Court of Appeals bas
committed serious and substantial error or that it bas acted with
grave abuse of discretion resulting in substantial prejudice ta the
petitioner without indicating with specificity the nature of such
error or abuse of discretion and the serious prejudice suffered by the
petitioner on account thereof, shall constitute sufficient ground tro
the Supreme Court to dismiss outright the petition.
20.1 WHO MAY FILE A PETITION WITH THE SUPREME COURT ?
Appeal by Certiorari to the Supreme Court
party.
'Two
re;
reaurtng in grave prejudiwe to the aggrieved
n,Jl ..
Th኏.follown,g whiJo neither rtmtroH1ng- nor
Jn.f'aou.nn g"
tl e court's discrst
, serious and
:
eon, nu diRate the
com; Ilia.
necessarily, restrictive nature nf the gr
ant
de t}, will Pe\Hug,
'
Tuns that
warrant the
exercise
f ti S
,
se or
e tiupreme Curt's discretionary pow
th
Court of Appeal;
''
·ers, whh
en the
A party desiring to appeal by certiorari from a judgrent or final
order or resolution of the Court of Appeals issued pursuant to these
Special ADR Rules may file with the Supreme Court a verified petition
for review on certiorari. 'The petition shall raise only questions of law.
which must be distinctly set forth.
Online Dispute Resolution
21.00 IS THE SPECIAL ADR RULES APPLICABLE TO ONLINE DISPUTE RESOLUTION?
ers.
. j,~,_"ailed
uu
cal review prescribed an these Special AD
.
"
ving at its do
to apply the appliesble standard or test for
l
1uIRs
:.
1n arri-
er1son resulting in substantial prejudice t th
w
te
grieved party;
in upholding a final order or decision despite
,,"Erred
rde1 uek Ct 1u_r1Sfuchon af the court that
o
rendered such final
ter or derision;
~"""
c.
Failed toapplyanyprove·
.: .:.
contained in these Sp«ial 5re
Dreiple, poly or rule
CI Aul
It
le resulting in substantial
prejudice ta the aggrieved party; and
5
'
SnU4
:
'?
d.
Committed an error so egregious and harmful to a
party as to amount to nan uneninble excess of jurisdiction.
Yes, whenever applicable and appropriate, the Special ADR
Rules shall govern the procedure for matters brought bofore the
court involving Online Dispute Resolution
21.01 WHAT IS THE SCOPE OF ONLINE DISPUTE RESOLUTION?
Online Dispute Resolution shall refer to all electronic forms of
ADR including the use of the internet and other web or computetd
based technologies for facilitating ADR.
g
PT1
hp:l me·nnt Hals. nd Kvulatim- cf the Alternative
eputu Resolution Act u! 20OM
5i
(d) 'lo enlist active private sector participation in the
settlement of disputes through ADR. (Article I.2)
CHAPTER THREE
IMPLEMENTING RULES AND REGULATIONS
OF THE ALTERNATIVE DISPUTE
RESOLUTION ACT OF 2004
DOJ DEPARTMENT CIRCULAR NO. 98
Pursuant to Section 52 of RA. No. 9285, otherwise known as
the "Alternative Dispute Resolution Act of 2004 ('ADR Act"), the
following Rules and Regulations (these Rules") are hereby promul
gated to implement. the provisions of the ADR Art
1.02 WHAT ARE THE CASES WHEREIN THE ADR ACT DOES NOT
APPLY?
'The provisions of the ADR Act shall not apply
GENERAL PROVISIONS
RULE 1 -- Policy and Application
1.00 WHAT IS THE PURPOSE OF THESE RULES?
ADR Aet.
1.01 WHAT IS THE DECLARED POLICY OF THE STATE?>
the resolution
(a) labor disputes covered by P,D, No. 442, otherwise
known as the "Labor Code of the Philippines, as a amended."
and its Implementing Rules and Regulations;
Chapter 1
Article 1.I provides that these Rules are promulgated to prescribe the procedures and guidelines for the implementation of the
tu
or settlement of the following:
(b)
the civil status of persons;
(c)
the validity af marriage;
(d)
any ground for legal separatiun;
(o)
the jurisdiction of courts;
(f
future legitimate;
(g)
criminal liability;
(h)
those disputes which by law cannot be compromised;
nnd
() disputes
(Article 1.3)
referred
to court-annexed
mediation.
It is the policy of the State:
1.03 DOES THE ELECTRONIC SIGNATURE AND E-COMMERCE
ACT APPLY TO ADR PROCEEDING?
() To promote party autonomy in the resolution of dis-.
putes or the freedom of the parties tu rake their own arrangetents ta resolve their disputes;
The provisions of the Electronic Signature an E- Commerce
Act, and its implementing Rules and Reulations shall apply to
proceedings contemplated in the ADR Aet. (Article 1.4)
(b) Ta encourage and actively promote the use of
Alterative Dispute Resolution ("ADR") as an important
means to chicve speedy and impartial justice and declog court
dockets;
(c) To provide means for the use of ADR as an efficient
tool and an alternative procedure tor the resolution ot appropriato cnses; and
66
1.04 WHAT IS THE LIABILITY OF ADR PROVIDERS/PRACTITO-
NERS?
Tho ADR providers/practitioners shall have the same civl
liability for acts done in the performance of their offeil duties us
that of public officers as provided in Section 38 (1), Chapter 9, Book
1 of the Administrative Code of 1987, upon clear showing of bad
faith, malice or gross negligence. (Article 1.5)
'[It' AI,I+u'It pw4rt 1Re'M 1it
ND 'HI II"I;'TK, 1W
ld+vent
I'lter T'ls
I)irat
RULE 2 - Definition of Terms
•
1.05 DEFINE THE FOLLOWING TERMS.
F'or purposes of these Rules, the term
shall be defined as
1.
7.
dispute,
2,
Alternative Dispute Resolution System
Arbitration
A voluntary dispute resolution process in which
one or more arbitrators, appointed in accordance
with the agreement of the parties or these Rules,
resolve a dispute by rondaring an award.
4.
8.
An agreement by the parties to submit
to
arbitration nll or certain disputes which have arisen
or which may arise between them in respect of a
defined legal relationship, whether contractual or
not. An arbitration agreement mnay be in tho form of
n arbitration clause in a contact or in the form a
of'
ta)
communication, ural or written, md in a dispute resolution proceeding, including any memoranda, notes or work product of the neutral
party or nun-party participant;
(b)
oral or written statement made or which
occurs during mediation or for purposes of considering, conducting, participating, initiating,
continuing or reconvemng medintion or retaining a mediator, autd
(c)
pleadings, motions, manifest»tions, witness
statements, reports tiled or submitted in arbitration or for expert evaluation.
Counsel
A iawyer dly admitted to the practice nf law in
tho Philippines and in good standing who represents
a party in any AD process.
Arbitration Agreement
&eparte agreement.
Confidential Information
Anvinformation, rolntive ta the subject of media
tion or arbitration, expressly intended hy the source
not to be disclosed, or obtained under circumstances
that would create reasonable expectation on behalf
of the source that the information shall not be disclosed. IL shall inelude:
Any press or procedures used to resolve a dispute or controversy. other than by adjudication of n
presiding judge of a cuurt or an officer of a government agency, as defined in the ADR Act, in which
neutral third person participates to assist in the resolutinn of issnes, including arbitration. mediation,
conciliation, early neutral evaluation, mini-trial or
any combination thereof
83.
Award
Any partial or final decision by nn arbitrator in
resolving the issue or cunt.rovery,
ADR Provider
The institutions ur persors accredited ns
mediators, conciliators, arbitrators, neutral evuluators or ny pcrson exercising similar functions
in any alternative dispute resolution system. This
is without prejudice to the rights of the parties to
choose non·accredited individuals to act as mediator
conciliator, arbitrator or neutral evaluator of their
Authenticnte
record or term.
6.
Terms Applicable to All Chapter
5Mi
Ir menns to sign. execute, adopt u symbol or
encrypt n record or establish the authenticity cf a
follows:
A.
I'I;1'
Hula .d Gelatin. st tho Altornutru
eobutun wt f zit·4
9.
Court
The Regional 'Trial Court except insofar as
otherwise defined under Model Law.
10.
Government Agency
Any governmental entity, office or officor,
other than a court that is vested hy law with quasi-
ult
P'HE I'T'EI&NA'T1NI 'IF'IT
I(EI"ON
AND 'T'HI AWW'TWT[UN 1 AW
'AK'TI
htuvr Threw
judicial power or the power to resolve or adjudicate
disputes involving the government, its agencies and
instrumentalities or private persons,
12.
Certified Mediator
A mediator certified by the office for ADR as
having successfully completed its regular professional
training program
6.
in
Terms Applicable to the Chapter on Mediation
Ad hoe Mediation
Any mediation other than institutional or court
annexed.
Institutional Mediation
Any mediation process conducted under the
rules of a mediation institution
3.
Court-Annexed Mediation
A mediation process conducted under the auspees of the court and in accordance with Supreme
Court approved guidelines, after such court has
acquired jurisdiction of the dispute.
=
Mediation Party
A porson who parheipatas m a medition and
whose consenr is necessary to resole the dispute
8.
Mediator
A person who conducts mediation,
9.
Non-Party Participant
A person. other than a party or mediator, who
participates in a mediation proceeding as a witness,
resource person or expert.
Special ADR Rules
i l Rules of Court on Alternative Dispute Resolution
'The Speca
issued by the Supreme Court on September 1, 2009.
2.
7.
Roster
A list of persons qualified to provide ADR cervices us neutrals or to serve ns arbitrators
1.
Mediation
A voluntary process in which a mediator, selected
by the disputing parties, faeihitates communication
and negotiation, and assist the parties in reaching a
voluntary agreement regarding a dispute.
The information written on a tangible medium
or stored
an electronic or other similar medium,
retrievable in a perceivable frm.
o
A.
[put telntitin Act af '2OD
5.
13. Record
15.
6l
galtutiunus of th iterative
Court-Referred Mediation
Mediation ordered by a court to be condueted in
accordance with the agreement of the pnrties when
an action is prematurely commenced in violation of
such agreement.
Proceedings
The judicial, administrative or other ndjudi.
cative process, including related pre-bearing or post
hearing motions, conferences and discovery.
14.
4l, al
4.
11. Model Law
The Model on International Commercial Arbitration adopted by tho United Nations Commission
on International Trade Law on 2I June 196.
hplee· ti
B.
Terms Applicable to the Chapter on International
Commercial Arbitration
1.
Appointing Authority
h mean the person
A used in the Model Law sall
or institution named in the arbitration agreement as
the appointing authority; or the regular arbitration
institution under whose rules the arbitration is
agreed to be conducted. Where the parties hnve
agreed to submit their uispute to institutional nrbi
tration rules and unless they have agreed to a different procedure, they shall be deemed to have agreed
to the procedure under such arbitration rules for the
selection and appointment of arbitrators. In ad hoc
arbitration, the default appointment of an arbitrator
l it1
THE, ALT\RNA'TIW IMS'HT ILOArT'I'W
AND THE AHITRATION LAW
I
shall be made by the National President of the Integrated Bar of the Philippines (IBP) or his/her duly
authorized representative.
7
2.
Arbitral Tribunal (under the Madel Law)
A sole arbitrator or a panel of arbitrators.
3.
le
hate Flss
tr
one of the following places is situated out-
(e)
the parties have expressly agreed that the
subject mntter of the arbitration agreemont relates to more than one country.
i
r
«
Arbitration
Any arbitration whether or not administered by
Commercial Arbitration
An arbitration that covers matters arising from
all relationships of a commercial nature, whether
contractual or not. Relationships of a commercial
nature include, but are not limited to, the following
commercial transactions: any trade transaction for
9.
Convention Award
10.
International Arbitration
An Arbitration where:
(a)
the parties to an arbitration agreement
have, at. the time of the conclusion of that
agreement, their places of business in
different states; or
Non-Convention Award
A foreign arbitral ward made in a state, which
is not a Convention State.
Court
Under the Model Law, it moans a body or organ
of the judicial system of the Philippines (i.e., the
Regional 'Trial Court, Court of Appeals, and Supreme
Court).
8.
New York Convention
The United Nations Convention of the Recognition and Enforcement of Foreign Arbitral Awartde
approved in 1958 and ratifed by the Philippine
Senate under Senate Resolution No, 7l.
Convention State
A state that is a member of the New York Convontion.
7.
side the Philippines in which the parties
have their plces of business
the place of arbitration if dotermine«d
(i)
in, or pursuant to, the arbitration
ugeerent;
(ii) an place where a substantial part
of the obligations of the commercial
relationship is to be performed or the
place with the subject matter of the
dispute is most closely connected; or
For this purpose:
(a) if a party hns more than one place af busi
ness, the place of business is that which
has th closest relationship to the arbilrtion agreement;
if n party does not have a plnce of business,
(b)
reference is to be made t his/ner habitual
residence,
A foreign arbitral award in a Convention State.
6.
d
ul lHejlfwts of the Alternative
(h)
!
the supply or exchange of goods or services; distribution agreements; construction of works; commercial
representation or agency; factoring; leasing; consulting; engineering; licensing; investment; financing;
banking; insurance; joint venture and other forms of
industrial or business cooperation; carriage of goods
or passengers by air, sea rail or road.
5.
lu le
rue· i+st.iu et at (NL
a permanent arbitration institution.
4.
nt
11.
C.
Non-Convention State
A state that is not a member of the New York
Convent.on.
Terms Applicable to the Chapter on Domestic Arbitration
L.
Ad hoe Arbitration
An arbitration admins
i tered by an nrbitrator
and'or the parties themselves. An arbitration admi-
t4
TI(E, AL'TERNTW
STU'TE HES4LA'TON
ANM TWF AHII'!KA'TTON 1AW
t'hate '['ls
regular arbitration institution in the Philippines.
IL.
Appointing Authoriry in Ad Hoe Arbitration
Appointing Authority Guidelines
'The set of rules approved or adopted by an
appointing authority for tho making of a Request for
Appointment, Challenge, Termination of the Mandate of Arbitrator!'s and for taking action thereon.
4.
Representative
A person duly authorized in writing b n party
to a dispute, who could he n counsel, a person in his!
her employ or any other person of his/her choice, duly
authorized to represent said psrty in the arbitration
proceedings
13.
Respondent
The person/s against whom the claimant commencehs arbitration
Arbitral Tribunal
A sole arbitrator or a panel, board or committee
of arbitrators.
6.
12.
Arbitration
A voluntary dispute resolution process in which
one or more arbitrators, appointed in accordance
with the agreement of the parties or these Rules,
resolve a dispute hy rendering sn award.
5.
14.
Court
Unless otherwise specified in these Rules, a
Regional Trial Court.
8.
D.
Terms Applicable to the Chapter on Other AD
orms
1.
Domestic Arbitration
An arbitration that is not international as
defined in Article 1(8) of the Model Law.
10.
Institutional Arbitration
An arbitration administered by an entity, which
is registered as a domestic corporation with the Secu-
Early Neutral Evaluation
An AD process wherein parties and their
lawyers are brought together early in the pre-trinl
phase to present summaries of their cases and to
receive a non-biding assessment by an experience d
neutral person, with expertise in tho subjoct matter
or substance of the dispute.
Day
A calendar day.
9.
Written communication
'Ibe pleading. motion, manifestation, notice,
ordor, award and any other document or paper sub
mitted or filed with the arbitral tribunal or delivered
to a party.
Claimant
A person/s with a claim against another and
who commence/s arbitration against the latter.
7.
Request for Appointment
The letter-request to the appointing authority
of either sr both parties for the appointment of arbitrator's or of the two arbitrators first appointed by
the parties for the appointment of the third member
of an grbitral tribunal.
In the absence of an agreement, the National
President of the IBP or his/her duly authorized representativc.
3.
t
f th Altera1i
rities end Exchange Commission (SEC) and engaged
in, among others, arbitration of disputes in the Philippines on a regular and permanent basis.
mistered by an institution shall be regarded as ad hoe
arbitration if such institution is not a permanent or
2.
irIt
l pl+rent i; Inho. +ul {vultius
Jul IA+dt
et t' 2of1
2.
Mediation-Arbitration or Med-Arh
A two-step dispute resolution process involving
mediation and then fallowed bv arhit.ration
TH AH'T'EI'NATIVE DIAM'TE +:ut
GG
1tu
tht+
3.
'T1er
Chapter 2
THE OFFICE FOR ALTERNATIVE DISPUTE RESOLUTION
RULE 1 -- Office for Alternative Dispute Resolution (QADR)
1.00 WHAT IS THE OFFICE FOR ALTERNATIVE DISPUTE RES0.
LUTION?
The 0AD is an agency attached to the Department of Justice.
It shall have a Secretariat and hall he leaded by an Executive
IJirector, who shall be appointed by the President of the Philippines,
taking into consideration the recommendation of tho Secretary of
Jstice. (Article 2.1)
1.01 ENUMERATE
Ih
equr lode.
b:paste llslt n
io
Mini-trial
structured dispute resolution method in
which the mwrits of a ease are argued betore a panel
comprising of senior decision·makers, with or without.
the presence of a neutral third person, before which
Lhe parties seck a negotiated settlement. (Article [.6)
THE POWERS OF THE OADR.
The OADR shall have the following powers:
(a} To act as appainting authority of mediators and arbi.
tratars when the parties agree in writing that it shall be empo
wered to do so;
(b) Ta conduet seminars, symposia, conferences and
other public fora and publish proceedings of said activities and
relevant materials/intmtion that would promote, develop
and expand the use of ADR:
(c) 'To establish an ADR library or resource center
where ADI laws, rles and regulation, jurisprudence, hooks,
articles ard other informntion about AD in the Philippines
and elsewhere may be stored and accessed;
(d) To establish training programs fur ADR providers
practitioners, hoth in the public nnu private seetors; 2nd to uudertake periodic and cantinuing training programs for arbitra
tion and modiation and charge fees on participants. It may do
so in conjunction with or in cooperation with the IBP, private
AD organizations, nnd local and forcgn government offcee
and agencies and interuationnl organizations;
u7
PM;TI
'NI» 'FIE AM{TI'TIWN 1,W
I
1
1
I
()
l It+utatos of th. iterusteve
et ' o!M
'To certify those who have successfully completed the
regular professionn training program provided hy the OADR;
(f) To charge for service rendered such n8, among others,
for training and certifications of AD providers;
(g) To aceept donation, grants and other assistance
from local and foreig sources; and
th)
To exercise such other powers as may be necessary
and proper tu curry into effect the provisions of the ADR
(Article 2.2)
Act.
1.02 WHAT ARE THE FUNCTIONS OF OADR?
The OADH shall have the following fictions:
(a) To promote, develop and expand the use of ADR in
the private and puble sectors through infornation, education
and communicnton;
(b) 'To monitor, study and evaluate the use of ADR by
the private and public sectors for purposes of, among others,
poliey formulation;
(¢)
'To recommend to Congress needful statutory
changes ta develop, strengthen and prove ADM; practices n
accordance with international professional standards;
(d) 'To mnke studies on nnd provide Linkage for tie
development, implementation, monitoring and evaluation of
government and private AD programs and secure information
about their rospoctive administrauve rules/procedures, problems encountered nnd how they were resolved;
(e)
'To compile and publish
hist or roster of ADIR provi.
training by the 04DR,
or hy such traiming prosiders/institutions recognized ur certified
by the OADR as performing functions in any ADIR system. The
list or roster shall include the nddresses, contact numbers, e-mail
addresses, ADR service/s rendered te.g., arbitratian, mediation)
antd experience in ADR of the ADR providers/practitioners;
ders/practitioners, who have undergone
(f)
To compile a list. ur roster of foreign or international
ADR providers'practitioners. The list or roster shall include the
addresses, contact numbers, c-mail addresses, ADR service's
rendered (e.g., arbitration, mediation) and experience in ADR
of the
ADR providers/practitioners; and
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(g)
(Article 2.3)
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RULE 2- The Advisory Council
2.00 WHAT IS THE COMPOSITION OF THE ADVISORY COUNCIL?
An Advisor Council is composed of n representative from each
of the folowing:
(a)
Mediation profession;
(h)
Arbitration profession,
IBP; and
(o)
Academe.
ln app?ying and construing tho provisions of these Rules,
vonsideration must be given to the need to promote candor of parties
and modiators through confidentiality of the mediation process, the
oliey of fostering prompt, economical and amicable resolution of
disputes in accordance with principles of integrity of determination
by the parties and the poliey that the decision-making authority in
the mediation process rests with the parties.
party may peuton n court befare which ar action is prematurely brought. in a matter which is the subject of a mediation agreement, if at east one party so requests, not later than the pre-trial
(c ) ADR organizations;
(d)
1.01 WHAT IS THE STATE POLICY ON MEDIATION?
it
te
conference or upun the request of both parties thereafter. to refer the
parties to mediation in accordance with the agreement of the parties.
(Article 3.2)
l'he members of the Couneil, who shall be appointed by rhe
Secretary of Justice upon the recommendation of the OADRR Fee
eutive Director, shall choose a Chairman from among themselves
(Article 2.5)
'
'
2.01 WHAT IS THE ROLE OF THE ADVISORY COUNCIL?
The Council shall a&vise the Executive Director on policy, operatonal and other relevant matters. The Council shall meet regularlv
at least once every two months, or upon call by the Executive Director.
(Article 2.6)
'
Chapter 3
MEDIATION
RULE 1 -- General Provisions
1.00 WHAT IS THE SCOPE OF APPLICATION OF THE IMPLEMENTING RULES?
'These Rules apply tu voluntary mediation, whether ad hoe or
institutional, other than court-annexed mediation and only in default
of an agreement af the partes on the applicable rules.
These Rules shall also apply to all cases pending before an
administrative or quasi-judicial ageney that are subsequently agreed
upon by the parties to be referred to mediation. (Artieie 3.1)
RULE 2-- Selection of a Mediator
2.00 DO PARTIES HAVE THE RIGHT TO SELECT A MEDIATOR?
Yes. the purties have the freedom to select. mediator. 'The parties
may request the 0ADR to provide them with a list or roster or the
r~sum~s of its certifed meditors. The O\DH may be requested to
inform he mediator of his/her seiertion. (Article 3.3)
2.01 WHEN MAY A MEDIATOR BE REPLACED?
If the mediator selected is unable to act as such for any renson,
the parties may, upon being informed of such fact, select another
mediator. (Article 3.4)
2.02 WHAT ARE THE GROUNDS WHEREIN A MEDIATOR MAY
REFUSE OR WITHDRAW AS SUCH?
A mediator may refuse from acting as such, withdraw or may
to withdraw fror mediator proceedings under the
following circumstances:
be compelled
ta)
If any of the parties so requests the mediator to with-
draw;
(b) The mediator does not have the qualifications, training and experience to enable him/her tu meet the reasonable
expectations of the parties:
(c)
Where the mediator's impartially is in question;
Tw1I
I'HE, ALT'iNNTIVF BISI'HJ' HI'NOH IW'TH+l
If the safety of any of the parties would be jeopardized;
(f)y
If the medintor is unable to provide effective services;
(g)
ln case of conflict af interest; and
(d) In any of the following instances, if the mediator is
satisfied that:
(i)
B.
one ar more of the parties is/are not acting in
Impartiality
A mediator shall maintain impartiality:
(a)
good faith;
(i)
the parties' agrcement would be illegal or involve the commission of a crime:
accopting a mediation, an individual
requested to serve as methitar shall:
Before
(i)
(ii] continuing the disputo resolution would give
rise to an appearance of' impropriety;
(iv) continuing with the process would cause significant harm to a non-participating person or to
the public; or
(v)
continuing discussion would not be in the best
interest uf tho parties, ther minor children or
tbe dispute resolution process. (Article 3.5)
(b)
3.00 EXPLAIN THE FOLLOWING TERMS AS ETHICAL CONDUCT
OF A MEDIATOR
Competence
maintain and continually upgrade his/her profe.
ssional competence in mediation skills;
(b)
ensure that his/her qualifications, training and experience nre known to and accepted by the parties; and
(c)
serve only when his/her qualifications, training ard
experienee enable hi/her to meet the reasonable expectations of the parties and shall not hold hirslf/
make n inquiry that is reasonable under the
circumstances to determine whether there aro
known facts tht a reasonable individual would
consider likely to affect the impartiality af the
mediator, including a financial or personal
·lerest in the outcome of the mediation antd
nu existing or past relation&hp
1.. ~%, wtith a p artyJ
any
of farceeeable participant in the mediation; and
disclase to the mediation parties any such fact
known or learned as soon as practical before
accepting n mediation,
If a mediator learns any fact descrihod in paragraph
(a) (i) of this Article after accepting a mediation, the
mediator shall disclose it as soon as practicable to
the mediation parties. (Article 3.7)
C.
Confidentiality
A mediator shall keep in utmost confidence all confident.il information obtained in tle course of the media
tion process
A mediator shall discuss issues of confidentiality
and the extent of confidentiahty provided in any private
sessions or caucuses that the modiator holds with a par!y
(Article 3.8)
D.
Consent and Self-Determination
(a) A mediator shall make reasonable
It is not required that a mediator shall have special
qualifications by background or profession unless the
special qualifications of a mediator shall:
(a)
whu i
(i)
RULE 3 - Ethical Conduct of a Mediator
A.
I
herself out or give the impression that helshe does
not bsve.
Upon the request of a mediation par, an individual who is requested to serve a radiator shall
disclose his/her qualifications to mediate a dispute
(Artele.6)
(d) If continuarion of the process would violate any ethical standards;
(e)
1
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efforts to ensure
that each party understands the nature and charactr of the mediation proceeding including private
i
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(e)
Ifthe safety of any of the parties would be jeopardized;
(f)
If the mediator is unable to provide effective services;
(g)
In case of conflict of interest; and
(h) In any of the following instances, if the medintor is
satisfed that.
()
one or more of the parties is/are not acting in
good faith;
(ii)
the parties' agreement would be illegal or in-
Upon the request of n mediation party. an indiidunl who is requested ta servo ns mdiator ehatl
disclose his/her qualifications to mediate n dispute.
{Article 3.6)
B.
Impartiality
A mediator shall maintain impartiality:
o accepting a mediation, an individual who is
(a) Befre
rquested to serve as a mediator shall:
vulve the commission of' a crime;
6)
make an inquiry that is reasonable under the
circumstances ta determine whether there are
known facts thnt a reasonable individunl would
consider likely to affect the impartiality of the
mediator, including a financial or personal
interest in the outcome of the mediation and
any existing or past relationship with a party
of foreseenble participant. in the mo&intian; and
(ii)
disclose ta the mediation parties any such fact
known or learned as soon as practical before
accepting a mediation.
(iii) continuirg tbe dispute resolution world give
rise to an appearance of impropriety;
(iv} continuung with the process would cause signilicant harm to a non-participating person or to
the public; or
continuing discussion would not be in the best
interest of the parties, their minor children or
the dispute resolution process. (Article 3.5)
0)
RULE 3 -- Ethical Conduct of a Mediator
3.00 EXPLAIN THE FOLLOWING TERMS AS ETHICAL CONDUCT
OF A MEDIATOR.
A.
t Hr· ltr t
herself out or give the
If continuation of the prowess would violate any othi
cal standards;
(v)
t
1Aw'l' I
'lpts 'Threw
Competence
C.
It is not required that a mediator shall have special
qualifications by background or profession unless the
sperial qualifications of a mediator shall
mediator learns any fact descrihed in paragraph
(a) () of this Article after accepting a mediation, the
mediator shall disclose it us eoon a8 practicable to
the mediation parties. (Article 3.7)
If a
Confidentiality
A metiaor shall keep in utmost confidence all eonfidential information obtained in the course of the mchation process.
A mediator shall discuss issues of confidentiality
(a)
maintain and continually upgrade hie/her professional competence in mediation skills;
and the extent of confidentiality provided in anv private
sessions or caucuses that the mediator holds with n pnrty.
(h)
ensure that his/her qualificationss, ruining and experience are known to and accepted iy the parties; and
(Article 8.8)
(c)
serve only when his/her qualificnt.ions, training and
experience enable him/her to meet the rcasonahle expertations of the parties and shall nut. hold himself/
D.
Consent and Self-Determination
(a)
A mediator shall make reasonable eftts to ensure
that each party mderstands the nature and character of the mediation proceeding including private
1Ht, AI'T'TI;NA'IIWE IHI'WTE It;ArriuN
NI'T'HE ART'ILA'T'JAN 1.W
caucuses, the issues, the available options, the alter-
(i)
limit the scope of the mediation proceedings in
a manner consistent with the party's ability to
participate, and/or recommend that the party
obtain appropriate assistance in order to continue with the process; o
terminate the mediation proceedings.
A mediator shall recognize and put in mind that the
primary responsibility of resolving a dispute and the
shaping of a voluntary and uneaerced settlement
rests with the parties. (Article 3.9)
(ii)
(b)
E.
I
F.
refrain fror giving legal ar technical advice snd
oterwise
h
engaging in counseling or advocacy;
i
(b)
Charging of Fees
l
()
l
(e)
t
G.
H.
abstain from exprssing his/her peronal opiion on the rights and duties of the parties and
the merits of any proposal made.
(ii)
recommend that the parties seek outside pro
fessional advice to help them make informed
decision and to undorstand the implication of
any proposal; and
suggest that the parties seek independent legal
and/or technical ndvice before a settlement
mediator shall not enter into a fee reemcnt,
which is contingent upon the results of the mediation
or the amount of the settlement. (Article 3.11)
Promotion of Respect and Control of Abuse of Process
Solicitation or Acceptance of any Gift
No meriatur or any member of n medintor's immediate family or his'her agent shall request, solicit, receive or
accept any gift or any type of compensation other than the
agreed fee and expenses in connoction with any matter
coming before the mediator. (Article 3.18)
Whore appropriate and where either or both parties
are not represented by counsel, a mediator shall
(i)
parties the basis cl cost, fees and charges.
The mediator who with&raws from the mediation
shall return to the parties any unearned foe und unused deposit.
The mediator shall encourage mutual respect
between the parties, and shall take reasonable steps, subiect to the principle of sel-determination, to limit abuses
of the mediation process. (Article 3.12)
nnd
(ii)
'I
With respect to charging of fees:
(a) A mediator shall fully disclose and explain to the
Except in evaluative mediation ar when the parties
so request, a mediator shall:
(i)
lh
tter. (Article 3.1t)
Separation of Mediation from Counselling and Legal
Advice
(a)
I
''rt
ad Isl:litotes of 1l Mira'1et
I°e.soi» \et sf 24l
lee ts
without the vnsent. of all parties, and for u reasonable tire under the particular circumstance, me
diator who also practices another profession shall
not establish a professional relationship in that other
profession with one of the parties, or any person or
entity, in a substantially ant factually related ma-
natives to non-settlement, and that each party is free
and able to make whatever choices he'she desires
regarding participation in medintion generally and
regarding specific settlement options.
If a mediator believes that a party, who is not
represented by counsel, is unable to understand, or
fully participate, the mediation proceedings for any
reason, a mediator may either:
I
t'lusr 'Thus
RULE 4 - Role of Parties and their Counsels
4.00 MAY A PARTY DESIGNATE A LAWYER TO ASSIST MEDIATION?
Yes, except as otherwise provided by the ADR Aet or by these
Rules. a party may «designate a lawyer or any other person to provide
assistance in the mediation, A waiver of this right shall be made mn
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PROCEEDING.
ttd 'T'he use-ihle options fur settlement but
stress:ang the need to be open-rinded about
other possibilities; and
The roles of a counsel are as follows:
(ve)
4.01 ENUMERATE THE ROLES OF A COUNSEL IN MEDIATION
(a) 'The lawyer shall view his/her role in the mediation
as a collaborator with the other lawyer in working together
toward the comm goal nf helping their chents rsolve their
differences ta their mutual advantage
b)
4.02 WHAT OTHER MATTERS MUST A COUNSEL DO TO ASSIST
MEDIATION?
The lawyer shall encournge and assist his/her client
to actively part:pate in positive disussions and cooperate
crafting an agreement tn rsalve their dispute
in
(c) The i.-,.,;er muF.<t, ,i኏,;;st his/her elienl w comprehend
and appreciate the mediation process and its benefits, as wel
as the client' sgrater personal responsibility for the success of
mediation in resolving the dispute,
(d) In preparing for participation in mediation, the law
yer shall confre and discuss with his[her client the following:
()
(ii)
The mediation process as essentially a negotiation between the parties assisted by their
respective lawyers. and facilitated by a mediator, stressing it its ~difference frnm litigation, its
advantages and benefite, the clients heightened
rule in mediation and responsibility far its suc.
cess and explaining the role of tbe lawyer in
mediation proceedings,
'T'he substance of the upcoming mediation such
as:
(aa) 'I'he substantive issues invulved in the
dispute and their prioritization in terms
of importuuce to his/her client's real intorests and neetd;
'T'he best, worst and most likely alterratrve
a non-negotiated settlement. (Article
3.15)
to
;
1
'Te assist mediation, the lawyer:
ta) shall give support to the mediator so that his/her
client will fully undertand the rules and procosaes of mediation;
tb) shall impress upon his'her client the importance
taking responsibility for
of speaking for himself/horself
decisions
the
negotiations
within the mediation
during
making
process,
fc) may ask for a recess in order to give advice or sugetions ta his/her client in private, if he/she perceives that his/her
client is unable ta bargain effectively;
an
(d) shall assist his/her client and the mediator put in
writing the terms ot the settlement agreement that the parties
have entered into. That lawyers shall see a it that the terms ol
the settlement agreement are not contrary to law, morn ls, good
customs, publie order tr public policy. (Article 33.I6)
RULE 5- Conduct of Mediation
5.00 WHAT ARE THE ARTICLES TO BE CONSIDERED IN THE
CONDUCT OF MEDIATION?
The articles to be considered in the conduct of mediation are
the following:
(bb} The study al other party's position in re.
ltiwn to the issues with a view to under
standing the underlying interests, fears,
concerns and needs;
(a) The mediator ahnll not rake untruthful or exaggeratad claire about the dispute resolution process, its costs
and benefits, its outcome or the mediator's qualifications and
(cc) The information or facts to be gathered
r sought from th other side or to be exchanged that are recesssry tro informed
(b) The mediator shall held the parties reach a satisfacta their dispute hut has no authority to impose
resolution
tory
a settlement on the parties.
decision-making;
abilities during the entire mediation
prueeei.
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() 'The parties shall personally appear tu mediation
and may be assisted by a lawyer. A party may be represented bv
an agnt who must have full authority to negotiate and settle
the dispute.
°
(d) 'l'he mediation praces shall, in general, consists of
the following stages:
(i)
(i
opening statement of the medintor;
individual narration by the parties;
(ii) exchange hy the parties;
(iv} summary af issues;
(v)
(vi)
generation and evaluation of optiots: and
closure
(e) The mediation proceeding shall be held in private
Feron, other than be parties, their representatives and mcdintor, ma attend only with the consent of all the parties,
(f
the mediation shall be closed:
fi)
by the «xecution of a settlement agreement by
the parties;
fi)
by the withdrawal of any part y from mediation;
and
(iii) by the written declaration of the mediator that
any further effort at mediation wold not be
helpful. (Article 3.17)
RULE 6 --Place of Mediation
6.00 WHERE
IS THE PLACE OF MEDIATION?
T'he parties are free ta agree on the place of mediation. Failing
such agreement, the place of medintion shall be any place convenient
and appropriate to all parties. (Article 3.18)
RULE 7 - Effect of Agreement to Submit Dispute
to Mediation Under Institutional Rules
7.00 WHAT DOES AN AOREEMENT TO SUBMIT A DISPUTE TO
MEDIATION BY AN INSTITUTION INCLUDE?
An agreement to submit a dispute ta mediation by an institu.
tion shall include an agreement to be bound by the internal media
t
l
J
I
t
tion nnd adminrtrtvvt policies ot' such institution. Further, an
y;reement to ubnuit a dispute to mediation under institutional meliton rules shall be deemed to include an agreement ta have such
mules govern the mediation of the dispute and for the mediator, the
ties, their respective counsels and non-party participants to abide
hy such rules. (Article 3.1')
RULE 8 -- Enforcement of Mediated Settlement
Agreement
8.00 WHAT ARE THE OPERATIVE PRINCIPLES TO GUIDE MEDIA-
TION?
The mediation shall be guided by the following operative
principles:
(a) A settlement agreement following successful mediation shall be prepared by the parties with the assistance of their
respective counsels, if an, and by the medintor. The parties
and their respective counsels shall endeavor to make the terms
and condition of the settlement agreement complete and to
rake adequate provision for the contingency oaf breach to avoid
conflicting interpretations of the agreement.
(b) The parties and their respective counsels, if any,
shall sign the settlement agreement, The mediatur shall certify
that he/she explame} the contents of the settlement agreement
to thc partics in a language known to them.
(c) If the parties agree, the settlement agreement may
be jointly deposited by the parties or deposited by one party with
prior notice to the other party!ties with the Clerk of Court of the
Regional Trial Court (a) where the principal place of business
in the Philippines of any of the parties is located; (b) if any of
the parties is an individual, where any of those individuals
resides; or (c) in the National Capital Judicial egion. Where
there is a need to enforce the settlement. agreement, a petition
nay be filed by any of the parties with the same court
which
case, the court shall proceed summarily to hear the petition, in
accordance with the Special ADR Rules.
in
(d) The parties may agrec in the settlement agreement
that the mediator shall become a sole arbitrator for the dispute
and sball treat the settlement agreement ns z arbitral award
which shall be subject to enforcement under R.A. No. 876,
i
t,
AL'TE'MN'I'IVI, 1MI,
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AND 'THI ARI!TIRA4WN LAW
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otherwise known e "The Arbitration Law,"
4 u1,4;
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th
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iCIWle known ue Lhle
oustruction '.Industry
Arbitration Law" for medint d di
i
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·id the
he Construction
outside
_
Industry Arbitration Ce
(Article 3.20)
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RULE 9 - Confidentiality of Information
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'The rot rt+on of the ADR Act shall contmue to
apply event if n mwli:tu i found to have fled to act impartially.
(r)
(f)
mediator may not be malled to testify to provide
confidential information gathered in mediation A mediator
who is wrongfully subpoenaed shall be reimbursed the full cost
of his/her attorney'a fees and related expenses. (Article 3.21)
9.00 WHAT ARE THE PRINCIPLES AND GUIDELINES ON INFOR.
MATON OBTAINED THROUGH MEDIATION?
9.01 MAY THE PRIVILEGE OF CONFIDENTIALITY OF INFORMA-
Information obtained through mediation proceedings shall be
subject tw the following priceiples and guidelines:
"
Yes, under the following circumstances, a privilege of confidentalit of information is deemed waived:
(a) Information obtained through mediation shall be;
vileged and confidential.
pr
i.
()
party, mediator, or ncn-prty participant mav
refuse to disclose and may prevent any other person from disclo.
sing a confidential information,
(c)
Confidential information shall not be subject to discovery and stall be inadmissible in any advoraarial procedin
whether judicial or quasi-judicial. However. cvid «.
,_'f'
Iaence or 1forth
t
mnton
at is otherwise admissible or subject to discovery does
not become inadmissibie or protected from discovery solely b
reason of its use in a mediation.
4Y yY
i
(d) In such nn adversarial proceeding, the tollo
sons in h d
'
wng per.
oIe
previously involved in a mediation mav not b
compelled to disclose confidential information obtained d.
the mediation:
rung
ar
ti)
the parties to the dispute;
(ii)
the mediator or mediators:
..
(ii) the counsel for the parties;
(iv)
the non-party participnnts;
()
any person hired or engaged in connection with
the mediation as secretary, stenographer, clerk
or assistant; and
(vi) any other
person who obtains or possesses
confidential informntion by reason af
his/her
proteesion
TION BE WAIVED?
(a) A privilege arising from the confidertinlity of information may be waived in a record or orally during a proceeding
by the mediator and the mediation parties
(b) With the conent of the mediation parties, a privilege
arising from the confidentiality of information may likewise be
waved by a non-party participant if the information is provided
by such non-party participant.
A person who discloses contidentinl information shall
be precluded from asserting the privilege dcr Article 8.221
(Confidentiality of Information) tu bar disclosure of the rest of
the information necessary to a complete undentanding of the
previously disclosed information. If a person suffers loss or
damage as a result of the disclosure of the confidential informntion, hc'she sha!l be entitled to damages in a judicnl proceeding
against the person who made the disclosure.
(c)
(d) A person who discloses or makes a representation
about a mediation is precluded from asserting the privilege
mentioned in Article 3.21 to the extent that the communication
prejudices another person in the proccoding ard it is necessary
for the person prejudiced to respond to the representation or
disclosure. (Article 3.22)
9.02 WHAT ARE THE EXCEPTIONS TO THE PRIVILEGE OF CONF.
DENTLALITY OF INFORMATION?
Thore is no privilege against disclosure under Article 3.21
the following instances:
()
in
in an agreement evidenced by n record authenticated
by all parties to the agreement;
Ill N TN'TW
;wrr He,v t in1;
IN'II AI;BHTIHT'I4 4,
.tlf•
lupvr 'Tl
available to the public or made durin I' swwuono}
e.
f'
h s open, or is required hy lew t be
met dati ion wivhi
ncch
I tl
'
oe open. 4oIn
public;
(ii)
(iii) a threat or statement of' a plan to inftict bodily injury
or commit a crime uf violence;
fiv) intentionally used to plan a crime, attempt to commit,
commit a crime, or conceal an ongoing crime or criminal
"
activity;
or
sought or oflered to prove or disprove abuse. neglect
(v)
abandonment or exploitation in a proceeding
hieijij;'
agency is protecting the interest of an individual protected ,
law: but this exception does not apply where a child pro:cuio
matter is referred
mediation by a court or where a public
agency participates in the child protection mediation;
to
{vi) sought or offered to prove or disapprove a claim or
complaint of professional misconduct or malpractice tiled against
a par',on·arty participant, or representative of a party based
on ooduct occurring during a mediation. (Article 8.23)
9.03 MAY A MEDIATOR BE ALLOWED TO MAKE A REPORT OR
COMMUNICATE MATTERS REGARDING MEDIATION?
As a rule, no, a mediator may not make report, assessmert
evaluation, recommendation. finding or other"9Hmn
commnn;~;,
D
"nt:on regarding; amcacdihiation Lo a eotrt or agency or other authority that
make a ruing on dispute that is ite sbrt of a medias»,~,,
'i
nut
[,t,}";";""
RULE 10 - Fees and Cost of Mediation
10.00 IN AD HOC MEDIATION, WHAT ARE THF RULES ON FEES
AND COST?
In ad hoc mediation, the puartics are fr to make their own
to mediation cost and tees, Im default thereof, the
arrangement as
Hi
Mt rt+v
10.02 WHAT ARE THE FACTORS IN DETERMINING MEDIATION
FEE?
A mediation servioe provider may determine such mediation
fee as is reasonable taking into consideration the following factors,
among others:
the complexity of the case;
(
(ii)
(ii)
the number of hours spent in mediation; and
the training, experience nnd stature of mediators. (Article
3.26)
Chapter 4
{n) to staie that the mediation occurred or bas terminutod, or where a settlomen was rencled; qt
,"e
In put
ti'I
I+le+
l lie· le, sf th
1{+ lt
Aet r'4M
10.01 IN INSTITUTIONAL MEDIATION, WHAT DOES MEDIATION
COT INCLUDE?
mediation rust. shall include the
i
In institution] mediaton,
of
the
mediation
institution under which
duinistratve charges
rl· parties have agreed to be bound, mediator' fees and associated
expenses, if any. In default af agreement of the parties as to the
.amount and manner of payment of mediation's cost and fees, the same
hail be determined in accordance with the applicable internal rules
f the mediation service providers under whose rules the mediation
is conducted. (Article 3.26)
"Z[";'
parties may,by an oroemeat in writing. stipulate that th
settlement agreement shell b¢ scaled and not di-closed to anit[i
apply
party including the court. Such stipulation, however, shall
none or «erase m +mo-moat ·snarii
nt
+lwiule of rut al fr- to he nproved by the OADR shall be
tllowel (Aenele:2)
""
(b) as permitted to be disclosed under Article 3.23
Exception to the Privilege of Conde»tafitof Ito+kact#j
ls
INTERNATIONAL COMMERCIAL ARBITRATION
RULE 1- General Provisions
11.00 WHAT IS THE SCOPE OF APPLICATION OF CHAPTER 4 ON
INTERNATIONAL COMMERCIAL ARBITRATION7
to international commerinl arhitra(a} 'This Chapter apples
in
force between the Philippines and
t.ion. subject to any agreement
ctber state ar states.
(I) 'This Chapter applies only if the place or seat. of nrbiration
is the Philippines and in default of any agreement of the parties on
the applicable rules.
This Chapter shall not affect any other law of the Philip
of which certain disputes may not be submitted to
pire by virtue
(¢y
TE, ALI AI
II
I
al +ti
NI+'THE AM!'TI A'Tl0! 1 AW
t'hgt
arbitration or may be submittec
tted t Io rhit
arburaton only @tor«dg Lu pros1oms other than those of the D Act. (Article 4.1
Is
'4tI
to
Notel lier;t.lats f 1le · Meli
a u4. ts· +Aun Awwt +fl
ls
1.02 WHEN IS A VWRIT TEN COMMUNICATION DEEMED RECEIVED?
is.
11.01 CITE THE RULES OF INTERPRETATION IN INTERNATIONAL
COMMERCIAL ARBITRATION.
I
a)
I
Uhles ollwrwe reed by ihe purlies.:
{i)
any written communication is deemed to have been
received if it is delivered to the addressee pmrsonlly
or at hia'her place uf business, habitual residence or
mailing address; if none of these can be found after
making a reasonable inquiry, n written communication is deemed tu have been received if it is sent to
the addrossee's last known place of business, huttual residence or maling address by registered letter
or any other means which provides n record of the
at'mpt to delver it;
{ii)
the communication is deemed to have been received
on tdre day it is so lelivered.
The following are the rules of interpretation in international
eounmervial arbitration:
(a) luternntonal eomreruial arbitration shall be
vered
by the Model Law
las
:,
E?
on [einternational
Commercial Arbi.
.
»
lruion.
?Jl
(b)
In interpreting this Chapter, regard shall be had
to the international arigin of the Model Law and to the need
for uniformity in its interpretation. Resort may be made to the
traaux prepartoires and the Report of the
t
.Ge
retary-iener
Ni.
f
the
Ur·
»
o1
e nit.et iatiuns Commission on International Trade
Law dated March 1985 entitled, "Internationnl Commercial
Arbitration: Analytical Commentary un Draft Text identifed
by reference number A'CN. 9/264."
Secre
(e) Moreover, in interpreting this Chapter, the court
have due regard to the policy of the law in favor of arbitrstion and the policy
to actvely
ti «l promote pnrty
' of the Philippines
"l
.
autonomy in the resolution of disputes or the freedom of the
pa'lies to make their own arrangement to resolve their dispute.
shall
(d) Whre n provision of this Chapter, exerpt the Rules
applicable ta the substance of the dispute, leavee the parties free
to deterine a certain issue, such freedom includes the right of
he parties to authorize a third party, including an institution
to make that determination.
'
(e) Where n prvision of this Chapter refers to tho fact
that the parties have agreed or that they may agree or in any
other way refers to an agreement of the parties, such agreement
inehides an y arbitration rules referred to in that agreement,
(D Where a provision of tis Chapter, other than in
paragraph ts) of Article 1.25 (Default of a Prey) and paragraphs
(b) (i of Article 4.32 (Trmination Proceedings), refers t
"" it refers
'Stoa
claim it als so apple
lie s to a couter-claim, and where
to
a defense, it also applies to a defense to such cm it
:l
" ' counter-ciamm.
(Article 4.2)
o
'The provisions of this Artivle do nut appl y to comnmunicatiuns in court proceedings, which shall he governed by the Rules of
Court. (Article 4.3)
(')
11.03 MAY THE RIGHT TO OBJECT BE WAIVED?
Yes, the right to object. may be wived.
Ary party who knows
that any provision of' this Clapter from which the parties my
derogate ur any requirement urler the arbitration agreemcrt has
not been complied with and et proveeds with the arbitration without
stating the objections for such non-cornplience without undue «delny
or if a time limit i provided therefor, within such period of time,
shall be deemed to have waived the nght to object. (Article 4.4)
11.04 WHAT IS THE EXTENT OF COURT INTERVENTION?
In matters governed by this Chpter, no court shall intervene
except when so provided in the ADR Aet. Resort to Philippine courts
for matters within the scope of the ADR Aet shall be governed by the
Special ADR Rules. (Article 1.5
11.05 WHAT OTHER FUNCTIONS MUST BE PERFORMED BY THE
APPOINTING AUTHORITY?
(a) Te functions referred to in paragrphas (c) and (d) of Article
4.11 (Appointment of' Arbitrators) and paragraph tc} of Article 4.13
(Challenge Procedure) and paragraph (a) of Article 4.14 (Failure or
Impossibility to Act) shull be performed by tho appointing authority
as defined in Article 1.6CI, unless the latter shall fail or refuse to act
t
«f
fl# LT IN1NI pH'At'
:M,TH;
NI'IJ¥ I{WAT11N 1,W
t'/pit
within tirtv (It duy from resvipt of the request. in wheh ease t.he
applicnnt may reuew the pphcation with the court.
The appoinutment. of n arbitrator is not, subject to appeal or
motwn for reconsidernt ion,
{b) The furtions referred to in paragraph (c) of Article 4. 16(¢)
(Competence of Arbitrat Tribunal to Rule on its Jurisdiction), second
paragraph af Article 1.34 (Application for Setting Aside an Exclusive
Recourse Aainsi Arbitral Award), Article 4.%5 (Recogmiton and
Enforcement), Arirle 4.38 (Venue nd Jurisdiction), shall be performed by the appropriate Regional Trial Court.
(c) A Court may not refuse to grant, implement or enforce
a petition for an interim measure, including those provided for in
Article 4.9 (Arbitration Agreement and interim Measures by Court),
Article 4.11 (Appointment of Arbitrators), Article 4.13 (Challenge
Procedure), Article 4.27 (Cort Assistance in Taking Evidence), on
the sole ground that the Petitian is merely an ancillary relief and the
principal action is pending with the arhitral tribunal (Article. 4.6)
RULE 2- Arbitration Agreement
12.00 EXPLAIN THE FORM OF AN ARBITRATION AGREEMENT.
The Arbitration Agreement, as defined in Articles 1.6 A4, shall
be in writing. An agreement is in writing if it is contained in a doe.
ment signed by the parties or in an exchnnge of letters, telex, telegrams r other mens of telecommunication which provide a record
of the agreement, or in an ex:hnnge of statements of claim and
defense in which the existence of an agreement, er in an exchange of
statements of claim and defense in which the existence of an agran
ment is alleged by one party and not denied by another. 'The refe-.
rence in a contract to a doeumont containing an nrbitration clause
eunistitutes nn arbitration agreement provided that the contracts is
writing znd the reference is such as tu make that. elauso part of the
cnrtract. (Aricle 4.7)
12.01 WHAT ARE
THE RULES WHEN A SUBSTANTIVE CLAIM IS
BEFORE THE COURT?
The following are the rules on subtnntive claim before the
court:
court hetore which an action i brought in a matter
which is the subject of an arbitration zrvemwnt nhnll, if' at
(a)
'1
hpleo
+Ir'f
Al
l lisp«alto: al 1le \Hurn»tiw»
Aton
al pit4
qui+ I%,
st
+
wj
least une rly on request- af hath pnrties thereafter, refer
the purties tu rbitrtion unless it finds that the arbitration
agreement is null and void, inoperative or incapable of hoing
performed.
b) Where an action referred to in the previous paragraph
has been brought, arbitral proceedings may nevertheless be
commenced or continue, nnd an ward may be made, while
tho issue is pending before the court
Where the action is commenced hy or against mulparties,
one or more of whom are parties to nn nrhitrntiple
tion agreement, the court shall refer to arbitration those parties
who are bound by the arbitration agreement although the civil
action may cortinue ns to those who are not bound by such
arbitration agreement. (Article 4.8)
(c)
12.02 MAY A PARTY REQUEST FOR AN INTERIM MEASURE OF
PROTECTION BEFORE OR DURING THE ARBITRAL PRO-
CEEDINGS?
Yes, it is not incompatible with an arbitration agreement for a
party to requast from a court, before the constitution of the arbitral
tribunal ur during nrbitral proccedings, an interim measure of protection and for a court to grant such measure.
To the extent that the arbitral tribunal has nu power to act or is
unable to act effectively, a request for interim measure of protection,
or modification thereof as provided for, and in the manner indicated
in Artiele 4,17 (ower ot 'Tribunal to Order Interim Measures), may
be made with the court
The rules of Interim or provisional relief provided for i paragraph (c) of Article 4.I7 af these Rules shall be observed.
A part ymay bring a petition under this Article balure the court
in accordanee with the Rules of Court. or the Special ADR Rules.
(Article 4.9)
RULE 3 - Composition of Arbitral Tribunal
13.00 HOW MANY ARBITRATORS MAY THE PARTIES AGREE
UPON?
The parties are free to determine the number of arbitrators.
Failing such determination, the number of arbitrators shall be
three (3). (Article 4. 10)
H#, ATTN'IIWI, DE'TI I'u+111,
NI TH III@I0N t
up+lee· tug Rule nl
lusts He»dution
J
13.01 EXPLAIN HOW ARBITRATORS ARE APPOINTED.
'I'h, e appointment
·
procedure;
+
of arbitrators nre governed by tl
'·
agrecd hy the parties.
The parties are free to agree on a procedure of ap-
pointing the arbitrator or arbitrators, subject to provisions of
paragraphs (d) and (e) of this Article.
(c)
Failing sch agreement:
ti)
(ii)
(d)
an arbitration with three arbitrators, each
party shall appoint one arbitraar, aud the two
arbitrators thas appointed shall appoint the
third arbitrator; if any party fails 4 27int
the arbitrator within 30 days of met ct a ro
quest to do so frm the other party, or if the two
arbitrators fail to agee on the third arbitrator
within '0 days of thoir appointment shall be
made, upon request of a party, by the appointIng authority;
in
an arbitration with s ale arbitrator, if the
parties are unable to agree an the arbitrator
he/she shall be appointed, upon reqeat of' a
party, by the appointing authority.
in
Where, under nn appointment procedure ngreed upon
by the parties,
()
(ii)
a party fails to act as required under such po.
cedure, or
the parties, or two arbitrators, are unable to rwach
an agreement experted of them under such pro.
cecdure, or
l.! ...
(jji) a third
party, including an institution, fails
to perform nny function entrusted to it under
such procedure,
Any party may request the appointing authority to take
the necessary measure to appoint an arbitrator, unless tu
agreement an the appointment proc~re provide other means
for securing the appoinrment
(e) A decision on a matter entrusted by paragraphs (c)
and (d) of this to the appointing authority shall he immediate
4+ulatint l the ltertntiw
et a! /HJ4
extwuLory mud not. be subjcct to a motion for reconsideration
or appenl. The appointing authority shall have in appointing
lull»wing
(a) Na person shall be produced by reason uf hither
nationality frot acting as an arbitrat, unless atherwiee
(b)
,
I'Aw'i
j
an arbitrator, due regard to any qualifications required of the
arbitrator by the agreement of the parties and to such coneidorations as are likely to secure the appointment of an independent and impartial arbitrator and, in the case of n sale or third
arbitrator, shall take into account as well the advisability af
appointing an arbitrator of a nationality other than the Rules
of Court of the Special ADR Rules. (Article 4.1I)
13.02 WHAT ARE THE GROUNDS TO CHALLENGE AN ARBITRATOR?
The grounds for challenge are as follows:
(a)
When a person is approached in connection with his/
her possible appointment as an arbitrator, he/sbe shall disclose
any circumstance likely to give rise to his/her impartiality or
independence. An arbitrator, from the time of his/her appointrent and throughout the arbitrl proceedings shall, without
delay, disclose any such circumstance to the parties unless they
have already been informed of them by him/her
() An arbitrator ray be challenged only if eireumstances exist that give rise to justifiable doubts as to his/her impartiality or independence, or if he/she does not possess qualifications agreed to by the parties. A party my challenge n
arbitrator appointed by him/her, or in whose appointment hel
she has participated, only for reasons of which he!she becore
aware after the appointment has been ruade (Article 4.12)
13.03 WHAT IS THE PROCEDURE IN CHALLENGING AN ARBITRATOR?
The challenge procedure is as fllows:
o
(a) 'The parties are free to agree on a procedure for challenging an arbitrator, subject to the provisions of this Article;
(b) Failing such agreement, a party who intends to challenge an arbitrator shall, within 15 days after becoming aware
of the constitution of the nrbirrn! tribunal or alter becoming
aware of any circumstances referred to in paragraph (b) of
Article 4.12 (Grounds for Challenge.) send a written statement
of the reasons for the challenge to the arbitral tribunal. Unless
IHI4, MW'TINT#, DH4f' Rte.trrut
A NI THE NII'TATION 1W
w'it
( uptr Thus
Io.he • tln
Inept
tie challenged arbitrator withdraws from his/her afties r the
other party agrees tu the challenged arbitrator withdraws LroI
his/hor offee or the party agrees to the challenge, the arbitrnl
tribunal shall decide on the challenge; and
(e)
If n challenge under an procedure agreed upon
by the parties or under the procedure of' purgraph (b) of this
Article is not successful, the challenging party may request
the appointing authority, within 0 days after having received
ootice of the decision rejecting the challenge, to decide on the
challenge, which decision shall be immediately executory and
not subject to motion for reconsideration or appeal. While
such a request is pending., the arbitrnl tribunal, icluding the
challenged arbitrator, may continue the arbitral proceedings
and make an award.
party may bring a petition under this Article before the court
n accordance with the Rules of Court or the Special ADR Rules
(Article 4.13)
8.
THE CONSEQUENCE IF THERE IS FAILURE OR
IMPOSSIBILITY TO ACT AS AN ARBITATOR?
13.04 WHAT IS
(a) If an arbirutur becomes de jure or de fauto unable ta per.
foemn his/her functions or fir other reasons fails to act without undue
delay, his/her mandate terminates if he/she withdraws from his/her
oflice r if the parties agree on the termination. Otherwise. it' the
controversy remains concerning any of these grounds, any party mav
request the appointing authority to «decide on the termination of the
mandate, which derision shall be immediately executory and not
subject fr motion for reconsideration or appeal.
I+
llnrl l4stat putt, t' le· Ah4 wmtrwr
Auto 'wt ol {tu4
be:wusses of' tlw· rvvatie uf ht#her mandate, a substitute arbitrator
·hnll be pouted :worthing to the rules that were applicable to the
appointment uf the arbitrator being replaced. (Article ·A. 15)
RULE 4- Jurisdiction of Arbitral Tribunal
14.00 DISCUSS THE COMPETENCE OF ARBITRAL TRIBUNAL TO
RULE ON ITS JURISDICTION.
(a) The arbitral tribunal may rule on its own jurisdiction,
inchding any objections with respect to the existence or validity of
tho arbitration agreement or any condition precedent to the fling of
the request for arbitration. For that purpose, an arbitration clause,
which fors part of a contraet shall be treated as an agreement independent of the other terms of tle contract. A decision by the rbitral
tribunal that the contract is null and void shall not entail ipso jure
the invalidity of the arbitration clause.
db) A plea that the arbirral tribunnl does not have jurisdichon shall be raised not later than the submission of the statement of
defense ti.e., in an Answer or Motion to Dismiss). A party is not pre
cluded from raising sueh plen by the tact that he/she has appointed,
or participated in the appointment af, an arbitrator. A plen that the
arbitral tribunal is exceeding the swope of its authority shall be raised
as soon as the matter alleged to be beyond the swope of its authority
is raised during the nrbitra! proceedings. The arbitral tribunal may,
in either case, admit a later plea if it considers the delay justified
th) II, under this Article or paragraph (b) of Article 4.1(Chal.
lengte Procedure), an arbitrator withdraws from his'her office or a
porty agrees for termination of the mandate of an arbitrator, this does
not imply acceptance af the validity of any round referred to in this
Article or in paragraph (b) of Article 4.1 (Grounds jor Challenge)
(Article
() The arbirral tribunal may rule on a plea referred to in
paragraph (b) of this Article either as a preliminary question or in an
award on the merite. If the arbitral tribunal rules as a preliminary
question that it has jurisdiction, any party may request, within 30
days after having received notice of that ruhng, the Regional Trial
Court to decide the matter, which decision shall he immediatoly executory ard not subject to motion for reconsideration or appeal. Wile
such request is pending, the arbitral tribunal may contribute the
arbitral proceedings and make an award. (Article 4.16)
13.05 WHAT IS THE CONSEQUENCE IF THE MANDATE OF AN
14.01 DOES AN ARBITRAL TRIBUNAL HAVE THE POWER TO
ORDER INTERIM MEASURES?
Where the mandate of an arbitrator terminates under Articles
413(Challenge Procedure) ad 4.14 (Failure or Impossibility to Act)
or because of bis'lor withdrawal from offies for any other reason or
(a) Unless otherwise agreed by the pnrties, the arbitral
tribunal may, at the request of the party, order any party to take
such interim measures of protection as the urbitral tribunal may
consider necessary in respect of the subject to matter of the dispute
4.14)
ARBITRATOR IS TERMINATED?
a
'THE, IT'E'NATIVE pl;
ND 'TH% AI'T
r]
'Te
t:+Mr[ti
LAW
t'lute- 'Tu.
I
following parraph tr) of this Article. Such interim mer:sre may
include, but shall nr be limited tn, preliminary injunction directed
tvi»
agninst a part, appointment of receivers, or detention, preservation,
inspection of property that is the subject of' the dispute in arbitration.
(b) After constitution of the arbitral tribunal, and during
urbitral proceeding, n request for interim measures of protection, or
modification thereof shall he made with the arbitral tribunal. The
arbitral tribunnl is deemed constituted when the sole arbitrator
or the third arbitrator, who has been nominated, has accepted the
nomination and written communication of said nomination and
acceptance hae been received by the party making the request.
1.
be granted:
2,
(aa) To prevent irreparable loss or injury;
(cc) To produce or preserve evidence;
Interim or provisional relief is requested by written
appiication transmitted by rensonablo menns ta the
nrbitrl tribunal and the party against whom relief
is sought, describing in appropriate details of tho
precise relief, the party against wham the relief is
requested, the grouud for the relief, and the evidence,
Failing such agreement, the arbitrl tribunal may,
uhjort to this Chapter, conduct the arbitration in
such manner as it considers appropriate. Unless the
arbitral tribunal considors it inappropriate, the UN.
CTTRAL Arbitration Rules adopted by the UNC}TRAL on 28 April 1976 and the UN General
Assembly on 15 December 1976 hall apply subject
to the following clarification: Al references to the
"Secretary-General of the Permanent Court of Arbitration at the Hague" shnll be deemed to refer to the
appointing authority.
(c)
The power conferred upon tbe arbitral tribunal
inelades the power to determine the admissibility,
relevance, materinlity and weight of any evidence.
request,
Either party may apply with the curt for assistance
in implementing or enforcing nn interim measure
ordered by an arbitrnl tribunal.
pt.y who does not curply with the order shall be
iablo for nl damages, resulting fromnoncompliance,
including all expenses, and reasonable attorneys
fees, paid in obtaining tle order's judicial enforce
ment. (Article 4.17
(h)
tione upon the provision of secumty or any act or
omission specified in order,
(vi)
'!
Subject tu the provisions of this Chapter, the parties
nre froe to agree on the procedure to be followed by
the arbitral tribunal in conducting the proceedings.
(Article 4.19)
(iii) 'The order granting provision] relief may bo condi-
The order granting or denying an application for the
interim elief shall be bdmg pun the parties
td
(a)
8ions
(v)
it
On Determination of the Rules of Procedure.
(dd) To compel any other appropriate acts or omis-
supporting the
l Heultium of 1ln Alternative
On Treatment of Parties.
(bb) 'To provide security for the performance of an
obligation;
(iv)
ht.so
The nrbitral proceeding s is governed by the Equal
Treatment of Partie.s It states: "The parties shall be treated
with equality and each sha!l be given a full opportunity of
presenting his/her case." (Article 4.18)
Any party may request that the interim or provisional
Such relief' may
«ts Ar
Ile
15.00 DISCUSS THE CONDUCT OF ARBITRAL PROCEEDINGS.
reliefhall be observed.
(ii)
t
RULE 5 -- Conduct of Arbitrat Proceedings
(c) 'The tallowing rules on interim or provisional relief shall
be observed:
(i)
'Ar L
huh+
3.
On Venue
(a)
of Arbitration.
T'he parting are free to agree on the place of arbitration. Failing such agreement, the place of arbitration
shall be in Metro Manila unless the arbitral tribu-
nal, having regnrd ta the circumstarees of the case,
IH
A4TN'I'IN DIS'Ti,
« trT'Io
AT ''HI ARB'\UT'IHN 1AW
P'I'TL
d'hits 'T'he
including the convenience of the parties, shall decide
different place of arbitration.
'The·
ties may submit with their statements,
nll laments they consider to be relevant or may
add a reference to the documents or other evidence
on
()
Notwithstanding the rule stated in paragraph (a)
they will submit
of this provision, the arbitral tribunal may, unless
otherwise agreed by the parties, meet at any place
it considers appropriate for consultation among its
(b)
uments. (Article 4.20)
On Commencement of Arbitrl Proceedings.
Unless otherwise agreed by the parties, the arbitral
proceedings in respect of n particular dispute commence on
the date on which a request for that dispute to be referred
to arbitration is received by the respondent. (Article 4.21)
5,
7.
On Hearing and Written Proceedings.
(•a.) S b" •t w anv c."Ontnuy a኏
ment by zhe parties.
uDJeCL
.¥
it)
On Language to be used.
(a)
rials. However, unless the parties have agreed that
no henrings nt an pproprinte ste uf the proceed.
igs, if so requested by a party.
The parties are free to agree on the language or
languages to be used in tle arbitral proceedings. Failing such agreement, the language to be used shall be
English. This agreement, unless otherwise specified
therein, shall apply to any written statement by a
(b)
tribunal for the purposes of inspection goods, other
'The arbitral tribunal may order that any documen.
(c)
by a translation
into the language or languages agred upon by the
pnrtieg or determined by the arbitral tribunal in
accordance with paragraph (a) of this Article. (Article
1.22)
On Statements of Claim and Defense.
(a)
Within the period of timc agreed by the parties or
determined by the arbitral tribunal, the claimant
shall state the facts supporting his/aer/its claim,
the points at issue and the relief or remedy sought,
and the respondent shall state his/hcrfits defense in
respect of these particulars, unless the parties have
otherwise agreed as to the requirod elements of such
statements,
The parties shall he given sufficient advance notice
of any hearing and of any meeting of the arbitral
property or documents.
Lary evidence shall be accompanied
6.
ther to,
le
,]
the arbitral tribunal shall decide wheth
to bold
oral hearings for the presentation ol evidence or [or
oral argument, or whether the proceedings shall be
conducted on the basis of documents and otter mate-
party, any hearing and any award, decision or other
communication by the arbitral tribunal.
(b)
Unless otherwise agreed by the parties, either party
mey amend or supplement his/her clsim or defense
during the course of the arbitral proceedings, unless
the arbitral tribunal considers it inappropriate to
allow such amendment having rogrd tn the delay in
making it, (Article 4.23)
members, for hearing witnesses, experts or the pares, or for inspection of goods, other property or doc-
4.
tulen ml Ito r,ult- of tl Altertstiv«
It+ Ate+ du
Aet t 'Ii.4
lu hunt
8.
All statements, documents or other information
supplied to the arbitral by one party ahall be commu
icated to the other party. Also. an expert report or
evidentiary document on which the arbitral tribunal
may rely in mnking its decision shall be communicated to the parties. (Article 4.24)
On Default of a Party.
Unless atherwise agrad by the parties, if, without,
showing sufficient cause,
(a)
the claimant fails to commumicnte his statement of
claim in accordance with paragraph (a) Article 4.23
(Statement of Claim and Defnse),
e
the arbitral tribunal shall terminate the proceedings;
(b)
he respondenr fails to communicate his/her'its
~t sent of defense in accordance with paragraph ()
wt'I
THI AH'l'RNAT'VI II]'UT HP+.""WM
AND THI ARI'ILA TON 1AW
f
i
phw
I,s
party
11.
any party's fails to appear at a hearing or to produce
documentary evidence, the arbitral tribunal may
continue the proceedings and make the sward on the
On Expert Appointed by the Arbitral Tribunal.
Unless otherwise agreed by the parties, the arbitral
tribunal:
(a)
(b)
may appoint one or more experts to report to it on
specific issues to be determined by the arbitral tribunal; or
expert any relevant
information or to produce, or to provide access to. any
rolevnnt documents. goods or other property for his/
her inspection.
may require n party to give the
Unless otherwise agreed by the parties, if a party so
requests or if the arbtral tribunal considers it necessary,
tho expert shall, after delivery of his/her written or oral
report, participate in a horing where the parties have the
opportunity tw put questions to him and to present expert
witnesses in order ta testify on the points at issue. (Article
4.26)
10.
On Court Assistance in Taking Evidence.
Th arbitral tribunal or a party with the approval
of the arbitrul tribunal may request from a court of the
Philippines assistance in taking evidence. The court may
execute the request within its competence and according
to its rules on taking evidence
Tho arbiral tribunal shall have the power to require
any person to attend a heuring as a witness. 'The arbitral
tribunal shall have the power to subpoena witnesses and
documents when tho relevancy of the testimony and th
materiality thereof has been demonstrated to it. The
artitral tribunal may also require the retirement of any
witness during the testimony of nny other witness.
aw hring a petition
under this Section
hfor the curt
evidence before it. (Article 4.25)
9.
l l{+lats sf tl- lterna1tr»
Re»hon he+ f 22Uk1
, Nu· t
in aexordance with the lules of Court or
ADR
Rules. (Article 4.27)
the peril
Article 4.28 (Statement of Claim and Defense, the
arbitral tribunal hall continue be proceedings without treating such failure in itself as an admission of
the claimant's allegations;
(c)
t
!
On Rules Applicable to the Substanee of Dispute.
ta) The arbitral tribunal shall decide the dispute um
accordance with such rules af law as are chosen
by the prties as applicable to the substance of the
dispute. · ny designation of the law or legal system
of a riven state shall be construed, unless otherwise
expressed, as directly referring ta the aubetnntve
law of that state nnd not its conflict of laws rules.
(h)
Failing any designation by the parties, the arbitrnl
tribunal shall apply the lw determined by the contliet of law srules, which it considers applicable.
(e)
The arbitral tribunal shall decide ex aeqo et bono
or as amiable compositeur only if the parties have
expressly authored it to do so
In all eases, the arbitral trihunl shall decide in
accordance with the terms of the contract and shall
tke into account the uages of the trade applienble
tu the transaction. (Articie 4. 2)
I
F
I
i
l
I
(d)
12.
Decision-Making by Panel
of Arbitrator.
In arbitral proceedings with more than one arbitra-
\
tor, any levision of the nrbitrnl tribunal shall be made,
unless otherwise agreed by other parties, hby n majority
of all its members. However, questions of procedure ma
be decided by a presiding arbitratar, if so authorized l
the parties tr all members of the arbitral tribunal. (Article
I
'
4.29)
13.
Settlemenl
If, during arhital proceedings, the parties settle the
the arbitral tribunal shall terminate the proceed
dispute,
ings and. if
requested by the parties and not objected to by
the arbitral tribunal, record the settlemonr in the form ol
an arhitral award on agreed termsAn
terms shall be made
in aceoon agreed
r award
s
r'
,
a€'conof
Article
4.31
{/rzn
anad
the
with
provisions
dance
i
'I'
Ht A 'RN
VI S]'I'E ('M 1I1+t4
'ND 'T'TH AMI'TRAN'TION 1,Aw
Mr'T1
o,he i+tap lulu, awl iKej,tat u
I. ts· 1% tut
et of zr4
j
tents of Award), an ahall state that it is an award. Such
an award has the same status and effect as aw other
award on the merits aft the case. (Article 4.30)
(b)
(c)
The ward shall be made in writing and shall he
signed by the arbitrator or arbitrators. In arbitral
proceedings with nor than one arbitrator, the aignatures of the majority of all members of the arhinal
tribunnl shall suffice, proded that tho reason for
any omitted signature is stated.
The award shall state the reasons upon which it is
based, unless the parties have agreed that no rensons
are to be given or the award is an award on agreed
terms under paragraph (a) of Article 4.220 (Place of
Arbitration).
The award shall state its date and the place of arbitration as determined in aoeardance with paragraph
(a) ol this Article. 'The award shall he deemed to have
been made at that. place.
(d
15.
After the award is made, a copy signed by the arbirators in accordance with paragrapb (a) of this
Article shall be delivered to ench party. 'Article 4.31)
On Termination of Proceedings.
(a)
(b)
16.
T'he mandate of the
td)
Notwithstanding the foregoing. the arbitral tribunal
may, for speciul reascn. reserve in the final award
'
·
or order,
a" hearing to quantity costs and determine
which party shall bear the costs or the division thereof as mav be determined u be equitable. Pending
determination of this issue, the award shall not be
deemed final for purposes of appeal, vacation, correction, or any post-award pnceedings. (Article 4.32)
~)
'The claimuent withdraws his/her/its claim, unless the roepondont objects thereto and the ar.
bitral tribunal recognized a legitimate interest
on hi/her~its part in obtaining » final settlement of the dispute;
4.
On Correction and Interpretation of Award, Additional Award.
ta) Within thirty (30) days from receipt of the awurd.
unless another period of time has been agreed upon
by the parties:
A party may, with notice to the other partly,
()
request the arbitrul tribunal to correct in the
award any errors in computation, any cleriral
or typographical errors or any errors of simil
nature;
'The arbitral proceedings nre terminated by the
final award or by an order of the arbitral tribunal in
accordance with paragraph (b) ot this Article.
The arbitral tribunal shall issue an order for the ter.
minarion of the arbitral proceedings when:
arbitral tribunal ends with terminatom of the artntrel prcccdipgs subject to the
(Correction cmn Irterpre
provisions of Articles
tation of Award, Additionai Auard) and paragraph
(d) of Articles 4.34 (Application for Setting Aside an
Exclusite Recourse against Arbitra! Award).
(c)
4. On Form and Contents of Award.
(a)
l l A/sat ne
(ii)
A party may, if so agreed bs the parties and
with notice tu the other parts, request the arbitral tribunal to give an interpretation of a se(b)
cific point or part of the awnrcd.
If the arbtra! tribunal considers the request to be justted, it shall make the correction ur give the nterpretation within 30 days from receipt of the request.
The interpretation shall form pat af the award
The parties agree the termination of the procecding;
The arbitral tribunal may correct any error of the
type referred to in paragraph {a) of this Article on
its own imtintive within W days from the dnte of the
award.
(iii) The arbitrnl tribunal finds that the continuation of the proceedings has for any othor reason
become unnecessary or impossible,
Unless otherwise agreed by the parties, n party may,
with notice to the other party. request, within 330
days receipt of the award, the arbitral tribunal to
{ii)
(c)
i
H' AMI'HNTIE IM
It HE' +LA'i'MI
NI TIE, MII'TA'TIN 1AW
LA4I'I I
f'letsr Th
l»pd a ut
it tte+ft u
6t days,
17.
'The arbitral tribunal may extend, if necessary, the
period of tire within which it shall make a correcion intorprettion or an additional award under
paragraphs {a) and {b of this Article.
if)
T'he provisions of Article 4.31 (Form and Contents of
ward) shali apply to a curreetiun or interpretation
of the award or to an additional ward. (Article 4.813)
eoure to a cotut against an arhirral award may
be mude orly by application for setting aside in
ncordancn with second and third paragraphs of this
Article,
(l)
An arhitra] awnrd may be stet aside by the Regional
Trial Court only if:
()
the party making he application furnisbos
proof that.:
(as)
party to the arbitration agreanent was
under some incapacity, or the said agreement is not valid nder the law to which
the parties have subjected it or, failing
nn inlienton thereon, under the law of
tle Philippines; or
Act or
(ii)
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
fbb) the sward is in conflict with the public
policy of the Philippines.
(c)
An applieation far sotting aside may not be made after three months have elapsed from the date on which
the party making that application had received the
award or, if n request had been made under Article
4.33 (Correction and Interpretation of Award, Addi-
tional Award) from the date on which that request
has been disposed of by the Arbitrnl tribunal.
(d)
'The court, when asked to sot aside nn award, may,
where appropriate and so requested by a party, suspend the setting aside proceedings for a period of
time determined by it in order lo give the arbitral
tribunal an opportunity to resume the arbitral pro.
ce~dings or take such other action as in the arbitral
tribunnl's opinion will eliminate the grounds for setting aside.
(e)
A party may bring a petition under this Article before the court in accordance with the Special ADR
Rules. (Article 4.4)
(bb) the party making the application was not
given proper notice of the appointment of
an arbitrator or of the nrbit.ral proceedings or was otherwise unable to present
his case; or
(ce} the award doals with a dispute not eontemplated hy or not failing within the
terms of the submission to arbitration
or contans decisions on matters beyond
tbw: wope of the ubmisson to arbitration,
f' {tH
(dd) the composition of the arbitral tribunal or
the arbitral procedure was not in aeoordance with the agreement of the parties,
unless such agreement was in conflict with
a provision of ADR Act from which the parties cannot derogate, or, falling such agreemen.t, wns not in accordnnce wth AD
On Application for Setting Aside an Exclusive Recourse against Arbitral Award.
ta)
'et.
provided that, if the eeisions on mntters
submitted to arbitration can he separated
from those not so submitted, only the part
of the award wlich vontins decisions on
matters not submitted to arbitration may
bo set aside, or
auditional award as to claims» prsw:turd 1n
the nrbtral proceedings hut nritend from the ward
If the arbitral tribunal considers the request to be
justified, it shall make the additional ward within
take an
(e)
9
Hole, ul %+plntavwf t/ Alter+al4
i
It
DI''TE H 4
tr'tuA'ttN 1Aw
THE AL.TINA'TIVE
AMI TH
u
In1
IM;I
d'lpler Tl
RULE 6 - Recognition and Enforcement of Awards
•
The rules an recognition and enforcement
are
''
lrsh+
I)e put
I
I0!
lee, ul Kw;ulatt m- f {he iterate
1er·lut et. of 'I1f
, Iin
I/ the I&egional 'Trial Court ha& recognized the arbitral award but an applicntion for rejection and/or suspension of
enforcement of that award is subsequently made, the Regional
Trial Court may, if it considers the application to be proper,
vacate or suspend the decision to enforre that nwart and may
also, on the application of the party claiming recognition or on(f
16.00 WHAT ARE THE RULES ON RECOGNITION AND ENFORCE
MENT?
et
a £UL0WS,
FI,
it
(a) A foroign nrbit.rnl award shall be recognizod ss bind
ing and, upon petition in writing to the regional trial court,
be enforced subject to the provisions of this Article and of
Article 4.36 (Grounds for Refusing Recognition or Enforcement).
shadi
forement of that award, order the other party seeking rejection
ar suspension to provide appropriate security. (Article 4.3)
The petition for recognition and enforcement of scb
arbitral awands shall be fled with the RRerional trial Court in
accordance with Special ADR Ruleg,
16.01 WHAT ARE THE GROUNDS FOR REFUSING RECOGNITION
OR ENFORCEMENT OF CONVENTION AWARD AND NONCONVENTION AWARD?
C'onvention Award The N&w York Convention
The grounds for refusing rorognition or enforcement are as
follows:
(b)
(i)
shail govern the recognition and enforcement
of arbitral awards covered by said Convention
The petitioner shall establish that the country
in which the foreign arbitration award was
made is a party to the New York Convention
(ii}
Non-Convention Award
The recognition
and enforcement of foreign arbitral awrds not
covred by the New York Convention shall bo
done in accordance with procedural rules tu b
promulgated hy the Supreme Court. 'The court
may, on grounds oaf comity and reiprocity,
recognize and enforce a non-conventiuin award
A.
With Respect to Convention Award.
Recogition or enforcement of an arbitral award,
made in a state, which is a party to 1he New York Convention, may be refused, at the request of the party against
whom it is provoked, oniy if the party furnishes to the
Regional 'l'rial Court proof that:
{a)
The parties to the arbitration agreement are, under
the law applicable to them, under some incapacity;
or he said agreement i not valid undor the law to
which the parties have subjected it or; failing any
indication thereon, under the law of the country
where the awar d was made; or
(h)
the party against whom tho award is invoked was
not given proper notice of the appointment of an
arbtrator or of the arbitral proceedings or was other.
wise in able to present his ease; or
(c)
the award deals with dispute not contemplated by
or not failing within the terms of the submission
to arbitration, or it contains decisions on matters
beyond the scope of the submission to arbitration;
provided thnt. if the decisions on matters submitted
to arbitration can bo separated from those not so
submitted, that part of the award which contains
derisions on matters submitted to arbitration may
be recognized and onforcod; ar
as a convention award
The party relying on an award or applying lro its enforcement shall file with the Regional 'T'rial Court the original
or duly authenticated copy of the award and tho original arbiration agreement or a duly authenticated copy thereof, If the
awart! or agreement is not made in au offcial language of the
Philippines, the party shail supply n duly certified translation
(c)
thereof into such language.
(d) A foreign arbitral award when confirmed by a cout
of n foreign country, shall be recognized and enforced as g
foreign arbitral award and not as a judgment of n foreign court.
(o) A foreign arbitral award when confirmed by the
Regional Trial Court, shall be enforced in the ame manner as
final nnd executory decisions of court of law of the Philippines
4l.-
TI4 AM
rt
IRA'IV [TI I&ULT1+HJ
NI THI AKI'HA'TON 1,AW
'iu
1.L
•
the composition
of the arbitral tribunal or the arbi
Ira? procedure was not in accordance with the agreement of the purties, or failing such agreement, was
not in accordance with the law of the country where
the arbitration took place; or
(.:!/
d, 呸
the award has not become binding on the parties or
has been set aside or suspended b y a court of the country in which, ur under the law of which, that awnrd
we made.
(e)
Hecognition and enforcement of an arbitral award
may also be refused if the Regional Trial Court where
rce ognition and enforcement is sought finds that:
the subject matter of the dispute is not capable of settlement by arbitration under the law of Philippines; or
t)
the recognition or enforcement of the award would be
contrary to the public policy of the Philippines.
.4,;
party ta aa fforeign
arbitration proceeding my
opr
ppose
application for recognition nnd enforcement of
the arbitral award in accordance with the Special ADR
Rules only on the grounds enumerated under paragraph
ta) and (e) of Article 4.95 {Recognition and Enfrcement).
o
other
raised
shall
be
disregarded
by the
round
Any
Regional [rin. Court. (Article 4.36)
(b)
s
B.
an
'
With Respect to Non-Convention Award,
(a)
A foreign arbitral award rendered in a state which
is not s party to the New York Convention will be
recognized upon proof of the existence of comity
and reciproity and may be treated as a convention
award. not ao treated and if no comity or reciprocity exists, the nor convention award cannot be
recognized and/or enforced but may be deemed as
presumptive evidence of a right as between the parties
in accardance with Section 48 of the Rules of Court.
If
(b)
If the Regional Trial Court has recognized the arbitral award but a petition for suspension of enforcement of that award is subsequently made, the Re.
petition
gional Trial Court may. if it con»ides
to be proper, suspend the proceedings ta enfrce
o the
award. and may also, on the application of the party
the
I'lore
t
(c)
as·le
lh
in,
tt
·st·
I'et
l
d lie,lali@vet. al lw
Jet t 'MJ
· Iterative
·liming; recognition or enforcement of' tbat award,
order the other party seeking suspension to provide
appropriate securty.
If the petition for recognition ar enforcement of the
nrbitral award is fled hy n party and a counter-pet-i
tion for the rejection of the arbitral award in filed by
t.he other party, the Regional Trial Court may. if it
considers the counter-petition to be proper hut the
objections thereto may be rectified or cured, remit
the award to the arbitrni tribunal for appropriate
nction and in the meantime suspend the recognition
and enforcement proceedings and may also on the
application of the petitioner order the counter-poti
uiorer to provide appropriate security. {Article 4.6)
16.02 WHAT IS THE REMEDY OF THE LOSING
ARBITRAL AWARD RENDERED BY THE
PARTY FROM AN
REGIONAL TRIAL
COURT?
A decision of the Regional Trial Court recognizing, enforcing.
veating or setting aside an arbitral award may be appealed to the
Court of Appels in accordance with the rules of praeetdre to be
promulgated by the Supreme Court. (Article 4.87)
16.03 IS THE APPELLANT REQUIRED TO POST A BOND?
Yes, the losag party who appeals from the judgment
of tbe
curt
o recognizing and enforcing an arbitral award shall bo required
by the Court of Appeals to post a counter-bond executed in favor of
the prevailing party equal to the arount of the awnrd in accordance
with the Special AR Rules. (Article 4.37)
t6.04 IS A STIPULATION THAT THE ARBITRAL TRIBUNAL'S AWARD
OR DECISION SHALL BE FINAL VALID?
Yes, any tipulntion hy the parties that the arbitral tribunal's
award or decision shall be final, and therefore not appealable, is
valid. (Articte 4.7)
16.05 WHAT IS THE CONSEQUENCE IF THERE IS A STIPULATION
THAT THE ARBITRAL TRIBUNAL'S AWARD OR DECISION
SHALL BE FINAL?
Such stipulation carries with it a waiver of the right to appeal
from an arbitral award. (Article 4,37)
,
o.
'PI AMT'KNA'TIVIS DI~HI
+KT 1
Lr+t
AND» 'THI AKITH'THIN I,AW
t'hpt
16.07 WHAT IS THE NATURE OF THE PROCEEDINGS INVOLVING
THE FOLLOWING?
(a) recognition and enforcement of an arbitration agroe
ment or
'8
(b)
vacation or setting aside of an arbitral award, and
(c)
any application with a court for arbitration assi
tance and supervision, except appeal
3sis-
Under Article 4.38, proceedings for recognition and %a#
ment of'an ·it
niorce
a
nrturnton agreement or for vacation or getti:
·id o ¢
a arbitral
vng
as«de
rd,
.
awara, an«d any application with a court for arbitration
ass1stance and supervision, except appeal, shall be deemed as,
;4
speca
proceedings.
t..
s,
e
16.08 WHICH COURT HAS JURISDICTION TO TRY THESE CASES?7
CITE THE VENUE THEREOF.
These cases may be fled with the Regional Trial Court where:
(a) the arbitration proceedings are conducted;
(b) where the asset tu be attached or levied pan, or the
l to
be enjomed is located;
'
eac
(c) where any af the parties to the dispute resides or he its
place of business; or
r 1as ts
tale wntvy {lo; ml IRelat ir af the lerntve
tn it I«alt m wt, af '4up»]
16.10IS A PARTY ENTITLED TO LEGAL REPRESENTATION IN
NTERNATIONAL COMMERCIAL ARBITRATION CONDUCTED
IN THE PHILIPPINES?
16.06 IS THE REMEDY OF CERTIORARI UNDER RULE 65 AVAILABLE IF APPEAL IS DEEMED WAIVED BY VIRTUE OF THE
AFORESAID STIPULATION? (Article 4.37)
'es, the implementing rules expressly provide that it is ·ith
18 wt
out
prejudice to· · de ,]
Ju«cal review by way cf certiorari under Rule 6; f th
Rules cf Court. (Article 4.387)
o o1 tne
'Its+
J
\
Yes. in international commercial arbtaon conducted in the
party ray he represented by any persor of his/her
choice: Provided, Tst such representative, unless admitted to the
practice of law in the Philippines, shall not be authorized to appear
us counsel in any Philippine court or any ther quasi-judicial body
whether or not such appearance is in relation to the arbitration in
which ho'she appenrs. (Article t.10)
Philippines,
16.11 MAY THE ARBITRATION PROCEEDINGS BE DISCLOSED TO
THE PUBLIC?
No, the arbitration proceedings, including the records, evidence
mnd the arbitral award, shall be considered confidential and shall not
be published except:
(a}
with the consent of the parties; or
(b) foe tho limited purpose af disclosing to the court relevant
documents in cases where resort to the court is allowed herein.
Provided, houweuer, That tho court in which the action or the
appeal is pending mazy issue a protective order to prevent or prohibit
disclosure of documents or information eontaiming secret processes,
developments, research and other intormation where it is ±shown
that the applicant shall be materinily prejudiced hy an authorized
disclosure thereof (Article 4.4i)
16.12 IS A PETITION FOR RECOGNITION AND ENFORCEMENT
AWARDS SUMMARY IN NATURE?
OF
in the National Capital Judicial Region at the ti,
%44,
applient. (Article 1.38)
'
oPnon o fthe
Yes, n petition for recognition and enforcement of wnrds
brought before the court ehall be heard and dealt with summarily in
accordance with the Special ADR Rules. (Article 4.4)
16.09 IS NOTICE OF PROCEEDINGS TO PARTIES MANDATORY7
16.13 WHAT IS THE CONSEQUENCE WHEN A PARTY DIES AFTER
(di)
'IF a special proceeding for recognition and enforcement
ot an arbiani award, the court shall send notice to the arties at
'tat
their address of record in the arbitration. or if any
e
pant
served notice at such ndress, at auch part's last k
dd
:
-"·
RII
Known
ad«
"ess
'Th,
e notice shall be sent at least 15 days before the dato set far the
S
initial hearing of the application. (Article 4.39)
IFt
MAKING A SUBMISSION OR A CONTRACT TO ARBITRATE?
Where s party dies after making a submission or a contract to
arbitrate as prescribed in these Ruics, the proceedings may be begun
or continued upon the application af, or notice to, his/her executor or
administrator. or temporary administrator of his'her estate,
it, AL'TEI4N''!IVE, IlSF'TE, I;
Ar1ti1
AND 'IHI, Hi'TAT0N 1w
+'Ail't
I{le
l egudatn
lw· h + ot
Impui Helt±on \el. of 2t-4
t'Ip·ts'TI
!
J
ln any such ease, the court. may issue an order vxteding the
tame within which rotice of a motion to recognize or vacate an award
must be served. Upon recognizing an award, where a party has died
since it was tiled or delivered, the court must enter judgment in the
name of the original party; and the proceedings thereupon are the
same as where a party dies after a verdict. (Article 4.43)
16.14 WHAT RULES SHALL GOVERN A MULTI-PARTY ARBITRA
TI0N?
-
When a single arbitration iuvolres more than two parties, the
foregoing rules, to the extent possible, shall be used, subject to such
modifications consistent. with this Chapter ns the arbitral tribunal
shall deem appropriate to address possible complexities of a multiparty arbitration (Article 4.44)
-
(a) that the arbitration proceedings shall be consolidated
with other arbitration procoedings; or
(b) that concurrent hearings shall be held, on such
"
may be agreed.
term
er
ts
as
Unless the parties agree to confer such power on the arbitral
tribunal, the tribunal has no power to order consolidation of arbitraton proceedings or concurrent hearings. (Article 4.45)
16.16 DISCUSS THE COSTS OF ARBITRATION IN THE ARBITRAL
TRIBUNAL'S AWARD.
Article 4.46 provides:
"(a) The arbitral tribunal shall fx the costs of arbitraThe term "costs" include only:
tion in its award.
(iw)
'T'he travel and other expenses of witnesses to
the extent such expenses zure approvad by the
rbtral tribunal;
(v)
The costs fro legal representation and assistanee of the successful party if such coats wero
claimed during the arbitral proceedings, and
only to the extent that the arbitral tribunal
determines that the amount of such costs is
reasonable; and
(vi) Any fees ad expenses of the appointing authoI
rity.
t
(b) The fees of the arbitrul tribunal shall be reasonable
in amount, taking into account the amount in dispute, the complexity of the subject matter, the time ±pent by the arbitrators
and any other relevant circumstances of the case.
I
If an appointing authority bas been agreed upon by the
parties and if such authority has issued a schedule of fees for
arbitrators in international cases which it administers, the
arbitral tribunal in fixing its fees shall take that schedule of
fees into account to the extent that it considers appropriate in
the circumstancos f tho case,
16.15 MAY THE PARTIES AGREE TO CONSOLIDATE PROCEED.
INGS AND CONCURRENT HEARINGS?7
Yes, the parties and the arbitral tribunal may agree
14
of the Alternatir
I
If such appointing authoriy has not issued a scedule
h
of fees for arbitrators in international cases, nny party may,
at any time request the appoiniing authority to furnish a
attement setting forth the basis for establishing fees which is
customarily followed in internatiunnl cases in which the autho
rity appoints arbitrators. If the appointing authority consents
to provide such a statement, the arbitraul tribunal, in fixing its
fees, shall take such information into account to the extent
that it considers appropriate in the circumstances of the case,
(e) In cases referred to in the second and third subparagraphs of paragraph (h) of this Article, when a party so
requests and the appointing authority consents to perform the
The fees of the arbitral tribunal to be stated
separately as to each arbitrator and to be fixed
by the tribunal itself in accordanee with the
paragraph (b) af this Article;
T1be travel and ather expenses incurred by the
'
arbitrators;
function, the nrbitral tribunal shall fix its fees only after consultation with the appointing authority which may make any
comment it deems appropriate to the arbitral tribunal concerning the fees.
(ii) The costs of expert advice and of other sssistance required by the arbitral tribunal:t
(d) Except as provided in the next sub·paragraph of this
paragrapb, the cost3 of arbitration shall, in principle, be borne
(i)
(i1.' )
TH AM'!IHNAT'IVE AMIT IKE{+H,+ Tu1l
ANI+ TH ARITA1\0N 1,AW
('/pits
I
by the . unsuccessful part· , Hoowever, the e arltral
,
·j,
tril
l may
apportion each of such costs between the partie ; ; 4
.:
Wies l 1l «eierm
Ines th at apportionment is reasonable. tali·
'R
IR,
aatng :mtn account
the
tie circumstances of the case.
y,
'l'hush· he-
r.
I
When the arbitral tribunal issues an order for the termination of the arbitrul proceedings or makes an
r%4
:.
,.
test award oh agree
te
erms, it shall fix the costs: af arbitration
M
:
d to in
't+IOI To[erred
para,
hs
grapl (b), (c) and (td) of this Article in the context f th
or award.
TOI that order
e.
"
r
The arbitral tribunal, on its establishment,
may
request each party deposit an equal amount as an advance for
the costs referred to in paragraphs (). (ii) ad (iii) of
anc au) u:paragraph
(a) of this Articlo.
(c)
to
ttt
Chapter 5
1
DOMESTIC ARBITRATION
RULE 1 -- General Provisions
$.
With respect to the costs of legal representation and
"Stance retrod to in paragraph te) of paragraph (a (iii) of
this Article, the abitral tribunal, taking into account the cir.
· cumstan&es af the case, shall be free to determine
·hi:h party
'Imme w/cl
shall be:
a such costs or may- apportion such costs
at
Ru ueiween the
tie
purtes jf·'it determines that gppointment is reasonable.
' w'II
no I(hr l ltlof tl- lu
pt. Ii
4it ts wt 4t 'ft
17.00
WHAT IS THE SCOPE OF APPLCATION OF DOMESTIC ARBITRATION IN CHAPTER 5?
The scope of application of Domestic Arbitration in Chapter 5
eludes
(a) Domestic arbitration, which is not international as
defined in paragraph C8 of Article 1.6 shull continue to be go
verned by R.A. No. 876, otherwise know as "The Arbitration
Law." as amended b y the ADR Act. Articles 8, 10, 11. 12, 13,
14, 18, and 19, and 29 to 32 of the Model Law and Sections
22 to 31 of the ADR Aet are specifically applicable to domestic
arbitration.
In the absence of a specifit applicable provision, all other
rules applicable to international commercial arbitration may be
applied in a suppletory manner to domestic arhitration.
+.
(b)
~,,'ie the course of the arbitral proceedings. the arbitra
nal may request supplementary deposits from the parties.
If' an appointing authority has been agreed upon by the
parties and when a party so requests and the a
.,,'
·. or
·9point1ngy au
thorjtv co
.y
nets to perform the function, tie arbit tl ttib
shall fi th
.
"
ar
ra tr mum
•
I
e amounts of any deposits or supplementary deposits only after consultation with tho appointing authority which
may make any comments to the arbitral tribunal which it
deems appropriate concerning the amount of such deposits
d
3113 an
supplementary deposits.
Ifthe required deposits are not paid in full within 39 davs
""eeipt of the request, the arbitral tribunal shall so ta.for m
parties in order that the ruquired payment may be made. f
such payment is not mnde, the arbitral tribunal may orde th
suspension or termination of the arbitral prvwvedinc,
"·e
After the award has been made, tho rbitral tribunal shall
render an accounting to
the e part·ti
. received
o
ies offth
tie deposits
and
return any unexpended balance to the purtie.
'This Chapter hall apply to domestic arbitration
whether the dispute is commercial, as defined in Section 2I of
the ADR Act, or non comcrcial, by an arbitrator who is a pri
vate individual appointed by the parties to hear and resolve
their dispute by rendering an award; Provided 'That, although
a construction dispute may be commerciai, it shall continue to
be governed by E.O. No. 1008, s.1985 and the rules prorulgated by the Construction Industry Arbitration Commission.
(c) 'Iwo or more persons or parties may submit. to 8rbi-tration by one or more arbitrators any controversy existing
between them at the time of the submission and which may be
the subject of an action; or the parues to any coutract may in
such contract agree to settle by arbitration a controversy thereafter arising between them. Such submission or contract shall
be valid, enforceable and irrevocable, save pun euch grounds
as exist at law for the revocation of any contract.
Such submission or contract may include questions arising
out of valuations, appraisals or other controversies which may
be collateral, incidental, precedent or subsequent to any dispute
between the parties.
it \t,TR!TI DE:.4'l rt i u+
+NI
controversy cannot. h urbit.rated whwre «w »! the prties
to the controversy i an iufant, ur a person judicially «declared tu
be incompetent, unless the appropriate court having jurisdiction
approved a petition for permission to submit such controversy to
arbitration made by the general guardian or guardian ad 'item of
the infant or of the incompetent,
But. where a person capable of entering into a submission or
contract has knowingly entered into the samo with a person ineapable of so doing, the objoction on the ground of incapacity can be
tnken only in behalf af the parson s incapacitated. (Article 5.)
17.01 HOW SHOULD THE DELIVERY OF WRITTEN COMMUNICATION BE MADE?
The delivery of written comrnunication can be made through
the following:
(a) Except as otherwise agreed by the parties, a written
communirtion from one party to the other or to the arbitrator or to an arbitration insitution
t
or from tho arbitrator or
arbitration institution to the parties shall be delivered to the
addressee personally. by registered mail or hy courier service.
Such communication shall be deemed to have been received
on the date it is delivered at the addressee's address of record,
place af business, residence or last known address. 'The commancaton, as appropriate,
be delivered to each party
ta the arbitration and to each arbitrator, and, in institutional
arbitration, one copy to the administering institution.
shell
ib) During the arbitration proceedings, the arbitrator
may order a mode of delivery nnd a rule fur roceipt of written
communications diffcrnt from that provided in paragraph (a)
ol this Article
(e} If n party is represonted by counsel or a represent.a
trve, written communications for that party shall be delivered
to the addresa of record of sueh counsel or representative.
(d) Except as the parties may agree or the arbitrator
may direct otherwise, a written communicntion mnv be delisered by ekvtronir mal or facsimile transmission or bw such
other means that will provide a record of the sending and
receipt thereof at the recipient's mailbox (electronic inbx).
Sura cormunicalion shall be deemed to lave been received
on the sue date of its transmittal and receipt in the mailbox
(electronic inboxi. (Article 5.2)
Itl
rt'I
in+
IHI, AM'W'TWA'TI+»,
lpMer lhs
I
ts Hue
l lKegtnfwm
lots felts wt ut 46A
lop+le
l Ile
lletwtvr
17.02 WHEN IS A PARTY DEEMED TO HAVE WAIVED HIS RIGHT
TO OBJECT?
'The following constitutes a waiver of right to object:
(a) A party shall be deemed to bave waived his righu
to object to non-complunc with any non-mandatory prov1son
of these Rules (from which the parties my derogate) mr any
requirement under the arbitration agreement wbent
() he/she/it knows of such nun-compliance; and
(i) proceeds with the arbitration without stating
his/her/its objections to such non-compliance
without undue delay or if a time-limit u prvile~d therefor, within such period of time.
(b)
If an nct is required or allowed to be done under
this Chapter, unless the applicnhle rule or tho agreement uf
the parties provides a different period for the act to be done,
it shall be done within a period of 30 days from the date when
sucb act could have been done with legal effect. (Article 5.3)
17.03 DOES A COURT HAVE
THE RIGHT TO INTERVENE?
In matters governed by this Chapter, no court shall intervene
except in accordance with the Specinl ADR Rules, (Article 5.4)
17.04 WHAT OTHER FUNCTIONS MAY BE PERFORMED BY THE
APPOINTING AUTHORITY?
Article 5.5 entitled "Court or Other Authority for Certain Fune-
tions
of Arbitration Assistance and Supervision" provides:
"The functions referred to in paragraphs t¢) ad (dy of
Article 5.10 (Appointment of Arbitrators), paragraph (a) of
Article 5.11 (Grounds for Challenge), and paragraph (a) of
Article 5. 13 (Failure or Impossibility to Act), shall be performed
by the appointing authority, uless the latter shall fail or
refuse to act within thirty (3l)) daye from receipt of the ruquet
in which case, the applicant may renew the application with
the court." {Article 5.5)
RULE 2- Arbitration Agreement
18.00 WHAT IS THE FORM OF AN ARBITRATION AGREEMENT?
An arbitration agreement shall be in writing. An agreement is
in writing if it is contained in a documnent signed by the parties or
l'
I'i
ET'ARN'WE IE
:t
ANf T'Ht, IT44\44 4.A
+A
1ti1+
in an exchange of letters, telex, telegrams or otlwr mem of telecommunicntion which provide a record oaf the agreement, or in an
exchange at statements af claim and defense in which the existence
of an agreement. is alleged by one party and not denied by the other.
The reference in a contract to n document containing nn arbitration
clause constitutes an nrbitrntion gruement provided thnt the con.
tract is in writing and the reference is such as to make that clause
part of tho contract. (Article .6)
18.01 MAY A PARTY REQUEST THE COURT TO STAY THE ACTION
AND REFER THE DISPUTE TO ARBITRATION?
A party to an action may request the court bofore which it is
pending to stay the action and to refer the dispute to arbitration in
accordance with their arbitration agreement not later than the pretrial conference. Thereafter, both parties may make a similar request
with the cout, 'I'he parties shall be refrred
e
to arbitration unless the
court finds that the arbitration agreement is null and void, inoperative or incapable of being performed. (Article 5.7a)
Where an action referred to in paragraph (a) of this Article bas
been brought, arbitral proceedings may nevertheless be commenced
or continued, and an awart may be made, whiic the issue is pending
before the court. (Article 5.Tb)
18.02 WHAT MUST THE COURT DO WHEN THE ACTION IS
COMMENCED BY OR AGAINST MULTIPLE PARTIES, ONE
OR MORE OF WHOM ARE PARTIES TO AN ARBITRATION
tuts+ 'Th+
18.03 MAY A PARTY REQUEST FOR AN INTERIM MEASURE OF
PROTECTION?
Yes, it is not incompatible with an arbitration agreement for a
party to request fem n court, bafore the constitution of the arbitral
tribunal or during arbitral proceedings, an interim measure of
protection and for a cuurt Lo grant such measure.
lu µ:\1h,኏111nr1 of the J\ltct'l\l'.UV8
I+put I+ewltun Ac.t 1f 404
tit.utan of the arrb-itral1 trib 0' n1 and during
After the
.
· terim measure ot , protection,
tic
.rtitral proctvdits, a request tor an mne
·'rul zjl al or to
made witthe a-bi?[;""tale
.r o«sication ihercot. may
:;_
hes extent that the arbitral tribunal has no power to
et effectively, the request may he made with the court. (Article
•, pars. a and b)
s;
be
18.04 WHAT ARE THE RULES ON INTERIM OR PROVISIONAL
RELIEF THAT MUST BE OBSERVED?
The following rules on interim or provisional relief shall be
alerve:
()
Any party may request that interim or provisional relief
(i)
Such relief may be granted:
be granted ginst the adverse party.
(aa) To prevent irreparable loss or injury;
(b) To provide security for the performance of an obliaton;
(ce) To produce or preserve evidence; or
(dd) To compel any other appropriate act or omissions.
(i) The order granting provisional relief mny be conditioned
upon the provision of security or any act ar omission 8pe-
cilied m the order.
(iv)
AGREEMENT?
Where the action is commenced by or against multiple parties,
one or rare of whom are partios to an arbitration agreement, the
court shall refre to arbitration those parties who are bound by the
arbitrtion agreement although the civil action may continue as to
those who are not bound by such arbitration agreement. (Article 5.7)
1
1,,,111• 1111 1,111,,• 1(1111•11 Jlllli
(e)
or provisional relief is requested by written apPli
•
·itted by reasonable means to the arbitra
caton tra
transnu
''
zht, des
lits.
"
tribunal and the pary against whom relief s souEI,
Intarim
eribing in appropriate detail of tho procise relief. the par'Y
against whom the relief is requested, the ground for the
relief, and the evidence supporting therequest.
'The order either granting or denying an applicatoi n lo
inter relief shall be binding upon the parties.
Either party may apply with the court for assistance i
implementing ar enforcing an interim measure ordered by
an arbitral tribunal
with the order shall be liable
A PepartyY who does not comply
(vii)
(I)
:.
inchding
¢
fr all damages, resting from noncom]pliance, " . •኏-...1 reason.able attorney'& fees, paid in obll expense8, +IU
taining the order's judicial enforcement.
(vi)
it M'EHN'IHVI II;I'TE
TI
;M.A rPJ
I 'hasp+
AND TH' AKI'TA'TIO» 1.AW
18.05 WHAT ARE THE MATTERS DEEMED INCLUDED IN THE
INTERIM MEASURES OF PROTECTION?
Unless otherwise agreed by the parties, the nrbitral tribunal
may, al the request uf a party, order any party to take such interim
measures of protection as the arbitral tribunal may consider necessary in respect of the subject matter of the dispute following the
Rules in this Article. such interim measures may include but shall
not be limited to preliminary injunction directed against a party,
appointment of receivers or detention, preservation, inspection af
property that is the subject of the dispute in nrbitration. Either
party may apply with the court for assistance in implementing
or enforcing an interim meaure ordered by an arbitral tribunal.
(Article 5.8)
RULE 3 - Composition of Arbltral Tribunal
19.00 HOW MANY ARBITRATORS MUST CONSTITUTE AN ARBITRAL TRIBUNAL?
The parties are free to determine tho number of arbitrators.
Failing such determination, the number of arbitrators shall be tbrve.
(Article 5.9)
19.01 WHO MAY BE APPOINTED AS ARBITRATOR?
'ny person appointed to serve as an arbitrator must be of legal
age. in full enjoyment of his/her civil rights and knows how to read
and write. No person appointed to sorve as an arbitrator shall be
related by blood or marriage within the sixt hdegree to either party
to the controversy. No person shall serve as an arbitrator in any proceeding if he/she has or has had financial, fiduciary or other interest
in the controversy or cause to be decided or in tho result of the proceeding, or bas any personal bias, which might prejudice the right of
any party to a fir and impartial award.
No party shall select as an arbitrator any person to act as his/
her champion or to advocate his/her ause. (Article 5.I0, par. a)
I
ls+
I ii1+ I
I ltl.t•
tot+- Ke
Ir
IL%
1c,
wt t kM
1 •• 11, .. t
tiow
1•11t11l1ui11111fUJ,
ailint · wh nprvwurd,
in an arbitration with three arbitrators, each party shall
()
and the two arbitrators thus
int one turbitrator,
appott
4'
•
.
,t,,
4,:
if
the
third arbitrator; 11 a party
a
shall
appoint
amwointed
of
arbitrator
within
30
days
receint
the
t appoint
• l-ul •r1.1rt.v
I so f•from t'e ORI!
">7' 00' tf tn(). two
of a request to do
arbitrator wthin 39
arbitrators fail to agree on the
dvs
a of their appointment, the appointment shall be made,
upon request of a party, by the appointing authority}
'is
third
(ii)
in an arbitration with u cle arbitrator, if the parties r
appointed.
unable tu agree on tho arbitrator, he/she shall be
the
uuthurity.
st
by
appointing
party,
upun request tof a
(Article 5.10, par. c)
i
'·
Where, mder an appointment procedure agreed upon by thc
parties,
(
(~)
a party fails to act or appoint an arbitrator as required
under such procedure;
the parties, ar two arbitrators, are unable to appoint. 8n
arbitrator or racb an agreement expected of them under
such procedure;
;t4;
:.
r;le to appointan
,,
(ii a third party, ineluding an insttunon, 1a1s
auy
function
entrusted
to
it
under
tn
or
perform
arbitrator
such procedure, or
(iv the multiple claimants or the multiple respondents is/are
unable tu appoint ita/their respective arbitrator, any par
may request the nppointing authority to appoint an nrhi
trator
I making the appointment, the appointing authority snull
. d ..I h呸u· r኏
pective t"ounscl to Llppe-8.l' h0fo1኏
summon tnh partes art
those
said authority on the date, time and place set by it, for 1e purpe
:.
a sole nrhitrtor. If a sole arbitrator 1
· t?
of selecting and appoint2n
"""
not. take place
'
not appointed in such meeting, or the meeting ao
;
ot
either
vr
both
parties
despite
due no!me,
absence
tbe
of
wzause
the appointing authority shall appoint the sole arbitrator. (Article
5.10. par. d)
If' the default appointment of' an arbitrator is objected to by a
a
appointment is to be made, and
arty on whose behalf the defult
,
the
authoriw for additional
appointing
defaulting party requests
s,
19.02 WHAT IS THE PROCEDURE IN THE APPOINTMENT OF ARBITRATOR OR ARBITRATORS?
Under paragraph b of Article 5. 10, the parties are free to agree
on a procedure of appointing the nrbitrtar or arbitrators. If, in the
contract for arbitration or in the submission, a provision is made for
a method of appointing nn arbitrator or arbitrators, such method
ahall be followed.
i\11,
t111111'•1•
Iii
rtII
I'H H TEI'IV II'I I MA+
NI 'JI AMRFT'TIN IAW
thapt+
In making n default gppointment, the appointing authority
have regard to such considerations a are likely to secure the
zppointmnent of an indeperdent and impnrtial arbitrator. In order
to achieve speedy and impartial justiee nd to moderate the cost of'
arbitration, in choosing an arbitrator, the appointing authority shall
give preference to a qualified person who has a place of residence
or business in the same general locality ns the agreed venue of the
arbitration and who is likely to accept the arbitrator's fees agreed
upon by the parties, or as fixed in accordance either with tle internal
guidelines or tle schedule of fees approved by the administering
institution or by the appointing authority. (Article 5.10, par, f)
shall
'The appointing authority shall give notice in writing to the
parties nf the appointment made or its inability to comply with the
Request for Appointment and the reasons why it is unable to do so, in
which later case, the procedure described under Article 5.5 (Court or
Other Authority for Certain Functions of Arbitration Assistance and
Superuison) shall apply. (Article 5.I0. par. g)
A decision on a matter entrusted by this Article to the appointing
authority shall be unmediauely executory and not subject to appeal
or motion for reconsideration. The appointing authority shall be
deemed to have been given by the parties discretionary authority in
making the appointment but in doing so. the appointing authority
shall have due regard to any qualification or disqualification of an
arbitrator#s under paragraph (a) of Article .10 (Appointment of
Arbitrators) as well as any qualifications required of the arbitrator/s
by the agreement of the parties and to such considerations as are
likely t secure the appointment of an independent and impartial
arbitrator {Article 5.10, par. h)
The chairman of the arbitral tribunal shall be selected in
accordance with the agreement of the parties and/or the rules agreed
Isl rt
{nl, aet Helt wt
tale Hu lutiv et. f It
Il
l Hie lterlvt
upun or, in tetnult t/wreaf, by the arbitrators appointed. (Article
10, par- )
time to appoint his/her arbitrator, the appointing authority, Irving
regard to the circumstances, may give the requesting party not more
than N days to make the appointment
Ii the abjection of a party is based on the ground that the party
did not fail tu rhooe and appoint an arbitrator for the arbitral tribunnl, there shall be attached to tle objection the appointment of
an arbitrator together with the latter'a acceptance thereof and
crnelum vitae. Otherwise, the appointing authority shall appoint
the arbitrator for that party. (Article 5.10, par. e)
Tls
Any clause giving one of the agreement, if otherwise valid, shall
hw construed as permitting the appointment of one arbitrator by all
claimants and one arbitrator by all respondents. The third nrhitrntor
hall be appointed as provided nbove.
l
If all the claimants ur all the respondents canot decide among
themselves on an arbitrator, the appointment shall be made for them
by the appointing authority. (Article 5.10, par. j)
The appointing authority may adopt guidelines for the making
of a Requeat for Appointment. (Article 5.10, par. k)
Except as otherwies provided in the guidelines of the appointing authority, if any, a Request for Appointment shall include, as
applicable, the following:
the demand for arbitration;
(ii) the name's and curricula vitae of the appointed arbitrtor's;
(iii) the acceptance of his'her/its appointment of the appointed
arbitrator's;
(iv) any qualification or disqualification of the arbitrator as
provided in the arbitration agreement;
(v) an executive summary of the dispute which should indicate
the nature of the dispute and the parties thereto;
(i)
(vi) principal office and officers of a corporate party;
(vii) the person's appearing as counsel for the party/ies; and
(viii) information about arbitrator's fees where there i3 an
agreement between the parties with respect thereto.
I institutional arbitration, the request shall include such
further information or particulars ns the ndministering institution
sball require. (Article 5.10, par.I)
A copy af the Request fro Appointment shall be delivered to the
adverse party, Proof of such delivery shall he included in, and shall
form part of, the Request for Appointment filed with the ppointing
authority. (Article 5.10, par- m)
A party upon whom a cpy of the Request fro Appointment is
communicated may, within seven days of its receipt, file with the
_
II
'I'I
AM,TIN''TI Ii+rt it±
\4I TI#. WtrTiltut' 1 1
tu
t
I
t 4
I
I
h+he ,
h.
appointing authority his/her'its ahjeton/s to tw
et
·vtk tor an
extension of rime, not exceeding t days from rvetit »i th ••juext,
to appoint an arbitrator r act in accordaner with the osedure
agreed upon or provided ly these Rules. (Article 5.1Mi gr. r
Within the afrementioned
o
periods, the party seeking the
extension 8hull provide the appointing authority and the adverse
party with a copy of the appointment of his/hr arbitrator. the latter's
curriculum uitae, and the latter's accptnnee of the appointment. In
the event that the said party fails to appoint an arbitrator within said
period, the appointing authority shall mako the default nppointment.
(Article 5.10, par n)
An
arbitrator, i accepting an nppointment, shall include, in
his/her acceptance letter, a statement that:
r·
(i)
he'she agrees to comply with the applicp!l: !ww, the
arbitration rules agreed upon by the partics,
He?ault
thereof, these Rules, and the Code of Fthies for Arhitrutors in Domestic Arbitration, if any:
(ii)
he/she accepts as cumpensntion the arbitrator's fees
agreed upon by the parties or ns determined in accordance
with the rules agreed upan by the parties, or in default
thereof, these Rues. nnd
(iii) he agrees to devate as much time nnd nttuntion tu the
arbitration as the crcut1stances mny mquire in r«ei r to
achieve the abjective of a speedy, effective and fnir r€so
lution of th dispute. (Article 5.10, par. o)
19.03 WHAT ARE THE GROUNDS TO CHALLENGE AN ARBITRATOR?
(a) When a person is approached in connection with his/her
possible appointment as an arbitrator, he/she shall disclose any
circumstance likely to give rise tu justifiable doubts as to his/her
impartiality, independence, qunlifictions and disqunhfictions. An
arbitrator, from the time of hie'her appointment and throughout
the arbitral proceedings, shill without delay, disclose any such
circumstances to the parties unless they have already been informed
of them by him/her.
A person, who is appointed as an arbitrator notwithstanding
the disclosure made in aecordace with this Article, shall reduce the
disclosure to writing and provide a copy of such written disclosure to
all nrties in the arbitration.
il
{hr
{ii
.AMI I
ti le
oh tlultsw
f le
et
lot
nt4
al th+
Alt+ltwi
f 4II
hat rntor my be challenged only if:
at
.
:
zivs
rise to justifiable
thDMl
eiweuml
atucos east
L'
'
doubt as to his/her impartiality or independence;
+
he/she does not possess qualifications as provided tro
in this Chapter or those agreed to by the parties;
() he/she is disqualified to act as arbitration under
these Rules;
(iv) he refuses u respond to questions by a party regarding the nature and extent of his professional dealings
with a party or its counsel.
after
appointment but before or during hearing, a person
(e) If,
wot«ai serve ii a »riiaor iii isower ap
whic hhe/she belie',,',
likely to create a presumption of bias,
disqualify him/her as an impartial arbitrator, the arbitrator she iraedataly disclose such information to the parties. Thereafter, the
par ties ray agree in writing:
to waive the presumptive disqualifying circum(i)
tances; or
(ii) to declare the office of such arbitrator vacant ny
such vacaney sball be filed in the same manner the
original appointment was made.
ti}
r
I
;'
or
gr"""" f;
course
of the
(d) After initial disclosure is made nnd in the
;.
:
A;as. when the arbtrator
i
discovers
circumstance#
nrbtraton
proceeon·
"I
•
tall
that are ukaly to create a presumption of bias, he'she sh""""
ditely disclose those circumstances to the parties. A writ" ''
closure is not required where it is made during the arbitratiuu ant t
appears in a written record of the nrbisration proceedings.
(e) An arbitrator who has or has had financial or professional
den!ings with a party to the arbitration or to the counsel u! either
party shull disclose in writing such fact to the parties, and shall,
in good faith, promptly respond to questions from a party regarding
the nature, extent and age of such financial or professional dealings.
(Article 5.)
19.04 WHAT IS THE PROCEDURE TO CHALLENGE AN ARBITRA-
TOR?
The procedure to challenge an arbitrator is as follows
'Te parties are free to agree on a procedure for chalarbitrator, subject to the provisions of paragraph (c)
lenging an
of this Article.
Ti, ALT'#IHNAT'IW JM'A
IR: 4 t'tut
AND 'TT, AI{H'TIRA'TiN I,AW
('hapte 'I1a,
F'ailing such agreement, a partywhr tsd. to haullenge an arbitrator shall, within I5 days after becuin; ware
of the constitution of the arbitrnl tribunal or after becoming
aware of any circumstance referred to in paragraph (b} of
Artici 5.11 (Ground sfor Challenge), send a written statement
of the reasons for the challunge to the nrbitra! tribunal. Unless
the challenged arbitrator withdraws from his/her office or the
other party agroos to the challenge, the arbti ral tribunal shall
decide on the challenge.
(b)
tc)
If
(j)
lutior
l l4ea.ltis f th Mt.ornate
et af 20(4
In default of an agreement af the parties to agree on
challenge within 30 days from the date of its rcceipt or within
such further tire as it may fix, with notice to the parties, tho
requesting party may renew the request with tho court.
The request made under this Aricle shall include the
challenge, the reply or explanation of the challenged arbitrator
and relevant communication, if any, from either party, or from
the arbitral tribunal.
td) If n request for inhibition is made, it shall be deemed
as a challenge.
(e A party may challenge nn arbitrator appointed by
him/her/it, or in whose nppointment he/she/it bas participated,
only for reasons of which he'she/it becomes aware after the
appointment has been made.
(l) An arbitrator who does not accept tho challenge shall
be given an opportunity to be heard
1'I
L
the challenge thereby replacing the arbitrator, the arbitral tribunal shall decide on the challenge within '0 dnys from receipt
of the challenge.
(k) If the challenge procedure as agreed upon by the
parties or as provided in this Article is not successful, or a party
or the arbitral tribunal shall decline to act, the challenging
party may request the appointing authority in writing to decide
on the challenge within 30 days after having received notice of
the decision rejecting the challenge. The appointing authority
shall decide on the challenge within 15 days from receipt of
the request. If the appointing authority shall fail to act on the
challenge under nny procedure agreed upon
·
(g)
Within 16 days of receipt of the challenge, the chalenged arbitrator shall decide whether he/she shall accept tho
challenge or reject it, If he'ste accepts the challenge, be/she
shall voluntarily withdraw as arbitrator, Lf he/she reej cts it, ha/
she shall communicate, within the same period of time, his/her
rejection of the challenge and state the facts and arguments
relied upon for such rejection,
'
t't
I(lie+
Notwithstanding the rejection of the challonge by the
(i)
arbitrator, the parties may, within the same I5 days period
agree to the challenge.
by the parties or under the procedure of paragraph (b) of this
Article is not successful, the challenging party may request
the appointing authority, within 30 days after having received
notice of tbe decision rejecting the challenge, u decide on the
challenge, which decision shall be immediately
executory and
not subject to appeal or motion for reconsideration. While
such a request is pending, the arbitral tribunal, including the
challenged arbitrator, may continue the arbitral proceedings
and rake an award.
(D 'The challenge shall be in writing and it shall state
specific fncts t.hat provide the basis for the ground relied upon
fur the challenge. A challenge shall be made within 15 days
from knowledge by a party of the existence of a ground for a
challenge or within 15 days from the rejection by an arbitrator
of a party's request for his'hor inhibition.
'A
Ip#rue· tun
tr· H
'I
l
(l) Every communication required or agreement made
under this Article in respect of a challenge Ehall be delivered,
as appropriate, to the challenged arbitrator, to the pnrties,
to the remaining members of the arbitral tribunal and to the
institution administering the mrbitration, if any.
(m) A challenged arbitrator shall be replaced if'
he'she withdraws as arbitrator. or
() the parties agree in writing to declare the office
of arbitrator vacant, or
ii) the arbitral tribunal de«ides the challenge and
declares the office of the challenged arbitrator
vacant, or
(iv) the appointing authority decides the challenge
and declares the office of the challenged arbitrator vacant, or
(v) in default of the appointing authority, the court
decides the challenge and declaros tho offiee nf
the challenged arbitrator vacant.
()
s
'I'H, A4AB.RNA'I'VI DI+tr[' RE«t+tu+
N {HI AI'TH'TINN 1.AM
vMrrt
'ids
[ls
tole+
Ii
(n) The decision of the parties, the urbtrnl tribunal, the
appointing authority, or in proper cases, the euurt, tw accept or
eject a challenge is not subject to appeal or motion for reconei
deration.
RULE 4-- Jurisdiction of Arbitral Tribunal
20.00 WHAT ARE THE GROUNDS FOR OBJECTION OVER THE
JURISDICTION OF THE ARBITRAL TRIBUNAL?7
(a) When a demand for arbitration made by a party to a dispute is objected to by the adverse party, the arbitrai tribunal shall,
in the first instance, resolve the objection when made on any of the
following grods:
(p) 'The appointment of a substitute arbitrator shall be
made pursuant to the procedure applicable to the appointment
of the arbitrator being replaced. (Article 5.12)
19.06 WHEN IS THE APPOINTMENT OF A SUBSTITUTE ARBITRA-
TOR PROPER?
Where the mandate of an arbitrator terminates under Articles
or 5.13 (Failure or Impossibility) or
5.L2 (Challenge Procedure)
()j
the arhitration agreement is in existent, void, unenforcable or not, binding upon a person for any reason, including the fact that the adverse party is not
privy to said agreement,
(ii)
the dispute is not arbitrable or is outside the scope of
the arbitration agreement; or
(ii) the dispute is under the original and exclusive jurisdiction of a court or quasi-judicial body. (Article 5.15
19.05 WHAT ARE THE CONSEQUENCES IF THERE IS FAILURE OR
IMPOSSIBILITY TO ACT?
(b) If, under this Article or Articl 5.12 (Challenge Procedure)
an arbitrator withdraws from hishor office or a party agrees to the
termination of the mandate of n arbitrator, this does not imply
acceptance of the validity of any ground referred to in thi Article
5. 12. (Article 5.13)
wt
hnuse of his withdrawal from office for any other reasan or because
f the revocation of his mandate by agreement of the parties or in any
other case of termination of his'her mandate, a substitute arbitrator
·ball be ppointed according to the rules applicablc to the arbitrator
being replaced. (Article 5.It)
(o)
Until a derision is made to replace the arbitrator
under this Article, the arbitration proceeding shall continue
notwithstanding the challenge, and the challenged arbitrator
shall continue to participate therein as an arbitrator. However,
if the challenge incident is raised before the court, because the
parties, the arbitrl tribunal or ppointing authority failed
or refused to act within the period provided in paragraphs
() and () of this Article, the arbitration proceeding shall be
suspended until after he oourt shall have decided the incident.
The arbitration shall be continued immediately after the court
has delivered an order on the challenging incident. It' the court
agrees that the challenged arbitrator shall be replarod, the
parties shall immediately replace the arbitrator concerned
(a) it' an arbitrator becomes de jure or de facto nablo to
perform his/her functions or for other reasons fails to act without
undue delay, his/her mandate terminates if he'she withdraws from
his/her office or if the parties agree on the termination. Otherwise,
if' a controvery remains concerning any of these grounds, any party
tay request the appointng authority to decide on the termination of
the mandate, which decision shall be immediately executory and not
subject tu appeal or motion fro reronsidorntion,
1zt
lulu nm leltiona nt tte Alternutie
lteswiutin wt «f '20414
at+
f
par.a)
(o) If a party rises any of the grounds for objection, tho same
shall mot preclude the appointment of the arbitrator!a ns such issue
s for the arhitral tribunal to decide
The participation of a party in the selection and appointment. of
an arbitrator and the fling of appropriate pleadings before the arbitral tribunal to question its jurisdiction shall nat be construed as a
submission to the jurisdiction of the arbitral tribunal or of n waiver of
his/her/its right to assert such grounds to challenge the jurisdiction
of the arbitral tribunal or the validity of tho resulting awsrd.
(e) [he respondeut in the arbitration mas invoke any such
grounds to question before the court the existence, validity, or enfrceability
o
of the arbitration agreement, or the propriety of the arbiration, or the jurisdiction of the arbitrtor and invoke the pendency
of such action ns ground fr suspension of the arbitration proceeding.
The arbitral trihunal. having regard to the circumstances of the case,
and the need for the cnrly nd expeditious settlement of the dispute,
in light of the facts and arguments raised to question its jurisdictian, my decide either ta suspend the arbitration until the court has
made a decision on the issue or continue with arbitration.
''HIE, AE.TRNA1IVE IH-I'ET', HD.AT\et
I! 'THIE. AITT'KATI9N 1.AW
(d) If a dispute is, under an arbitration agreement, to he submitted to arbitration. but before arbitration is commenced or while
it is pending, a party files an action before the court which embodies
or includes as a cause of action the dispute thnt is to be submitted to
arbitration the fling of such acrion shall not prevent the commencement of tho arbitration or the continuation of the arbitration until
the award is issued. (Article 5.15)
op.b+rt nt
I
t+
(dd
(ii)
may, at the request of a party, order any party to
Alter the constitution of the arbitral tribunal, and during
arbitral proceedings, n request for interim measures of protection,
or modification thereof. shall be made with the arbitral tribunal.
'The arbitral tribunal is deemed constituted when the sole arbitrator
or the third arbitrator, who has been nominated, has accepted the
nomination anl written communication of said nomination and
acceptance has been received by the party making the requost.
(Article 5.15. par. b
The following rules on interim or provisional relief shall be
observed:
(
Ans party
(i)
Such relief may be grarted:
may request that the provisional or interim
relief be granted against the adverse party,
(a) To prevent irreparable loss or injury;
{bb) To provide security for the performance of an obligation;
'To compel nny other appropriate act or omissions.
The order granting provisionnl relief may be conditioned
upon the provision of security or any act or omission
specified in the order.
(v)
The order either granting or denying an application for
interirn relief shall be binding upon tho parties.
(vi)
ither party muy apply with the court for assistance in
implementing or enforcing an interim measure ordered by
an arbitral tribunal.
(ii) A parts who does not comply with the order shall be liable
fur all damage, resulting from noncomplinnce, including
all expenaes, and reasonable attorney's fee paid in obtaining the order's judicial enforcement . (Article 5.16. par. c)
RULE 5- Conduct of Arbitral Proceedings
21.00 DISCUSS THE CONDUCT OF ARBITRAL PROCEEDINGS.
a.
On Equal Treatment of Parties
The parties shall be treated equally und each pnrly
shall be given a full opportunity of presenting his/her/its
case. (Article 5.IT)
b.
On Determination of Rules of Procedure
20.03 WHAT ARE THE RULES ON INTERIM OR PROVISIONAL
RELIEF THAT MUST BE OBSERVED?
Alternative
Interim or provisional relief is requested by written application transmitted by reasonable means to the arbitral
trihunal and the party against whom relief is sought, describing in appropriate detail the precise relief, the party
against whom the relief is» requested, the ground for the
relief and the evidence supporting the request.
SURES?
20.02 WHEN MAY A REQUEST FOR INTERIM MEASURES OF
PROTECTION BE MADE?
125
th+
ve) 'To prutduce or preserve evidence; or
20.01 CAN AN ARBITRAL TRIBUNAL ORDER INTERIM MEA-
Unless otherwise agreed by the parties, the arbitral tribunal
take such interim
measures of protection as the arbitral tribunal may consider necessary in respeet of the subject matter of the dispute following the rules
in this Article, Such interim measures may include, but shall not be
limiied tw preliminary injunction directed against a party, appointment of receivers or detention preservation, inspection of property
that is the subject of the dispute in arbitration. (Article 5.15, par. a)
'AI''I
al lteelntnss af
Ket wt of 2DOM
; l~he
(a)
Subjected to the provisions of these Rules, the parties
are free ta agree on the procedure to be followed by
the arbitral tribal in conducting the proceedings.
05)
Failing such agreement, the rbitral tribunal may
subject to the provision of the AL Act, conduct the
arbitration in such manner as it considers appropnate. The power conferred upon the arbitral tribunal
includes the power to determine admissibility, rele
vance, materially nnd weight.ofevidence. (Article5. 18)
TH ALT'EIKNTIWI IISTU 'TI I;AIL
ANI 'I'TH AHUITIL'TI0N L,AW
Ht
«'h,upon 'I,
Ile
untin
AN'TI
luulo amt
vulat lens f tha Alternnriwvo
137
l+pita l~snlr:ten Art of Y»,
c.
On Place of Arbitration
(a)
.d dare stated therem whch shnll not be lass than
30 days from receipt of the demand.
The parties are free ta agree on the place of arbitration. Failing such agreement. the place of arbitration
sball be in Metro Manila unless the arbitral tribunal, having regard to the circumstances of the case,
(e)
If the rhitration agreement provides for the estahlishment of n rbitral tribunal of three arbitrators,
the demd shall mare the arbitrator appointed by th
claimant. It shall include the curriculum vitae ef the
arbitrator appointed by the claimant and the latter's
acceptance of the appointment.
(d)
Where there is no prior aurbtratiou agreement, aurbiration may be initiated by ono party through a
demand upon the other to submit their disputo to
arbitration. Arbitraton shall be deemed commenced
upon the agreement by the other party to submit the
dispute to arbitration.
(e)
T'he demand ahnll require the respondent to name
bis'hvr'its arbitrator within a period which shad! not
be less than 15 days from receipt of the demand. This
period my be extended by the agreement of the parties. Within said period, the respondent shall give a
written notice to the claimant of the appointment of
the respondent's arbitrator and mttach to the notice
including the convenience of the parties, shall decide
on a different place of arbitration.
(b)
d.
The arbitral tribunal may, unless otherwise ngreed
by the perties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts pr tho partie, or for inspection
of goods, other property or documents. (Article 5.19)
On Commencement of Arbitral Proceedings
(a) Where there is a prior arbitration agreement bet.
ween tbe parties, arbitration is deemed commenced
ns follows:
(i)
(i)
In institutional arbitration, arbitration is commened in accordance with the arbitration rules
of the intitution
s
agreed upon by the parties.
In ad hoc arbitration, arbitration is commenced
by the claimant upon delivering tu the respondent a demand for arbitration. A demand may
be in any form stating
the arbitrator's curriculum vitae and the latter's
nccepranco of the appointment. (Article 5.20)
e.
(aa) the name, address and description cf each
af the parties;
(bl
On Language
(a) The parties are free to agree on the language or lan!uages to be used in the arbitral proceedings. Failing ouch agreement, the language to be used shall
be English or Filipino. 'The Language/s agreed, unless
a description of the nature and circumstances of the dispute giving rise to the claim:
otherwis spooifiod thorin, shall he in nil haring
and all written statements, orders or other wormu-
(cc) a statement of the relief sought, including
the amount of the clnim;
(dd) the relevant agreements, if any. including
nication by the partie sand the arbitral tribunal.
(b)
the arbitration agreement, an copy of which
shall be attached: ad
(ee) appointment of arbitrators and/or demand
to appoint.
(b)
If the arbitration agreement provides for the appointrent of u sole arbitrator, the demand shall include
an invitation of the clir:mt to the respondent to
meet and agree upon sueh nrhitrtor, the place, time
t.
The arbitrnl tribunal mny order that any documentary evidence shall be accompanied by a translation
into the language or langages agreed upon ty tbe
parties in nccordnnce with paragrnph (a} of this
Article. (Article 5.21)
On Statement of Claim and Defense
ta}
Wthin the period nl time agreed by the parties or
determined hy tho arbitral tribunal, the claimant
l'
l'It AM,IAN''II' "{H'HI
E,4 tin
ANI 'I'HE AMUWTA'Ti(N 1 .w
1AT't
1
t'hp+ 'le
g.
In ad hoe arbitration, the procedure determined by
the arbitrator, with the agreement of the parties,
shall be followed. In institutional arbitration, the
applicnble rules of procedure of th arbitration in.
stitution shall be fllowed.
a
In default of agreement
of the parties, the arbitration procedure shall be as
provided in this Chapter.
(b)
Within 30 days from the appointment of the arbitrator or the constitution of an arbitral tribunal, the arhitral tribumal shall call the pnrtios and their respec-j
tive counsels to n pre-hearing conference to discuss
the following matters:
The manner of recording the proceedings;
(iii) The periods far the communication of the state-
ment uf claims with or without counterclaims
an the form
and contents of such plendings:
and answer to the counterclaim/s
f ;4Kt
'The manner by which evidence
(v)
may be offered
if an oral hearing is required, the submission
of sworn written statements in hiou of oral
testimony, the cross-examination and further
examination of witnesses.
(vi)
'The delivery of certain typos of communications
such as pleadings, terms of reference, order
granting interim relief, final award and the hike
that, if made by electronic or similar means
shall require further confirmation in the form
of a hard copy or hard copies delivered person
ally or by registered pot.
(a)
(ii)
wt
At+rnt4vi
parties;
On Hearing and Written Proceedings
The venue or place/s where the arbitration proceeding may be conducted in an office space, a
business center, a function room or any suitable
pince agreed upon by the parties and the arbi.
tral tribunal, which may vary per session/hear.
ing'conference;
·ultinn
:
d elatiws of' tlw
mary of the claims and counterclaims of t.hw
Unless otherwise agreed by the parties, either party
may amend or supplement his/herfits clsim or defen.se durng the course of the arbitral proceedings,
unless the arbitral tribunal considers it. inappropriate to allow such amendments hnving regard to the
delay in making it. (Article 5.22)
(i)
in, lKulr+
() 'The icfinition of the issues submitted to the nrbitral tribunal for determination and the sum-
hnll state tbc facts supporting hillerht. vlim, thu
points at issue and the relief or remedy suught, and
the respondent. shall state his/her defense in respect
of these particulars, unless the parties may have
otherwise agreed as to the required elements of such
statements. 'The parties may submit with their staterents all documents they consider t be relevant or
may add u reference to the documents or other evidence they will submit.
tb)
luted
tmuh
j
J
(vii) Thoe issuance of subpoena or subpoena duces
tecum by the arbitral tribunal ta compel the
production of evidence if either party shall or is
Likely to request it;
tviii The manner by which expert testimony will bu
received if a prty will ar is likely to request the
arbitrnl tribunal to appoint one or more experts,
and in such case, the period for the submissior
tu the arbitrator by tha rcqusting party of the
proposed tems
r
of reference for the expert, the
fees to be paid, the manner of payment to the
'
l
expert and tha deposit by the parties or the
requosring party of such amount necessary tno
cover all expenses associated with the referrul
of such issues to the expert before the expert is
appointed;
(ix) The possibility of either party applying for au
order grang interim relief either with ar
bital tribunal or with the court, and. in such
case, the nntre of the relief to be applied for;
()
The possibility of a site or ocular inspection, be
purpose of such inspeetion, and in such case,
the date, place and time of the inspection and
the manner of conducting it, and the sharing
and deposit of sny associated fees and expenses;
'TH AMT'EI&AT'VI DI}IT, Ee tu41+
ANSI'THE AIU!'TIRA'TIM1N 1,AW
fi) The nmaunt. t be paid to the aritral ihunal
as fees and the associated costs, larges and
expenses of arbitration and the manner and
timing of such payments; nd
A
4lpt s 'Ito.
Id
()
«xii) Such other rolovant matters as the pnrties and
the arbitral tribunal may consider necessary to
provide for a speedy and efficient arbitration of
th :dispute.
ie)
td)
(e)
(f)
(g )
(h)
To the extent possible, the arbitral tribunnl and the
parties shall agree upon any such matters and in default of agreement, the arhitral tribunal shall have
the discretion and authority to rake the decision,
although in making decision, regard shall he given to
the views expressed hy both parte
i s.
'The arbitral tribunal shall, in consultation with the
parties, fix the dntels and the tire of hearing, regard
being given tu the desirability of conducting and concluding an arbitration without undue delay,
'l'he hearing set shall not bo postponed except with
the coulrmity
o
of the arbitrator and rht parties and
only for » gootd and sufficient cause. The arbitral tribunail may deny u request to postpone or to cancel
n scheduled hearing an the ground that a party has
requested or is intending to request from the court or
from tho arbitrator an order granting interim relief.
lust
(j)
lHle zl lr;ult wt f' Ile- \lIeruve
lier»lufun et f le)f
Iv raised during the arbitration proceeding relaling tu (a) rho jurisdiction of' the arbitral tritmnnl over
one or more of the cl1ms or counter claims, or (b} the
arbitrability of' a particular claim or counter claim,
shnll be resolved by the arbitral tribunnl as thresh-
old issues, if the pnrtits so request, unless the ynre
intertwined with factual issues that they cannat he
resolved abead of the hearing on the merits of the
dispute.
Each witness shall, before giving testimony, be re
quired to take an oath/affirmation before the arbitral
tribunal. to tell the whole truth and nothing but the
truth during the hearing.
()
Tho rbit:al tribunal sball arrange fr the transerip
tion of the recorded testimony of each witness and
require eaet party tu share the cost of recording and
transcriptian oaf the testimony of cnch witness.
(I)
Each party shall provide the othor party with a copy
of each statement or document submitted to the ar-
bitral tribunal and shall have an opportunity tu reply
in writing to the other party's statements and proofs
(m) The arbitral tribunal may require the parties to produce such other documents or provide such information as in ita judgment would be necessary for it to
render a complete, fir and impartial uwurd
(n)
A party ray, during the proceedings. represent himself/herself/itsolf or through representative, et such
hearing.
'The arbitrul tribunal shall receive as evidence all
exhibits submitted by a party properly marked and
identified at the time of submission
(o)
'IT'he hearing may proceed in the absence of a party
who fails to obtain an adjournment thereof or who,
despite due notice, fnil to be preset, by himself
herselfftself or throgb a representative, at such
hearing.
(p)
AL the close of the hearing. the rbit:al tribunal shall
specifically inquire uf all part.es whether they have
further proof or witnesses to present; upon receiving
a negative reply, the arbitral tribunal shall declare
the hearing closed.
Aiter a hearing is declared closed, no further motion or manifestation or submission may he allowed
except for post hearing briefs and reply briefs that
tbe parties havo agreed to submit within fixed pe
riod after the hearing is declared closed, or when the
arbitral tribunal, motu proprto or upon request of 8
party, allows the reopening uf the hearing.
Only parties, their respective representatives, the
witnesses und the administrtive staff of the arhtral tribunnl shnll have the right to be present if the
parties, upon being informed of the presence of such
person and the reason for his/her presence, interpose
no objuction thereto,
TI, MI'CNN'IV DE AT'W (:4+ 14+
ANI» TH#,
HIT'IR'TIN 1,AW
t'hut+r Th
(q
tr)
(s)
(t)
(u)
()
Leeisiors on interlocutory matter, t hull h·
he hw
the sole rbitcator or by the majority uf the nrbitrl
tribunal The arhitral tribunal ray authorize it
chairman to issue or release, on behalt of the arbitral
tribunal, its decision on interlocutory mattere.
Except as provided in Section 17() of the ADR Aet,
no arbitrator shall act ns medintor in any prucued1ng in which he/she is acting as arbitrator even if requested by the parties; and all negotiations towards
settlement of the dispuro must take place without
the presence of the arbitrator
Before assuming the duties of his/her office, an arbitrator must be sworn by any officer authorized by
law to administer an oath or be required to make an
affirmation to faithfully and fairly bear and examine
the matters in controversy and make n just award
according to the best his·her ability and understandng. copy of the arbitrator's oath or affirmation
shall be furnished each party ta the arbitration.
Either party may object tu the commencement or
continuation of an arbitration proceedng unless the
arbitrator takes an oath or affirmation as required in
this chapter. If the arbitrator stall refuse tr take an
oath or affirmation as required by law nnd this rule,
he'she shall be replaced. The failure ta object to the
absence of an oath or affirmation ehull be decmed a
waiver of such objection nnd the proceedings shall
continue in de course and may not later be used as
ground to invalidate the proceedings
The arbitral tribunal shall have the power to ndmi.
niter onths to, or require affirmation from, nll wit.
nesses directing them to tell the truth, the whule
truth and nothing but the trath in any teatimony,
oral or written, which they may give mr ofl'er in anv
arbitration hearing 'The oath or affirmation shall be
required of every witness before his/her testimony,
oral or written, is heard or considered.
'The arbitral tribunal shall have the power to require
any person to attend a hearing as a witness. It shall
have the power to euhpoena witnesses, to testify
and'or produce document when the relevancy and
I'AtT I
Ile ent
Iles ail kpuLtious pf the ltrnova
Dew lReultion t uf 2004
materiality thereof has been shown to the arbitral
tribunal 'The arbitral tribunnl may aleo require the
exclusion of any witness during tle testimony of any
other witness, Unless the parties otherwise agree,
all the arbitrators in nny controversy must attenc all
the hearings and hear the evidence af the parties.
(Article 5.23)
.
$
I
呸
j
21.01 WHEN MAY THE TRIBUNAL ORDER INTERIM MEASURES
OF PROTECTION?
'The Arbitnl Tribal my order interim measures of protection
to
,
an party under tbe fallowing cireumstances:
(a) unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party and in accordance with the this Article, order any party tu take such interim measures of protection as
the arbitral tribunal may consider necessary in respect of the subjoct
outter of the dispute of the procedure. Such interim measures msy
include, but shall not be limited, to preliminary injunction directed
against a party, appointment uf receivers or detention of property
that is the subject of the dispute in arbitration or its preservation or
inspection.
(b) Ater the constitution of the arbital tribunal, and during
the arbitration proceedings, a request for interim measures of protection, or modification thereof, may be made with the rhit.ral tribunal. 'The arbitral tribunal is deemed constituted when the solo arhttrntor or the third arbitrator, who has been nominated, has accepted
t.he nomination and written communication of said nomination and
acceptance has been received by tho party making the reuuest.
(c)
The following rules on interim or provisional relief shall
be observed:
(i)
Any party may request that provisional or interim
relief be granted against the adverse party.
(ii)
Such relief may be granted:
(aa} To prevent irreparable loss or injury;
(oh) To provide security for the performnnc of an
obligation;
(cc) To prouduce or preserve evidence; or
(d) 'To compel any other appropriate act or omissinns,
fl, ALT'EI&'N TI, IP"IE, IR:4Wei2
A'NI 'T'HI, AH'HR+»N t,Aw
'TH
(iii) The order granting
provisional
relief tay I· vothttioned upon the provision of security or any aet or
omission specificd in the order.
(iv)
Interim provisional relief is requested by written
application transmitted hy reasonable means to the
arbitral tribunal and the party agairst whom relief is
sought, describing in appropriate detail af the precise
relief, the party against whom relief is requested, the
ground for the relief, and the evidence supporting the
r€quest,
(v)
'The order ither granting or denying an application
for interim relief sbnll be binding upon the pnrties.
(vi)
Either party may apply with the court. for assistance
in implementing or enfrcing
o
an interim measure
ordered hy an arbural tribunal.
(vii) A party who does not comply with the order shall be
liable for nli damages, resulting from noncompliance,
including all expenses, and resonnbly torey's
fees, paid in obtaining the order's judicial enforce.
ment
(d) The arbitral tribunal shall have the power at any time,
befre
o rendering the award, without prejudice to the rights of any
party to petition the court to take measures ta safeguard and/ar conserve any matter which is the subjeet of the dispute in arbitration.
21.02 WHAT ARE THE POSSIBLE CONSEQUENCES WHEN THERE
IS A DEFAULT ON EITHER PARTY?
Unless otherwise agreed by the parties, if, without showing
sufficient causes,
(a) the claimant fails to communicate hialher'its atatement. of' claim in accordance with paragraph (a) of Article 5.222
(Statement of Claim and Defense), the arbitral tribunal shall
terminate the proceedings;
(b)
the respondent fails to communicate his/herits state-
ment of defense in accordance with paragraph (a) of Article 5.222
(Statements of Claim and Defense), the arbitral tribunai shall
continue the procediugs without treating such failure in itself
ns an admission of the claimant's allegations;
Tl
'
I,o+
Ii
lh
th w tu
lir ml lw
I +u
u
irrulwmo,
ll
ol
1He·,l
\wt sf
wt fails Lu ppear at a hearing or tu prrues
my
tr)
doemwntry yitlenct, the arbitral tribuni my contnue the
ocvethings and make the award based on the evidence before
it. (Aricie 5.26)
2L03 MAY THE ARBITRAL
TRIBUNAL APPOINT AN EXPERT
WITNESS?
I
'
I
'
Yer, an arbitral tribunal may appoint un expert witness under
le· following circumstances:
(al Unless athewwise agreed by the parties, the abitral
ritunal,
nay appoint one or more experts to report to rt
()
on specific issues to be determined by the nrbitrnl trihunnl; or
i
:.
·es th 0yet
uIy relr·t t gr
u party
it
may require
.
ant informnntion or to prolue, tr to provide
nczoss to, any relevant documents, goods or
other property for his/her insporion
Unless otherwise greed by the pnrties, if a party so
qr
if the arbitral tribunal considers it newesnry, tle
request
expert shall, after delivery of bisher written or oral veport.
participate in a hearing where the parties have the opportrni!
to put questions to bim'her and to present epert witnesses
ore to testify on the points at issue.
(c} Upon agreement of' the parties, the finding of the
expert engaged by the arbitral tribunal on the tatter/s referred
to him shall be binding upon the parties and the arbtra trihual. (Article 5.26)
th
21.04 MAY THE ARBITRAL TRIBUNAL REQUEST ASSISTANCE IN
TAKING EVIDENCE AND OTHER MATTERS?
Yes. the erbitral tribunal may request the following tom the
court:
(a) 'The arbitral tribunal ar a party. with the npproval
of the tbitral triannl may request from a court, ussustanee
in tkng evidence such as the issuance of subpoena ad testifi
candm nd subpoena duces tecum, deposition taking, $te 0"
ocular inspection, and physical examination of properties 'The
court nun grant the request
ing to
its
within its competence and accord-
rules on taking evidence.
PKT\
THI AM 'TINT1Wt
;Pry\, Ii:6l,Arr
AI» 'TH AKITA'TT~N LAW
I'Ai
tb)
thats
The rbitral tribunal or a party to the dispute intc
rested in enforcing an order of the arbitrl tribunal may request
from a competent court, assistance in enforcing orders of thr
arbitral tribunal, including but nat limited, to the following:
(i)
Interim or provision relief;
(ii)
Protective orders with respect to confidentiality;
iii)
Orders of the arbital tribunal pertaining to the
subject matter of the dispute that may affect
thirud persons end/or their properties; and/or
(iv)
Examination af debtors. (Article 5.27)
21.05 WHAT ARE THE RULES APPLICABLE TO THE SUBSTANCE
OF DISPUTE?
The srbitrui tribunal shall decide the dispute in accordanco
with such law as is chosen by the parties. In the absence of' such
(a)
agreement, Ph~ippine I»w shall apply
(b) The rbitral tribunal may grant any remedy or relief which
it deems just and equtable and within the scope of the agreement. of
the parties, which shall include, but not be limited to, the specific
performance of n contract.
In all enses, the arbitral tribunal shall decide in accordance
with the terms of the contract and shall tnke into account the usages
of the trade applicable to the transaction. (Article 5.28)
(c)
21.06 EXPLAIN HOW THE ARBITRAL TRIBUNAL RENDERS ITS
DECISION.
ln arbtration proceedings with more than one arbitrator,
any decision of the arbitral tribunal shall be made, unless otherwise
agreed by the parties, by a majority of all its members. However
questions of procedure ray be decided hy the chairman of the arbitral
tribunal, if so authorized by the parties or all members of the arbitral
tribunal.
(au)
(b) Unless otherwise agreed upon by the parties. the arbitral
tribunal shall render its writton award within 3O davs after the
closing of all hearings and/or submission of the parties' respective
briefs or if the oral hearings shall have been waived, within 30 day
after the arbitral tribunal shall have declared such proceedings in
lieu of' hearing closed. This period may be further extended bv mutual
consent of the parties. (Article 5.29)
7
T'Io,,
I;
a Mute
id ellionf tl \it+r11vs
pt+ ialuf uni rt al 'oil
Ide»wpto.
21.07 WHAT IS IHE CONSEQUENCE IF DURING THE ARBITRAL
PROCEEDINGS, THE PARTIES SETTLE THE DISPUTE?
If. during arbitral proceedings, the parties settle the dispute,
i unal, hall record the settlement i the form of an
the arbitral trb
rbitral award on agreed terms, consent award or award based on
em promise
An award as rendered above shall he made in accordance with
the provisions of Article 5,31 Form and Contents of Auard) and shall
state that ir is an award. Such an award has the same status and
fTect ns any other ward on the merits of the case. (Artirle '.3}, pars.
a and b)
21.08 CITE THE REQUIRED FORM AND CONTENTS OF AWARD.
(a) The award shall be made in writing and shall be signed by
the arbitral riburl. In arbitration proceedings with more than one
arbitrator. the signatures of the majority of all members of the arbitral tribunal shall suffice. provided that the reason for nny omitted
signature ie stated.
(B) T'he award shall state the reasons upon which is basad.
unless the pnrties have agreed that no reasons are to he given or the
award on agreed terms, cons&mt award hard on compromise under
Article 5.J0 (Settlement)
fe) The award shall state it= date nnd the placed of arbitrtion as determined in accordance with the paragraph (a) of Article
5,19 (Puce uf Arbitration). 'The award shall be deemed to have made
t that plnco.
(d ) After the award is made, copy signed by the arbitrators
in accordance with the paragraph (u) of his Article shall be delivered
tw each party.
(e} The nwrd of the arbitral tribunal need not be acknowledged, swnm to under cath, or affirmed by the arbital tribunal nnless so required in writing by the parties. If despite such requirement,
the arbitral tribunnl shall fail to do as required. the parties may,
within 0 days from the receipt of snid award, request. the arbital
tribunal to supply the omission. The failure of the parties to make
an objection or make such request within the said period shall bc
deemed a waiver or such requirement and may no longer be raised
as a ground to invalidate the award. (Article 5.l)
Tit, Al I'tu;wTW pl; I'Tt I;« tr+1tI
A NI HIE IHI'TIRA'It, 1,W
Ii呸
21.09 HOW IS THE ARBITRAL PROCEEDINGS TERMINATED?
The arbitration
di)
proceeding are terminnted by the final award
or by an order of the arbitral tribunal in accordance with paragrph
a
(b) of this Article. @Articte 5.32, par. a)
(ii) 'The arbitral tribunal finds thnt tho cvotinua.
ion of the proceedings has for any other reason
become unnecessary or impossible; t
21.10 WHEN SHOULD THE ARBITRAL TRIBUNAL ISSUE AN
in
full in
iv) 'The required deposits are not paid
accordance with paragraph (d of Article 5.48
(Fees un C'osts).
ORDER OF TERMINATION?
'f'he arbital tribunal shall issue an order fr
a the termination of
the arbitration proceedings when:
ti)
The climant withdraws bis claim. unloss the respondent
objects thereto for the purpose of prosecuting his counterclaims in the same proceedings of the arbitral tribunal
recognizes a legitimate interest on bis part in obtaining a
final settlement af the dispute; or
(ii)
The pnrties agree on the termination of the proceedings: or
T'he parties agree on the termination of the pro
ceedings; or
,
t
(e) 'The mandate of the arbitral tribunal onds with the
·. ti
subjeet to the pro
proceedings,
arbitration
fermat
om oi f' the
ne <r·
to
"
d
..:.
- \-1ee 5.33 (Correction and Interpretation of Award,
VIS1On O TUC
•
·'
•
.
•
Additional Award) and Article 54 (Application fr Settings
Aside an Exclusive Recourse Against Arbitral Award).
(d) Except as otherwise pruvidod in the nrbit.ration
'""·oti A.-.
' .-I0r tt,:=oru-i<lo-rat1<Jn, corrarl1nn and interagreementt, no mM
proration of award or additional award shall he mude wit ith thth
e
'
T
'he
arbitral
tribunal,
by
releasing
its
final
arbitral tribunal,
loses jurisdiction over the dispute and the parties to
ward,
኏
f'
fu.·b1trat1un, However, where it is shown that the arbitral
tribunal failed to resolved an issue submittod to him for determination, n verified motion tu complete a final award may be
made within 30 days from its receipt.
On
(~) The arbitral tribunal finds tht the continuation of the
proceedings has for any other reason become unnecessary
or impossible; or
(iv) The required deposits are no paid in full in accordance
with paragraph (d) of Article 5.46 (Fees and Costs). (Article
5.32, par b)
21.11 WHEN DOES THE MANDATE OF THE ARBITRAL TRIBUNAL
END?
Article 5.32. Termination of Proceedings.
(a)
Tho arbitration praceedings are terminated by the
final award or by an order of the arbitral tribunal in accordance
with paragraph tb) af this Article.
(by 'The arbitral tribunnl shall issue an order for tle
termination of the arbitration proceedings when:
()
The claimant withdraws his elm, unless the
respondent objects thereto for the purpose of
prosecuting his counterclaims in the same
proceedings or the arbitral tribunal recognizes
a legitimnte intereet on his part in obtsting n
final settlement af the dispute; or
Notwithstanding the foregoing, the arbitral tribunal
w rhe final i1ward Ol' order. a
኏c:,on ' re:se1.,,c
኏
.
'..]
1a· 1 ኏
may, J IOr Su7KI
44
be
(e)
·ar
hearing to quantity costs and determine which party shall
determined to
the costs or apportionment thereof as may
l'endino'F <lt t኏·,rminalion of this issue, the A.ward
·t ... h1"'"
I e etua
If,
,
deemed
final for purposes of appeal, vacation,
be
not
shall
correction, or any post-award proceedings. (Article 5.32
be
~
Article 5.3. Correction cd Interpretation of Aword, Additional
Award.
1nl
Within 30 days from receipt of the award,d. ur less
another period of time has been agreed upon by the parties
A party may, with notice to the other party,
(i
request the arbitral tribunal to correct in the
nwrd any errors in computation, any clerical
or typographieal errors or any errors of eimilar
nature.
(a)
THE! ALT#{NYI'Wt HS{PUT IOI t"
ANI 'T'[IE AMITRT'ION 1.W
4n
(ii)
'lt 'Ile
•
If so agreed by the parties, a party, with notice
the other party, may request the arbitrl
I
tribunal to give nn interpretation of a seo»tic
point ur part of the award,
i
d
the request to b
·-. ·the· rbitral tribunal ! considers
justified, it shall make the correction or give the interpretation within 30 days from receipt of the rec
interpretatiou shall form part of the awar4
"Hest,
Th
D
»
:.
(ii)
~;
:.
'
~if,E?'
(d) The arbitral tribunal may extend, if ner s«r th
period of tire within which it shall maken '_Stsary. the
correction, iterpretation
'
,"""" adiddi
ditional
award under paragraphs (a) and (c) of
4:.
Li. 'tIcIe.
r
i.
The provisions of Article 5.31 (Form and C
s.
;'
a contenis
of ward) +hall apply Iy too a vvrreution
or interpretation of th
nwrd or an additional wward. (Article 5.33)
(e)
21.12
+
WHAT MUST THE COURT DO UPON APPLICATION FOR
SETTING ASIDE AN AWARD ?
The cout wher nsked to set nsid¢ an aw re
may, where
appropriate and so &quested by
a~.,"Rrts, suspend the setting aside
proceedings tor a periot or
a
art
.'~"Z
I
'
{{:«;
,,";""ns
sac.mm»ta
or
i»
"
ra
proceetmngs
to take such others»so«a«
actic
the
in
t
h
e
arbtral
tribunal's
eliminate the grounds fur setting uside an award, {Articleopinion will
5.534)
21.13 WHAT ARE THE GROUNDS TO VACATE AN ARBITRAL
AWARD?
al nwna-d. may b኏qu኏
th኏-኏tt Lubi኏
im,኏
d. vw.:at<..'Ci i'll" ኏Pt a኏itlc
h r"rt in accordance wit uhspec! ADR ales
e following grounds,
%' ~~"{""?";pt
ti
ink nl It+,nlalol ts lter:ti»wit
hutvn et. .i6ht
(iii) I'he arbitral tribunal was guilty of misconduct or any form
of misbehavior that has materially prejudiced the rights of
any party such as refusing to postpone the hearing upon
sufficient enuse shown or tu hear evidence pertinent and
material to the controversy or
(iv)
(c)
+,
N
I
'I'he- rbtrnd award was procured by corruption, fraud or
otler undue means; or
There was evident partially or corruption in the erbitrul
tribunal or any of its members; or
(j)
'''
Unless otherwise agreed by the parties,
•
"i,a parts ray,
with notice te th e other
th
party,
within
may
request,
thirty
Io
.
days of receipt of the award, the arbitral tribunal to mt~i
additional award us to claims preseted in th ubitalPree!
gs but emitted from .he awar w us.
&Eal tribunal coth le request to be justified, it shall make
sider»
"
'>
the additior il
award within 6 days.
na
rt
wuss·
e
(b) The arb1itras] tribunal
may correct any errur of th
type referred tu in pamgraph a) of this Atiel
e
tis rncle on ts own
initinti
iintive within 3O days of the date af the award.
"
lph
r'
(w)
One ar more of the arbitrturs ws disqualified to act as
such under this Chapter nnd willfully refrained from dis-
closing such disqualification; or
The arbitrnl tribunal exceeded its powers, or so 1mperfectly
exeruted them, such that a complete, final und definite
award upon the subject matter submitted to it was not
made.
Any other ground raised to question, vaente or set aside the
· rttral award shall be disregarded by the court. {Article 5.35, par. a)
21.14 WHAT MAY THE PARTIES DO WHEN A PETITION TO AWARD
OR SET ASIDE AN AWARD IS FILED?
Where a petition to vacate or set aside an award is tiled, the petitiorer may simultanoously, or the oppositor may in the alternative,
petition he court to remand the same to the arbitral tribunal far the
purpose of making a new or revisod final and definite ward or tu
dirswt a new hearing before the same or new urbitral tribunal, the
members of which shall be chosen in the manner originaly provided
in the arbitration agreement or submission, In the latter enee, any
provision limiting the tme in which tbe arbitral tribunal may make a
decision shall be deemed applicabie to the new nrbitral tribunal and
ta commence from the date of the court's order. (Article 5.5, par, b)
21.15 WHERE A PARTY FILES A PETITION WITH THE COURT
TO VACATE OR SET ASIDE AN AWARD BY REASON OF
OMISSION'S THAT DO NOT AFFECT THE MERITS OF THE
CASE AND MAY BE CURED OR REMEDIED, WHAT MAY THE
ADVERSE PARTY DO?
Where a party files» a petition with the court to vacate or sot
aside an awurd hy reason of omission/s that do not affect the merits
i
al the case and may le vuretd or remedied, the lver pwrty my
opoe that petition and instead request the court Lu spwnd th
vacnton or setting aide the proceedipg for u period of time to give
the arbitral tribunal an opportunity to cure gr remedy the aw:rd a
resume the arbitration proceeaings or take such other action as will
chiminate the grounds fr
o vaction or getting aside. {Article 5.35.
4.%
rl'I
It. AI,I' It, II; J'IP'E HI
111
I» 'HE A!At.le I»
j
'
I very
lhs
lus
I'/pt
those
1•,,1,
l'
i
Ike-rdtw
,m,I l኏•኏1•HI
,1 '""' ttl • I,,• ,\II
'·
'et
·f'1t'1U.-'኏
t HMM
22.03 WHAT IS THE NATURE OF THE PROCEEDINGS FOR
THE
FOLLOWING?
(a,)
(b)
n1ld Anforccrneut r.r an arbitration
·t·
recogion
agreement or
vacation or setting aside of an arbitral award, and
lication with a court for arbitration assisany aplice
tnnce and supervision, except appe.
Pro""",[;
cuedi·gs for recognition and enforcement of an arbitration
acation or setting aside of an arbitral award, and
agreement or tor
.:
,:,
ee and supervi
my a lication with a cuurt for arbitration assistance
.,
Ip9i
snll be deemed as special proceedings. (Article
~snl,
sin. exeept app, Si1all De
'HT-'
te)
par c)
RULE
6 - Recognition and Enforcement of Awards
THE PARTY MOVING FOR AN ORDER CONFIRMING, MODIFYING, CORRECTING, OR VACATING AN
22.00 WHAT MUST
AWARD 00?
T'he party moving foe an order contrming. modifying, correcting.
or vacating an award, shall, mt the time that such motion ia filed with
the court for the entry of judgment thereon, also file the original or
verified copy of the ward, the arbitration or settlement ageerent,
nnd such papers as mny b required by the tlpecial ADI Rules.
(Article 5.86)
22.01 WHEN MAY THE COURT ENTER ITS JUDGMENT?
Upon the grant of an order eonfirming. modifying or unrrecting
an ward. judgment my be entered in conformity therewith in tho
court where aid application is fled, Cost of the applicaten and the
proceedings srbsequent thereto my be awarded by the court in its
discretion, If awarded, the amount thereof must be included in the
judgment. Judgment will he enforced like court judgments, {rwle
5.37)
•
+
r
5.39)
«
1
tt
22.04 WHERE IS THE VENUE OF THE SAID PROCEEDINGS?
The same shall be filed with the court:
t
(a)
I
(b)
,
t
where he arbitration proceedings are conducted;
the nct,:,At 1o be at,l..a<'bt-:d or lesved upon, or ኏b4t ac:i
where
l
kt
fl)
be enjoined is located;
(e)
(d)
where any of the parties to the dispute resides or has its
place of business; or
in the National Capitrl Judicial Region a the option of the
applicant. (Artie!e 5.89)
22.05 IS NOTICE TO PARTIES REQUIRED IN A SPECIAL PROCEEDING FOR RECOGNITION AND ENFORCEMENT OF AN ARBI-
TRAL AWARD?
22.02 WHERE MAY A DECISION OF THE COURT CONFIRMING,
VACATING, SETTING ASIDE, MODIFYING OR CORRECTING
AN ARBITRAL AWARD BE APPEALED TO?
A decision of the court confirming, veating, setting aside
modifying or varrex:ting an rhitral award may bo appealed to the
Court of Appeals m accordance with Spwrinl AD)R Rules.
The losing party who appeals from the judgment of the Court
confirming an arbitrel award shall be rsquired by the Court of' Appen le to post a counter-hod executed in fyr of the prwvmuling party
equal ts the mount of the award in accordanes with the Special
AD Raloe. (Article 5.38)
In
;J
,
;,
Sr recgnition and enforcement of an
TR
AL'
prcee(ding
specinl
the eIr
rard, the court shall send notice to the parties at
·bitral
arlntr
aw;
he served
nddress of' record in the arbitration, ort;E nny party cannot
;
'T
at
such
tast
known
address.
e
notice
at
such
party's
nddross,
notce
I5 days
before the date Bet for the initial
ghall bee sen t·in a t lest
Ieus'
•
hearing of the application. (Article 5,40)
0
22.16
jfJ
Iv
I,
_
DOMESTIC ARBITRATION, IS A PARTY ENTITLED TO LEGAL
REPRESENTATION?
· domestic arbitration conducted in the Philippines, a
es,
1
perun nf his/her'its choice: Provi1ted Dy
1
J} any
r• ኏ t-""
.
t.
puw 1·..-呸· CD ... V he ,e r',1•C:,en
..
to the• practice at 1 law
le
a dmitted
'
ded, that sueh reprontative, untess
·»
.gt
li1
•
TIE' AM T'IRINA'I!VI [IT'WT
I3Mt4ti rt!
ANM TIHE AMII'TR'T'IN LA
II
in the Philippines, slll not be authorized to appear as counsel in any
Philippine Court, or any other quasi-judicial body wtether or such
appearance is in relation to the arbitration in which he/she appears.
No arbitrator shall act as mediator in any proceeding iu which
he'she is acting as arbitratar and ali negotiationtowards settlement
of the GLVSXWH must tnke without the presence of the arbitrators.
(Article 5.41)
22.07 IS THE ARBITRATION PROCEEDINGS PRIVILEGED?
Yes, the arbitration SURFHHGLQJV including the records, evidence
and the arbitral award and other confidential information, shall be
considered privileged and confidential, DQG shall not EH SXEOLVKHG
H[FHSW(l)
with consent of the parties; or
(2) for the limited purpose DI disclosing ta the court relevant
documents in cases where resort to the court is allowed herein;
Provided, houeter, 'That the court in which the actian or the
appeal is pending may isne a protective order WX prevent or prohibit
disclosure RIdocuments or LQIRUPDWLRQ containing secret SURFHVVHV
developments, research and other information ZKHUH it LV shown
WKDWthe applicant shall EH materially prejudiced E\an authorized
disclosure thereof. (Article 5.42)
22.08 WHAT IS THE CONSEQUENCE OF THE DEATH OF A PARTY?
Where a party dies after making a submission or a contact to
nrbitrate as SUHVFULEHG in these Rules, the proceeding PD\ be begun
or continued upon the application of, or notice to, his'her executar
or administrator, or WR temporary administrator of hia'her estate.
Jn any such cuse, the court PD\ issue an order extending the time
within which notice of a PRWLRQ tu UHFRJQL]H or YDFDWHDQDZDUGPXVW
EHVHUYHG /OSRQrecognizing DQ award, where a party has died since
it was filed or delivered, tho court must enter judgment in the name
of the arigual party; and the proceedings thereupon are the snme QV
where a party dies after a verdiet (Artele 5.43)
22.09 WHAT ARE 7+( RULES IN MULTI-PARTY ARBITRATION?
I
hut4
"Air'l I
tLm>: ,.,t lh.- Alwrn呸U.. F
1, mi.I lt1•,-uJ111
I gee u
f $QWO
WXWtte VODt XV
•
ICitl
,,,,,
'ls
wt
኏
ncit)
ln UQāK 14titn1tlio11኏WRXVW6 WHF/ ,.._ith 呸QLFORV (1'.l
tent of larties) DQG 5.18 (Determination of Rules RI
(a) When a single arbitration involves more thnn two
parties, these XOHVto the extent possible, shall be used subject
HF
ure
as the arbitral tribunal shall deen appropriate to address possible complexities of a multi-party arbitration; and
() When a claimant includes persons who are not
rtics to ar otherwise bound by the arbitration agreement,
SDUHV
QGHQW as
āLPKHer ant dtbe
«ye resp
directly or by reference, EHWZHHQ hi
DGGLWLRQDO claimants or the additional respondents unless no'
later than the date communicating his/her answer to the reque!
e ir his
for arbitration, either by motion or by a special defnse
answer, he objects, on jurisdiction.al grounds, to the ictus»i""2"
,44e; l respondents. The additional respondents VKD
Xƒ,., DG
2KL~pis
.
.
:
lht•1rmdwuon m ihe arb1trauon
co.nsent(;'(i
luwe
R
d኏
ed
b e.¢,
.: ,tr@ their answer /R
unless. not later than WKHdate of FRPPXQDQ. wither
by
PRWLRQ
or
n
sperinl
defense
arbitration,
for
s
t
WOhe
te requesl
de, to their
object,
on
jurisdictional
grouns
in their answer, they
inclusion (Article 5.44)
±
'
0$< 7+( 3$5 7,( 6 $*5 ( ( 21 & 216 2/,'$7,21 2) 35 2
& ( ( ',1*6 $1' +2/',1* 2) & 21& 85 5 ( 17 +( $5 ,1*6 " Yes, WKHSDUWLHV PD\agree that
(a) the arbitration proceedings shall be consolidated
with other arbitration proceedings; or
h) that concurrent hearings shall be KHOGon such terms
Dmay be agreed.
Unless the parties agree to confer such power on the arbitrnl
order consulidation of arbitral has no power to
@
OH WULEX
uibuntl, WLH
‡
H
‡
tion proceedings or concurrent. KHULQJV (Article '.d5)
22.11 WHAT ARE THE RULES IN FEES AND COSTS?
The following are the rules in IHHVDQGcnsts.:
e of the arbitrators shall be agreed upon by the
(a) The fes
in writing prior to the nrbitraton
'L
nrbi•··ilt.ot/s
parties an FO t QRD W
In default of agreement of the parties as to the amount
y .;
t '· fees, the DUELWUDWRU Vfees
DQGPDQQHr RIpayment ol arbitrator V 1ee
al
hall be determined in accordance ZLWKthe applicable inter~
5,
The rules in multi-·party arbitration are as follows:
A'
Ƈ
,
r«ear a-bianon ins«tauQDGLUwhoe""",""";
HWFXH
arbitration is conducted; or in ad hoc arbitration, the
sch
T4# AU'I'EI,NAI!I Si ' itt:ls+it1
NI TH, RIFT'&'l10N L.'W
af fees approved by the IBP. if any, or in default thereof, thu
schedule of fees that may be approved by the OADR
e the parties shall be
(b) lr addition tw arbitrator's fcs.
responsible fur tbe payment of the administrative fees of an
arbitration institution administering an nrhbitration and cost of
arbitration. The latter shall include, as appropriate, the fees of
an expert appointed by the arbitra! tribunal, the expenses for
conducting a site inspection, the use of ruem where arbitration
proceedings hall be or have been conducted, the expenses for
the recording and transcription of the arbitration proceedings.
(e) The arbitral tribunal shall fix tho costs of arbitration
in its award. The term "costs" include onlv:
""
ti)
'I'he fees of the arbitral tribunal to be stated
separately as to each arbitrator and to he fixed
by the arbitral tribunal itself in uccordanco
with this Article;
(ii}
The travel and other expenses incurred by the
arbitrators
(ii) The costs of expert advice and of other assis-
tance required by the arbitrnl tribunal. such as
site inspection and expenses for the recording
and transcription of the arbitration proceed-
1ng;
i) The travel and other expenses at witnesses to
the extent such expenses are provided by the
arbitral tribunal;
(v)
The costs for legal representation and assistance of the successful party if such costs were
claimed during the arbitrnl pruceeadings, and
only to the extent that the arbitral tribunal
determines that the amount of such costs is
reasonable;
(vi}
Any fees and expenses of the appointing au-
thority.
(d) Te fees of the arbitral tribunal shall he reasonable
in amount, taking into account the amount in dispute, the complexit of the subject matter, the time pent by the nrhitrators
and ny other relevant circumstances of t.he ease.
\Ml't
t'ht
hp+he o nt my lulu
Tl+
Du«ts le ultn
4
l l+plat
et ofuo4
sf '
tertdvr
f au ppuinting authority has been agreed upon by
the parties and if such appointing authority has issued
scheule of foes tor arbitrators in domestic cases which it
administers, the arbitral tribunal, in fixing its fees shall
take that schedule ot fees into acount to 1he extent that it
considers appropriate in the circumstances of the case
If such appointing authority has not issued a
schedule of fees for arbitrators in inrornational caseE, n'
party may, at any time request the appointing authority to
furnish a statement setting forth the basis for establishing
fees which is customarily followed in international cases
in which the authority appoints arbitrators. If the
appciting authority consents to provide such a statement,
the rbitral triburul, in fixing its fees shall take such
into account to the extent hat it considers
infrmation
o
appropriate in the circumstances af the case.
In cases referred to in paragrnph td) of this Article,
when a party so requests and the appointing authority
consacnts to perform the function. the nrbitral tribunal
shall fix its fees ol after consultation with the appointing authority which may make any comment it deems
appropriate to the arbital tribunal concerning the fees.
Except as prvided in the next paragraph, the costs
of arbitration shall, in priciple, be borne by tLe nurcessful party. However, tha arltral tribunal may apportion each of such costs between the parties if it determines
that apportionment is reasonable, taking into account the
circumstances af the case.
With respect to the coets of legal representation and
usietance referred to in paragraph (c) (iii) of this Article,
the arbitral tribunal, taking into account the circumstances of the cnse, shall be free to determine which party
shall bear such costs or may apportion such costs between
the parties if it determines that appointment is reason-
able.
When the arbitral tribuul issues an order for the
termination of' the arbitra proceedings or makes an
award on agreed terrs, it shall fix the costs pf nrbitration
referred tin paragraph {a) of this Article in the context of
that order or award.
IM A 'I'JNNIV
Ir'I'
w4
VD l'I ARI'II\''IN 1W
I +!
;I'I
rruJ
t'huts Te+
oh+
e · tu Rule
t A{us lot
i {rd
wt
t
iw
Chapter 7
OTHER ADR FORMS
pwelation or correction or completion of its award under these
RULE 1 -- General Provisions
Rules.
the costs referred to in paragraphs {i), (it and (ii) of paragraph
(e) of this Article.
lieu.tit
'I
Excopt
otherwise agreed by the parties, mo auddttional fees may be charged hy the rbitral tribunal fur inter(e)
(f The arbitral tribunal, on its establishment, may re.
quest each purty to deposit au equai mount as nn ndvanco for
u' 1e-
24.00 WHAT IS THE SCOPE OF APPLICATION OF THIS CHAPTER?
I
l
L.he
Except as otherwise agreed, this Chapter shall apply and supply
deficiency in tle agreement of the parties for matters involving
he following forms of' AD!
During the course of the arbitral proceedings, the arbitral tribunal ray request supplementary deposits from the parties.
!fan appointing authority has hoen agreed upon by the parties,
nd when a purty su requests and the appointing authority consents
to perform the function, the arbitral tribunal shall fix the amounts
of any deposits or supplementary deposits orly after consultation
with the appointing authority which may make any comrents to tho
arttral tribunal which it deers appropriate concerning the amount
of suwh depasits and supplementary deposits
if tho reutired deposits nre not paid in full within 30 days atter
o the parreceipt of the request, the arbitral tribunal shall so infrm
ties in order that one of them may make the required payment within
auch a period ar reasonable extension thereof as may be determined
b y the arbitral tribunal. If auch payment is not mnde, the arbitral
tribunal may order the termination of the rbitrnl proceedings
After the award has been made, the arbitral tribunal shall
render an accounting to tho parties of the deposits received and
return nny unexpended balance tn the parties. (Article 5.46)
Chapter 6
ARBITRATION OF CONSTRUCTION DISPUTES
23.00 WHAT AGENCY GOVERNS ARBITRATION OF CONSTRuC-
TION DISPUTES?
The Construction Industry Arbitration Commission (CIAC),
which has orignal and exclusive jurisdiction over arbitration ot con
struction disputes pursuant to Executivo Order No. 1008, s. 198,
otherwise known as the "Construction Industry Arbitration Law,"
shall promulgate the Implementing Ruls and Regulations govern.
ing arburation of construction disputes, incorporating therein the
pertinent provisions of the ADR Act.
(a)
early neutral evuluution;
(b)
neutral evaluation:
(e)
mini·trial;
(d)
mediation-arbitration;
n combination thereof; or any other ADR firm. (Article 7.1)
(e)
24.01 WHEN DOES CHAPTER 3 WHICH GOVERNS MEDIATION
HAVE SUPPLETORY APPLICATION?
If the other ADR form/process is more akin to arbitration i.e.,
he neutral third-person merely nssists the pnrten in reaching a
voluntary agreement), Chapter 3 governing mediation hall have
suppletory application to the extent that it is not in conflict with the
agreement of the parties or this Chapter. (Article 7.2)
24.02 WHEN DOES CHAPTER 5 WHICH GOVERNS DOMESTIC
ARBITRATION HAVE SUPPLETORY APPLICATION?
If the other ADR tozm/process is
more ukin to arbitration (i.e.,
the neutral third-person has the power to mako a binding resolution
of the dispute), Chapter S governing domestic arbitration shall have
suppletory application to the extent that it is not conflict with the
agreement of the parties or this Chnpter. {Article 7.3)
in
24.03 IF A DISPUTE IS ALREADY BEFORE A COURT, MAY A PARTY,
BEFORE AND DURING PRE-TRIAL, FILE A MOTON TO
REFER THE PARTIES TO OTHER ADR FORMS/PROCESSES?
Yes. if a dispute is already before a court, either party my,
hefore and during pre-trial, flo a motion for the court to refer the
parties to other ADR forms/'processes.
However, at any time during rourt proceedings. even after pretrial, the parties may jointly rove for suspension'dismissal of the
l'}Hi, AI,RN'It, I;arT
+
+
'NI THI' AA»IT'TWA 1 4
actian pursuuntt to Article
20o ot the Civil Co.
(Article 7.4)
'i+
6
),Hempe
1]J
24.04 MAY A PARTY SUBMIT A SETTLEMENT
FOLLOWING A NEUTRAL OR AN EARLY
TRIAL OR MEDIATION- ARBITRATION?
e
4,
·"
(f)
T'he neutral or early neutral evaluation sha!' i wrwernd
by the rules and proche greed upon hy t
hes. !
the absence of said agreement, this le shall apply
If the parties cannot agree on, or fail to provide for:
ti)
'The desired qualification of the neutral third person;
fji)
The manner of his/her selection;
(iii)
The appointing authority (at IBI who stall have
the authority to make the appointment al'a neutral
Luru person; or
i despite -. agreement
on the foregoing
:,
'''i and t.uliK 1t\pt'.
th period of time
the
stipulated for the appointment,
the parties are unable to select a neutral third perssm
or appointing authority, then, tine
either er'
pa:·ty my
request the defalt appointing authority, ns defined
under paragraph CI of Article (Definition of'Terms)
to make the appointment taking intu consideration
the nature of tbe dispute and the experience and
expertise of the ncutral tlrd person.
•
'There shall be no ex-parte communication between the
neutral third porson and any party to dispute without the
con9on: of all parties
(h)
All papers and written presentations communicated to the
neutral third person, including any paper prepared by s
party to be communicated ta the routral third person or
to the other party as part of the dispute resolution process. nnd the neutral third person's written non-binding
assessment ar evaluation, shall be treated as confidential.
e'
The parties shall
submit and exchange
aosit'
''
Fi10n paper
.
s
th
contain
the
issues
and
statement
of
the
{
+,
•
4ui
I reievflt
rats
•
and zppeuding supporting documents and affidavits of
witneeses· tn nsaist the neutral third person
j
'
'
nevniuatung!
ox assessing the dispute.
.%,
The neural third person may reuuet either party t :d
Iv tu uddit. 4l issues that. he/she may consider
h ess additionni
thr
necessary for a complete evaluation/assessment of the dispute.
i.
'"W}
"
'The neutral third person shall issue a written evaluation
or assessment within 30 days from the conchsimn af the
evaluation process. 'le opinion shall be non-binding and
shall set forth how the neutral third person would have
ruled had the matter been subject to a binding process.
The evluntian ar nssussment shall indicate the relative
strengths and weakness of the positions af the parties, the
basis for the evaluation or assessment, and an estimate,
when feasible, af the amount for which a party may be
liahle to the other if the dispute were made subject to a
binding process.
(g)
at f
«
w· teal third person mny structure the evaluation
;,
25.00 CITE THE RULES IN THE APPOINTMENT OF A NEUTRAL OR
EARLY NEUTRAL EVALUATION.
fiv)
ho Alt+rhe
areas of agreement, clarify the issues, define those that
are contentious, and encourage the parties tu agree on
a definition of issues and stipulate on facts or admit the
genuineness and due execution of documents
RULE 2- Neutral or Early Neutral Evaluation
(a)
et etIi(t
f'
in any manner he#she deems appropriate. In the
course thereof, the neutral third person may identify
· ,-EM£NT
'
d lelatiuu,
process
EVA;LATH4, MINI
"
'',
'The·
(e
Tither party may submit tu the court before which the
Ube case 1s
settle
nny selement
agreement fllowing;
a neutral or ar
I
o
",;
neutral vntaton, mu trial or ruediotion-arbitration. (Ares
pending
+"
1ht
+Rt t
le· » t, I4 ten
I
put+e- It dutu
(Article 7.6)
i
1
RULE 3 - Mini-Trial
26.00 HOW IS A MINI-TRIAL CONDUCTED?
(a)
A mini-trial shall be governed by the rules and procedure
agreed upon by the parties. In the absence of said agreement, this Rule shall apply
(b)
A mini-trin] shall be conducted either as: (i) a separate
dispute resolution process; or (ii) n continuation of mediation. neutral or early neutral evaluation or any other ADIR
prowess
i
''
Tit
AW 'TRNA'II
AMI THE
Dir
R 4l 1le
t'#yurt+ lee
tc)
'The partes mny agree thnt a mini-twin\ hw
duetsl with
or without the presence and participation of a neutral
The rules are as fallows:
(a) A Mediation-Arbitration shall be governed by the
· procedure
parties. " In the absence
d
rules and
agreec:d upon by·, the A'
5
on
Mediation
shall first apply and
of said agreement, Chapter
thereafter, Ghapter 5 an Domestic Arbitration.
men18,
Unless the parties agree on a shorter or longer
period, the presentation-in-chief hall ho made, without
interruption, for one hour und the rebuttal or sur-rebuttal
shall be 80 minutes.
At the end of each presentation, rebuttal or surrebuttal, the mini-trial panel memberls my ask clarifcatory questions from auy of the presentors.
No person stall having been engage and having
acted ns mediator of a dispute between the parties, following a
failed mediation, act as arbitrator of the same dispute, unless
the parties, in a written agreement, expressly authorize the
mediator to hear and decide the case as an arbitrator.
(b)
ratification by the latter.
Ar the date time and place aged upon, the parties shall
appear before the mini-trial panel member. 'The lawyer
of each party nu/or authorized representative shall pre
sent hither case starting with the claimant followed by
the respondent. The lawyer andiur representutiv al each
party may thereafter offor rebuttal or sur-rebuttal argu-
t
t
I
(e) The mediator who becomes an arbitrator pursuant
to this Rule shall rake an appropriate disclosure to the parts
if the arbitration proceeding had commenced and wil
::oc0cd es o. new
di.EptH.e re-solution jJ\.'<.x'኏኏኏' irntl .,:Juul, b኏101-c
his/her
duties, execute the appropriate oath
entering upan
of
office
us
arbitrator in atordsnee with these
or affirmation
Rules. (Article 7.8)
RULE 5 --Costs and Foos
28.00 WHAT ARE THE RULES ON COSTS AND FEES?
The following are the rules on costs and fees:
(a) Before entering his/hor duties as AD provider,
኏
be'she shall agree with the partic኏ on the cost ot the AD
procedure, the fees to be paid and manner of payment for bis
her services.
(b) In the absence of such agreement, the fees for the
:
,
ADR provider/practitioner shnll be determined
gerttes tl fth' if
as follows:
I'
(g)
tter the mini-trial, the min-trial panel members shall
negotiate a settlement of the dispute by themselves.
et uf 2004
27.00 WHAT ARE THE RULES ON MEDIATION-ARBITRATION?
party. 'IT'his appointmcnt shall constitute n representation
ta the other party that the mini-trial panel member/s has!
hve the authority to onter into n settlement agreement
binding upon the principal without any further avton or
(fy
ipte Resolution
c.d lht- ,'\lt.c,1u.d1\f+.:
RULE 4 - Mediation-Arbitration
The senior executive/s chosen to sit as miui-trial panel
members must oe duly authorized to negotiate and settle
Each party shall submit a brief executive summary of
the dispute i sufficient copies as to provide one copy to
eneh mini-trial panel member nnd to the adversc party.
The summary ghnll identify the powific tactual or legal
issue or issues. Each party may attach to the summary a
mare exhaustive recital of the facts of the dispute and the
applicable law and jurisprudence.
,1,·i, ... nl 1111: lt,:k•:11ltk) H,·኏
...•ul1tlH)llil
7 T)
the dispute withtheother party.The appointment ofa minitrial panel member!s shall he communicated ta the other
(e)
• ,•1
In cases where neural third pcrson is appointed, the neutral
third person shall assist the parties/mini-trial panel members in
. ••ttlmg the diEpute and, unlass otherwise agreed by the parties.te
rucendings shall be governcd by Chapter 3 of Mediation. (Article
third person. If a neutral third person is agreed upon
and chosen, he'sho shall preside over the mini-trial The
parties may agree to appoint one or more (but equal in
number por party) senior executivets, nn its behalf, to sit
as mini-trial panel members
(d)
16J
I'A'II
HT'U'TIN 1
'
H
(i)
ITEFRNA'TWE DH}I TE
wl,'tL
AND THI' AI&ITHA ION 1w
If the ADR procedure is conducted under the
rulee nndle administered hy an institution
regularly providing ADservices to the general
i
CHAPTER FOUR
COLLECTIVE BARGAINING
AND ADMINISTRATION AGREEMENT
public, the fees of the ADR professional shall
be determined in accordance with schedule af
fees approved by such institution, if any;
(ii)
Ln ad hoc AD, the fees shall be determined in
accordance with the schedule of foes appruvrd
by the OADR:
(iii) Inthe hsence of a schedule of fees approved by
the ADR institution or by the OADR, tbe Tes
shall be determined iy the AD institution or by
the OADR, as the pnse my be, and complexity
of the process, the amount in dispute and the
professional standing of the ADR professional.
PRESIDENTIAL DECREE NO. 442
,
ARTICLES 250-254 OF TITLE VII
4
tt
1.00 UNDER ARTICLE 250, TITLE VII OF THE LABOR CODE OF THE
PHILIPPINES, WHAT ARE THE PROCEDURES THAT MUST BE
OBSERVED IN COLLECTIVE BARGAINING?
'The following procedures shall be observed in collective bargaining:
a.
When n party desires tu negotinte an agreement, it shail
serve a written notice upon the other party with a statement of its proposals. The other party shall make a reply
thereto not later than 14 calendar days from receipt of
such notice.
(c)
A contingoncy fee arrangement shall not. be allowed.
The amount that ray be allowed to an ADR professional may
not be made depondent upon the success of his/her effort in
helping the parties t settle their dispute. (Article 7.9)
b.
Should differences arise on the basis of such notice nnd
e
which
repl,y either party may request for a confrence
shall begin not later thnn 10 calendar days from the date
of' request;
c.
If the dispute is not settled, the Board sball intervene upon
request uf either ar both parties or at its own initiative nnd
immediately call the parties to conciliation meetings. 'The
Board shall have the power to issue subpoenas requiring
the attendnnce of the parties to such meetings. It shall be
the duty af the pmrties to participate fully und promptly in
the conic liation meetings the Board may cal
d.
Daring the conciliation proceedings in he Board, the parties are prohibited from doing any act which may disrupt
ox impede tho oar.y selement ef the disputes; and
e.
The Board shall exert all efforts to settle disputes amicably and encourage the parties to submit their csn tu a
voluntary arbitrator. (As amended by Section 2. .A. No
6715, March 21, 1989)
'I'THE AM''I N'TIWI DI'rT E;·tt,rTt
AND 'T'HI{ AI{WT'WA''(N 1,AW
4
t Ide
n
FM!'t I
1tow+ linrrau
wl
lmust au gr+el
''
..
1.01 EXPLAIN THE DUTY TO BARGAIN COLLECTIVELY IN THE
ABSENCE OF COLLECTIVE BARGAINING AGREEMENTS
UNDER ARTICLE 251 OF THE LABOR CODE.
the date l vxpry of sch five yexr tern of the Collective Brgaining
In the absencc of an agreemcnt or other voluntary arrangement
Ali other provisions of the Collective Bargaining Agreement
hall be renegotiated not later than three years after its execution
Any agreement on such other provisions of tha Collective Bargaining
Agreement entered into within six months from the date nf expiry cl
the term ot' such otter provisions as fixed in such Collective Bargain
ing Agreement, shall rotroaet to the day immediately following such
greemwt.
providing for a roe expeditious manner of collective bargaining, it
shall he the duty of employer and the representatives of the employees
to bargain collectively in accordance with the provisions of this Code,
1.02 WHAT IS THE MEANING OF DUTY TO BARGAIN COLLECTIVELY UNDER ARTICLE 252 OF THE LABOR CODE?
The duty to bargam collectively means the performance of a
mutunl obligation to meet and convene promptly and expeditiously
in good faith for the purpose of negotiating an agreement with respeet to wages, hours of work and all other terms and conditions of
employment including proposals for adjusting any grievances or
qoetiona arising under such agreement and executing a contract
incorporating such agreements if requested hy either party but such
duty does not compel any party to agree to a proposal or to make any
eocesSIOT.
1.03 EXPLAIN THE DUTY TO BARGAIN COLLECTIVELY WHEN
THERE EXISTS A COLLECTIVE BARGAINING AGREEMENT
UNDER ARTICLE 251 OF THE LABOR CODE.
When there is a collective bargaining agreement, the duty to
bargain collectively shali also mean that neither party sha}l terminate
nor modify such agreement during its lifetime. However, either party
can serve a written notice to terminate or modify the agreement at
ienst 60 dnys prior to its expiration date. It shall be the duty of bott
parties to keep the status quo and to continue in full force and effect
the terms and conditions of the existing agreement during the 50-day
period and/or until a new agreement is reached by the parties
1.04 EXPLAIN THE TERMS OF A COLLECTIVE BARGAINING
AGREEMENT UNDER ARTICLE 253-4 OF THE LABOR CODE.
Any collective hargning agreement that. the parties may enter
into shall. insofar as the representation aspect is concerned, be for
a term of five years. a petition quetionmng the majority tst.u13
of the incumbent bargaining agent shall be entertained and no
certification election shall be conueted by the Department of Labor
and Employment outside of tho 60-day period immediately before
l
date
[f any such agreement is entered inta beyond six months, the
parties shall agree on the duration of retroactivity thereof. In case of
a dealack in the renegotiation of the Collective Bargaininggroe
rent, the parties may exercise their rights under his Cade. (A
amended by Section 21, R.A. N. 6715, March. 21, 1989)
1.05 CAN INJUNCTION BE ISSUED IN ANY CASE INVOLVING OR
GROWING OUT OF LABOR DISPUTES
OF THE LABOR CODE?
UNDER
ARTICLE 254
Na temporary or permanent injunction ur restraining order 1n
nnv ce irvalving nr growing out of labor dspues hall be issuo
by any court or other entity, except as otherwise provided in Articles
218 and 264 of this Code. (As amended by B.P. Blg.27, lune 1, 1982)
-End of Part 1-
4'it ti
t tqpfi 4
1
5
'It+
all
n l2+»
02 WHAT ARF THE CONTROVERSIES OR CASES NOT SUBJECT
TO R.A. NO. 876?2
l'his Aet hall not apply to controversies nnd to cases which
re subject to the jurisdiction of the Court of ludustrial Relations o
which have been subnutteud to it as provided ly Comtonwealth Act
Nnmher@d One Hundred snd 'Three, s amended. {Section 3)
PART II
CHAPTER ONE
THE ARBITRATION LAW
2 00 WHAT IS THE FORM OF THE ARBITRATION AGREEMENT ?
contract to nrbirmte a controversy thereafter arising batween
tbe partes, as well as submission to arbitrate an existing contro»
wrsy shall be in writing arud subscribed hsy the party sought tn he
charged, qr by hie lawful agont.
REPUBLIC ACT NO. 876
1.00 WHAT ARE THE SUBJECT MATTERS OF ARBITRATION?
Two or mare persons or parties may submit to the arbitration
of one or more arbitrators any controversy existmy between them at
the tine af the submission and which may be the suhjet of an etion,
or the parties to any contract may in such cnntraet agree to settle
by arbitration a contrvarsy thereafter arising between them. Such
submission or contract slall he valid, enforceable and irrevocable,
save upon such grounds as exist at law for the revocation of any
contract.
'
The making of a contract or submission fro arbitration described
» Section two hereol. providing for arbitration of any controversy,
-hall be leered a onset of the parties to th jurssccton of the
teurt of First Instnnee of the p»wince or ity where any of the parties
rides, to enforce such eontrnrt or submission, (5ertion 4)
2.01 DISCUSS THE PRELIMINARY PROCEDURE OF ARBITRATION.
An arbitration shall he instituted by.
Such submission or contract my include question arising out of'
lr the cie of a contract to nrhitrate future contraby either party upon the other of a
demand for nrhitration in nceard9nee with the enrtraet Such
demand eball set forth the nature of the controversy, the amount
involved if any, and the relief sought, together with s true copy
(a)
valuations, appraisals or other controversies which mav be callateral,
incidental, precedent or Buhsequent to sny issue between the parties,
(Section 2)
\l
versics,
1.01 WHO ARE DISQUALIFIED TO ARBITRATE?
af the contract providing for arbitration. The demand shall he
A controversy ennnot. be arbitrated where one of the parties ta
the controversy is an infant, or a persan judicially declared ta be in
competent, unless the appropriate court having jurisdiction mpproe
a petition [or permission to submit such euntrovers to arbitration
made by the general guardian or guardian ad item of the infant or
af the inenmpetert.
呸
Fut where a person capable of entering into n submission ur
crtruet hns knowingly entered into the same with a person incapxbhe
of so doing. the ubjcrtion on the ground of incapacity can he taken
only in behalf of the person so incapacitated. (Serttn 2)
I
'
158
by the service
l
sorved upon any part either in person or by registered mail
In the event that the contract between the parties provides fer
the appointment of u single arbitrator, the den:and shall be set
forth n specific time within which the nnties shall agree tpon
such arbitrator lt the contract between the parties provides
tor the nppaitmant of three arbitrators, one to be selected by
each party, the deranui shall name the arhit.ratur appointed by
tho party making the demand; and shall require that the parts
upon whom the demand is mnude shall within 15 days after
receipt. thereof advise in writing the party making sueh demanud
of the name of the person appointed bv the second party; such
natire shall require tht the two arbitrators so appointed must
agree upon the third arbitraur within 10 days from the date ot
such notice
I
.ii
'I'H, ALT'EI{MA'I' DE1'I!'TI; Rv 1I+»
4 TIE, AI!IT'KA'T'MN LAW
th) In the ever that one party do:alts
auswering
the derand, the aggrieved party may file with the Clerk of
the Court of First Instance having jurisdiction over the pnrtie,
a copy of the demand for arbitration under the contract to
arbitrate, with
notice that the original demand was sent
by registered mail or delivered in person to the party against
whom tho claim is scrtod. Such demand shall set forth the
nature of the controversy, the amount involved, if any, and the
relief sought, and shall be accompanied by a true copy of the
contraet providing for arbitration,
or
(c}
In the case of the submission
an cxisling cuntro.
versy by the fling with the Clerk of the Court of First Instance
having jurisdiction, of the submission agreement, setting forth
the nature of the controversy, and the amount involved, if any.
Such submission may be filel hy any party and shall be duly
executed by both parlies.
(d) In the event that ore party neglects, fails or refuses
to arbitrate under a submission agreement, the aggrieved party
shall follow the procedure prescribed in subparagraphs (a} and
(h) of thi+ section. (Section 3)
2.02 HOW IS THE HEARING BY COURT IN ARBITRATION CONDUCTED?
A party aggrieved hy the failure, neglect or refusnl of nnother
to perfrm
o under an agreement in writing providing for arbitration
may petition the court for an order directing that such arbitration
prucued in the manner provided for in such agreement. Five day8
notice in writing of the hearing of such application shall be served
either personally or by registered nail upon the party in default. Tho
court shall hen« the parties, and upon being sutistied that the making
of the agreement or sueh failure to comply therewith is not in issue,
shall mako an order dieting the parties 1o proowd tu arbitration
in accordance with the terms of the agreement. If the making of the
agreement or default be in issue the court shall proceed to summarily
hoar such issue. If the finding he thnt nu agreement in writing
providing fur arbitration was made, or that there is no default in
the proceeding thereunder, the proceeding shall be dismissed. If the
finding be that a written provision for arbitration was made nnd
there is a default in proceeding thereunder, an order shall be mado
summarily directing the purties to proceed with the arbitration in
aceordance with the terms thereof.
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'I'he· curt hull de ile sl motuns, petitions ur applications filed
under the pries of this Art within ten dny after such motions,
tv·tit.ions, nr appwntions hnv heen lenrd by it. (Section 6)
2.03 WHEN MAY A CIVIL ACTION BE STAYED?
If any suit or proweeding be brought upon an issne arising out of
n agreement providing for the arhit.ration theroof, tho court in whicb
uch quit or preeding 16 pending, upon being satisfied that the
sue involved in such suit or proceeding is referable to arbitration,
·hnll stay the action or proceeding until an arbitration hss been
had in aceurdance with the terms of the agrcevent: Provided, That
the applicant, for th st& is mot in default in proceeding with such
arbitration. (Section 7)
3.00 HOW ARE ARBITRATORS APPOINTED?
If, in the contract for arbitration or in the submission described
in Section two, provision is mde for method of nnming ur appoinng an arbitrator or arbitrators, such method shall be followed; but
if no method be provided therein the Court of First Instance shall
designate an arbitrator or arbitrators.
The Court of Firat Instance (TC) chall appoint an arbitrator
or arbitrators, ns the case may be in the following instances;
If the parties to the vontrct or submission are unable
(g)
to gree upon Bingle nrbitrntor; ar
(b) If an arbitrator appointed by the parties is unwilling
or unable to serve, and his successor has not been appointed in
the manner in which he was appointed; or
(c) If either party to the contract fnils ar refuses to name
his arbitrator within 15 days nfter receipt ot the demand fox
arbitration; or
If the arbitrators appointed by each party to the eonid)
a and by the proper
tract, or appointed by one party to the contrct
Court, shall fail to agree upon or to select the third arbitrator.
(e) 'The court. shall, in its discretion appoint one or three
arbitrators, according to the importance of the controversy
involved in any of the preceding cases in which the agreement
is lent as ta the number of arbitrator;
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'IiI A;TAN'TIE I!'ITT
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AND 'T'I, MT'TI'WN1 1W
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Armitrators appointed under this sstion shall
either accept or decline their appointments within seven davs
of th rocoipt of their appointmonts. In case of decliration or
the failure of an arbitrator or arbitrators tu duly accept their
appointments the pnrties or the court, as the case may be, shall
proceed to appoint a substitute or substitutes for the arbitrator
or arbitrutors who decline or failed to accept his or their
appointments. {(Section 8)
(t)
.
4
(b) tu «declare the office of such arbitrator vacant Any such
vacancy shall be filled in the same manner as the original appointment
was made. (Section 1@)
If they do not yield to the challenge, the challenging party may
renew the challenge before the Court of First Instanceof the province
or city in which the challenged arbitrator, ur, any of them, if there ho
more than one, resides. While the challenging incident is discussed
before the court, the hearing or srbitration shall he suspended and it
hall be continued immediately after the court has delivered an order
on the challenging incident. (Section 1I)
3.02 WHAT ARE THE QUALIFICATIONS OF AN ARBITRATOR?
3.05 WHAT IS THE PROCEDURE TO BE FOLLOWED BY THE ARBI
Any person appointed to serve as n arbitrator mst be of legal
age, in full-enjoyment of his civil rights and know how to read and
write, No person appointed to serve as an arbitrator shall be related
by blood or marriage within tho sixth degree to either party to the
controversy, No parson shall serve as an arbitrator in any proceeding
if 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, or
has any personal bias, which might prejudice the right of any party
TRATOR?
Subject to the terms of the submission or contract, if any are
specified thcrein, are arbitrators selected as prescribed herein must,
within five days after appointment if the parties to the controversy
reside within the same cit or province, or within fifteen days after
appointment if the parties roside in differnt provimwes, set a time
and place fur the hearing of the matters submitted to them, and must
cause notice thereof to be given to each of the parties. 'T'he hearing
can be postponed or adjourned by the arbitrators only by agreement
of the parties; otherwise, adjournment ray be ordered hy the arbi
trators upon their own motion only at the hearing nnd for good and
sufficient cause. Na adjournment shall extend the hearing beyond
the day fixed in the submission or contract for rendering the award,
uless the time so fixed is extended by the written agreemeut of the
partias to the submission or contract or their attorneys, or unless the
parties have continued with the arbitraton without objection to such
to u fair und impartial awand.
No party shall select as an arbitrator any person to act as his
champion or to advocate his catue.
3.03 WHAT MUST THE ARBITRATOR DO IF, AFTER APPOINTMENT
BUT BEFORE OR DURING HEARING, A PERSON APPOINTED
TO SERVE AS AN ARBITRATOR SHALL DISCOVER ANY CIRCUMSTANCE LIKELY TO CREATE A PRESUMPTION OF BIAS,
OR WHICH HE BELIEVES MIGHT DISQUALIFY HIM AS AN
IMPARTIAL ARBITRATOR?
wive the presumptive disqualifying circumstances; or
ttw
'The challenge shall be made before them
upon the hearing."
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'The arbitrators mny be challenged only for the reasons mentioned in tbe preceding section which may bave arisen after the nrbi
trat.ion agreement or were unknown at the time of arbitration.
Yes, Section 9 provides: "Where a submission or contract proides that two or more arbitrators therein designate or to be thereafter appointed by the parties, may solect or appoint a person as an
additional arbitrator, the selection or appointment must be in writing. Such additional rhitrator must sit with the original arbitrators
(a)
I'ho
3.04 DISCUSS THE CHALLENGE OF ARBITRATORS.
3.01 MAY ADDITIONAL ARBITRATORS BE APPOINTED?
ln this case, the arbitrator shall immediately disclose such information to the parties. Thereafter, the parties ray agree in writing:
AT'
apter tw
adjournment.
j
Tho hearing ma proceed in the absence of any party who,
after due notice, fais to be present at such hearing or fails to obtain
an adjournment thereof. An award shnll not be made solely on the
default of a party. The arbitrntors shall require the other party
submit such evidence ns thcy may requiro for making an award,
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31.08 DO ARBITRATORS HAVE THE POWER TO TAKE MEASURES
TO SAFEGUARD AND/OR CONSERVE ANY MATTER SUBJECT OF THE DISPUTE IN ARBITRATION?
Na one other than n party to said arbitration, or at person in
the regular employ of such party duly authorized in writn
i g by said
party, or
pacticing
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attorney-at-law, shali be permitted by the
arbitrators to represent before him or them any party to the arbitration. Any party desiring to be represented by counsel shall notify
the other party or parties of such intention at least five days prior to
the hearing.
Yes, the arbitrator or arbitrators shall have the power at any
lime, before rendermg the award, without prejudice ta the rights of
any party to petition the court to take measures to safeguard and/or
onservc an matter which is the subject of the dispute in arbitration.
(Section I4)
T'he arbitrators shall arrange for the taking of a stenographic
record of the testimony when such a record is requested by one or
more parties, and when payment of the cost thereof is assumed by
3.09 HOW IS THE HFARING OF ARBITRATORS CONDUCTED?
Arbitrators may, at the commencement of the hearing, ask both
parties for brief statements of the issues in controversy and/or an
greed statement of facts. Thereafter the parties may offer such evidence as they desire, and shall produce sueh additional evidence as
the arbitrators shall require or deem necessary to an understanding
nud determination of the dispute. The arbitrators shall be the sole
judge of the relevancy and materiality of the evidence offered or produced, and shall not he bound to conform to the Rules of Court perraining ta evidence. Arbitrators shall receive as exhibits in evidence
anv document which the parties may wish to submit and the exhibits
shall be properly identified at the time of subraission. All exhibits
shall remain in the custody of the (lerk of Court during the course
of the arbitration and hall be returned to the parties at. the time
the award is made. The arbitrators may make an ocular inspection
of' any matter or premises which nre in dispute, but such inspection
shall be made only in the presence of all parties to the arbitration,
unless any party who shal have received notice thereof fails to
appear, in which ovent such inspection shall be made in the absonce
of such party. (ection
S
15)
such party or parties.
Persons having a direct interest in the controversy which is the
subject of arbitration shall bave the rigbt to attend any hearing; but
the attendance of any other person shall be nt the discretion of the
arbitrators. (Seion I2)
3.06 ARE ARBITRATORS REQUIRED TO TAKE AN OATH?
Yes, before hearing ry testimony, arbitrators must be sworn,
by any officer authorizad by law to administer an oath, faithfully and
fairly to hear and examine the matters in controversy and to make a
just award according ta the best of' their ability and understanding.
Arbitrators shall have the power to administer the oaths to all
witnsse
e
requiring them to tell the whole truth and nothing but
the truth in any testimony which they may give in any arbitration
hcaring. This oath shali be required of every witness before any of his
testimony is heard. (Section 1)
3.07 DO ARBITRATORS HAVE THE POWER TO ISSUE SUBPOENA
DUCES TECUM AND AD TESTIFICANDUM?
3.10 WHEN MAY THE PARTIES' BRIEFS BE FILED?
Yes. Arbitrators shall have the power to require any person to
attend a honring ss n witness. They shall have the power to subpoent
witnesses and documents when the relevancy of tbe testimony and
the materiality thereof has been demonstrated to the arbitrators.
Arbitrators may also require the retirement of any wimess during
the testimony of any other witness. All of the arbitrators nppointd
in any controversy mast attend all the hearings in that matter and
hear all the allegations and proofs of the parties; but an award by
the majority of them is vald unless the concurrence of all of them is
expressly requred in the submission or contract to arbitrate,
At the close of the hearings, the arbitraiors shall specifically inquire of all parties whether they have nny further proof ar witnesses
to present; upon the receipt of a negative reply from all parties, the
arbitrators shall declare the hearing closed unless the parties have
signified an intention to file briefs. Then the hearing shall be closod
hy the arbitrations after the receipt of briefs and/or reply briefs.
Definite time limit for the tiling of such briefs must be fixed by the
arbitrators at the close of the hearing. Briefs may filed by the parties
within 15 days after the close of the orul hearings; the reply briefs,
o
such 15-day period.
if any, shall be filed within five days fllowing
(Section 16)
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Yes, the hearing may be reopened by the arbitrators on their
own motion or upon the request of any party, upon good cause, showr
at any time before the award is rendered. Whan hearings are thus
reopened the effective date for the closing of the hearings shall he the
date ol the closing of the reopened hearing. (Section 17)
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In the event that the parries to nn nrhitration he, uring the
we f sueh arbitration, settled their dispute, they may reuue!
• the arbitrutar that such sattlerpent. he embodied in n award
lie h shall be signed by the arbitrators. No arbitrator shall act as a
·lintor in any proceeding in which he is acting us arbitrator; and
ll negotiations toward settlement of the dispute must take plat
without the presence of the arbitrator.
3.12 MAY PARTIES SUBMIT THEIR DISPUTE TO ARBITRATION
OTHER THAN BY ORAL HEARING?
The arbitrators shall have the power to decide only those
ratters which have been submitted to them The terms nf the award
:hall he confined to such dispute
Th rbitrntos shall have the power to assess in their award the
esp@nses of any party against another party, when such assessment
:hul be deemed necessary. (Section 2
t
4.02
I ARBITRATION A SPECIAL PROCEEDING?
Yea, arbitration under a contract or submission ehall be deemed
a special proceeding, of which the court specified in the contrCt OF
:ubmission, or if nune be aperifend, the Court af First Instnnre for the
weovince or city in which one af the parties reside3 ar is doing bles, or in wheh the arbitration was held. shall have jurisdiction.
applicatiun tu the court, or a judge thereof. hereunder shall be
nade in manner provided fr the mking nnd hearing of moon,
-xcept as otherwise herein expressly provided. (Setinn 2)
.ny
4.00 WHEN IS THE PROPER TIME TO RENDER THE AWARD?
4.03 WHEN MAY THE ORDER OF CONFIRMATION OF AWARD BE
MADE?
Unless the parties shall have stipulated by written agreement
the time within which the arbitrators must render thoir award, the
written award of the arbitrators shall be rendered within 30 days
after the closing of the hearings or if the oral hearings shall have been
waived, within 30 days afer the arbitrators shall have declared such
proceedings i lieu of hearing closed. 'This period may be extended by
mutual cuusent af the parties. (Section !9)
At any time within one month after the award is made, an
pauty to the controversy which was arbitrated may apply tu the court
having jurisdiction, as provided in Section twenty-eight, for an order
<untiring the awad, and t.hereupon th curt must grant such order
unless the award is vacated, modified or corrected, as prescribed
herein. Notice of sueh motion must be sewed upon the alvwrt pa
or his attorney as prescribed by law for the eervise of such notice
upun n attorney in action in the same court, (Section 2
4.01 WHAT MUST BE THE FORM AND CONTENTS OF THE AWARD?
The swnra must be made in writing andeigned and acknowledged
by a majority of the arbitrators, if more than one; and by the sole
arbitrator, if there is only one. Each party shnll be furnished with
a copy of the award. The arbitrators in their award may grant any
reedy or relief' which they deem just and equitable and witnin the
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owl tht re+went. of the purties, which +hall mrlude, bt not be
Butel tu, thw sf:ifit performance of a contract.
3.11 MAY A HEARING BE RE-OPENED?
Yes, the parties to a submission ar contract to arbitrate may,
by written agreement, submit their dispute to arbitration by other
than oral hearing. 'The parties may submit an agreed statement of
facts. They may also subruit their respective contentions to the duly
appointed arbitrators in wrti ing; this shall include n statement of
facts, together with all documentary proof. Parties may also submit
a written argument. Each party hall provide all other parties to
the dispute with a copy af all sraterents and documents submitted
ta the arbitrtors, Each party shall have an opportunity to reply in
writing to any other party's statemnents and proofs; but if such party
fails to do so within seven davs afer
t receipt of such statements and
proofs, he snall be deemed to have waived hi» right to repiy. Upon
the delivery to the arltrators of all statements and documents,
together with any reply statements, the arbitrators shall declare the
proceedings in lieu of hearing closed. (Section 18)
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4.04 WHAT ARE THE GROUNDS TO VACATE AN AWARD?
In any ane of the following cases, the court must make an order
vaeating the waru upon the prtition af nny party to the onntrovers
'THE, AL#RNA'IV
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ANI» 'THE ARRI'IHA'TION LAW
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when such party proves affirmnzively that in the arbitration pro-
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ceeding:
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Whors the arbitrators have awarded upon a matter
not submitted Lu them, not affecting the merits of the decision
(a)
upon the matter submitted; or
'I'he award was procured by corruption, fraud, or other
uudue mane; or
(e) Where the award is imperfect in n matter of form
not affecting the merits of the controversy, and if it had been &
commissioner's report, the defect could have been amended ur
disregardcd by the court
(b) 'That there was evident partiality or corruption in the
arbitrators or any of them; or
(c)
That the arbitrators were guilty of misconduct in
refusing to postpone the hearing upon sufficient cause shown,
or in rofuaing to hcnr evidence pertinent and material to the
The order may modify and correct the award so ts to effect the
intent thereof and promote justice between the parties, {Section 25)
i
呸
controversy; that one or more of the arbitrators was disqualifed to act as such under Section nine hereof, and willfully
refrained from disclosing such disqunlifications or of any other
misbehavior by which the rights of any party have been mate.
rially prejudiced; or
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(d) That the arbitrators exceeded their powers, or so imperfectly executed them, that a mutual, final and definite awnrd
upon the subject matter submitted to them was not made.
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Upon the granting uf en order confirming, modifying or
rocting an award. judgment may be cntcrd in conformity therewith
in the court wherein said application was filed. Costs of the application and the proceedings subsequent thereto may be awarded by
the court in its discretion. If awarded. the amount thereof must be
included in the judgment. (Section 27)
4.08 WHAT ARE THE PAPERS THAT MUST ACCOMPANY THE
Whero the court vacates an award, costs, not exceeding fifty
pesos and disbursements may be awarded to the prevailing party and
the payment thereof may be enforced in Like manner as the payment
of costs upon the motion in an action. (Section 24)
MOTION TO CONFIRM, MODIFY, CORRECT OR VACATE THE
AWARD?
The party moving lor an order confirming, modifyin.g correctng. or vacnting nn award, shnll at the time thnt such motion is filed
with the court for the entry of judgment thereon alsa file tle following papers with the Clerk of Court:
4.05 WHAT ARE THE GROUNDS TO MODIFY OR CORRECT AN
AWARD?
(a) Where there was an evident miscalculation of figures,
or an evident mistake in the dascription of any person, thing or
property referred to in the award; nr
Notice of a motion to vacate, modify or correct the award must
be served upon the adverse party or his counsel within 3O days after
award is filed or delivered, a prescribed by law for the service upon
an attorney in an action. (Section 26)
4.07 WHEN MAY THE JUDGMENT BE MADE?
Where an award is vacated, the court, in its discretion, may
direct a new hearing either before the same arbitrators or before a
new arbitrator or arbitrators to be chosen in the manner provided in
the submission or contract for the selection of the original arbitrator
or arbitrators. and any provision limiting the time in which the
arbitrators may make a decision shall be deemed applicable to the
new arbitration and to commence from the date of the court's order
In any one of the [ullowing cases, the court must make an order
modifying or correcting the award, upon the application of any party
to the controversy which was arbitrated:
4.06 WHEN SHOULD A NOTICE OF A MOTION TO VACATE, MODIFY
OR CORRECT THE AWARD BE SERVED?7
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(a) The submission, or contract to arbitrate; the appointment of the arbitrator or arbitrators; and each written extension
of the time, if any, within whuh to make the award.
(b}
A verified of the award.
(c) Each notice, affidavit, or other paper used upon the
application to confirm, modify, correct or vacate such award,
and a copy of ench of the court upon snch application,
'TIE AL'T'IHNAT'WE, IM''rT r'+n 41el
ANI+ TH AMI'TWA TIWN LAW
170
Tho judgment shall be docketed as if it were rendered in an
action.
CHAPTER TWO
The judgment so entered shall have the same force and effect in
all respects, as, and be subject to all the provisions relating to, a judgment in an action; and it may be enforced as if it had been rendered
in the court in which it is entered. (Section 28)
CONSTRUCTION INDUSTRY ARBITRATION LAW
EXECUTIVE ORDER NO. 1008
4.09 WHEN MAY AN APPEAL BE TAKEN?
1.00 WHAT IS THE TITLE OF EXECUTIVE ORDER NO. 10087
An appeal may be taken frorn an order made in a proceeding
under this Act, or from a judgment entered upon sn award through
certiorari proceedings, but such appeals shall be limited to questions
of law. The procoedings upon such an appeal, including the judgment
thereon shall be governed by the Rules of Court in so far s they are
applicable. (Section 29)
This Executive Order shall bo known as the "Construction
Industry Arbitration Lau." (Section )
1.01 WHAT IS THE DECLARED STATE POLICY UNDER E.O. NO.
1008?
The policy of the State is to encourage the early and expeditious
settlement of disputes in the Philippine construction industry. (See-
4.10 WHAT IS THE CONSEQUENCE IF A PARTY DIES AFTER
MAKING A SUBMISSION OR A CONTRACT TO ARBITRATE?
Where a party dies after making a submission or a euntract to
arbitrate as prescribed in this Act, the proceedings may he begun or
continued upon the application of, or notice to, his executor or administrator, or temporary ndministrator of his estate. In any such case,
the court may issue an order extending the time within which notice
of a motion to confirm, vacate, modify or correct an award must be
served. Upon confirming an award, where n party has died since it
was filed or delivered, tho court must enter judgmncnt in the name af
the original party; and the proceedings thereupon are the same as
where a party dies after a verdict. (Section 30)
+ion. 2)
2.00 WHAT IS
THE BODY CREATED
UNDER E.0. NO. 1008?
There is hereby established in the CIAl a body to be known
as tho Construction Industry Arbitration Commission (CIAC). 'The
CIAC shall be under the administrative supervision of the PDCB.
(Section. 3)
2.01
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WHAT IS THE JURISDICTION OF THE CIA?
The CEAC 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 thereof, These disputes may involve
government. or private contracts.
the Board to acquire jurisdiction, the parties to a dispute must grcc to submit the same to voluntry arbitration. (Section 4)
or
The jurisdiction of the CIAC may include but
is
not limited to
violation of specifications for materials and workmanship; violation
of the terms of agreement: interpretation and/or application of contractual provisions, amount of damages and penalties; commencement time and delays; maintenance and defects; payment, default
of employer or contractor and changes in contract cost.
171
T'HF,I'!EN'TIV, DIP"T, tu
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2.02 ARE DISPUTES ARISING FROM EMPLOYER-EMPLOYEE
RELATIONSHIP COVERED BY THIS LAW?
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2.03 WHAT IS THE COMPOSITION OF THE COMMISSION?
e.
3)
4)
'To formulate and adopt an arbitration program for the
construrtion industry;
To enunciate policies and prescribe rules and procedures
f.
g.
b.
Term
The term of o£fee af the members of the Commission
shall be six years; Provided, however, 'That of the Commseon members first appointed, the chairman shall hold
offre for six years; the other member for four years: and
The third for two years. 'T'be appointment to
vaancy
c
1 the Commission shall only he for the unexpired portion
of the term ot the predecessc (Section 8J
any
Secretariat
a
Publica-
Authority to appoint
T'he Commission is hereb y authorized to appoint the
Executive Director, the consultants, the arbitrators, as
well as personnel nd staff. (Section 12)
tons as may be assigned to them from time to time (So.
tion 6)
'·IC
The memhers» ot the Commission shall receive such
pcr diems and allowances as may be fixed by the CIAP
from time ta time. (Section 7)
Deliberations
The Secretariat shall have among others
tion and a Training Division. (Section 1H)
'To direct its officers and employees tu perform such fune-
2.05 DISCUSS THE FOLLOWING RELATED SUBJECT MATTERS.
a.
Compensation of the Commission
Quorum
charges, and fees. It shall be the duty of the Executive
Director to notify the parties af the awnrde made by the
arbitrators.
for construction arbitraticn;
Ta supervise the nrbitration program, nd exorcise such
authority related thereto as regards the appointment,
replacement or challenging of arbitrators; and
T
'The Commission shall have a Secretnrt to be headed
by an Executive Director who shull b responsible for
receiving reuuests for arbitration, and other pleadings, for
notifying the parties thereto; and, for fixing and receiving
filing fees, deposits, costs of arbitration, administrative
'The Commission shall perform, among others thnt may be
conferred by law, the following functions:
)
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'T'he decisions of the Commission shall be arrived at
by majority vote (Section 10)
2.04 WHAT ARE THE FUNCTIONS OF THE COMMISSION?
I)
w
T'he presence of a majority of the members of the
Commission shall constitute a quorum for the transaction
of business. (Section 9)
No, excluded from the coverage af this law are disputes rising
from employer-employee relationships which shall contnue to be
covered by the Labor Code of the Philippines,
'T'he Corission hall consist of a Chairman and two members
all to be appointod hy the CIAP Board npon recommendation
by te
members of the PD)CB. (Sectton 5}
tow· di
Authority to Collect Fees
The Commission is empowered ta determine and
collect fees, dcposits, costs of arbitration, as well as administrative and other charges as may be necessary in the per
formance of its functions nd responsibilities. The CLAC is
also authorized to use its receipts and deposits of funds to
finance its operations subject to the approval of the PDCB,
the provisions of any law to the contrary notwithstanding.
(Section 13)
3.00 HOW ARE ARBITRATORS APPOINTED?
A sole arbitrator or three arbitrators may sottle n cispute.
Where the parties agree that the dispute shall be settled by a
sole arbitrator, they may, by agreement., nominate him from the list of
arbitrator accredited by the C'IAC for appointment and confirmation.
IHA; t'TR4Tt pl4TE,
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WI THE 4II/'T'HAT'6N I,
lf the parties laul to agree as to the nrbitrntr, the+« th
tu
consideration the complexitios and tricawies ot the dnutei h.
tho option to appoint a single arbitrator or an Arbitral Tribunal
If the CIA€ daciules to appoint an Arbitral Tibmnl. each part.
ray nominate one arbitrator from the list nf' nrhit cators aceeuditod
by the CIAC for appointment nd for confirmation. The third arb
trator who is acceptable to both parties canfirmed in writing shall L.
appointed by the CIAC nnd shall preside over the Tribunal
Arbitration shol] be men of distinction in whom the business
sector and the governrnent can have confidence. 'They shall not bu
permanently employed with the CIA\C. Instead, they shall render
services only when called to arbitrate. For each dispute they settle
they shall be given fees. (Setion 14)
3.01 MAY EXPERTS BE APPOINTED?
Yes, theservices uf thnieal or legal experts may ho tilied in
the settlement of disputes if requested by any of the parties or hy th
Arbitral Tribunal. If the r&quest for nn expert is dare hy either ar by
both of the parties, it is necessary that the appointment of the xpert
be confirmed by the Arbitral Tribunnl.
Whenever the pnrtips requegt for the services of an expert, they
&hall equally shoulder the expert'a foes nnd expenses, half of which
shall he deposited with the Secretariat before the expert renders
scrice. When only on party makes tho request, it shall deposit the
whole amount required. (Section 15)
3.02 WHAT DO ARBITRATION EXPENSES INCLUDE7
Arbitration expenses shall include the filing fee; administrative
charges, mhbitrntar's fres; fee and expenses of the expert, and othors
which may be imposed by the CLAC
'The administrative charges and the arbitrntor's fees shall Le
computed on the bsi of percentage of the sum in tlipute tor he [ixed
1 accordnce with the 'T'able of' Administrative Charges ard Arbi
trator's Fees. (Section 16)
3.03 TO WHOM MAY PAYMENT OF THE EXPECTED ARBITRATION
EXPENSES BE DEPOSITED?
The CIAC' shall be authorized to fix the amount ta be deposited
which must be equivalent ta the expected arbitration expenses,
l l
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fas
4
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The «dip»·sit. shall he paid to the secretariat before arbitration
proceedingslll commence. Payment shall either be shared equally
hy the parties or be paid by any oaf them. If one party fails t contrihute his share in the deposit, the other party must pay in full If both
parties fail tu tender the required deposit, the case shall be oonsidvrel dismissed bur the parties shall till be liable to pay one half of'
the agreed administrative charge. (Section 17)
4.00 WHAT REPORTS MUST THE COMMISSION SUBMIT TO THE
CIAP?
'The Commission sball, within three months after the end af the
fiscal year, submit its annual report to the CIAP. It shall, likewise,
submit such poriodic reports as it mya he re@uureud from tie to time.
(Section 18)
4.01 IS AN ARBITRAL AWARD FINAL AND UNAPPEALABLE?
The arbitral award shall he binding upon the psrties. It shall
be final and unappealable except on questions of law which shnli bc
appealable to the Supreme Court, (Section 19)
4.02 WHEN MAY A WRIT OF EXECUTION BE ISSUED?
As soon as a deision, order to award has become final and execuory, the Arbitral Tribunal or the single arbitrator with the occurrence of the CIAC shall mot propio, or on motion of any interested
party, issue a writ af execution requiring any beriff or other proper
officer to execute said decision, order or award. (Section i)
4.03 DOES CIAC HAVE A RULE-MAKING POWER?
Yeas, the CIA(' shnll formulate and adopt necessary rules and
procedures for construction arbitration. (Section 2I)
;
Mt'I
I+at! ulies
CHAPTER THREE
CONSTRUCTION INDUSTRY ARBITRATION
COMMISSION (CIAC) REVISED RULES OF
PROCEDURE GOVERNING CONSTRUCTION
ARBITRATION
(s
amended by C{AC Resolution Nos. 15-2006, 16 2006, 182006, 19-2006, 02-2007, 07-2007, 13-2007, 02-2008, 03-2008, 11-2008,
01-2010, 04-2010, ad 07-2010)
RULE 1- Policy and Objectives
1.00 WHAT IS THE POLICY AND OBJECTIVE OF THESE RULES?
It is the policy and objective of these Rules to provide a fnir and
expeditious resolution of construction dispute s as nn nlternative to
judicial proceedings, which may restore the disrupted harmonious
and friendly relationships between or nmong the parties. (Section 1.1)
1.01 IN WHAT PROCEEDINGS ARE THESE RULES APPLICABLE?
These Rules are applicable to proceedings in arbitration before
an Arbitrnl Tribunal of one or more Arbitrator/. (Section 1.2)
1.02 ARE THE JUDICIAL RULES OF EVIDENCE CONTROLLING IN
ARBITRATION PROCEEDINGS?
In any arbitration proceedings under those Rules, the judicial
rule of evidence need not be controlling, nnd it is the spirit and
intention af these Rules tu ascertain the facts in each case by every
and all reasonable menns without regurd to technicalitiea of law or
procedure.
(Section 1.32)
RULE 2 - Jurisdiction
2.00 WHAT IS THE JURISDICTION OF CIAC?7
The CLAC shall
have originnl and
exclusive jurisdiction over
construction disputes, which arose from, or is connected wit.h contracta entered into by parties involved in construction in the
ultralun
('Ehppe whether he ti,pule arose before or after the eurnpletion
f h contract, ur ntto the abandonment or breach thereof. 'These
dispute rruy involve government ar private contracts, (Section 2.I)
T'he jurisdivtiun af he CIAC mny include but is
not limited to
violation of specifications for material and workmanship; violation
al' the terms of ngreement; incrprotation an/or application of con-
watual provisions mount of damages and penltias; commence
ent time and delnys: maintenance and defects; payment default of
employer or contractor and changes in contact
r cost. (Section 3.1I)
2 01 WHAT IS THE COVERAGE OF A CONSTRUCTION DISPUTE?
Construction dispute shall include those bewen or among parties to, or who are otberwise bound by, an arbitration ngreement,
·directly or by reference, wtether such partes are project owner,
entvactor, +ubeantractor, fabricator. projtrt manager, design prfessioncl, cunaultant, quantti y surveyor. bondsman or issuer of an
insurance poliey in a construction project. (Section 2.2)
2.02 WILL CIAC CONTINUE TO EXERCISE JURISDICTION OVER
CONSTRUCTION DISPUTES ALTHOUGH THE ARBITRATION
IS COMMERCIAL?
The CIAC ahall continue to exercise original aad exclusive juris.
hetion over construction disputes although the arbitration is curmercl pursuant ta Section 21 of .A. No, 28H5 or the Alternative
Dispute Resolution Act ct 2004. (Section 2.2.1)
2.03 WHAT ARE EXCLUDED FROM THE COVERAGE OF THESE
RULES?
xluded frm the covernge of this Rules are disputes arising
fro emploser-employee relatwmnships, which shall canrmnue to be
covered by the Labor Code of the I'lulppes, (Section 22.2)
2.04 WHAT ARE THE CONDITIONS BEFORE CIAC MAY ACQUIRE
JURISDICTION?
'
For the CIA(' t acquire jurisdiction, the parties to n dispute
must be bound by an urbtratiou agreement in their contract or subscquently agree to submit the same to voluntary arbitration. {eetion
2.3)
a,
7
+'
IH
Such arbitration agreement or subsequent submission
must be alleged in the Complaint. Such submission may
'Ht, 4.4 I!NI1VE IHI TB RE'O,Te
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LAW
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b.
t,
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c)
d)
If the Complaint is tiled without the required arbitration
clauso or subsequent submission, the CLAC Secretariat
shall within three days from such filing, notify the Respon-
Any part to a construction contract desiring to avail of arbitraLion shall fe its Request fr Arbitration in the prescribed form and
number of copies te the serrtarint of the CLAC. (Section 8. A)
3.01
WHAT MUST BE STATED IN THE COMPLAINT/REQUEST FOR
ARBITRATION?
government con
'T'he claimant against the government, in
traction contrnt, shall state in the Corplaint/Request for Arbitra
t.ion that: 1) all administrative remedies have been exhausted, or )
there is unreaunable delay in acting upon the claim by the government office or officer to whom appeal is made, or 3) due tu the appli
cation for interim relief exhaustion of administrative remedies is not
DISMISS BASED ON LACK OF JURISDICTION?
Yes, a motion to dismiss based on lack of jurisdiction shall be
resolved by the appointed arbitral tribunal. (Section 2.4)
practicable. (Section 3.2)
The claimant in a private oonstruction contract has the same
obligation as the above to show similar good faith compliance with
all preconditions imposed there or exemptions therefrom. (Section
The Arbitral 'Tribunal ahal! have full authority to resolve all
issues raised in the Motion to Dismiss for lack of jurisdiction on the
grounds that the dispute is not a construction dispute, or that the
Respondent was represented by one without capacity to enter into a
binding arbitration agreement, or that aaic agreement or submission
is nut valid for some other reasons, or daess not cover the particular
dispute sougth to be arbitrated, or other issues of interpretation
or non.fulfillment of pre-condito
i ns to arbitration that are raised
therein. (Section 2.4.1)
3.2.7)
case of non·compliance with the precondition contractually
imposed, ahsent a showing of justifiable reasons, exemption. or a
waiver thereof, the tribunal shall suspend arbitration proceedings
pending conplinnce therewith within a reasonable period directed by
the Tribunal. (Section 3.2.2)
In
2.06 DO THE FOLLOWING ACTS CONSTITUTE AS A WAIVER OF
JURISDICTIONAL CHALLENGE?
3.02 WHAT MUST BE DONE AFTER THE FILING?
A party does not waive its right to challenge the jurisdiction of
CIAC by any of the following acts:
participating in the nomination process including challen-
opposing an application for interim relief;
fling of n motion to diamiss/suspend. (Section 2.5)
3.00 WHAT MUST A PARTY TO A CONSTRUCTION CONTRACT WHO
DESIRES TO AVAIL OF ARBITRATION DO?
Respondent's refusal to answer the Complaint or the fling
of a Motion to Dismiss for lack of jurisdiction shall be
deemed a refusal to subrit to arbitration, In either case
the Commission (CIAC) shall dismiss the Complaint without prejudice to its refiling upon a subsequent submission.
(Section 2.83.)
£mg the qualifications of n nominee;
tension af tire to file appropriate pleading'
RULE 3 -- Request for Arbitration/Complaint
2.05 MAY THE APPOINTED TRIBUNAL RESOLVE A MOTION TO
a)
nil.rt.rt
mot.ion tu di8miss;
"
dent that, if he/it is willing to have the dispute be resolved
by arbitration, such agreement must bo alearly expressed
in the Answer.(Section 2.3.2)
c.
pnvup tr
b)
+!
toed Itul' lraslur t leverinn
t'au.re'w
be an exchange of communication between thw prtic or
some other form showing that the parties have agreed to
submit their dispute to arbitration. Copies of such communicatiun or other form shall be atachod to the Complaint.
(Section 2.3.I)
t_
lo,
'At'
t
The CIAC Secretariat shat! within three daya from ling, transthe respondent request for his Answer attaching thereto n
to
mit
copy of the Complaint and the Request far Arbitration togethor with
the annexed documents, (Section 3.3)
.
it
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3.03 WHAT IS DEEMED TO BE THE DATE OF COMMENCEMENT
OF THE PROCEEDINGS?
RULE 4 - Elect of Agreement to Arbitrate
CIAC JURISDICTION?
b.
uni.g;
shall
BE AN AGREEMENT TO SUBMIT TO
An nrhitration clause in a construction contract or submission
to arbitration of a construction dispue shall be deemed an agreement
to submit sn existing or future controversy to CLAC jurisdiction,
notwithstanding the reference to a different arhitrntion institution
or nrhit.rni body in such contract or submission, (ection 4I)
n.
LL
+lure#
ln the +vet 1hut. br-lu
mwad. the respondent who had not
earlier quest id th jurisdietion of the Tribunal, appears and offers
o present his evidence, the rbitral Tribunal may, for reasons that
- EI.1tI1CS
es the failure to appear', reopen the proceedings,. require
him
,
lo file his answer with or without counterclaims, pay the foes, where
required under these Rules, and allow him to present his evidence,
witb limited right ta cross examine witnesses already presented
the discretion of the Tribunal. Evidence already admitted
remain. 'The Tribunal shall decide the effect af such controverting
evidence presented by the responont on evidence already admitted
prior to such belated appearanee (Section 4.2.I)
The date when the Request fur Arbitration is fled with CLAC
shall, for nll intents nd purposes, be doemed ta be the date of com.
tucncement of the proceedings. (Seetio 3.4)
4.00 WHAT IS DEEMED TO
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4.02 IS THERE AN INSTANCE WHEREIN ARBITRATION CANNOT
PROCEED?
Yes, where the oontrwt between the parties docs not provide for
arbitration and the parties crnot agree to submit the dispute(s) to
arbitration, the arbitration cannot proceed aud the claimant's shall
be infrmed
o
of that fact. (Section 4.3)
When a contract contains a clause for the submission of
a future controversy to arbitration, it is not necessary for
the parties to enter into a submission agreement before
the claimant may invoke the jurisdiction of CIAC. (Section
M.1I)
RULE 5- Answer/Counterclaim
5.00 WHAT IS THE PROCEDURE IN FILING AN ANSWER?
An arbitration agreement or n submission to arbitration
shall be in writing, but it need nat be signed by the parhies, as long as the intent is elear that the parties ngree
to submit a present. or future controversy arising from a
construction contract to arbitration It may be in the form
of' exchange of letters sent by pots ar hy telefax, telexes,
telegrams, electronic mail or any other mode af communication. (Section 4.1.2)
T'he respondent shall, within 15 days from receipt of tho
Request for Arbitration/Complaint, file
Answer thorato including
-uch counterclaim/s as it may tsert, For justifiable renson/s, respundent may apply to CIAC for an extension of time to file its Answer. If
respondent fails to da so, the arhtration shall proceed in accordance
with these Rules, (Sertion 5.I)
its
copy of the answer shall be transmitted
the claimant nnd to CIAC. {Section 5.2)
4.01 WHAT IS THE CONSEQUENCE IF THERE IS FAILURE OR
REFUSAL TO ARBITRATE?
in sufficient copies to
5.01 WHEN MAY A REPLY BE FILED?
The claimant stall ale a reply to the counterclaim with C1AC
and shal furnish the respondent a copy thereof within 15 days from
date of receipt. of the answer with counterclaim (5ertin 5.3)
Where the jurisdiction of CIAC is properly invoked by the fling
of a Request for Arbitration in accordance with these Rules, the
failure despite due notice which amounts to a refusal of the raspot.
deut to arbitrnte, shall not stay the procccdings notwithstanding
the absence or lack of participation of the respondent. In such case,
CLAC shall appoint the arbitrator/s in accordance with theee Rule.
Arbitration proceeding shall continue, and tho award shll be made
after rcwiving the evidence of the claimant. (Section 4.2)
RULE 6 - Submission and Communications/Notices
6.00 CITE THE RULES ON SUBMISSION AND COMMUNICATION.
the
?
±Al! pleadings and written statements submitted by
partics,
as well as all documents attached thereto, shall be in sufficient copies
TI
AL'Tt INN'TI IN!{JI'TE I{A
AN 'HE AIIT' 'WI++; 1
Ju
to provide one copy for encl parts, plus one fur vrh italur, and
ore for the secretariat. (Sertian 6.1)
Insofar as notices are concerned, notifications or «zmnicaions from the secretariat and/n the arbitrator(s) shsii be validly
made if they are delivered againat receipt or forwarded by registered
maul to the ndress or last known address of tho party/iee tro whom
the same are intended as notified by the party/es in queetion or by
the other party/ies as appropriate.
If the Notice to Respondent/Request to Answer the Complaint
under Section 3.3 hereof is not received by the respondent due to
wrong address or because respondent. ha moved out from, or cnnnot
be fund
o
at, the last known address provided by the claimant, the
CIAC Secretariat shall inform the claimant of the non-lelirry.·ion.
receipt of tho notice an require the claimant to prai
I;st rt
respondent's correct/now nddress within fifteen_(l~±days trom rergipt
of advice lf claimant fails to romply, the Commission shall dismiss
the case without prejudice to its refiling once the whereabouts of
respondents are known to claimant/s. (Section 62
. )
Notification or communication shall be deemed tu have heen
effected on the date when actually or constructively received. (Section
62
. .1)
RULE 7 -- Confidentiality
7.00 IS THE ARBIRATION PROCEEDINGS CONFIDENTIAL?
The arbitration proceedings shall be considered confidential
and shall not be published except: (i) with the consent of the parties,
or (i) when neeasary in zaso resurt to the Court is made under the
Rules of Court. 'The term "arbitration proceedings shall include com
municat.ions to or tom CIAK, the pleadings, applications and other
papers filed with CIAC, sworn statements, documentary nnd testi.
rnorial evidenoe, reports and minutes taken of the proceedings, and
other orders, derision, award or resolution issued by the arbitrator(s).
(Section 7.1)
7.O1 WHAT ARE THE SANCTIONS IN CASE OF VIOLATION OF
CONFIDENTIALITY?
Any person who violates the immediately preceding contideniality provision shall be subject to thefollowing sanctions:(Section 7.2)
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lutrt ion
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If ti volatu is a lwyor, administrative action ar proceeding
• { be voniuetwd by CIAC, with proper notice and hearing, for
inhibition or prohibition from appearing as counsel for any party
•
ty arbitration case before CLAC for a period not exceeding six
out hs; without prejudice to suspension or disbarment action before
i Integrated Bar of the Philippines (IBP, at the instance of C1AC.
(iection 7.2.I)
If the violator is a duly licensed and registered professional,
administrative/disciplinary action may be filed before the rofes·nonal Regulation Commission (PRC), at the instance of CLAC. (Sec-
tion
7.2.2)
RULE 8 - Qualification of Arbitrators
.90 WHAT ARE THE GENERAL QUALIFICATIONS OF ARBITRATORS?2
'The arbitrators shall he men of distinction in whum the husiness sector anl the government can have confidence, Thcy shall
be technically qualitied to resolve any construction dispute expodi
tiously and equitably. The arbitrators shall come from different profssions.
e
'T'hey may include engineers, architects, construction mnnagera. engitouring consultants, nnd businessmen familinr with the
construction industry and lawyers who are experienced in construction disputes. (Seztion 8.I)
8.01 MUST THE ARBITRATORS BE CIAC-ACCREDITED?
Yes, only CIAC-accredited arbitrators may be nominated by
parties r by the first two arbitrators appointed as the third member
of a Tribunal and appointed hy CIAC as arbitrator. A replacement
arbitrator shall likewise be a CL\t-accredited arbitrutor. However, as
an exception to this rule, CIAC may appoint to an Arbitrnal Tribunal an
arbitrator who is not (LAC-accredited PROVID»ED) thnt the nominee:
l) is the parties' common nominee; ') possesses the technical/legal
competence to hrdle the construction dispute involved; and a) as
signified his availability/acceptance of his possible appointments.
(ection
S
&.2)
8.02 ARE ARBITRATORS PERMANENT EMPLOYEES OF CIAC?
No, arbitrators shall render service only when called upon to
arbitrate a construction dispute, (Section 8.3)
T', ATAN
.Mr
Al#, Instr'Ti t!et 4rs
ITU'TIN 1A
THE
8.03 ARE ARBITRATORS CIVILLY LIABLE FOR THEIR OFFICIAL
ACTS7
lied or is nut nvuluhlu, ('IAC shall return the lists af nominees to the
pnrties and ask them to make an agrcement on a common nominee/ s
within 48 hours. If the parties still fail to agree on a common nominee, CLAC may appoint a Sole Arbitrator or an Arbitrul Tribunal. It
CIAC decides to appoint a Sole Arbitrator, it may select an arbitrator
who is not a nominee of any one of the partics and who is not disqualified and is available far appointment. (Section 9.2.1)
.No, arbitrators shall not be civilly liable fox acts done in the
performance of their official «dutics except in a clear case of bad faith
nalie or gross negligence ns provided ir Section 38(1), Chapter 9,
Book 1 of the Administrative Code of 1987. (Section 8.4)
RULE 9 - Nomination and Appointment of Arbitrators
9.02 HOW IS AN ARBITRAL TRIBUNAL CONSTITUTED?
9.00 CITE THE PROCEDURE IN THE APPOINTMENT OF ARBITRA.
TORS.
Where the parties agree that the dispute shall be resolved hy
an Arbitral Tribal, each party shall have the might to nominate six
arbitrators from the list ot CIAC-accredited arbitrators. If thore 1s no
A Tribunal of one or three arbitrators mny be appointed to settle
a dispute in accordance with the provisions hereunder. (Section 9.1)
a
The parties shall submit the name's of not more than
aix nominees from CIA-accredited arbitrator in the
order of their preference for appointment as arbitrators.
The common nominee/s of the parties shall be appointed,
subject to their availability and other considerations.
(Section 9.1.1)
b.
In the absence of an agreement on the mumber of arbitra.
tors, C'LAC taking into consideration the complexities and
intricacies of the dispute's or the sum involved, has the
option to appoint a Sola Arbitrator or n Arbitral 'Tribunal
(Sction 9.1.2)
c.
la case of multiple parties, whether as claimant or as
respondent including three or more parties in the arbitration, where all parties are unable to @gee to a method
fr constitution of the Tribunal within 10 days from notice
CIAC shall appoint the arbitrators. (Section 9.1.3)
'
9.01 WHEN MAY A SOLE ARBITRATOR BE APPOINTED?
Where the parties hnve agreed that the dispute(s) shall be
set.tled by a Sole Arbitrator, each party shall hsve the right to
uommnate six arbitrators, If any or both of the parties fnil to subms;t
the names of their nominees within the period/s prescribed by CLAC'
a Sole Arbitrator hall be appointed by CIAC. (Seeton 9.2)
"
CIAC shall appoint as Sole Arbitrator the common nominee of
the parties who is available and not disqualified. [n tho absence of a
common nominee or in cases where the common nominee is disqli-
4
t'ii' (lei
le od l'rs odur Cir-rin
tart n rhitrt
iu
common nominee, CIAC shall choose and appoint, as members ot' the
'Tribunal, one arbitrator from the claimant's nominees and another
arbitrator from respondent's nominees. 'The third arbitrator shall
be selected by the two arbitratrs first chosen within l5 days from
acceptance of their appointment. The three arbitrators shall decide
from among themselves who will be the chairman. lu case of failure
to agree on the third member within aueh period, C'LAC shall, within
15 days thereafter, appoint the tbird member from its list of acerehted arbitrators, (Section 9.3)
If there is a common nominee, ('IAC shall nppoint the common
I
I
nominee and one from each list submitted by the parties. T'he three
arbitrators appointed shall designate their chairman. f there are two
common nominees, CIAC shall appoint them and the third member
who shall be sclected by th first two appointees within the period
prescribed above, If there are three common nominee, all of them
shall be appointed. The appointees shall designate their chairman
(Section 9.3.1)
9.03 WHAT ARE THE CONDITIONS IN THE APPOINTMENT OF
FOREIGN ARBITRATOR?
a8
A forein arbitrator not acredited by CLAC may be appointed
a co-arbitrator or chairperson ot' an rbit.rul tribunal fur u cons-
truction dispute under the following conditions:
a)
the dispute is a construction dispute in which one party
is an international party, i.e., one whose place af business
is outside the Philippines, For this purpose, the term
international party shall not inelude a domestic subsidiary
run,
T[If.
4W'·1;'{£I ·if4 TE
•
ti'i;
r'rt suit
it
I'rl 1l
1pee
lbu
fni
of such iuternatol party qr
r inter t a joint
venture with a part whwh hus its ulaes of h;inas in th
Philippines;
wt
uthes just
uttality
I+lw
,lit tn
may ho request the inhibition of' an arbitrntnr upon
wt vahid reasons alerting independence, integrity, imnd tereat (ectian 6)
'i
the freign
o
arbitrutor to be nppointed is nat n national of
th& Fhilipines and is not ot th same nationality s the
internntionl purr in the dispute, (Secttan 9.4j
9.07 IS A MOTION FOR INHIBITION OR A REQUEST FOR THE DISQUALIFICATION AND REPLACEMENT OF AN ARBITRATOR
9.04 WHAT IS THE PROCEDURE IN THE APPOINTMENT OF
FOREIGN ARBITRATOR?
Yes, a moon fur inhibition or a request for the disqualificntion
and replacement of an arbitrator shall be treated as a challenge
b)
The foreign arbitrator must be nominated by the international
party or is the common choice of the two CAC.accredited nrbitr@
tors, one of wham was nominated by the internatiml prt The
nomnation must be uerompanind by a r~sun~ ar bio-data cf the
nominee relevant to qualification ns n eustwurtian arbitrator nnd
e signed undertaking of the noninee to nbida hw (LAC arbitrtiun
rules and policies. (Section 9,4.1
9.05 WHAT IS THE CONSEQUENCE IN CASE OF DISQUALIFICA-
TION OF OR NON-ACCEPTANCE BY NOMINEES?7
If the nominee#s) of a party a«hall be disquahfie! or fail or refuse
'accept the appointment, C1At ±hall choose n appoint any qualifie] arbitrator whe + willing tu be so appointed. (Section 9.5J
9.06 WHAT IS THE PROCEDURE TO CHALLENGE AN ARBITRA.
TOR?
An Arbitrator may be challenged by a pty at any time utter
his appointment but before the lapse of the original 10-day period
tor submission of memoranda or drant derision under Section 13.16,
Rule 13 hereof. Any extensions of time tu file memoranda or drant
decisions will not FXTEND the ID-day period to tile a
challenge or
motion fur inhihiticn. 'The challenge ehall be baaed pon the following
grounds:
n)
TREATED AS A CHALLENGE?
(Seeton 96.)
T'he challenge motion ur request. +hall he in the form of a Complaint uder uath, stntmg «hatingy and concisely the fcts
a con-
plained ot. supported by affidavits, if nv, af persons having personal
knowledge af the tacts therein alleged and shall be accompanied with
Cop±es af such documents a may suh-1untiate snid facts, (Section
9.8.2)
The arbitrator concerned shall be given by CIAC' an opportunity
to he heard. He may, without adnutting the existence of the ground
of the chnllenge, motion or request, choose to inhibit himself bt his
decision shall be subject to nppruval by CLAC. {Section 9.6.3)
Ir cn the challenged arbitrator is llowed to inhibit himself
or is emovwd. C'IAC shull promptly appoint his replacement If the
arbti rator concerned is the third membor ofthe Arvitral'Tribunal, the
flrst two members thereof'shall stl+rt his replacement. (Sectiar 9.6.4)
The decision of CIA( to retain ar replace nn arbitrator shell he
final (Seeti 96.{)
9.08 IS A CONCILIATOR/MEDIATOR DISQUALIFIED TO ACT AS
ARBITRATOR?
relationslp by blood or mnrriase within the sixth degree
Yes. an arbitrator who artel as cnri'tor'mediator in a case
previously bruught here him for cancilintiorvmedintion cannot act
ns arbtntor for the sare- case when bought to arbitration, unless
both parties consent to his ppunt went in writung (Section 97)
fourth degree, cumpud ncear«ding to the rules of civil lnw.
RULE 10 - Appointment and Acceptance of Arbitrators
of either party ta the controversy, or to cur-els within the
DUTY TO COMMUNI-
financial, fiduciary tr other interest in the controversy;
partiality or bins;
10.00 DOES THE SECRETARIAT HAVE THE
c)
d)
incompetence, or professional misconduct
Yes, the secretariat =hail communicate to tho arbitrators their
appointment (ertin 10.i)
b)
CATE APPOINTMENTS7
I4ii»
Mt II
T'It MT'HNAT'IV, I!I' Kt;u1 r11,
'Nd TH IIWTHAT'ION LAW
10.01 EXPLAIN THE DUTY OF ARBITRATOR TO DISCLOSE DISQUALIFICATON.
Upon acceptance of his appointment, the arbitrator shall dis
close in writing to CLAC any circumstance likely to create in either
party a presumpto
i n of bias or which he believes might disqualify
lir as an impartial nrhitrator.
Such written disclosure shall be communicated to the parties
immediately by the secretariat, The purpose of such disclosure shall
be to enable either party tu investigate and ascertain whether there
is a substantial legal basis ta file a motion for ithibition of the arbiLrator ·unearned or eek his replacement.. (Section 10.2)
10.02 WHAT IS THE CONSEQUENCE IF AN ARBITRATOR FAILS
TO COMMUNICATE HIS ACCEPTANCE OR REFUSAL OF HIS
APPOINTMENT?
The arbitrator mast communicate to CIAC the acceptance ar
refusal of his/her appointment within five days from receipt thereof.
If no cummunication is received within the prescribed period,
CIAC shall appoint a replacement from the list of the party who
nominated him/her or, if none is available or qualified, from the list
of CLAC-accredited arbitrators. (Section 10.)
10.03 WHAT IS THE CONSEQUENCE IF THERE IS VACANCY
DURING THE PROCEEDINGS BUT BEFORE AN AWARD?
If, at any time during the proceedings but before an award has
been rendered. any arbitrator should resign, be incapacitated, refuse
or be unable, or be disqualified for any reason to perform the duties of
his office, GLAC may, within five days from the occurrence of a vacancy
or refusal/inability to accept appointment, appoint a substitute(s) to
be ehosen from a list of alternatives previously agreed upon by the
parties. Ir the ahsenre of such a hist, the CLAC shall fill the vacancy
from the list of accredited nrtntrators.
K
Artie'in
+lutalet
f arbitrator; te, for the substitute/s. 'The CIAC may, if it tnde it
necessary, appoint n substitute/s. If the CIAC finds the request to
be unnecessary (e.g., for Motions for correction of final uwnrd under
Rule 17,1; Motions fro execution or stay of execution under Rules
18.5 and 18.6; Motions for relief nor covered by the Rules under Rule
I9.1: cases wher the appellate court merely directsa re-computation
of the award or a clarification thereof, or other matters which do not
entail a re-hearing of the nae, or a hering on the merits of any
issue. or would not disturhinlter the findings in the final award; and
other similar instances as determined by the CLAC), it shall deny the
same, refund the deposit made, and direct the remaining/surviving
arbitrator/s to act on pending matters.
The decision of the CIAC on vacancies shall be final. (Section
10.4)
RULE 11 -- Preliminary Conference/Terms of Reference
11.00 WHAT MUST BE CONSIDERED DURING THE PRELIMINARY
CONFERENCE?
'Ihe Arbitrator'Arbiral Trihunal shall set the ease for preliminary conference not later than 1% days alter ppuiutuuet ol :urlitratuor(s}, and a notice to the parties thereof shall forthwith be sent to
finalize the Terms of Reference as provided in RULE 1.4, n draft copy
o
am1ung
of which is attached thereto and ta consider the fllowing,
others:
a. possibility of amicable settlement;
necessity or desirability of amendments to pleadings;
b.
c.
obtaining stipulations or admission o facts and/or docu
ments to avoid unnecessary proof;
d.
limitation of the number of witnesses;
suggested formulation of issues by the parts;
application fro interim relief, appointment of experts and
necessity of site insprclian; and
such other matters as may aid in the just and speedy disposition of' the case. (Section 11.I
If the vacancy occurs after the award has been rendered but
befare the jurisdiction of the arbitrator's over the dispute is termnated under Section 16.0 of ule 16 hereof, the CLAC may, on its
own initiative, or upon written request of any of the parties, appoint
a replacement fror tbe list of alternatives previously agreed upon by
thr parties or the list of accredited arbitrators.
11.01 WHAT MUST THE ARBITRATOR DO AT THE START OF THE
PRELIMINARY CONFERENCE?
The request shall state the justification/s for the nod for a
replacement and shall be filed together with the required deposit
At the start of the prelminary conferenre, the arbitrator/s shall
introduce themselves to the parties paying particular attention to
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matters related to professional training nd
experience, (Seeton
11.2)
11.02 WHO IS REQUIRED TO MAKE A DISCLOSURE DURING THE
PRELIMINARY CONFERENCE?
During the preliminary conference, the arbitrator wha had
failed to make his ur her written disclosure required in the previous
section shall disclose any circumstance likely to gv
i e rise to justifiable
doubts as to impartiality or independence, including financial or
personal interost in the outcome af the arbitration and any existing
or past relationships with any individual or corporate party together
with their respective relatives or principal stockholders/officers or
foreseeable participant in the proceedings. On the basis of such disclosure, either party may ask clarificatory questions thereon that ray
lead to a decision tu move for inhibition or accept the appointment.
(Section 11.3)
11.04 CAN ARBITRATION PROCEED EVEN WITHOUT A TOR?
Yes, in the exercie of the sound discretion of the Arbitral
Tribunal, arbitration shall proceed even without. the TOR on the
hasis of the issues formulated by the pleadings filed by the parties
(Section 11,5)
11.05 WHEN MAY A CASE BF DEEMED SUBMITTED FOR DECISION?
Ne factual issue being in dispute, the case may be deemed submitted for decision without an oral hearing and on the basis c doeuentry evidence already submitted. (Section 11.6)
RULE 12- Venue
(TOR).
The TOR shall include the following particulars:
a)
the full names of tho partiee, and their respective counsels,
12.00 WHO MAY SET THE VENUE, DATE AND TIME OF HEARING?
'T'he venue, date and time of the arbitral proceedings shall be
mutually agreed upon by the parties and the Arltrnl Tribunal. I
the event of disagreement. the choice of venue made by the Arbitral
'Tribunal shall prevail. (Section 12.t)
RULE 13 - Arbitration Proceedings
if any;
b)
c)
d)
e)
f)
g)
h)
i)
the addresses and contact numbers of the parties/counsels,
to which notifications or communications arising in the
course of the arbitration may validly he made;
a summary of the parties' respective claims;
full statement of admitted facts and documents:
the issues to be resolved in question form;
the arbitrators' full names;
the place where arbitration poceedings
shall be held;
r
the breakdown, schedule of payments, and ehuring of
arbitration fees;
such other particulars as may be required by the Arbitral
Tribunal for the proper and speedy adjudication of the
case. (Section 11.4.1
rt-Lu;ltt di
'Th· 'Te·r.ol et'rec t'CR) shall he signed on eh und ever
page: thereof, by he parties together with there respective counsol
and the Arbrtral 'Trbunul immediately after finalization thereof. In
any ease, the TOR rust be finalized and signed not later than five
lays from inception. (Section 11,4.)
11.03 EXPLAIN THE IMPORTANCE OF THE TERMS OF REFERENCE
This document functions like a pre-trial order in judicial proceedings and controls the arbitration proceedings unless corrected
for manifest errors by motion fled not later than the hearing date,
(Section 11.4)
Lil
Ile
13.00 WHAT IS THE ORDER OF PROCEEDINGS IN ARBITRATION?
A hearing shall be opened by recording of the place, time and
date af hearing, the presence of the Arbitral Tribunal, parties, and
witness. if y. The nnmes and addresses of all witnesses and ex.
hibita in the order received shall he made part of the record. (Section
13.1
a.
Quorum
'Two members of a tribunal shall comprise a quorun
for the purpose of conducting a hearing. (Section 1.1.I)
b.
Briefing on rules and procedures
At the initial bearing, the Arbitral Tribunal shall
inform the parties of the general rules and procedures
on arbitstion prococdings, stressing peculiarities front
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judicial proceedmgs. its striet adherent tu time hars. its
Yes, the Arbitral Tribunal shall require the simultnneous submissior af affidavits of' witnesses in lieu of their direet testimonies
tt.taching thorora pertinent documents supportive of their respective
declarationg. These documents shall be properly marked tor purposes
of identification. (Section 13.6)
Order ofpresentation
It shall be within the discretion of' the Arbitral Ti.
bunal to determine the order of presentation of evidence.
Generally. the party who seeks to enforce a right or
estnbFish a claim shall be required to present its evidonco
first, followed by the other party. (Section 13.3)
d.
13.02 MAY THE ARBITRAL TRIBUNAL ASK CLARIFICATORY QUESTIONS?
Expeditious procedures
Yes, the rbita] Tribunal may ask clarificatory questions of
the witnesses at any stage of the proceedings (ection
S
13.7)
Tho Arbitrnl Tribunal shall at all times adopt the
mot expeditious procedures fro the introduction and re-
cepton of evidences, and ehll have compicte control over
the proceedings, b in any case shall afford full and equal
opportumity to all parties to present relevant evidence
13.03 MAY A DOCUMENTARY EVIDENCE BE REJECTED?
As a general rule, no documentary evideucefs) presented and
offered shall be rejected nrless the same is found by the Arbitral
Tribunal ta ba completely irrelevant. {Section 13.8)
(Section 13.4)
e.
Evidence
The parties ray offer such evidence as they desire and
shall produce such additional documents and witnesses
ns tho Arbitral 'Tribunal may deem necessary to clear understanding of facts and issues for a judicious detormination of the dispute(s.) The Arbitral 'Tribunal shall act
according to justice and equity and merits of the case
without regard to technicalities or legal forms and need
not be bound by any technical rule of evidence. Evidence
shall be taken it the presence of the Arbitral Tribunal and
all of the parties, except where any of the parties is absent,
or has waived his right to he present. (Section 13.5)
f
13.04 WHEN MAY THE OFFER OF DOCUMENTS BE MADE?
All documents not offered with the Arbitral Tribunal at the
hearing but which nre arranged nt the hearing aubaequently by
grooment af th parties to be submitted, shall be fiicd within five
dye from the termination af thc hearing. l parties shall be afforded
opportunity to exmine such documents. (Section 13.9)
13.05 MAY THE ARBITRAL TRIBUNAL CONDUCT A SITE INSPECTI0N?
Yes, the Arbitral Tribunal may, motu proprio after notice to the
parties, or upon motion of a party, conduct a ste mspection of any
building. place or premises, including any work, material, implement,
machinery, appliance or any objnct therein. The Tribunal in deiding
on the necessity of a site inspection, may consider whether n video or
pictorial presentation may suffice. (Sectior 13.I0)
Order to produce documentary evidence
Upon motion of either or both of the parties, or on
its own initiative, the Arbitral 'Tribunal may direct any
person, board, body, tribunal, or government office, agency
or instrumentality, or curporation to proauce real or documentary evidences necessary for the proper adjudication
of the issues. (Scetion 13.5.1)
g.
Order to give testimony.
The Arbitral Tribunal may, likewise, direct any per.
son to give testimony at any proceedings for arbitration.
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13.01 MAY AN AFFIDAVIT BE SUBMITTED IN LIEU OF DIRECT
TESTIMONY?
policies agamnst postponements and other matters to insure
a speedy and fair disposition of the issues. (Section 13.2)
c.
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Costs including transportation, accommodations. mcals, rental
fee for the video/still camera, services, video tape recording. copy of
pictures and other expenses shall be equally shared by bot.h parties.
In special cases upon tho order of the Arbitral Tribunal, the party
who seeks this video and will benefit from it shall bear the expenses
(etion 1R ? 1
19
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the filing of
umtents
as
agreed
upon,
whichever
is later.
previously
lditional
from the triation of the hearing or from the date of
13.06 ARE ADJOURNMENTS OF PROCEEDINGS ALLOWED?
The Arbitral Tribunal far good cause shown. ma yadjourn tl
hexing upon his~ts own initiative or upun the request of ont of thu
parties. djonment shall nut be more than five working days.
(Section 13.11)
ertion 13.16)
T both parties agree to submit memoranda or draft decisions,
the fling shall be simultaneous. (Section 1.76.1)
Hearing may be adjourned for more than five working days
when such have been upended due to payment deflts of any or
both of the parties. 'The Arbitral Tribunal shall order the suspension
of hearings upon advice by CIA€ of nor-pytent of arbitration foe
by one or both parties. Hoarings shall resume upon notice by CLAC of
compliance by the defaulting party'ies (Section. 13.11.1)
13.12 MAY PARTIES AGREE TO SUBMIT RESOLUTION BASED ON
PLEADINGS INSTEAD OF A FORMAL HEARING?
Instead of a formal hearing, the parties mav agree tu submit
the issues for resolution after the fling of pleadings, evidence, memorarda or draft decisions. (Section 13.17)
13.07 CAN ARBITRATION PROCEED INTHE ABSENCE OF THE PARTY?
13.13 WHEN IS THE START OF THE PERIOD TO MAKE A FINAL
The arbitration may proceed despite the absence of any party
who after due notice fails to be present or fails to obtain an adjournment.. An award, however shall not he made solely on the default
of n party It shall be made on the hasis of evidence submitted and
proven. (Section 13.12)
AWARD?
The number of days within whieh an ward shall be made will
star. from the date af the termination of' the hearing, or from the filing
of additional documents, or from the submission date of memoranda,
pleadings, documents or evidences whichever is latr. (Section 13.18)
13.08 WHEN IS THE PROCEEDINGS CONSIDERED CLOSED?
RULE 14 - Interim Relief
Attor the submission of the draft decision/fnal memorandum
of arguments undtor the lapse ot the period given for the submission
14.00 WHEN MAY THE INTERIM MEASURES BE AVAILED OF?
thereof, the proceedings is considered clascd and no further pleadings
papers shall be filed nor accepted for filing. (ection 13.13)
In the course of the proceedings, the Arbitrl Tribunal may.
upor the request of either or both parties or upon its own initiative,
13.09 IS RE-OPENING OF HEARING ALLOWED?
issue orders as is necessary tu attain the following objectives:
'T'he hearing may be reopened b ythe Arbitral Tribunal on their
own motion or upon the request of any party, upon good cause shown,
at any time befare the award is rendered. When hoaring are thus
reopened, the effective date for the closing of the hearing shall be the
date of closing uf the reopened hearing. (Section 13.11)
to ensure the enforcement of the ward;
•
to preveut irreparable loss or injury or deterioration of
property;
to minimize or avoid undue delays in project or contract
implementation;
to provide security for the performance af any obligation;
c.
13.10 MAY THE ARBITRAL TRIBUNAL REQUIRE PARTIES TO
d.
MAKE ORAL SUMMATION?
0.
'The Arbitral Tribunal nay direct the pnrties ta make u brief
oral summation at the end of the oral hoaring. (Section 13.15)
13.11 IS SUBMISSION OF MEMORANDA OR DRAFT DECISION
ALL OWED?
Yes, if any or both of the parties so desire, written memoranda
or draft decisiore may be submitted not later than ten calendar days
•
4
I
•
f.
to produce or preserve any evidence;
such other measures deemed by the Arbitral Tribunal to
be necessary to prevent a miscarriage of justice or abuse ul
rights of any of the parties. (Section 14.1)
The order granting provisional rlief may he conditioned upon
provision of security for any act or omission specified in the order.
(Section 14.1.I)
I
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11tu1
AI!TA'TIN L.MW
THE' AL'TENA'TI
AND I'TH
Such interim measures may include but. shall not le Initil
to preliminary irjunction directed against a party, ppuintmnent of
receivers or detention, preservation, inspection of property, that is
the subject of dispute in arbitration. ither party may apply to the
Court for assistance in implementing or enforcing an interim measure oricred by an Arbitrul Tribunal. (Section 14.1.2)
1aw
4
u
of the
orly
n purtan 1lreof shall be i writing specifying the
portion/s dissented framn with a statement of the reason/s thereof and
signed by the dissenting member. (Section 16.2)
16.02 WHAT MUST BE THE CONTENTS OF THE FINAL AWARD ?
Generally, the final award shall contain the issues involved, a
brief statement and discussion af the facts, and the authority relied
. )
upon fr the resolution or disposition of the issues. (Section. 163
RULE 15 --Appointment of Experts
15.00 MAY EXPERTS BE APPOINTED?
16.03 MAY THE PARTIES SET FORTH THE AGREED SETTLEMENT
AS AN ARBITRAL AWARD?
Yes, the service of technical or legal experts may be utilized if
requested by any of the parties or if deemed nocvssary by the Arbitral
Tribunal If the request for an expert is made by either or hy both of
the parties, the necessity of such appointment must be confirmed by
the Arbitrnl Tribunal before issuing nn appointment. (Section 15.1)
If the parties settle their disputei)s during the course of the
arbitration. the Arbitral Tribunal, upon their request, mayet. forth
the agreed settlement as an arbitral award. (Section 16.4)
Whenever the parties request for the services of an expert, they
shall equally shoulder the expert's fees and expenses. ball' of which
shall be deposited with the Secretariat before the expert renders
service. When only one party mnkes the request, it shall deposit the
whole amount required If the request for an expert is by the Arhitral
Tribunal, tho cost of such service[s) shall be considered part of the
arbitration expenses which may be ordered to he paid by the losing
party or by both parties as the Arbitrnl 'Tribunal in his/their ward
may adjudge, in the absence of e provision in the TOR signed by the
parties relative to the sharing of these expenses; Provided, however,
both parties consented to the hiring of an expert. (Section 75.1.1)
16.04 WHEN IS A COMPROMISE AGREEMENT SETTLED BY MEDIATION TREATED AS ARBITRAL AWARD?
A compromise agreement settled by mediation in the course
of arbitration or by direct negotiation between the parties shall be
treated as an arbitrul award if so moved by the parties ansubject tu
the approval of the Arbitral Tribunal, after a suumnmary hearing, that
the same is not contrary to law, morals, good customs, public order,
or public policy. {Section 16.4.1J
16.05 MAY THE FINAL AWARD FIX THE COSTS OF ARBITRATION?
In the case of non-monetary claims or where the parties agreed
that tho sharing of fees shall be determined by the Arbitral Tribunal,
the final award shall, in addition to dealing with the merits of the
case, fix the costs of the arbitration, rd'or decide which af the parties
shall bear the cost(s) or in what proportion the costks ) shall be borne
by each of them. (Section 16.5)
RULE 16 -- The Arbitration Award
16.00 WHEN MUST THE AWARD BE RENDERED?
The award shall be rendered promptly by the Arbitral Tribumal
within 30 days from the time tho case is submitted fro resolution
but not more than six months from the date of signing of the TOR,
or in cases where a TO is absent, not more than six months from
the date of the last preliminary conference called for the purpose af
finalizing and/or signing of the TOR There shall be no extensions of
time unless approved by the CIAC, (Section 16.1)
16.06 WHEN IS THE JURISDICTION OF THE ARBITRAL TRIBUNAL
OVER THE DISPUTE DEEMED TERMINATED?
16.01 WHAT IS THE FORM OF THE AWARD?
'The final award shall be in writing and signed by the Arbitral
Tribunal or a majority of its members. A dissent fro the decision
w'ti
std l{leaf l'nwlure tern ing
twlm etas«rnlu
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Except for execution or post award proceedings, the jurisdiction
of the Arbitral 'Tribunal aver thc disputc is terminated upon the
finality of the final award or Decision. Where an appeal is taken
from a decision or final award, and the appellate court. directs a
re-hearing or a hearing on the merits on any issue arising in the
case, jurisdiction terminates only upon a final dipoaition of th cane
T'[H; AMT'INATIV IT
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AI 'THE MKIHT'THIN 1,AW
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by the appellate court and/or a fiual daterminut ion of all incidental
matters thereto. (Setion 16.6)
16.07 WHEN IS A PARTY ENTITLED TO NOTIFICATION OF AWARD7
Once a final award bas been made, provided that the costs of
the arbitration have been fully paid to the secretariat by the parties
or by one of them, the secretariat shall provide the parties through
their respective counsel u copy of the final award signed by the
Arbitral Tribunal. (Section 16.7)
Additional copies corrified true by the executive director of the
made available, on request and at nny time, to
secretarint shall
the parties or their counsel but to no one else. (Section 16.7.1)
be
16.08 WHERE MUST THE ORIGINAL OF AN ARBITRAL AWARD BE
FILED?
The original of an arbitral aw»rd shall be fled with the Secre.
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17.00 WHAT ARE THE GROUNDS FOR CORRECTION OF FINAL
AWARD?
Any of the parties may file n motion far correction of the final
award within 15 day from receipt thereof upon any of the following
"
grounds:
a.
an evident miscalculation of figures, a typographical or
arithmetical error;
b.
un evident mistake in the description of any party, person
J
•
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c.
tato, maunt, thing or property referred to in the award;
where the arbitrators have awarded upon a matter not
submitted to them, not affecting the merits of the decision
upon the mutter submitted:
4 fastars \
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situsiy,
17.01 WILL IHLE FILING OF THE MOTION FOR CORRECTION
INTERRUPT THE RUNNING OF THE PERIOD TO APPEAL?
Yes, the fling of the motion for correction shall interrupt the
running of the period for appeal (Section 17 1.1)
17.02 WILL A MOTON FOR CORRECTION BASED ON OTHER
GROUNDS INTERRUPT THE RUNNING OF THE PERIOD TO
APPEAL?
No, a motion fur carreclion pon grounds other then those men-
tioned in this section shall not interrupt the running of ths period for
appeal. (Section 17.1.2)
17.03 IS A MOTION FOR RECONSIDERATION OR NEW TRIAL A
PROHIBITED PLEADING?
Yes, a motion for reconsideration or new trial shall be considered
u prohibited pleadig. (Section 27.2)
uiat. (Section 16.8
RULE 17 -- Post-Award Proceedings
' MI'l I
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RULE 18 -- Executive of Final Award
18.00 WHEN IS A FINAL ARBITRAL AWARD EXECUTORY?
A final arbitral nwnrd shell become exarutory upon the lapse of
Li days from receipt thereof' by the parties. (Section 1.1)
18.01 IS THE FILING OF A PETITION FOR REVIEW FROM A FINAL
AWARD ALLOWED?
Yes, petitian for review from a final award may be taken by
any of the parties within l5 days from receipt thereof in accordance
with the provisions of ule 43 of the Rules of Court. (Section 18.2)
18.02 WHEN IS A FINAL AWARD (IN WHICH A PETITION FOR
REVIEW AND A TRO IS ISSUED) BECOME EXECUTORY?
If petition fro review is filod from a final award and a temporary restraining order (TRO) is issued by the appellate court, such
award shall become executory only upon the issuance of the entry of
judgment of the appellte
a court, or upon the lapse/lifting of the I'RO
or lifting of the preliminary injunetion. (Section 18.3)
d.
where the arbitrators have failed or omitted to resolve
certain issue's formulated by the parties in the Terms of
Reference (TOI) snd subnitted to them for resolution; and
e.
where the award is imperfect in a matter of form not
lfecring the merits of the controversy.
18.03 WILL A PETITION FOR REVIEW STAY THE EXECUTION OF
THE FINAL AWARD?
The motion shall be acted upon by the Arbitral Tribunal or the
No, the petition for review shall not stay the execution of the
final award sought to be reviewed less tho Court of Appeal3 directs
surviving/remaining members.
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18.04 WHAT MUST THE ARBITRAL TRIBUNAL DO AS SOON A8
A DECISION, ORDER OR FINAL AWARD HAS BECOME
EXECUTORY?
As soon as a decision, order or fnal award ha sbecome executory, the Arbitral Tribunal (or the surviving remaining member/),
shall, motu proprio or on motion of the prevailing party issue n writ
of execution requiring any sheriff or proper offeer to execute said
decision, order or fmal award. Ij there are no remaining/survitin
appointed arbitrator/s, the Cmmission
o
shall issue the writ prayed
for. (Section 18.5)
18.05 WHEN IS THE RELEASE OF WRIT OF EXECUTION BY THE
COMMISSION PURELY MINISTERIAL?
Notwithstanding the Commission's disagreement with the substaneo or morit f tho nwardioeision, if oxocutian is ripe or proper
under the CIAC Rules, it shall release the writ of execution issued
by the arbitrator's. Hence, one an award/decision becomes exeutory, the release of tho writ of execution by the Commission is purely
ministerial, regardless of whether or rot the arbitrator's considered
the comments of the Commission, or any of its members, on points of
substance in the award during scrutiny. (Section 18.5)
The writ of execution shall direct the sheriff or other officer to
conduct the sale of property on execution in accordance with Section
15 of ule 39 of the Pulos of Court. In the case of sale of real property
or personal property not capable of manual delivery, the auction sale
shall be held at the office of the sheriff serving the writ. Upon proper
application by the sheriff, with notice to the parties, CLAC may nuthorize the sale to be held in the place where the property is located
(Section 18.5.1)
18.06
MAY AN EXECUTION
BE STAYED?
Execution issued under the preceding section may be stayed
upon approval by the Arbitral Tribunal (or the surviving/remaining
member/'s). with the concurrence of CIAC, of a bond posted by the
petitioner in an amount equal to the award, conditioned upon the
performance of the judgment of the appellate court in case it upholds
the award in whole or in part. Such bond shall be posted within such
peril of time, which shall in no case he less than 15 days, as may be
granted by the Arbitral Tribanal during the hearing on the motion
for execution and the opposition thereto. The Surety Company posting the bond must be included in the latest list of surety companies
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accredited hy the Snupweme Court and mnust comply with the requirements set by Lhe CIAC for bond approval, concurrence, ad/or acceptun.ce, such as, but not limited to, the prescribed 'Surety U'ndertaking'
formn. If there are na remaining/surviving appointed arbitrators, the
Commission may approve the required bond.
The concurrence of the Commission to the approval by the arbitrator/s oj the hond to slay execution is orly fro the purpase of ensriag compliance uith the requremans set by the CIAC for bond
approval. (Section 18.6)
18.07 WHAT IS THE EFFECT OF REVERSAL OF AWARD?
Where an award is partinlly or totally reversed on uppeni, the
Arbitrnl Tribunal (or the surviving/remaining members, or the Commission if there are no remaining/surviving appointed arbitrators)
may, on proper motion, issue such order of restitution or repar11on
f damages as equity and justice may warrant under the circumstances. (Section 18.7)
18.08 WHAT ARE THE EXECUTORY POWERS OF THE ARBITRAL
TRIBUNAL7
The Arbital Tribunal (or the surviving/remaining member/s,
or the Commission, if there nre no remaining/surviving appointed
arbitrators) shall have the authority and power to decide matter
and issue appropriate orders which are necessary and related to the
execution of the award, including but not limited to the determinatiou
of suffciency of the bond, approval nf the surety or bondiug company,
satisfaction of the award. quashal of the execution, partial exerution,
issuance of alas writs, assessment of properties levied, appointment
of a quantity surveyor or as=cssor, examination of, and issuance
of subpoena ad testificandum and subpoena duces tecum to banks,
debtors of the judgment debtor and any person holding properties or
S
18.)
assets of the judgment debtor. (ection
RULE 19 - Relief not Covered
by the Rules
19.00 IS THERE A FILING FEE REQUIRED FOR A MOTION FILED
IN CONNECTION WITH THE EXECUTION OF AN AWARD NOT
EXPRESSLY AUTHORIZED BY THE RULES?
Every motion or other paper filed in connection with the exoeution of ar award not expressly authorized by the Rules shall be
charged a fling fee of 3,000.00 or as may be prescribed by CIAC.
'Ir'T
'tl ALTERNATIVE DI IT Ku 1r1et
ANI 'THE ANITA'TION 1,w
4'pis 'T'14°
4untr
21.01 DOES THE ARBITRAL
ALL PROCEEDINGS?
The motion +hall be acted upon by the Arbitrad 'Tribunal (or
the surviving/remaining members, or the Cammision if there are
remaining/surviving appointed arbitrators). (Section 29.1)
to
IH
lilt it
TRIBUNAL HAVE CONTROL OVER
The Arbitral 'Tribunal shall exercise complete control over all
proceedings o insure a speedy, adequate and justifiable disposition of
the disputes and csee submitted to them for resolution. (Section 2I.2)
In al arbti ration proceedings before or after an award has
been rendered but prior to tho termination of the jurisdiction of
.he arbitrator/s over a case puraunnt to Section 16.6 hereof, the
rbitratorls shall have the power to issue subpoena and/or subpoena
duces tecum requiring any person to attend the hearing as a witness
r to produce relevant documents. (Section 21.2.)
RULE 20 - Small Claims
20.00 WHAT IS CATEGORIZED AS A SMALL CLAIM?
Cases where the claim does not exceed Pl million shall be categorized as a small claim thereby entitled to special procedures of
disposition and reduced fees. (Section 20 1)
21.00 WHAT IS THE PROCEDURE IN SMALL CLAIM?
21.02 WHAT IS THE EXTENT OF THE POWER OF ARBITRAL TRI-
A small claims case shall be handled hy a sole arbitrator
whose fces shall be nt a fixed rate of 3% of the claim but not less
than r10,000.00 or as may be prescribed by CIAC. The expenses of
the Sole Arbitrator and CIAC staff consi»ting of actual cxperses for
travel, accommodations, and administrative costs for at most two
days incurred for hearing if held outside of Metro Manila shall be
borne by CIAC. (Seetion 20.1.1)
BUNAL?
The Arbitral Tribunal shall decide only such issues and related
tatters as are submitted to them for adjudication. They have no
power to add, tu subtract from, modify, or amend any of the terms of
he contract or any supplemontary agreement thereto, or nny rule,
regulation or policy promulgated by the CLAC. (Section 21.3)
All prescribed periods under normal procedure shall whenever
practicable, be abbreviated to fifty percent (50%) of that required
(Section 20.1.2)
RULE 21 -- General Matters
21.03 HOW SHOULD THE ARBITRAL TRIBUNAL INTERPRET AND
APPLY THESE RULES?
The Arbitral 'Tribunal shall interpret and apply these Rules in
so far as they relate to his/its powers and duties, Where there is a
difference of opinion among the Arbitrators in an arbitral tribunal
concerning the meaning or application of these Rules, the same shali
he decided by a majority vote. (Section 21.d)
21.00 HOWIS THE RECORDING OF PROCEEDINGS CONDUCTED?
Proceedings hefore an Arbitral Tribunsl may be recorded by
means of any audio and'or audio-visual recording equipment such
as. but not lirited to, tape recorders and video cameras, ar if n stenographer is available, either through sterogaphie notes or minutes
taken of the proceedings All recordings on tapes, films, cassettes,
disks, or diskettes shall be done by CIAC and shall remain in its cus.
tody for safekeeping and eventual diepoal after the resolution of the
case. Copies of sueh recordings including transcripts and minutes of
the proceedings shall be mnde available to the parties upon request
for a nominal fee.
T'he Arbitral Trihunal may opt to dispense with the use of
recording devices or stenographic services and take down notes of
the proceedings. Such notes taken shall be filed with CLAC and shall
be part of the records of the case. C'opies of the notes filed shall be
made available to the parties, upon request, at reproduction cost.
(Section 21.1)
21.04 WHO ARE ENTITLED TO ATTEND THE HEARINGS?
Porsons having direct interest in the arbitration are entitled
Lo attend the hearings. It shall be discretionnry upon the Arbitral
'Tribunal to determine the propriety of the attendance of any other
person. The Arbitral 'Tribunal shall have the power to require the
exclusion of any witness. (Section 21.5)
21.05 WHAT IS DEEMED AS A WAIVER OF RIGHT TO OBJECT?
t
w
I
Any party who proceeds with the arbitration after knowledge
that any provision or requirement of these Rules has not been
complied with and fail to state bis objection thereto in witng, shall
be deemed ta have waived his right to object. (Section 21.6)
'TH. AA.Tt4'TIy
I 1Ht,
i;it it, st1 Tiu,
UT'TUT'IN 1 Aw
21.06 ARE PARTIES FREE TO SETTLE DISPUTE DESPITE ARBI-
TRATION?
PART III
T'he parties shall he free to settle the dispute(s) anytime ever
if the same is under arbitration. In such case, the actual expense
incurred for arbitration ahall be charged ngainst the deposit. If the
deposit is insufficient, the parties shall squally shoulder the balance.
CASES DECIDED BY THE SUPREME COURT
1. KOPPEL, INC. V. MAKATI ROTARY CLUB FOUNDATION, INC.
(Section 21.7)
Thparties may either jointly withdraw or moue that their com
promise agreement be tu basis fur rendering an award by the Arbitral Tribunal, if the latter have already been appointed. Where the
arbitrators have been appointed nd proceedings have commenced,
the arbitration fces to bx: charged the parties shall be in accordance
with the stage of proceedings. (Section 21.7.1)
'The Arbitral 'Tribunal shall act upon the motion after conducting
a summary bearing (Section 2'.7.2)
G.R. No. 198075, September 4, 2013
FACTS:
registered owner
Fedders Koppel, Incorporated (FKI). was the
of a arcel of land.In 1975, F'KI bequeathed the subject land in favor
riaaui Rotary Chub Foundation, Incorporatad by way of condi
tonal donation. The respondent accepted the donation with all of its
conditions On 26 May 1975, FKI and the respondent executed a Deed
af Donation evidencing their consensus.
22.00 WHAT DO ARBITRATION EXPENSES INCLUDE?
One of the conditions of tho donation required the respondert
to leuse the subject land bnck to EKI under terms specified in their
Deed of Donation which the respondent accepted.
Arbitration expenses shall include the filing af administrative
fees, arbitrator's fees, ADF charges and fee and expenses of the
expert, and others which may be impoed
s by CLAC. (Section 22. 1)
In October of 1976, FKI and the respondent executed an
Amended Deed of Donation that reiterated the provisions of the Deed
contained in the
of Donation. Verily, by virtue of the lease agreement-
RULE 22 - Costs
The tiling and ndministrative fees, ADF charges, and arbitrator's
fees for monetary, non-monetary and small claims and the schedules
of payment therefor shall be in accordance with the CIAC-approved
Table of Administrative Charges and Arbitrator's Fees. (Section
22 1.1)
Expert's fees shall be determined and paid for in accordance
with Section 15 1.I of the Rules. (Section 22.1.2)
22.01 MAY THE CIAC FIX FEES OF THE ARBITRAL TRIBUNAL
·
DIFFERENT FROM THE APPLICATION OF THE TABLE OF
FEES?
Yes, the CIAC mny fix the lees of the Arbitral Tribunal at a figure
higher or lower than that which would result from tho application of
the Table of Fees if in the exceptional circumstances of the case, the
same appears to be necessary. {Section 22.2)
End of Part II-
Deed af Donation and Amended Deed of Donation, FKI was able to
continue in its possession and use of the subject land.
Two days before the expiration of the lease, FI and respondent
executed another eontrat of lease (200o Lease Contract) overug
the subject land. In this 2000 Lease Centrer, FKI and respondent
greed on a new five-year lease. The 2000 Lease Contract also cop·
enforceable in the event the parties
rbitration clause
raneesd an arnn
•
.
and
licati
about
the "interpretation, appl cat1oh
come to disagreement
execution" of the lease, viz.:
<.,
1.
hi,2"","""
Goverai:Jaw Te prov»stop of
Contract shall be governed, interpretet ant cul
trued in all aspects in accordance with the laws of
the Republic of the Philippines.
Any disagreement as to the interpretation, applica-
tion or execution of this 2000 Lease Contract shall
205
t
ITH.
\IT'NI, DR4
T-
teA
I+'IE AI{II'T'I;\''1+, 1L..A
+rt
be submitted to a hoard of three (})y rbitrntors con
stituted in accordance with the arbitration law r
the Philippines, The decision of the majority of th
arbitrators shall be binding upon KI and respon-
dent. (Emphasis supplied)
After the
Zoo
Lease Contract expired, F'KI and reaponrent
&greed to rnaw their lease for another five years. 'Thie new leas
(2005 Lesssu Contract) required FKI to pay a fixed annual rent snd
to make a yearly "donation" of money to the respondent. Notably, the
22005 Lease Contract. contained an arbitration cinuse similar ta that
in the 2000 Lase Contract.
In June of 2008, P'KI sold all its rights and proportioa relative
to ita husmess in favor of herein petitioner Koppel, Incorporated
On 29 August 2D08, FK! and petitioner executed an Assignment
and Assumption of Lenee nd Donation
wherein KL with the
conformity of the respondent, formally assigned all of is interests
and obligations under the Amended Deed of Donation and the 22005
Lease Contract in favor of petitioner.
T'he tallowing year, petitioner discontinued the payment of the
rent aud "donation" nder the 2005 Lcasc Contract
Petitioner'n rafsl to pay such rent and donation" emnnted
from its belief that the ronta] stipulations of the 2005 Lease Contract
and even of' the 2000 Lease Contrnct, cannot be given effect because
thoy violated one of the "material conditions" of the donation of the
subject land, as stated in the Deed of Donation and Amended Deed
of Donation.
According to petitioner, the Deed of Donation and Amended
Teed of Donation actually established not only one bat twu lease
agreements between FKI and respondent, ie,,
. one ease for the fir4t
25years or from 1975 tw 2000, and nnother lease fro the next 25 years
thereafter or from 2000 ra 202. Both leases are material cunditions
of' the donation at the subject land.
Petitioner points out that while a definite nmout of rent for
thr second Z5 year lease was uot fixed in the Deed of Donation and
Amended Deel of Donation, both deeds nevertheless prescribed
rules and limitations by which the same may be deteruinod. Such
rules and limitations ought to be observed in any succeeding lease
agreements between petitioner and respondent for they are, in themselves, material raditions of' tha donation of the subject land.
lul'II
us, Ito ll h le +mite 'rl
'4l
E'or petitioer then, the rental stipulations af both the 200U
leas C'ontract nd #uh Lease Contract cannot be enforced us bey
are clearly, in view of their exorbitant exact.ions, in violation nf the
aforementioned threshold in item 2(g) of the Deed of Donation and
Amended Deed of Donation. Consequently, petitioner insists that. the
amount of rent it has to pay thereon is and must still he governed
by the limitations prescribed in the Deed of Donntion and Amended
Deed of Donation.
On
June 2009, respondent sent its first demand letter u
petitioner notifying the latter of its default "per Section 1? of the
2005 Lease Contract" and demanding for the settlement of the rent
and "donation" due for the year 2009. Respondent, in the same letter,
further intimated of canceling the 2005 Lease Contract should petitioner fail to settle the said obligations
On 22 September 2009, petitioner sent a reply to respondent
expressing its disagreement over the rental stipulations of the 2005
" 'severely
1 disproportionate,
.,i: ti .
'· 'J ''unc()n•
Lease Contract
cailing tncm
h
scionable and "in clear violation to the nominal rentals mandated
by the Amended Deed of Donation. In lieu of the amount demanded
by the respondent, which purportedly totaled ta P8,394,000.00,
exclusive of interests, petitioner offered to pay only P80,502.I, in
accordance with the rental provisions of the De ot Donation and
Amended Deed of Donation. Respondent refused this offer.
On 25 September 20U9, respondent sent its second demand
lotter to petitioner, asking for the payment of the obligations already
due under tho 2005 Lanae Contraet. The second demand letter also
contained n demand for petitioner to "immediately vacate the lensed
premises' should it fail to pay such obligations within seven days
from its receipt of the letter.
Petitioner refused to comply with the demands ct the respondent.
Instead, on 30 Scptomber 2009, petitioner filed with the Regional
Trial Court (Tt) ot Parnraque City a complaint for the rescission or
cancellation of the Deed of Donation and Amended Deed of Donation
against the respondent.
ca
On 5 October 2009, respondent filed an unlawful detainer
against the petitioner before the Metropolitan Trial Court (MeTC)
of Paraaque City.
On 4 November 2009, petitioner in its Answer with Compulsory
Counterclaim reiterated is objection over the rental stipulntione of
I'[I, AM'TAN'Iv# IM'rT W:
4+1tel
NI» TH AMI(IV'W'TN AW
II
ul# shill
the 2005 Lease Contract fc
..
..
-,nrive
'
or berg
viol
of th
al+rial editions
f'the
of the Deed of Donation nnd Amended Leed ot Donation
of sh splat ou, whereas, petitioner, in substance, repudiates
them. It is fro
petitioner's npparent breach of the 2005 Lease
Cont.ract that rcspondent filed the instant unlawful detainer acon
On
27 April 2010, the MeTC rendered judgment in tavor of
the petitioner. While the MT •
:
nie MO U refused to d lisrise the action on the
""nd that the dispute is subject to arbitration, it nonetheless sided
with the petitioner with respect. to the issues regaurding the insuff.
cency of the respondents demand ard the nullity of tho 90y3 ;~,,
Contract.
<JD LU
•
'The arbitration clause of the 2005 Leaso Cortret stipulates
that "any disagreement" as to the "interpretation, application or
execution of the 2005 Lcaso Contract ought to be submitted to
arbitration. To the mind of the Court, such stipulation is clear and is
comprehensive enough so as to include virtually any kind of conflict
or dispute that may arise from the 2005 Lease Cont ract including the
one that presently besets petitioner and respondent.
I
The respondent appealed to the Regional Trial Court (RT(J
On 29 October 2010, the RTC reversed the MeTC decision and
ordered the eviction of the petitioer
n fro the subject land:
'l'he application of the arbitration clause of the 200~ Lease Contract in this case carries with it certain legal effects. However, before discussing what these legal effects are, the Court shall first dcal
with the challenges posed against the application of such arbitration
clause
ggrieved, the petitioner appealed to the Court of Appeals,
ISSUES:
1.
Whether or not the disagreement between the peti4ioner and respondent is non-arbitrable as it will
inevitably touch upon the issue of the validity af the
2005 lease contract.
FIRST ISSUE:
The disagreement between the petitioner and respondent falls
within the all-encompassing terms of the arbitration clause of the
2005 Lease Contract. While it may be conceded that in the arbitration
of such disagreement, the valdity of the 2005 Lease Contract, or
at. least, of such contract's rental stipulations would have to be
determined, the same would not render such disagreement nonrhitrable. T'he quotation from Gonzales t. Climax Mining. Ltd. that
was used to justify the contrary position was taken out of context.
rereading of Gorzales would fix its relevance to this case
Whether or not the petitioner can validly invoke the
arbitration clause of the 2005 lease contract while
impugning the contract's validity.
Whether or not the arbitration clause can be opera-
tional despite the faet that petitioner did not file
formal application before the MeTC to render
arbitration clause operational.
4.
sue
In Gonzales, a complaint for arbitration was filed before the
Pane! of Arbitrators of the Mines and Gensciences Bureau (PA-
Whether or not petitioner and respondent already
underwent Judicial Dispute Resolution (JDR) proceedings before the RTC.
MGB) seeking the nullification of a Financial Technical Assistance
Agreement and other mining related agreements entered int b
private parties. 'The grounds invoked for the nullification of such
agreements include fraud nnd unconstitutionality. The pivotal
issue that confrontd the Count then was whether the PA.MG has
jurisdiction over that particular arbitration complaint.
SUPREME COURTS RULING:
The Court granted the petition. The Me'TC, RTC and Court of
Appeals all erred n overlooking the significance of the arbitrtion
clause incorporated in the 205 Lease Contract. As the Court sees it
that is a fatal mistake.
''
It is discrnable that the dispute between the petitioner and
respondent emanates from the rental stipulations of the 2005 Lease
Contract, The respondent insists upon the enforceability and validity
l- 'tr-{ct
.
I
.I
Gonzales deeded the issue jn the negative. In holding that the
PA-MB was devoid of any jurisdicrion to take cognizance of the
cornplaint for arbitration, the Court pointed out to the provisions af
iR.A. No. 7942. or the Mining Act of 1995, which granted the PA-MCB
with exclusive originl jurisdiction only over mining disputes, ie,
disputes involving rights to mining areas," "miner agreer:ents or
.
:11
ti 4+l
+pt
I'It
M'IAN.It'I Ht!T'HJ l Itt Lt1
· ND'III, 4III'KT'N 1,
permits,"and "surface owners, ocupants, chin alders r concvsionoire" requiring the technical knowledge and +xwrience of mi
ning nuthorilies in order ta he resolved. Accordingly, since the cmplaint for arbitration in Gonzales did not raise mining disputes as
contemplated under R.A. No. 794 but only issues relating to the vaLidity of certain mining related agreements. the Court held that such
complaint could not be rbitrated before ths PA-MGB. It is in this
context that we mde the pronouncement now in disession:
Arbitration before the Panel of Arbitrators is proper only
when there is a disagreement between the parties as to some
provisions of the contract between them, which needs the interpretation and the application of that particular knowledge
and expertise possessed by members of that Panel. It is not
proper when one of the parties repudiates the existence or
validity of such contract or agreement on the ground of fraud
or oppression as in this case. The validity of the contract cannot be subject of arbitration proceodings. Allegations of fraud
and duress in the execution of a contract are matters within
the jurisdiction of the ordinary courts of law. These questions
re legal in nature and require the application and interpretation of laws and jurisprudence which is necessarily a judicial function. (Emphasis supplied)
'['he Court in Gonzales did nat simply base its rejection of the
complaint for arbitration on the ground that the issue raised therein,
i.e., the vuhdity of contracts. is per se non-arbitrable. TLe real
consideration behind tho ruling was the limitation that wns placed
by RA. No. 7942 upon the jur»diction of the PA.MGB as an arbitral
body. Gonzales rejected the complaint for arbitration because tbe
issue raised therein is no a mining dispute per R.A No. 7942 and it
is for this reason, and only for this reason, that such issue is rendered
non arbitrable before the PA.MCB As 6tnted beforehand, .A. No.
7942 clearly limited the jurisdiction of the PA-MG only to mining
disputes
full t lu 'pr net'rt
l
assuming that the existence of the
,t,4_
('A' decision
"
i concrxheul, thRe s
I;
,
contract. and the arbitration claue
_
is still currect
tic
:.
··rrnl of the pares' dispute tu arbitration 1
declining reer!
'
., :. e HTC'
the issue of whether
t.hat it..Q cumplmnt tn L e ..r:\. """ presents
•t1..
l .
l t clame
;
the contract w1th
tou reeeind
4;tlee
኏
alle኏
Pd
lt
L'
4
en
b኏
u
••
t
} facts
under the
licil question or one
ml I "
id that. issue constitute a Ju:
ie.a
damages; an
firetion and cannot be the
]
ad
f
.
:
exercise
0l
juhmn
IuC
the
that requres
R,
cites the ruling
")n pl'ocee,1lng. L"1.., ,..sondet
b. ,uq
subject ol f an a'tu""
1f arbitrator 's
·"
the Court held that a panel O
he
in Gonzales, wherem
laint for declaration of nullity/
,
bereft of jurisdiction over the vorpia1n
'l
of fraud and
•
gour«is
tr ct on the
t,
of the subject
contract
»
t''
tion
or turmm9T
""
:
contract. an d
t
he addendum
t
1
da t to the execution o1 f +
uld
oppression attoncau
d tbut the complaint aho , Id
኏
•fitl [, 1"')111 \it, t 00
,..mO
\a'
Cts GI ''
the ot'er
b contreCI
oled issues which
it
C.lltll lS, ne. l Ul''\ 0 V
ul • w l th the reulnr
have b ieen fi1IUt
v
are judicinl in nature.
argument is misplaced and respondent cannot
Such
u«
rt.its argument, (Emphasis ours
on the Gonzales case to suppo
went
•
otenu
eds that
'
t
=;
...
~.
3'
,,
1..a.
\
s,
]
i·
Tel'
-
SECOND ISSUE:
• ..
rbitration clause of the 200:
3k¢ t
the aro1
.· th
Petitioner may still invoke
validity of
኏
the
fact
that
1t
V'
t
notwith.
t.
a
ndinff
..
CollUact
Lew
i,呸呸呸 '-
such contract. This is «due to the doctrine of separabihi-
agreemem!
Under the doctrine of acparability, an arbitration separ!
:,
the
main
contract.
Being
a
· de ndent af.
is conidered as intepe
mn thus he invoked
: lf. the arbitration agreement m
contract in its0l6,
'
:.
lidity of the main contract.
regardless of the possible nullity or ivalt I'
.
as»»
ca@."he""";""""""""""
o»es
i«see
+epara ility even Le 'J
t· dctrineof 'ke
'
as a further consequence of the 10€
rbitration
the min contract may invoke 1Ls Lr
who
repudiates
party
clnuse
THIRD ISSUE:
Much more instructive for our purposes, on the other hard, is
the recent case of Cargal Philippines v.
Fernando Regal Trading,
Inc. I Cargill, the Court answered the question of whether issuos
involving the rescission of a contract are nrbitrable. The ropondent
in Cargill argued against arbitrability, also citing therein Gonzales.
After dieectig Gonzales, the Court ruled in favor of arhitrllity,
T'bus. the Court held:
San
no"""
The operation of the arbitration clause in this case
falure of the petitioner to fle a formal 'reues!
defeated by the
.,
MeT'C The Court. finds tat the fling
application therefor with thc
ie not the scle
[.A. • Ne 4o. g285
!'
fr ""Test" pursuant to Section 24 of
zod '
ot s
clause
may he validly invoke
in a
arbitration
an
means y wIICJ « <
ponding suit.
j
~,
i
I'i,
AM'TNTI
DH:'II
WI:Lt/ti»u
r~I It
N TH, AIt/II&'T'IN t,A
' st- lh +le ie
le,pv
t'ol
Section 24 of R.A. No. 9285 reads:
SEC. 24. Referral to Arbitration.
A cou tu4
ww
before
whr·h
'io
"" an aetin
is brought in a matter which is the subJect matter of an arbitration agreement shall, if at least
one party so requests not later that the pre.4r•
,
renee, or
e-rrai
confe•
upon ttth
e request of both parties thereafter
f
be artier to arbitratton unless ii ads
n ta
agreement is null and vold, inoperative or incapable
w
~',,""";"
on
of being performed. [Emphasis ours; italics original]
Th
.
e "request" referred to in the abav provision is. ·
implemented by Rules 4.1 to 4.3 of AM. N 07.
turn,
!
Special Rules of Court
'o.
1-11-08-SC or the
.:...
on Alternative Dispute Resolution (Special
ADR Hales):
RULE L. REFERRAL 'TO ADR
Rule L.1. Who makes the request.
action filed in violation of the arbitr ztic
A party to a endi
'
pen«mg
·.=a.au.~a.."AL:I.Z";
may request the court to refer the parties to arbitratior
:,
a r
accordance with such agreement.
Rule 4.2, When to make request. -- (A) Whe
·, arbitra.:
ore the
agreement exiet before the nction is Glad
'I'e
for »fe
aea. -le request
h
Ic
reterral ' shall
be made not later than the pre-trial corf
rence. Afer the
~r,
.trial conference,
pre-trt
the court will nl le·
upon the request for referral if
orly act
it
ide
all parties to the case.
I
mace wit·ith the agreement of
tio
n1
--
Attention must he paid, towever, to the salient wordings of
Rule 4. 1. It reads: "u party to a pending action filed in viointion of the
arbitration agreement x xx mny request the court to refer the parties
to arbitration in accordanwe with such agreement."
In using the word "may"to qualify the art of fling a request"
under Section 24 f R.A, No. 9285, the Special ADR Rules clearly did
not intend to lmit the invocation of an arbitration agreement in a
pending suit solel y via such request.' After all, non-compliance wth
an arbitration agreement is a valid defense to any offending suit and,
as such, may even he raised in an newer as providvd in our ordinary
rules of procedure.
In this case, it
is conceded that petitioner was not able to file
a separate request" of arbitration hefor the Me'TC, However it ia
equally conceded that the petitioner, ns early as in its Answer with
Counterclaim, had already apprised the MeTC of the existence of
the arbitration clause in the 2005 Lase Contraet and, more significant/y, of its desire to have the same enforced in this case. This aet of
petitioner is enough valid invocation of his right to arbitrate.
w
(D) Submission agreement. -If the
:.
ere is no existing nrbitraton
at the time tho caso is filed but the parties
utaequently enter into an arbitration agreement, t
,,
request the court to rofe ;:he· di
ney may
•
,,
Ier tIer·dispute to arbitration at any time
chzurng
the
," "seuuent
a
•
"
proceeding8.
"l"",'?}";;pa
" motion,-Tr
««
air
orm ol a
which shrll state th
4
dispute is cuvered by an rbite+,,
Sate
at the
·'
r77on agreement.
..
heard. The party making the request shall serve it pon the res
pondent to give him the opportunity to file a comment or opposition as provided in the immediately succeeding le before
the hearing. [Emphasis ours; italics original]
e
• ..","~""?
m«baas.e as»a«a»an aaon .o
entc copy of the arbitration agreement.
The request shall contain a notice of heari
to all parties specifying the date
tng addressed
u
-'
tare aru time when it would be
·»,
FOURTH ISSUE:
The fact that the petitioner and respondent already underwent
through JD proceedings before thr TC, swill not make the subseuuent conduct of arbitration between the parties unnecessary or circuitous. The JDR system is substantially different from arbitration
proceedings.
The JDR framework is based on the processes of mediation,
concilintion or early neutral evaluntion which entsls the submission
uf a dispute before a DR judge" who shall merely "facilitatu settlemont" between fhe parties in conflict or make a "non-binding evaluation or assessment of the chances of each party's case." Thus in
the JDR judge lacks tbe authority to render a resolution of the dispute that is binding upon the parties in contlict. In arbitration, on the
other hand, the dispute is submitted to an rbitrator/s a neutral
third person or a group of thereof whu shall have the authority to
render a resolution bin&ding upon the parties.
JD,
es
'It
'tI
Clearly, tho mere submission of a dispute to JD& proceeding
would not necessarily render the subsequent conduct af rhtration
mere 8urplusage. The failure af the parties in confliet to reach an
umirablo settlement before the JD may, in fact, be supplemented
by their resort to arbitration where a biding resolution to the dis.
pute could finally be achieved. This situation precisely finds application to the case at bench.
Neither would the u:nmry nature of ejectment cases be a
ald reason to disregard the enforcement of the arbitration clause
of the 2005 Lease Contract. Notwithstanding the summmry nature of
ejectment cnaes, arbitration still remains relevant as it aims not only
to afford t.be parties an expeditious method of resolving their dispute.
pivotal feature of arbitration as an alternative mode af dispute
resolution is that it is, first and rerost, a product of party autonomy
or tho foodom of the partin to "make their own arrangement» to
resolve their own isputee." Arbitration agreements manifest not
oaly the desire of the parties in conflict fro an expeditious resolution of
their dispute. They also represent, if not more so, the parties' mutunl
aspiration to achieve such resolution outside of judicial auspices, in
a more informal and less artagonistie environment under the terms
of their choosing. Needless to state, this critical feature can never
be satisfied in an ojcctment cnan no matter how summary it may be
Legal E{feet of the Application of the Arbitration Clause
Since there really are to legal impediments to the application of
the arbitration clause of the Z(% Contract af Lease in this case, the
Court finds that the instant unlawful detainer action was instituted
in violation of such clause. The Law, therefore, should have governed
the fate at the parties and this suit:
R.A. No. 876
Section 7. Stay of Civil Action,
If any suit or proceeding be brought upon an issue arising out of an agreement providing for the arbitration thereof, the court in
which such suit. or proceeding is pending, upon being
satisfied that the issue involved in such suit or proceeding is referable to arbitration, shall stay the action or
proceeding until an arbitration has been had in aecordance with the terms of the agreement: Provided, That
the applicant for the stay is not in default in proceeding
with such arbitration. [Emphasis supplied]
l
tl· 'iprve
'AN
t'RNA'T'IV II; IT• RE!WAIF'ill
A.N TM AH'I'RA'TIUJN LAW
'..Ir piul
i
tot
K.A. No. 92'
o
Section 24. Referral to Arbitration. A court befre
is
in
a
matter
which
is
the
subject
brought
action
which an
matter nf an arbitration agreement shall, if at least one
party so requests not later that the pre-trial conference,
or upon the request of both parties thereafter, refer the
parties to arbitration unless it finds that the arbitration
agreement is null and void, in operative or incapable of
being performed. [Emphasis supplied]
It is clear that under the law, the instant unlawful detainer
action should have been stayed; the petitioner and the respondent
should have been referred ta arbitration pursuant to the arbitration
clause of the 2005 Lease Contraet. 'The Me'TC, however, di not do
in violation of the law which violation was, in turn, affrmed by the
RTC and Court oft Appeals on appeal.
by
the MeTC of the clear directives under R.A
renders
invalid ell proceedings it undertook in
Nos. 876 and 9285
t the fling by petitioner of its Answer with
the ejectment case afer
the point when the petitioner and the respondent
Counterclaim
should have been referred to arbitration. This case must, therefore,
be remanded to the Me'TC and be suspended at said point, Inevitably,
the decisions of the Me'TC, RTC and the Court of Appeals must all be
The violation
vaeatend and 8etaside.
Te petitioner and the respondent must then be referred to
arbitration pursunnt to the arbitration clause of the 2005 Lease
Contract.
2. J PLUS ASIA DEVELOPMENT CORPORATION V.
UTLTY ASSURANCE CORPORATION
G.R. No. 199650, June 26, 2013
FACTS:
On Decanter 24, 2007. J Plus Asia Development Corporation
represented by its Chairman, Joo Han Lee, and Martin E. Mabunay,
doing business under tho name and style of Seven Shudes of Blue
Trading and Services, entered into Construction Agreement whereby
the latter undertook to build the former's T2 room condominiurn'
P42,000,000.00, i5
hotel (Condot.el Building 25). The project, costing
ta be completed within one year or 365 daya reckoned from the hist
THE AL'IN,'I1KW,
N'TH
pH'TIT i;;
4+4t
WIT&TIN 1.A
d'is
calendar day afur signing of the Notice of
wrd it Natier· to Pr.
cec and rcoeipt of' down payment {20% uf ontrart pries).
'I'ho down
Puent was fully pi on Jnuury 14, 2008. Payment of' the hew lane.
of the contract price will he based on actual work finished within 1
days from receipt of the monthly progress billings. Per the
agreed
wok schedule, the completion date af the project will be on Decombar 2008. Mabunny also subitted the required Per'ormonens Bond
issued by respondent Utility Assurance Corporntion
{TAB5CO; e
the amount equivalent to 20% down payment or 8.4 rillio.
Mabuna commenced work st the project sie on January ,
2008. Petitioner paid up to the 7th monthly progress
billing sent by
Mabunay. As nf Septernher 16, 2008, petitioner had paid the :cal
mount of P15,979,472.0inclusive uf the 20% down payment LHo.
ever, as of said date, Mabunay had accomplished only 27.5% of the
pryeet.
On November 19. 2008, petitioner terminated the contract
and sent demand letters toMabunay and respondent surety. As its
demands went unheeded, petitioner filed a Request for Arbitratios
before the Construction Industry Arbitration Commission
(CIA€,
Petitioner prayed that Mabunay and respondent be ordered to
pay
the sums of P8,980,575.89 as liquidated damages and P2.379,441.53
corresponding u the unrecouped down payment or
ovorpayrent
petitioner made ta Mabunay,
Respondent, on the other hand, filed a motion to dismiss on the
ground thnt petitioner has no cause af nction and the complaint states
no cause of' action ngnst it. The (LAC cnied the motion to
dismiss.
Respondent's motion for reconsideration was likewise denied.
On February 2, 2010, he CIAC rendered its Decision which
ordere Mabunay nnd U'PAS5CO to jointly nnd severally pay claimant
liquidated damages and unrecouped down payment plus interest
therecn. It likewise orders Mahunny tu pay tu claimant zhe
auunt
af arbtration cost which the claimant advanced with legal
interest,
an« to indemnify LT'AS8CO of the amount which the latter will have
paid to claimant.
Dissatisfied, respondent tiled in the CA n petition for review
under Rule 43 of the 1997 Rules of Civil Procedure, ns amended.
In the assailed decisian, the CA granted the petition and
reversed and set side the Decision rendered by the CIA€
4t
l'wt IHI
tel he lo,
'It
nit+
i
Lion uf the C decision while
et itistwt ruwvsl tit resuuulrntte.
;~,,
motions
, • aJ rccoul'l 1deratw!l 呸 3oth
'Ni..
repondant filed motion I•fat parti
were denied.
ISSUES:
1.
S""",f a
Restice
a notate","",,""[ii". snrat«. pie
C
whether or not the
h
Appeals seriously erred
Dispute
tion Act and the Speci
patuti·
the Court ofof Appeals
- e
pute esol
unon have stripped
'l
•diotia
ta review arbitral awarrds ·.
ofjurist
ic7on o
'E
,
f Appeals seriously erred
Whether or not the Court
of App
;
i ta.. - ttrb itr'fl l award on an tsse that was
in rversing the
t
d in the terms
raised in the answer, not iden~,t;fe
inee
ot•
otassigned
as an error, and not argued
of
reference , not
088?
the courr,
:n
. any0jf tha
pleadings
fled
before tie
«e
'$
%
ir
;,
Kt
SUPREME COURT'S RULING:
titioner's contention that with the
Th::. C t fin<hl DO mer1t m pew,
1
A 'o
R••
etourr
dispute resolution under
institutionalization
of
ate"?"""
;
g_4,,
·
known as he t _',,, • piepute Resolution Aet or
tie
ern0'
,
9285, otherwise'
risdiction te review the decisiuns or
204, the CA was divested of jurisdie"
~, ie onon the provision
ouu,
1 pa«iii
erroneously relied
awards of' the CIAG. etitiono "',, ~stic arbitration to file in tho
in said law allowing any parts to"",
correct or
Regional Trial Court (RTC) a petition eit» es
vacate a domestie arbitral award.
~
conirm.
not confer on Regional
The Court holds that R.A. N, o. 9285 did,_;
~aru
. - .
wards
or
theCLACin
udecions
T'rial Courts jurisdiction to revie"",, gaction 40 thereof
expressly
"
disputes. On the contrary,
.
construction
~_
R'TC
is
.by
tic
not
thus:
the
required,
declares that confirmation
by'
ol
ti of
'The confirmation
Comfy""""
"-~[aAward.
.ail oe overaed by see-
sC. 40, nrbitral aw
of a domestic
tion 23 of R.A. 876.
1
·
rbitral award when confirmed shall [be
domestic
ar
enforced in the same manner as final and executory deei1s of the legional Trial Court.
sons
'tr
firmv .tion of a domestic award shall lber maade
The
conf
t
; accccordance with the Rules
by the Regionalaa
Trial
Court in
t
he proomulgated by the Supreme Ce ourt.
of Procedure to be
rts
o
Ttf AT ''I{NA'VR DM' If'E' tt t» 111 ·1l
AND TT AIII'I'IT'ON 1 AW
ult
G.R.
E.O. No. I008. (Emphasis supplied.)
Petitioner misread the provisions of A.M. No. 07-11-08-SC
(Special ADR Rules) promulgated bv this Court and which took effect
on October 30, 2009. Since RA. No. 9285 explicitly excludcd CLAC
awards trom domestic arbitration awards that need to be confirmed
to be executory, said awards are therefore not covered by Rule LL of
tho Special ADR Rules, as they continue to be governed by E.O. No.
I00, as amended and the rules of procedure of the CIAC. 'The CLAC
Revised Rule s of Procedure Governing Construction Arbitration
provide for the mnmner and mode of nppeal from fIAf decisions or
awards in Section 18 thereof, which rends:
SEU['ION 18.2 Petition for review. -A petition for review
from n final award may he taken by any of the parties within
fifteen (15) days from receipt thereof in accordance with the
provisions of Rule 43 of the Res of Cort.
As to the alleged error committed by the CA in deriding the case
upon an issue not raised or litiguted before the CIAC' this assertion
has no basis, Whether or not [Mabunay had incurred delay in the
oaf his obligations under the Construction Agreement
perfrmance
o
was the very first issue stipulated in the Terms of Reference (TOR),
which is distinct from the issue of the extent of respondent's liability
under the Performance Bond.
Court
3. PUROMINES, INC. V COURT OF APPEALS
A CIAC arbitral award necd not he confirmed hy the
Regional Trial Court to be executory as provided under
Executive Order (EO) No. 1008 vests upon the CIAC 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 ariaes before or nfter the completion
of the contract. or ufter the abandonment or broach thereof. By ex
press pruvision of Section LS thereof, the arbitral wsrd of the CIAC
is final and unappealalle, except on questions of law, which are
appealnble tu the Supreme Court. With the amendments introduced
by R.A. No. 7902 and promulgation of the 1997 ules of Cvil Pro.
cedure, as amended, the CIAC was included in the enumeration of
quasi·judicial agencies whose decisions or awards may be appealed
to the CA in a petition for review under Rue 43. Sucb review of the
CIAC award may involve either questions of faet, of law, or of fact
and law.
II'T All
duly Ile nprv
No. 91228, March 22, 1993
FACTS:
:.
hr
(Puromaines) and Makati Agro Trading, nc.
Puromines, Inc.
Oceanic,
, Philipp Brother
ts edintua contract wti 'I
A
GMakati Agro
enter
,, .,J Urea in bulk. In their sales contract,
e4%.
Lne. (hilpp)fur the salenf prle ire
te arising
.,
:
·
· oided which says thnt any d1spur
an arbitration clause is pre '
,j
.
M/V
'Thereafter,
a:,
ettied by arbitration. 8'
hall be e",''y,
frorr said contract sha
of
a
shipment
USSR
.
..
" j,
Aed on board nt Yurziahny U
Liliana Dimitrov1oaaes
ordcr
good
di
1u
ant 1
Lr,re8 in bulk complete
r'[Lo
.:
J5,50D mctrie tons pr.Ile
be delivered ta
it;the
and condition for transport to toil and Manila,
:.
,
Thre bills of lading were issued by the ship-er
Purominos.
(Ma±time). 'The shipment coverer
•
... M኏
r1ti..mc. 1:1otors. "኏.• ~~A>.
"኏
l.l\
•
huppie>,
loilo City' complete ant d i
PL:t.
f fading No. 2 was discharged in 1o1
II]
by Bi ot Lt
',,,
the shipments covered by Bi
'
•
:.
oad order and condition. He[awever, &
rder and
,
Nos. 1 ad were discharged in Manila in had ore'
ot
audmng>
discolored and contaminated
id
h
condition, caked, hardened ac ImP>;__, 1 P683,056.29 including
,
D.nmaaej:. wru·呸 va i.tea ,
with rust ant d l-.-+
HT
'i
result, Puromines fled a
As
additional discharging expenses. •
before he trial court
. t l<.w b1·ec1ch ot c1.mtr11ct OL '-=s 1.1'lt:UtO
,. h
pl
com Lan1
,
.:,
was impleaded as charterer of the
against Maritime and Fnil?
i
,,bilipp filed a motinn to dismiss
vessel. Maritime filed its ans"""e
arbitration clause Philipp
on the ground of failure to comply.w',that the cause of action did
oed the motion to dismiss assertny
',e
0pu
of the terms of the eales contract but on
.: ,J,4+uot
from the viola11on""__,t of carriage). The trial court ruled
claims of cargo damages (cont"
th trial courts
.A rever>en I
Wm
eal the (A
in favor Puromies, th 'pan apPe
d nough to include
ruling contending that the sale contract
livery sf the
the claima for damages arising from the crr1age
goods. Thus. the case reached the 5G.
. ,a.
i
u
"+
2
re
,
j~
;ti.
"!'~
ee
arise
is"";
;),,ion elause in the sales
Whether or not the arbitrator
·t
;
,
claims for damages subbi.
j@e
the
in
44; ble
e
contract is app.cam
matter of the case.
ISSUE:
SUPREME COURTS RULING:
..
:
.,
·· the sales contract is applci able in the
'The arbitration clause m
corret is
;,
mntter of the case. The e CA 8
es
subject
claims far de lamage8 ut
1
enot th to include
314K
saying that the sales contract is comprehensive
C
>-
'I
I ALT'ERNA']IW
I'I WE' + i41
NI I'HI AI'II'THEA'TIN L.\
claims for damages arising from carriage and deliwry al' the goods,
As a general rule, the seller has the ob»ligation to transmit the good
to the buyer, and concomitant thereto, the contracting of a carrier tu
deliver the same (Art. 1523 of the Civil Code).
tau4
Assuming that thc liability of Philipp is not based on the sales
contract but rather on a contract of' carriage, it is matrial to distinguish what kind of charter party, i.e., demise or bareboat charter of
the vessel or contract of affreightment Philipp is to determine its
liability, Under the first one, the charterer will generally be considered as owner for the voyage or service stipulated. Hence, subject
tu liability tu others for damages caused by negligence. In tho second
one, the owner of the vessel leases part or all of its space to haul
goods for others and the general ownor retains the possession, ommand and navigation of the ship, the charterer or freighter merely
having use u! the space in the vessel in return for bis payment of the
charter hire. 'Thus, the charterer is usually tree from liability to third
persons in respect of the ship.
Assuming that Philipp is a demise or bareboat charter, then, it
is liable to Puromines subject to the terms and conditions of tho sales
contract. If tha contract. between Philipp and owner of M/V Liliana
Dimitrova was merely that of nffreigbtment, then it cannot be held
liahle for the damages caused by the breach of contract of carriage,
the evidence of which are the bills of lading.
In any case, whether Philipps liability should be based on the
sales contract or that of the bill of lading, the parties are nevertheless
obligated to respect the arbitration provisions on the sales contract
ad/or bill of lading. Purominos being a signatory and party to the
ales cont.ct cnnot. ec pe from bis obligation under the arbitration
clause as stated therein.
Arbitration bas been held valid nnd constitutional. Even before
the enactment of RH
No. 876, the SC has countenanced the settlement of disputes through arbitration. The rule now is that unless
the agreement is such as absolutly to closo tho danrs of the courts
against the parties, which agreement would be void, the courts will
A.
P'ART' LL
l h Ile tun»wv
4rt
look favor upun such amicable arrangements and will only interfere
with great reluctance to anticipate or nullify the action of the arbitrator.
4. CHUNG FU INDUSTRIES (PHILIPPINES), INC. V.
COURT OF APPEALS
ramines derives his right to the cargo from the bill of lading
which is the oontract of affreightment together with the sales
contract. Hence, Purvmines is bound by the provisions and terms of
smid bill of lading and of the arbitration clause incorporated in the
sales contract.
[n+lo
G.R. No. 96283, February 25, 1992
FACTS:
Chung Fu Industries (Philippines), Inc. (Chung u) and
Robleeor Philippines, Inc, (Roblecor) forged a construwlion agreement
whereby Roblecor committed to construet Chung Fu its corpara:om
industrial/factory complex. It was stipulated that in the event
submitted for resolution
disputes arise from the contraet, it shall be
before a single arbitrator chosen by the parties. Apart from the
construetion agreement, another ancillary contracts, ie., construct1on
of a dormitory and support taelities and installation of electrical,
water, and hydrant systems at the plant site were entered into by
the same partiesu Rohlecor failed to umpiete the work despite of
axtension f time allowed by Chung Fu which prompted the latter to
take ovwr the construction when it hnd become cvident that Robernr
wns not in a position to fulfil its obligation. Claiming an unsatisfied
acrout of P10.500),000 and unpaid progress billing of r2,370,178,
Roblepsr filed a petition for Compulory Arbitration with prayer for
s
to the arbitration clause in
TRO before R'TC Makati Br. 57 puruant
the corstrucaon agreement. Subsequent negotiations between the
r
nt
e arbitration
led to the formulation of an ageem
parties eventually
states
inter
alia
that
the
decision
of
the arbitrator
which
agreement
nnd
there
shall
be
no
further
judicial
and
unappealable
shall be fir.al
with
the
whole
or
any
part
of the
disagrees
either
party
recourse if'
The
arbitration
agreement
was
approved
by
nrbitrator's award,
arbitratorWillardo
Asurcion
as
sole
the RTC and appointed Engr.
Asuncion ordered Chung Fu to pay RcblecorI6,108,801. He further
declared that the award is final and unappealable, pursuant to the
Arbitration Agreement precluding judicial review ot the award
Roblocor moved to confirm the nward but Chung Fu moved to
read the case for further hearing and asked for reconsideration of
the judgment award stating that Asuncion committed 1 instnncvs
of «error by disregarding the provisions of the parties contract. Tbe
lower court granted Roblecar's motion and denied Chung Fur's motion
and eventually granted the motion for the issuance of the wrii at
execution. Upon appeal, the CA affirmed lower court's decision
I'IH# I'TIN'I'IV DINI"T, Apt
NI 'THE AKIN'TUA TIN
'Tu41
+At IHI
LAW
vensoning that being signatories tu the arbitration arvent, ('hung
Fu and its afficers are bound to observe the stipulations uf the said
agreement. 'The denial of the MR prompted Chung Fu to bring the
mater before SC.
ISSUE;
Whether or not Chung Fu is precluded to seek judicial
review of the judgment awarad.
SUPREME COURTS RULING:
Chung Fu is not precluded to seek judicial review af the judgmctt ward A clause in a contract providing that all matters in
dispute between the parties shall be referred to arbitrators end to
them alone is contrary to public policy and cannot oust the courts of
jurisdiction. But certainly, the stipulation to refer nll future disputes
lo an arbitrator ur to submit an ongoing dispute to one is valid. Being
part of s contract between the parties, it is binding and enforceable
in court in case one of them neglects, fails or refuses to arbitrate.
Going a step further, in event that they declare their intention to
refer their differences to arbitration first before taking court action,
this constitutes a condition precedent, such that where a suit has
been instituted prematurely, the court shall suspend the same and
the parties shall be directed forthwith to proceed to arbitration
It is stated eplicitly
x
undor Art. 2044 of the Civil Code that
the finality of the arbitrators' award is not absolute and without
exceptions. Where the conditions described ir Arts. 2208, 2039, and
2014/) applicable to both compromises and arbitrations are obtaining,
the arbitrators' award may be annulled or rescinded. Additionally,
under Sees. 24 and 25 of thu Arbitration Law, there are rounds for
vacating, modifying or rescinding an arbitrators' award. 'Thus, if
and when the factual cirurstances referred to in the above-cited
provisions are present, judicial review of the award is properly
warranteud
If courts refuse or neglect to inquire into the factual milieu cf an
arbitrators award to determine whether it is in accordance with law
or within the scope of his authority, the proper remedy is certiorari
under Rule 65 or the RRC. This action will lie only where a grave
abuse of discretion or an act without, or in excess of jurisdiction on
the part of the voluntary arbitrator is clearly shown. The writ of
certiorari is an extra-ordinary remedy and that certiorari jurisdiction
ti
Ill b th upwwn {'it
not be euuuted with appellate jurisdiction. In a special civil ution
of certiorari, the Court will not engage in a review of the faeta found
nar even of the law are so patent and gross and prejudicial as tu
amount to a grave abuse cf discrerion or an exces de pouoir on the
1
part of arbitrator
It should be stressed, too, that voluntary arbitrators, by the
nature of their functions, uct in u uuusi-judicial capacity It stands to
renson, therefore, that their dccisions should not be beyond the acope
uf the power of judicial review of the Court
From the hist of rrrs and Chung Fu's discussion of the same,
Chung Fu has amply mado out a case where the voluntary arbitrator
failed to apply the terms and provisions of the Construction Agreement which forms part of the law applicable between the parties,
thus, committing grave abuse of discretion. Mureover, in granting
unjustified extra compensation to oblecar for several items, he
exceeded his powers
all of which ould havo constituted ground
for vacating the award under Section 24(d) of he Arbitration Law.
The trial court's refusal toook intw the merits of the case, despite
prima facie showing of the existence of grounds warranting judicial
review, effertively deprived Chung F of their opportumity to prove
or substantiate their allegations. In so (doing, the trial zaurt itself
committed grave abuse of discretion. Likewise, the appellate court,
in not giving due course to tho petition, committed grnve abuse of
discretion. Respondent courts should not shirk from exercising their
power to review, where under the applicable laws and jurisprudence,
such power may be rightfully exercised; more so where the objections
raised against an arbitration award ray properly contrtui+ proud+
for annulling, vacating or modifying said award under the laws on
arbitration,
5. CALIFORNIA AND HAWAIIAN SUGAR COMPANY, ET AL. V.
PIONEER INSURANCE AND SURETY CORPORATION
G.R. No. 139273, November 28, 2000
FACTS:
MV Sugar Islander arrived at Port ofManila carrying a cargo of
soybean meal in bulk consigned to several consignees, one of which
was theMetroManila Feed Millers Association (Metro). The shipment
was insured with ioneer Insurance and Surety Corporation (PISC)
in the amount uf PI9,976,404, The cargo was discharged from the
I'FIE, AM,TINNTWI IS'I!I 'OMrTDt
NII THI
Tl'RAT'ON AW
2rt
vessel to barges and fror barge, the ergo wnss offloaded, vehnggod,
and reloaded to consignees delivery trucks. Respondent claims tht
when tho cargo was weighed an a licensed truck scale a shortage of
255.051 metric tons valued at TL,62I,I71.16 was discovered. Due to
the alleged refusal of petitioners to settle tber respective liabilities,
PIC paid consignee Metro. Thereafter, as alleged subrogee of
Metro, PISC filod a complaint for @damages against petitioners before
RTC Makati. Petitioner fled a motion to dismiss on the ground
prematurity. The lower court issued an order deferring the hearing of
the motion to dismiss and directing petitioners to file an answer. 'The
MR was likewise denied considering that the roason relied upon by
the petitioners was a matter of defense. Petitioners filed au answer
with counterclaim and eroaseleim alleging tbat the respordent did
not comply with the arbitration clause of the charter party The
rial court set the case for pre-trial which tbe petitioners moved to
be deferred and further moved tu sot for preliminary hearing the
affirmative defense of lack of eaua of action for filure
a
to comply
with the arbitration clause. 'The motion was denied as well as the
subsequent MR, 'The CA sustained the RTC'a ruling. Thus, the case
was brought to SC
ISSUES:
I.
Whether or not a preliminary hearing of the affrmative defense can be done despite the fact that a motion
to dismiss had been already filed.
2,
Whether or not the arbitration clause is applicable to
a subrogee like PISC in this case.
SUPREME COURTS RULING:
I.
Preliminary hearing of the affirmative defense can be
done despite the fact that a motion ta dismiss had been already filed
Any of the grounds for dismissal provided for in this Rule, except
improper venue, may be pleaded as an affirmative defense, and a
preliminary hearing ma be had thereon s if a motion to dismiss
had been fled (Section • Rule 16, pre-t997 Rules o; Court). True, the
said provision specifically provides that a preliminary hearing on the
affirmative dofenses may be allowed only when no motion to dismiss
has been fled. Section t however must be waived in the light of
Swction S of the sare Rule, which requires courts to resolve n motion
to dismiss and prohibits them from deferring its resolution on the
ground of indubitahilty. Section 6 disallows a preliminary bearing of
Aw'T
'tu.Iw«.dent hy th krie- f.rt
ftirnative efses once a motion to dismiss has been filed because
such defense should have already been resolved. In the present case,
the trial eourt did not categorically resolve petitioners motion to
dismiss but merely deferred resolution theroof. Indeed, the present
Kules are consistent with Section 5, Rule 16 f the pre-1997 Rules of
Court, because both presuppose that no motion to dismiss hnd ben
filed; or in the case of' the pre-1997 Rules, if one has been tiled, it has
not been conditionally denied. Hence, the ground invoked may be
still pleaded as affirmative defense even if the defendants' motion
to dismiss has been filed but. not definitely resolved, or if it has been
deferred as it could be under the pre-1997 Rules.
2
The arbitration clause is applicable to subrogee as PLSC
in tins case. Citing Pan Malaya Insurance Corp. • CA, it ruled
that the right of respondent insurance company as suhbrgme was not
based on the charter party or any other contract; rather, it accrued
upan the payment of the insurance claim by private res;on&dent to tho
insured consignee. There was nothing u
Malayan, however, that
prohibited the applicability of the arbitration clause t the subrogee.
That case merely discussed, inter alia, the accrual of the nght of
subrogation and the legal basis therefor. This issue is completely
different from that of the consequences of such snhragion: that is,
the rights thnt the insurer acquires from the insured upon payment
of the indemnity.
/n
6. ASSET PRIVATIZATION TRUST
V. COURT OF APPEALS
G.R. No. 121171, December 29, 1998
FACTS:
By virtue of existing lawsthat time (R.A. Nos. L528, 2077, and
4167), MO4 was drawn whereby the RP through Surigao Mineral
Reservation Bord granted Marinduque Mining and Industrial C'orporation EfMIC') the exclusive right to explore, develop, and crloit
nickel, cohals, and other mineral in tho Surigao mineral reservation.
The Philippine Government undertook to support the financing
a
of MMIC hy purchase af MMIC debenture bonds and extension
of guarantees. MMIC, PN, and DBP executed a Mortgage Trust
Agreement whereby MMIC agreed to constitute u mortgage in favor
of PNB an DBP over all MMC's assets; subject of' real estate and
chattel mortgage executed by the mortgagor and additional assets
described and identified, including assets ol' whatever kind, nature
or description, which the mortgagor may acqre whether in substi-
I'll
I'TE'HNI\VF Ii, It
in rt
ANI}'HIE AHTW'TIA'TIN 1,w
tution of, in replenishment, or in addition thereto, Tne has coue
wher MMIt' finds it diftwult. tu reet t finctal oblgutons. 'TEt»,
a FP was drafted by SGV and opproved MMIC Board of Director»
but the came was not formally adopted, approod, or rntific& by NH
and DBP. By virtue of PD 385, DBP and PNB decided to exercise
their right to extra;judicially foreclose the mortgages in accordance
with the MTA. The foreclose assets were sald to PNF as lone bddor
and were assigned t Nonor Mining Corporation, Maricalum Mining
and Industrial Corporation, end Island Cement Corporation. But the
assets were transferred to AP'T n 1986, Jesus S. Cabarrus, Sr. and
ther tuakholders ot MMIC filed a derivative st against Dbl and
PNB before RTC Maka:i Br. 62 for annuhmnt of foroclosures, ope
cifc performance, and damnges 'Civil Case No, 900). In the course
nf the trial, the parties reed tn submit. the cse to arbitration by
entering into a Compromise and Arbitration Agreement. As a result,
the trial court issued an order dismissing the complaint. The Arbitratiun Committee ruled in fvor of Cabarrus et al who subsequently
fled in the same Civil Case No. BO0 and application/motion for con.
frmation of arbitration award. APT opposed the same for being filed
improperly considering that the said motion was neither a part nor
a continuation of the said civil ense, 'The lower court confirmed the
nward. Thus, APT fled a speril civil action for certiorari before GA
but the same was denied due cuursve and dismissed, 'Thug, the case
reached the 8C.
ISSUES:
1.
Whether or not the trial court has jurisdiction to
confirm the arbitral award.
2.
Whether or not AIT is estopped from questioning the
jurisdiction of the lower court.
8.
Whether or not the arbitral award in the case at bar
is reversible.
SUPREME COURTS RULING:
I,
'T'he trial curt has no jurisdiction to confirm tho arbitral
ward. When it disaiased the ve instead of suspending it, itmade
a fatal mistake. While Brunch 62 should have merly suspended the
case and not dismissed it, neither parties questioned said dismissal.
Hence, both parties as well as the court are bound by such error.
The trial court has lost its jurisdiction. It could not have validly
reacquired jurisdiction over the said oas on more motion of one af
I
l
t
I
T I
4'+sltenld I fl -prom, 4
cl
'i
th pnrti, 'The· Hule of Court is specific on how a new cnse mny be
uitiat+ud znl such i nut don by uuert motion in a particular branch
uf the TC, Cons&quentl as there was no pending action' to spank
al, the petition to confirm the arbitral award should lave been filed
as new case and raffled accordingly to one of the branches of RTC,
2.
T'he APT i not estopped to question the jureriction of
the lower court. The rule is that. "Where the court itself clearly has
no jurisdiction Dver the subject mntter or the nture
the action,
at
the invocation of this defense may be done at any time. It is neither
for the courts nor for the parties to violate or disregard that rule,
let alone tu confer that jurisdiction. this mavtzr being legislative in
·hnrcter. As a rule then, neither waiver nor estoppel shall npply
to confer jurisdiction upon a court burring highly meritorious and
eaceptirl cirrstances. Cne such exception was enunciated in
Tijam v. Sibonghanuy. where it wus held thut "after voluntarily
.bmit.ting a causc and encountering n adverse decision on thc
merits, it is too late lir the loser to question the juisdic~on or power vf
the court." Peritioner's situation is ifferent because from the outset,
t. has consistently held the positinn that the HTC', ranch 6 had no
jurisdiction to confirm the arbitral award; consequently, it cnnnot be
said that it was +stopped from questioning the R'Tt's jurisdiction.
Petitioner's prayer for the setting usido of the arbitrl award was not
consistent with it.s disavowal of the court's jurisdiction.
3,
'The arbial award in this case is reversible. The urbi
trntors came out wth an award in excess of their powers nnd palpably
tevoid of faetual end tegal basis. In the case at bur, the foreclosure
made was fully just±fed considering that there was no financil
restructaring program. If the loans are restruturuble, because they
were already due and unpaid, they were likewise forecloseable. It
is at the option of PNB and DBP whether to foreclose the mortgage
adopt
s
'RP. When they chose Lo forrln, they did it only »s
mar.dated by PD 385. The arbiters exceeded their authority in awar
ding damages ta MMIC which is not impleaded ns a party to the
derivative suit. Likewise, it exceeded its authority in warding moral
tams;es tu lesua f'brruas, Sr.
NOTE:
Accordingly, Section 20 of R.A No. 876 provides:
Sec.. 20, Form and contents of ward.
The award must be
made in writ.ng and signed and ncknowledge by a inajority of t.he
'T'Ht, AI 'I'IN'IV DSIHT It et+1tit
AN TF. AKiTILT'ION I AW
+"T
arbitrators, if more than one; and by the sole arhitr;tor, if thorn i
only one. Each party shall be furnished with a cpy of the award
The arbitrators in their award may grant any remely or relief wheh
they deem just and equitable and within the scope af the agreemenl
of the parties, which shall include, but not be limited to, the spocifit
performnnce of n contract.
S@tin '! whiwh vertes tho grods tor modifying the
·ward provides:
See. 25. Grounds fur modifying or correcting ward Tn
anyone oaf the following cases, the court must make an order
modifying or correcting thr award. upon the application of any
party to the controversy which was abitravetd
XXX XXX XX
(a)
The arhitrators shall have the power ta decide only those matters
which have been submitted to them. The terms of the award shall he
confined to such disputes. (Emphasis our).
Where there was an evident miscalculation of tigures, or
an evident mistake in tho description of any person, thing
or property referred to in the award;
th)
Where the arbitrators have awarded upon a matter not
submitted tu them, not affecting tbe merits of the decision
upon the matter submitted; or
(e)
Where the award is imperfect in a matter cf 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.
xUx XXX
XX
Section 24 of the same law enumerating the grounds for vaca-
ing an award states:
Se, 24. Grounds for vacating award
I any one of the
following cnses, the court must. make an order vacating the nward
upon the petition of any party to the controversy when sueh party
proves affirmatively that in the arbitration proeeehug:
(a)
The award was procured by corruption. fraud, or other
undue mean8;
(b)
That there was evident pnrtility or corruption
arbitrators or any of them;
(c)
That the arbitrators were guilty of miscunduct in refusing
in
7. AGAN, JR., ET AL. V. PHILIPPINE INTERNATIONAL AIR
TERMINALS CO. INC., ET AL.
G.R. No. 155001, May 5, 2003
FACTS:
the
to postpone tbe hearing upon sufficiont cause shown, or
in refusing to hear evidence pertinent and material to
the controversy, tbat one or more of the arbitrator was
disqualified to act as such under Section nine hereof, and
willfully retrained from disclosing such «disqualifications
oany other misbehavior by which the rights of nny port.y
have been materially prejudiced; or
(d)
'That the arbitrators excccdcd their powers, or so imperfeetly executed them, that a mutual, final and definite
award upon the subject matter submitted to them was not
made. (Emphasis ours)
I
This is one af the three consolidated cases regarding the
PIATCO conrrovorsy on NALA IPT IHI. In 1989. Aeroport de Paris
(ADP) wa+ engaged by DOYTC to conduct a comprehensive study
of the NALA and determine whether the irport can cupe with the
traffic development up to the year 2010, ADP submitted the Draft
Final Report in December 1989. In 1993, six business leaders, i.e..
John Gokongwei, Andrew Gotianun, Henry Sy, Sr., Lucio Tan,
George 'Ty and Alfonso Yuchengo met with Pres. Ramos to explore
the possibility of investing in the construction and oporation of 2
new international airport terminal. Said business leaders formed
Asia's Emerging Dragon Corp. (AEDC) which was registered to
SEC to signify their commitment to the project AEDC submitted
an unsolicited proposal to the Glovorment through the DO'I'CY
MIA4 for the development of NAIA II II under a build-operateand-transfer arrangement pursuant to R.A No. 6957 as amended hy
R.A. No, 7718 (BOT Law). On December 2, 1994, the DOTC issued
Dept. Order No. 94-82 constituting the lrequalificaton Bids and
Awards Committee (PBAC) for the implementation of the NALA LT
s
Iil project. Aside from AEDC, Paireargo Consortium consisting of
People'e Air Car and Warehousing Co., Ine. irnrgo), Phil. Air
aunt Grouncs Services, Inc, (PAGS) and Security Bank Corp. also
j
from AEDC regarding
join the bidding process. Despite abection
the financial capability of the Paireargo. the latter won the bidding
because it offered to pay the government a guaranteed payment of
PI7.75 billion fr 27 years while AEDC only offered Pl5 million
for the same period. Honce, the project was awarded to laircargo
who subsequently incorporated to Philippine Internationnl Airport
Terminals Co., Inc, {PLATCO). AEDC fled a Petition for Declaration
of Nullity of the Proceedings, Mandamus and Injunction against the
Secretary of the DOYTC, Chairman of PAC, voting member of PBAC,
and Pantaleon Alvarez. Chairman of PBAC Technical Committee
before the RIC Pasig. However, the government tlroug;h DOTC
See. Arturo 'T Errile and PIATCO President Henry T. Go signed
the Concession Agreement for the Build-Operate-and-Transfer
Arrangement of the NATA IPT III (1997 Concession Agreement)
Subsequently, the Amended and Restatod Concession Agreement
(ARCA) was signed by the same parties. Section 10,2 of ARCA
pmvides the ventof the arbitration proceedings in case a dispute or
controversy arises between the parties to the agreement. Thereafter,
three Supplements to ARCA were signed by the government nd
PIATCO. In the yoar 2002, different petitions assailing the said
agreements fled by the workers of the international uirline service
providers, Cong. Bateria, Martinez, and mnun more who were not.
parties to the agreement reached the SC. During the pendency of the
case, Pres. GM\ in one of her speeches stated that the government
will not honor the PIA'TCO contracts for being null and void. On
March 6, 2003, PIATCO informed the Court that on March 4, 2003,
they commented arbitration proceedings before the International
Chamber of Commerce, International Court of Arbitration ([CC) by
filing n Request for Arbitration with the Secretariat of'the ICC against
the Government of the RP acting through the DO'TC and MLAA
ISSUE:
Whether or not the proceedings shall be suspended to
give way to arbitration,
SUPREME COURTS RULING:
The proceedings shall not be suspended just to give way to
arbitration. 'Though, arbitration proceedings have been filed at the
instance o! PLAT€O pursuant to See 1D.0 of the ARCA, such step
.:
PIT Ill
TI, AI,IF4NTiV
EI\W' H'4 1IT1«1R4
A 'H, AM&IT'KATIN 1.AW
nw. l
· isl
he,
the
pre·ts· 'er1
ut IHn court of its jurisdiction over the cases at bar. It
i. v·stablish«d that petitioners in the present cases who have
presented legitimate interests in the resolution of the controversy are
not parties to the PLATCO Contracta. Accordingly, they cannot be
hound bv the arbitration clause provided for in the ARCA and hence,
nnnot be compelled to submit to arbitration proceedings. A speedy
and decisive resolution of all the critical issues in the present
controversy, including those raised by petitioners, cannot
be made before an arbitral tribunal. The object of arbitration
is precisely to allow an expeditious determination of n dispute. This
objective would nat be met if this Court were to allow the parties to
ettle the cases by arbitration as there nre certain issues involving
non-parties to the PI4T(O Contracts which the arbitral tribunal will
not be equipped ta resolve.
will nol.
NOTE:
The PIATCO Conracts are null and void:
'The predecessor of PLATCO is not a qualified bidder for
1)
failure to comply the financial capability to undertake the project in
the mimun amount of {0% of the project cost. It is because, under tho law (.A. No, 337 as amended by General Banking Act), the
Security Bank cannot invest the entire amount of its et worth n a
single urdertaking or enterprise, whether allied or non-allied.
2) The 1997 Concession Agreement is not valid. It allows
amendments that cover items that would not materially affect. the
preparation of the proponent's proposal. A close comparison of the
draft Concession Agreement attached t the Bid documents and the
1997 Concession Agreement reveals that the documents differ in at
least two material aspects. First, modification on the public utility
revenues and non-public utility revenues that may be collceted by
PIA'TCO. When tnken as n whole, the changes under the 1997 Concession Agreement with respect to reduction in the types of fees that
se subject to MIA regulation and the relaxation of such reguinton with respect to other fees are significant amendments thnt sub
stnntially distinguish the raft concession agreement from the 1997
concession agreement. Second, assumption by the government of the
liabilities of PIATCO in the event of the latter's default thereof.
There is a provision in the 1997 Concession Agreement
3)
Article 1, Soction 17 of the 198 Constitution
contravenes
which
(temporary takeover of public utility in case of national emergency).
i
T'TH#, I,T'ARNA'iW, DI'I'IT He@ I+tut
Ar I
AND THI, AKI'TIA'TWJN 1AW
wlh
Part of the provision of the 1997 Concession Agreement says, "Con.
cessionaire shall be entitled to reasonable compensation for the duration of the temporary take over by GRP, which compensation shall
take into account the reasonable cost for the use of the terminal and/
or terninal complex...
4)
'The 1997 Concession Agreement and ARCA contravene
the Constitutional provision regarding prohibition and regulation of
monopolies (Article 12, Section I9). The 1997 Concession Agreement
nnd ARCA provide that in view of the exclusive right granted to
PIATCO, the ccncession contracts of the service providers currently
servicing termnals I and would no longer be renewed and those
concession ontrnets whose expiration are subsequent to the inservice date would cease to be effective on the said date.
8. ASSOCIATED BANK V. COURT OF APPEALS
G.R. No. 107918, June 14, 1994
FACTS;
l'hilippine Commercial International Bank (PCIB), Far East
Bank nd Trust Company (EBTC), Security Bank and Trust Company (SBTC), and Citytrust Banking Corportion
a
(CBC) filed a
complaint for violation of the Negotiable Instruments Law and Damages against. Associated Bank seeking the recovery of 900,913.60
which the later charged against their current account by virtue of 16
cheeks drawn by them despite the apparent alterations therein with
respect to the name of the payee, i.e., Filipinas Shell was erased and
submitted with Ever Trading nnd DBL Trading by their supervisor
Jeremias Cabrera without their knowledge and consent. Associated
Bank argued that the checks were regularly issued and the proximate cause of the plaintifls' loss was thoir own laxity, negligence and
lack of control, due care and diligence in the conduct of their business
affairs. With leave of court, Associated Bank filed a third-party complaint gainst PCI, FEBTC, SBTC, and CBC for reimbursement,
contribution, indemnity from said third-party defendnnts for being
the collecting banks of the subject checks and by virtue of their bank
guarantee for all checks sent for clearing to the Philippine Clearing
House Corporation (CHC), In the answer of the PCIB, one of its
arguments is that RTC Br. 81 of Quezon City has no jurisdiut.ion over
the suit as it and third-party plaintiff ars members of the PCH and
bound by the Pules and Regulations thereof providing for arbitration.
Likewise. SBT€ fled a motion to dismiss on the ground of fu~lure
le! hr lw up+et'rt
o resorwt ts arltration a provided for in Section 336 of the Clearing
louse Rules and Regulations of the PCHC. Associated Bank cour-
I
!
f
'
wred that the court has jurisdiction over the suit as the provisions
of the Clearing House Rules and Regulations are applicable only if
he suit or action is between participating member banks, wherens
the plaintiffs are private persons and the third-party complaint
between participating member banks is only a consequence of' the
original action initinted by the plaintiffs. The trial court dismissed
he third party complaint for lack of jurisdiction Lpon appeal, the
L'A dismissed the appeal Hence, the case reached the SC.
ISSUE:
Whether or not the arbitration provision of the Clearing House Rules and Regulations of the PCHC (Section
36) is applicable in the case at bar.
SUPREME COURTS RULING:
The nrbitration provision of the Clearing House Rules and
Regulations of the PCHC (Sectin 86) is applicable in the case at bar.
Under the rules and regulations of the Philippine Clenrig House
Corporation (PCIIC), the mere act of participation of the parties
cunwerued in it operatons in effect amounts to a manifestation of'
agreement- by the parties to abide by its rules nnd regulations. As a
consequence af such participation, a party cannot invoke the juriediction ut' the courts aver disputes and controversies which fall under
the PCHC Rules nnd Regulations without first going through tho
arbitration prowesses laid out. by the holy. Since claims relating Lo
the regularity of checks lard by banking institutions are among
those claims which should first be submitted for resolution by the
PC'HCs Arbitration Committee, petitioner Associated Bank. having
voluntarily band itaolf ta nhide hy such rules nnd regulation, is
estopped from seeking relief from the Regional Trial Court on the
coattails of a private claim and in the guise of a third party complaint
without first having obtained a decision adverse to its claim from the
aid body. It cannot bypass the arbitration prnces& on t.he basis of its
averment that its third party complaint is inextricably linked to the
original complaint in the Regional Trial Court.
Pursuant to its function involving the clenring of checks and
other clearing items, the PCHC has udopted rues and regulations
designed to provide member hanks with n procedure whereby dis-
i
'IIE, I
IN'TIWI, DI<I'IT II,Al1 Fu4
\4I TH, AMK!'HI'1N 1.Aw
putes involving the clearance of checks and other neotbl instr.
mens undergo a process of arbitration prior tu submission to the
courts below. 'T'his procedure not. only ensures a uniformity of ruling
relating to factual disputs ivolvngchecks and other negotibie ins
trumenta but also provides a mechanism for settling minor disputes
among participating and membcr banks which would otherwise go
direcly to the trial courts. While the PCHC Rules and Regulation
allow appeal to the Regional Trial Courts only on questions of law,
his does not preclude our lower courts from dealing with questions
of fnct already dcded by the PCHC arbitration when warranted and
appropriate.
In Baneo de Or Savings and Mortgage Banks v. Equitable
Banking Corporation, this Court had the occasion to rule on the
validity of those rules as well as the jurdiction of the PC'HC as a
forum for resolving disputes and controversies involving checks
and other clearing item when it held that "the participation of two
banks... in th Cleaning Operatons of the PCHC (was) a manifestation of its submission to its jurisdiction."
Section 6.6. 'The mere fact. that au bank participates in the
clearing operations of PCHC shall deemed its written ad subscribed
consent to the binding effect of this arbitration agroentent ns if it had
done so in accordanee with Section 4 of the R.A. No. 876 (Arbitration
Law), 'Thus, not only do the parties manifst
e by rare participation
their consent to these rules, bt such participaton is deemed (their)
written and subscribed consent to the binding effect of arbitration
agreements under tbe PCHCt rules. Moreover, a participant subject
to the Clearing House Rules and Regulations of the PCHC may go
on appeal to any of' the Regional Trial Courts in the National Capital
Region where the head otfice of any of the parties is located only after
a decision or award has been rendered by the arbitration committee
or arbitrator on questions of law,
Clearly therefore, petitioner Associated Bank, by its voluntary
participation nnd its conacnt to the arbitration rules cannot go
directly to the Regional 'Trial Court when it finds it convenient to do
so. 'The jurisdiction of the PCHC under the rules and regulations is
clear, undeniable and is particularly applicable ta all the pnrties in
the third party complaint under their obligation to first eek redress
of' their disputes and grievances with the PCHC before going to the
trial court.
t
a
'AHrT IHI
le
lid-d h
vs kiri
9. HEIRS OF AUGUSTO L. SALAS, JR.
V LAPERAL REALTY CORPORATION, ET AL.
G.R. No. 135362, December 13, 1999
FACTS:
Salas, Jr. was the registered owner of a vast tract of land in
Lipa City, Datangas spanning ,44,3354 square meters. He entered
into an Owner-Contractor Agreement {Agreement.) with laperal
Realty Corporation (-aperal Realty) to render and provide complete
construction services on his land. He also executed a SPA in favor of
Lnarsl Realty to exercise generrl control, supervision and managemetn of the sale of bis land. for eesh or on installment basis. Salas,
Jr. lett his home for business trip to Nueva Eeija and never returned.
'I'bus. Teresita Laz Salas fled with the RTC Malati City a veri
fied petition for the declaration of presumptive death of her husband
which the lower court granted. Laperal Realty subdivided the land
and sold subdivided portions to Rockway Real state Corporation
and South Ridge Village, Ic, and to several lot buyers. Hence, tho
heirs of Salas, hr. filed before the RTC Lipa Ciry n complaint for
declaration of nullity of sale, reconveyance, cancellation al contract
accounting and damages agminst Laperal Realty et al. Laperal Realty
኏
---t.,a the oon1nlaii኏t tor fn.iluro LCJ comply with the arbiOVE d t LO Ii~
H
.]
th
tration provision of the agreement. 'The lower court isniased the
complaint. Thus, the heirs of Salas, Ir, filed n petition fr revicw on
certiorari before SC.
ISSUE:
Whether or not Rockway Real Estate Corporation,
South Ridge Village, Inc, and the buyers of the lot are
bound by the arbitration provision of the Agreement,
SUPREME COURTS RULING:
Rockwav Real Estate Corporation, South Ridge Village. Inc.,
and the buyers of the lot are bound by the arbitration provision of
the Agreement. A submission to arbitration is z contract. As such,
the Agreement, containing the stipulation on arbitration, binds the
parties thereto, as well as their assigns and heirs. But only they
petitioners, us heir of Suls, Jr., nd respondent Laperal Realty are
certainly bound by the Agreement If respondent Laperal Realty had
TIHL AI'TEIN'HV# JE#HT Iwwl 41tuAN[ 'IHI; AM{WTIRATON I,,'
'u..in
assigned its rights urder the Agreement to, n th rl party, making
the former, the assignor, and the latter, the nssi;nee, such assigner
would also be bound by the arbitration provision inwe assignment
involves such transfer of rights as to vest in the assignee the power tu
enforce them to the same extent as the assignor could have enfrced
o
them against the debtor or in this case, against the heirs of the
original party to the Agreement. However, respundents IRorkwav
Real state Corporation, South Ridge Village, Iuc.. Mahnrami
Development Corporation, spouses Abrajano, spouses Lava, Oscar
Dacillo, Euurdo Vacuna, Florante de la Cruz and Jesus Vicente
Capellan are not assignees of the rights of respondent Laparal Rea!ty
under the Agreement to develop Salas, Jr.'+ land and sell the same
They are, rather, buyers af the land that respondent Laperal Realty
was given the authority to develop and sell under the Agreement. A4$
such, they are not "assigns" contemplated in Art. 1311 ol' the New
Civil Code which provides that "contracts take effect only between
the parties, their assigns and heirs."
led l
tte !pwt
wont
10. COCA-COCA BOTTLERS PHILIPPINES, INC. SALES FORCE
UNION-PTGWO-BALAS V COCA-COLA BOTTLERS
PHILIPPINES, INC.
G.R. No. 155651, July 28, 2005
FACTS:
The Urion ~led u Notice to Strike with th NCMB raising certin tasucs for conciliation. As a result ol' the snid dispute, the Union
taged a strike. 'I'hereafter, NCMB succeeded in making thc parties
agree to a voluntary settlement of the case vin n [O\ signed by then
which provides that the company shli grent all those covered by
the bargaining unit represented hy the union an amount equivalent
to 50% of their avergo commission for the last six months in the
Christmas bonus, which the union knowledges as a management
prerogative. In December 1999, the company granted n fixed amount
of P4,000 eliminating the said 50%. Thus, claiming that the same
was a violation of the MO\, the union submitted its grievance to
CCBPI. No settlement was reached, thus, the case wns then refrred
e
to a Panel of Voluntary Arbitrator. After hearing and the submission af evidence and position papers, the Arbitration Fane! ruled
that the P4.000 ex gretia is not n bonus, thus, the 5Un claim is denied. The ruling was signed by Apron langahnt and Noel Sanchez
as chairman and member With respect to Arnel Dolendo, intead
s
of signature, he noted on the ruling that he dissented on delibertion and will file a Repnrare opinion, Ihe Decision was received by
t.he Union without the attached dissenting opinion on February 222,
2001. Hence, they filed an Lhrgent Ex Pare Manifestation with Motion
assailing the decision to be incomplete and premature and moving
that the Decision be held in abeyance tho preseriptve period for a
legal remedy be suspended. 'The panel did not act on the motion, On
March 2, 2001, the union wan furnished witb a copy af the dissenting
opinian of Dolendo. Thus, on March 12, 2001, the uniontiled a MR of
the January 21, 2001 Decsion. The order of denial wus received by
the union on duly 9, 200I. Thus, the union filed a petition for review
before the CA on July 24, 2001. The CA dismissed the petition as well
as the subsequent M for being Liled out of time
lt is the contention of the heirs of Salas, Jr. that they instituted
action against both respondent Laporal Realty und respondent lot
buyers for rescission of the sale transactions and reconveysnce to
them of the subdivided lats. 'l'hey argue that rescission, being their
cnuse of action, falls under the exception clause in Seczion 22 of R.A.
No. 876 which provides that "such submission [to] or contract [of
arbitration] shall bo valid, enforceable and irrevocable, cave upon
such grounds as exist at law for the revocation of any contret." SHnid
contention is without merit.
Laperal Realty, as a contraetin party to the Agreement, has
the right to vorpel petitioners to first arbitrate before seeking judicial relief, However, to split the proceedings into arbitration for
responoient Laperul Realty and trial fro the respondent lat buyers,
or to hold trial in abeyance pending arbitration between petitioner
und respondent Lapcral Realty, would in effect result in multiplicity
of suits, duplicitous procedure and unnecessary delay. On the other
hand, would be in tho interest of justice if the trial court bents tbe
complaint against ali herein respondents and adjudicates petitioners'
rights as against theirs in a single and complete proceeding.
it.
ISSUE:
Whether or not the Decision of the Panel of Arbitrators attained its finality even without the dissenting opinion of one of its members.
.l
TE AL'T'ENA'TIE iM:rrtj
:a4
Tu
AND 'THI, AI\'IS'IN 1,AM
SUPREME COURTS RULING:
'The Decision of the Panel of Arbitrators attuined its finslit
membes,
r Ruty]
Section 1 of the Procedural Guidelines in the Canhct of Voluntary
Arbitration Proceedings provides, "T'he final arbitral disposition of
1suets submitted to voluntary arbitration is the Derision. The dispo.
sition may take the form of a dismissal of a claim or grant af s;eili
remedy, either by way of prohibition of particular acts or specific performance of particular acts, Ln tbe latter case, th& decision is called
an \ward,"
even without the dissenting opinion of one of its
In herein rase, the Decision of the Panel was in the frm of
a dismissal of petitioner's complaint. Naturally, this dismissal was
contairod in the main decision and not in the dissenting opinion.
Thus, auder Section 6, Rule VII of the same guidelines imple.
menting Article 262-A of thc Labor Code, this Disio, as a matter
af course, would become final and executory after ten (10) calendar
days from receipt of copies of the decision by the parties even without
receipt of the dissenting opinion unless, in the meantime, » motion
fur reconsideration or petition tor review to the Court ot Appeals
udor Rule 43 of the Rules of Court is filed within the sure 10-day
period, Ag correctly pointed out by the Court of Appeals, a dissenting
opinion ia nnt binding on the parties as it is a mere oxpression o f the
individual view of the dissenting member from the conclusion held
by the majority af the Court, following the ruling in Garia v. Perez
s riterated
in Natin@]
Union_of Workers ir_Hts,
Restaurants
and Allied Industries •NLRC.
F'rescinding from the foregoing, the Court of Appeals
correctly
dismissed the petition before it gs it no longer had ary appellate
jurisdiction to alter or nullify the decision of the Panel. T'he Panel's
Deeision bad become final and executory, hence, unchallengeable.
11. NATIONAL STEEL CORPORATION V RTC
LANAO DEL NORTE
BRANCH 2, ILIGAN CITY
G.R.
No. 127004, March 11, 1999
FACTS:
Edward Willkom Enterprises, Inc. (EWEI) together with
Ramiro Construction executed a Contract for Site
Developeut
with National Steel Corporation (NSC) whereby the former jointly
I u
PAI!' HI
ls«le! hw ls itntt -ft
lortusk t vomuruet the latter its lntegrated lron and Steel Mills
omplex to he established at Iligan City 'Thereafter the servies of
1tmiru Construction was terminated and EWEI took over its conractual obligation. NC granted EWEI extensions of time for the
termination of the project. Differences later arose which prompted
WEI to file civil case befre
o RTC Lan@o Br. 6 praying essentially for
the payments of P458,381.001 with interests from the time of delay;
the price adjustment as provided by P.D No 1584; und exemplary
damages in the amount o! r50,000 ad attorney's fees NS€ filed its
·nswer with counterclairn to the complnmts. Upon joint motion of
the parties, the lower court dismissed the complaint and counterclaim in view of the desire of both parties ta implement See. 18 of
the contract, providing tr
o a resolution of ary conflict by arbitration.
Subsequently, the Arbitration Board was corposed and after hear
ings, rendered decision dirocting NSC to pay EWEI: (a.) P458,381.00
representing EWEI's last billing No. 16 with interest thereon at the
rate of 1-1/4% per month from January 1, 1985 to actual date of paytent; (b.) 11,330,514.0 representing price escalation adjustment
under .D. No. 1594. with interest thereon at the rate of 1-1/4% per
month from January 1, 19: to nctunl date of payment; (c.) r50.000
as and for exemplary damages; (d.) P350,000 for attarney's fees,
and (d.) P35,000 for the cost of arbitration. RTC Br. 2, Tligan City
affirmed and confirmed in toto the award of tbe Board af Arbitrators
Upon denial of the MR. NBC brought the case to SC via petition for
certiorari with prayer for preliminary injunction and 'TO
ISSUE:
Whether or not the lower court committed grave
abuse of discretion in not vacating the award of the Board
of Arbitrators.
SUPREME COURT
RULING:
Tho lswer did not commit grave abuse of discretion in not
vacating tho awnrd ot the Board of Ab»tratars. It. should he stressed
that voluntary arbitrutors, by the nature of their functions, act in a
quasi-judicial capacity. As n rule, findings of facts by qunsi-judicial
bodies, which have aequired expertise because their jurisdiction is
confined to specific matters, are accorded not only respert but even
finality if they are supported by suhstantinl evidence, even if not
overwhelming or preponderant. As the petitioner las availed of Rule
65, the Court will not review the facts found nor even of the law as
It. Ai,IMA'Twt ; +'» 1RI;4
NI THI AMHWTRFW4 1.AW
t11I
interpreted or applied by the rblrtor unless tls·;uwsd error of
facts or of law re so patent and gross and prejudicial as tu around
to a grave abuse of discretion or an excess de potuvoir on the part uf
the arbitrators.
In tho case at bar, NSC posited evident partiality in the assailed
decision of he arbitrators n favor of FWEI and mistaken apprecin
ion of facts and application of the law by the arbitrators as ground
far vacnting the award. As ruled in Adamson v. CA, proofs other than
mere inference are needed to establish evident partiality. Here, NS(
merely averred evident partiality without any proof to back it up. NSC
was never deprived of the right to present evidence nor was there any
showing that the board showed signs of any lias in favor of EWEL
The derision must be sustained for it is n well-scrtled rule that the
actual findings of an administrative body should be affirmed if thero
is substantiai evidenco to support them and the conclusions stated
in the decision are rot clearly against the law and jurisprudence,
similar to the instant case. Henceforth, every reasonable intendmcnt
will be indulged to give effect sch proceedings and in favor of the
regulatory and integrity of the arbitrators' act.
The ground of mistaken appreciation of' tacts and lw of the
case is likewise not meritorious. NSC failed to prove that there was
failure on he part of FWFI to complete the work agreed upon which
will determine whether Final Billing No. 16 can be made chargeable
to the cost differential paid by NSC to another contractor. NSC ailed
to substantiate such allusion of completion by another contractor
three unfinished items of works, actual quantities accomplished and
unit cost diffrential
e
paid chargeable against EWEI. 'There is no such
report of mention of unfinhed work al £0,000MT of dumped riprap,
100,000cu m of site grading and 300,{DX eu m of spreading common
excavated materials in the EWEI contract alluded to by the NSC
as unfinished work otherwise BWFI Hilling No. 16-Final would not
have passed processing for payment unless there is really no such
unfinished work NSC evaluation report with no adverse findings of
unfinished work consider the contract as completed. If at all, this
unfinished work may be additional/extra work awarded in 1984 to
nnother contractor at priwe higher thnn the uit price tendered by
EWEI in 1982 nndior the discrepancy between actual quantities of
work accomplished per plans versus estimated quantities of work
covered hy separate contract as expansion of the original project.
Moreover, under the contract. it is incumbent upon the owner to send
呸l
I'AXT
IHI
lhuhsl l th itprtnu
furl
to contrnetor letl.er within seven (7 days after completion of the
wctio tr city the objections thereto. NC failed to comply with
·uch requirement, and therefore it would be unfair to refuse payment
to [WEL considering that tbe latter had faithfully submitted Final
Idling No. 16 believing thut its work had been completed because
NSC did not ell its attention to any objectionable aspect of their
prujeet..
The price escalation is likewise justified in accordance with the
enrdinnl rule in the interpretation of contracts that 'if the terms of a
contract nre clear and leave no doubt upon the intention of the contracting parties, the litoral moaning of its stipulations shall control"
Also price esenlation is allowed under P.D. No. 1594. However,
the I-1w4% interest rate per month frozn January 1, 1985 to actual
date of payment shall be changed to 6% per annum being the legal
rate of interest. The award of exemplary damages are Likewise not
wnrranted considering that the requirements for the award of said
damages nre not present in the case nt bar. Attorney's fees are nlso
not justified, it ia n conclusion without a premise, its basis being
Improperly left tu speculation and conjecture.
12. DEL MONTE CORPORATION-USA V CA
G.R. No. 136154, February 7, 2001
FACTS:
DMC-U8A entered into Distributorsbip Agreement with Montebena Marketing. Inc. (MMI making the latter as the sole and
exclusive distributor of the former's Del Monte products in the Philippines for a period of five years. Said agreement provides for an
arbitration clause. With the approval of DMC-USA, MMl appointed
abrosa Foods, Ine. (SFI as its marketing arm. However, MMI, SI,
and MMTs Managing Director Liong Liong C Sy (Lily Sy) fled a
complaint against DMC-USA, Paul E. Derby, Jr., Daniel Collins, ard
Luis Hidulgo, and Dewey Ltd. hefore R'TC Melaban. The complaint
ie prelienteri on Arts. 20, 21, and 23 of the Civil Code. 'The complainants alleged that DMC-USA products continued to be brought into
tbe country by parallel importers despite the appointment of MMI
with the Distributorship Agreement thereby causing them great embarrussment and substantial damage, DMC-USA filed a motion to
suspend proceedings invoking the arbitration clause in the agroement. The lowor court deferred to consider the same as the grounds
alleged therein did not constitute the suspension of the proceedings
'FI4EM1Ny
II!''t
Kt.
u1++rt
t
AND 'THE MI'TKN'TI~W
[.. on,
considering that the action was tor dammge with pruyor for the i-suance of' writ of preliminary attachment aud not an the Distributorship Agreement 'The complainants fled Urgent Motion for Leave 1o
Admit tupplemental Pleading whieb the lower court admitted.Upon
the admission of the Supplemental Complaint, DMC-USA filed n
mazifestat.ion adopting their motion to suspend proceedings. Upon
appeal to CA, the appellate court at~irmd the trial court'e ruling
on the ground that the interpretation of Art. 2I would require a full
blown trii making arbitration out of the question. Hence, the case
reached the SC via petition for certiorari.
+
f'rt
luwval Realty Curportion, wheh supursueded that of
· rltration clause has beeme dysfunctionsl because of the presence
ot third parties is untenable" ratiocinating tlat "[cjontracts are
rtsptend ns the law between the contracting parties und that lale
uch, the parties are theroby expected to abide with good faith in
their contractual commitments." However, in Salas, hr. orly parties
ta the Agreement, their nssigns or heirs have the right to nrtitrate or
vuuld be compelled to arbitrate 'The Court went further hy derlrinp
that in recognizing the right af' the contracting parties w arbitrate tr
to compel arbitration, the splitting of the proceedings to arbitration
as ta some of the parties on one hand and trial fur the others on the
other hand, pr tho suspension of trial pending arbitration between
same of the parties, should not be allowed as it would, in effect. result
in multiplicity of sits, duplicitous procedure and unnecessary del
Whether or not the parties in the case at bar can be
compelled to submit their disputes to arbitration.
SUPREME COURTS RULING:
'The object of arbitration is to allow the expeditious determinuion of n diaputo, C'early, the iasue hnfore us could not be speedily
ad efficiently resolved in its entirety if we allow simultaneous arbi-
No, the pnrtie in the case at bar cannot be compelled tu submit
their disputes tu arbitration. Thongh, a careful xaminntion af the
instant case shows that the arbitration clause in the Distributorship
Agreement between DMC-USA and MMI is valid and the dispute
is arbitreble, the parties in this ease cannot bu compelled to utilize
such provison. 'I'he Agreement borwean petitioner DMC USA and
private respondent MMI is a contract. The provision to submit to
arbitration any dispure arising therefrom
the relationship of the
parties is part ot that contract and is itself a contract. 18 a rule,
contracts re respected s the law between the contracting parties
and produce effect as between therm, their assigns and hoirs Clearly,
only parties tu the Agreement, i.e., petitioners DMC-USA and its
Managing Director far Export Sales Paul E. Derby, Jr., nnd private
respondent MMI and its Nanaging Iirecur LILY SY are bound
by the Agreement and its arbitration clause as they are the only
tration proceedings and trial, or suspension of trial pending arbitraLion. Accordingly, the interest of justicr would only be served if the
trial court hears und adjudicates the care in a single and complete
proceeding.
and
this case. Thia is consistent with the rerent case of Heirs of Augusto
t
PW'T IL
rlelh 4le!it+
Toyota Mota Philippines Corp. u. Court ofAppeals.
fn Toyota, the Court ruled that [t/he contention that the
ISSUE:
signatories thereto. Ptitianers Daniel Collins an Luis Hidalgo, and
private respondent SFI, not parties to tho Agreement and cunnot
even be considered nsaigns or heirs of the parties, nre not bound hy the
Agreement and the arbitration clause therein. Consequently, referral
to arbitration in the State of California pursuant to the arbitration
clause and the suspension of the proceedings in Civil Case No, 2637MN ponding the return of the arbitral award could be called for but
only as ta petitionerg DMC'.USA umnd Paul E. Derby, Jr, and private
respondents MMI and LILY SY, and not as to the other parties in
·Jr
-
NOTE:
T'here is no doubt that arbitration is valid and constitutional
ir our jurisdiction. Even before the enactment of RA. No. 876, the
Court has countenanced the settlement of disputes through arhitration. Unless the agreement ie such as absolutely to cloee the douts
of the rourts aginst the parties, which agreemeni. would he void,
the courts will luok with favor upon such nicable arrangement
and will only interfere with great reluctance to anticipate or nullify
the action of the arbitrator. Moreover. as R.A. No. 78 expressly
authorizes arbitration of comestir disputes, foreign arbitration as
a sy9tem of settling commerciul disputes was likowise recognized
when the Philippines adherer! to the United Natins "Convention on
the Recognition and the Enforcement of Foreign Arbitral Awords of
1958" under the 10 Mas 1965 Resolution No. 71 of the Philippine
I
I
t
I
Senate, giving reciprocal recognition nnd allowng enforcement of
international arbitration agreements between parties of different
nationalities within n contracting state.
'IA+ SM 'lINAT'!'t, Ii[,' W'Mt ti+
NI TE AMETIUATTuN L.
I4
'
13. JORGE GONZALES AND PANEL OF ARBIIRAIORS V
1AT I
lulu l l tle+imps
(
nut
IsSUF:
CLIMAX MINING LTD., ET AL
Whether or not the arbitration clause (Clause 19.1)is
separable from the main contract (Addendum Contraet).
G.R. No. 161957, January 22, 2007
FACTS:
SUPREME COURTS RULING:
This ease was consolidated in G.R. No, 167994, Jorge Gonzales
v ·Judge Oser Pimentel of RTC Br. 148 ofMakat City. Both cases
rooted in the sme dispute Addendum Contract entered into by both
parties. In GR. No. 161957, the Court held that the DENR Pane! of
Arbitrators had no jurisdiction over the complaint for the annulment
of the Addendum Contract on grounds of fraud and violation of the
Constitutiun and that the netion should have boon brought before
the regular courts as it involved judicial isues. Both parties file&d
an MR. Clrax Mining Ltd., et al. filed their Motion fo» Partial
Reconsideration and/r Clarification seeking reconsideration of that
part of the Decision holding that the case should not be brought for
arbitration under RR.A. N. 876 also known as the arbitration law.
Climax Mining Ltd.. et al.. citing American jurisprudence and the
UNCITRAL Model Law, argue that the arbitration clause in the
Addendum Contraet shculd be trented as an agreement independeut
of the other terms of the contract, and that a claimed rescission
of' the main contract does not avoid the duty to arbitrate. Climax
Mining Ltd., et al add that Gonzales's argument relating to the
alleged invalidity of the Addendum Contract still has ta be provon
nnd adjudicated on in a proper proceeding; that i=, an action separate
trom tho motion ta compel arbitration Pending judgment in such
sepurate nctior, the Addendum Contract remains valid nnd binding
nnd so does the arbitration clause therein. Climax Mining Ltd., et
al. add that the holding in the Decision that the case should ot
be brought under the ambit of the Arbitration Lawappears to be
prernised on Gonzales's having "impugned the existence or validity"
of the addendum contract. If so, it supposedly convesy the idea that
Gonzales's unilateral repudiation of the contrut or mere allegation
of iis invalidity is all it takes to avoid arbitration. Hence, respondents
sabmit that the curt'a holding that "the case should not be brought
under the nmbit of the Arbitration Law" be understood or clarified
a3 operative only where the challenge to the arbitration agreement
has been sustained by final judgment. GR. No 167994 is a Rulo
65 petition flod while MR ir the other cane is pending wherein
Garzales challenged the orders of the RTC requiring him to proceed
with the arbitration proceedings as sought hy Climax-ArimcoMining
The arbitration clause (Clause 19.1) is separable from the maim
contract (Addendum Contract). Implicit in the summary nature of
the judicial proceedings is thc scparable or independent character
of the arbitration clutee or agreement 'The doctrine of separability,
or severability as other writers call it, enunciates that an arbitra
tion agreement is independent of the main contract. The arbitration
agreement is to he treated as a separate agreement and the arbitration agreement does not automatically terminate when the contract
of which it is part romcs to nn end. The separability of the arbitration
agreement is especially significant ta the determination of whether
the invalidity of the main contract also nullities the arbitration
clause. Indeed, the doctrine denotes that the invalidity of the main
contract, also referred tu as the "container" contract, does not affect
the validity of the arbitration agreement. Irrespective of the fact thnt
the main onntrnct is invnlid, the arbitration clause'agreement still
remains valid and enforceable. 'The separability of the nrhitration
clause is confirmed in Art. 16(1) of the UNCITRAL Model Law and
Art. 21(2 of the UNCIIRAL Arbitration Rules.
NOTE:
The case was re-raffled to the sala af Judge Pimentel from the
sala Judge Benito at the instance af Climax-Amrico @due to the absence of the cold neutrality of an impartial judge.
This brings us bark to CR. No. 16195. The ndjudication oftho
petition in G.R. No. 167984 effectively modifies part of the Decision
dated 28 February 2005 in GR. No. 161957. Hence, we now hold that
the validity of the cantrart containing the agreement to submit to
arbitration does not affect the applicability af the arbitration cluse
itself, A contrary ruling would suggest that a party's mere repudiation
of the main contract is sufficient to avoid arbitration. 'That is exactly
the situatinn that. the separability doctrine as well as jurisprudence
applying it, secks to avoid. We add thut when it was declared in f.PR.
No. 161957 that. the case should not he brought for arbitration, it
should be clarified that the case referred to is the case actually filed
by Gonzales before the DENR Panel of Arbitrators, which was for
Corporation (Climax-Arimco)
l'
i
·u
I'Ht M'INTI'
ST' R AM
Al '
till+4+ +
l
l a
the nullification of the main contract on the ground l' tr«l, as it
had already been determined that the case should have hen Fraught
before the regular courts involving as it did judicial issue
ly
·e
I'it'l'
1Hl
'r+
l hoy lv 'mp'vine· t'rt
I'e tr! sat lied Sl's mtion for reconsideration and ordered
it to file its respanive pleading. Instead of filing an nnwer, PI fled
pw1ition for certiorari under Rule 65, wbich the Court of Appeal.
lrnhly acted upon. In n petition for review before this Court, B
('arporation alleged, among others, that the Court ot Appeals should
have ds
i missed the petition for certiorari since the order of the trial
court denying the motion to suspend proceedings "is a resolution
of an incident on the merits and upon the continuation of the
proceedings, the trial court would evcntually render decision cn
the merits. which decision could then be elevated to n higher court
'in nn ordinary appeal,"
We address the Rule 6 petition in G. Na. 167994 fr. from the
remedial law perspective. It deserves to be dismissed on procedural
grounds, as it was filed in lieu of appeal which is the prescrihed remedy
and at that far beyond the reglementary period. It is elementary in
remedinl law that. the use of an erroneous mode of nppesl is cause
fur dismissal of the petition for certiorari and it hns been repeatedly
&tressed that n petition for certiorari is not a substitt for lost
ppei. As its nature, a petition for certiorari lies only where tiere
is "n appeal," and "na plain, speedy and adequate remedy in the
ordinary course of law." 'The Arbitration Law specifiea!ly provides
Ir an uppenl by certiorari i.e., a petition for review unde certiorari
urder Rule 45 f the Rules of Court that raises pure aw
s af
law. 'There is no merit to Gonzales'a argument that the use of the
permissive term may in Section '2, R.A, No. 87G in the fiiing of
appends does not prohibit nor discount the tiling of a petition for
certiorari under Rule 65. Proper interpretation of' the aforesaid
mrovision of law shows that the torm "mny" rafers only to the filing of
au appeal, not to the mode of review to be employed. Indeed, the &o
of "may" merely reiterates the principle that the right to eppeal is
not part of due procos of lw but is a mere stututory privilege to be
exercised only in the manner and in accordance with law
14. OIL AND NATURAL GAS COMMISSION V. CA
AND PACIFIC CEMENT COMPANY, INC.
G.. No. 114323, July 23, 1998
FACTS:
Foreign corporation, Oil and Natural Gas Commission (ONGC)
entered into a contract with the local corporation, Pacific Cement
Company, Ine. (PCCI whereby the latter undertook to supply the
frmer
o
4300 metric tone of oil well cement In considration
e
thereof
ONG( bound itself to pay PCCI the amount of $477,300 by opening
an irrevocable, divisible, aud confirmed lettor of eredit in fvor of the
latter. However, due to dispute between PC'CI and the shipowner
MV Surutana Nava, the oil well cement to be delivered to Bombay
and Calcutta, India was held up in Bangkok and did not reach its
point of destination. Despite the fart that PCCI had already received
payment and despite several demands, PCCI failed to deliver the ail
well cement. After negotiations betwaen the parties, it was ngreed
that PCCI will replace the 4300 metric tons of oil well ement with
Class G cement cost free, However, upor inspection, the Class G did
nat conform to the ONGC's specifications. ONGC informed PCCI
that it wll refer its claim to an arbitrator pursuant t Clause 16 of
the contract The arbitrator resolved the dispute in favor of ONGC.
To execute tho arbitrator's award, ONG€ fled a petition befora the
Court of Civil Judge in Dehra Dun praying that the arbitrator's
decision be made the "Rule of Court" in India The foregn court
notified PCCI Lo file its objections and pay the necessary fling fees so
that the objections will be considered. P€CI President Jose C'ortes,
Jr wrote the freign
o
court inquiring about the amount of the fling
fees. Without responding to the PCCT's query, the foreign did not
Neither can BF Corporation v. Court of Appeals cited by Gcnzales
support his thenry, Gonzales argues that Eid case recognized and
lowed a petition for certiorari under Rule +: "appealing the order
of the Regional Trial Court disregarding; the arbitration agreement
a8 an acceptable remedy." The BF Corporation case had itsorigins in
a complaint fro collection of sum of money filed by therein petitioner
BF Corporation against Shangri-la Properties, Ine. (SPI, Pi moved
to suspend the preeedin> alleging that the construction agreement
or the Articles of Agreement. between the parties contained a clause
requiring prior resort to arbitration before judicial intervention. The
trial esurt found that an arbitration elsuse was incorporated in the
Conditions of Contract appended to and deemed an integral part of
the Articles of Agreement. Still, the trial court denied the motion to
suspend proceedings upon a finding that the Conditions of Contract
were not «duly executed and signed by the parties. The trial court
also fouud that SPI hnd fniled tu le any written notice ot demand
for arbitration within the period specified in the arbitration clause.
t
T4; AL.S'RN'Ti' ppr[, Wt;41 +1«
NI 'THE AIU{ETRTWN 1,AM
consider PCCl' objections and ruled in fvor
u of ON«(:, twspite notier
af the order and several demands, PCCI refused t comply with
the decision, Hence, GNGC filed a complaint for the enforcement
of foreign judgment before RTC Br. 30, Surigao City. PCCI moved
to dismiss the complaint. The lower couut ruled in favor of PC
Upon appeal. the CA affhrmed lower court's decision. Hence, the case
reached the sC.
"
ISSUES:
1,
Whether or not the non delivery of the oil welt cement
is within the ambit of the arbitration clause (Clause
16).
2.
Whether or not non-compliance of Claes G cement
with ONGC's specifications is within the ambit of
arbitration clause (Clause 16),
3.
Whether or not the foreign judgment can be recognized in this jurisdiction.
SUPREME COURTS RULING:
I.
No, the non-delivery of he oil well cement is within the
ambit of the arbitration clause (Clnse 16). First, applying the gram
matical rules of construction, ONGC has misquoted the phrase in
Clause 16, shrewdly inserting a comma between the wards supply
order'contract!' and "design" where none actually exists. It is thus
clear that to fall within the purview of this phrase, the "claim. right or
tbing whatsoever" must arise out of or relate to the design, drawing,
specification, or instruction of the supply order/conrct. Likewise,
applying the principles of-nascirur a soriis. it reveals that Clue 16
covers three (8) matters: (l.) allquestions and disputes, relating to
the meaning of the specification designs, drawings and instructions
herein before mentioned and as to quality of workmanship of the
items ordered; (2.)yy
question, claim,
right gr thing what.soever, In uy way arising out of or relating to the
supply order/contract
design, drawing, specification, instruction or these conditions; snd
(3.) otherwise concerning the materials or the execution or failure
xecute the same iring stipulated/extended period or after the
completion/abandonment thereof. Thus, the nan-delivery of the oil
well cement is definitely not in the nature of a dispute arising from
the failure to execute the suppiy order/contract design, drawing,
Instructions, specifications or qulty of the mnteriuls. 'That Clause 16
other
e
IT
4.ll
loud h» ll--uo
'I
t'et
hold ;rrtua only to mntters involving the technical aspects of the
runtract i But a logical inference cnnsideriug that. the underlying
trpose of a referral to nrbitration is for such technical matters to be
deliberated upon by person possessed with the required skill wnd
expertise which ma be otherwise absent in the regular courts.
Also, if non-delivery of the ail well cement will he included
within the arbitration clause, ir will render nugatory Clause 15 which
says, All questions. disputes, difforancos, arising under out of or in
connection with this supply order, shall be subject to the excisive
jurisdiction of the court, within the local limits of whose jurisdiction
and the place from which this supply order is situated." Thus, violating the canon of construction that in interpreting a statute (or a
contract as in this case). care should be taken that every part thereof
be given effect, on the theory that it was enacted ns nn integrated
meaaue and not as a hodge-podge of conflicting provisions The
rule is that a construction that. would render a provision inoperative
should be avoided; instead, apparently inconsistent provisionsbould
he reconciled whenever possible as parts of s coordinated and harmonious wholo.
2.
Yes, non-compliance of the Class G cement with the
0)NGU's specifications is within the ambit of the arbitration cinuse
following the ruling in the first issue.
3.
Yes, foreign judgment can be enfored in this jurisdiction.
T'he recognition tu be accorded a foreign judgment is not necessarily
affected by the fact that the procedure in the courts of the country
in which such judgment was rendered differs from that. of the courts
of the country in which the judgment is relied on. This Court has
held that. mutters of' remedy und pracelure are governed hy the lex
jpri or the internal law of' the forum. 'T'hue, if under the procedural
Kies 6rrh& fiviCount'? Tera Dun, India, a valid judgment may
be rendered
by
adopting the arbitrator findinge, then the same
must be acgmnrded respect. In the same vein, if the procedure in the
foreign court mandates that an Order of the Court becomes final and
exerutory upon failure to py the necessnry docket fees, then the
courts in this jurisdiction cannot invalidate the oruder of the foreign
court. simply because our rules provide otherwiae.
NOTE:
'The constitutional mandate that no derision shall be rendered
by any court without expressing therein clearly and distinctly tle
:
THE ALTERNATIVE DISPLTE RESOLUTION
7AT III
ANDY 'TIH ARBITRATION LAW
facts and the law on which it is based does nat preclude the validity
of "memorandum decisions' which adopt by reference the findings
of fact. nnd conclusions of iaw contained in the decisions of inferior
delays in the conpition of the phases permeated the MRiV Project
due to the submission of deficient documents as well as intervening
i-sue regarding BCA'PPCs supposed financial incapacity tu fully
tribunals.
15. DFA AND BSP V HON. FRANCO T. FALCON, PRESIDING
JUDGE OF RTC BR. 71 OF PASIG CITY
G.R. NO. 176657, September 1, 2010
FACTS:
In line with the DFA's mandate o improve the passport and
visa issuance system, as well as the storage and retre
i val of its
related application recorda, and pursuant to our government's
International Civil Aviation Organization's (ICA0) commitments,
rhe DFA secured the approval of the President of the Philippines
as Chairman of the Board of NEDA for the implementtton of the
Machine Readable Passport and Visa Project. (MRIV Project) under
the Build-Operate-and-Transfer (BOT) scheme, provided far by R.A.
No. 6957 as amended by IR.A. No. 7718 (OT Law) and its IRR. Thus,
PAC published an invitation to pre-qualify and bid far the supply
of the needed machine readable passports rd viass, and conducted
p,ihli<: bitltting.fot' the1VIRPJ'V Prujert. 8CJ\ lntemauowtl Corx,oration
was among those who pre-qualified and submitted its technical and
financial proposals. PBAC found CA as the sale complying bidder
ad permitted DFA to engage in direct negotiations with HCA PBA(
also recommended to DF Secrety to award the MP/Project to
BCA on BOT arrangement, In compliance with th Noice of Award
and Section 11.3, Rule 11 of the BOT Law, BC± incorporated with
Philippine Passport Corporation (PPC) to undertake and implement
theMRP/V Project. Thereafter, BO'T' Agreement was signcd by DFA
(Acting Secretary Lauro Baj Jr.} and PPC (President Bonifacio
Sumbilla). Subsequently, DFA Sac Teofisto Guingon and Sumbilla
as BCA President signed an Amended OT Agreement with the
conformity of PP€ in order to reflect the change in the designation
of the parties and ta harmonize Secton 11. with Section II8 of
the IRR of the BOT Law The two agreements contain substantially
the same provisions except for even ndditiann! paragraphs in
the whereas clauses and twa new prviion
Section !+,0'
on Performance nd Warrant, vrits al Sectiu
0).1! on
Miscellaneous Provisins 'Therits DEA
d It'A impute hrnrh
uf the· nenll Ii']'\eye wnl mu! ·ne lolls I]'\
tt. 1ht
251
Cnsea Doridsel by the apreue Court
J:
!
'
implement the project. BCA contends that the DFA failed to perform
irg reciprocal oblgation to issue to BCA a Certificate of Acceptance of
Phase l within 14 working days of operation purportedlrequired by
Section 14.0 of the Amended BOT Agreement. BCA bewailed that
it took almost three years for the DFA to issue the said Certificate
allegedly because every appointee tu the position of DA Secretary
wanted to review the award of the projcct to BCA. HCA further alleged
that it was the DFA's refusal to approve the location of tbe DFA
('antral Facility which prevented BRCA from proceeding with Phase 2
f the MHP'V Project. After getting an opinion from DO.J regarding
the matter, DA required BCA ta submit documents which will show
ts financil capacity to implement the project, BC terminated the
Assignment Agreement with PPE and notified DF'A that it would
directly implement the MRP/' Project. Thereafter DFA terminated
the agreement with BCA nd PP€ via Notice of Termination. BOA
et a letter to D)FA asking the latter tu reconsider its previous
twrnnation When DEA fi
a led to respond, BCA sent a Notice af
Default. BCA's request for mutual discussion under section 19.01 of
the Amended BOT Agreement was purportedly ignored by the DFA
and left the dispute unresolved through amicable means within 90
days. As a result, BHCA fled request fur arbitration with Philippine
Dispute Resolution Center, Inc. (PDCi) pursuant to Section 19.02
al' the Ameuded BOT Agreement. PDRC'I requeeted DFA to submit
its nnswer and requested both parties to nominate thoir chosen
arbitrator, The DFA declined the request for arbitration stating
that there was no mention of specific body in the arbitration clause
al arbitration +hold be done before the ad hc arbitration body.
h aexordunce with the opinion of the DOI again sought by DF
he latter and the BP entered into a MO for the latter to provide
Ihw former passports compliant with international standards. BS
lieited bids for the supply delivery. installation and commissioning
of a system for thw production of Electronic Passport Booklets or
+ lusspurts. On the hwy that th e-Passpurt will veplee MRP'V
'roject Jenee, mh
mos It'A's remedies, BCA flo a petition
lir interim rvhef'
for. the W'Te Ir, TI Pasi City presided by
lu«de F'less punt to; t
'/ f \H Aet ol 2604, DPA filed
A,
mn qpwlu ln th pleat
l 'I'IR4 mntd npplieaiun r writ
if' pr·linmr
» ttf tut
lhul Ih tw pus+l:t nre wl th
mm· , lln, It'\ [. as • nt
if
tun \H
am
wrap al
+i
+4
I
AITKIN'Tie DANIT Wt ++1
NW THE AI{II'{'I1
1,
the parties oral arguments, the lower court isuwl th 'It) against
DFA and BS. 'The lower court also granted tho application for writ of
preliminary injunction. The DA and BSP invoked SC's jurisdiction
via Petition for Certiorari and Prohibition under Rule 65
ISSUES:
1.
tr
''T
»w
lwtsl
ls iaprvtw fut
Z
Yes, an itesim measuro s allowad before the constitution
f' an arbitral tribunal. 'This is pursuant to Secion 2 or ADR Act of
2004, The relief may be granted: (a.) tu prvnt irreparable loss or
o
of any obligation;
Injury; (b.) to provide security fur the perfrmance
te.) to produce or preserve any evidence; and (c.) to compel any other
appropriate act or omission.
Whether or not the e-Passport Project is within the
ambit R.A. Na. 8975 prohibiting lower courts to issue
TO.
2.
Whether or not an interim measure is allowed before
the constitution of an arbitral tribunal.
•
Whether or not the granting of the lower of the interim relief in the case at bar is proper.
SUPREME COURTS RULING:
1.
'The ePassport Project is nut within the ambit of R.A No,
975 prohibiting lower courts to issue TO. In ruling in this issue, the
SC harmonized the provisions of R.A No. 8975, BOT Law, an& R.A
No. 911 (Government Procurement Reform Act). Linder the BO'T
Law, wherein the project are to be privately funded. the entire inforration technology project, including the civil work component and
he technological aspect thereof, is considered an infrastructure or
development projrt and treated similarly as traditional "infrastruc.
turc" projects. Under A. No. 9184, which contemplates projects
ta be funded by publie funds, the term "infrastructure project" was
limited to only the "civil works component" of information technology
projects. The non-civil works component of information technology
projects would be treated as an acquisition of goods or consulting
services a the case may be. DF and BSP presented no proof that
the e-Passport Project. was a BOT Project On the contrary, evidence
adduced by both sides tended to show tbat the e-Passport Project
wns a procurement contract under R.A. No. 9184. Thus, only the civil
works componont uf the e-Passport Project would be considered
infrastructure project that may not be the subject of the lower-court
issued writ of injunction under R.A. No. 8975. Likewise, it cannot also
be considered servie contract since to be considered as such, DF'A
and BSI zuast show thnt the e-I'assport. Proipet is nn infrastructure
project or necessarily related to an infrastructure project which the
DFA and BSP filed to do
3,
No, the granting of the lower of the interim relief n the
casc nt bar i not prper. BCA will suffer no grave and irreparable
injury so as to justify the injunctive relief. The BOT Law as amended
by RA. No. 7718 as well as the amended BOT agreement lay down the
mensure of compensation to be paid under the appropriate circumstances. 'Thus, the requisite that to he entitled to injunctive relief,
the party seeking such relief must be able to show grave, irreparable
injury that is not capable of compensation, is wanting in this cnse.
Likewise, the only circumstance under which a court may grant
injunctive relicf is teh existence of a matter of extrme urgency
involving a constitutional issue, @uch that anless a TRO or injunctive
writ is issued. grave injustice nnd irreparable injury
result
lowever. BC failed to demonstrate that there is a vunstitutiorl
is3u involved in this case, much less a constitutional issue of extreme
urgency. Thus, the trial court's issuance of a writ of preliminary
iujunction despite lack of sufficient legal justification for tbe same. is
tantamount to grave abuse of discretion.
will
NOTE:
During the pendeney of this case, PDRCI Case No. 30-2006¢
BGF was dismissed by PDRCI for lack of jurisdiction in view of the
lack of agreement between parties to arbitrate before PDRC}, 'Thus,
the dismissal of the principal action results ta the denial of the writ.
16. KOREA TECHNOLOGIES CO., LTD. (KOGIES) V
HON. ALBERTO A. LERMA, PRESIDING JUDGE OF BR. 256,
RTC MUNTINLUPA
G.R. No. 143581, January 7, 2008
FACTS:
KOGLES and Paci/ic General Seel Manufcturing
a
Corporation
(PGSMC) executod a Contract wherby thn former would set up an
LPG Cylinder Manufacturing Plant in Carmona, Cavite. In Korea.
the parties executed an Amendment for Contract No. KLP-970301
amending the terms of payment. 'The contract and its amendment
i
'THE AU'EN'TIN, III'TE Rt
ANI HI AMT'TN 1M
Ai
Te1
etpulated that KOGIES will ship tho maehwry ud facilities
necessary fre manufacturing LPG cylinders for which !GMC would
pay USD 1,224,000. KOGLES would install and initiate the operation
of the plant for which PMC bound itself to pay USD 306,000 upon
the plant producton of the 11 kg. LPG cylinder smples. Thus, the
total contract price mounted to UD 1,530),000. Thereafter, PGSMC
entered into a Contract of Lease with Worth Properties, Ine tra
use of the later's property to house the LPG manufacturing plant.
Subsequently. the machineries, equipment, and facilities for the
mounufucture of LPG cylinders were shipped, delivered, and installed
in the Carmona plant PGSMC paid KOGIES USD 1,224,000.
However, gleaned from the Certifieute issued by tho parties, after
the installation of the plant, the initial operation could not he
conducted as PGSMC encountered financial difficulties affecting the
supply of materials, thus, forcing the parties to agree that K~GIES
would be deemed to have completely complied with the terms and
canditors of the Contract. For the remaining balance of $3306,000,
PGM€ issued tw post-dated chocka. When KOGIES deposited the
checks, the same was dishonored for reason payment sopped. Thus,
KOGA'ts sent a demand letter to PGSMC with a thrent of criminal
cTon of BP 2! in case of non-payment. PGSMC replied that the
cherks were fully funded but payment stopped for reasons previously
known ta KOGIES. PGSMC informed KOGIES that PGSMC was
canceling their Contract on the ground that KOGIES had altered the
quantity ant lowered the quality of the machineries and equipment
it delivered to PGSMC, and that PGSMC would dismantle and
transfer the machineries, equipment, and facilities installed in the
Carmona plant. Five days later, PGSMC led before the Offlee of the
Public Prosecutor an Affidavit-Complaint for staf adocketed as IS.
No, 96-033813 against Mr. Dae Hyun Kang, President of KOGTES.
KOGIES informed PGSMC that the latter cannot do the same and
insisted that their disputes should be settled by arbti ration pursuant
to Article 15 of the Contract. PGSMC reiterated its stnd. Hence.
KO6TES insit.utcd an Application for Arbitration before he Korean
Commercial Arbitration Board (KCAB) in Seoul, Korea. 'Thereafter,
KOGIES filed a complaint for specific performance against PGSMC
before RTt Muntirlupa BR 256. 'The lower court issued a TO.
PGSMC opposed the I'RO on the ground that the arbitration clause
was null nnd void for being against public policy as it ousts the local
courts of jurisdiction over the instant controversy The lower court
ruled in favor of PGSMC which was affirmed by CA. Thus, the case
reached the SC via petition for review an certiorari under Rule 45
' rs Ihevlel hv l
L.
il
pr· rt
'rt
Whether or not the arbitration clause in the cuse at
bar is against public policy.
Whether or not the stipulation in the arbitration
clause that foreign urbitral award shall be final and
binding ousts the courts ofjurisdiction.
SUPREME COURTS RULING:
Ihe rbtration clause in the case at bar is mot ngainst
I.
public pohc. Established in this jurisdiction is the rule that the law
af the place where the contract is made governs. Lex lomi contrae
ts. 'The cortract in this case was perfected here in the Philippines.
Therefore, our laws ought to govern, Nonetheless, Article 2044 of the
Civil Code sanctions tho validity of mutually agreed arbitra clause
or the finality and binding effect of an arbitrnl award. Article 2041
provides, "Any stipulation thut the arbitrators' award or deci6ion shall be final, is valid, without prejudice to Articles 2038,
2039 and 2010." Articles 2088, 20398, and 2040 abovecitd refer to instances where a compromise or an arbitrnl award, as applied to Art,
2044 pursuant to Art. 20143, may bo voided, rescinded. or annulled,
but these would not denigrate the finality at the arbitralaward. The
arbitration clause was mutually and voluntarily agreed upon hy the
parties, li has not been shown to be contrary ta any Jaw, or aguunst
morals, good customs, publie «rder, or public policy. 'There hna been
no showing that the parties have not dealt with each other on euual
We find no reason wh y the arbitration clause should not be
foting.
o
respected and complied with b yboth parties. In Gonzales v, Climax
Mining Ltd., we held tlat subnssicn to arbitration is a vontract anr
that a clause in a contract providing that all matters in dispute hetween the parties shall be referred to arbitration is a contract. gain
in DelMonte Corporation-USA v. Court of Appeals, we likewise ruled
that "[tJhe provision to vubwit to arbitration any dispute ring
therefror and the relationship of the parties is part of that contract
and is itself a contract."'
T'be arbitration clause which stipulates tht the arbitration
must be done in Seoul, Korea in accordree with he Commercial
Arbitration Rules of hn KCAB, and that the arbitrnl award is final
and binding, is not contrary to public pohey. 'This Court has sanctioned
the validity of arbitration clauses in a cutena af cases. In the 1957
case of' Eastbard Navigation Lad. v. Jan smael and Co.. Int..
2g
Ii LT#H'
ANI
Di'+
+MAT«
ME. AMITUT'IAN I.AW
this Court had ocuaion to rule that an arbitration clause to resolvu
differences and brenches of mutually ngreel contractunl terms is
valid la BF Corporation v. Cort of Appeals, we held that [i] thi
jurisdicton, arbitration has beer held valid and constitutional. Even
before the pproval on June 19, 1953 of R.A. No. 876, this Court bhns
countenanced the settlement of disputes through arbitration. R.A.
No. 57@ wnR adopted to supplement the New Civil Code's provisions
on nrbirnfion
•
No, the stipulation in the arbitration clause that foreign
arbitral award shall be final and binding does not oust the courts
of jurisdiction. It is because RA. No. 92&5 which incorporated the
UNCITRAL Model Law and should be given retroactive effect being
remedial in nature provides on how to enforce a foreign arbitral
award in thin jurisdiction. These are as follows: (a.) The RTC must
refre to nrbitration in proper cses; (b.) Foreign arbitrul awards must
he confirmed by tho TC When cofirmed hy the RTC, it is deemed
not as a judgment of the foreign court but as a foreign srbitral award
and enforced as final and executory decisions of our courts af law; (c.)
PT'has jurisdiction to review foreign arbitral awards; (d.) Grounds
for judicial roview different in domestic (Section 25 of' R.A. No. 876)
ad foreign arbitral awards «Art 34j2] of the UNCI'TRAI, Model
Law); (e.) TC decision of assailed foreign arbitral award appealable.
OTE:
Lnilnral rescission, improper and illeal. Having rulad that
the arbitration clause of the subject contract is valid and binding on
the parties, and not contrary to public palicy; consequently, being
bound to the contract of arbitration, a party may not unilaterally
rescind or terminate the contract for whatever cause without first
resorting to arbitration.
R'I'C has interim juriedietion to protect the rights of' the parties
under Section 28 of R.A. No. 9285 and Article17(2) of the UNCITRAL
Model Law on 1CA.
17. MCC INDUSTRIAL SALES CORPORATION V.
SSANGYONG CORPORATION
G.R. No. 170633, October 17, 2007
FACTS:
One of the suppliers of MCC in its business of importing and
wholesaling stainles steel products is the Ssangyong. They con-
t'tea
PH'lT IHI
weeded I tle prime +rt
hies- through telephone calls and facsimile or telecopy
transmissions, Sisangyong would send the pro frma invoices
containing the details of the steel product order to MC; if tho latter
conforms thereto, its representative affixos his signature on the
taxed copy and sends it back to Ssangyong, again by fax. >sangyo1g
Manila Office sant, hy fax, a letter addressed to Gregory Chan,
MCC Manager and also President o f Sanyo Seiki Stainless Steel
Corporation to confirm MCC's and Sanyo Seiki's order cf 220 MT of
hot rolled stainless steel under a preferential rate of $1,860 per MT.
Chan on behalf' of the corporations assented and atfxed his signnture
on the confarme portion af the letter. Tie cones where MCC met
financial difficulty. Hence, its previous order of 2U M'T of steel was
split into two, one for 110MT covered by Pro-Forma Ivwwice No. ST2
POSTS0401 I and another for 110 MT cavered by ST POSTS0401-2.
'The splitting was because MCC could open only a partial letter of
credit. Despite sevoral letters of demand and granting of extensions,
MCC was unable to open its second and last letter of credit. Hence,
Ssangyong through counsel wrote a lettor to MCC cancelling the
sales contract under ST2-POSTS0401-1 and ST2-POE'TS0401-2 and
lemanding payment of $97.317.37 representing losses, warehousing
expenses, interests and charges. Thereafter, Ssangyong filed a civil
action for damages due to breach of contract against MCC, Sanyo
Seiki and Gregory Chan before RTC Mkati. Ssngvong alleged that
defendants breached their contract when they refused to open the
LC in the amount af US$170,000.00 fr the reraining 100MT of
steel under Pro Forma Invoice Nos. ST2 POSTS0401 1 and ST2POS'TS04012. After Ssanyong rested its case, defendants filed
a Demurrer to Evidence alleging that the original copies af the
pro fnrma invoices on which the civil action was based wero not
presented. The lower court denied the same stating the documentary
evidence was already admitted and its admissibility finds support
in R.A No. 79 (Electronic Commerce Aet of 200(). Alter trial. the
lower court rendered decision if favor of Ssangyong, Upon appeal,
the CA affirmed rhe trial court's ruling but absolved Gregory Ghan
from liability. Hence. the case reached SC via petition for review on
certiorar.
duet+d
ISSUE:
Whether or not the photocopies of facsimile printouts
of Pro Forma Invoice Nos. ST-POSTS04012
and ST2POSTS0401-2 ore within the coverage af R.A. No. 8792.
2
'I
AI'TERN'TI
NM 'TH,
'n
EI
HIW'I;
4HJMI
w
+flt
SUPREME COURT'S ULLNG:
The photocopies of facsimile printouts of Pro Forma Invoiee
Nos. SP-POTS4(1-1 and T2-POST401-2 are not. within
the coverage of R.A. No. 8792. Hence, it cnnnar be considered a
electronic evidence. It is not the functional equivalent of an original
under the Best Fvidence Rule and is not admissible as electronic
evidence. A perusal of the doliburutions in the «rafting of .A No.
8792 patiuiarl the ndoptal f Sen, Miriam Dufensor-Santingo
which cre adopted in the law will lead to a conclusion that when
Congress formulated the term "electronic data message it intended
the sume meaning ns the term electronic record" in the Canada
Law, Thi construction of the term "electronic data message" which
excludes telexes or fxes, except computor-generated fnxes, is in
harmony with the Electronic Commerce law's focus on paperless
commumientons and the "functional equivalent ppronch' that it
espouses. In fct,
a
the deliberations of tho Legislature re replete
with discussions on paperless and digital transactions.
I an ordinary facsimile transmistun, there exits an original
paper-based information or data that is scanned, eent through a
phone line, and re-printed at the receiving end Be it noted tht in
enacting the Electronic Commerce Act ot 2000, Congress intended
tirtuul or paperless writings to be the functional equivalent and to
hve the ssme legal funetion as paper-based documents, Further, in
a virtual or paperless environment, technically, there is no original
copy to speak of, as all direct printouts of the virtual reality are the
same, in all respects, and are considered as originals. Ineluctably, the
law's definition of electronic data message," which, as aforesaid, is
interchangeable with "electronic document," could not bave included
facsimile transmissions, which have an original paper-based copy
as sent and a paper-bused facsimile copy as reveied. 'These two
copies are distinct from ouch ather, and have different legal effects.
While Congress anticipated future developments in communications
and computer technology when it drafted the law, it excluded the
early forms of technology, like wlegrapl, telex and telecopy (ox&opt
computer-generated Laxes, which is a newer development as
compared to the ordinzry fax machine ta fax machine transmission'),
when it detined the term "elect.rome data message
Cleal then, the IR «went beyond the parameters of the law
when it adopted verbatim tle UNIT'RAL Model Law'a dfinion of
data message," without considering the intention of Congress when
the latter deleted the phrase"but nut limited tu. electronic data inter-
'
virr pt
I'un
le
tat hrw ti·
pres t'rt
(BJ, etetronie natl, telegram, telexor telecopy." 'The inclu
-ion of this pbrse mn the IRR offends a hnsie tenet in tho exercise
f the rule-making power of administrative agnwies. After all, the
power of administrative officials to promulgate rules in the implemnentaon of a statute is necesal limited to what is found in the
legislative enactment itself. The implementing rules and regulations
of a law cannot extend the law or expand its coverage, as the power
to nmend or repeal a statute ia vested in the Legislature. Thus, if a
discrepancy occurs between the basic law and an implementing rule
or regulation, it is the former that prevails, because the law cannot
be broadened by a mere administrative issuancean administrative
agency certainly connar amend an act of Congress, Had the Legislature ranally wanted ordinary fax transmissions to be covered by the
mantle of the Electronic Commerce Act of 2000, it could have easily
lifted without hit of tntter the entire wordings of the UNCITRAL
change
Model Law.
NOTE:
However, mn this cnse, even though the pro forma invoices in
question are inadmissible, the S(' ruled that Ssanyong was able to
provo that there was a breach of contract on tbe part of MCC.
In an action for darages due to beach of a contract, it is
essential that the claimant proves: (l) the existence of a perfected
contract, (2) the breach thereof by the other contracting party, and
(3) tho damages which he/she sustained due to such breach. Actori
incumbt onus probandi. 'The burden cf proof rests on the party who
advances a proposition affirmatively. I other words, a plaintiff in a
civil action must establish his case by a preponderance of evidence,
that is, evidence that has greater weight, or is more convincing than
that which is ot'fared in opposition ta it.
In general, contracts are perfected by mere consent, which is
manifested by the meeting of the offor and the acceptance upon the
thing and the cause which are to constitute the contract. 'The offer
must be certain and the acceptance absolute. lhey are, moreover, obligatory in whatever form they may have been entered into, provided
all the essential requisites for their validity are present. Sale, being
a consensual contract, follows the general rule that it is perfected at
the moment there is a meeting of the minds upon the thing which is
the object. of tho contract and upon the price, From that moment, the
parties may reciprocally demand performance, subject to the provisions of the law governing the form of contract.
'I'IE MIRNA'T'IN DIST\T u.»
NI 'TH MFHTK'TU 1,Aw
1u
The essential elements of a contract of al art: tl) voment st
meeting of the minds, that is, to ransfer ownership in exchange fut
the price, (22) object certain which is the subject matter of the contrawl
and (3) cause of the obligation which is established.
As to
Pro Porma Invoice No. ST2-PO8TS080-2 (Exhibits 1-4
and 2-C), which was certified by PCIBank ns a true copy of its oriinal, it was, in fact, petitioner MCC which introduced this document
in evidence Petitioner MCC paid for the order stated in this invoice.
'
'The logical chain of events, as gleaned from the evidence of both
parties, started with the petitioner and the respondent agreeing on
the sale and purchase af pMT of stainless steel at U8$1,860.00 per
MT. This initial contract was perfected. Later, as petitioner asked
for several extensions to pay, adjustments in the «delivery dates, and
discounts in the price as originally agreed, the parties slightly varied
the terms af their contract, without necessarily nuvating it, to the
effect that the original order was reduced to 2200MT split into two
deliveries, and the price discounted to U8$1,700 per MT Petitioner
however, paid only half of its obligation and tiled to open an LWC for
the other L~0MT. Notably, the conduct of both parties sufficiently
established the existence of g contract of sale, even if the writings
of the parties, hecnuse of their contested admissibility, were not as
explicit in establishing a contract. Appropriate conduct by the parties
may be sufficient to establish nn ngreement, and while there may be
instances where the exchunge of correspondence does not disclose the
exact point at which tho deal was closed. the actions of the parties
may indicate that a binding obligation has been undertaken.
With our finding tbat there is a valid contract, it is crystal-clear
that when petitioner did not open the LWC for the first half of the
transaction (100MT), despite numerous demands from respondent
Ssangyong, petitioner breached its contractual obligation. It is a
well-entrenched rule that the failure of a buyer to furnish an agreed
letter af credit is a hreach of the contract between buyer and seller.
Indeed, where th buyer fails to open a letter of credit as stipulated,
the seller ar exporter is entitled to claim damages for such breach.
Damages for failure to open a commercial credit may, in appropriate
t
trl
rems, inwlule the loss of profit which the seller would reasonably
have mnde haul the transaction been carried out
The rules on offering of secondary evidence were also discussed
n this case. The award of actual damages was changed to nominal
damages
18. MAGELLAN CAPITAL MANAGEMENT CORPORATION
(MCMC) AND MAGELLAN CAPITAL HOLDINGS
CORPORATION (MCHC) V. ROLANDO M. ZOSA
AND HON. JOSE P. SOBERANO, JR.
Its admissibility, therefore. is not open to quostion.
These invoices (ST2-POSTS0401, ST2-POSTS080-1 and ST2POSTS080-2), along with the other unchallenged documentary evi
dence of' respondent Ssangyong, preponderate in favor of the claim
that a cuntract of sale was perfected hy the pnriies
I'1 IHI
·n Aul-l hr, b· 'pr
G.R. No. 129916, March 26, 2001
FACTS:
Under a management agreement, MCHC appointed MCMC as
manager for the operation af its business and affairs. In accordance
with the management agreement, MGHC mnd MCMC entered an
employment agreement with Rolando Zosa designating the latter
as President and CEO of MCHC. The employment agreement
contains au arbitration clause which states inter alia that tho panel
of three nrbitratars shall be designated by the Manager, Employee,
and Corporation. Thereafter, the majority of the MCHC's Board
of Directors decided not to re-elect Zoea as President and CEO of
MCIC on account of loss of trust and confidence arising from alleged
violation of the resolution issued by MCHC's board of directors and
non-completion clause of the employment agreement but elected
him to a new position as MCHC's Vice Chairmar/Ghairman for New
Ventures Development. Subsequently, Zosn vesigmed from his new
post stating that said position had less scope nnd responsibility and
demanded that. he he given benefits as provided for Section 8(c)(i)
and (iii) of the agreement. MCHC did not accept Zosa's resignation
and informed him that the employment agreement is terminated due
to his breach of Section l? and that he has no further rights under
it except the amounts starod in Section &(a)(i) and (i). As a result
Zoea invoked the arbitration clause and designated his brother Atty
Francis Zea ns his representative in the arbti ration panel. However,
instead of submitting the dispute tn arbitration, Zasn fled an action
for damages against MC[C and MCMC before RTC Cebu to enfrce
o
his benefits under the employment agreement. MCHC and MCMC
filed motion to dismiss considering that Zasa's claims should be
resolved through arbitration pursuant to the arbitration clause
T'be lower court denied the same considering that the validity and
THE AI'FAN
Irr
tr't
tit
I''!
NI 'TIE ABIT1LT0N 1Aw
legality of the arbitration clause can be determinel ate trial on the
merits. UJpon denial o? MCHC's and MCMCs suhscent motion,
they went to CA. The CA ruled that the trial court is directed to
resolve the issue of validity and effectivity of the arbitration clause,
The subsequent MR was denied. In compliance with the CA's ruling,
tbe TC thereafter rendered a decision declaring partially void and
no effect the arbitration clause insofar as the composition of the panel
of arbitrator is concerned. Hence, cnsc roached SC via petition for
review on certiorari under Rule 46.
ISSUE:
're
Victoria Abri. w had the occasion to stress that "where contract
f' employmunt, being a contract of acdhsion, is ambiguous, any
ambiguity therein should be construed strictly against the parry who
prepared it." And, finally, respondent Zosa nover submitted himself
to arbitrntion proceedings (as there was none yet) before bewailing
the composition at the panel of arbitratur. He in fact, lost no time
in assailing the "arbitration clause" upon realizing the inequities
that may mar the arbitration proceedings if tho existing line-up of
arbitrators remained unchecked
Furthermore, the decision of the Court of Appeals in CA.G.R.
Whether or not the arbitration elause in question is
void insofar as the composition of the panel of arbitrators
is concerned.
SUPREME COURTS RULING:
The arbitration clause in qucstion is void insofar as the composition of the panel of arbitrators. As curreetly pointed out by the
trial court, MCMC and MCHC represent the same interest. Hence,
the panel of arbitrators they will appoint will surely act in their favor
giving little opportunity for Zosa to obtain justice from the award
that the panel of arbitrators will render. As provided for in Article
2045 of the Cii] Code, Any_clause giving one of the parties power
to choose more arbitrators than the other is
and of no effect."
We nccd only to erplasize in closing that arbitration prucodings
are designed to level the playing field among the parties in pursuit
of a mutually acceptable solution ta their conflicting claims. Any
arrangement or scheme that would give undue advantage to a party
in the negotiating table is anathema to the very purpose of arbitration
and should, therefore, be resisted.
SP No, 43059 affirming the trial cour's assumption of jurisdiction
over the case has becorue the law of the case" which now binds the
petitioners. The "law of tho case doctrine has heen defined as "a term
applied to an established rule that when an appellate court passes
on u question and remands tae cause to the lower court for further
proceedings, the question there settled becomes the law of the case
upon suhsequent ppeal." To note, the CA's derision in CA-G.R. S
No. 43059 has already attained finality as evidenced by a Resolution
of this Court ordering entry of judgment of said cnse
19, TRANSFIELD PHILIPPINES, INC. (TPI) V. LUZON HYDRO
CORPORATION (LHC), AUSTRALIA
AND NEW ZEALAND BANKING GROUP LIMITED
AND SECURITY BANK CORPORATION
void
NOTE:
In this connection, petitioners' attempt
to put respondent in
estoppel in assailing the arbitration clause must bn struck down. For
one, this issue of estoppol, as likowise noted by the Court of Appeals,
found its way for the fnst time only on appeal. Well-settled is the rule
that issnna not raised below cannot be resalved on review in higher
courts. Seendly,
a
employment agreements such as the one at bar
usually contracts of adhcsion. Any ambiguity in its provisions
is generally resolved against the party who drafted the document.
Thus, in the relatively recent case of Phil. Federation of Credit
Cooperates, Inc. (PCCI) and Fr, Benedicto Jayomu • NLRC and
are
IHI
ltd hi tho nprvm· Cont
G.R. No. 146717, May 19, 2006
FACTS:
LHC claimed that TPI is guilty af forum shopping wban it fled
the following suits: (1.) Civil Case No. 04-332 filed on 19 March 2004,
pcnding before the Regional 'Trial Court (RTC) of Makati, Branch 5G
fur confirmation, recognition and enforcement of the Third Partial
Awar in case 11264'TE.MW, ICC International Court of Arbitration,
entitled Transfield Philippines, Inc. v. Luzon Hydro Corporation; (2.)
ICE Case No. 112G4/TE'MW, Transfieid Philippines. Inc. v. Lusun
Hydro Corporation filed before the International Court of Arbitration
International Chamber of Commerce ICC} a request for arbitration
dated 3 November 200 pursuant to the Turnkey Contract between
LHC and TPI; and (3.) G.R. No. 1467\7, Tansfcid Philippines, Inc.
• Luzon Hydro Corporation, Australia and Neu Zealand Banking
Group Limited ard Security Bank Corp. fled on 5 February 2001,
whicb was an appeal by certiorari with prayer for TRO/preliminary
'tH#' AI TE(NA'TI, [H>-V'U!'TI IR!HM 1+1' N
WI» 'T# MIL TIN 1.w
prohibitory and mandatory iuuntion, of the Court of Appeal
Decision dated 31 January 200I in CA-GR SP No. 61901; (3u.)
CA-GR. S! No. 61901 was a petition for review of the Decision i
Cisill Case No. (0 112, wherein TPI claimed thnt LHC'call on the
securities was premature considering tbnt the issue of default ha»
not yet been rsolvcd with finality; the petition was however denied
by the Court af Appeals AND (3b.) Civil Case No. 00-1312 was
complaint for injunction with prsyer for temporary restraining order
ad'or writ of preliminary injunction dated 5 November 2000, which
sought to restrain LHC' frum calling on the securities and respondent
banks from transferring or paying of the securities, the complaint
was denied by the RTC.
ISSUE:
Whether or not there is a forum shopping in the case
at bar.
SUPREME COURTS RULING:
T'here is no forum shopping in the case at bar. The essence of
forum-shopping is the fling of multiple suits involving the same parties for the same cause of action, either simultaneously or successively, for the purpose of obtaining a favorable judgment. Forumshopping has likewise been defined as the act of n party against
whom an adverse judgment has been rendered in one forum, seeking
and possibly getting a favorable opinion in another forum, other than
by appeal or the special civil action of certiorari, or tho institution of
two nr more actions ar proe@dings grounded on the same cause on
the supposition that one or the other court would make e favorable
disposition.
Thus, for forum-shopping to exist, there must be: (a) identity
of parties, or at least such parties ns represent the same interests
in both actions; (b) entity of rights asserted and relief prnyad for
the relief heing loud on the amne facts; nnd (e) the identity of th e
two preceding particulars is such that any judgment rendered in the
other action will, regardless of which party is successful, amount to
res judicata the action under consideration. None of these elements
are preseut in the case at bar.
As fundamental point, the pendency of arbitral proceedings
does uot foreclose rsurt to the courts for provisional reliefs. The
Rules cf the ICC, which governs the parties' arbitral dispute. allows
the application of a party to a judicial authority for interim or eon
u
IT II
I rd toy tleiueu &»ur
ervatary meuures. Likewise. Section 14 of R.A. No, 876 (The Arbitraton Law) recognizes the rights of any party to petition the court
tu take measures to safegunrd nnd'or conserve any matter which is
the subject of the dispute iu arbitration. I addition, R.A No. 9285,
otherwise known as tbe Alternative Dispute Resolution Act of 2004,"
allows the filing of provisional or intorin moasumas with the regular
courts whenever the arbitral tribunal has no power to act or to act
effectively.
R.A. No. 9825 provides that international commercial arbitrations shall be governed by the Model Law an Internationnl Commercisl Arbitration (Made! Lnw) adopted by the Urited Nations
Commission on International 'Trade Law (UN(TTRAL. Mareoer,
the New York Convontion. to which the Philippines is a signatory,
governs the recognition and enforcement. of foreign arbitral awards.
The applicability of the New York Convention in the Philippines was
confirmod in Section 42 of R.A. No. 9285, Said law also provides that
the npplicntion for the recognition and enforcement of such awards
+hail be filed with the proper RTC.
20. HUTAMA-RSEA JOINT OPERATIONS, INC. V.
CITRA METRO MANILA TOLLWAYS CORPORATION
G.R. No. 180640, April 24, 2009
FACTS:
Hut.ama-RSA Joint Operations, Inc. (Hutama) and Cita Metro
Manila Tollways Corporation (Citra) entered into an Engineering
Procurement Construction Contract (PCC) wherehy Hutu ma would
undertake the construetion of Stage I of the South Metro Manila
Skyway Project (Skyway Project) which stretched from the junction
of' Buendia Avenue, Makati City up to Bicutan Interchange, Tguig
City. A8consideration, Citra obliged itself under EPCC to pay Iuramn
a total amount of $369.510,304. During the constructio, Hutama
wrote Citra or several acrcnsions requesting payment of the former's
interim billings pursuant to the provisions of FPCC. Citra partially
paid the interim billings, thus, prompting Hutama to demand that
Citra pathe outstanding halance thereon, but Citra failed to do so.
Thereafter, the Skyway Project was openod for public use and toll
fees were collected accordingly. Thus, Htnma reiterated its demand
that Ciru pay the outstanding balance an the interim billing as well
s the "early completion bonus" agreed upon in the EPCC but Cit.ra
refused to comply with Hutama's domnmds. 'Thus, Hutama, through
HK AI'T'INA'TY DIST'I Wien+
AND 'THI AMI'TIA'TIU!N 1,AW
counsel sent another demand letter to Cirra. 'Thor·after, Huta
and Citra through their respective officer and representatives hod
several meetings to discuss the possibility of amicably settling tlw
dispute which lasted for almost one year but they failed to reach an
amicable settlement. As a result, Hutama filed with Construction
Industry Arbitration Commission (CIAO) a request for arbitration
seeking to enforce its money claims against Cits. Citra filed n motion
to dismiss on ground of prematurity since the cnse was» referred
first to Dispute Adjudication Board as provided for by Clauso 20.4
of the EPCC, CIAC denied the motion considering that compliance
with Clause 20.4 was a fctual
a
issued to be determined during the
trinl. After tbe preliminary conference, Citrn filed an Urgent Motion
requesting CLAC to refrain from proceeding with the trial proper
without resolving first the issue of compliance with the condition
precedent. CIAC denied the motion stating that prior resort to DAB
was not a condition precedent for CIAC ta assume jurisdiction. A a
result, Citra filed a potition before CA and the latter ruled in favor of
the former. Upon denial of MR. Hutama went to SC via petition to
review on certiorari under Rule 45.
ISSUE:
Whether or not prior referral to DAB as provided far
in Clause 20.4 of EPC€ is a condition precedent before
CEAC can assume jurisdiction over the dispute in the case
at bar
SUPREME COURTS RULING:
Friar referral to DAB s provided fro in Clause 20.4 f EPCC is
not a condition precedent before CIAC can assume jurisdiction over
the dispute in the case at bar. A perusal of the provisions of F.O No.
1008 shows that CIAC shall have jurisdiction over a dispute involving
a construction contract if said contract contains an arbitration else
(notwithstanding any reference by the same contract to nother
arbitration institution or arbitral boly): or, even in the absence of
such a clause in the construction contract, the parties still agree
to submit their dispute to arbitration. It is undisputed that in the
case at bar, the EPCC contains an arbitration clause in which the
petitioner and respondent explicitly agree to submit to arbitration
any dispute between them arising from or connected with the EC€,
lt is true that Clause 20.4 of the EPCC states that. a dispute
between petitioner and respondent as regards the PCC' shall be
1
I'Al' HI
tw lpf hi 4le 'igtne l
rt
utinlly referred to the D
for decision, and only when the parties
· rt distialiod with the decision of the DAB should arbitration
manence. 'This does mot mean. however. that the CIAC is barred
ram assuming jurisdiction over the dispute if such clause was not
complicd with.
Under Section I, Article III of the CIAC Rules, an arbitration
clause in a construction contract shall be deemed as an agreement
to submit an existing or future controversy to C1AC jurisdiction,
"notwithstanding the reference to a different. arbitration institution
or arbitral body in such contract x x x." Elementary is the rule that
when laws or rules are clear, it is incumbent on the court to apply
them. When. the law (or rule) is unambiguous and unequivocal, application, not interpretation thereof, is imperative,
Hence, the bare fact that the parties heroin incorporated an
arbitration clause in the EPCC is sufficient to est the CIAC with
jurisdiction over any construction controversy or claim between the
purties. The arbitration clause in the construction contract ipso facto
vested the CIAC with jurisdiction. This rule applies, regardless of
whether the parties specifically choose another forum or make refernce to another arbitral body. Since the jurisdiction of CLAC is
conferred by law. it ennot be subjected to any condition; nor can
it be waived or diminished by the stipulation, net or omission of the
parties, as long as the parties agreed to submit their construction
contract dispute to arbitration, or if there is an arbitration clause
in the construction contract. The parties will not be precluded from
electing to submit their dispute to CIAC, because ths right has been
vested in each party by law.
NOTE:
The ling of SC in this cnse has a procedent in the case of
China Chang Jiang Energy Corporation (Philippines) t. Rosal Infrastrcture Builders nnd National Irrigation Administration v. CA.
It. bears to emphasize that the mere existence of an arbitration clause in the construction contract is considered by law as an
agreement by the parties to submit existing or future controversies
between them t CIAC jurisdiction, without any qualification or con
dtion precedent. 'To affirm a condition precedent in
construction contract, which would effectively suspend the jurisdiction of the
C[AC until compliance therewith, would be in conflict with the
nized intention of the law and rules to automatically vest CIAC with
the
recog-
fl# L'EHN TW DR:.JP[F [II 'IL A+tot
AN'M M{HTRT'IAN I,w
jurisdiction over a dispute should the construetu
an arbitration clause.
tt l
-
ntret vontnm
Moreover, the CIAC' was crated in recognition of the com
ribution of the construction industry to national development goals,
Renliring that delays in the resolution of construction industry
disputes would also hold up the development of the country, EO
No. 1008 expressly mandates the CIAC to expeditiously settle con
struction industry disputes and, for this purpose, vests in the CIA(C
original and exclusive jurisdiction over disputes arising from, or
connected with, contract entered into by the parties involved in con.
8ruction in the Philippine.
'T'he dispute between petitioner and respondent has been lingering for almost five years now. Despite numerous meetings and
negotiations bet ween the parties, which took place prior to petition
er's fling with the CIAC uf its Request. fro Arbitration, no amicable
settlement was reached. I ruling requiring the parties to still appoint. n DAB, to which they shouid first refer their dispute before the
same could be submitted ta the CIAC, would merely be circuitous
and dilatory at this point. It would entail unnecessary delays and
expenses on both parties, which .O. No. 1008 preciselyseeks to prevent. It would, indeed, defeat the purpose for which the CIAC was
created.
21. HI-PRECISION STEEL CENTER, INC. V LIM KIM STEEL
BUILDERS, INC. AND CLAC
G.R. No. 110434, December 13, 1993
FACTS:
Hi Precision entered inta a contract with Lim Kim under which
the latter as contractor was to complete a P1 million construction
project owned by the former within n period of 153 days (rom
May
f
8,1990 to October 8, 1990). The project completion date was frst
moved to November 4. 1990 but on said date, only 75.8674% of the
project was actually completed. Hi Precision attributed this noncompletion to Lim Kim which allegedly had frequently incurred
delays during the original contract period and the extension period.
However, Lim Kim insisted that the delays in the project were either
excusable or due to Hi Precision's own defauit and issuance of change
orders. Hi Precision took over the projewt un November 7, 1990 and
eventually completed an February 1991. Lim Kim filed n request for
I'ts lh+lat»
ho'woe 4 ourl
ndjudientiun with t1AC. In 1ts complaint, Lim Kim sought payment
of its unpaid progress buildings, alleged unearned profits end other
a
rvcevables. Hi Precisiun in its answer and amended answer climesl
damages,
reimbursement
ut
alleged
additional
·etual and liquidated
costs it had incurred in order to complete the projoct and attorney s
+Hen
fees. CIAC ruled in favor of Lim Kim in a unanimous award.
of
both
under
Rule
45
and
Rule
6~
of the
review
Hi Precision seeks
Rules of Court.
ISSUE:
Whether or not the arbitral award in the case at bar
can he reviewed by the SC
SUPREME COURTS RULING:
'l'he arbitral award in the case at bar eannot be reviewed by
the SC, Section 19 E.0. No, 1008 ns amended says, "The
nwul_sall
h be binding the purtjes, It shall be firal and irapshall be nppealable to the
pealable excepton questions of law which
it
clear
that questions of fact cannot
crystal
makes
I
1
9
SC," Section
before
the
Supreme
Court -which is no'
in
be raised
procoedings
in
of
an
arbitral
award
render under
respect
n trier of facts
C'LAC.
Consideration
of
the
animating
purpose of
the aegis of the
voluntary arbitration in general, nnd nvhitration under the aegis
ef the CIAC in particular, requires ua to apply rigorously tbe nboe
principle embodied in Section 19 that tbe Arbital 'Tribunal's fndings
of fct
a shall be final and inappealable.
or
upon
arbisral
Voluntary arbitration involves the reference of a dispute to
an impartial body, the members of :hich are chosen by the parties
themselves, whicl parties freely consent in advance to abide by the
a the
arbitral award issued after proceeding= where both parties hd
The
basic
ob
j
ective
is
to
provide
n
speedy
heard.
be
ta
opportunity
inexpensive method of settling disputes by nllowing the parties
ad aggravation which
delay,'+ expense
id tle fertnlities.
Lt) aAvut'
I€IE>, '-·
·"
. ",
•
litigation which
<specially
litigation.
ordinary
commonly accompany
1008 created
the entire hierarchy of courts. E.O, No.
nr
gm
.
gues through
th
a arbitration facility to which the construction industry 1 n
Philippines can have recours. The Executive Order was enacted to
encrage the early and expeditious settlement of dpuis in the
construction industry, public policy tbe implementation of whic his
necessary and important for the realization of' national development
an
tt
e
goals.
o
I
AA'TRNTIVE
{1th, IE,
1'AI,I IL
lewis hy tl
1H
AN THE' ATTN t
Aware of the objective of' voluntary nrlitrutin in th labor field,
in the construction industry, and in any other nrvn for that mntwr,
the Court will not assist one or the other or even both parties in ay
effort to subvert or defeat that objective fr their private purposuw,
The Court will not review the factual findings of an arbitral tribunal
upon the artful allegation that such body had "misapprehended th
facts' and will not pass upon issues which are, at bottom, issues ol
fact, nu matter how cleverly disguised they might be as legal questions." The parties here had recourse to arbitration and chose th
arbitrators themselves; they must have had confidence in such arbitratars. 'The Court will rot, therefore, permit the parties to relitigat
before it the issues of fcts previously presented and argued before
the Arbitral Tribunal, save only where a very clear showing is mad
that, in reaching its factual conclusions, the Arbitral Tribunal committed an error so egregious and hurtful to one party as to constitute
a grave abuse of diserotion resulting in lack or loss of jurisdiction.
Prototypical example would be factual conclusions of the Tribunal
which resulted in deprivation of one or the other party of a fair op.
portunity ta present its position before the Arbitral Tribunal, and an
award obtained through fraud or the corruption of arbitrators. Any
other, more relaxed, rule would result in setting nt naught the basic
objective of a voluntary arbitration and would reduce arbitration to a
largely inutile institution,
Examination of the Petition at bar reveal that it is essentially
a attempt to re-assert and re-litigate before this Court the detailed
or itemized factual claims made before the Arbitral Tribunal under
a general averment that the Arbitral 'Tribunal had misapprehended
tho facts" submitted to it. In the present Petition, too, Hi-l'recision
claims that the Arbitral Tribunai had committed grave abuse of discretion amounting tu lack of jurisdiction in reaching its factual and
legal conclusions.
22. RUBEN N. BARRAMEDA, ET AL. V ROMEO ATIENZA, ET AL.
G.R. No. 129175, November 19, 2001
FACTS:
National Electrification Administration (NA and Carnarines
Norte Electric Cooperative (CANORECO) entered into a Contract of
Loan and First Mortgage of CANORECO. Ore of the signatrios
o
to
the loan contract was Reynaldo Abundo. general manager of CANORECO at that time. During his incumbency, he filer to pay the loan
runt
«'rt
obligations s they fell due. I'hus, a= of March 1, 195, CANORECO's
outstanding; loan with NE\ amounted to,74 million pesos. NEA enforced the provisions of the mortgage euntract by designating an acting genera} manger of CANORECO to prutet state funds invested
therein. During the annual general membership assembly 'of €ANOECO on May 28, 1995, the_membersolerte @neiset of members
of the board of directors. NEA appointed a new general mare"
Felix Rolando G. Zak±a and dee)rod,former manager Reynaldo
V.
as persona non gratd Abundocontested the authority of
NEA to supervise and contra] CAN~ECO vi filing of several cases
with Cooperative Development Authority.
declared void abtitio the May 28, 1995 board meeting fur lack of quorum considering
th~t there were only three incuriibent members who were present.
Thereafter, Abund resigned as general manager and NE recog_
nized the appointment of acting general munger,Zaldya.Juanito
Irabon replaced Zaldua on September 23, 1996. CD issued g writ
of execution
order
to
thereby enabling Baramcda et al.
to resume control of CANORECO In response ta the letters of Cam.
Norte Governor and SP, President Ramos issued Memorandum Ord hoe cmift&e to temporarily
de+· Na. 49,constituting
andmanage the affairs fANORECO. The ad hoc commti tee
called a special membership meeting to determine whether there is
n need to change the composition of CANORECO's board of directors
which resulted in the affirmative. Hence, CANORECO conducted a
general election of directors and elected Atienzn et al, as now board
A5undo'
CD
vacate
and
an
over
tak
members. 'The new board issued aresolutin
o declaring theposition
of gen&rnl manager vacna t and another resolution appointing Mary
Ain C. Aor as general manager Thus, a petition for quo warrunto
before SC was filed by Burrameda et al.
ISSUE:
Whether or not Memorandum Circular No. 409 is the
proper remedy to resolve the dispute in the case at bar.
SUPREME COURT'S RULING:
' Memorandum Circular 409 is not the proper remedy tn resolve
the dispute in the case at bar. Said memorandum circular_is jrival.
Having registered itself with the (DA pursuant to ton T8 af .A.
No. 6938 and Section 17 of R A. No. 6939, CANORECO was brought
under tho coverage of said laws. In he case at bar, the dispute which
resulted to the
of Memorandum Circular 409 is an intr>
issuance
TH
LT'FIRS'TI
MW,T IE
NI Ti. AIi#TI'iN 1
4+
L
cooperative dispute. Article 1I of the toopet· tad provdes,
"Dispntes amoug members, ofticors, dircetors. ad cummttee memberg, nnd intra-cooperative disputes shall, as far as practicable, be.
settled nmicably in nocordance with the conciliation or r~rliation
mechnnisrus embodied in the by-laws of the cooperative, and in applilaws Should such conciliation/mediation pre&dig fail the
matter shall be settled in a purt of competent jurisdiction.' Com.
plementing seid article, Sertion 8 of RA. No 699 pryides, "Upon
reuest of ether or both or both
the
IL_cjsi¢ %a
conciliate disputes with the cooperative or beiw~en cooperatives:
Provided, Thnt if no mediation or conciliation succeeds wthin three
months from request thereof, n certilicate of non-resolution shall be
issued by the commission prior to the filing an appropriate action
before tho proper courts."
cable
parties. ·CD~ sha
'
Aw'I 1HI
4n
le+alol hy tle tirenw· ('rt.
hewn perfestel. One motion for reconsideration is allowed. A nal
resolution or «deesio of an administrative agency also binds the
lice of the President even if such agency is under the administrative
apervison snd contrul of the latter.
While Memo No. 409 is unconstitutiona?}, tho lotion of Ation7a
al. before such event is prs~red val@duntil nullified.
Without prejudice to the holding of a general assembly for the
rrpos of eon.ducting another election of directors since the terr of
office of the directors expired sometime in 1996. Atienza shall hold
tfce until their successors sball have been elected and qualified.
23. EDUARDO J. MARINO, JR.,
ET AL. V GIL GAMILLA, ET AL.
G.R. No. 132400, January 31, 2005
NOTE:
FAC'TS:
'Even granting for the snke of argument that the party
aggrieved by a decision of the CDA could pursue an administrative
appeal to the Ofhce of the President or the theory that the CDA i
an gem under its direct supervision nd control, still the Office of
the President could not in this case, mot proprio or tpon request
of a party, supplant er overturn the decision of the CDA. The record
does not disclose that the gr~up ~jNorberto Ochoa appealed from
the decision of the CDA in CDA-CO Case No. 95-010 to the O/fee
of the President as the head of the Executive Department exercising
supervision and control over said agency. In foct the CDA had already
issued a C'ease and Desist Order dated 14 August 1996 rderin
.fn tar Obics, Norberto Ochoa, Lie Pascua, Felicita llan and their
flowers to
cease and desist from actiag as the Board of.Directors
and Officers,ofC@marines Norte Electric Cooperative (CANORECO)
and to refrain from implementing their Resolution calling for the
District'V Election on August 17 and 24. 1996." Consequently, the
said decision of' the CDAhad long become final and executory when
Memorandum Order No. 40 was issued on 3 December 19967¢
Memorandum cannot then be considered as one retersing the decision
of the CDA which had attained finality.
"Under Section 15, Chapter III of Book VII of the Administrative
Cod& of 1987 (Executive Order Na. 292), decisions of administrative
agencies become finnl and executor [ifteon days after receipt of
copy thereof by the party adversely affected unless within that
period an administrative nppeal or judicial review. if proper, has
US'T Faculty Union (USTU) entered into an initial collective
bargaining agreement with the US'T wherein UST undertook to
provide USTFU with tree office space at Room 302 of' its Health
Center Building. 'The officers and directors of UST FU schedulod n
general membership meeting on October 5, 1996 for the election of
the anion officers. However, Camilla and some faculty members fled
a petition with the Med-Arbitration Unit of th DOLE socking to stop
the holding of the UTFU election. Med-Arbiter Tamas Fnlconitin
issued a TRO enjoining the holding of the election of the USTFU
officers and directors. Nevertheless, Camilla and some of the faculty
present in the October 4, 1996 faeulty convocation procecdod with
tho election of the UST'U officers. Hence, Marino. Jr.. et al. filed
with the DOLE a petition for prohibition, injunction, with prayer
preliminary injunction and TRO seeking to invalidate the election
for
held on October 4, 1996. On December 4, 1996, UST and USTFU
rcprosontod by Gamilla and his co·officers entered into a collective
bargaining agreement for a period of fve years
was ratified
on December 12, 1996. The Med-Arbiter issued a TRO enjoining
Camilla and his fellow officers to cease
daiat from performing
any and all acts pertaining to the duties and functions of the officers
and directors of UST'FU. 'Thereafter, Gamilla, Cardenas, and Aseron
with some other persons served n letter to Marino and Alam1s
demanding that the latter vacate the premises located at loom 30,
Health Center Building, UST-the Office of USTFU. After coercing the
officer messenger who was there to step out, Camilla and company
which
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padlocked the door leading to the union's ·flier IH«nee, Marino,
et al. filed with the RTC of Manila a complaint for injunction nnd
damages with a prayer for preliminary injunction nnd 'I'RO or the
use of US'TFLU office. The Med-Arbiter rendered a decision declaring
October 1, 1996 election null and void ab initio which was affirmed
by the BLR. Wen brought to SC via special evil action for certiorari,
the SC dismissed the petition. 'The TC ruled in favor of Marina. et
al. However, via petition for certiorari before CA, the latter reversed
the R'TC's ruling and denied the subsequent MR. Hence, Marino, et
al. went to SC via petition for review under Rule 45
ISSUE:
Whether or notTC's issuance ofpreliminary injunction and TRO in favor of Marino, et al. ls correct.
{'lo
liter dated II February 1997, declaring the supposed union
officers' vlct.ion void ab iritio and ordering respondents to cease and
desist from discharging the duties nd functions of the legitimate
officers af the USTFU, The trial court even obtained a copy of the
aid decision two (2) days after its promulgation. Still, it continued
the hearing on the application for injunction and eventually isued
the assailed orders.
Med
At this juncture, the Court notes that a key question in this
case has already been settled by the Court in its decision in UST
Paelty Union, et al. v. Bitonio, Jr., et al. In that case. it was ruled
that the 04 October 1996 election was void for having been conducted
in violation of the union's constitution and by-laws. Nevertheless, the
complaint a quo could not have validly proceeded at the time af its
fling of the said case due to petitioners' lack of cause of aetion.
SUPREME COURTS RULING:
NOT'E:
'The RTC's issuance af preliminary injunction and TRO in favor
of Marino, et al. is not correct. 'The dispute in the case at bar is an
intrs-union dispute, The propriety of padlocking the uniou's office,
the relief sought by the petitioner in tho civil re, is interwoven with
the issue of legitimacy of the assumption of office by the respondents
in light of the violator of the union's cunstitution and by-laws, which
ws then pending before the fed Arbiter. Necessarily, therefore, the
trial eourt has no jurisdiction over the case insofr
a as tbe prayer far
the removal of the padlocks and the issuance of an injunctive writ is
concerned.
The petition is partially granted na fars the claims fro damages
nre concerned. 'The case wns remanded to the trial for further in this
It is a settled rule that jurisdiction, once acquired, continues until
the case is finally terminated. The petition with the Med-Arbiter was
filed ahead of the complaint in the civil case before the RTC. As such,
when the petitioners filed their complaint- a quo, jurisdiction over the
injunction and restraining order prayed for had already been lodged
with the Med-Arbiter. The remuval of padlocks and the access to the
office premises is necessarily included in petitioners' prayer to enjoin
respondents from performing acts pertaining to union officers and
on behalf of the union. In observance of the principle of adherence
of jurisdiction, it is clear that the R'IC should not have exercised
jurisdiction over tho provisional reliefs prayed for in the complaint. A
review of tha complaint shows that petitioners disclosed the existence
of the petition pending before the Med-Arbiter and even attached n
copy thereof. The trial court was also nware of the decision of the
aspect.
The Bureau of Labor Relations and the Labor Relations Divisions
in the regional offices of the Department of Labor shall have original
and exclusive authority tu act, ut their own initintive or upon request
of either or both parties. on all inter-union znd intra-union conflict=,
and uull disputes, grievances or problems arising from or affecting
labor-management relations in all workplaces whether agricultural
or non-agricultural, exwept those arising from the implementation or
interpretation of collective bargaining agreements which shall be the
subject of grievance procedure and/or voluntary arbitration.
Thus, unlike the NLRC which is explicitly vested with tho
jurisdiction over claims for actual, moral, exemplary and other forms
of damages, the BIR is not specificall y empowered to adjudicate
claims ofsuch nature arising from intra·mion or inter-union disputes.
In fact, Art. 241 of the Labor Code ordains the separate institution
before the regular courts of criminal and civil liabilities arising
from violations of tho rights ant conditions of union membership.
The Court has consistently held that where no employer-employee
exists between the parties and no issue is involved which may be
resolved by reference to the Labor Code, other lahor statutes, or any
collective bargaining agreement, it is the regional trial court that hn
jurisdietion.
THE, INN
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24. A.D. GOTHONG MANUFACTURING CORPORATION
EMPLOYEES UNION-ALU (THE UNION) V.
HON. NIEVES CONFESSOR, SECRETARY OF DOLE
AND A.D. GOTHONG MANUFACTURING CORPORATION
(THE COMPANY)
G.R. No. 113638, November 16, 1999
FACTS:
The Union fled a petition for certification election in its bid
ta represent the unorganized regular rank-and-file employees of
the company excluding ita office staff and personnel, The company
opposed tho petition as it excluded otfice personnel who are rank
and fles. In the inclusion-exciusion proceedings, the parties agreed
to the inclusion of Romnuls Plaza and Paul Michael Yp
a in the list
of eligible voters on condition that their votes are considered chal
lenged on the ground that they were supervisury employces. 'The
certification election yielded a result of: Yes, 20; No, 19; Spoiled, 0;
nnd Challenged. 2. The Med-Arbiter declared that the challenged
voters Yap nd Plaz aare rank-and file employees. UJpon appeal to
the SOLE, the latter attired the decision af the Med-Arbiter. Thus,
the casc reaclued the SC,
ISSUE:
Whether or not the decision of the Med-Arbiter
affirmed by SOLE is reversible.
SUPREME COURTS RULING:
The decision of the Med-Arbiter affrmod by SOLE is not
reversible. It has also been established that in the determination of
whether or not certain employees are managerial employees, this
Cort neurds due rcspet and therefre
o sustains the findings of fnct
made by qunsi-judicial agencies which nre supported by eubst.untial
eviece
n considering their expertise in their respective fields.
'Ihis Court is not a trier of facts., As earlier stated. it is not the
function of this Court to examine nnd evaluate the probative valuc
of all evidence presented to the concerned tribunal which formed the
basis af its impugned decision or resolution. Foll owing established
precedents, it is inappropriate to review that factual findings of the
Med-Arbiter regarding the issue whether Romulo Plaza and Paul
Michael Yap are or are not rank-and-file employees considering that
I'u- Irle
FAM'T I
he le upnene 'rt
these nr+ matters within their technical expertise. l'hey are binding
an tls Court as we nre satisfied that they nre supported by subeta.ntial evidence, and we find no capricious exercise of' judgment warranting reversal by certiorari
NOTE:
In this petition, petitioner Union elaims that the documentary
evidenc was "misapprehended'' by public respondent. Petitioner
Union reiterates that.(1)in minutes of the staff meeting ofrespondent
Company on August 13, 1989, duly siged by the President Albino
Gothong nnd attested by Jose F. Loso presiding ofticer/VP and Gertrudo Lao, Assistant General Manager. Paul Michnel Yap wns listed
as one of
staff; (2) in the regular quarterly meeting on January
4. 1991, the names of Yap and Plaza are listed under the heading
Department Heads'Supervisors duly signed by President/General
hong and Asst. (General Manager Gertrudo Lao;
Manager Albino Got
and (3) in the staff mooting of Ma:ch 5, 1993, Plaza was assigned a
officer-ir ·charge of the company's branch in Davao.
the
T'he Court finds no cogent reason to disturb the finding of
the Med-Arbiter and the Secretary of Labor that the copies of the
minutes presented in evidence do not prove that Yap and ±Laza
were managerial or supervisory employees. The Court has examined
the documentary evidence, und nowhere is there a statement
therein about any instance where the challenged voters effectively
recommendod any managerial action which would require the use of
independent judgment. The last pee of evidence was not dicssetd
by the Med-Arhiter; however a perusal thereof would show that while
one J. Chua of the Sales Department reported that "omy Plaza was
in Davao right now acting as OIC," the same document states that
the Davao operations still had to be finalized. On the other hand, the
claim of respondent Company that Plaza is the head of the Davao
branch is belied hy tho artificatiun o the City Treasurer of Iavao
and of the Bureau of Internal Revenue of Mandaue City that the plan
to open a branch in Davao City did not materialize.
Tho reliance of petitioner on the affidavit of Jose Loseo, Personnel Manager, tht. Plaza and Yap were hired by bim as department
head and supervisor of the respondent Company cannot. be sustained
in light of the uffdavit of said Loseo dated September 28, 1993,
attesting that he was "forced to sign the earlier memorandum on
the job assignment of Yap and Plaza. 'I'his affidavit is sought to
he discarded by respondent Company for being perjurious and ill-
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motivated. Petitioner Union however reiterates thut laaeo's affidavit
is corroborated by the other public documents indicating that. Plz
ad Yan are not rank-and.-file empioyoos
25. CAPITOL MEDICAL CENTER, INC. (THE COMPANY) V.
NLRC, ET AL.
G.R. No. 147080, April 26, 2005
FACTS:
Capitol Medical Center Employees Association-Alliance of
Filpino Workers (Union) had to contend with another union --Capitol Medical Center Allianco of Concerned Employees (CMC
ACE) -which demanded for u certification election among rankand-fie employees of the company. Med-Arbiter Bridido Fadrigon
granted the petition and the matter was appealed to the SOLE
Use. Bienvenido Laguesma rendered a resolution granting rhe
appeal and denied the subsequent motion af the company and CM€
ACE 'The latter brought the matter to SC and the Court rendered
judgment affirming the decision of the Undersecretary. Instead of
filing a motion with the SOLE
the enforcement of the resolutions
of Undersecretary LnguesIna as affrmod by this Court, the Union
filed a Notice of Stike on October 29, 199' with the National
Conciliation and Mediation Board (NCMB), serving a copy thereof to
the company. The Union alleged as grounds for the projected strike
the following acts of' the petitioner: (a) refusal to bargain; (b) coercion
n employees; and (c) interference! rastrint to self-organization. A
eries ot conferences was conducted before NC}MB but no agreement
was rached. 'The company filed with the board a letter requesting for
the dismissal of the notice to strike since the Union had apparently
failed to furnish the Heioa:a! Branch of the NCM with a copy of
a notice of the meeting where the strike vote was conducted. The
Union submitted to the NCMB the minutes of the alleged strike
vote purportedly held an November 10, 1997 at the parking lot in
front of the petitioner's premises, at the corner of Scout Magbnua
Street and Panay Avenue, Quezon City. It appears that 178 out of
the 300 union members participted
a
therein, and the results were
as follows: 156 memhers voted to strike; 14 members cast negatve
votes; nnd eight votes were spoiled. Thereafter, the officers and
members of the Union staged a strike. Subsequently, the Union filed
an ex parte motion with the DOLE, praying for its assumption of
jurisdiction over the dispute. The SOLE issued an Order assuming
r
"7
liell h tle· iprrn·
Cort
jurisditi. Hence, i obedience with the order of the SOLE, the
officer and members of the Union stopped their strike and returned
to wurk. 'The company filed a petition with NLRC asking to declare
the strike illegal. Labor Arbiter Facundo Leda ruled in favor of tho
company declaring the strike illegal. Upon appeal to the NLRC, the
latter reversed the ruling of the LA and denied the subsequent MR.
T'he company filed n petition fro certiorari before CA but the latter
affirmed NLRC's ruling. Hence. the case reached the SC via petition
for review.
ISSUE:
Whether or not the strike in the case at bar is illegal.
SUPREME COURTS RULING:
The strike in the case at bar is illegal. The union failed to comply
with the procedures mandated hy law.
Section 10of Rule 22of the Omnibus Rules of the NLRC provides,
"A decision to declare a strike must be approved by a majority of the
total union membership in the bargaining unit concerned obtained
by secret ballot in meetings or referenda called for the purpose. A
dceision to declare a lockout must be approved by a majority of the
Board of Directors of the employer, corporation or association or
the partners obtained by a secret ballot in a meeting called for the
purpose."
The regional branch of the Board may, at its own initiative or
upon the request of any affected party, supervise the contduet of the
secret balloting. In every case, the union or the employer shall furnish
the regional branch of th Board and notice af meetings referred to in
the preceding paragraph at least twenty-four (24) hours before such
meetings ns well as the rosults of the voting at least seven (7) days
before the intended strike or lockout, subject to the cooling-off period
provided in this Rule.
Although the second paragraph of Section 10 of the said Rule
is not provided in the Labor Code of the Philippines, nevertheless,
the same was incorporated in the Omnibus Rules Implementing the
Labor Code and has the foree and effect of law.
Aside from the mandatory notices embedded in Article 263,
paragraphs (c) and (f) of the Labor Code, a union intending to stage
a strike is mandated ta notify the NCMB of the meeting for the
T'HJ, AI I'ENT'Vi :+Ji+, It'w Ir u I
AN T'THE , AI'HAT\ON AW
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t'.welt hey lie in-t'rt
conduct. of strike vote, at least twenty four (4) ho»tr» prior to uel
meeting. Unless the NCMI is notified of the date, le and timu of
the meeting of the union members for the conduct of a strike vote, the
NCMB would be unable ta supervise the balding ot' the same, if and
when it decides Lo eeruse 1ts pwwer ol supervision.
Tn the event
that. the report is false, the seven-day period affords the members
an opportunity to take the appropriate remedy before it is too late.
'The 15 tu 30 day cooling-off period is designed to afford the parties
the opportunity ta amicably resolve the dispute with the assistance
of th NCNB conciliator/mediator, while the seven-day strike bar
is intended to give the DOLE an opportunity to verify whether the
projected strike really anrries the imprimatur ct the majority of the
In Nationui Federation of Labor v, LRRC, the Court enumerated
the notices required by Article 263 af the Labor Code snd the
Implementing Rules, which include the 24 -hour prior notice ta the
NC'MB:
A notice of strike, with tho required contents, should be
fed with the DOLE, specifically the Regional Branch of the NCM1,
1)
copy furnished the employer of the union;
2) A cooling-off period must be observed between the fling of
notice and the actual execution of the strike thirty (30) days in rase
of bargnining deadlock and fifteen (15) days in case of unfair labor
practice. However, in the case of union busting where the urion's
existence is threatened, thc cooling-off period need not be observed.
3) Before n strike is acially commenced. a strike vote should
be taken by secret balloting, uith a 24-hour prior notice to NCMB.
T'he derision to declare a strike requires the secret-ballot approval
of majority of the total union membership in the bargaining unit
concerned.
4)
The result of the strike vote should be reported to the
NC'MB at least seven (7) days before the intended strike or lockout,
subject to the cooling-off period.
A union is mandated ta notify the NCMB of' an impending dispute
in a particular bargaining urit via a notice of strike. Thereafter, the
NC'MB. through its conciliator-mediators, shall cnll the parties to a
conference at the soonest possible time in order to actively assist them
in exploring all possibilities for amicahio cttlomont. In the event
of the failure in the conciliation/mediation proceedings, the parties
shall be encouraged to submit their dispute for voluntary arbitration.
However, if the parties refuse, the union may hold n strike vote, and
if the requisite number of votes is obtained, a strike may ensue. The
purpose of the strike vote is to ensure that the decision to strike
broadly rests with the majority of the vrion members in general and
not with a mere minority, and at the same time, discourage wildcat
strikes, union bossism and even corruption. A strike vote report
submitted. to the NCMB at least seven days prior to the intended date
f' strike · urturm-. that
strike vote was, indesl, Laken.
uion members.
'The requirement of giving nonce of the can~duct. of strike vote
to the NCMB at least 24 hours before the meeting fur tle soipurpose
is designed to: (n) inform the NCMT of the intent af the union to
con«duct strike vote; (b) give the NC'MB ample time to docide on
whether or not there is a need to supervise the conduct of the strike
vote to prevent any acts of violence and/or irregulnrities attendant
thereto; and {e) should th NCMB dide an its own initiative or
upon the request af an interested party ineluding the employer, tu
supervise the strike vote, to give it ample time to prepnre fro the
deployment af the requisite personnel, including peace officers if need
be. Unless and until the NCM is notited at least 24 hours of the
union's decision to conduct a strike vote, and the date, place, and time
thereof, the NCME cannot determine for itself whether to supervise
a strike vote meeting or not anrd inure its peaceful nd regulnr
conduct 'The failure nf n union tocomply with the requirement of the
giving of nutice tu the N('MB At least 24 hours prior to the holding
of a strike vote meeting will render the subsequent strike staged by
the union illegal.
In this case, the respondent Union fa~led to comply with the 24
hour prior notice requirement to the N€MB before it eonducted the
alleged strike vote meeting an November 10, 1997 As a result, the
petitioner complained that no strike vote mceting ever took place and
auerred that the strike staged by the respondent union uas illegal.
Conformably to Artcle
i 26+ of the Labor Code of the Philippines
and Setton 7, Rule Ll of the Omnibus ulee Implementing the
I.nhr Code, no labor organization shall declare n strike unless
supported hy a majority vote af the members of the union obtained by
secret ballot in a meeting called for that purpasa. The requirement
is mandntoy and the tailurc of a union to comply therewith render
the strike illegal. The union is thus mandated to allege and prove
compliance with the requirements of the law