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INTRODUCTION
Historical Note
Judicial and legislative trends lean towards the utilization of alternative means and methods
implemented outside the court trial system
June 21, 1985 which adopted the Model Law on International Commercial Arbitration
Philippines committed to adhere to the Model Law
Judiciarys Action
Judiciarys response to the problems of delay in the delivery of justice:
Requirement of conducting pre-trial conferences
Utilization of the different modes of discovery
Strict proscription against forum-shopping
Encouraging the use of alternative dispute resolution through the Philippine Mediation Center
or through JDR
Legislative Action
Special domestic legislations prescribing arbitration, mediation, and conciliation to help
decongest court dockets:
PD 442 Labor Code of the Philippines
NLRC together with its Arbitration Brance has been dispensing arbitration service in cases
involving ULP, termination of employment, conditions of employment, damages arising from
ER-EE relationship, and other labor-related disputes.
RA 7160 Local Government Code of 1991
Requires conciliation, mediation or arbitration in the barangay level before the pangkat ng
tagapagkasundo of would-be adverse parties in specified civil and criminal cases before
resort to courts can be had
ADR Notes
ADR Notes
FUNDAMENTALS OF ADR
Alternative Dispute Resolution
ADR - a system, using means and methods allowed by law and approved by the parties, for the
purpose of resolving or facilitating the resolution of disputes and controversies between them, in
an expeditious and speedy manner, without resorting to court adjudication
ADR Act of 2004 - Any process or procedure used to resolve a dispute or controversy, other
than by adjudication of a presiding judge of a court or an officer of a government agency in
which a neutral 3rd party participates to assist in the resolution of issues
State policy:
1. Actively promote party autonomy in the resolution of dispute or the freedom of the parties to
make their own arrangements to resolve their disputes
2. Encourage and actively promote the use of ADR as an important means to achieve speedy
and impartial justice and declog the court dockets
3. Provide means for the use of ADR as an efficient tool and an alternative procedure for the
resolution of appropriate cases
Principles
of ADR:
Objectives of ADR:
1. Speedy and impartial justice
ADR is a tool for the speedy, inexpensive and amicable settlement of dispute
2. Declogging of court dockets
Declogging is the ultimate objective of ADR
Features of ADR:
1. ADR is a means used to resolve a dispute or controversy
Objective is to resolve or facilitate the resolution of the dispute in a speedy, amicable, and
inexpensive manner
ADR should not be resorted to when the motive is to delay or suspend the proceedings
2. ADR utilizes means and methods allowed by law
3. ADR is contractual in nature
Contractual in nature because the parties are given the freedom to agree to resolve their
dispute
Any form of ADR that satisfies the essential requisites of a contract is allowed as long as it is
not contrary to law, morals, good customs, public order or public policy
Consent:
1. Pre-causal consent - when the parties to a contract stipulate that any dispute that will
arise from the contract shall be resolved by arbitration
2. Present-causal consent - when the parties to an existing controversy voluntarily submit
themselves either to arbitration or mediation
4. ADR avoids court trial
ADR Notes
5. ADR usually involves the participation of a neutral 3rd party
Sources of ADR:
1. Domestic laws and rules which may either be general or special
1. General ADR laws:
1. Article III, Section 16 of the 1987 Constitution
2. Chapters 1 and 2, Title XIV, Book IV of the Civil Code
3. Arbitration Law
4. ADR Act of 2004 and its IRR
2. Special ADR laws:
1. Local Government Code of 1991
2. Labor Code and its IRR
3. Other similar laws applicable to specific classes of disputes
2. Acts of the Executive branch
1. Rules of ADR for Disputes Between National Government Agencies
2. EO 1008 creating the CIAC as well as the CIAC Revised Rules of Procedure Governing
Construction Arbitration
3. Decisions of the SC
4. International laws
1. UNCITRAL Model Law on International Commercial Arbitration
2. Convention on Recognition and Implementation of Foreign Arbitral Awards
5. General principles of law and equity
Forms of ADR:
1. Arbitration - Arrangement for taking and abiding by the judgment of selected persons in some
disputed manner, instead of carrying it to established tribunals of justice, and is intended to
avoid the formalities, the delay, the expense and vexation of ordinary litigation
A voluntary dispute resolution process in which one or more arbitrators, appointed in
accordance with the agreement of the parties, or rules promulgated pursuant to the ADR Act,
resolve a dispute by rendering an award
2. Mediation - Voluntary process in which a mediator, selected by the disputing parties, facilitates
communication and negotiation, and assists the parties in reaching a voluntary agreement
regarding a dispute
Arbitration
An arbitral tribunal or arbitrator evaluates evidence
and the merits of the case and renders an arbitral
award based on his appreciation thereof
Mediation
The parties to the controversy are convinced by a
mediator to settle their controversy through a
voluntary agreement executed by the parties
themselves called a mediated settlement agreement
ADR Notes
and is not contrary to law, morals, good customs, public order and public policy, is an
acceptable form of ADR
Components of ADR
1. Contending parties - who are involved in a dispute or controversy
2. Dispute or controversy - which is susceptible of being subject to ADR
3. Form of ADR - may either be:
1. Arbitration
2. Mediation
3. Conciliation
4. Early Neutral Evaluation
5. Mini-trial
6. Any combination of the foregoing
4. ADR provider or practitioner
1. Provider - institution or person accredited as mediator, conciliator, arbitrator, neutral party
evaluator, or any person exercising similar functions in any ADR systems
ADR Notes
Basic Concepts:
Concluding Acts or Agreements
1. Arbitration
1. Arbitrary award - partial or final decision by an arbitrator in resolving the issue in a
controversy
Mediation
2.
1. Mediated settlement agreement - a contract executed by the mediating parties, with the
assistance of their respective counsel, certified by the mediator, evidencing a successful
mediation
2. Compromise agreement - a contract whereby the parties, by making reciprocal
concessions, avoid litigation or put an end to one already existing
3. Court Annexed Mediation
1. Judgment based on compromise
4. Conciliation
1. Waiver or Quitclaim - a statement renouncing any right or claim involved in a controversy
by one party in favor of the other.
ADR Notes
As
such, their decisions are reviewable in a special civil action for certiorari under Rule 65
Sec. 1 Art. VIII Consti - xxx judicial power includes the duty of courts of justice to settle
actual controversies involving rights which are legally demand able and enforceable and to
determine whether or not there has been grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality of the government.
XPN: In domestic arbitration, if the arbitrator tribunal, in the exercise of its authority to
resolve or defer the resolution of the preliminary issue on its jurisdiction over the arbitration
all agreement, opts to defer the resolution of the jurisdictional issue until the final rendition
of the arbitrator award, none of the parties can seek judicial relief from the deferment.
A petition for review under Rule 43 is generally an available remedy for the review of
decisions and awards of ADR providers
Sec. 1 Rule 43 ROC - This rule shall apply to appeals from judgments or final orders of the
xxx voluntary arbitrators
ADR providers are civilly liable for their acts done in the performance of their duties unless
there is a clear showing of bad faith, malice or gross negligence under Chapter 9, Book 1 of
the Administrative Code
ADR Notes
communication and negotiation, and assists the parties in reaching a voluntary agreement
regarding a dispute
Excluded from ADR Act:
Court annexed mediation
Court referred mediation
JDR
Lumping tagapamayapa conciliation
Pangs at no tagapagkasundo conciliation
Mediator - person who conducts the mediation
Mediation parties - parties thereto
Non-party participants - parties who take part in the process
Classification of Mediation
1. As to form of ADR
1. Mediation is non-evidentiary or non-merit based - the mediator must refrain from giving
legal or technical advise or otherwise engaging in counseling advocacy, and must abstain
from expressing his personal opinion on the rights and duties of the parties and the merits
of any proposal made.
2. On the basis of the structure of the ADR provider
1. Institutional - when administered by, and conducted under the rules of a mediation
institution
An agreement to submit a dispute to mediation shall include the following:
To be bound by the internal mediation and administrative policies of such institution
To have such rules govern the mediation of the dispute and for the mediator, the parties
and their respective counsels and non-party participants to abide by such rules
2. Ad hoc - other than institutional
Place of Mediation
GR: in the absence of such agreement, the place convenient and appropriate to all parties
XPN: parties are given the freedom to agree on the place of mediation
Stages in Mediation
GR: mediation process consists of the following:
1. Opening statement of the mediator
2. Individual narration by the parties
3. Exchange by the parties
4. Summary of issues
5. Generalization and evaluation of options
6. Closure
XP: parties may choose the procedure that will govern their mediation
Advantages of Mediation
Sec. 8 of ADR Act of 2004:
ADR Notes
ADR Notes
3.
4.
5.
6.
7.
8.
1. It is required to be open to the public; thus the parties do not intend it to be confidential
A threat or statement of a plan to inflict bodily injury or commit a crime of violence
1. The State has a greater interest to prevent violence
Communication intentionally used to plan, attempt to commit, or commit, a crime, or conceal an
on-going crime or criminal activity
1. The State has a greater interest to prevent the commission of the crime
Communication sought or offered to prove or disprove abuse, neglect, abandonment, or
exploitation in a proceeding in which a public agency is protecting the interest of an individual
protected by law
1. The violator cannot conceal the abuse he has committed by using the benefits of the ADR
act
Communication sought or offered to prove or disprove a claim or complaint of professional
misconduct or malpractice filed against a mediator in a proceeding
1. Mediator cannot be allowed to hide under the mantle of confidentiality for his own
misconduct or malpractice
Communication sought or offered to prove or disprove a claim or complain of professional
misconduct or malpractice filed against a party, non-party participant, or representative of a
party based on conduct occurring during mediation
Exception based on public policy
1. The privilege cannot be invoked after a hearing in camera
2. It substantially outweighs the interest in protecting confidentiality
Waiver of confidentiality
Protection of confidentiality is susceptible of waiver
Kinds of waiver:
1. Expressed - when it is contained in a record, or made orally during a proceeding by the
mediator and the mediation parties
2. Implied:
1. By failing to timely object to an objectionable question propounded during a trial, or to a
document being offered in evidence
2. By testifying or presenting a witness to testify on confidential and privileged information
3. Estoppel - when the non-party participant discloses the erstwhile confidential information
1. A person who discloses confidential information is barred from invoking the privilege as
to the remainder of the information necessary to a complete understanding of the
previously disclosed information
2. This principle is rooted on fair play and equity
The mediator
The role of the mediator is very crucial that his presence and competence must be ensured
A mediator who refuses to act as such may withdraw or may be compelled to withdraw from
mediation proceedings under any of the following circumstances:
1. If any of the parties requests the mediator to withdraw
2. The mediator does not have the qualifications, training and experience to enable him to
meet the reasonable expectations of the parties
3. The mediator's impartiality is in question
4. The continuation of the process will violate an ethical standard
5. The safety of any one of the parties will be jeopardized
6. The mediator is unable to provide effective service
7. In case of conflict of interest
8. Other instances provided for under the IRR
Unlike
an arbitrator, he cannot rule upon the merits of a claim and render an award there on
ADR Notes
1. Competent
1. A mediator should maintain and continually upgrade his professional competence in
mediation skills;
2. Ensure that his qualifications, training and experience are known to and accepted
by the parties;
3. Serve only when his qualifications, training and experience enable him to meet the
reasonable expectations of the parties and not tO hold himself out or give the
impression that he has qualifications, training and experience that he does not have
4. Upon the request of a mediation party, disclose his qualifications to mediate a
dispute
2. Impartiality - before accepting a mediation, the mediator should:
1. Make an inquiry that is reasonable under the circumstances to determine whether
there are known facts that a reasonable individual would consider likely to affect his
impartiality
2. Disclose any such fact known or learned as soon as practicable
2. During the mediation
1. Confidentiality
2. On consent and self-determination
1. Exert reasonable efforts to ensure that each party understands the nature and
character of the mediation proceedings
2. Each party is free and able to make whatever choices he desires regarding his
participation in the mediation as well as his specific settlement options
3. On promotion of respect and control of abuse of process
1. Encourage mutual respect between the parties
Mediator's
costs and fees
In
an
ad
hoc mediation, the parties are free to make their own arrangements as to mediation
ADR Notes
ADR Notes
ARBITRATION IN GENERAL
Concept of Arbitration
Arbitration - Voluntary dispute resolution process in which one or more arbitrators, appointed in
accordance with the agreement of the parties or rules promulgated pursuant to the ADR Act,
resolve a dispute by rendering an award.
A completed arbitral proceeding is concluded by an arbitral award constituting the partial or final
decision by an arbitrator in resolving the issue in a controversy.
Kinds of Arbitration
1. In General
1. Compulsory - the process of settlement of [labor] disputes by a government agency which
has the authority to investigate and to make an award which is binding on all parties, and
as a mode of arbitration where the parties are compelled to accept the resolution of their
dispute through arbitration by a 3rd party
Is not governed by the ADR Act and its IRR
2. Voluntary - involves the reference of a dispute to an impartial body, the members of which
are chosen by the parties themselves, which parties freely consent in advance to abide by
the arbitral award issued after the proceedings where both parties had the opportunity to be
heard
Based
on the seat of arbitration and the presence of foreign element
2.
1. Domestic - If it is not international in character. Or if:
1. Components of parties' place of business, place of arbitration, place of performance of
a substantial part of the obligation, and place where the subject matter of the dispute is
most closely connected, are all located in the Philippines.
2. International commercial or foreign - If any of the following instances occur:
1. The parties' place of business, which at the time of the conclusion of the arbitration
agreement, is in different states
2. The place of arbitration provided in the arbitration agreement and in which the parties
have their places of business, is outside the Philippines
3. The place where a substantial part of the obligation is to be performed or the place with
which the subject matter of the dispute is most closely connected, and in which the
parties have their places of business, is outside the Philippines
4. The parties have expressly agreed that the subject matter of the arbitration agreement
relates to more than one country
International
arbitration is at the same time commercial if:
It
covers
matters
arising from all relationships of a commercial nature, whether
1.
contractual or not, in which case the arbitration is called international commercial
arbitration
1. If seat is with the Philippines (even if the place of arbitration is outside), it is
domestic and the ADR Act and its IRR will apply
2. If seat is outside of the Philippines (even if the place of arbitration is in the
Philippines), it is foreign. The ADR Act and its IRR governs only when the foreign
arbitral award is applied for recognition
Policy on Arbitration
Korea Technologies Co,, Ltd. v. Lerma
Being an inexpensive, speedy and amicable method of settling disputes, arbitration is
encouraged by the SC
Brushing aside a contractual agreement calling for arbitration between the parties would be a
step backward
ADR Notes
Objectives of Arbitration
Provide a speedy and inexpensive method of settling disputes by allowing the parties to avoid
the formalities, delay, expense and aggravation which commonly accompany ordinary litigation,
especially litigation which goes through the hierarchy of courts
Arbitrator
Arbitrator - the person appointed to render an award, alone or with others, in a dispute that is
the subject of an arbitration agreement
Arbitrator
May use his own discretion in the performance of
his function
Arbiter
Who is bound by rules of law and equity in rendering
an award
Voluntary arbitrators - by the nature of their functions, act in a quasi-judicial capacity, such that
their decisions are within the scope of judicial review
Arbitration Agreement
Arbitration Agreement - agreement of the parties to submit to arbitration all or certain disputes
which have arisen or which may arise between them in respect of a defined legal relationship,
whether contractual or not.
It is a formal contract
Its validity depends on the validity of the contract being executed
Formal requisites:
1. Must be in writing
2. Must be subscribed by the parties or their representatives
It may be included in the container contract in which case, it is referred to as an arbitration
clause or a compromissoire, or may be constituted in separate contract
Ormoc Sugarcane Planters' Association, Inc. v. CA
An agreement to arbitrate is a contract
The relation of the parties is contractual
The rights and liabilities of the parties are controlled by the law of contracts
Cargill Philippines Inc v. San Fernando Regala Trading
A contract is required for arbitration to take place and to be binding
The provision to submit to arbitration any dispute arising therefrom and the relationship of the
parties is part of the contract and is itself a contract
Tuna Processing Inc v. Philippine Kingford Inc
When a party enters into a contract containing a foreign arbitration clause and in fact submits
itself to arbitration, it becomes bound by the contract, by the arbitration and by the results of
the arbitration
Doctrine of Separability
ADR Notes
ADR Notes
1. Will not assist one or the other or even both parties in any effort to subvert or defeat the
objective for their private purpose
2. Will not review the factual findings of an arbitral tribunal upon the artful allegation that such
body had misapprehended facts
3. Will not pass upon issues which are, at the bottom, issues of fact, no matter how cleverly
disguised they might be as 'legal questions'
4. Will not permit the parties to relitigate before it the issues of facts previously presented and
argued before the Arbitral Tribunal, save only where a clear showing is made that, in
reaching its factual conclusions, the Arbitral Tribunal committed an error so egregious and
hurtful to one party as to constitute grave abuse of discretion resulting in lack or loss of
jurisdiction
Nature and extent of judicial review under the Special ADR Rules:
Review is not a matter of right, but of sound judicial discretion which is granted only for
serious and compelling reasons resulting in grave prejudice.
Grounds for the exercise of the Court's discretionary review of the CA's decision:
1. Failed to apply the applicable standard or test for judicial review prescribed in these
Special ADR Rules in arriving at its decision resulting in substantial prejudice to the
aggrieved party
2. Erred in upholding a final order or decision despite the lack of jurisdiction of the
court that rendered such final order or decision
3. Failed to apply any provision, principle, policy, or rule contained in these Special
ADR Rules resulting in substantial prejudice to the aggrieved party
4. Committed an error so egregious and harmful to a party as to amount to an
undeniable excess of jurisdiction
Judicial
Review
of an arbitration is more limited than judicial review of a trial
Courts
are
without
power to amend or overrule merely because of disagreement with
matters of law or facts determined by the arbitrators. They will not review findings of law
and facts contained in an award, and will not undertake to substitute their judgment for that
of the arbitrators, since any other rule would make an award the commencement, not the
end, of litigation. Error of law and fact, or an erroneous decision of matters submitted to the
judgment of the arbitrators, are insufficient to invalidate an award fairly and honestly made
protection of the subject matter of the dispute. They are akin to the provisional remedies under
the 1997 Rules on Civil Procedure. They include but are not limited to:
Preliminary injunction
Appointment of receivers
Detention of property
Preservation of property
Inspection of property subject of the dispute
ADR Notes
INTERNATIONAL COMMERCIAL
ARBITRATION UNDER THE ADR
ACT OF 2004 AND ITS
IMPLEMENTING RULES AND
REGULATIONS
International Commercial Arbitration
Arbitration is international if:
1. The parties' place of business which at the time of the conclusion of the arbitration
agreement, is in different states;
2. The place of arbitration provided in the arbitration agreement and in which the parties
have their places of business, is outside the Philippines
3. The place where a substantial part of the obligation is to be performed or the place with
which the subject matter of the dispute is most closely connected, and in which the parties
have their place of business, is outside of the Philippines
4. The parties have expressly agreed that the subject matter of the arbitration agreement
relates to more than one country
Arbitration is commercial if it covers matters arising from all relationships of a commercial
nature, whether contractual or not
Applicability of ADR Act and the IRR:
An international commercial arbitration with the Philippines as its seat even if place of
arbitration is outside the Philippines
On the other hand, an international commercial arbitration whose seat is outside the Ph is a
foreign arbitration even if the place of arbitration is in the Ph.
Rules of interpretations
1. Interpretations of the ADR Act
The court shall have due regard to the policy of the law favoring arbitration
2. Interpretation of the Model Law
There must be a uniformity in its interpretation
Concepts and principles under the Model Law should be understood in the light of their
international usage rather than their ordinary domestic or local usage
3. Interpretation of the IRR
ADR Notes
The same policies on the interpretation of the ADR Act and Model Law
Party autonomy should be promoted
The freedom of the parties to determine certain issues including the right to authorize a 3rd
party to make that determination
A reference to an agreement of the parties includes any arbitration rules referred to in that
agreement
The rules applicable to claims are equally applicable to counterclaims, and those applicable
to defenses are equally applicable to defenses against counterclaims
Confidentiality in ICA
Same in the case of mediation
Confidential and shall not be disclosed except:
1. With the consent of the parties
2. For the limited purpose of disclosing to the court relevant documents in cases where resort
to the court is allowed
The court may issue protective orders to prevent or prohibit the disclosure of documents or
information containing secret processes, developments, research and other information where it
is shown that the applicant shall be materially prejudiced by an unauthorized disclosure thereof.
ADR Notes
Default date of commencement of arbitration is the date on which a request for that dispute to
be referred to arbitration is received by the respondent
Language
The parties to an ICA shall determine the language or languages to be used during the arbitral
proceedings
The arbitral tribunal may order that any documentary evidence shall be accompanied by a
translation thereof in the language or languages to be used in the proceedings
In default, English shall be used
In default, the law determined by conflicts of law rules as determined by the arbitral tribunal to
be applicable taking into account the terms of the contract and the usages of the trade shall be
applied
ADR Notes
An arbitrator may be challenged only if circumstances exists that give rise to a justifiable doubt
as to his:
1. Impartiality or independence
2. Possession of the qualifications agreed upon by the parties
1. Lack of jurisdiction
In determining the jurisdiction, the arbitration agreement or arbitration clause should be
treated as an independent and separate agreement from the container agreement, and,
hence, the invalidity of the latter does not automatically result in the nullity of the former
In general, jurisdiction over the subject matter being a matter of law, cannot be waived
and cannot be the subject of a compromise or the stipulation of the parties
The rule is different in a challenge against the jurisdiction of AT in an ICA
Challenge should be raised not later than the submission of the statement of
defense in the answer or in a motion to dismiss; otherwise, the objection is deemed
waived
2. In excess of jurisdiction
Where an AT which has jurisdiction in the first place but exceeds the scope of authority
Must be raised as soon as the excess of jurisdiction becomes apparent; otherwise, the
objection will be deemed waived unless the delay is justified
If
jurisdiction
is challenged
The
AT
may:
ADR Notes
2. Defer the resolution thereof until the rendition of the arbitral award and the resolution of
the jurisdictional issue shall form part thereof especially in instances when the
jurisdictional challenge does not appear to be indubitable
The order of deferment is not susceptible of judicial relief
ADR Notes
6. Conclusion/closure
1. By an award or settlement
If more than 1 arbitrator, the decision shall be made by majority of the members
The award shall be made in writing, signed by the sole arbitrator, or a majority of the
arbitrators, and the date and place of arbitration are stated, and a copy delivered to
each party
AT's mandate extends:
1. To correct and interpret the award
2. To set aside an exclusive recourse against the arbitral award
3. When reserved, to the quantification of costs and the determination of the party
liable thereof, or the division thereof
2. Termination
1. The claimant withdraws his claim, unless the respondent objects thereto on the
basis of a legitimate interest in obtaining a final settlement of the dispute
2. The parties agree to terminate the proceeding
3. The arbitral tribunal finds that the continuation of the proceedings has become
unnecessary or impossible
4. If during the arbitral proceedings, the parties settle their dispute, the AT shall
terminate the proceeding
Costs in ICA
Includes:
1. Fees of the AT
2. Travel and other expenses
3. Costs of expert advise
4. Travel and other expenses of witnesses
5. Costs for legal representation and assistance
6. Fees and expenses of appointing authority
In principle, the costs shall be borne by the unsuccessful party. However, the arbitral tribunal
may apportion the costs if reasonable under the circumstances of the case
ADR Notes
A party may ask the AT for the correction of the award, within 30 days from receipt of the
award, and with notice to the other party, for any error in computation, clerical or
typographical error, or other errors of similar nature
An error is typographical or clerical in character, and therefore, correctible even after the
decision has become executory, if the error is occasioned by a mistake in copying or
typing, does not alter the substance of the decision and does not affect or prejudice
substantial rights
4. Correction of typographical error initiated by the AT
Within 30 days the AT may motu propio correct any typographical error
5. Interpretation of the award
Same with #3, the parties may agree to request the AT to give an interpretation of a
specific point or part of the award
6. Additional award
Within 30 days from receipt of the award, a party, with notice to the other party, may
request the AT to make an additional award as to claims presented in the arbitral
proceeding but omitted in the award
Only
the
AT may correct an ICAA. Courts can only set them aside, extend recognition to them, or
The
arbitration proceedings took place
1.
2. The asset to be attached or levied upon, or the act to be enjoined is located
3. Any of the parties to the dispute resides or has his place of business
4. National Capital Judicial Region, at the option of the applicant
Petition
must be filed within 3 months from the date on which the party making that application
received the award, or from the date on which a request for correction, interpretation or
additional award has been disposed of by the AT
award and confers upon it the capability to be enforced under Ph law through Ph legal
processes
Confirmation - judicial affirmation of a domestic arbitral award
Enforcement - the execution and implementation of the foreign arbitral award through Ph legal
processes
foreign arbitral award - it is one rendered in an arbitration whose seat is outside the Ph
Must go through recognition un order to be entitled to enforcement in the Ph
Same thing with Ph ICA, recognition instead of confirmation
Jurisdiction over these proceedings is vested on the RTC
ADR Notes
ADR Notes
DOMESTIC ARBITRATION
Domestic arbitration in general
Arbitration is domestic if:
Conducted in the Philippines
Components of parties' place of business, place of arbitration, place of performance of a
substantial part of the obligation, and place where the subject matter of the dispute is most
closely connected, are all located in the Philippines
Governed by:
1. Arbitration Law
2. The Model Law
3. The following provisions of the ADR Act on international commercial arbitration:
1. Sec 22
2. Sec 23
3. Sec 24
4. Sec 25
5. Sec 26
6. Sec 27
7. Sec 28
8. Sec 29
9. Sec 30
10. Sec 31
11. Sec 32
12. Sec 33
4. IRR of the ADR Act
1. Sec 32 - distinguished domestic arbitration from international arbitration and declared
that the Arbitration Law remains applicable to domestic arbitration
2. Sec 33 - Adopted certain provisions of the Model Law and the ADR Act on international
commercial arbitration to domestic arbitration
5. All other rules applicable to international commercial arbitration which may be given
suppletory application in the absence of specific applicable provisions
Disputes covered
Unlike ICA, DA covers both commercial and non-commercial disputes provided they are
susceptible of arbitration and do not fall within the exclusive original arbitral jurisdiction of quasijudicial agencies
Due process
The rule is that administrative agencies excercising quasi-judicial powers shall not be fettered by
the rigid technicalities of procedure, albeit they are, at all times required, to adhere to the basic
concepts of fair play
In administrative proceedings, the essence of due process is simply an opportunity to be heard,
or an opportunity to explain one's side or opportunity to seek a reconsideration of the action or
ruling complained of.
This is satisfied if a person is granted and opportunity to seek reconsideration of an action
or ruling
ADR Notes
Unless the arbitral tribunal shall decide on a different place taking into account the
circumstances of the case and the convenience of the parties
Language
The parties to an tribunal shall determine the language or languages to be used during the
arbitral proceedings
The arbitral tribunal may order that any documentary evidence shall be accompanied by a
translation thereof in the language or languages to be used in the proceedings
In default, English or Filipino shall be used
Confidentiality
Privilege:
1. Arbitration proceedings
2. Records
3. Evidence
4. Arbitral award
5. Other confidential information
Exempt:
1. Consent of the parties
2. Limited purpose of disclosing to the court relevant documents where resort to the court is
allowed
Waiver of objection
Objections to non-compliance with the rules or any requirement under the arbitration agreement
must be raised without undue delay or within the time prescribed therefor, failing which, the right
to object is deemed waived
A party may be estopped from questioning non-compliance or is deemed to have waived his
objection thereto if he fails to raise the objection without delay or within the time prescribed
therefor
ADR Notes
1. Articles 2038-2040 of the Civil Code - compromise through mistake, fraud, intimidation,
or violence
2. Manifest disregard of law - must fly in the face of clearly established legal precedent
Requirements:
The applicable legal principle is clearly defined and not subject to reasonable
debate
The arbitrators refused to heed that legal principle
Interim measures may be requested or enforced through the courts
As a fundamental point, the pendency of arbitral proceedings does not foreclose resort to
the courts for provisional reliefs. The Rules of the ICC, which governs the parties' arbitral
dispute, allows the application of a party to a judicial authority for interim or conservatory
measures. The Arbitration Law recognizes the rights of any party to petition the court to
take measures to safeguard and/or conserve any matter which is the subject of the dispute
in arbitration. In addition, the ADR Act allows the filing of provisional or interim measures
with the courts whenever the arbitral tribunal has no power to act or to act effectively.
If the arbitral tribunal, in the exercise of its authority to resolve or defer the resolution of the
preliminary issue of its jurisdiction over the arbitration agreement, decides to defer the resolution
thereof until the rendition of the arbitral award, none of the parties can seek judicial relief from
the deferment. The parties can await the rendition of the final arbitral award, and raise the
jurisdictional issue before the courts in a proceeding for setting aside or vacating the award
Representation
A party may appear by himself or be represented or assisted by any person of his choice,
provided that such representative, unless admitted to the practice of law in the Ph, shall not be
authorized to appear as counsel in any Ph court or quasi-judicial body
A party desiring to be represented by counsel shall notify the other party or parties of such
intention at least 5 days prior to the hearing
Arbitration agreement
It is a contract
It must satisfy the essential requisites of a valid contract:
1. Consent
1. Pre-causal consent - when parties agree in a contract to settle by arbitration a
controversy that will arise between them
2. Present causal consent - when the controversy already exists between the parties at
the time of the submission to arbitration
2. Object
3. Price
It
must be in writing and subscribed by the party sought to be charged, or by his lawful agent
When the court action is multi-party, and one or more but not all of the parties are parties to an
arbitration agreement, the court shall refer those who are parties to the arbitration agreement to
arbitration, and proceed with the court action as to those who are not bound by such arbitration
agreement
The court may issue an order directing the inclusion in the arbitration of those parties who are
not bound by the arbitration agreement but who agree to such inclusion provided that those
originally bound by it do not object to their inclusion.
ADR Notes
Number of arbitrators
GR: party autonomy
In the absence thereof: there shall be 3 arbitrators
ADR Notes
3. Has personal bias which might prejudice the right of any party
4. Been selected to act as champion or to advocate a party's cause
4. He refuses to respond to questions by a party regarding the nature and extent of his
professional dealings with a party or his counsel
The party appointing an arbitrator may challenge that arbitrator for reasons which the party
became aware of after the appointment was made
If an arbitrator so appointed discovers the existence of any circumstance that would create a
presumption of bias or would render him a partial arbitrator, he shall immediately disclose such
information to the parties
Arbitral proceedings
GR: party autonomy
In absence thereof, default procedure:
1. Statement of claims is required to be submitted within the time agreed upon by the
parties. It includes:
1. Supporting facts
ADR Notes
2.
3.
4.
5.
6.
2. Points at issue
3. Relief sought
Statement of defenses
Amendment of claims or defenses. The parties may amend or supplement their claims or
defenses unless the arbitral tribunal considers the amendment inappropriate or dilatory
Hearing and written proceedings
1. Ad hoc - the procedure determined by the arbitrator with the agreement of the parties
shall be followed
2. Institutional - rules of procedure of the institutional arbitrator shall be followed which has
been impliedly accepted by the parties on account of the designation of the institutional
arbitral tribunal
Pre-hearing conference - in order to expedite the arbitral proceedings, the parties are
required to undergo a pre-hearing conference within 30 days from the appointment of the
arbitrator or the constitution of an arbitral tribunal. They shall discuss the ff:
1. Venue of the arbitration
2. Manner of recording the proceedings
3. Periods of communication of the statement of claim, answer, and answer to
counterclaims, and the form and contents thereof
4. Manner of offering evidence
5. Delivery of certain types of communication
6. Issuance of subpoena by the arbitral tribunal
7. Manner of receiving expert testimony
8. Possibility of applying for interim relief
9. Possibility of site or ocular inspection
10. Fees of arbitral tribunal
11. Other relevant matters
Threshold issue - issues on the jurisdiction of the arbitral tribunal over the claims and
counterclaims, or the arbitrability of the claims or counter-claims, shall be resolved by the
arbitral tribunal as threshold issues if the parties so request
Hearing dates and postponements
Default of a party
If the claimant fails to communicate his statement of claims, the AT shall terminate
the proceedings
If the respondent fails to communicate his statement of defenses, the AT shall
continue the proceedings without treating such failure in itself as an admission of
the claimant's allegation
If the party fails to appear at the hearing or produce evidence, he shall be deemed
to have waived them
Decision on interlocutory matters
Consolidation or concurrent hearings
Closure of hearings - after the hearing is closed, no further motion may be allowed
except for post-hearing briefs and reply briefs, unless the AT, motu proprio or upon the
request of a party, allows the re-opening of the hearing
Rules on evidence
Testimonial evidence - witnesses shall be required to take an oath or affirmation to tell the
truth. The parties may also agree in writing to submit their dispute to arbitration other than
by oral hearing
Documentary evidence - each party shall provide the other with copies of the statements
or documents submitted to the arbitral tribunal
Subpoena - AT has the power to issue subpoena dues tecum and ad testificandum
Expert - AT may appoint one or more experts to report to it on specific issues. However, in
DA, it is provided that, upon the agreement of the parties, the finding of the expert
engaged by the AT shall be binding upon them and the AT.
Court assistance in taking evidence - subpoena, interim or provisional reliefs, protective
orders, orders that may affect 3rd parties, examination of debtors
Decision
ADR Notes
Interim measures
PartIes may seek from the AT interim measures including:
1. Preliminary injunction
2. Appointment of receivers
3. Detention of property and preservation
4. Inspection of property
Parties
may also secure assistance from the courts for the implementation of interim measures
Procedure:
1. After the AT has been constituted, any party may request for the grant of interim measures
from the arbitrator against the adverse party
1. It may be granted in order to prevent irreparable loss, to provide security for the
performance of an obligation, to produce or preserve evidence, or to compel any other
appropriate act or omission
2. Grant may be conditioned upon the provision of security or any act or omission
specified in the order
3. The order granting or denying the request shall be binding upon the parties
4. A party who refuses to comply with the order shall be liable for damages resulting from
non-compliance
2. Before the constitution of the AT, the interim measures may be requested from the court in
accordance with the Special Rules of Court on ADR
Multi-party arbitration
The AT is empowered to implement procedural modifications as it shall deem appropriate to
address the complexities of the multi-party arbitration
ADR Notes
When the AT renders its final award, it loses jurisdiction over the dispute and the parties to the
arbitration
No motion for reconsideration, correction and interpretation of award or additional award
shall be filed with the AT
However, Sec 17 of Arbitration Law specifically allows the continuation of the arbitral
proceeding motu proprio by the arbitrators or upon motion of a partym upon good cause
shown
Amendment or modification by the arbitral tribunal of arbitral award is allowed in the ff cases
(as XPN to GR):
1. Under the arbitration agreement
2. Failure to resolve an issue
3. Quantification of costs
4. Correction of typographical and similar errors initiated by a party
A party may ask the AT for the correction of the award within 30 days from receipt of the
award
5. Correction of typo error initiated by the AT
AT may motu proprio correct typographical error within 30 days from date of award
6. Interpretation of the award
Within the same period, the parties may agree to request the AT to give an interpretation
on a specific point or party of the award
7. Additional award
Within 30 days from receipt of the award, a party may request the AT to make an
additional award as to claims presented in the arbitral proceeding but omitted in the
award
Grounds
when a court may amend or modify a domestic arbitral award:
Where
there is an evident miscalculation of figures, or an evident mistake in the description
1.
of any person, thing or property referred to in the award
2. Where the arbitrators have awarded upon a matter not submitted to them, not affecting the
merits of the decision upon the matter submitted
3. Where the award is imperfect in a matter of form not affecting the merits of the controversy,
and it has been a commissioner's report, the defect could have been amended or
disregarded by the court.
If
the
award upon a matter not submitted for arbitration, or if the imperfect form of the award,
affects the merits of the decision or controversy, the award should be vacated instead of merely
being amended or modified by the court
The court before which a petition for setting aside a domestic arbitral award is filed has the
prerogative and option to suspend the court proceedings in the ff instances:
1. To give the arbitral tribunal an opportunity to resume the arbitral proceedings or take such
action which will eliminate the grounds for setting aside an award
2. For the purpose of making a new or revised final and definite award or to direct a new
hearing before the same or new arbitral tribunal
3. If the ground for vacating an arbitral award does not affect the merits of the case and may
be cured or remedied, the adverse party may oppose the petition and instead request the
ADR Notes
court to suspend the vacation or setting aside proceedings to give the arbitral tribunal an
opportunity to cure or remedy the award
ADR Notes
If the ADF form is more akin to mediation than arbitration, the specific provisions of the IRR on
mediation shall have suppletory application to the extent that they are not in conflict with the
agreement of the parties
If the ADF form is more akin to arbitration than mediation, the specific provisions of the IRR on
arbitration shall have suppletory application to the extent that they are not in conflict with the
agreement of the parties
Other forms
1. Early neutral evaluation
Parties and their lawyers are brought together to present summaries of their cases and to
receive a non-binding assessment by an experienced neutral person, with expertise in the
subject matter or substance of the dispute
Availed of early in the pre-trial phase
Self-determinantion; parties shall govern the conduct of the ENE
In absence of any agreement, provisions of the IRR on ENE shall apply
Akin to mediation
Default appointing authority is the National President of the IBP or his representative
Parties are required to submit and exchange position papers containing the issues and
statements of the relevant facts and append thereto supporting documents and affidavits of
witnesses
No ex parte communication
Neutral 3rd person shall issue a written evaluation or assessment within 30 days from the
conclusion of the evaluation process. His opinion shall not be binding
Neutral
evaluation
2.
3. Mini-trial
Structured dispute resolution method in which the merits of a case are argued before a
panel composed of senior decision-makers, with or without the presence of a neutral 3rd
person, before which the parties seek a negotiated settlement
Panel shall be appointed by the parties equally
The parties shall submit a brief summary of the dispute, identifying the specific factual or
legal issues, after which they shall appear before the mini-trial panel members before
whom their lawyers shall present their respective cases starting with the claimant. After the
mini-trial, the panel members, with the assistance of the neutral 3rd person, shall negotiate
a settlement of the dispute
GR: party autonomy
In absence thereof, the provisions of the IRR on mini-trial shall be applicable
Akin to mediation
Unless, the panel of decision-makers, or the neutral 3rd person is given by the parties
the authority to render a binding decision, in which case, the proceedings becomes
akin to domestic arbitration
Conducted either as:
1. A separate dispute resolution process
2. As a continuation of mediation, neutral or early neutral evaluation or any other ADR
process
4. Mediation-arbitration
A two step dispute resolution process involving mediation and then followed by arbitration
GR: party autonomy
ADR Notes
In the absence thereof, its proceedings shall be governed by the rules on mediation first,
and thereafter, by the rules on domestic arbitration.
5. Combination thereof
6. Any other ADR form
ADR Notes
practice and procedure subject to the condition that they shall not diminish, increase or modify
substantive rights
Applicable only to proceedings before Philippine courts and any quasi-judicial agency which
may adopt the rules in a suppletory character
Summary
in nature
XPN:
1. Those that pertain to the confirmation or recognition and enforcement of arbitral awards
2. The deposit of mediated settlement agreements which is not a judicial proceeding
Special proceedings
Except for #12 (above), the subject matter of SRC procedures are special proceedings
Jurisdiction over the persons of the parties is acquired by the court upon proof of compliance
with the jurisdictional requirements
Summary proceedings
Proceedings under Special ADR are generally summary and are conducted by way of
submission of verified pleadings
The ff pleadings are not allowed and shall not be accepted for filing:
1. Motion to dismiss
2. Motion for bill of particular
ADR Notes
Non-summary proceedings
1. Confirmation, correction or vacation of award in domestic arbitration
2. Recognition and enforcement of an award in an international commercial arbitration
3. Recognition and enforcement of a foreign arbitral award
Jurisdiction
Lodged by law with the RTC
Venue
1. The place where any of the parties resides or has his place of business
2. The place where the asset or act involved is located
3. The national capital judicial region, at the option of the petitioner
ADR Notes
Issues involved:
ADR Notes
Referral to ADR
Pertains to the referral of a pending court action to arbitration rather than any other form of ADR
Applies when:
1. There is already a pending court action
2. There is either a pre-action arbitration agreement or a present-action arbitration agreement
Pre-action - executed prior to the filing of an action
The request for referral to arbitration may be made by any one of the parties not
later than the pre-trial conference
A request made after the pre-trial conference must be with the agreement of both
parties
Present-action - executed after the filing of the action
The parties may request the referral to arbitration at any time during the
proceedings
One
or
both parties desire to undergo arbitration
3.
ADR Notes
Procedure:
1. Pleading that initiates is a request or a motion because the rules on referral to ADR
contemplate the existence of a pending court action already initiated
Must contain an authentic copy of the arbitration agreement and must be served upon
the respondent and be set for hearing
Comment
or opposition must be filed within 15 days from service of the request
2.
Must show:
There is no agreement to refer the dispute to arbitration
The agreement is null and void
The subject matter of the dispute is not capable of settlement or resolution by
arbitration
3. The court may:
1. Grant the motion if it finds prima facie that there is a valid an enforceable arbitral
agreement
2. Deny it if the court finds otherwise
4. Relief against court action
1. If grant - immediately executory and shall not be subject to a MR, appeal, or certiorari
2. If denied - not subject to appeal but may be the subject of MR and petition for certiorari
Courts cannot deny based on the ff:
1. Not all of the disputes subject of the civil action may be referred to arbitration
2. Not all of the parties to the civil action are bound by the arbitration agreement and referral
to arbitration would result in multiplicity of suits
3. The issues raised in the civil action could be speedily and efficiently resolved in its entirety
by the court rather than in an arbitration
4. Referral to arbitration does not appear to be the most prudent action
5. The stay of the action would prejudice the rights of the parties to the civil action who are not
bound by the arbitration agreement
Koppel inc v. Makati Rotary Club Foundation - legal effects of the non-application of the
arbitration clause to a case:
1. The judicial proceedings conducted beyond the point when the dispute should have been
referred to arbitration are rendered invalid
2. The decisions, including those of the appellate courts, must be vacated and set aside
3. The case must be remanded to the court a quo to be suspended at said point
4. The petitioner and respondent must be referred to arbitration
ADR Notes
ADR Notes
Temporary protective measure
Bond is required
Appointment of Arbitrators
When it applies:
1. There is a failure to appoint an arbitrator under the following circumstances:
1. Where any of the parties in an institutional arbitration failed or refused to appoint an
arbitrator, or the parties have failed to reach an agreement on the sole arbitrator, or
when the two designated arbitrators have failed to reach an agreement on the 3rd or
presiding arbitrator and the institution under whose rules arbitration is to be conducted
fails or is unable to perform its duty as appointing authority within a reasonable time
from receipt of the request for appointment
2. Where the arbitration is an ad hoc and the parties failed to provide a method for
appointing or replacing an arbitrator, and the IBP failed or refused to act within such
period as may be allowed under the pertinent rules of the IBP
3. Where the parties agreed that their dispute shall be resolved by the 3 arbitrators but no
method of appointing those arbitrators has been agreed upon
2. And any party or the appointed arbitrators request the court to act as the appointing
authority and appoint the arbitrator or 3rd arbitrator as the case may be.
Procedure:
1. Petition for the appointment of an arbitrator filed with the RTC where:
1. The principal place of business of any of the parties is located
2. If any of the parties are individuals, where those individuals reside
3. In the National Capital Judicial Region, at the option of the petitioner
2. Petition shall state:
1. The general nature of the dispute
2. A description of the procedure for the appointment of the arbitrators, if there is any, and
the agreement containing such procedure
3. Number of arbitrators agreed upon or the absence of such an agreement
4. The special qualifications of the arbitrators
5. The fact that the appointing authority, without justifiable cause, has failed or refused to
act as such within the time prescribed
6. Petitioner is not the cause of the delay or in the failure of appointment
7. Contain an authentic copy of the arbitration agreement
3. The aggrieved party may file a comment or opposition within 15 days from the service of
the petition
4. The court may require each party to submit a list of not less than 3 proposed arbitrators
together with their curriculum vitae
5. Relief against court action
1. Appointing an arbitrator - shall be immediately executory and shall not be the subject
of MR, petition, or certiorari
2. Denying appointment - MR, appeal, or certiorari
ADR Notes
may be allowed under the applicable rule or, in the absence thereof, within 30 days from
receipt of the request
2. The aggrieved party wants to secure judicial action on the challenge
Procedure:
1. Petition shall be filed with the RTC where:
1. Where the principal place of business of any of the parties is located
2. If any of the parties are individuals, where those individuals reside
3. In the National Capital Judicial Region, at the option of the petitioner
2. Petition shall state:
1. Name of the arbitrator challenged and his address
2. Grounds for the challenge
3. Challenge has been expressly or impliedly rejected
4. Appointing authority failed or refused to act on the challenge
3. The challenged arbitrator may file a comment or opposition within 15 days from service of
the petition
4. The court has the following options:
1. Grant the petition for removing the challenged arbitrator if it finds merit
2. Dismiss the petition if there is no merit
3. Allow the challenged arbitrator to withdraw
4. Accept the challenge and remove the arbitrator if:
1. The party or parties who named and appointed the challenged arbitrator agree to
the challenge and withdraw the appointment
2. The other arbitrators in the AT agree to the removal of the challenged arbitrator
3. The challenged arbitrator hails or refuses to submit his comment on the petition or
the brief of legal arguments as directed by the court
Decision
shall be immediately executory and shall not bee subject to a MR, appeal, or
5.
certiorari
Challenge to an arbitrator
ADR Notes
who desires to perpetuate his testimony or that of another may avail of the rule on dispositions
before action or pending appeal
Examples of court assistance:
1. On testimonial evidence
1. To comply with a subpoena ad testificandum
2. To appear as witness before an officer for the taking of his deposition upon oral
examination or written interrogatories
2. On documentary evidence
1. To comply with a subpoena duces tecum
2. To allow the examination and copying of documents
3. On real evidence
1. To allow the physical examination of the condition of persons, or the inspection of things
or premises and, when appropriate, to allow the recording or documentation of the
conditions of persons, things or premises
Procedure:
1. The petition shall be filed with the RTC where:
1. Arbitration proceedings are taking place
2. The witness resides or may be found
3. Evidence may be found, at the option of the petitioner
2. Petition must state:
1. There is an on-going arbitration proceeding even if such proceeding cannot continue
due to some legal impediments
2. The arbitral tribunal ordered the taking of evidence or a party desires to present
evidence to the AT
3. The materiality or relevance of the evidence to be taken
4. The names and addresses of the intended witnesses, place where the evidence may be
found, or the place where the acts required are to be done
3. The aggrieved party may file a comment or opposition within 15 days from the service of
petition
4. Relief against court action
1. Grant - Immediately executory and shall not subject to a MR, appeal, or certiorari
2. Denied - may file MR, appeal, or certiorari
Confidentiality/Protective Order
Different from Interim Measure of Protection
Protective order - judicial enforcement of the confidential nature of information disclosed or
obtained during an ADR proceeding
When it applies:
1. ADR proceeding is pending
2. A party, counsel or witness disclosed information or was otherwise compelled to disclose
information
3. The disclosure was made. Under circumstances that would create a reasonable
expectation, on behalf of the source, that the information shall be kept confidential
ADR Notes
4. The source of the information or the party who made the disclosure has the right to prevent
such information from being disclosed
5. The source of the information or the party who made the disclosure has not given his
express consent to any disclosure
6. The applicant would be materially prejudiced by an unauthorized disclosure of the
information obtained, or to be obtained, during the ADR proceeding
Procedure:
1. Petition:
1. If no pending court proceeding, the initiatory pleading shall be a petition to be filed with
the RTC of the place where the order may be implemented
2. If there is a pending court proceeding, the applicant should file with the court where the
proceeding is pending a motion to enjoin the disclosure or to suppress the confidential
information
Where the situation is urgent, a timely objection must be raised by a party in the
case who will be aggrieved by the disclosure before the question is answered
2. The petition must state:
1. Information sought to be protected was obtained, or would be obtained, during an ADR
proceeding
2. The applicant would be materially prejudiced by the disclosure of that information
3. The person or persons who are being asked to divulge the confidential information
participated in the ADR proceedings
4. The time, date and place when the ADR proceedings took place
3. The comment or opposition must be filed within 15 days from service of the petition or
motion
4. Court action:
1. Meritorious - issue an order enjoining the persons involved from divulging confidential
information
Court shall impose proper sanctions to any person who disobeys the order
5. Relief against court action
1. Grant - immediately executory and may not be enjoined while the order is being
questioned before the appellate courts
2. Refusal - may be the subject of a MR or appeal but not certiorari
Causes of action:
1. Confirmation
ADR Notes
Petition can be filed at any time after the lapse of 30 days from receipt by the petitioner
of the DAA
Petition shall be granted unless there exist grounds to vacate the DAA
2. Correction or modification
Petition must be filed not later than 30 days from receipt of the DAA
Grounds:
1. Where there was an evident miscalculation of figures or an evident mistake in the
description of any person, thing or property referred to in the award
2. Where the arbitrators have awarded upon a matter not submitted to them, not
affecting the merits of the decision upon the matter submitted
3. Where the arbitrators have omitted to resolve an issue submitted to them for
resolution
4. Where the award is imperfect in a matter of form not affecting the merits of the
controversy, and if it had been a commissioner's report, the defect could have been
amended or disregarded by the court
3. Vacation
Petition must be filed not later than 30 days from receipt of the DAA
Grounds:
1. The arbitral award was procured through corruption, fraud or other undue means
2. There was evident partiality or corruption in the arbitral tribunal or any of its
members
3. The arbitral tribunal was guilty of misconduct or any form of misbehavior that has
materially prejudiced the rights of any party
4. One or more of the arbitrators was disqualified to act as such and willfully refrained
from disclosing such disqualification
5. The arbitral tribunal exceeded its powers, or so imperfectly executed them, such
that a complete, final and definite award upon the subject matter submitted to them
was not made
6. The arbitration agreement did not exist, or is invalid for any ground for the
revocation of a contract or is otherwise unenforceable
7. A party to the arbitration is a minor or a person judicially declared to be incompetent
Combination of causes of action - must be pleaded in the same proceeding
Initiatory relief - that which is pleaded in the initiatory petition
Relief-in-opposition - prayed for in order to oppose the initiatory relief
Supplementary relief - prayer for correction of an arbitral award in support of a petition for
confirmation
Alternative relief - prayer for correction as an alternative to a petition to vacate in
opposition to a petition for confirmation
The following combinations are available:
1. Confirmation/vacation
2. Confirmation/correction
The correction of the arbitral award implies the confirmation of the corrected or
modified award
3. Vacation/correction
Procedure:
1. Initiatory pleading is a pleading filed with the RTC having jurisdiction over the place:
1. In which one of the parties is doing business
2. Where any of the parties resides
3. Where the arbitration proceeding was conducted
2. Petition must state:
1. Addresses of the parties and any change thereof
2. The jurisdictional issues raised by a party during arbitration proceedings
3. The grounds relied upon
4. The date of receipt of the arbitral award and the circumstances under which it was
received by the petitioner
5. Authentic copy of the arbitral award
ADR Notes
3.
4.
5.
6.
7.
8.
ADR Notes
2.
3.
4.
5.
6.
7.
Does
not
apply
to non-convention awards
Convention
award - foreign arbitral award made in a state which is a party to the New York
Convention
As-is convention award - one which, although rendered in a state which is not a party to
the NYC, may be recognized and enforced by the Ph by reason of comity and reciprocity as
if ta convention award
Exclusive grounds for setting aside an ICA award:
1. The party making the application to refuse recognition furnishes proof that:
1. A party to the arbitration agreement was under some incapacity, or the said agreement
is not valid under the law to which the parties have subjected it or, failing any indication
thereof, under the law of the country where the award was made
2. The party making the application was not given proper notice of the appointment of an
arbitrator or of the arbitral proceedings or was otherwise unable to present his case
3. The award deals with a dispute not contemplated by or not falling within the terms of the
submission to arbitration
ADR Notes
4. The composition of the AT or the arbitral procedure was not in accordance with the
agreement of the parties
5. The award has not yet become binding on the parties or has been set aside or
suspended by a court of the country in which the award was made
2. Or the court finds that:
1. The subject matter of the dispute is not capable of settlement by arbitration under Ph
law
2. The recognition or enforcement of the award would be contrary to public policy
Procedure:
1. Initiated by a petition filed any time after receipt of the foreign arbitral award at the RTC
where:
1. The assets to be attached or levied upon are located
2. The act to be enjoined is being performed
3. The principal place of business in the Ph of any of the parties is located
4. If the parties is an individual, where any of those individuals reside
5. In the National Capital Judicial Region, at the option of the petitioner
2. Petition shall state:
1. The address of the parties
2. In the absence of any indication in the award, the country where the arbitral award was
rendered and whether such country is a signatory to the NYC
3. The relief sought
4. Authentic copy of the arbitration agreement
5. Authentic copy of the arbitral award
6. Translation in english
3. Court shall cause notice to be delivered to the respondent who may file a verified
opposition within 30 days from receipt of the notice
4. Court may conduct the hearing:
1. Summary:
1. Submission of briefs of legal arguments if the issue is mainly one of law
2. The submission of affidavits of witnesses, reply affidavits and documents in support
thereof if there are issues of fact relating to the grounds relied upon for the petition
2. If the court finds a need to conduct an oral hearing, it shall set the case for hearing
5. The court shall either:
1. Recognize and enforce
2. Refuse to recognize or enforce depending on the presence or absence of any of the
grounds to refuse
ADR Notes
Does not cover mediated settlement agreements or compromise agreements arrived at in courtannexed mediation where the agreement is subject to the approval of the court and is made part
of the judgment based on compromise
Parties may require any of the following processes regarding the SMA:
1. Deposit of mediated settlement agreements
To be enforced by judicial action, it must be deposited with the proper Clerk of Court of
the RTC where:
1. The principal place of business in the Ph of any of the parties is located
2. If any of the parties is an individual, where any of those individuals resides
3. In the National Capital Judicial Region
Enforcement
of the mediated settlement agreements
2.
Upon breach, any of the parties nay file a verified petition to enforce the agreement with
the court where the agreement was deposited
Verified petition shall state:
1. Name and designate as petitioner and respondent all parties to the mediated
settlement agreement and those who may be affected by it
2. The addresses of the petitioner and the respondents, and the ultimate facts that
would show that the adverse party has defaulted in the performance of his
obligation under the agreement
ADR Notes
ADR Notes
4. Special civil action for certiorari to the CA on the ground of grave abuse of discretion
amounting to lack or excess of jurisdiction when there is no appeal or any plain, speedy
and adequate remedy under the ordinary course of law
Principles the appellate or reviewing court must take into account which the RTC should have
been observed:
1. A party to arbitration is precluded from filing an appeal or a petition for certiorari
questioning the merits of an arbitral award
An agreement to refer a dispute to arbitration is tantamount to an implied agreement
that the arbitral award shall be final and binding
Appeals
through petitions for review and special civil actions for certiorari from decision
2.
of the RTC are exceptional remedies
Allowed only in the instances provided under the Special ADR Rules and only in the
manner provided therein
As
a
general rule, the grounds and infirmities provided under the Arbitration Law, the Model
3.
Law, and the Special ADR Rules for vacating or setting aside a domestic arbitral award or
an ICAA are exclusive
4. The court can deny recognition and enforcement of a foreign arbitral award only upon the
grounds provided for in Article VI of the NYC
assailing the decision of the RTC confirming an arbitral award is an appeal before the
CA pursuant to Sec 46 of ADR Act of 2004
Allowed only from the ff orders of the RTC:
1. Granting or denying an interim measure of protection
2. Denying a petition for appointment of an arbitrator
3. Denying a petition for assistance in taking evidence
4. Enjoining or refusing to enjoin a person from divulging confidential information
5. Confirming, vacating or correcting/modifying a domestic arbitral award
6. Setting aside an international commercial arbitral award
7. Dismissing the petition to set aside an ICAA even if the court does not decide to recognize
or enforce such award
8. Recognize and/or enforcing an ICAA
9. Recognizing and/or enforcing a foreign arbitral award
10. Refusing recognition and.or enforcement of a foreign arbitral award
11. Granting or dismissing a petition to enforce a deposited mediated settlement agreement
12. Reversing the ruling of the AT upholding its jurisdiction
Appeal shall be filed within 15 days from notice of the decision of the RTC or the denial of the
petitioner's motion for reconsideration
CA may direct the transmittal of records, set the case for oral arguments, require the submission
of memoranda, and render judgment
Filing shall not stay the award, judgment, final order, or resolution sought to be reviewed unless
CA directs
Bond is required in favor of the prevailing party equal to the amount of the award
ADR Notes
ADR Notes
CONSTRUCTION DISPUTE
ARBITRATION
Construction dispute
Construction - all on-site works on buildings or altering structures, from land clearance through
completion including excavation, erection and assembly and installation of components and
equipments
Construction dispute - those between or among parties to, or who are otherwise bound by, an
arbitration agreement, directly or by reference, whether such parties are project owner,
contractor, subcontractor, fabricator, project manager, design professional, consultant, quantity
surveyor, bondsman or issuer of an insurance policy in a construction project
Includes those between or among parties to, or who are otherwise bound by, an arbitration
agreement, directly or by reference whether such parties are project owner, contractor,
subcontractor, fabricator, project manager, design professional, consultant, quantity surveyor,
bondsman or issuer of an insurance policy in a construction project
ADR Act directs RTC to dismiss and refer the parties to the CIAC unless all the parties, assisted
by their respected counsels, submit to the court a written agreement making the court the body
that will resolve the dispute
Request for dismissal of the action and the referral shall be made through a verified motion that
shall contain:
1. Statement showing that the dispute is a construction dispute
2. Accompanied by proof of the the existence of the arbitration agreement
3. Notice of hearing
ADR Notes
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
jurisdiction of the CIAC may include but is not limited to:
1. Violation of specifications for materials and workmanship
2. Violation of the terms or agreements
3. Interpretation and/or application of contractual provisions
4. Amounts of damages and penalties
5. Commencement time and delays
6. Maintenance and defects
7. Payment default of employer or contractor and changes in contract cost
The parties can neither expand nor diminish a tribunal's jurisdiction by stipulation or agreement
All that is required for the CIAC to acquire jurisdiction is for the parties to a construction contract
to agree to submit their dispute to arbitration, without any qualification or condition precedent
In principle, CIAC has jurisdiction over the construction dispute and not the contract
Excludes:
1. Disputes arising from employer-employee relationships
2. Claims for moral damages, exemplary damages, opportunity or business losses in addition
to liquidated damages and attorney's fees
Doctrine of primary jurisdiction - precludes courts from resolving construction disputes over
which jurisdiction has been initially lodged with the CIAC by reason of its special knowledge,
experience and services to determine technical and intricate matters of fact
The jurisdiction of the CIAC is dependent on the agreement and consent of the parties to the
construction contract, to submit their dispute to arbitration, and that, absent such consent, the
CIAC cannot validly proceed against a party for lack of jurisdiction
Absence of such agreement, the jurisdiction over the construction dispute will remain with
the regular courts
Two acts which vests CIAC jurisdiction:
1. Presence of an arbitration clause in a construction contract
2. Agreement of the parties to submit the dispute to the CIAC
Refusal or failure of a respondent to appear will not stay the proceedings. CIAC is mandated to
appoint the arbitrator.s in accordance with the Rules, and the arbitration proceedings shall
continue
Even after failing to appear, a respondent is given the opportunity to have the proceedings
reopened and be allowed to present evidence
An arbitration agreement or a submission to arbitration must be in writing but it need not be
signed by the parties, as long as the intent is clear that the parties agree to submit a present or
future controversy arising from a construction contract to arbitration. The agreement may even
be in the form of exchange of letters sent by post or telefax.
ADR Notes
If there is no agreement, each party shall submit the names of not more than 6 nominees
from CIAC-accredited arbitrators in order of their preference
In case of sole arbitrator, CIAC shall appoint amont the parties; nominees the common
nominee provided he is available and not disqualified
For AT, CIAC shall appoint the parties' common nominees. If there is no common nominee,
the CIAC shall choose and appoint one arbitrator from each parties
If one common nominee, he shall be appointed together with 2 others from the list
submitted by the parties
If 2 common nominees, the CIAC shall appoint them
Within 15 days, the 2 arbitrators will select the 3rd arbitrator
In case of failure, CUAC shall, within 15 days, appoint the 3rd member
If 3, CIAC shall appoint all
The arbitrators will choose among themselves who will be the chairman
Arbitrators must communicate to the CIAC their acceptance or refusal of his appointment
within 5 days
5. Challenge to arbitrators
Shall be in the form of a complaint under oath
The challenge should be filed at any time after the challenged arbitrators' appointment but
before the lapse of the original 10 days prior for the submission of memoranda or draft
decision
Challenge must be based on the ff grounds:
1. Relationship by blood or marriage within the 6th degree of either party to the
controversy, or to counsels within the 4th degree
2. Financial, fiduciary or other interest in the controversy
3. Partiality or bias
4. Incompetence, or professional misconduct
5. Other just and valid reasons affecting independence, integrity, impartiality and
interest
Challenged
arbitrator will be given an opportunity to be heard
Upon
removal
or inhibition, CIAC shall promptly appoint the replacement, unless he is the
3rd member, in which case, the 2 arbitrators will select his replacement
6. Preliminary conference and terms of reference
The following matters shall be considered:
1. Possibility of amicable settlement
2. Necessity or desirability of amendment to pleadings
3. Obtaining stipulations or admissions of facts and/or documents to avoid
unnecessary proof
4. Limitation of the number of witnesses
5. Suggested formulation of issues by the parties
6. Application for interim relief, appointment of experts and necessity of site inspection
7. Such other matters as may aid in the just and speedy disposition of the case
Terms
of Reference - controls the proceedings unless corrected for manifest errors by a
motion filed not later than the hearing date. It shall include:
1. Full name of the parties, and there respective counsels
2. The addresses and contact numbers of the parties/counsels, to which notifications
or communications arising in the course of the arbitration may be validly made
3. A summary of the parties' respective claims
4. Full statement of admitted facts and documents
5. The issues to be resolved in question form
6. The arbitrators' full names
7. The place where the arbitration proceedings shall be held
8. The breakdown, schedule of payments, and sharing of arbitration fees
9. Such other particulars as may be required by the AT for the proper and speedy
adjudication of the case
7. Arbitration proceedings
1. Venue, date, and time
ADR Notes
When
a timely motion for correction has been filed
1.
2. Notwithstanding the finality of the award the AT retains jurisdiction to exercise
executory powers which includes:
1. Determination of the sufficiency of the bond
2. Approval of the surety or bonding company
3. satisfaction of the award
4. Quashal of the execution
5. Issuance of alias writs
6. Assessment of properties levied
7. Appointment of a quantity surveyor or assessor
8. Examination of banks, debtors of the judgment debtor and any person holding
properties or assets of the judgment debtor
9. Issuance of subpoena ad testificandum and subpoena dues tecum
9. Execution of the award
If the decision is appealed, the execution may be stayed upon approval by the AT
Costs of arbitration
GR; determining which party ought to bear the costs:
1. Non-monetary claims, the award shall decide which of the parties shall bear the costs or in
what proportion the costs shall be borne by each
2. Costs ordinarily follows the result of suit, costs shall be allowed to the prevailing party as a
matter of course, but the court shall have the power to adjudge that either party shall pay
the cost of an action