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ALTERNATIVE DISPUTE RESOLUTION

By. Atty. Gabriel Robeniol


CHAPTER 1: INTRODUCTION
I. Historical Note
Judicial and Legislative trends Dispute resolution towards these trends
consistently lean towards the utilization of alternative means and methods
implemented in or outside the court trial system
Civil Code of the Philippines:

Took effect on 30 August 1950

Contains provisions on compromises and arbitration which encourage litigants


to agree upon fair compromise and authorize arbitration as a means of concluding
controversies.
19 June 1953

Enactment of Arbitration Law

Republic Act. 876 supplemented the provisions of the NCC on arbitration


10 May 1965

Philippine ADR was achieved when the Philippines Senate passed Resolution No.
71 adhering to the UN Convention on the recognition and enforcement of foreign
arbitral awards of 10 June 1958

Philippine law has acknowledged the international arbitration as system of


setting commercial dispute.
UNCITRAL

The Philippine was a signatory of the United Nation Commission on International


Trade Law New York Convention of 21 June 1985

A Model law on International Commercial Arbitration which the Philippines


committed its adherence.
II. Judiciary Action
Response of Judiciary to the Problems of Delay:

Requirements of conducting pre-trial conference


Utilization on different modes of discovery
Strict proscription against forum shopping
More importantly, the supreme court encourages the use of arbitration through
Philippine Mediation Commission or through Judicial Dispute Resolution (JDR)

III. Legislative Action

Special domestic legislations have been passed the prescribing arbitration,


mediation and conciliation in specific types of cases to help decongest court
dockets.
For instance:
1. The Labor Code of the Philippines mandate the creation and constitution of the
National Labor Relations Commissions (NLRC) which, together with its Arbitration
Branch, has been dispensing arbitration service in cases involving:

a)
b)
c)
d)
e)

Unfair Labor Practice


Termination of Employment
Conditions of Employment
Damages arising from ER EE
Level Arbitration

2. The Local Government Code of 1991 which requires conciliation, mediation or


arbitration in the barangay level before the pangkat ng tagapagsundo of would-be
adverse parties in specified civil and criminal cases before resort to courts can be
had.
IV. Executive Branch Contribution

Construction Industry Arbitration Commission (CIAC) Enacted under E.O. No.


1008 dated 4 Feb 1985
23 August 1998 Approval and promulgation of the Rules of Procedure
Governing Construction Arbitration
19 November 2005 CIAC revised rules of procedure governing construction
arbitration
22 March 2010 The Executive Branch of Government, through the Office of
Solgen, promulgated the Rules on ADR for dispute between national government
agencies which reiterated its adherence to the policy of the law to encourage the
amicable settlement of disputes through alternative dispute resolution methods.

V. The ADR Act of 2004

The first alternative dispute resolution law in the Philippines under R.A. No. 9285
An act to institutionalize use of an alternative dispute resolution system in the
Philippines and to establish the office for alternative dispute resolution and for
other purposes.
Promulgated on 2 April 2004 and became effective on 28 April 2004 after its
publication on 13 April 2004.
It is a general law applicable to all forms of alternative dispute resolution such
as arbitration, mediation, conciliation, early neutral evaluation, mini0trial, or any
combination thereof.

The Supreme Court, in Korea Technologies Co., Ltd., v. Lerma, enumerated and
explained the salient features of R.A. No. 9285 applying and incorporating the
UNCITRAL Model, namely:
1.
2.
3.
4.
5.

RTC must refer to arbitration in proper case


Foreign Arbitral awards must be confirmed by RTC
The RTC has jurisdiction to review foreign arbitral awards
Grounds for judicial review different in Domestic and Foreign arbitral awards.
RTC Decisions of assailed foreign arbitral awards appealable: CA, certiorari

VI. The Lawyers Role


1. Must contribute to the promotion of ADR
2. Duties to the Courts Assist courts in encouraging the parties to avail of
alternative means of dispute resolution
3. Duties to their clients to explain the benefits of the alternative dispute
resolution system to them.
4. Can be appointed as an arbitrator, mediator, conciliator or neutral evaluator.

5. They have to perform their functions in good faith, with no other motive except
that of securing for the parties a speedy, inexpensive and amicable settlement
of their disputes and controversies.
CHAPTER 2: FUNDAMENTALS OF ALTERNATIVE DISPUTE RESOLUTION
I. Alternative Dispute Resolution, defined.
In a broad sense, alternative dispute resolution is a system, using means and methods
allowed by law and approved by the parties, for the purpose of resolving or facilitating
the resolution of disputes and controversies between them, in an expeditious and
speedy manner, without resorting to court adjudication. This covers all forms and
methods of resolving disputes outside the court trail system.
ADR as defined in ADR Act of 2004, means 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 xxx in which a neutral third party participates to
assists in the resolution of issues xxx. Administrative agencies exercising quasijudicial power are not covered by the ADR Act of 2004.
II. State Policy in ADR

ADR act of 2004 declared the state policy


Promote party autonomy resolution of dispute
Freedom of the party to choose or make their own arrangement to resolve
dispute
Provides solutions that is less time consuming, less confrontational procedure of
goodwill and lasting friendship
Wave of the future in international relationship

III. Principles of ADR


1. Promotion of party autonomy and selfdetermination in dispute resolution
2. Recognition of ADR as an efficient tool and an alternative procedure for the
resolution of cases
3. Enlisting a private sector participation
IV. Objectives and Benefits of ADR
1. Speedy and impartial justice
2. Declogging of court dockets
V. Features of ADR
1. ADR means used to resolve a dispute or controversy
Exception: intention is to cause delay or suspend the proceeding
2. ADR utilize means and methods allowed by law
3. ADR is contractual in nature
4. ADR avoids court trial
5. ADR usually involves the participation of neutral third party
VI. Sources of ADR

1. Domestic Laws and Rules


Constitution
Civil Code
Arbitration Law
2. Acts of the Executive Branch
3. Decisions of the Supreme Court
4. International Law : UNCITRAL
5. General principle of Law and Equity
VII. Forms of ADR
1. Arbitration arrangement of the and abiding by the judgment or selected person in
dispute; binding between the parties
2. Mediation voluntary agreement between the parties with the help of third person
to convince them to come into an agreement; non-binding between eh parties.
3. Conciliation conciliation of dispute in an unantagonistic manner
4. Neutral lawyers are brought to present the summary of the case
5. Early Neutral availed of in pretrial case
6. Minitrial merits of the case argued in front of a panel
7. Any combination of the foregoing
8. Any other ADR forms
VIII. Classification of Forms of ADR
1. As to the number of parties:
Biparty one or two parties
MultiParty two or more
2. As to the number of issues involve:
Simple one issues involve
Complex two or more issues
3. As to the extent of conclusion
Complete all issues involve is resolve
Partial only two or three issues involve are resolved but not all
4. As to the role of evidence in the proceedings
Evidentiary
Nonmerit based
5. As to the pendency of the court case
Caserelated when there is a case involved
Independent
6. As to the applicable law
Domestic when the place of business and arbitration is in the Philippines
International when the place of business involved two states and arbitration is
outside the Philippines
Foreign when the place of business is outside the Philippines and the arbitration
is outside the Philippines.
7. As to the permanency of the ADR provider
AD HOC temporary
Institutional permanent

IX. Components of ADR


1.
2.
3.
4.

Contending parties
Dispute or controversy
Form of ADR
ADR provider or practitioner

X. Subject matter of ADR


All adversarial disputes and controversies except those which by law or reasons of
public policy are declared not capable of being subject to ADR, namely:
1.
2.
3.
4.
5.
6.

Civil Status of persons


Validity of marriage and any other forms of legal separation
Jurisdiction of courts
Future legitime
Criminal Liability
In general, those which, by law, cannot be compromise

XI. Seat and Venue of ADR


Seat The jurisdiction under whose law the proceeding is being conducted.
Venue or place The actual site where the arbitration is being conducted.
Hence it is possible for the venue or place of arbitration to be in a country different
from the country where the arbitration has its seat.
XII. Basic Concepts of ADR

Concluding Acts or Arguments


Arbitral Award final decision of arbitration on awarding issue or controversy
Mediated Settlement agreement contract executed by the parties
Compromise or compromise agreement avoidance of litigation or to put an end
to the one already existing
Waiver or quitclaim a statement renouncing any right or claim
ADR providers or practitioners
Preferences of ADR

XIII. Office for ADR

Pursuant to ADR Act of 2004, an Office for Alternative Dispute Resolution


(OADR) was created which is attached to DOJ
Headed by an Executive Director appointed by the president upon
recommendation of secretary of justice

Principal objectives, powers and functions of the OADR are the following:
1. To promote, develop and expand the use of ADR in the private and public
sectors through information, education and communication;
2. To assist the government to monitor, study and evaluate the use by the public
and private sectors of ADR, and recommend to Congress needful statutory
changes to develop, strengthen and improve ADR practice in accordance with
the world standards;

3. To act as appointing authority of mediators when the parties agree in writing


that it shall be empowered to do so; and
4. To compile and publish a list or roster of ADR providers/practitioners, and to
compile a list or roster of foreign or international ADR providers/practitioners.
CHAPTER 3: MEDIATION UNDER ADR ACT OF 2004
I. Mediation in General
Mediation, as defined under the ADR Act of 2004 is a voluntary process in which a
mediator, selected by the disputing parties, facilitates communication and
negotiation, and assists the parties in reaching a voluntary agreement regarding a
dispute.
Excluded from the coverage of the ADR Act are the following:
1. Court Annexed Mediated (CAM) Mediation process conducted under the
auspices of the court. Specifically, CAM is conducted prior to the pre-trial where
the judge refers the parties to the Philippine Mediation Center (PMC) for the
mediation of their dispute by trained and accredited mediators.
2. Court Referred Mediation Mediation ordered by a court to be conducted in
accordance with the agreement of the parties when an action is prematurely
commenced in violation of such agreement.
3. Conciliation conducted by the Lupong Tagapamayapa and Pangkat ng
Tagapagsundo
4. Judicial Dispute Resolution the mediation, conciliation and early neutral
evaluation process conducted by the judge of a pending case after a failed
court-annexed mediation and before the pre-trial stage.
A. Parties in Mediation
1. Mediator Person conducting mediation
2. Non Party participants Witness, resource person, or experts
B. Classification of Mediation

As a form of ADR, mediation is nonevidentiary or nonmerit based which


focuses on facilitation or communication and negotiation between the parties in
encouraging to voluntarily settle their dispute.

On the basis of the structure of the ADR provider, mediation is either


institutional when administered and conducted by or under the rules of mediation
institution or adhoc if it is other than institutional

An agreement to submit a dispute to mediation by an institution shall include an


agreement:
1. To be bound by the internal mediation and the administrative policies of such
institution; and
2. 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.

C. Place of Mediation

Two disputing parties are free to agree the place.


In the absence default is convenient to and appropriate to all the parties

D. Stages of Mediation
1.
2.
3.
4.
5.
6.

Opening statement of mediator


Individual narration by the parties
Exchange by the parties
Summary issues
Generalization and evaluation of options
Closure

The foregoing process, however, is not obligatory and the parties, under the
principles of self-determination and party autonomy, may choose the procedure
that will govern their mediation.

Mediation shall be held in private except when parties consented that there be
other persons.

Mediation shall be closed and concluded:


a) By the execution of settlement agreement by the parties;
b) By the withdrawal of any party from mediation; or
c) By the written declaration of the mediator that any further effort at
mediation would not be helpful.

E. Advantages of Mediation
1. Confidentiality in mediation process
2. Prompt, economical amicable dispute resolution
3. The decision-making authority rest upon the parties
F. Confidential and Privileged nature of Mediation Communication
The ADR Act of 2004 maintains the confidentiality of the mediation process by
declaring that all information of evidence is privileged and confidential in character.
Ways of guaranteeing the privilege:
By declaring certain information as confidential and, therefore, not capable of
being disclosed.
By declaring the privileged information inadmissible in evidence.
Confidential Information
Any information relative to the subject of mediation or arbitration, relative to the
subject of mediation or arbitration, expressly intended not to be disclosed, or obtained
under circumstances that would create a reasonable expectation on behalf pf the
source that the information shall not be disclosed.
It can either be:
Expressly Confidential if the intention not to be disclosed is expressed by its source;
and

Impliedly confidential if obtained under circumstances that would create a


reasonable expectation on behalf of the source that the information shall not be
disclosed.
Confidential Information Includes:
1. Communication, oral or written, made in a dispute resolution proceeding, including
any memorandum, note or work product of the neutral party or non-party
participant;
2. An oral or written statements made or which occurs during the mediation or for
purposes of considering, conducting, participating, initiating, continuing or
reconvening mediation or retaining a mediator; and
3. Pleadings, motions, manifestations, written statement and reports filed or
submitted in arbitration or for expert evaluation.
Legal effects of Confidential and privileged nature
1. A party may refuse to disclose confidential information
2. Confidential information shall not be subject to discovery and inadmissible in
adversarial proceedings whether judicial or quasi-judicial
3. In an adversarial proceeding, persons involved or previously involved in mediation
may not be compelled to disclose confidential information obtained during
mediation:
Parties to the dispute;
Mediator or mediators;
Counsel for the parties;
Nonparty participants;
Any person hired or engaged in connection with mediation as secretary,
stenographer, clerk or assistant; and
Any persons who obtains or possesses confidential information by reason of
his profession. In other words, practically all of the parties, mediator, and
non-party participants are bound by the prohibition to disclose confidential
information.
4. The protection under the ADR Act shall continue to apply even if the mediator is
found to have failed to act impartially.
5. Mediator may not be called to testify to provide information gathered in mediation.
Exceptions based on agreement, Nature of Proceedings, Crime or Social
Justice
1. Contained in an agreement evidence by a record authenticated by all parties to
agreement.
2. Those available to the public or made during a session of mediation which is open,
or is required by law to be open, to the public.
3. A threat or statement of plan to inflict bodily injury or commit a crime of violence.
4. Communication intentionally used to plan, attempt to commit, or commit, a crime,
or conceal an on-going crime or criminal activity.
5. 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.
6. Communication sought or offered to prove or disprove a claim or complaint of
professional misconduct or malpractice filed against a mediator in a proceeding.

7. Communication sought to offered to prove or disprove a claim or complaint of


professional misconduct or malpractice against a party non-party participant, or
representative of a party based on conduct occurring during mediation.
Exceptions based on Public Policy
1. Court proceeding involving a crime or felony
2. A proceeding to prove a claim or defense that under the law is sufficient to reform
or avoid liability on contracts arising from mediation
Limited use of External Evidence
Only such portion of the communication necessary for the application of the exception
can be admitted in evidence.
Privilege of the Mediator

Bound by the confidential and privileged nature of mediation communication.

He may not be compelled to provide evidence of a mediation communication or


testify in such proceeding.

He may not a report, assessment, evaluation, recommendation, finding or other


authority that will make a ruling on a dispute that is the subject of a mediation.
Exceptions:
1. Termination of mediation, or where settlement was reached;
2. Permitted to be disclosed under Section 13 of ADR Act
Waiver of Confidentiality

Expressed when it is contained in a record, or made orally during s proceeding


by the mediator and the mediation parties; or

Implied (a) by failing to timely object to an objectionable question propounded


during a trial, or to a document being offered in evidence, or (b) by testifying or
presenting a witness to testify on confidential and privileged information.

It can also come by way of estoppel such as when a non-party participant


himself discloses the erstwhile confidential information.
II. The Mediator

Mediation parties are given the freedom to select mediators and they may
request the OADR to provide them with a list or roster of its certified mediators,
and their resumes.
Withdrawal Requirements
1.
2.
3.
4.
5.
6.
7.
8.

The party requested


Lacks qualifications, training and experience
Mediators impartiality is in question
Violation of ethical standards
Safety will be jeopardized
Unable to provide effective services
Conflict of interest
Other instances

Duties and Functions of Mediators

Prior to Mediation
On competence:

Upgrade professional competencies in mediation skills and ensure that his


qualifications, trainings, and experiences are known to and accepted by the
parties.
On partiality:
Reasonable inquiry whether there are known facts that a reasonable individual
would consider likely to affect hiss impartiality

During the Mediation


Confidentiality
On consent and self-determination:
A mediator shall exert reasonable effort to ensure that each party understands the
nature and character of the mediation proceedings
On promotion of respect and control of abuse and process:
The mediator shall encourage mutual respect between the parties, and shall take
reasonable steps, subject to the principle of self-determination, to limit abuses of
the mediation process.

Mediators Cost and Fees

A mediator is allowed to charge costs, reasonable fees and charges against the
parties but is under obligation to fully disclose and explain the basis thereof.
In an Ad Hoc mediation, parties are free to make their own arrangement as to
the mediation of cost and fees.
In an Institutional mediation, mediation costs shall include the administrative
charges of the mediation institution, mediators fees and associated expenses.

Mediated Settlement Agreement

Compromise Agreement
Successful Mediation

Roles of counsel in Mediation


Section 14 of ADR Act

Collaborate with the other lawyer in working together towards the common goal
of helping their clients resolve their differences to their mutual advantage.

Encourage and assist the client to actively participate in positive discussion and
cooperate in crafting an agreement to resolve their dispute.

Assist the client to comprehend and appreciate the mediation process and its
benefits, as well as the clients greater and personal responsibility for the success
of mediation in resolving the dispute.

Confer and discuss with the client the mediation process and substance.
Supreme Court Resolution, albeit concerning CAM and JDR
1. Help their clients comprehend the mediation process and its benefits and allow
them to assume greater personal responsibility in making decisions for the success
of mediation in resolving the dispute.
2. Discuss with their clients the following:
a) The substantive issues involved in the dispute;
b) Prioritization of resolution in terms of importance to client;

c) Understanding the position of the other side and the underlying fears,
concern, and needs underneath that position;
d) Need for more information or facts to be gathered with the other side for
informed decision-making;
e) Possible bargaining options but stressing the need to be open-minded about
other possibilities;
f) The best, worst, and most likely alternatives to a negotiated agreement.

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