ADR Lecture Notes

January to April 2022

Analyn G. Avila
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ALTERNATIVE DISPUTE RESOLUTION

LECTURES

A. Introduction and History

1. Pertinent Laws
a. Civil Code of the Philippines
Chapter 1&2, Title XIV, Book IV on compromise and arbitration-
encourages litigants to agree upon a fair compromise and
authorize arbitration as a means of concluding controversies

TITLE XIV
COMPROMISES AND ARBITRATIONS
CHAPTER 1

Compromises
Article 2028. A compromise is a contract whereby the parties, by making
reciprocal concessions, avoid a litigation or put an end to one already
commenced. (1809a)
Article 2029. The court shall endeavor to persuade the litigants in a civil case
to agree upon some fair compromise. (n)
Article 2030. Every civil action or proceeding shall be suspended:
(1) If willingness to discuss a possible compromise is expressed by one
or both parties; or
(2) If it appears that one of the parties, before the commencement of
the action or proceeding, offered to discuss a possible compromise but
the other party refused the offer.
The duration and terms of the suspension of the civil action or proceeding and
similar matters shall be governed by such provisions of the rules of court as
the Supreme Court shall promulgate. Said rules of court shall likewise provide
for the appointment and duties of amicable compounders. (n)
Article 2031. The courts may mitigate the damages to be paid by the losing
party who has shown a sincere desire for a compromise. (n)
Article 2032. The court's approval is necessary in compromises entered into
by guardians, parents, absentee's representatives, and administrators or
executors of decedent's estates. (1810a)
Article 2033. Juridical persons may compromise only in the form and with the
requisites which may be necessary to alienate their property. (1812a)
Article 2034. There may be a compromise upon the civil liability arising from
an offense; but such compromise shall not extinguish the public action for the
imposition of the legal penalty. (1813)
Article 2035. No compromise upon the following questions shall be valid:
(1) The civil status of persons;
(2) The validity of a marriage or a legal separation;
(3) Any ground for legal separation;
(4) Future support;
(5) The jurisdiction of courts;
(6) Future legitime. (1814a)
Article 2036. A compromise comprises only those objects which are definitely
stated therein, or which by necessary implication from its terms should be
deemed to have been included in the same.
A general renunciation of rights is understood to refer only to those that are
connected with the dispute which was the subject of the compromise. (1815)

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Article 2037. A compromise has upon the parties the effect and authority of
res judicata; but there shall be no execution except in compliance with a
judicial compromise. (1816)
Article 2038. A compromise in which there is mistake, fraud, violence,
intimidation, undue influence, or falsity of documents, is subject to the
provisions of article 1330 of this Code.
However, one of parties cannot set up a mistake of fact as against the other if
the latter, by virtue of the compromise, has withdrawn from a litigation already
commenced. (1817a)
Article 2039. When the parties compromise generally on all differences which
they might have with each other, the discovery of documents referring to one
or more but not to all of the questions settled shall not itself be a cause for
annulment or rescission of the compromise, unless said documents have been
concealed by one of the parties.
But the compromise may be annulled or rescinded if it refers only to one thing
to which one of the parties has no right, as shown by the newly-discovered
documents. (n)
Article 2040. If after a litigation has been decided by a final judgment, a
compromise should be agreed upon, either or both parties being unaware of
the existence of the final judgment, the compromise may be rescinded.
Ignorance of a judgment which may be revoked or set aside is not a valid
ground for attacking a compromise. (1819a)
Article 2041. If one of the parties fails or refuses to abide by the compromise,
the other party may either enforce the compromise or regard it as rescinded
and insist upon his original demand. (n)

CHAPTER 2
Arbitrations
Article 2042. The same persons who may enter into a compromise may
submit their controversies to one or more arbitrators for decision. (1820a)
Article 2043. The provisions of the preceding Chapter upon compromises
shall also be applicable to arbitrations. (1821a)
Article 2044. Any stipulation that the arbitrators' award or decision shall be
final, is valid, without prejudice to articles 2038, 2039, and 2040. (n)
Article 2045. Any clause giving one of the parties power to choose more
arbitrators than the other is void and of no effect. (n)
Article 2046. The appointment of arbitrators and the procedure for arbitration
shall be governed by the provisions of such rules of court as the Supreme Court
shall promulgate. (n)

b. Republic Act No. 876- The Arbitration Law

c. International conventions
Resolution No. 71 of the Philippine Senate- adhering to the United
Nations Convention on the Recognition and Enforcement of Foreign
Arbitral Awards- June 10, 1958- gave reciprocal recognition and allowed
enforcement of international arbitration agreements between the parties
of different nationalities within a contracting state.
The Philippines is also a signatory to the United Nations
Convention on International Trade Law (UNCITRAL) New York
Convention of June 21, 1985 which adopted the Model Law on
International Commercial Arbitration

d. Other laws:
Labor Code of the Philippines

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Local Government Code

Rules on construction dispute arbitration
Rules on ADR among government agencies
2. Conflict Resolution in the Philippines
3. Katarungang Pambarangay
- P.D. No. 1508 dated June 11, 1978, repealed by Local Government
Code

The Katarungang Pambarangay is a community-based

mechanism for dispute resolution. It covers disputes between
members of the community and involves the Punong Barangay
and other members of the community (the Lupon members) as
intermediaries (mediators, conciliators, and arbitrators).

Revised Katarungang Pambarangay Law (RKP Law)

June 1, 1992- the DOJ promulgated the Implementing Rules and

Regulations for the KP Law, otherwise known as the KP Rules. These
rules govern the establishment, administration, and operation of the
Lupong Tagapamayapa, as well as the procedures in settling disputes
among barangay members through mediation, conciliation, and
arbitration.

Objective of KP Law
-reduce the number of court litigations and prevent the
deterioration of the quality of justice, which has been brought about by
the indiscriminate filing of cases in the courts.

Cases covered
GR: all disputes are subject to Barangay conciliation pursuant to the
RKP Law and prior recourse thereto is a precondition before filing a
complaint in court or any government office
See Alogoc, p. 463 for number of cases

Exceptions

SECTION 408. Subject Matter for Amicable Settlement; Exception

Thereto. – The lupon of each barangay shall have authority to bring
together the parties actually residing in the same city or municipality for
amicable settlement of all disputes except:

(a) Where one party is the government, or any subdivision or

instrumentality thereof;

(b) Where one party is a public officer or employee, and the dispute
relates to the performance of his official functions;

(c) Offenses punishable by imprisonment exceeding one (1) year or a

fine exceeding Five thousand pesos (P5,000.00);

(d) Offenses where there is no private offended party;

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(e) Where the dispute involves real properties located in different cities
or municipalities unless the parties thereto agree to submit their
differences to amicable settlement by an appropriate lupon;

(f) Disputes involving parties who actually reside in barangays of

different cities or municipalities, except where such barangay units
adjoin each other and the parties thereto agree to submit their
differences to amicable settlement by an appropriate lupon;

(g) Such other classes of disputes which the President may determine
in the interest of justice or upon the recommendation of the Secretary
of Justice.

The court in which non-criminal cases not falling within the authority of
the lupon under this Code are filed may, at any time before trial, motu
proprio refer the case to the lupon concerned for amicable settlement.

SECTION 412. Conciliation. –

(b) Where Parties May Go Directly to Court. – The parties may go

directly to court in the following instances:

(1) Where the accused is under detention;

(2) Where a person has otherwise been deprived of personal liberty

calling for habeas corpus proceedings;

(3) Where actions are coupled with provisional remedies such as

preliminary injunction, attachment, delivery of personal property and
support pendente lite; and

(4) Where the action may otherwise be barred by the statute of

limitations.

(c) Conciliation Among Members of Indigenous Cultural Communities. –

The customs and traditions of indigenous cultural communities shall be
applied in settling disputes between members of the cultural
communities.

Supreme Court Administrative Circular No. 14-93 dated July 15,

1993

1. Where one party is the government, or any subdivision or

instrumentality thereof;

2. Where one party is a public officer or employee, and the dispute

relates to the performance of his official functions;

3. Where the dispute involves real properties located in different cities

and municipalities, unless the parties thereto agree to submit their
difference to amicable settlement by an appropriate Lupon;

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4. Any complaint by or against corporations, partnership or juridical

entities, since only individuals shall be parties to Barangay conciliation
proceedings either as complainants or respondents (Sec. 1, Rule VI,
Katarungang Pambarangay Rules);

5. Disputes involving parties who actually reside in barangays of

different cities or municipalities, except where such barangay units
adjoin each other and the parties thereto agree to submit their
differences to amicable settlement by an appropriate Lupon;

6. Offenses for which the law prescribes a maximum penalty of

imprisonment exceeding one (1) year or a fine over five thousand pesos
(P5,000.00);

7. Offenses where there is no private offended party;

8. Disputes where urgent legal action is necessary to prevent injustice

from being committed or further continued, specifically the following:

a. Criminal cases where accused is under police custody or

detention (see Sec. 412 (b) (1), Revised Katarungang
Pambarangay Law);

b. Petitions for habeas corpus by a person illegally deprived

of his rightful custody over another or a person illegally
deprived or on acting in his behalf;

c. Actions coupled with provisional remedies such as

preliminary injunction, attachment, delivery of personal
property and support during the pendency of the action; and

d. Actions which may be barred by the Statute of

Limitations.

9. Any class of disputes which the President may determine in the

interest of justice or upon the recommendation of the Secretary of
Justice;

10. Where the dispute arises from the Comprehensive Agrarian Reform
Law (CARL) (Sec. 46 & 47, R.A. 6657);

11. Labor disputes or controversies arising from employer-employee

relations (Montoya vs. Escayo, et al., 171 SCRA 442; Art. 226, Labor
Code, as amended, which grants original and exclusive jurisdiction over
conciliation and mediation of disputes, grievances or problems to certain
offices of the Department of Labor and Employment);

12. Actions to annul judgment upon a compromise which may be filed

directly in court (See Sanchez vs. Tupaz, 158 SCRA 459).

Mandatory nature and applicability: No complaint, petition, or

proceeding involving any matter within the authority of the Lupon shall
be filed or instituted directly in court or any other government office for

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adjudication, unless there has been a confrontation between the parties

before the Lupon Chairman or the Pangkat, and that no conciliation or
settlement has been reached as certified by the Lupon Secretary or
Pangkat Secretary as attested to by the Lupon or Pangkat Chairman or
unless the settlement has been repudiated by the parties thereto.

A case filed in court without compliance with prior Barangay

conciliation which is a pre-condition for formal adjudication (Sec. 412
[a] of the Revised Katarungang Pambarangay Law) may be dismissed
upon motion of defendant/s, not for lack of jurisdiction of the court but
for failure to state a cause of action or prematurity (Royales vs. IAC,
127 SCRA 470; Gonzales vs. CA, 151 SCRA 289), or the court may
suspend proceedings upon petition of any party under Sec. 1, Rule 21
of the Rules of Court; and refer the case motu proprio to the appropriate
Barangay authority, applying by analogy Sec. 408 [g], 2nd par., of the
Revised Katarungang Pambarangay Law which reads as follows:

The court in which non-criminal cases not falling within the

authority of the Lupon under this Code are filed may at any
time before trial, motu proprio refer case to the Lupon
concerned for amicable settlement.

Cases not in syllabus: Agbayani vs. Court of Appeals, G.R.

No. 183623, June 25, 2012

Royales v. IAC, 127 SCRA 470

Suspension of Prescriptive Period of Offenses for Complaints filed under

KPL

SECTION 410. Procedure for Amicable Settlement.

(c) Suspension of prescriptive period of offenses – While the dispute is
under mediation, conciliation, or arbitration, the prescriptive periods for
offenses and cause of action under existing laws shall be interrupted
upon filing of the complaint with the punong barangay. The prescriptive
periods shall resume upon receipt by the complainant of the complaint
or the certificate of repudiation or of the certification to file action issued
by the lupon or pangkat secretary: Provided, however, That such
interruption shall not exceed sixty (60) days from the filing of the
complaint with the punong barangay.

See: Alogoc, P. 473 onwards for prescriptive periods

Sample computation
Slight physical injuries- prescriptive period is 2 months from its
commission; crime committed on April 5, 2021, the crime will prescribe
on June 5, 2021; if complaint filed with punong barangay on May 18,
2021, there is a balance of 18 days

If a certificate to file action (CFA) was issued by the barangay on

the 50th day, or July 8, 2021, the complainant has until July 26, 2021
(18 days from issuance of CFA) to file the complaint

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If the barangay fails to issue a CFA after the lapse of 60 days, the
complaint may be immediately filed directly with the Office of the
Prosecutor even without the CFA on the ground that it will already be
barred by the Statute of Limitations.

Parties and Venue

SECTION 410. Procedure for Amicable Settlement. – (a) Who may

initiate proceeding – Upon payment of the appropriate filing fee, any
individual who has a cause of action against another individual involving
any matter within the authority of the lupon may complain, orally or in
writing, to the lupon chairman of the barangay

Only individuals shall be parties

No juridical persons- see Art. 44 of the Civil Code

Rules on Venue

a) For disputes between persons actually residing in the same

barangay, it shall be brought for amicable settlement before the
Lupon of the barangay
b) Those involving actual residents of different barangays within the
same city or municipality, it shall be brought in the barangay
where the respondent or any of the respondents actually resides,
at the election of the complainant
c) All disputes involving real property or any interest therein shall be
brought in the barangay where the real property or the larger
portion thereof is situated
d) Those arising at the workplace where the contending parties are
employed or at the institution where such parties are enrolled for
study, shall be brought in the barangay where such workplace or
institution is located.

Summary: cases should be filed in the place where the respondent

actually resides (Respondent’s Actual Residence Rule); the place
where the respondent’s real property is located (Real Property
Location Rule); common workplace of the parties (Common
Workplace Rule); and Common Place of Study (Common Place of
Study Rule).

Objections to venue shall be raised in the mediation proceedings

before the punong barangay; otherwise, the same shall be deemed
waived. Any legal question which may confront the punong barangay in
resolving objections to venue herein referred to may be submitted to
the Secretary of Justice or his duly designated representative, whose
ruling thereon shall be binding.

Punong Barangay and the Lupon

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Punong Barangay heads the Lupon- see p. 489, Alogoc, for specific
powers

Powers of PB
1. Set the date, time, and place of, and preside over, the regular
monthly meetings of the Lupon;
2. Prepare the agenda for each meetings;
3. See to it that the Lupon exercises administrative supervision over
the various Pangkats and perform such powers, duties, and
functions as maybe prescribed by law or ordinance
4. Where the mediation or arbitration was made by him, he shall
attest the certification signed or issued by the Lupon Secretary;
and
5. Enforce by execution, on behalf of the Lupon, the amicable
settlement or arbitration award in accordance with Rule VII hof
IRR.

Duty of the PB to constitute the Lupon

See p. 491, Alogoc, Rule III KP Rules

The Lupong Tagapamayapa

Functions
a. Administrative supervision over the various Pangkat
b. Regular meeting
c. Withdrawal of appointment
d. Execution of settlement or award
e. Other powers and duties

Qualifications
- Actual residence or work of place in the barangay
- Characteristics of suitability to the task- integrity, impartiality,
independence of mind, sense of fairness, reputation for probity and
other relevant considerations such as tact, patience, resourcefulness,
flexibility, and open mindedness
- Must not be expressly disqualified by law from holding public office

Term of Office
- Until a new Lupon is constituted on the third year following their
appointment, unless the term is sooner terminated by resignation,
transfer of residence or place of work, or withdrawal of appointment
by the PB

The Lupon members, while in the performance of their official duties or

on occasion thereof, shall be deemed as persons in authority under the
RPC.

Mediation and Arbitration Functions of the Punong Barangay

p. 503, Alogoc

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ADR Procedure in the Barangay

1. Commencement of proceedings for settlement

Any individual who has a cause of action against another individual
involving any matter within the authority of the lupon may complain
orally or in writing, to the lupon chairman of the barangay.

2. Mediation by Lupon Chairman

Upon receipt of the complaint, the LC shall within the next working
day summon the respondent/s, with notice to the complainant/s for
them and their witnesses to appear before him for a mediation of their
conflicting interests. If he fails in his mediation effort within 15 days
from the first meeting of the parties before him, he shall forthwith set a
date for the constitution of the pangkat
- Summons shall be personally served on the defendant
- Upon refusal, by tendering
- Substituted service: a) leaving copies of the summons at the
defendant’s residence with some person of suitable age and
discretion then residing therein, or b) by leaving the copies at the
defendant’s office or regular place of business with some competent
person in charge

3. Answer to the Complaint

Respondent to answer the complaint orally or in writing, by
denying the material averments of the complaint and/or alleging any
lawful defense; may also interpose a counterclaim, cross claim, or third
party complaint

Personal appearance
In all proceedings for amicable settlement, the parties must
appear in person without the assistance of counsel or the intervention
of anyone. Minors and incompetents, however, may be assisted by their
next of kin who is not a lawyer.

4. Hearing- informal but orderly manner

Proceedings shall be open to the general public, except that the PB or
Pangkat, as the case may be, at the request of a party or upon his or
her own initiative, may exclude the public in the interest of privacy,
decency, or public morals.

Effects of failure to appear

1. Dismissal if the complainant, after due notice, refuses or willfully
fails to appear without justifiable reason on the date set for
mediation, conciliation, or arbitration- order of dismissal may be
given by the PB or Pangkat Chairman after giving the complainant
the opportunity to explain his non-appearance; order certified to
by the Lupon or Pangkat secretary; the dismissal shall bar the
complainant from seeking judicial recourse for the same cause of
action as that dismissed; same rule as to counterclaim of the
respondent if he or she fails to appear
2. In cases where the respondent fails to appear, it is mandatory for
the PB to constitute the Pangkat; respondent’s willful refusal or

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failure to appear before the Pangkat, as determined by the

Pangkat after due notice and hearing, shall be a sufficient basis
for the issuance of a certification for filing complainant’s action in
court or with the proper government agency or office
3. In addition, willful refusal or failure to appear may subject the
party or witness to punishment as for contempt of court, upon the
application by the Lupon Chairman, Pangkat Chair, or any
contending parties with the local trial court

The Pangkat ng Tagapagkasundo

- If the mediation and conciliation efforts before the PB proved

unsuccessful
- Where the respondent fails to appear at the mediation proceedings
before the PB

PB shall not cause the issuance of a certification to file action, because

it is mandatory for him to constitute the Pangkat before whom
mediation, conciliation, arbitration proceedings shall be held

The pangkat consists of 3 members who shall be chosen by the parties

from the list of members of the lupon; should the parties fail to agree,
the PB shall determine the members by lots; the members shall choose
from among themselves the Chairman and the Secretary

The pangkat members shall serve without compensation except as

provided under Section 393 of the LGC; in the performance of their
functions, they are deemed to be on official time, and shall not suffer
any diminution in compensation or allowance from said employment

Disqualification
-grounds: relationship, bias, interest, or other grounds discovered after
the constitution of the pangkat, the disqualification shall be resolved by
the affirmative vote of the majority of the pangkat whose decision shall
be final

Conciliation before the Pangkat

In case of failure to appear, the Pangkat Chair shall set a date for the
absent party to appear to explain his or her non-appearance

If the failure to appear is without justifiable reason, the PC shall

a. Dismiss the complaint
b. Direct the issuance of and attest to the certification to bar the
filing of the action in court or any government office
c. Apply with the local trial court for the punishment of the
recalcitrant party as for indirect contempt of court
- This would also apply to respondent in relation to his or her
counterclaim, and a witness

Period to arrive at a settlement agreement

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-15 days from the day the pangkat convenes; extendible for another 15
days

Interest-Based Mediation
-RKP is aimed at keeping peace and harmony within the community
- settlement would result in the preservation of relationships among
families and residents of the same community to the end of
decongesting court dockets

Settlement Agreement
-must be in writing, in a language or dialect known to the parties, signed
by them and attested to by the lupon chairman or the pangkat chairman
-it shall have the force and effect of a final judgment of a court after the
expiration of 10 days from the date thereof.

Issuance of a Certification to File Action

1. Issued by the Lupon Secretary and attested by the Lupon

Chairman, certifying that a confrontation of the parties has taken
place and that a conciliation settlement has been reached, but the
same has been subsequently repudiated
2. Issued by the Pangkat Secretary and attested by the Pangkat
Chair, certifying that a) a confrontation of the parties took place
but no conciliation/settlement has been reached; or b) that no
personal confrontation took place before the Pangkat through no
fault of the complainant
3. Issued by the PB as requested by the proper party on the ground
of: a) failure of settlement where the dispute involves members
of the same ICCs, which shall be settled in accordance with the
customs and traditions of the ICC; or b) where one or more parties
to the dispute belong to the minority and the parties mutually
agreed to submit their dispute to the indigenous system of
amicable settlement, and there has been no settlement as
certified by the datu or tribal leader or elder to the PB of the place
of settlement
4. If mediation or conciliation efforts before the PB proved
unsuccessful, there having been no agreement to arbitrate

Arbitration under the RKP

PB shall exert all efforts to conciliate the parties within 15 days

from their initial confrontation; if conciliation fails, he or she shall set a
date for the constitution of the Pangkat; the pangkat shall convene to
conciliate the parties not later than 3 days from its constitution;
conciliation for 15 days; extendible for another 15 days

Agreement for Arbitration

- If parties agree in writing to have their dispute decided by arbitration
proceedings by PB or Pangkat, arbitral hearings shall follow
- Agreement to arbitrate may be repudiated

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- PB or Pangkat shall after hearing make the award not earlier

than the 6th day but not later than the 15th day following the
date of the agreement

Form of the Award

-must be in writing, in a language or dialect known to the parties, signed
by them and attested to by the lupon chairman or the pangkat chairman
-it shall have the force and effect of a final judgment of a court after the
expiration of 10 days from the date thereof.

Effect of settlement by arbitration or conciliation

- Amicable settlement has the force and effect of a final judgment of a
court upon the expiration of 10 days from date of settlement or date
of receipt of award, unless repudiation has been made or a petition
for nullification of the award has been filed before the local trial court

Repudiation
- Within 10 days from the date of the settlement, any party to the
dispute may repudiate the settlement by filing with the LC a
statement to that effect, sworn to before him, where the consent is
vitiated by fraud, violence, or intimidation. Such repudiation shall be
a sufficient basis for the issuance of the certification for filing of
complaint.

Transmittal of settlement or award

- The Secretary of the Lupon shall transmit the settlement or the
arbitration award to the appropriate city or municipal court within 5
days from the date of the award or from the lapse of the 10-day
period of repudiating the settlement and shall furnish copies of the
agreement to each party and the LC

Execution of Amicable Settlement

-may be enforced by execution by the Lupon within 6 months from the
date of settlement.
-after the lapse of 6 months, the settlement may be enforced by action
in court

Remedies when there is failure to comply with the amicable settlement

1. Execution by the Punong Barangay- quasi judicial and summary

in nature

PB shall conduct hearing to ascertain non-compliance; determine

whether voluntary compliance can be secured; if there is no
voluntary compliance, PB shall issue a notice of execution in the
name of the LT.

Mode of execution before PB

1. Payment of money. If the execution is for the payment of money,

the party obliged is allowed 5 days to make voluntary payment; if
he or she fails, the PB shall take possession of sufficient personal

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property of the party obliged located in the barangay to satisfy

the settlement or award from the proceeds of the sale
2. For delivery or restitution of property located in the barangay, PB
shall oust therefrom the losing party
3. For delivery or restitution of property located in another barangay
of the same city or municipality, PB shall issue authorize the PB
where the property is located to take possession of the property
and to act as in (2)
4. Execution or conveyance of a land title, or to deliver deeds or
other documents, or to perform any other specific act, and the
party fails to comply within the time specified, the PB may direct
the Lupon Secretary to perform the act at the cost of the
disobedient party

2. Execution by judicial action

Venue is governed by Rule 4, Section 1 of the Rules of Court ; rule

on regular procedure shall apply

3. Right of rescission under Article 2041 of the Civil Code

Art. 2041. If one of the parties fails or refuse to abide by the

compromise, the other party may either enforce the compromise or
regard it as rescinded and insist upon his original demand

Vidal vs. Escueta, G.R. No. 156228, December 10, 2003

Section 417 of the LGC grants a party a period of six months to

enforce the amicable settlement by the Lupon through the Punong
Barangay before such party may resort to filing an action with the MTC
to enforce the settlement. The raison d’ etre of the law is to afford the
parties during the six-month time line, a simple, speedy and less
expensive enforcement of their settlement before the Lupon.

The time line of six months is for the benefit not only of the
complainant, but also of the respondent. Going by the plain words of
Section 417 of the LGC, the time line of six months should be computed
from the date of settlement. However, if applied to a particular case
because of its peculiar circumstance, the computation of the time line
from the date of the settlement may be arbitrary and unjust and
contrary to the intent of the law. To illustrate: Under an amicable
settlement made by the parties before the Lupon dated January 15,
2003, the respondents were obliged to vacate the subject property on
or before September 15, 2003. If the time line of six months under
Section 417 were to be strictly and literally followed, the complainant
may enforce the settlement through the Lupon only up to July 15, 2003.
But under the settlement, the respondent was not obliged to vacate the
property on or before July 15, 2003; hence, the settlement cannot as
yet be enforced. The settlement could be enforced only after September
15, 2003, when the respondent was obliged to vacate the property. By
then, the six months under Section 417 shall have already elapsed. The
complainant can no longer enforce the settlement through the Lupon,

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but had to enforce the same through an action in the MTC, in derogation
of the objective of Section 417 of the LGC. The law should be construed
and applied in such a way as to reflect the will of the legislature and
attain its objective, and not to cause an injustice. As Justice Oliver
Wendell Holmes aptly said, "courts are apt to err by sticking too closely
to the words of the law where these words support a policy that goes
beyond them. The Court should not defer to the latter that killeth but to
the spirit that giveth life.

In light of the foregoing considerations, the time line in Section

417 should be construed to mean that if the obligation in the settlement
to be enforced is due and demandable on the date of the settlement,
the six-month period should be counted from the date of the settlement;
otherwise, if the obligation to be enforced is due and demandable on a
date other than the date of the settlement, the six-month period should
be counted from the date the obligation becomes due and demandable.

Parenthetically, the Katarungang Pambarangay Implementing

Rules and Regulations, Rule VII, Section 2 provides:

SECTION 2. Modes of Execution. - The amicable settlement or

arbitration award may be enforced by execution by the Lupon within six
[6] months from date of the settlement or date of receipt of the award
or from the date the obligation stipulated in the settlement or adjudged
in the arbitration award becomes due and demandable. After the lapse
of such time, the settlement or award may be enforced by the
appropriate local trial court pursuant to the applicable provisions of the
Rules of Court. An amicable settlement reached in a case referred by
the Court having jurisdiction over the case to the Lupon shall be
enforced by execution by the said court. (Underlining supplied).

By express provision of Section 417 of the LGC, an action for the

enforcement of the settlement should be instituted in the proper
municipal or city court. This is regardless of the nature of the complaint
before the Lupon, and the relief prayed for therein. The venue for such
actions is governed by Rule 4, Section 1 of the 1997 Rules of Civil
Procedure, as amended. An action for the enforcement of a settlement
is not one of those covered by the Rules on Summary Procedure in civil
cases; hence, the rules on regular procedure shall apply, as provided
for in Section 1, Rule 5 of the Rules of Civil Procedure, as amended

Cases

a. Miguel v. Montanez, G.R. No. 191336, January 25, 2012

b. Malecdan v. Atty. Baldo, A.C. No. 12121, June 27, 2018
c. Guerrero vs. RTC of Ilocos Norte, Br. XVI, G.R. No. 109068,
January 10, 1994
d. Pascual vs. Pascual, G.R. No. 157830, November 17, 2005
e. Ledesma v. CA, G.R. No. 96914, July 23, 1992
f. Aquino vs. Aure, G.R. No. 153567, February 18, 2008

Property exempt from execution- same as Rule 39, Section 13 of the

Rules of Court

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Indigenous Modes of Dispute Resolution

Section 399, RA 7160

(f) In barangays where majority of the inhabitants are members

of indigenous cultural communities, local systems of settling disputes
through their councils of datus or elders shall be recognized without
prejudice to the applicable provisions of this Code.

Section 15, R.A. 8371

SECTION 15. Justice System, Conflict Resolution

Institutions, and Peace Building Processes. — The ICCs/IPs shall have
the right to use their own commonly accepted justice systems, conflict
resolution institutions, peace building processes or mechanisms and
other customary laws and practices within their respective communities
and as may be compatible with the national legal system and with
internationally recognized human rights.

B. Alternative Dispute Resolution: Framework under R.A. No. 9285 “ The

Alternative Dispute Resolution Act of 2004- promulgated on April 2,
2004 and took effect on April 28, 2004

Alternative Dispute resolution refers to 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 third party participates to assist in the resolution of
issues.

1. State Policy on ADR (Sec. 2, ADR Act of 2004)

to actively promote party autonomy in the resolution of disputes or

the freedom of the party to make their own arrangements to resolve
their disputes. Towards this end, the State shall encourage and actively
promote the use of Alternative Dispute Resolution (ADR) as an
important means to achieve speedy and impartial justice and declog
court dockets. As such, the State shall provide means for the use of ADR
as an efficient tool and an alternative procedure for the resolution of
appropriate cases. Likewise, the State shall enlist active private sector
participation in the settlement of disputes through ADR. This Act shall
be without prejudice to the adoption by the Supreme Court of any ADR
system, such as mediation, conciliation, arbitration, or any combination
thereof as a means of achieving speedy and efficient means of resolving
cases pending before all courts in the Philippines which shall be
governed by such rules as the Supreme Court may approve from time
to time.

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Insular Savings Bank vs. Far East Bank and Trust Co., G.R. No.
141818, June 22, 2006

2. Principles of ADR

a. Promotion of party autonomy and self- determination

in the resolution of disputes
b. Recognition of ADR as an efficient tool and an
alternative procedure for the resolution of cases
c. Enlisting of private sector participation

Hygienic Packaging Corporation v. Nutri-Asia, Inc., G.R. No.

201302, January 23, 2019

3. Objectives and Benefits of ADR

Speedy and impartial justice

Declogging of court dockets

4. Forms of ADR (R.A. 9285); classification/components

Spectrum of Conflict Management

Negotiation Mediation Neutral Arbitration Litigation

Negotiation Evaluation

a. Arbitration- is a voluntary dispute resolution process in which

one or more arbitrators, appointed in accordance with the
agreement of the parties, or rules promulgated pursuant to the
ADR Act, resolve a dispute by rendering an award

b. 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

c. Conciliation- adjustment and settlement of a dispute in a

friendly, unantagonistic manner through extrajudicial means;
bringing two opposing sides together to reach a compromise in
an attempt to avoid taking a case to trial

d. Neutral and early neutral evaluation- Neutral evaluation is an

ADR process wherein the parties and the lawyers are brought
together to present summaries of their cases and receive a non-
binding assessment by an experienced neutral person with

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expertise in the subject or in the substance of the dispute; early

neural evaluation is availed in the early pre-trial phase.

e. Mini-trial- a structured dispute resolution method in which the

merits of the case are argued before a panel composed of senior
decision makers, with or with the presence of a neutral third
person, after which the parties seek a negotiated settlement

f. Any combination

i.e. Mediation-Arbitration- a two-step dispute resolution process

involving mediation and then followed by arbitration

g. Any other ADR form (innominate ADR form)

5. Subject Matters of ADR - take note of matters that cannot be

compromised

These cannot be valid subject matters of ADR

a. Labor disputes
b. Civil status of persons
c. Validity of marriage and any ground for legal
separation
d. Jurisdiction of courts
e. Future legitime
f. Criminal liability
g. Those which cannot be compromised
h. Cases under the original jurisdiction of the CIAP
i. Management, oversight, and implementation of the
Katarungang Pambarangay System

6. Concluding Acts or Agreements

a. Mediated Settlement Agreement / Settlement Agreement

b. Compromise Agreement
c. Judgment based on compromise
d. Waiver and Quitclaim
e. Arbitral award
f. Award on agreed terms
g. Consent award
h. Award based on compromise

C. Office for Alternative Dispute Resolution (OADR)

1. Agency attached to the Department of Justice- headed by an

Executive Director
2. Composition
3. Principal objectives, powers and functions
a. To promote, develop, and expand the use of ADR in the public and
private sectors

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b. To assist the government to monitor, study, and evaluate the use

by the public and the private sector of ADR, and recommend to
Congress needful statutory changes to develop; and
c. To strengthen and improve ADR practices in accordance with the
world standards

Powers:

(a) To formulate standards for the training of the ADR practitioners and
service providers;

(b) To certify that such ADR practitioners and ADR service providers
have undergone the professional training provided by the office;

(c) To coordinate the development, implementation, monitoring, and

evaluation of government ADR programs;

(d) To charge fees for their services; and

(e) To perform such acts as may be necessary to carry into effect the
provisions of this Act.

See: Sections 49 and 50, ADR Act (R.A. 9285)

See also: Articles 2.1 to 2.3, IRR of R.A. 9285

Article 2.2. Powers of the OADR. The OADR shall have the following
powers:
(a) To act as appointing authority of mediators and arbitrators
when the parties agree in writing that it shall be empowered to
do so;
(b) To conduct seminars, symposia, conferences and other public fora
and publish proceedings of said activities and relevant
materials/information that would promote, develop and expand the use
of ADR;
(c) To establish an ADR library or resource center where ADR laws, rules
and regulations, jurisprudence, books, articles and other information
about ADR in the Philippines and elsewhere may be stored and
accessed;
(d) To establish a training programs for ADR providers/practitioners,
both in the public and private sectors; and to undertake periodic and
continuing training programs for arbitration and mediation and charge
fees on participants. It may do so in conjunction with or in cooperation
with the IBP, private ADR organizations, and local and foreign
government offices and agencies and international organizations;
(e) To certify those who have successfully completed the regular
professional training programs provided by the OADR;
(f) To charge fees for services rendered such as, among others, for
training and certifications of ADR providers;
(g) To accept donations, grants and other assistance from local and
foreign sources; and
(h) To exercise such other powers as may be necessary and proper to
carry into effect the provisions of the ADR Act.

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Article 2.3. Functions of the OADR. The OADR shall have the following
functions:
(a) To promote, develop and expand the use of ADR in the private and
public sectors through information, education and communication;
(b) To monitor, study and evaluate the use of ADR by the private and
public sectors for purposes of, among others, policy formulation;
(c) To recommend to Congress needful statutory changes to develop,
strengthen and improve ADR practices in accordance with international
professional standards;
(d) To make studies on and provide linkages for the development,
implementation, monitoring and evaluation of government and private
ADR programs and secure information about their respective
administrative rules/procedures, problems encountered and how they
were resolved;
(e) To compile and publish a list or roster of ADR providers/practitioners,
who have undergone training by the OADR, or by such training
providers/institutions recognized or certified by the OADR as performing
functions in any ADR system. The list or roster shall include the
addresses, contact numbers, e-mail addresses, ADR service/s rendered
(e.g., arbitration, mediation) and experience in ADR of the ADR
providers/practitioners;
(f) To compile a list or roster of foreign or international ADR
providers/practitioners. The list or roster shall include the addresses,
contact numbers, e-mail addresses, ADR service/s rendered (e.g.,
arbitration, mediation) and experience in ADR of the ADR
providers/practitioners; and
(g) To perform such other functions as may be assigned to it

D. Mediation

1. Concept and Definition under ADR Act

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

Advantages of mediation

a. confidentiality in the mediation process

b. prompt, economical, and amicable resolution of disputes
c. decision-making authority rests in the parties

Classifications
1. as to form, non-evidentiary and non-merit base
mediation focuses on the facilitation of communication and
negotiation between the parties in order to encourage them to
voluntarily settle in their dispute
mediator must refrain from giving legal or technical advice or
otherwise engaging in counseling advocacy, and must abstain
from expressing his personal opinion on the rights and duties of
the parties and merits of any proposal made

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2. As to structure, institutional- administered by, and conducted

under the rules of a mediation institution, and ad hoc if it is other
than institutional

Selection of a mediator (Rule 2, IRR of ADR Act)

The parties have the freedom to select their mediator

Parties may request the OADR to provide them with a list or roster or
the resume of its certified mediators

A mediator may refuse from acting as such, withdraw, or may be

compelled to withdraw, in the following circumstances:
a. If any of the parties request the mediator to withdraw
b. The mediator does not have the qualifications, training, and
experience to enable him or her to meet the reasonable
expectations of the parties
c. Where the mediator’s impartiality is in question
d. If continuation of the process would violate any ethical standards
e. If the safety of any of the parties would be jeopardized
f. If the mediator is unable to provide effective services
g. In case of conflict of interest; and
h. In any of the following instances, if the mediator is satisfied that:
a. One or more of the parties is/are not acting in good faith
b. The parties’ agreement would be illegal or would involve the
commission of a crime
c. Continuing the dispute resolution would give rise to the
appearance of an impropriety
d. Continuing with the process would cause significant harm to
a non- participating person or to the public
e. Continuing discussions would not be in the best interest of
the parties, their minor children, or the dispute resolution
process

Standards in selecting a mediator

1. Competence- special qualifications by background or profession

are not required, unless said qualifications are required in the
agreement of the parties

The mediator shall

i. maintain and continually upgrade his or her professional

competence in mediation skills
ii. ensure that his or her qualifications, training, and experience
are known to and accepted by the parties
iii. serve only when his or her qualifications, training, and
experience enable him or her to meet the reasonable expectations
of the parties and shall not hold himself/herself out or give the
impression that he or she has qualifications, training, and
experience that he or she does not have

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Any individual who is requested to be a mediator shall disclose his

or her qualifications to mediate a dispute.

2. Impartiality

Before accepting a case for mediation, he or she shall:

i. Make a reasonable inquiry to determine facts that a reasonable
individual would consider to affect the impartiality of the mediator,
including financial or personal interest in the outcome of the
mediation or any existing or past relationship with a party or
foreseeable participant in the mediation.
ii. disclose to the mediation parties any such fact known before
accepting a mediation
-if the fact is known after accepting a mediation, the mediator
shall disclose such fact as soon as practicable

3. Confidentiality
-shall keep in utmost confidence confidential information
-shall inform the parties of the scope and limits of the
confidentiality of the proceedings

4. Consent and self-determination

If a mediator believes that a party, not represented by counsel, is
unable to understand, or fully participate in the proceedings, the
mediator shall:

1. Limit the scope of the proceedings in a manner consistent with

the party’s ability to participate, and/or recommend that the
party obtain appropriate assistance
2. Terminate the mediation proceedings

Counseling and Legal Advice

Except in evaluative mediation or when the parties request,
a. A mediator shall refrain from giving legal or technical advice and
otherwise engaging in counseling or advocacy; and
b. Abstain from expressing his/her personal opinion on the rights and
duties of the parties and merits of any proposal made

Charging of Fees
- Mediator shall fully disclose and discuss the basis of the costs, fees,
and charges
- Any mediator who withdraws from mediation shall return unearned
and unused deposit
- Mediator shall not enter into a fee agreement which is contingent
upon the results of the mediation or amount of settlement
- No mediator or any member of his or her immediate family or his or
her agent shall request, solicit, receive or accept any gift or any type
of compensation other than the agreed fee and expenses in
connection with any matter coming before the mediator

Role of Lawyer/counsel

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Except otherwise provided by the ADR Act and its IRR, a party
may designate a lawyer or any other person to provide assistance in
mediation; waiver of this right shall be made in writing; may be
rescinded anytime
The lawyers shall collaborate toward the common goal of helping
their clients resolve the dispute; the lawyer shall confer with his or
client the following matters: a) the mediation process; its difference
from litigation; advantages, etc. b) the substance of the upcoming
mediation: i. the substantive issues involved in the dispute; ii. study
the other party’s position; iii. Facts necessary to come up with
informed decision; iv. possible options for settlement; and v. the
best, worse, and most likely alternative to a non-negotiated
settlement

Conduct of Mediation/ Stages of mediation

a. Introduction- mediator introduces himself or herself and get to

know the parties; build rapport with parties and make them feel
comfortable with mediation
b. Opening statement of the mediator-mediator outlines the
mediation process and lays out the ground rules; set the tone of
the mediation and inform the parties what to expect and how to
conduct themselves during mediation
- Role of mediator; objectives; role of parties; mediation process;
ground rules

c. Individual narration by the parties

*Exchange by the parties
-opening statement by the complainant
-opening statement by the respondent

d. Summary of issues
- Mediator should neutralize the parties’ statements and not restate
defamatory utterances by the parties
- An effective summary gives the parties a chance to hear themselves;
parties are given chance to review their thoughts and feelings from
a more detached position

e. Generation and evaluation of options

-agenda setting- allow the parties to focus on the issues that need
to be addressed to resolve the dispute; parties to come up with
issues which should be framed in a neutral language and be listed
in bullet points
-exploration of issues- the mediator helps the parties understand
the true nature of their dispute through probing questions

Objectives:
- Find out about the details of the dispute
- Enable the parties to express their interests, hopes, concerns, and
needs
- Encourage the parties to talk directly with each other in order for
them to understand each other

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- Enable the parties to provide options; mediator may also do reality

testing to help the parties realize the most appropriate solution to
their dispute

Barriers
- One party appears confused and fails to comprehend what the other
party is saying
- Impressions of lack of neutrality of the mediator
- One party is reticent
- When the other party is making monologues

- Private sessions- mediator must speak with each party separately;

time to clarify interests and perceptions, consider alternatives, and
allow discussion of additional and confidential information; equal
number of session per party

- Joint sessions- mediator should direct the discussion towards the

commitments that he or she was able to obtain from the parties
during private sessions; the mediator must clarify details and terms
with the parties, present modified or new proposals, and move
towards a formal agreement

f. Closure
- Execution of a settlement agreement- mediator will outline the terms
and may write a draft agreement
SMART technique
- Specific, Measurable, Agreed Upon, Realistic, and Time-related
- Withdrawal of any party
- Written declaration of the mediator that any further effort at
mediation would not be helpful

Place of mediation
-parties may agree; in the absence of agreement, any place
convenient and appropriate to all parties

Agreement to submit to mediation must include: a) agreement to be

bound by the internal and mediation policies of the institution; and b)
an agreement to have such rules govern the mediation of the dispute
and for the mediator, the parties, their respective counsel and non-
party participants to abide by such rules.

4. Confidential and Privileged Nature of Mediation Communication

Coverage of confidential communication

a. Information obtained through mediation is privileged and
confidential
b. A party, mediator, or non-party participant may refuse to
disclose and may prevent any other person from disclosing a
mediation communication
c. Confidential information shall not be subject to discovery and
shall be inadmissible in any adversarial proceeding, whether
judicial or quasi-judicial; evidence or information that is

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otherwise admissible or subject to discovery does not become

admissible or protected from discovery by reason of its use in
mediation
d. In such adversarial proceedings, the following persons may not
be compelled to disclose confidential information: parties;
mediators; counsel; non-party participants; any person hired
in connection with the mediation as secretary; stenographer,
clerks, or assistant; and any other person who obtains
confidential information by reason of his or her profession

Legal Effects of Confidential and Privileged Nature of Mediation

Communication
- A person who discloses confidential information is precluded from
asserting the privilege
- A person who suffers loss or damages as a result of the disclosure is
entitled to seek damages in court against the person who made the
disclosure

Waiver
-waiver on record or orally during a proceeding by the parties and
mediator
-may also be made by non-party participant if the information is
provided by such participant

Exceptions Based on Agreement, Nature of Proceedings, Crime or

Social Justice

1. in an agreement evidenced by a record authenticated by all parties

to the agreement
2. available to the public or that is made during a session of a
mediation which is open, or is required by law to be open, to the
public
3. a threat or a statement of a plan to inflict bodily injury or commit a
crime of violence
4. intentionally used to plan a crime, attempt to commit, or commit a
crime, or conceal an ongoing crime or criminal activity;
5. 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;
but this exception does not apply where a child protection matter is
referred to mediation by a court or a public agency participates in
the child protection mediation
6. sought or offered to prove or disprove a claim or complaint of
professional misconduct or malpractice filed against the mediator in
a proceeding
7. sought or offered to prove or disprove a claim or complaint of a
professional misconduct or malpractice against a party, non-party-
participant, or representative of a party based on conduct during
mediation
8. there is likewise no privilege if the court or administrative agency
finds, after a hearing in camera, that the party seeking discovery of
the proponent of the evidence has shown that the evidence is not

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otherwise available, that there is a need for the evidence that

substantially outweighs the interest in protecting confidentiality,
and the communication is sought or offered in
i. court proceeding involving a crime or felony
ii. a proceeding to prove a claim or defense that under the law is
sufficient to reform or avoid liability on a contract arising out of the
mediation

Privilege of mediator
- mediator may not be compelled to provide evidence of a mediation
communication or testify in such proceeding

Non-reporting
- A mediator may not make a report, assessment, evaluation,
recommendation, finding or other communication regarding a
mediation to a court or other authority, except: to state that
mediation occurred or has terminated, or where a settlement was
reached; or as permitted to be disclosed under Art. 3.23 of the IRR
of the ADR Act

Federal Express Corporation vs. Jennings, G.R. No. 216600,

November 21, 2016

5. Mediated Settlement Agreements

-may also take the form of a compromise agreement; has the
effect of res judicata and, therefore, binding upon the parties
whether or not it has been submitted to the court for approval;
however, there can be no execution of a concluding agreement
unless it has been first judicially approved. Once approved, the
agreement may be enforced through a writ of execution.

Principles applicable

1. A settlement agreement following a successful mediation shall

be prepared by the parties with the assistance of their
respective counsels, if any, and by the mediator.
2. The parties and their respective counsels, if any, shall sign the
settlement agreement, and the mediator shall certify that he
has explained the contents thereof to the parties in a language
known to them
3. If the parties agree, the settlement agreement may be jointly
deposited by the parties or deposited by one party with prior
notice to the other party or parties, with the clerk of court of
the RTC a) where the principal place of business in the
Philippines of any of the parties is located; b) if any of the
parties is an individual, where any of those individuals reside;
or c) in the National Capital Region
4. Where there is a need to enforce the settlement agreement, a
petition may be filed by any of the parties in the same court,
in which case, the court shall summarily proceed to hear the
petition in accordance with Special ADR Rules.

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5. The parties may agree in the settlement agreement that the

mediator shall become a sole arbitrator for the dispute and
shall treat the settlement agreement as an arbitral award which
shall be subject to enforcement under R.A. No. 876.

Deposit of the agreement with the RTC is not indispensable for its
validity. It is required for enforceability of the agreement. Unless
deposited, the petition to enforce settlement is premature and can be
dismissed on the ground of non-compliance with a condition precedent.
The RTC whereat the deposit is made will be the venue of the petition
to enforce the agreement.

7. Consolidated and Revised Guidelines to Implement the Expanded

Coverage of Court-Annexed Mediation (CAM) and Judicial Dispute
Resolution (JDR)
- A.M. No. 11-1-6-SC-PHILJA dated January 11, 2011, as amended
by the 2020 Guidelines for the Conduct of Court-Annexed Mediation
and Judicial Dispute Resolution in Civil Cases (A.M. No. 19-10-20-
SC dated February 9, 2021)

Kent vs. Micarez, G.R. No. 185758, March 9, 2011

E. Arbitration

1. Concept
- is a voluntary dispute resolution process in which one or more
arbitrators, appointed in accordance with the agreement of the
parties, or rules promulgated pursuant to the ADR Act, resolve a
dispute by rendering an award.

2. Distinguished from court trial system

- An 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

3. Voluntary vs. compulsory

Voluntary arbitration involves the reference of a dispute to an

impartial tribunal or body, the members of which are chosen by the
parties themselves, which party freely consent in advance to abide
by the arbitral award issued after the proceedings where both
parties had the opportunity to be heard.

Compulsory arbitration refers to a 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 third
party.

4. Key Features of Arbitration

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a. Party autonomy-consent through arbitration agreement

or clause; it is voluntary, consensual, and contractual
b. Equal treatment and fairness- 1985 UNCITRAL Model Law
provides that parties must be treated with equality and
each party shall be given a full opportunity of presenting
his or her case.
c. Ease of enforcement- limited grounds to refuse and set
aside arbitration awards

a. Uniwide Sales Realty and Resources Corp. v. Titan-

Ikeda Construction and Development Corp., G.R. No.
126619, Dec. 20, 2006
b. Benguet Corp. v. DENR-MAB, G.R. No. 163101, Feb.
13, 2008
c. Korea Technologies Co., Ltd. v. Lerma, G.R. No.
143581, January 7, 2008

5. Subject of arbitration/Types of Arbitration

1. State-state- covers disputes on the interpretation and

application of a treaty (International Dispute for Sustainable
Development); treaty parties submit the request for
arbitration when an issue or issues relative to the
interpretation or application of the treaty arises

2. Investor-state

-also called investor-state dispute settlement is a procedure

to resolve disputes between foreigners and host states;
foreign investors are given legal standing to launch claims
against states at the international level.

3. Ad hoc arbitration- administered by the arbitrator or the

parties themselves. A proceeding administered by an
institution shall be regarded as ad hoc if such institution is not
permanent or regular; the parties dictate the particulars of the
arbitration proceedings including but not limited to , the
appointment of the arbitrator, applicable rules and timetable
for filing various documents

4. Institutional arbitration- administered by an entity, duly

registered as a domestic corporation with the Securities and
Exchange Commission and engaged in, among others,
arbitration of disputes in the Philippines on a regular or
permanent basis; roster of qualified arbitrators; pre-
established rules; and provision for administrative assistance.

5. Legislated arbitration- provided by law, i.e. R.A. No. 9184, p.

101, Alogoc

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6. Construction arbitration- shall include those between or

among parties who are bound by an arbitration agreement,
directly or by reference, whether such parties are project
owners, contractors, subcontractors, quantity surveyor,
bondsman or issuer of an insurance policy in a construction
project.

7. Commercial arbitration- covers matters that are commercial

in nature, whether contractual or not, such as any trade
transaction for the supply or exchange of goods or services;
leasing; construction of works; consulting; engineering;
licensing; investment; financing; banking; insurance;
exploitation agreement or concession; joint venture and other
forms of industrial or business cooperation; carriage of goods
or passengers by air, sea, rail, or road.

8. Domestic arbitration- arbitration that is not international; one

which is conducted in the Philippines, where the arbitration
has no foreign element. It is domestic when all the
components such as parties’ place of business, place of
arbitration, place of performance of a substantial part of the
obligation and where the subject matter of the dispute is most
closely connected, are all in the Philippines.

9. International Commercial Arbitration- under the 1985

UNCITRAL Model Law, an arbitration is international if:

a. The parties to an arbitration agreement have, at the time

of the conclusion of that agreement, their places of
business in different States
b. One of the following places is situated outside the State
in which the parties have their places of business:
i. the place of arbitration if determined in, or pursuant to,
the arbitration agreement; or
ii. any place where a substantial part of the obligations of
the commercial relationship is to be performed or the place
with which the subject matter of the dispute is most closely
connected;
c. The parties have expressly agreed that the subject matter
of the arbitration agreement relates to more than one
country.

6. Arbitration Agreement; form

An arbitration agreement is the basis of an arbitrator’s jurisdiction

and mandate. It is an agreement by the parties to submit to
arbitration all or certain disputes which have arisen or which may
arise between them in respect of a defined legal relationship,
whether contractual or not. It may be in the form of an arbitration
clause in a contract or in the form of a separate agreement.

RA 876

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- Must be in writing
- Subscribed by the party sought to be charged or by his agent

UNCITRAL Model Law

An arbitration agreement shall be in writing. Must be contained

in a document signed by the parties or in an exchange of letters,
telex, telegrams or other means of communication which provide
a record of the agreement, or in an exchange of statements of
claim and defense in which the existence of an agreement is
alleged by one party and not denied by the other. The reference
in a contract to a document containing an arbitration clause
constitutes an arbitration agreement provided that the contract is
in writing and the reference is such as to make that clause part of
the contract.

Recall: Hygienic Packaging Corp. vs. Nutri-Asia, Inc., G.R. No.

201302, January 23, 2019

Key elements of an arbitration agreement

1. Submission to arbitration- intention of the parties to submit the

dispute to arbitration; consent
2. Seat of arbitration/ place- legal home of arbitration; not necessary
the physical place, but the place of which laws will apply to the
arbitration proceedings; will also determine the court that has the
power to intervene in the arbitration proceedings
3. Arbitral rules- stipulation on the rules that will govern the arbitral
proceedings
4. No. of arbitrators- either sole arbitrator or an arbitral tribunal
consisting of three arbitrators; stipulate also on the manner of
appointment of arbitrators and how to challenge it
5. Language- parties’ agreement; in its absence, English or Filipino;
6. Governing law- is the law governing the arbitration; not the same
as the law governing the substantive contract which contains the
arbitration agreement
Case not in syllabus: Mabuhay Holdings vs. Sembcorp Logistics

Liberal construction of arbitration clauses

- Arbitration clauses are liberally construed consistent with the
policy of encouraging alternative dispute resolution methods

a. TIEZA vs. Global-V Builders. Co., G.R. No. 219708, October 3,

2018
b. Ormoc Sugarcane Planter’s Ass’n Inc. (OSPA) v. CA, G.R.
No. 156660, August 24, 2009
c. Cargill Philippines, Inc. v. San Fernando Regala Trading, Inc.,
641 SCRA 630 (2009)

2019 Philippine International Center for Conflict Resolution (PICCR)

Model Clause

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“Any dispute, controversy, difference or claim arising out of or in relation

to this agreement, including any question as to the interpretation,
implementation, existence, validity, breach or termination thereof or as
to any non-contractual obligation arising out of or relating thereto, shall
be referred to and finally resolved by arbitration administered by the
Philippine International Center for Conflict Resolution (“PICCR”) in
accordance with the PICCR Arbitration Rules in force at the time of the
commencement of the arbitration (“PICCR Arbitration Rules”), which
rules are deemed incorporated by reference in this clause.

The arbitration shall be conducted by one or more arbitrators to be

appointed in accordance with the PICCR Arbitration Rules. The seat of
the arbitration shall be [the Philippines]. The language of the
arbitration shall be [English]. This arbitration agreement shall be
governed by the laws of [the Philippines].”

2021 PDRCI Model Clause

"Any dispute, difference, or claim arising out of or relating to this

contract, or the existence, validity, interpretation, breach, or
termination thereof shall be finally settled by arbitration in accordance
with the PDRCI Arbitration Rules in force at the time of the
commencement of the arbitration. The number of arbitrators shall be ...
(one or three). The seat of arbitration is ... (country), whose laws shall
be the law of the arbitration agreement. The language(s) of the
arbitration shall be ... (language)."

______

Any dispute, controversy or claim arising out of or relating to this

contract, or the breach, termination or invalidity thereof, shall be settled
by arbitration in the Philippines.

7. Doctrine of competence competence; kompetenz kompetenz

Separability of arbitration clause

Principle of separability
- An arbitration clause which forms part of a contract shall be treated
as an agreement independent of the other terms of the contract. A
decision by the arbitral tribunal that the contract is null and void shall
not entail ipso jure the invalidity of the arbitration clause.

Pathological clauses- used to identify arbitration clauses that contain

defects. When stipulations are ambiguous, incomplete, unclear or
contrary, these clauses are created.

Four essential elements of an arbitration clause that could be used

in order to assess the nature and extent of the pathology, and serve as
guiding principles in drafting arbitration clauses, to wit:
a. Production of mandatory consequences for the parties;

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b. Exclusion of state court intervention in the settlement of

the disputes, at least, before the issuance of the award;
c. Equipping arbitrators, the power to resolve disputes that
are likely to arise between the parties; and
d. Permission to put in place a procedure under best
conditions of efficiency and rapidity in rendering an award
that is susceptible of judicial enforcement

Generally, even if an arbitration clause is defective, the court still

gives effect to the stipulation so long as it will not prejudice the
rights of either party and the interpretation is still well within the
intention of the parties involved. Notably, pathological clauses are
often main points of contention between parties; hence, they are
a significant consideration in drafting arbitration agreements.

Doctrine of competence competence or kompetenz kompetenz

The arbitral tribunal shall be accorded the first opportunity or

competence to rule on the issue of whether or not it has the competence
or jurisdiction to decide a dispute submitted to it for decision, including
any objection with respect to the existence or validity of the arbitration
agreement. The court must exercise judicial restraint and defer to the
competence or jurisdiction of the arbitral tribunal by allowing the
tribunal the first opportunity to rule upon such issues.

Arbitration Agreement and Substantive Claim Before the Court

A court before which an action is brought in a matter which is the

subject of an arbitration agreement shall, if at least one party so
requests not later than the pre-trial conference, or upon the request of
both parties thereafter, refer the parties to arbitration unless it finds
that the arbitration agreement is null and void, inoperative or incapable
of being performed.

Where an action referred to in the previous paragraph has been

brought, arbitral proceedings may nevertheless be commenced or
continued, an award may be made, while the issue is pending before he
court.

Where the action is commenced by or against multiple parties,

one or more of whom are parties to an arbitration agreement, the court
shall refer to arbitration those parties who are bound by the arbitration
agreement although the civil action may continue as to those who are
not bound by such arbitration agreement.

Koppel, Inc. vs. Makati Rotary Club Foundation, Inc., G.R. No.
198075, September 4, 2013

PARTIES

Who may submit to arbitration?

a. natural persons/ individuals with capacity to contract

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b. juridical entities
c. state/ state entities

Disqualification- one party is an infant or a person judicially

declared to be incompetent.

Two or more persons or parties may submit to arbitration by one or

more arbitrators any controversy existing between them at the time
of the submission and which may be the subject of an action; or the
parties to any contract may in such contract agree to settle by
arbitration a controversy thereafter arising between them. Such
submission or contract shall be valid, enforceable and irrevocable,
save upon such grounds as existing at law for the revocation of any
contract.

Treatment of parties- treated with equality; each party shall be given

an opportunity to present his or her side

9. Procedure of arbitration: general

Consider distinction between ad hoc and institutional

Domestic/ international commercial arbitration
RA 876 and RA 9285 in relation to the UNCITRAL Model Law

10. Appointment of Arbitrators; qualifications

Arbitrators
- the person appointed to render an award, alone or with others, in a
dispute that is subject of an arbitration agreement. An arbitral tribunal
refers to the body of three arbitrators in accordance with the agreement
of the parties.

Who may be arbitrators?

- Any person appointed to serve as an arbitrator must be of legal age,
in full employment of his or her civil rights and knows how to read
and write
- No person appointed to serve as an arbitrator shall be related by
blood or marriage within the sixth degree to either party to the
controversy
- No person shall serve as an arbitrator in any proceeding if he or she
has or has had financial, fiduciary or other interest in the controversy
or caused to be decided or in the result of the proceeding, or has any
personal bias, which might prejudice the right of any party to a fair
and impartial award.
- No person shall select as an arbitrator or any person to act as his or
her champion or to advocate his or her cause

If after the appointment of the arbitrator but before or during

hearing, the arbitrator shall discover any circumstance likely to
create a presumption of bias, or which he believes might disqualify
him as an impartial arbitrator, the arbitrator shall immediately

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disclose such information to the parties. The parties may agree in

writing:
a. To waive the presumptive disqualifying circumstance
b. To declare the office of such arbitrator vacant

Independence- in relation to the parties or even non-parties (objective)

Impartiality- state of mind; in relation to the subject matter of dispute

(subjective)

11. Challenge of arbitrators

IBA Rules of Ethics for International Arbitrators

Fundamental Rule- arbitrators shall proceed diligently and efficiently to

provide the parties with a just and effective resolution of their disputes,
and shall remain free from bias

Acceptance of Appointment

2. Acceptance of Appointment
2.1 A prospective arbitrator shall accept an appointment only if he is
fully satisfied that he is able to discharge his duties without bias.

2.2 A prospective arbitrator shall accept an appointment only if he is

fully satisfied that he is competent to determine the issues in dispute,
and has an adequate knowledge of the language of the arbitration.

2.3 A prospective arbitrator should accept an appointment only if he is

able to give to the arbitration the time and attention which the parties
are reasonably entitled to expect.

2.4 It is inappropriate to contact parties in order to solicit appointment

as arbitrator.

3. Elements of Bias

3.1 The criteria for assessing questions relating to bias are impartiality
and independence. Partiality arises when an arbitrator favours one of
the parties, or where he is prejudiced in relation to the subject-matter
of the dispute. Dependence arises from relationships between an
arbitrator and one of the parties, or with someone closely connected
with one of the parties.

3.2 Facts which might lead a reasonable person, not knowing the
arbitrator's true state of mind, to consider that he is dependent on a
party create an appearance of bias. The same is true if an arbitrator has
a material interest in the outcome of the dispute, or if he has already
taken a position in relation to it. The appearance of bias is best
overcome by full disclosure as described in Article 4 below.

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3.3 Any current direct or indirect business relationship between an

arbitrator and a party, or with a person who is known to be a potentially
important witness, will normally give rise to justifiable doubts as to a
prospective arbitrator's impartiality or independence. He should decline
to accept an appointment in such circumstances unless the parties agree
in writing that he may proceed. Examples of indirect relationships are
where a member of the prospective arbitrator's family, his firm, or any
business partner has a business relationship with one of the parties.

3.4 Past business relationships will not operate as an absolute bar to

acceptance of appointment, unless they are of such magnitude or nature
as to be likely to affect a prospective arbitrator's judgment.

3.5 Continuous and substantial social or professional relationships

between a prospective arbitrator and a party, or with a person who is
known to be a potentially important witness in the arbitration, will
normally give rise to justifiable doubts as to the impartiality or
independence of a prospective arbitrator.

4. Duty of Disclosure
4.1 A prospective arbitrator should disclose all facts or circumstances
that may give rise to justifiable doubts as to his impartiality or
independence. Failure to make such disclosure creates an appearance
of bias, and may of itself be a ground for disqualification even though
the non-disclosed facts or circumstances would not of themselves justify
disqualification.

4.2 A prospective arbitrator should disclose:

(a) any past or present business relationship, whether direct or indirect

as illustrated in Article 3.3, including prior appointment as arbitrator,
with any party to the dispute, or any representative of a parry, or any
person known to be a potentially important witness in the arbitration.
With regard to present relationships, the duty of disclosure applies
irrespective of their magnitude, but with regard to past relationships
only if they were of more than a trivial nature in relation to the
arbitrator's professional or business affairs. Nondisclosure of an indirect
relationship unknown to a prospective arbitrator will not be a ground for
disqualification unless it could have been ascertained by making
reasonable enquiries;

(b) the nature and duration of any substantial social relationships with
any party or any person known to be likely to be an important witness
in the arbitration;

(c) the nature of any previous relationship with any fellow arbitrator
(including prior joint service as an arbitrator);

(d) the extent of any prior knowledge he may have of the dispute;

(e) the extent of any commitments which may affect his availability to
perform his duties as arbitrator as may be reasonably anticipated.

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4.3 The duty of disclosure continues throughout the arbitral proceedings

as regards new facts or circumstances.

4.4 Disclosure should be made in writing and communicated to all

parties and arbitrators. When an arbitrator has been appointed, any
previous disclosure made to the parties should be communicated to the
other arbitrators.

5. Communications with Parties

5.1 When approached with a view to appointment, a prospective

arbitrator should make sufficient enquiries in order to inform himself
whether there may be any justifiable doubts regarding his impartiality
or independence; whether he is competent to determine the issues in
dispute; and whether he is able to give the arbitration the time and
attention required. He may also respond to enquiries from those
approaching him, provided that such enquiries are designed to
determine his suitability and availability for the appointment and
provided that the merits of the case are not discussed. In the event that
a prospective sole arbitrator or presiding arbitrator is approached by one
party alone, or by one arbitrator chosen unilaterally by a party (a 'party-
nominated' arbitrator), he should ascertain that the other party or
parties, or the other arbitrator, has consented to the manner in which
he has been approached. In such circumstances he should, in writing or
orally, inform the other party or parties, or the other arbitrator, of the
substance of the initial conversation.

5.2 If a party-nominated arbitrator is required to participate in the

selection of a third or presiding arbitrator, it is acceptable for him
(although he is not so required) to obtain the views of the party who
nominated him as to the acceptability of candidates being considered.

5.3 Throughout the arbitral proceedings, an arbitrator should avoid any

unilateral communications regarding the case with any party, or its
representatives. If such communication should occur, the arbitrator
should inform the other party or parties and arbitrators of its substance.

5.4 If an arbitrator becomes aware that a fellow arbitrator has been in

improper communication with a party, he may inform the remaining
arbitrators and they should together determine what action should be
taken. Normally, the appropriate initial course of action is for the
offending arbitrator to be requested to refrain from making any further
improper communications with the party. Where the offending arbitrator
fails or refuses to refrain from improper communications, the remaining
arbitrators may inform the innocent party in order that he may consider
what action he should take. An arbitrator may act unilaterally to inform
a party of the conduct of another arbitrator in order to allow the said
party to consider a challenge of the offending arbitrator only in extreme
circumstances, and after communicating his intention to his fellow
arbitrators in writing.

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5.5 No arbitrator should accept any gift or substantial, hospitality,

directly or indirectly, from any party to the arbitration. Sole arbitrators
and presiding arbitrators should be particularly meticulous in avoiding
significant social or professional contacts with any party to the
arbitration other than in the presence of the other parties.

IBA Guidelines on Conflict of Interest in International

Arbitration

The Red List consists of two parts: ‘a Non-Waivable Red List’ (see
General Standards 2(d) and 4(b)); and ‘a Waivable Red List’ (see
General Standard 4(c)). These lists are non-exhaustive and detail
specific situations that, depending on the facts of a given case, give rise
to justifiable doubts as to the arbitrator’s impartiality and independence.
That is, in these circumstances, an objective conflict of interest exists
from the point of view of a reasonable third person having knowledge of
the relevant facts and circumstances (see General Standard 2(b)). The
Non-Waivable Red List includes situations deriving from the overriding
principle that no person can be his or her own judge. Therefore,
acceptance of such a situation cannot cure the conflict. The Waivable
Red List covers situations that are serious but not as severe. Because of
their seriousness, unlike circumstances described in the Orange List,
these situations should be considered waivable, but only if and when the
parties, being aware of the conflict of interest situation, expressly state
their willingness to have such a person act as arbitrator, as set forth in
General Standard 4(c).

1. Non-Waivable Red List

1.1 There is an identity between a party and the arbitrator, or the

arbitrator is a legal representative or employee of an entity that is a
party in the arbitration.

1.2 The arbitrator is a manager, director or member of the supervisory

board, or has a controlling influence on one of the parties or an entity
that has a direct economic interest in the award to be rendered in the
arbitration.
1.3 The arbitrator has a significant financial or personal interest in one
of the parties, or the outcome of the case.

1.4 The arbitrator or his or her firm regularly advises the party, or an
affiliate of the party, and the arbitrator or his or her firm derives
significant financial income therefrom.

2. Waivable Red List

2.1 Relationship of the arbitrator to the dispute

2.1.1 The arbitrator has given legal advice, or provided an expert

opinion, on the dispute to a party or an affiliate of one of the parties.

2.1.2 The arbitrator had a prior involvement in the dispute.

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2.2 Arbitrator’s direct or indirect interest in the dispute

2.2.1 The arbitrator holds shares, either directly or indirectly, in one of

the parties, or an affiliate of one of the parties, this party or an affiliate
being privately held.

2.2.2 A close family member of the arbitrator has a significant financial

interest in the outcome of the dispute.
2.2.3 The arbitrator, or a close family member of the arbitrator, has a
close relationship with a non-party who may be liable to recourse on the
part of the unsuccessful party in the dispute.

2.3 Arbitrator’s relationship with the parties or counsel

2.3.1 The arbitrator currently represents or advises one of the parties,
or an affiliate of one of the parties.
2.3.2 The arbitrator currently represents or advises the lawyer or law
firm acting as counsel for one of the parties.
2.3.3 The arbitrator is a lawyer in the same law firm as the counsel to
one of the parties.
2.3.4 The arbitrator is a manager, director or member of the supervisory
board, or has a controlling influence in an affiliate of one of the parties,
if the affiliate is directly involved in the matters in dispute in the
arbitration.
2.3.5 The arbitrator’s law firm had a previous but terminated
involvement in the case without the arbitrator being involved himself or
herself.
2.3.6 The arbitrator’s law firm currently has a significant commercial
relationship with one of the parties, or an affiliate of one of the parties.

2.3.7 The arbitrator regularly advises one of the parties, or an affiliate

of one of the parties, but neither the arbitrator nor his or her firm derives
a significant financial income therefrom.
2.3.8 The arbitrator has a close family relationship with one of the
parties, or with a manager, director or member of the supervisory board,
or any person having a controlling influence in one of the parties, or an
affiliate of one of the parties, or with a counsel representing a party.
2.3.9 A close family member of the arbitrator has a significant financial
or personal interest in one of the parties, or an affiliate of one of the
parties.

The Orange List is a non-exhaustive list of specific situations that,

depending on the facts of a given case, may, in the eyes of the parties,
give rise to doubts as to the arbitrator’s impartiality or independence.
The Orange List thus reflects situations that would fall under General
Standard 3(a), with the consequence that the arbitrator has a duty to
disclose such situations. In all these situations, the parties are deemed
to have accepted the arbitrator if, after disclosure, no timely objection
is made, as established in General Standard 4(a).

3. Orange List

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3.1 Previous services for one of the parties or other involvement in the
case
3.1.1 The arbitrator has, within the past three years, served as counsel
for one of the parties, or an affiliate of one of the parties, or has
previously advised or been consulted by the party, or an affiliate of the
party, making the appointment in an unrelated matter, but the
arbitrator and the party, or the affiliate of the party, have no ongoing
relationship.
3.1.2 The arbitrator has, within the past three years, served as counsel
against one of the parties, or an affiliate of one of the parties, in an
unrelated matter.
3.1.3 The arbitrator has, within the past three years, been appointed as
arbitrator on two or more occasions by one of the parties, or an affiliate
of one of the parties.5

3.1.4 The arbitrator’s law firm has, within the past three years, acted
for or against one of the parties, or an affiliate of one of the parties, in
an unrelated matter without the involvement of the arbitrator.
3.1.5 The arbitrator currently serves, or has served within the past three
years, as arbitrator in another arbitration on a related issue involving
one of the parties, or an affiliate of one of the parties.
3.2 Current services for one of the parties
3.2.1 The arbitrator’s law firm is currently rendering services to one of
the parties, or to an affiliate of one of the parties, without creating a
significant commercial relationship for the law firm and without the
involvement of the arbitrator.
3.2.2 A law firm or other legal organisation that shares significant fees
or other revenues with the arbitrator’s law firm renders services to one
of the parties, or an affiliate of one of the parties, before the Arbitral
Tribunal.
3.2.3 The arbitrator or his or her firm represents a party, or an affiliate
of one of the parties to the arbitration, on a regular basis, but such
representation does not concern the current dispute.
3.3 Relationship between an arbitrator and another arbitrator or counsel
3.3.1 The arbitrator and another arbitrator are lawyers in the same law
firm.
3.3.2 The arbitrator and another arbitrator, or the counsel for one of the
parties, are members of the same barristers’ chambers.

3.3.3 The arbitrator was, within the past three years, a partner of, or
otherwise affiliated with, another arbitrator or any of the counsel in the
arbitration.
3.3.4 A lawyer in the arbitrator’s law firm is an arbitrator in another
dispute involving the same party or parties, or an affiliate of one of the
parties.
3.3.5 A close family member of the arbitrator is a partner or employee
of the law firm representing one of the parties, but is not assisting with
the dispute.
3.3.6 A close personal friendship exists between an arbitrator and a
counsel of a party.
3.3.7 Enmity exists between an arbitrator and counsel appearing in the
arbitration.

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3.3.8 The arbitrator has, within the past three years, been appointed on
more than three occasions by the same counsel, or the same law firm.
3.3.9 The arbitrator and another arbitrator, or counsel for one of the
parties in the arbitration, currently act or have acted together within the
past three years as cocounsel.

3.4 Relationship between arbitrator and party and others involved in the
arbitration
3.4.1 The arbitrator’s law firm is currently acting adversely to one of the
parties, or an affiliate of one of the parties.
3.4.2 The arbitrator has been associated with a party, or an affiliate of
one of the parties, in a professional capacity, such as a former employee
or partner.
3.4.3 A close personal friendship exists between an arbitrator and a
manager or director or a member of the supervisory board of: a party;
an entity that has a direct economic interest in the award to be rendered
in the arbitration; or any person having a controlling influence, such as
a controlling shareholder interest, on one of the parties or an affiliate of
one of the parties or a witness or expert.
3.4.4 Enmity exists between an arbitrator and a manager or director or
a member of the supervisory board of: a party; an entity that has a
direct economic interest in the award; or any person having a controlling
influence in one of the parties or an affiliate of one of the parties or a
witness or expert.
3.4.5 If the arbitrator is a former judge, he or she has, within the past
three years, heard a significant case involving one of the parties, or an
affiliate of one of the parties.

3.5 Other circumstances

3.5.1 The arbitrator holds shares, either directly or indirectly, that by
reason of number or denomination constitute a material holding in one
of the parties, or an affiliate of one of the parties, this party or affiliate
being publicly listed.
3.5.2 The arbitrator has publicly advocated a position on the case,
whether in a published paper, or speech, or otherwise.
3.5.3 The arbitrator holds a position with the appointing authority with
respect to the dispute.
3.5.4 The arbitrator is a manager, director or member of the supervisory
board, or has a controlling influence on an affiliate of one of the parties,
where the affiliate is not directly involved in the matters in dispute in
the arbitration.

The Green List is a non-exhaustive list of specific situations where no

appearance and no actual conflict of interest exists from an objective
point of view. Thus, the arbitrator has no duty to disclose situations
falling within the Green List. As stated in the Explanation to General
Standard 3(a), there should be a limit to disclosure, based on
reasonableness; in some situations, an objective test should prevail
over the purely subjective test of ‘the eyes’ of the parties.

4. Green List 4.1 Previously expressed legal opinions

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4.1.1 The arbitrator has previously expressed a legal opinion (such as

in a law review article or public lecture) concerning an issue that also
arises in the arbitration (but this opinion is not focused on the case).

4.2 Current services for one of the parties

4.2.1 A firm, in association or in alliance with the arbitrator’s law firm,
but that does not share significant fees or other revenues with the
arbitrator’s law firm, renders services to one of the parties, or an affiliate
of one of the parties, in an unrelated matter.
4.3 Contacts with another arbitrator, or with counsel for one of the
parties
4.3.1 The arbitrator has a relationship with another arbitrator, or with
the counsel for one of the parties, through membership in the same
professional association, or social or charitable organisation, or through
a social media network.
4.3.2 The arbitrator and counsel for one of the parties have previously
served together as arbitrators.
4.3.3 The arbitrator teaches in the same faculty or school as another
arbitrator or counsel to one of the parties, or serves as an officer of a
professional association or social or charitable organisation with another
arbitrator or counsel for one of the parties.
4.3.4 The arbitrator was a speaker, moderator or organiser in one or
more conferences, or participated in seminars or working parties of a
professional, social or charitable organisation, with another arbitrator or
counsel to the parties.

4.4 Contacts between the arbitrator and one of the parties

4.4.1 The arbitrator has had an initial contact with a party, or an affiliate
of a party (or their counsel) prior to appointment, if this contact is
limited to the arbitrator’s availability and qualifications to serve, or to
the names of possible candidates for a chairperson, and did not address
the merits or procedural aspects of the dispute, other than to provide
the arbitrator with a basic understanding of the case.
4.4.2 The arbitrator holds an insignificant amount of shares in one of
the parties, or an affiliate of one of the parties, which is publicly listed.
4.4.3 The arbitrator and a manager, director or member of the
supervisory board, or any person having a controlling influence on one
of the parties, or an affiliate of one of the parties, have worked together
as joint experts, or in another professional capacity, including as
arbitrators in the same case.
4.4.4 The arbitrator has a relationship with one of the parties or its
affiliates through a social media network.

12. Procedure by arbitrators

Appointment of Arbitrators

The parties are free to agree on a procedure of appointing the arbitrator

or arbitrators. If, in the contract for arbitration or submission, a
provision is made for a method of appointing an arbitrator or arbitrators,
such method shall be followed.

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Appointing authority- person or institution named in the arbitration

agreement as the appointing authority; or the regular arbitration
institution under whose laws the arbitration is agreed to be conducted.
Where parties have agreed to submit their dispute to institutional
arbitration rules, and unless they have agreed to a different procedure,
they shall be deemed to have agreed to the procedure, they shall be
deemed to have agreed to the procedure under such arbitration rules
for the selection and appointment of arbitrators.

Ad hoc arbitration- default appointment shall be made by the National

President of the IBP or his duly authorized representative.

No nationality requirements for arbitrators, unless otherwise agreed by

the parties.

Procedure

In the absence of an agreement between the parties,

i. in an arbitration with 3 arbitrators, each party shall appoint one

arbitrator, and the 2 arbitrators thus appointed shall appoint the third
arbitrator; if a party fails to appoint the arbitrator within 30 days of
receipt of a request to do so from the other party, or if the 2 arbitrators
fail to agree on the third arbitrator within 30 days of their appointment,
the appointment shall be made, upon request of a party, by the
appointing authority; and
ii. in an arbitration with a sole arbitrator, if the parties are unable to
agree on the arbitrator, he or she shall be appointed, upon request of a
party by the appointing authority.

Challenging the appointment of arbitrator

For arbitration cases falling under the international commercial

arbitration, an arbitrator in ICA may be challenged based on the
following grounds:

a. If circumstances exist that give rise to justifiable doubts as to his

or her impartiality or independence; or
b. If he/she does not possess qualifications agreed to by the parties;
or
c. A party may challenge an arbitrator appointed by him or her, or
in whose appointment he/she has participated, only for reasons of
which he/she becomes aware of the appointment has been made.

In domestic arbitration, in addition to the ground above, the

arbitrator may be challenged if he refuses to respond to questions by
a party regarding the nature and extent of his professional dealings
with a party or its counsel.

The parties are free to agree on the following procedure, subject to

the following:

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a. Within 15 days after becoming aware of the constitution of the

arbitral tribunal or after becoming aware of any circumstance
referred to in the Grounds for Challenge, a party who intends to
challenge an arbitrator shall send a written statement of the
reasons for the challenge to the arbitral tribunal. Unless the
challenged arbitrator withdraws from his or her office or the other
party agrees to the challenge, the arbitral tribunal shall decide on
the challenge.
b. In default of an agreement of the parties to agree on the challenge
thereby replacing the arbitrator, the arbitral tribunal shall decide
on the challenge within thirty (30) days from receipt of the
challenge.
c. Within 30 days after having received notice of the decision
rejecting the challenge, the challenging party may request the
appointing authority, to decide on the challenge, which decision
shall be immediately executory and not subject to appeal or
motion for reconsideration. While such a request is pending, the
arbitral tribunal, including the challenged arbitrator may continue
the arbitral proceedings and make an award. Notwithstanding the
rejection of challenge by the arbitrator, the parties may, within
the same 15 day period, agree to the challenge.
d. If the appointing authority shall fail to act on the challenge within
30 days from the date of its receipt or within such further time as
it may fix, with notice to the parties, the requesting party may
renew the request with the court.
e. An arbitrator who does not accept the challenge shall be given an
opportunity to be heard
f. If a request for inhibition is made, it shall be deemed as a
challenge
g. Every communication required or agreement made under this
article in respect of a challenge shall be delivered, as appropriate,
to the challenged arbitrator, to the parties, to the remaining
members of the arbitral tribunal and to the institution
administering the arbitration, if any.

A challenged arbitrator shall be replaced if:

a. He/she withdraws as arbitrator; or

b. The parties agree in writing to declare the office of arbitrator
vacant; or
c. The arbitral tribunal decides the challenge and declares the office
of the challenged arbitrator vacant; or
d. The appointing authority decides the challenge and declares the
office of the challenged arbitrator vacant; or
e. In default of the appointing authority, the court decided the
challenge and declares the office of the challenged arbitrator
vacant.

Procedure/ Stages of Arbitration

Arbitration agreement

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1) Request or Demand For Arbitration

When is arbitration commenced?

ICA
Ad hoc/institutional- when request for arbitration is received by the
respondent

Domestic
Institutional- based on the arbitration rules
Ad hoc- upon delivery of the demand for arbitration to the respondent

2. Response to the Request

3. Constitution of the arbitral tribunal/ acceptance by sole arbitrator

4. Case management conference or preliminary conference

-Filing of statement of claims, evidence, witness statements, dates of
hearings, need for ocular inspection, possibility of interim relief;
possibility of settlement, place of arbitration, language, venue, filing of
communications and notices, expert witnesses

5. Arbitral tribunal conducts hearings

6. Post hearing briefs/memoranda if allowed

7. Arbitral tribunal deliberates on and issues final award

8. Recognition/enforcement of arbitral award, as well as vacation of

award

Confidentiality of Arbitration Proceedings

The arbitration proceedings, including records, evidence and the

Arbitration Award, and other confidential information, shall be
considered privileged and confidential and shall not be published except:

a. With consent of the parties

b. For the limited purpose of disclosing to the court relevant
documents in cases where resort to the court is allowed herein

Provided, however, that the court in which the court or the appeal is
pending may issue a protective order to prevent or prohibit disclosure
of documents or information containing secret processes,
developments, research and other information where it is shown that
the applicant shall be materially prejudiced by an authorized
disclosure thereof.

Legal Representation

In domestic arbitration conducted in the Philippines, a party may

be represented by any person of his/her/its choice; provided, that
such representative, unless admitted to the practice of law in the

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Philippines, shall not be authorized to appear as counsel in any

Philippine Court, or any other quasi-judicial body whether such
appearance is in relation to the arbitration in which he/she appears.

No arbitrator shall act as mediator in any proceeding in which he

or she is acting as arbitrator and a negotiations towards settlement
of the dispute must take place without the presence of the
arbitrators.

In international commercial arbitration conducted in the

Philippines, a party may be represented by any person of his/her/its
choice; provided that such representative, unless admitted to the
practice of law in the Philippines, shall not be authorized to appear
as counsel in any Philippine court or any other quasi-judicial body
whether or not such appearance is in relation to the arbitration in
which he/she appears.

13. Arbitral award; form; contents

An arbitral award means any partial or final decision by an

arbitrator in resolving the issue in controversy.

Form and contents

a. The award shall be made in writing and shall be signed by the

arbitral tribunal. In arbitration proceedings with more than one
arbitrator, the signatures of the majority of all members of the
arbitral tribunal shall suffice, provided that the reason for any
omitted signature is stated.
b. The award shall state the reasons upon which it is based, unless
the parties have agreed that no reasons are to be given or the
award on agreed terms, consent award based on compromise
agreement in accordance with the provisions on settlement.
c. The award shall state its date and the place of arbitration as
determined in accordance with the provisions on the Place of
Arbitration. The award shall be deemed to have been made at that
place.
d. After the award is made, copy signed by the arbitrators in
accordance with the above provisions shall be delivered to each
party.

Correction and Interpretation of Award; Additional Award

IRR, ADR Act

Article 4.33. Correction and Interpretation of Award, Additional

Award.

(a) Within thirty (30) days from receipt of the award, unless
another period of time has been agreed upon by the parties:

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(i) A party may, with notice to the other party, request the arbitral
tribunal to correct in the award any errors in computation, any clerical
or typographical errors or any errors of similar nature;
(ii) A party may, if so agreed by the parties and with notice to the
other party, request the arbitral tribunal to give an interpretation of a
specific point or part of the award.

(b) If the arbitral tribunal considers the request to be justified, it

shall make the correction or give the interpretation within thirty (30)
days from receipt of the request. The interpretation shall form part of
the award.

(c) The arbitral tribunal may correct any error of the type referred
to in paragraph (a) of this Article on its own initiative within thirty (30)
days from the date of the award.

(d) Unless otherwise agreed by the parties, a party may, with

notice to the other party, request, within thirty (30) days of receipt of
the award, the arbitral tribunal to make an additional award as to claims
presented in the arbitral proceedings but omitted from the award. If the
arbitral tribunal considers the request to be justified, it shall make the
additional award within sixty (60) days.
(e) The arbitral tribunal may extend, if necessary, the period of
time within which it shall make a correction, interpretation or an
additional award under paragraphs (a) and (b) of this Article. (f) The
provisions of Article 4.31 (Form and Contents of Award) shall apply to a
correction or interpretation of the award or to an additional award.

14. Confirmation of award; grounds to vacate, modify, or correct

Confirmation of a Domestic Award

- Governed by R.A. No. 876

Section 23. Confirmation of award. - At any time within one month

after the award is made, any party to the controversy which was
arbitrated may apply to the court having jurisdiction, as provided in
section twenty-eight, for an order confirming the award; and
thereupon the court must grant such order unless the award is
vacated, modified or corrected, as prescribed herein. Notice of such
motion must be served upon the adverse party or his attorney as
prescribed by law for the service of such notice upon an attorney in
action in the same court.

A domestic arbitration award, when confirmed, shall be enforced

in the same manner as that of final and executory decisions of the RTC.
The confirmation of a domestic award shall be made by the RTC in
accordance with the Rules of Procedure to be promulgated by the
Supreme Court.

Special ADR Rules

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CHAPTER 7 - JUDICIAL REVIEW OF ARBITRAL AWARDS

A. DOMESTIC AWARDS

SEC. 40. Confirmation of Award. - The confirmation of a domestic

arbitral award shall be governed by Section 23 of R.A. 876.

A domestic arbitral award when confirmed shall be enforced in the same

manner as final and executory decisions of the Regional Trial Court.

The confirmation of a domestic award shall be made by the regional trial

court in accordance with the Rules of Procedure to be promulgated by
the Supreme Court.

A CIAC arbitral award need not be confirmed by the regional trial court
to be executory as provided under E.O. No. 1008.

SEC. 41. Vacation Award. - A party to a domestic arbitration may

question the arbitral award with the appropriate regional trial court in
accordance with the rules of procedure to be promulgated by the
Supreme Court only on those grounds enumerated in Section 25 of
Republic Act No. 876. Any other ground raised against a domestic
arbitral award shall be disregarded by the regional trial court.

In construction cases, the CIAC arbitral award need not be

confirmed by the RTC in order to be executory.
A party to a domestic arbitration may only question the arbitration
award with the appropriate RTC only on those grounds enumerated in
Section 25:

Section 25. Grounds for modifying or correcting award. - In any

one of the following cases, the court must make an order modifying or
correcting the award, upon the application of any party to the
controversy which was arbitrated:

(a) Where there was an evident miscalculation of figures, or an

evident mistake in the description of any person, thing or property
referred to in the award; or

(b) Where the arbitrators have awarded upon a matter not

submitted to them, not affecting the merits of the decision upon
the matter submitted; or

(c) 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.

The order may modify and correct the award so as to effect the
intent thereof and promote justice between the parties.

Setting Aside an Arbitration Award

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- International commercial arbitration

IRR, ADR Act

Article 4.34. Application for Setting Aside an Exclusive Recourse

against Arbitral Award.
(a) Recourse to a court against an arbitral award may be made only
by an application for setting aside in accordance with second and third
paragraphs of this Article.
(b) An arbitral award may be set aside by the Regional Trial Court
only if:
(i) the party making the application furnishes proof that:
(aa) 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 thereon, under
the law of the Philippines; or
(bb) 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; or
(cc) the award deals with a dispute not contemplated by or not
falling within the terms of the submission to arbitration, or contains
decisions on matters beyond the scope of the submission to arbitration,
provided that, if the decisions on matters submitted to arbitration can
be separated from those not so submitted, only the part of the award
which contains decisions on matters not submitted to arbitration may
be set aside; or
(dd) the composition of the arbitral tribunal or the arbitral
procedure was not in accordance with the agreement of the parties,
unless such agreement was in conflict with a provision of ADR Act from
which the parties cannot derogate, or, failing such agreement, was not
in accordance with ADR Act; or

(ii) the Court finds that:

(aa) the subject-matter of the dispute is not capable of settlement

by arbitration under the law of the Philippines; or (bb) the award is in
conflict with the public policy of the Philippines.

(c) An application for setting aside may not be made after three
months have elapsed from the date on which the party making that
application had received the award or, if a request had been made under
Article 4.33 (Correction and Interpretation of Award, Additional Award)
from the date on which that request has been disposed of by the Arbitral
Tribunal.
(d) The court, when asked to set aside an award, may, where
appropriate and so requested by a party, suspend the setting aside
proceedings for a period of time determined by it in order to give the
arbitral tribunal an opportunity to resume the arbitral proceedings or to
take such other action as in the arbitral tribunal’s opinion will eliminate
the grounds for setting aside.
(e) A party may bring a petition under this Article before the court
in accordance with the Special ADR Rules.

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Petition to Vacate an Arbitral Award

Article 5.35. Grounds to Vacate an Arbitral Award.

(a) The arbitral award may be questioned, vacated or set aside by the
appropriate court in accordance with the Special ADR Rules only on the
following grounds:

(i) The arbitral award was procured by corruption, fraud or other undue
means; or
(ii) There was evident partiality or corruption in the arbitral tribunal or
any of its members; or
(iii) The arbitral tribunal was guilty of misconduct or any form of
misbehavior that has materially prejudiced the rights of any party such
as refusing to postpone the hearing upon sufficient cause shown or to
hear evidence pertinent and material to the controversy; or
(iv) One or more of the arbitrators was disqualified to act as such under
this Chapter and willfully refrained from disclosing such disqualification;
or
(v) The arbitral tribunal exceeded its powers, or so imperfectly executed
them, such that a complete, final and definite award upon the subject
matter submitted to it was not made. Any other ground raised to
question, vacate or set aside the arbitral award shall be disregarded by
the court.

(b) Where a petition to vacate or set aside an award is filed, the

petitioner may simultaneously, or the oppositor may in the alternative,
petition the court to remit the case to the same arbitral tribunal 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, the members of
which shall be chosen in the manner originally provided in the arbitration
agreement or submission. In the latter case, any provision limiting the
time in which the arbitral tribunal may make a decision shall be deemed
applicable to the new arbitral tribunal and to commence from the date
of the court’s order.

(c) Where a party files a petition with the court to vacate or set aside
an award by reason of omission/s that do not affect the merits of the
case and may be cured or remedied, the adverse party may oppose that
petition and instead request the court to suspend the vacation or setting
aside proceedings for a period of time to give the arbitral tribunal an
opportunity to cure or remedy the award or resume the arbitration
proceedings or take such other action as will eliminate the grounds for
vacation or setting aside.

Recognition and Enforcement of Arbitral Awards

IRR ADR Act

Article 5.36. Confirmation of Award.

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The party moving for an order confirming, modifying, correcting, or

vacating an award, shall, at the time that such motion is filed with the
court for the entry of judgment thereon, also file the original or verified
copy of the award, the arbitration or settlement agreement, and such
papers as may be required by the Special ADR Rules.

Article 5.37. Judgment. Upon the grant of an order confirming,

modifying or correcting an award, judgment may be entered in
conformity therewith in the court where said application was filed. Costs
of the application and the proceedings subsequent thereto may be
awarded by the court in its discretion. If awarded, the amount thereof
must be included in the judgment. Judgment will be enforced like court
judgments.

Article 5.38. Appeal. A decision of the court confirming, vacating,

setting aside, modifying or correcting an arbitral award may be appealed
to the Court of Appeals in accordance with Special ADR Rules. The losing
party who appeals from the judgment of the Court confirming an arbitral
award shall be required by the Court of Appeals to post a counter-bond
executed in favor of the prevailing party equal to the amount of the
award in accordance with the Special ADR Rules.

Article 5.39. Venue and Jurisdiction. Proceedings for recognition and

enforcement of an arbitration agreement or for vacation or setting aside
of an arbitral award, and any application with a court for arbitration
assistance and supervision, except appeal, shall be deemed as special
proceedings and shall be filed with the court (a) where the arbitration
proceedings are conducted; (b) where the asset to be attached or levied
upon, or the act to be enjoined is located; (c) where any of the parties
to the dispute resides or has its place of business; or (d) in the National
Capital Judicial Region at the option of the applicant.

Article 5.40. Notice of Proceedings to Parties. In a special proceeding

for recognition and enforcement of an arbitral award, the court shall
send notice to the parties at their address of record in the arbitration,
or if any party cannot be served notice at such address, at such party’s
last known address. The notice shall be sent at least fifteen (15) days
before the date set for the initial hearing of the application.

Recognition and Enforcement of Foreign Arbitral Awards

New York Convention

Article IV
1. To obtain the recognition and enforcement mentioned in the
preceding article, the party applying for recognition and enforcement
shall, at the time of the application, supply:
(a) The duly authenticated original award or a duly certified copy
thereof;

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(b) The original agreement referred to in article II or a duly certified

copy thereof.
2. If the said award or agreement is not made in an official language of
the country in which the award is relied upon, the party applying for
recognition and enforcement of the award shall produce a translation of
these documents into such language. The translation shall be certified
by an official or sworn translator or by a diplomatic or consular agent.
Article V
1. Recognition and enforcement of the award may be refused, at the
request of the party against whom it is invoked, only if that party
furnishes to the competent authority where the recognition and
enforcement is sought, proof that:
(a) The parties to the agreement referred to in article II were, under the
law applicable to them, under some incapacity, or the said agreement
is not valid under the law to which the parties have subjected it or,
failing any indication thereon, under the law of the country where the
award was made; or
(b) The party against whom the award is invoked was not given proper
notice of the appointment of the arbitrator or of the arbitration
proceedings or was otherwise unable to present his case; or
(c) The award deals with a difference not contemplated by or not falling
within the terms of the submission to arbitration, or it contains decisions
on matters beyond the scope of the submission to arbitration, provided
that, if the decisions on matters submitted to arbitration can be
separated from those not so submitted, that part of the award which
contains decisions on matters submitted to arbitration may be
recognized and enforced; or
(d) The composition of the arbitral authority or the arbitral procedure
was not in accordance with the agreement of the parties, or, failing such
agreement, was not in accordance with the law of the country where the
arbitration took place; or
(e) The award has not yet become binding on the parties, or has been
set aside or suspended by a competent authority of the country in which,
or under the law of which, that award was made.
2. Recognition and enforcement of an arbitral award may also be refused
if the competent authority in the country where recognition and
enforcement is sought finds that:
(a) The subject matter of the difference is not capable of settlement by
arbitration under the law of that country; or
(b) The recognition or enforcement of the award would be contrary to
the public policy of that country.

- Shall be filed with the RTC in accordance with the Special ADR Rules
- A petition to recognize and enforce or set aside an arbitration award
may, at the option of the petitioner, be filed with the RTC:
a) Where arbitration proceedings were conducted

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b) Where any of the assets to be attached or levied upon is locates

c) Where the act to be enjoined will be or is being performed
d) Where any of the parties to arbitration resides or has its place
of business; or
e) In the National Capital Region

Convention Awards vs. Non-convention awards

Rejection of a Foreign Arbitral Award

A party to a foreign arbitration proceeding may oppose an

application for recognition and enforcement of the arbitration award in
accordance with the Special ADR Rules only on those ground
enumerated under Article V of the New York Convention (Section 45,
ADR Act)

Comparative Matrix of Arbitration Awards and Available Remedies

Seat of Kinds Law Available

arbitration Governing Recourse
Enforcement
Foreign Outside the Awards in New York
Refusal to
Arbitration place of arbitrations Convention
enforce
Award arbitration seated award
(enforcement) outside the RA 9285
under
PhilippinesSpecial
ADR Rules
International In the place of Awards in 1985 Setting
Arbitration arbitration ICA seated UNCITRAL aside
Award (enforcement) in the Model Law under
Philippines Special
RA 9285 ADR Rules
Domestic In the country Domestic RA 876/RA Vacation
Arbitration of Awards 9285 under
Award enforcement Special
ADR Rules

CIAC EO 1008 Appeal

Arbitration under
Awards Rule 43 of
the Rules
of Court
(see Ross
Systems
vs. Global
Medical)

19. Judicial Review and Court Intervention

20. Special ADR Rules, A.M. No. 07-11-08-SC, September 1,

2009

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Subject Matter and Coverage

a. Relief on the issue of Existence, Validity, or Enforceability of the Arbitration
Agreement;
b. Referral to Alternative Dispute Resolution ("ADR");
c. Interim Measures of Protection;
d. Appointment of Arbitrator;
e. Challenge to Appointment of Arbitrator;
f. Termination of Mandate of Arbitrator;
g. Assistance in Taking Evidence;
h. Confirmation, Correction or Vacation of Award in Domestic Arbitration;
i. Recognition and Enforcement or Setting Aside of an Award in International
Commercial Arbitration;
j. Recognition and Enforcement of a Foreign Arbitral Award;
k. Confidentiality/Protective Orders; and
l. Deposit and Enforcement of Mediated Settlement Agreements.

These relief are applicable only to domestic arbitration .

and Philippine ICA, except (b), (g), and (i) which are also applicable to foreign
arbitration, including foreign ICA.

Except for deposit of MSAs, the procedures above are special proceedings

Summary Proceedings

a. Relief on the issue of Existence, Validity, or Enforceability of the Arbitration

Agreement;
b. Referral to Alternative Dispute Resolution ("ADR");
c. Interim Measures of Protection;
d. Appointment of Arbitrator;
e. Challenge to Appointment of Arbitrator;
f. Termination of Mandate of Arbitrator;
g. Assistance in Taking Evidence;
k. Confidentiality/Protective Orders; and
l. Deposit and Enforcement of Mediated Settlement Agreements.

Non-summary

h. Confirmation, Correction or Vacation of Award in Domestic Arbitration;

i. Recognition and Enforcement or Setting Aside of an Award in International
Commercial Arbitration;
j. Recognition and Enforcement of a Foreign Arbitral Award;

Fundamental Principles

Rule 2.1. General policies. - It is the policy of the State to actively

promote the use of various modes of ADR and to respect party
autonomy or the freedom of the parties to make their own arrangements
in the resolution of disputes with the greatest cooperation of and the
least intervention from the courts. To this end, the objectives of the
Special ADR Rules are to encourage and promote the use of ADR,
particularly arbitration and mediation, as an important means to achieve
speedy and efficient resolution of disputes, impartial justice, curb a
litigious culture and to de-clog court dockets.

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Rule 2.2. Policy on arbitration.- (A) Where the parties have agreed to
submit their dispute to arbitration, courts shall refer the parties to
arbitration pursuant to Republic Act No. 9285 bearing in mind that such
arbitration agreement is the law between the parties and that they are
expected to abide by it in good faith. Further, the courts shall not refuse
to refer parties to arbitration for reasons including, but not limited to,
the following:

a. The referral tends to oust a court of its jurisdiction;

b. The court is in a better position to resolve the dispute subject

of arbitration;

c. The referral would result in multiplicity of suits;

d. The arbitration proceeding has not commenced;

e. The place of arbitration is in a foreign country;

f. One or more of the issues are legal and one or more of the
arbitrators are not lawyers;

g. One or more of the arbitrators are not Philippine nationals; or

h. One or more of the arbitrators are alleged not to possess the

required qualification under the arbitration agreement or law.

(B) Where court intervention is allowed under ADR Laws or the Special
ADR Rules, courts shall not refuse to grant relief, as provided herein, for
any of the following reasons:

a. Prior to the constitution of the arbitral tribunal, the court finds

that the principal action is the subject of an arbitration agreement;
or

b. The principal action is already pending before an arbitral

tribunal.

The Special ADR Rules recognize the principle of competence-

competence, which means that the arbitral tribunal may initially rule on
its own jurisdiction, including any objections with respect to the
existence or validity of the arbitration agreement or any condition
precedent to the filing of a request for arbitration.

The Special ADR Rules recognize the principle of separability of the

arbitration clause, which means that said clause shall be treated as an
agreement independent of the other terms of the contract of which it
forms part. A decision that the contract is null and void shall not entail
ipso jure the invalidity of the arbitration clause.

Rule 2.3. Rules governing arbitral proceedings. - The parties are free
to agree on the procedure to be followed in the conduct of arbitral

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proceedings. Failing such agreement, the arbitral tribunal may conduct

arbitration in the manner it considers appropriate.

Rule 2.4. Policy implementing competence-competence principle. - The

arbitral tribunal shall be accorded the first opportunity or competence
to rule on the issue of whether or not it has the competence or
jurisdiction to decide a dispute submitted to it for decision, including any
objection with respect to the existence or validity of the arbitration
agreement. When a court is asked to rule upon issue/s affecting the
competence or jurisdiction of an arbitral tribunal in a dispute brought
before it, either before or after the arbitral tribunal is constituted, the
court must exercise judicial restraint and defer to the competence or
jurisdiction of the arbitral tribunal by allowing the arbitral tribunal the
first opportunity to rule upon such issues.

Where the court is asked to make a determination of whether the

arbitration agreement is null and void, inoperative or incapable of being
performed, under this policy of judicial restraint, the court must make
no more than a prima facie determination of that issue.

Unless the court, pursuant to such prima facie determination, concludes

that the arbitration agreement is null and void, inoperative or incapable
of being performed, the court must suspend the action before it and
refer the parties to arbitration pursuant to the arbitration agreement.

Rule 2.6. Policy on Arbitration-Mediation or Mediation-Arbitration. - No

arbitrator shall act as a mediator in any proceeding in which he is acting
as arbitrator; and all negotiations towards settlement of the dispute
must take place without the presence of that arbitrator. Conversely, no
mediator shall act as arbitrator in any proceeding in which he acted as
mediator.

Rule 2.7. Conversion of a settlement agreement to an arbitral award. -

Where the parties to mediation have agreed in the written settlement
agreement that the mediator shall become the sole arbitrator for the
dispute or that the settlement agreement shall become an arbitral
award, the sole arbitrator shall issue the settlement agreement as an
arbitral award, which shall be subject to enforcement under the law .

1. Judicial Relief on the issue of Existence, Validity, or Enforceability of the

Arbitration Agreement (Rule 3)

When judicial relief is available. - The judicial relief provided in Rule 3,

whether resorted to before or after commencement of arbitration, shall
apply only when the place of arbitration is in the Philippines.

Rule 3.11. Relief against court action. - Where there is a prima facie
determination upholding the arbitration agreement.-A prima facie
determination by the court upholding the existence, validity or

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enforceability of an arbitration agreement shall not be subject to a

motion for reconsideration, appeal or certiorari.

Such prima facie determination will not, however, prejudice the right of
any party to raise the issue of the existence, validity and enforceability
of the arbitration agreement before the arbitral tribunal or the court in
an action to vacate or set aside the arbitral award. In the latter case,
the court’s review of the arbitral tribunal’s ruling upholding the
existence, validity or enforceability of the arbitration agreement shall no
longer be limited to a mere prima facie determination of such issue or
issues as prescribed in this Rule, but shall be a full review of such issue
or issues with due regard, however, to the standard for review for
arbitral awards prescribed in these Special ADR Rules.

2. Referral to ADR (Rule 4)

Rule 4.1. Who makes the request. - A party to a pending action filed in
violation of the arbitration agreement, whether contained in an
arbitration clause or in a submission agreement, may request the court
to refer the parties to arbitration in accordance with such agreement.

Rule 4.2. When to make request. - (A) Where the arbitration

agreement exists before the action is filed. - The request for referral
shall be made not later than the pre-trial conference. After the pre-trial
conference, the court will only act upon the request for referral if it is
made with the agreement of all parties to the case.

Rule 4.8. Arbitration to proceed.- Despite the pendency of the action

referred to in Rule 4.1, above, arbitral proceedings may nevertheless be
commenced or continued, and an award may be made, while the action
is pending before the court.

3. Interim Measure of Protection (Rule 5)

Rule 5.1. Who may ask for interim measures of protection. - A party
to an arbitration agreement may petition the court for interim
measures of protection.

Rule 5.4. Grounds. - The following grounds, while not limiting the
reasons for the court to grant an interim measure of protection,
indicate the nature of the reasons that the court shall consider in
granting the relief:

a. The need to prevent irreparable loss or injury;

b. The need to provide security for the performance of any

obligation;

c. The need to produce or preserve evidence; or

d. The need to compel any other appropriate act or omission.

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Rule 5.6. Type of interim measure of protection that a court may

grant.- The following, among others, are the interim measures of
protection that a court may grant:

a. Preliminary injunction directed against a party to arbitration;

b. Preliminary attachment against property or garnishment of

funds in the custody of a bank or a third person;

c. Appointment of a receiver;

d. Detention, preservation, delivery or inspection of property; or,

e. Assistance in the enforcement of an interim measure of

protection granted by the arbitral tribunal, which the latter cannot
enforce effectively.

Rule 5.14. Conflict or inconsistency between interim measure of

protection issued by the court and by the arbitral tribunal. - Any
question involving a conflict or inconsistency between an interim
measure of protection issued by the court and by the arbitral tribunal
shall be immediately referred by the court to the arbitral tribunal which
shall have the authority to decide such question.

Rule 5.15. Court to defer action on petition for an interim measure of

protection when informed of constitution of the arbitral tribunal. - The
court shall defer action on any pending petition for an interim measure
of protection filed by a party to an arbitration agreement arising from
or in connection with a dispute thereunder upon being informed that an
arbitral tribunal has been constituted pursuant to such agreement. The
court may act upon such petition only if it is established by the petitioner
that the arbitral tribunal has no power to act on any such interim
measure of protection or is unable to act thereon effectively.

Rule 5.16. Court assistance should arbitral tribunal be unable to

effectively enforce interim measure of protection. - The court shall assist
in the enforcement of an interim measure of protection issued by the
arbitral tribunal which it is unable to effectively enforce.

4. Appointment of Arbitrators (Rule 6)

Rule 6.1. When the court may act as Appointing Authority. - The court
shall act as Appointing Authority only in the following instances:

a. Where any of the parties in an institutional arbitration failed or

refused to appoint an arbitrator or when the parties have failed to
reach an agreement on the sole arbitrator (in an arbitration before
a sole arbitrator) or when the two designated arbitrators have
failed to reach an agreement on the third or presiding arbitrator
(in an arbitration before a panel of three arbitrators), and the

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institution under whose rules arbitration is to be conducted fails

or is unable to perform its duty as appointing authority within a
reasonable time from receipt of the request for appointment;

b. In all instances where arbitration is ad hoc and the parties failed

to provide a method for appointing or replacing an arbitrator, or
substitute arbitrator, or the method agreed upon is ineffective,
and the National President of the Integrated Bar of the Philippines
(IBP) or his duly authorized representative fails or refuses to act
within such period as may be allowed under the pertinent rules of
the IBP or within such period as may be agreed upon by the
parties, or in the absence thereof, within thirty (30) days from
receipt of such request for appointment;

c. Where the parties agreed that their dispute shall be resolved by

three arbitrators but no method of appointing those arbitrators
has been agreed upon, each party shall appoint one arbitrator and
the two arbitrators thus appointed shall appoint a third arbitrator.
If a party fails to appoint his arbitrator within thirty (30) days of
receipt of a request to do so from the other party, or if the two
arbitrators fail to agree on the third arbitrator within a reasonable
time from their appointment, the appointment shall be made by
the Appointing Authority. If the latter fails or refuses to act or
appoint an arbitrator within a reasonable time from receipt of the
request to do so, any party or the appointed arbitrator/s may
request the court to appoint an arbitrator or the third arbitrator
as the case may be.

5. Challenge to Appointment of Arbitrators (Rule 7)

Rule 7.4. Grounds. - An arbitrator may be challenged on any of the

grounds for challenge provided for in Republic Act No. 9285 and its
implementing rules, Republic Act No. 876 or the Model Law. The
nationality or professional qualification of an arbitrator is not a ground
to challenge an arbitrator unless the parties have specified in their
arbitration agreement a nationality and/or professional qualification for
appointment as arbitrator.

6. Termination of Mandate of Arbitrator (Rule 8)

Rule 8.1. Who may request termination and on what grounds.- Any of
the parties to an arbitration may request for the termination of the
mandate of an arbitrator where an arbitrator becomes de jure or de
facto unable to perform his function or for other reasons fails to act
without undue delay and that arbitrator, upon request of any party, fails
or refuses to withdraw from his office.

Rule 8.2. When to request. - If an arbitrator refuses to withdraw from

his office, and subsequently, the Appointing Authority fails or refuses to

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decide on the termination of the mandate of that arbitrator within such

period as may be allowed under the applicable rule or, in the absence
thereof, within thirty (30) days from the time the request is brought
before him, any party may file with the court a petition to terminate the
mandate of that arbitrator.

Rule 8.6. Court action. - After hearing, if the court finds merit in the
petition, it shall terminate the mandate of the arbitrator who refuses to
withdraw from his office; otherwise, it shall dismiss the petition.

Rule 8.7. No motion for reconsideration or appeal. - Any order of the

court resolving the petition shall be immediately executory and shall not
be subject of a motion for reconsideration, appeal or petition for
certiorari.

Rule 8.8. Appointment of substitute arbitrator. - Where the mandate of

an arbitrator is terminated, or he withdraws from office for any other
reason, or because of his mandate is revoked by agreement of the
parties or is terminated for any other reason, a substitute arbitrator shall
be appointed according to the rules that were applicable to the
appointment of the arbitrator being replaced.

7. Assistance in Taking Evidence (Rule 9)

Rule 9.1. Who may request assistance. - Any party to an arbitration,

whether domestic or foreign, may request the court to provide
assistance in taking evidence.

Rule 9.2. When assistance may be sought. - Assistance may be sought

at any time during the course of the arbitral proceedings when the need
arises.

Rule 9.5. Type of assistance. - A party requiring assistance in the taking

of evidence may petition the court to direct any person, including a
representative of a corporation, association, partnership or other entity
(other than a party to the ADR proceedings or its officers) found in the
Philippines, for any of the following:

a. To comply with a subpoena ad testificandum and/or

subpoena duces tecum;

b. To appear as a witness before an officer for the taking of his

deposition upon oral examination or by written interrogatories;

c. To allow the physical examination of the condition of persons,

or the inspection of things or premises and, when appropriate, to
allow the recording and/or documentation of condition of persons,
things or premises (i.e., photographs, video and other means of
recording/documentation);

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d. To allow the examination and copying of documents; and

e. To perform any similar acts.

8. Confidentiality or Protective Orders (Rule 10)

Rule 10.1. Who may request confidentiality. - A party, counsel or

witness who disclosed or who was compelled to disclose information
relative to the subject of ADR under circumstances that would create a
reasonable expectation, on behalf of the source, that the information
shall be kept confidential has the right to prevent such information from
being further disclosed without the express written consent of the source
or the party who made the disclosure.

Rule 10.2. When request made. - A party may request a protective

order at anytime there is a need to enforce the confidentiality of the
information obtained, or to be obtained, in ADR proceedings.

Rule 10.8. Court action. - If the court finds the petition or motion
meritorious, it shall issue an order enjoining a person or persons from
divulging confidential information.

In resolving the petition or motion, the courts shall be guided by the

following principles applicable to all ADR proceedings: Confidential
information shall not be subject to discovery and shall be inadmissible
in any adversarial proceeding, whether judicial or quasi judicial.
However, evidence or information that is otherwise admissible or subject
to discovery does not become inadmissible or protected from discovery
solely by reason of its use therein.

For mediation proceedings, the court shall be further guided by the

following principles:

a. Information obtained through mediation shall be privileged and

confidential.

b. A party, a mediator, or a nonparty participant may refuse to

disclose and may prevent any other person from disclosing a
mediation communication.

c. In such an adversarial proceeding, the following persons

involved or previously involved in a mediation may not be
compelled to disclose confidential information obtained during the
mediation: (1) the parties to the dispute; (2) the mediator or
mediators; (3) the counsel for the parties: (4) the nonparty
participants; (5) any persons hired or engaged in connection with
the mediation as secretary, stenographer; clerk or assistant; and
(6) any other person who obtains or possesses confidential
information by reason of his/ her profession.

d. The protection of the ADR Laws shall continue to apply even if

a mediator is found to have failed to act impartially.

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e. A mediator may not be called to testify to provide information

gathered in mediation. A mediator who is wrongfully subpoenaed
shall be reimbursed the full cost of his attorney fees and related
expenses.

Rule 10.9. Relief against court action. - The order enjoining a person
or persons from divulging confidential information shall be immediately
executory and may not be enjoined while the order is being questioned
with the appellate courts.

If the court declines to enjoin a person or persons from divulging

confidential information, the petitioner may file a motion for
reconsideration or appeal.

Rule 10.10. Consequence of disobedience. - Any person who disobeys

the order of the court to cease from divulging confidential information
shall be imposed the proper sanction by the court.

9. Confirmation, Correction or Vacation od Award in Domestic

Arbitration

Rule 11.1. Who may request confirmation, correction or vacation. - Any

party to a domestic arbitration may petition the court to confirm, correct
or vacate a domestic arbitral award.

Rule 11.2. When to request confirmation, correction/modification or

vacation. -

(A) Confirmation. - At any time after the lapse of thirty (30) days from
receipt by the petitioner of the arbitral award, he may petition the court
to confirm that award.

(B) Correction/Modification. - Not later than thirty (30) days from

receipt of the arbitral award, a party may petition the court to
correct/modify that award.

(C) Vacation. - Not later than thirty (30) days from receipt of the arbitral
award, a party may petition the court to vacate that award.

(D) A petition to vacate the arbitral award may be filed, in opposition to

a petition to confirm the arbitral award, not later than thirty (30) days
from receipt of the award by the petitioner. A petition to vacate the
arbitral award filed beyond the reglementary period shall be dismissed.

(E) A petition to confirm the arbitral award may be filed, in opposition

to a petition to vacate the arbitral award, at any time after the petition
to vacate such arbitral award is filed. The dismissal of the petition to
vacate the arbitral award for having been filed beyond the reglementary
period shall not result in the dismissal of the petition for the confirmation
of such arbitral award.

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(F) The filing of a petition to confirm an arbitral award shall not authorize
the filing of a belated petition to vacate or set aside such award in
opposition thereto.

(G) A petition to correct an arbitral award may be included as part of a

petition to confirm the arbitral award or as a petition to confirm that
award.

Rule 11.3. Venue. - The petition for confirmation,

correction/modification or vacation of a domestic arbitral award may be
filed with Regional Trial Court having jurisdiction over the place in which
one of the parties is doing business, where any of the parties reside or
where arbitration proceedings were conducted.

Rule 11.4. Grounds. - (A) To vacate an arbitral award. - The arbitral

award may be vacated on the following grounds:

a. The arbitral award was procured through corruption, fraud or

other undue means;

b. There was evident partiality or corruption in the arbitral tribunal

or any of its members;

c. The arbitral tribunal was guilty of misconduct or any form of

misbehavior that has materially prejudiced the rights of any party
such as refusing to postpone a hearing upon sufficient cause
shown or to hear evidence pertinent and material to the
controversy;

d. One or more of the arbitrators was disqualified to act as such

under the law and willfully refrained from disclosing such
disqualification; or

e. 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.

The award may also be vacated on any or all of the following grounds:

a. The arbitration agreement did not exist, or is invalid for any

ground for the revocation of a contract or is otherwise
unenforceable; or

b. A party to arbitration is a minor or a person judicially declared

to be incompetent.

The petition to vacate an arbitral award on the ground that the party to
arbitration is a minor or a person judicially declared to be incompetent
shall be filed only on behalf of the minor or incompetent and shall allege
that (a) the other party to arbitration had knowingly entered into a
submission or agreement with such minor or incompetent, or (b) the
submission to arbitration was made by a guardian or guardian ad litem
who was not authorized to do so by a competent court.

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In deciding the petition to vacate the arbitral award, the court shall
disregard any other ground than those enumerated above.

(B) To correct/modify an arbitral award. - The Court may correct/modify

or order the arbitral tribunal to correct/modify the arbitral award in the
following cases:

a. Where there was an evident miscalculation of figures or an

evident mistake in the description of any person, thing or property
referred to in the award;

b. Where the arbitrators have awarded upon a matter not

submitted to them, not affecting the merits of the decision upon
the matter submitted;

c. Where the arbitrators have omitted to resolve an issue

submitted to them for resolution; or

d. Where the award is imperfect in a matter of form not affecting

the merits of the controversy, and if it had been a commissioner’s
report, the defect could have been amended or disregarded by the
Court.

10. Recognition and Enforcement or Setting Aside of an International

Arbitration Award

Rule 12.1. Who may request recognition and enforcement or setting

aside. - Any party to an international commercial arbitration in the
Philippines may petition the proper court to recognize and enforce or set
aside an arbitral award.

Rule 12.2. When to file petition. - (A) Petition to recognize and enforce.
- The petition for enforcement and recognition of an arbitral award may
be filed anytime from receipt of the award. If, however, a timely petition
to set aside an arbitral award is filed, the opposing party must file
therein and in opposition thereto the petition for recognition and
enforcement of the same award within the period for filing an opposition.

(B) Petition to set aside. - The petition to set aside an arbitral award
may only be filed within three (3) months from the time the petitioner
receives a copy thereof. If a timely request is made with the arbitral
tribunal for correction, interpretation or additional award, the three (3)
month period shall be counted from the time the petitioner receives the
resolution by the arbitral tribunal of that request.

A petition to set aside can no longer be filed after the lapse of the three
(3) month period. The dismissal of a petition to set aside an arbitral
award for being time-barred shall not automatically result in the
approval of the petition filed therein and in opposition thereto for
recognition and enforcement of the same award. Failure to file a petition
to set aside shall preclude a party from raising grounds to resist
enforcement of the award.

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Rule 12.3. Venue. - A petition to recognize and enforce or set aside an

arbitral award may, at the option of the petitioner, be filed with the
Regional Trial Court: (a) where arbitration proceedings were conducted;
(b) where any of the assets to be attached or levied upon is located; (c)
where the act to be enjoined will be or is being performed; (d) where
any of the parties to arbitration resides or has its place of business; or
(e) in the National Capital Judicial Region.

Rule 12.4. Grounds to set aside or resist enforcement. - The court may
set aside or refuse the enforcement of the arbitral award only if:

a. The party making the application furnishes proof that:

(i). 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 Philippine law; or

(ii). The party making the application to set aside or resist

enforcement was not given proper notice of the appointment
of an arbitrator or of the arbitral proceedings or was
otherwise unable to present his case; or

(iii). The award deals with a dispute not contemplated by or

not falling within the terms of the submission to arbitration,
or contains decisions on matters beyond the scope of the
submission to arbitration; provided that, if the decisions on
matters submitted to arbitration can be separated from
those not so submitted, only that part of the award which
contains decisions on matters not submitted to arbitration
may be set aside or only that part of the award which
contains decisions on matters submitted to arbitration may
be enforced; or

(iv). The composition of the arbitral tribunal or the arbitral

procedure was not in accordance with the agreement of the
parties, unless such agreement was in conflict with a
provision of Philippine law from which the parties cannot
derogate, or, failing such agreement, was not in accordance
with Philippine law;

b. The court finds that:

(i). The subject-matter of the dispute is not capable of

settlement by arbitration under the law of the Philippines;
or

(ii). The recognition or enforcement of the award would be

contrary to public policy.

In deciding the petition, the Court shall disregard any other ground to
set aside or enforce the arbitral award other than those enumerated
above.

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The petition to set-aside or a pleading resisting the enforcement of an

arbitral award on the ground that a party was a minor or an incompetent
shall be filed only on behalf of the minor or incompetent and shall allege
that (a) the other party to arbitration had knowingly entered into a
submission or agreement with such minor or incompetent, or (b) the
submission to arbitration was made by a guardian or guardian ad litem
who was not authorized to do so by a competent court.

Rule 12.5. Exclusive recourse against arbitral award. - Recourse to a

court against an arbitral award shall be made only through a petition to
set aside the arbitral award and on grounds prescribed by the law that
governs international commercial arbitration. Any other recourse from
the arbitral award, such as by appeal or petition for review or petition
for certiorari or otherwise, shall be dismissed by the court.

(B) Petition to set aside. - The petition to set aside or petition to set
aside in opposition to a petition to recognize and enforce an arbitral
award in international commercial arbitration shall have the same
contents as a petition to recognize and enforce or petition to recognize
and enforce in opposition to a petition to set aside an arbitral award. In
addition, the said petitions should state the grounds relied upon to set
it aside.

Further, if the ground of the petition to set aside is that the petitioner is
a minor or found incompetent by a court, there shall be attached to the
petition certified copies of documents showing such fact. In addition, the
petitioner shall show that even if the submission or arbitration
agreement was entered into by a guardian or guardian ad litem, the
latter was not authorized by a competent court to sign such the
submission or arbitration agreement.

In either case, if another court was previously requested to resolve

and/or has resolved, on appeal, the arbitral tribunal’s preliminary
determination in favor of its own jurisdiction, the petitioner shall apprise
the court before which the petition to recognize and enforce or set aside
is pending of the status of the appeal or its resolution.

Rule 12.13. Judgment of the court. - Unless a ground to set aside an

arbitral award under Rule 12.4 above is fully established, the court shall
dismiss the petition. If, in the same proceedings, there is a petition to
recognize and enforce the arbitral award filed in opposition to the
petition to set aside, the court shall recognize and enforce the award.

In resolving the petition or petition in opposition thereto in accordance

with the Special ADR Rules, the court shall either set aside or enforce
the arbitral award. The court shall not disturb the arbitral tribunal’s
determination of facts and/or interpretation of law.

11. Recognition and Enforcement of a Foreign Arbitral Award

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Rule 13.1. Who may request recognition and enforcement. - Any party
to a foreign arbitration may petition the court to recognize and enforce
a foreign arbitral award.

Rule 13.2. When to petition. - At any time after receipt of a foreign

arbitral award, any party to arbitration may petition the proper Regional
Trial Court to recognize and enforce such award.

Rule 13.3. Venue. - The petition to recognize and enforce a foreign

arbitral award shall be filed, at the option of the petitioner, with the
Regional Trial Court (a) where the assets to be attached or levied upon
is located, (b) where the act to be enjoined is being performed, (c) in
the principal place of business in the Philippines of any of the parties,
(d) if any of the parties is an individual, where any of those individuals
resides, or (e) in the National Capital Judicial Region.

Rule 13.4. Governing law and grounds to refuse recognition and

enforcement. - The recognition and enforcement of a foreign arbitral
award shall be governed by the 1958 New York Convention on the
Recognition and Enforcement of Foreign Arbitral Awards (the "New York
Convention") and this Rule. The court may, upon grounds of comity and
reciprocity, recognize and enforce a foreign arbitral award made in a
country that is not a signatory to the New York Convention as if it were
a Convention Award.

A Philippine court shall not set aside a foreign arbitral award but may
refuse it recognition and enforcement on any or all of the following
grounds:

a. The party making the application to refuse recognition and

enforcement of the award furnishes proof that:

(i). 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; or

(ii). 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; or

(iii). The award deals with a dispute not contemplated by or

not falling within the terms of the submission to arbitration,
or contains decisions on matters beyond the scope of the
submission to arbitration; provided that, if the decisions on
matters submitted to arbitration can be separated from
those not so submitted, only that part of the award which
contains decisions on matters not submitted to arbitration
may be set aside; or

(iv). The composition of the arbitral tribunal or the arbitral

procedure was not in accordance with the agreement of the

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parties or, failing such agreement, was not in accordance

with the law of the country where arbitration took place; or

(v). 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 that award was made; or

b. The court finds that:

(i). The subject-matter of the dispute is not capable of

settlement or resolution by arbitration under Philippine law;
or

(ii). The recognition or enforcement of the award would be

contrary to public policy.

The court shall disregard any ground for opposing the recognition and
enforcement of a foreign arbitral award other than those enumerated
above.

Rule 13.12. Recognition and enforcement of non-convention award. -

The court shall, only upon grounds provided by these Special ADR Rules,
recognize and enforce a foreign arbitral award made in a country not a
signatory to the New York Convention when such country extends
comity and reciprocity to awards made in the Philippines. If that country
does not extend comity and reciprocity to awards made in the
Philippines, the court may nevertheless treat such award as a foreign
judgment enforceable as such under Rule 39, Section 48, of the Rules
of Court.

a. Puromines v. CA, 220SCRA 281

b. Mindanao Portland Cement v. McDonough, 19 SCRA 808
c. DENR vs. UPCI, G.R. No. 212081, February 23, 2015
d. Steamship Mutual Underwriting Association (Bermuda) Ltd.
vs. Sulpicio Lines, G.R. No. 196072, September 20, 2017

F. Specific subject matters of arbitration

Construction Arbitration

- Executive Order No. 1008- created the Construction

Industry Arbitration Commission to promulgate the IRR
governing arbitration of construction disputes, and to
incorporate therein the pertinent provisions of the ADR Act, to
encourage the early and expeditious settlement of disputes in
the Philippine construction industry

- Construction Industry Arbitration Commission Rules of

Procedure
- Jurisdiction of the CIAC- the CIAC has original and exclusive
jurisdiction over disputes arising from, or connected with,
contracts entered into by parties involved in construction in
the Philippines, whether the dispute arises before or after

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the completion of the contract, or after the abandonment or

breach thereof. These disputes may involve government or
private contracts. For the Board to acquire jurisdiction, the
parties to a dispute must agree to submit the same to
voluntary arbitration

The jurisdiction of the CIAC may include but is not limited to

violation of specifications for materials and workmanship;
violation of terms of agreement; interpretation and/or application
of contractual time and delays; maintenance and defects; and
payment, default of employer or contractor and changes in
contract cost.

An arbitration clause in a construction contract or a

submission to a construction dispute shall be deemed an
agreement to submit an existing or future controversy to CIAC
jurisdiction, notwithstanding the reference to a different
arbitration institution or arbitral body in such contract or
submission.

Exceptions

• Disputes arising from employer-employee relationships

which shall continue to be covered by the Labor Code of
the Philippines

Functions of the Commission (EO 1008)

Sec. 6. Functions of the Commission. The Commission shall

perform, among others that may be conferred by law, the following
functions:

1) To formulate and adopt an arbitration program for the

construction industry;

2) To enunciate policies and prescribe rules and procedures for

construction arbitration;

3) To supervise the arbitration program, and exercise such

authority related thereto as regards the appointment,
replacement or challenging of arbitrators; and

4) To direct its officers and employees to perform such functions

as may be assigned to them from time to time.

Appointment of arbitrators
- Depends on the arbitration agreement
- EO 1008 will apply; appointing authority is the CIAC
- Only CIAC- accredited arbitrators may be appointed

RULE 8 – QUALIFICATIONS OF ARBITRATORS

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SECTION 8.1 General qualification of arbitrators - The Arbitrators shall

be persons in whom the business sector, particularly the stake holders
of the construction industry and the government can have confidence.
They shall possess the competence, integrity, and leadership qualities
to resolve any construction dispute expeditiously and equitably. The
Arbitrators shall come from different professions. They may include
engineers, architects, construction managers, engineering consultants,
and businessmen familiar with the construction industry and lawyers
who are experienced in construction disputes.

SECTION 8.2 The Arbitrators must be CIAC-accredited - Only CIAC-

accredited arbitrators may be nominated by the parties and appointed
by CIAC as arbitrators. A replacement arbitrator shall likewise be a
CIAC-accredited arbitrator. However, as an exception to this rule, CIAC
may appoint to an Arbitral Tribunal an arbitrator who is not CIAC -
accredited PROVIDED that the nominee: 1) is the parties’ common
nominee; 2) possesses the technical/legal competence to handle the
construction dispute involved; and 3) has signified his
availability/acceptance of his possible appointments.

SECTION8.3 Undertaking of arbitrator upon the acceptance of

appointment – An arbitrator who accepts an appointment as arbitrator
undertakes to:

1. a) Make himself/herself available at all stages of the arbitration

proceedings;
2. b) Remain independent of the parties and their counselor
representatives;
3. c) Maintain impartiality on all matters relating to the disputes;
4. d) Have a continuing duty to disclose any fact of circumstance
that may arouse justifiable doubts as to independence or
impartiality; and
5. e) Contribute to the fair, expeditious and timely resolution of the
dispute.

SECTION 8.4 Arbitrators not permanent employees of CIAC - The

Arbitrators shall render service only when called upon to arbitrate a
construction dispute.

Appointment of experts
- The service of technical experts may be utilized in the
settlement of disputes if requested by any of the
parties or by the Arbitral Tribunal. If the request is
done by either or both of the parties, it is necessary
that the appointment of the expert be confirmed by
the arbitral tribunal
- Whenever the parties request for the services of an
expert they shall equally shoulder the expert’s fees
and expenses, half of which shall be deposited with
the Secretariat before the expert renders service.
When only one party makes the request, it shall
deposit the whole amount required.

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Arbitration Expenses
- Arbitration expenses include the filing fee;
administrative charges; arbitrator’s fees; fee and
expenses for the expert, etc. which may be imposed
by the CIAC
- The administrative charges and the arbitrator’s fees
shall be computed on the basis of percentage in the
dispute to be fixed in accordance with the Table of
Administrative Charges and Arbitrator’s Fees.

Deposit to cover arbitration expenses

- The CIAC shall be authorized to fix the amount to be
deposited which must be equivalent to the expected
arbitration expenses. The deposit shall be paid to the
Secretariat before arbitration proceedings shall
commence. Payment shall either be shared equally by
the parties or to be paid by any of them. If one of the
party fails to contribute his share in the deposit, the
other party must pay in full. If both parties fail to
tender the required deposit, the case shall be
considered dismissed but the parties shall still be
liable to pay one half (1/2) of the agreed
administrative charge.
-
- Confidentiality; procedure

RULE 7- CONFIDENTIALITY

SECTION 7.1 Confidentiality of proceedings – The arbitration

proceedings shall be considered confidential and shall not be published
except (i) with the consent of the parties, or (ii) when necessary in case
resort to the Court is made under the Rules of Court. The term
“arbitration proceedings” shall include communications to or from CIAC,
the pleadings, applications and other papers filed with CIAC, sworn
statements, documentary and testimonial evidence, reports and
minutes taken of the proceedings, and other orders, decision, award or
resolution issued by the Arbitrator(s).

SECTION 7.2 Violation of confidentiality – Any person who violates the

immediately preceding confidentiality provision shall be subject to the
following sanctions:

7.2.1 If the violator is a lawyer, administrative action or proceeding to

be conducted by CIAC, with proper notice and hearing, for inhibition or
prohibition from appearing as counsel for any party in any arbitration
case before CIAC for a period not exceeding six (6) months; without
prejudice to suspension or disbarment action before the Integrated Bar
of the Philippines (IBP), at the instance of CIAC.

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7.2.2 If the violator is a duly licensed and registered professional,

administrative/ disciplinary action before the Professional Regulation
Commission (PRC), at the instance of CIAC.

Arbitral Award

RULE 16 – THE ARBITRATION AWARD

SECTION 16.1. Time of award - The award shall be rendered promptly

by the Arbitral Tribunal within thirty (30) days from the time the case is
submitted for resolution but not more than six (6) months from the date
of signing of the TOR, or in cases where a TOR is absent, not more than
six (6) months from the date of the last preliminary conference called
for the purpose of finalizing and/or signing of the TOR. There shall be
no extensions of time unless approved by the CIAC.

SECTION 16.2 Form of award - The Final award shall be in writing and
signed by the Arbitral Tribunal or a majority of its members. A dissent
from the decision of the majority or a portion thereof shall be in writing
specifying the portion/s dissented from with a statement of the reason/s
thereof and signed by the dissenting member.

SECTION 16.3 Contents of the final award - Generally, the Final Award
shall contain the issues involved, a brief statement and discussion of the
facts, and the authority relied upon for the resolution or disposition of
the issues.

SECTION 16.4 Award upon settlement - If the parties settle their

dispute(s) during the course of the arbitration, the Arbitral Tribunal,
upon their request, may set forth the agreed settlement as an Arbitral
Award.

16.4.1 Settlement as award - A compromise agreement settled by

mediation in the course of arbitration or by direct negotiation between
the parties shall be treated as an arbitral award if so moved by the
parties and subject to the approval of the Arbitral Tribunal, after a
summary hearing, that the same is not contrary to law, morals, good
customs, public order, or public policy.

SECTION 16.5 Decision as to costs of arbitration - In the case of non-

monetary claims or where the parties agreed that the sharing of fees
shall be determined by the Arbitral Tribunal, the Final Award shall, in
addition to dealing with the merits of the case, fix the costs of the
arbitration, and/or decide which of the parties shall bear the cost(s) or
in what proportion the cost(s) shall be borne by each of them.

SECTION 16.6 Termination of jurisdiction – Except for execution or

post-award proceedings, the jurisdiction of the Arbitral Tribunal over the
dispute is terminated upon the finality of the Final Award or Decision.
Where an appeal is taken from a decision or Final Award, and the
appellate court directs a re-hearing or a hearing on the merits on any

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issue arising in the case, jurisdiction terminates only upon a final

disposition of the case by the appellate court and/or a final
determination of all incidental matters thereto.

SECTION 16.7 Notification of award to parties - Once a Final Award has

been made, provided that the costs of the arbitration have been fully
paid to the Secretariat by the parties or by one of them, the Secretariat
shall provide the parties through their respective counsel a copy of the
Final Award signed by the Arbitral Tribunal.

16.7.1 Additional copies certified true by the Executive Director of the

Secretariat shall be made available, on request and at any time, to the
parties or their counsel but to no one else.

SECTION 16.8 Filing of award - The original of an arbitral award shall be

filed with the Secretariat.

- Finality of awards- the arbitration award shall be binding

upon the parties. It shall be final and unappealable, except
on questions of law which shall be appealable to the
Supreme Court

Execution and Enforcement of Awards

- As soon as a decision, order, or award has become
final and executory, the arbitral tribunal or the single
arbitrator with the concurrence of the CIAC shall motu
proprio, or on motion of any interested party, issue a
writ of execution requiring any sheriff or other proper
officer to execute said decision, order or award.

i. Tondo Medical Center v. Rolando Rante, G.R. No. 230645,

July 1, 2019
ii. Fort Bonifacio Development Corp. v. Sorongon, G.R. No.
176709, May 8, 2009
iii. Metro Construction, Inc. v. Chathan Properties, Inc., 365
SCRA 697 (2001)
iv. Heunghwa Industry Co., Ltd. v. DJ Builders Corp, 373
SCRA 240 (2008)
v. LICOMCEN, INC. v. Foundation Specialists, Inc., 647
SCRA 83 (2011)
vi. HUTAMA-RSEA Joint Operations, Inc. v. Citra Metro Manila
Tollways Corp., G.R. No. 180640, April 24, 2009
vii. Maria Luisa Parl Association, Inc. v. Almendras, 588 SCRA
663
viii. Republic v. Far East Enterprises, Inc., 597 SCRA 75
ix. First Lepanto Ceramics, Inc. v. Court of Appeals, 253
SCRA 552
x. Shinryo (Philippines) Company, Inc. v. RRN Inc., 634
SCRA 123
xi. Global Medical Center of Laguna vs. Ross Systems
International, Inc., G.R. No. 230112, May 11, 2021

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Labor-Management Disputes

- Procedures in collective bargaining; Labor Code

i. San Jose v. NLRC, 294 SCRA 336

ii. Apalisok v. Radio Philippines Network Radio Station, 403
SCRA 238
iii. San Miguel Corp. v. NLRC, 255 SCRA 133
iv. Vivero v. CA, 344 SCRA 268

Check-clearing Disputes
- Check Clearing House Rules and Regulations
- -Philippine Clearing House Corporation; 2012 Clearing
House Regulations

Sec. 36 - ARBITRATION
36.1 Any dispute or controversy between two or more clearing
participants involving any cheque/item cleared thru PCHC shall be
submitted to the Arbitration Committee (ARBICOM for short) through a
written Complaint of the involved participant(s) serving the same upon
the other party(ies) or defendant(s). The defendant(s) shall within a
non-extendible period of thirty (30) days after receipt thereof, file its
(their) written Answers to the Complaint, providing the ARBICOM and
the complainant(s) with duplicate serving copies.

36.2 The ARBICOM, to be created by the PCHC Board or its duly

authorized officer, to investigate, hear and decide the issues, shall
consist of four (4) members, three (3) of whom are incumbent or retired
Senior Officers of participating banks not involved in the dispute and
one (1) law member with at least five (5) years experience as a bank
lawyer without any previous or present relation with any of the
participating banks involved. Said attorney-at-law shall only have
advisory function but shall not have the right to vote. However, in cases
where the principal amount of the dispute is ONE MILLION
(P1,000,000.00) PESOS or less, only one arbitrator and one non-voting
law member shall be sufficient to investigate, hear and decide the case.
Should any or all the members of the Committee or any PCHC director
for that matter, be disqualified to act as arbitrator/s for any reason, the
PCHC Board of Directors or its duly authorized officer shall name
substitute arbitrator/s who should not be lower in rank than VP of any
disinterested participating member bank.

36.3 The ARBICOM must within fifteen (15) days after the expiry
of the mandated non-extendible 30-day period for filing the Answer (or
even if no Answer is received) and the selection/appointment of the Sole
Arbitrator/ARBICOM had been finally agreed upon, set a time and place
for the hearing of the case, and must cause notice thereof to be given
to each of the parties. The hearing including the adjournments ordered
by the arbitrators shall not extend beyond the period of sixty (60) days
from the start of the hearing of the complaint.

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36.4 The decision or the award of the ARBICOM/Sole Arbitrator or

the Board of Directors shall be rendered in writing not later than ninety
(90) days from the date the case is submitted for decision and shall
contain a clear and concise statement of the facts and the law on which
the decision is based.
36.5 The findings of facts of the decision or award by the
Committee shall be final and conclusive upon all the parties in said
Arbitration proceedings.
36.6 The Arbitration Committee may impose such fines or
penalties on any party litigant in any of the arbitration proceedings
before it for violation of any Arbitration Rules of Procedure and any of
its orders or process but such fines or penalties may be appealed to the
Board of Directors together with the appeal of the Award or Decision of
the Arbitration Committee.
36.7 The fact that a bank participates in the clearing operations
of PCHC shall be deemed its written and subscribed consent to the
binding effect of this arbitration agreement as if it had done so in
accordance with Section 4 of the Republic Act No. 876 otherwise known
as the Arbitration Law.
36.8 In all matters not herein provided for, the provisions of
Republic Act No. 876 otherwise known as the Arbitration Law
supplemented by the Rules of Court shall govern such arbitration
proceedings.

36.9 The Board of Directors of the PCHC may from time to time
amend the provisions of this Section 36 on Arbitration and also adopt,
amend, repeal or modify such rules of procedure as are necessary for
the efficient and orderly conduct of the proceedings before the
Arbitration Committee.

i. BDO v. Equitable Banking Corp., 157 SCRA 188

ii. Associated Bank v. CA, 233 SCRA 137

G. Comparative Study of the International Commercial Arbitration under

ADR Act of 2004 & IRR vis-à-vis and IRR Domestic Arbitration
- New York Convention; Rule 13, Special ADR Rules

a. Gonzales v. Climax Mining Ltd., G.R. Nos. 161957 and

167994, January 22, 2007
b. Romago, Inc. v. Siemens Building Technologies, Inc., G.R. No.
181969; October 2, 2009
c. Keppel Cebu Shipyard, Inc. v. Pioneer Insurance and Surety
Corp., G.R. Nos. 180880-81, Sept. 25, 2009
d. Rockland Construction Co., Inc. v. Mid-Pasig Land
Development Corp., G.R. No. 164587, February 4, 2008
e. DFA vs. BCA International Corporation, G.R. No. 225051, July
19, 2017

ADR and Indigenous Disputes

RA 8371

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ICCS/IPS

Indigenous Cultural Communities/Indigenous Peoples — refer to

a group of people or homogenous societies identified by self-ascription
and ascription by others, who have continuously lived as organized
community on communally bounded and defined territory, and who
have, under claims of ownership since time immemorial, occupied,
possessed and utilized such territories, sharing common bonds of
language, customs, traditions and other distinctive cultural traits, or
who have, through resistance to political, social and cultural inroads of
colonization, non-indigenous religions and cultures, became historically
differentiated from the majority of Filipinos. ICCs/IPs shall likewise
include peoples who are regarded as indigenous on account of their
descent from the populations which inhabited the country, at the time
of conquest or colonization, or at the time of inroads of non-indigenous
religions and cultures, or the establishment of present state boundaries,
who retain some or all of their own social, economic, cultural and
political institutions, but who may have been displaced from their
traditional domains or who may have resettled outside their ancestral
domains.

Conflict Resolution Process under IPRA

SECTION 15. Justice System, Conflict Resolution

Institutions, and Peace Building Processes. — The ICCs/IPs shall have
the right to use their own commonly accepted justice systems, conflict
resolution institutions, peace building processes or mechanisms and
other customary laws and practices within their respective communities
and as may be compatible with the national legal system and with
internationally recognized human rights.

Under the Local Government Code

Section 399. Lupong Tagapamayapa. -

(f) In barangays where majority of the inhabitants are members

of indigenous cultural communities, local systems of settling
disputes through their councils of datus or elders shall be
recognized without prejudice to the applicable provisions of this
Code.

Section 412. Conciliation. -

(c) Conciliation among members of indigenous cultural

communities. - The customs and traditions of indigenous cultural
communities shall be applied in settling disputes between
members of the cultural communities.

KP Rules

Section 1. Local systems of dispute settlement. – In barangays where

majority of the inhabitants are members of ICCs as determined by the

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Provincial Office of the National Statistics Office, such community or

communities shall register with the office of the city/municipal mayor,
the name/names of their recognized datus, tribal leaders, elders or
similar leaders. The indigenous system of settling disputes as certified
to by their respective councils of datus, tribal leaders, or elders or other
similar leaders shall be recognized without prejudice to the applicable
provisions of the Katarungang Pambarangay.

Disputes between members of the same indigenous cultural community

shall be settled in accordance with the customs and traditions of that
particular cultural community as provided in the immediately preceding
paragraph. Where one or more of the parties to the aforesaid dispute
belong to the minority, submission to the indigenous system of amicable
settlement shall be mutually agreed upon by all the parties. In the
absence of such agreement, the settlement procedures provided in
these Rules shall apply.

IRR of RA 8371

Section 8. Right to Resolve Conflicts According to Customary Laws- All

conflicts pertaining to property rights, claims and ownership, hereditary
succession and settlement of land disputes within ancestral
domains/lands shall be resolved in accordance with the customary laws,
traditions, and practices of the ICCs/IPs in the area where the conflict
arises

If the conflict between or among ICCs/Ips is not resolved, through such

customary laws, traditions and practices, the Council of Elders/Leaders
who participated in the attempt to settle the dispute shall certify that
the same has not been resolved. Such certification shall be a condition
precedent for the filing of the complaint with the NCIP, through its
Regional Offices for adjudication. Decisions of the NCIP may be brought
on Appeal to the Court of Appeals by way of Petition for Review.

National Commission on Indigenous Peoples (NCIP)

The NCIP is an agency of the government that is tasked to

formulate and implement programs and policies for the IPs. The agency
is concerned in protecting indigenous peoples’ ancestral domains, their
beliefs, customs and traditions. The NCIP has evolved through a series
of government reorganizations in an effort to properly address the
multifarious issues and concerns confronting the country’s diverse
indigenous cultural communities, and to effectively, efficiently and
responsively deliver basic services to them.

Examples:
1. Bodong- Peace Pact- an indigenous governance institution that
originated in Kalinga; developed as an offshoot of the head
hunting practices in Kalinga in the early years.

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2. Magurang - Panay Bukidnon- “gurang” elder- They act as mediator

or arbiter and in so doing consciously preserve their honor and
integrity and maintain their prestige in the community.

Higara- an alliance is sealed by the exchange of valuable

possessions like talibong (indigenous bolo) or plow. The alliance
does not involve other members of the community, but the
agreement must be recognized by all members of the community

3. Rido- Maranao Tribe- blood feud, is a cyclic system of revenge

which results in killing or retaliation among Maranao families and
clans in Lanao.
4. Ifugao- criminal cases tried by ordeal: duel (uggub/alao);
wrestling (bultong); hot bolo ordeal and boiling water ordeal (da-
u).
5. Surugiden- Batak in Palawan- process whereby traditional elders
meet together with the parties involved to discuss and hear
conflict cases such as marriage, adultery, disrespect to in-laws,
thefts, and other violations of traditional laws and impose
penalties to the guilty

Boundary conflicts are referred by the NCIP Provincial Office to the

community level. If not settlement is reached, the NCIP PO shall cause
the parties to meet and preliminarily resolve the issue.

2018 NCIP Rules of Procedure (Administrative Order No. 1, Series of

2018, April 18, 2018)

Cases between or among ICCs and IPs

a. All claims and disputes, provided that no dispute shall be brought

to the NCIP unless the parties have exhausted all remedies under
customary law; the Council of Elders shall issue a certification of
non resolution that the issue has not been resolved (condition
precedent before filing the case before the NCIP)
b. Violations of RA 8371 which are punishable under customary laws

Venue

File with the CEB or the concerned RHO or with the nearest NCIP
Regional of Provincial Office or Service Center

Complaints involving ancestral domain/ land portions involving two or

more ethnographic regions shall be filed with the RHO where the greater
portion of the subject property is situated.

Parties
A case may be filed by any interested person/s who will be called
as the “complainant” or “petitioner”. The person/s against whom the
case is filed shall be referred to as the defendant or respondent.

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In cases involving community interest, the real party in interest

shall be the ICCs/ IPs, represented by person/s authorized through a
community resolution and selected following their customary practices.

Judgment based on settlement under CL or IDRP

Agreement/settlement shall be submitted to the RHO for the rendition

of judgment based on the settlement. The minutes of the settlement
proceedings, the certification of the mediator/conciliator or person or
body that intervened in the conflict resolution, is deemed sufficient to
prove that the settlement process occurred and that a resolution was
reached thereon.

Judgment Based on Compromise

This shall be treated as judgment on the merits

Finality of Judgment
A judgment rendered by the RHO shall become final and executory upon
the lapse of 15 days from receipt of all parties and/or their respective
counsel/s of the decision, award, or order denying the motion for
reconsideration and there is no appeal.

Appeal to the CEB; appeal to the Court of Appeals

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