REPUBLIC ACT NO. 876 Section 5. Preliminary procedure.

 - An arbitration shall be
instituted by:
AN ACT TO AUTHORIZE THE MAKING OF
ARBITRATION AND SUBMISSION AGREEMENTS, (a) In the case of a contract to arbitrate future
TO PROVIDE FOR THE APPOINTMENT OF controversies by the service by either party upon the
ARBITRATORS AND THE PROCEDURE FOR other of a demand for arbitration in accordance with
ARBITRATION IN CIVIL CONTROVERSIES, AND the contract. Such demand shall be set forth the
FOR OTHER PURPOSES nature of the controversy, the amount involved, if
any, and the relief sought, together with a true copy
Section 1. Short Title. - This Act shall be known as "The of the contract providing for arbitration. The demand
Arbitration Law." shall be served upon any party either in person or by
registered mail. In the event that the contract between
Section 2. Persons and matters subject to arbitration. - Two the parties provides for the appointment of a single
or more persons or parties may submit to the arbitration of one arbitrator, the demand shall be set forth a specific
or more arbitrators any controversy existing between them at time within which the parties shall agree upon such
the time of the submission and which may be the subject of an arbitrator. If the contract between the parties provides
action, or the parties to any contract may in such contract for the appointment of three arbitrators, one to be
agree to settle by arbitration a controversy thereafter arising selected by each party, the demand shall name the
between them. Such submission or contract shall be valid, arbitrator appointed by the party making the demand;
enforceable and irrevocable, save upon such grounds as exist and shall require that the party upon whom the
at law for the revocation of any contract. demand is made shall within fifteen days after receipt
thereof advise in writing the party making such
demand of the name of the person appointed by the
Such submission or contract may include question arising out second party; such notice shall require that the two
of valuations, appraisals or other controversies which may be arbitrators so appointed must agree upon the third
collateral, incidental, precedent or subsequent to any issue arbitrator within ten days from the date of such
between the parties. notice.

A controversy cannot be arbitrated where one of the parties to (b) In the event that one party defaults in answering
the controversy is an infant, or a person judicially declared to the demand, the aggrieved party may file with the
be incompetent, unless the appropriate court having Clerk of the Court of First Instance having
jurisdiction approve a petition for permission to submit such jurisdiction over the parties, a copy of the demand for
controversy to arbitration made by the general guardian or arbitration under the contract to arbitrate, with a
guardian ad litem of the infant or of the incompetent. notice that the original demand was sent by registered
mail or delivered in person to the party against whom
But where a person capable of entering into a submission or the claim is asserted. Such demand shall set forth the
contract has knowingly entered into the same with a person nature of the controversy, the amount involved, if
incapable of so doing, the objection on the ground of any, and the relief sought, and shall be accompanied
incapacity can be taken only in behalf of the person so by a true copy of the contract providing for
incapacitated. arbitration.

Section 3. Controversies or cases not subject to the provisions (c) In the case of the submission of an existing
of this Act. - This Act shall not apply to controversies and to controversy by the filing with the Clerk of the Court
cases which are subject to the jurisdiction of the Court of of First Instance having jurisdiction, of the
Industrial Relations or which have been submitted to it as submission agreement, setting forth the nature of the
provided by Commonwealth Act Numbered One hundred and controversy, and the amount involved, if any. Such
three, as amended. submission may be filed by any party and shall be
duly executed by both parties.
Section 4. Form of arbitration agreement. - A contract to
arbitrate a controversy thereafter arising between the parties, (d) In the event that one party neglects, fails or
as well as a submission to arbitrate an existing controversy refuses to arbitrate under a submission agreement, the
shall be in writing and subscribed by the party sought to be aggrieved party shall follow the procedure prescribed
charged, or by his lawful agent. in subparagraphs (a) and (b) of this section.

The making of a contract or submission for arbitration Section 6. Hearing by court. - A party aggrieved by the
described in section two hereof, providing for arbitration of failure, neglect or refusal of another to perform under an
any controversy, shall be deemed a consent of the parties to agreement in writing providing for arbitration may petition the
the jurisdiction of the Court of First Instance of the province court for an order directing that such arbitration proceed in the
or city where any of the parties resides, to enforce such manner provided for in such agreement. Five days notice in
contract or submission. writing of the hearing of such application shall be served
either personally or by registered mail upon the party in
default. The court shall hear the parties, and upon being which the agreement is silent as to the number of
satisfied that the making of the agreement or such failure to arbitrators.
comply therewith is not in issue, shall make an order directing
the parties to proceed to arbitration in accordance with the (f) Arbitrators appointed under this section shall
terms of the agreement. If the making of the agreement or either accept or decline their appointments within
default be in issue the court shall proceed to summarily hear seven days of the receipt of their appointments. In
such issue. If the finding be that no agreement in writing case of declination or the failure of an arbitrator or
providing for arbitration was made, or that there is no default arbitrators to duly accept their appointments the
in the proceeding thereunder, the proceeding shall be parties or the court, as the case may be, shall proceed
dismissed. If the finding be that a written provision for to appoint a substitute or substitutes for the arbitrator
arbitration was made and there is a default in proceeding or arbitrators who decline or failed to accept his or
thereunder, an order shall be made summarily directing the their appointments.
parties to proceed with the arbitration in accordance with the
terms thereof. Section 9. Appointment of additional arbitrators. - Where a
submission or contract provides that two or more arbitrators
The court shall decide all motions, petitions or applications therein designated or to be thereafter appointed by the parties,
filed under the provisions of this Act, within ten days after may select or appoint a person as an additional arbitrator, the
such motions, petitions, or applications have been heard by it. selection or appointment must be in writing. Such additional
arbitrator must sit with the original arbitrators upon the
Section 7. Stay of civil action. - If any suit or proceeding be hearing.
brought upon an issue arising out of an agreement providing
for the arbitration thereof, the court in which such suit or Section 10. Qualifications of arbitrators. - Any person
proceeding is pending, upon being satisfied that the issue appointed to serve as an arbitrator must be of legal age, in full-
involved in such suit or proceeding is referable to arbitration, enjoyment of his civil rights and know how to read and write.
shall stay the action or proceeding until an arbitration has been No person appointed to served as an arbitrator shall be related
had in accordance with the terms of the agreement: Provided, by blood or marriage within the sixth degree to either party to
That the applicant, for the stay is not in default in proceeding the controversy. No person shall serve as an arbitrator in any
with such arbitration. proceeding if he has or has had financial, fiduciary or other
interest in the controversy or cause to be decided or in the
Section 8. Appointment of arbitrators. - If, in the contract for result of the proceeding, or has any personal bias, which might
arbitration or in the submission described in section two, prejudice the right of any party to a fair and impartial award.
provision is made for a method of naming or appointing an
arbitrator or arbitrators, such method shall be followed; but if No party shall select as an arbitrator any person to act as his
no method be provided therein the Court of First Instance shall champion or to advocate his cause.
designate an arbitrator or arbitrators.
If, after appointment but before or during hearing, a person
The Court of First Instance shall appoint an arbitrator or appointed to serve as an arbitrator shall discover any
arbitrators, as the case may be, in the following instances: circumstances likely to create a presumption of bias, or which
he believes might disqualify him as an impartial arbitrator, the
(a) If the parties to the contract or submission are arbitrator shall immediately disclose such information to the
unable to agree upon a single arbitrator; or parties. Thereafter the parties may agree in writing:

(b) If an arbitrator appointed by the parties is (a) to waive the presumptive disqualifying
unwilling or unable to serve, and his successor has circumstances; or
not been appointed in the manner in which he was
appointed; or (b) to declare the office of such arbitrator vacant. Any
such vacancy shall be filled in the same manner as
(c) If either party to the contract fails or refuses to the original appointment was made.
name his arbitrator within fifteen days after receipt of
the demand for arbitration; or Section 11. Challenge of arbitrators. - The arbitrators may be
challenged only for the reasons mentioned in the preceding
(d) If the arbitrators appointed by each party to the section which may have arisen after the arbitration agreement
contract, or appointed by one party to the contract or were unknown at the time of arbitration.
and by the proper Court, shall fail to agree upon or to
select the third arbitrator. The challenge shall be made before them.

(e) The court shall, in its discretion appoint one or If they do not yield to the challenge, the challenging party may
three arbitrators, according to the importance of the renew the challenge before the Court of First Instance of the
controversy involved in any of the preceding cases in province or city in which the challenged arbitrator, or, any of
them, if there be more than one, resides. While the challenging
incident is discussed before the court, the hearing or Section 14. Subpoena and subpoena duces tecum. -
arbitration shall be suspended, and it shall be continued Arbitrators shall have the power to require any person to
immediately after the court has delivered an order on the attend a hearing as a witness. They shall have the power to
challenging incident. subpoena witnesses and documents when the relevancy of the
testimony and the materiality thereof has been demonstrated to
Section 12. Procedure by arbitrators. - Subject to the terms of the arbitrators. Arbitrators may also require the retirement of
the submission or contract, if any are specified therein, are any witness during the testimony of any other witness. All of
arbitrators selected as prescribed herein must, within five days the arbitrators appointed in any controversy must attend all the
after appointment if the parties to the controversy reside hearings in that matter and hear all the allegations and proofs
within the same city or province, or within fifteen days after of the parties; but an award by the majority of them is valid
appointment if the parties reside in different provinces, set a unless the concurrence of all of them is expressly required in
time and place for the hearing of the matters submitted to the submission or contract to arbitrate. The arbitrator or
them, and must cause notice thereof to be given to each of the arbitrators shall have the power at any time, before rendering
parties. The hearing can be postponed or adjourned by the the award, without prejudice to the rights of any party to
arbitrators only by agreement of the parties; otherwise, petition the court to take measures to safeguard and/or
adjournment may be ordered by the arbitrators upon their own conserve any matter which is the subject of the dispute in
motion only at the hearing and for good and sufficient cause. arbitration.
No adjournment shall extend the hearing beyond the day fixed
in the submission or contract for rendering the award, unless Section 15. Hearing by arbitrators. - Arbitrators may, at the
the time so fixed is extended by the written agreement of the commencement of the hearing, ask both parties for brief
parties to the submission or contract or their attorneys, or statements of the issues in controversy and/or an agreed
unless the parties have continued with the arbitration without statement of facts. Thereafter the parties may offer such
objection to such adjournment. evidence as they desire, and shall produce such additional
evidence as the arbitrators shall require or deem necessary to
The hearing may proceed in the absence of any party who, an understanding and determination of the dispute. The
after due notice, fails to be present at such hearing or fails to arbitrators shall be the sole judge of the relevancy and
obtain an adjournment thereof. An award shall not be made materiality of the evidence offered or produced, and shall not
solely on the default of a party. The arbitrators shall require be bound to conform to the Rules of Court pertaining to
the other party to submit such evidence as they may require evidence. Arbitrators shall receive as exhibits in evidence any
for making an award. document which the parties may wish to submit and the
exhibits shall be properly identified at the time of submission.
No one other than a party to said arbitration, or a person in the All exhibits shall remain in the custody of the Clerk of Court
regular employ of such party duly authorized in writing by during the course of the arbitration and shall be returned to the
said party, or a practicing attorney-at-law, shall be permitted parties at the time the award is made. The arbitrators may
by the arbitrators to represent before him or them any party to make an ocular inspection of any matter or premises which are
the arbitration. Any party desiring to be represented by in dispute, but such inspection shall be made only in the
counsel shall notify the other party or parties of such intention presence of all parties to the arbitration, unless any party who
at least five days prior to the hearing. shall have received notice thereof fails to appear, in which
event such inspection shall be made in the absence of such
party.
The arbitrators shall arrange for the taking of a stenographic
record of the testimony when such a record is requested by
one or more parties, and when payment of the cost thereof is Section 16. Briefs. - At the close of the hearings, the
assumed by such party or parties. arbitrators shall specifically inquire of all parties whether they
have any further proof or witnesses to present; upon the
receipt of a negative reply from all parties, the arbitrators shall
Persons having a direct interest in the controversy which is the declare the hearing closed unless the parties have signified an
subject of arbitration shall have the right to attend any hearing; intention to file briefs. Then the hearing shall be closed by the
but the attendance of any other person shall be at the arbitrations after the receipt of briefs and/or reply briefs.
discretion of the arbitrators. Definite time limit for the filing of such briefs must be fixed
by the arbitrators at the close of the hearing. Briefs may filed
Section 13. Oath of arbitrators. - Before hearing any by the parties within fifteen days after the close of the oral
testimony, arbitrators must be sworn, by any officer authorized hearings; the reply briefs, if any, shall be filed within five days
by law to administer an oath, faithfully and fairly to hear and following such fifteen-day period.
examine the matters in controversy and to make a just award
according to the best of their ability and understanding. Section 17. Reopening of hearing. - The hearing may be
Arbitrators shall have the power to administer the oaths to all reopened by the arbitrators on their own motion or upon the
witnesses requiring them to tell the whole truth and nothing request of any party, upon good cause, shown at any time
but the truth in any testimony which they may give in any before the award is rendered. When hearings are thus reopened
arbitration hearing. This oath shall be required of every the effective date for the closing of the hearings shall be the
witness before any of his testimony is heard. date of the closing of the reopened hearing.
Section 18. Proceeding in lieu of hearing. - The parties to a Section 22. Arbitration deemed a special proceeding. -
submission or contract to arbitrate may, by written agreement, Arbitration under a contract or submission shall be deemed a
submit their dispute to arbitration by other than oral hearing. special proceeding, of which the court specified in the contract
The parties may submit an agreed statement of facts. They or submission, or if none be specified, the Court of First
may also submit their respective contentions to the duly Instance for the province or city in which one of the parties
appointed arbitrators in writing; this shall include a statement resides or is doing business, or in which the arbitration was
of facts, together with all documentary proof. Parties may also held, shall have jurisdiction. Any application to the court, or a
submit a written argument. Each party shall provide all other judge thereof, hereunder shall be made in manner provided for
parties to the dispute with a copy of all statements and the making and hearing of motions, except as otherwise herein
documents submitted to the arbitrators. Each party shall have expressly provided.
an opportunity to reply in writing to any other party's
statements and proofs; but if such party fails to do so within Section 23. Confirmation of award. - At any time within one
seven days after receipt of such statements and proofs, he shall month after the award is made, any party to the controversy
be deemed to have waived his right to reply. Upon the delivery which was arbitrated may apply to the court having
to the arbitrators of all statements and documents, together jurisdiction, as provided in section twenty-eight, for an order
with any reply statements, the arbitrators shall declare the confirming the award; and thereupon the court must grant such
proceedings in lieu of hearing closed. order unless the award is vacated, modified or corrected, as
prescribed herein. Notice of such motion must be served upon
Section 19. Time for rendering award. - Unless the parties the adverse party or his attorney as prescribed by law for the
shall have stipulated by written agreement the time within service of such notice upon an attorney in action in the same
which the arbitrators must render their award, the written court.
award of the arbitrators shall be rendered within thirty days
after the closing of the hearings or if the oral hearings shall Section 24. Grounds for vacating award. - In any one of the
have been waived, within thirty days after the arbitrators shall following cases, the court must make an order vacating the
have declared such proceedings in lieu of hearing closed. This award upon the petition of any party to the controversy when
period may be extended by mutual consent of the parties.alf- such party proves affirmatively that in the arbitration
itc proceedings:

Section 20. Form and contents of award. - The award must be (a) The award was procured by corruption, fraud, or
made in writing and signed and acknowledged by a majority other undue means; or
of the arbitrators, if more than one; and by the sole arbitrator,
if there is only one. Each party shall be furnished with a copy (b) That there was evident partiality or corruption in
of the award. The arbitrators in their award may grant any the arbitrators or any of them; or
remedy or relief which they deem just and equitable and
within the scope of the agreement of the parties, which shall
include, but not be limited to, the specific performance of a (c) That the arbitrators were guilty of misconduct in
contract. refusing to postpone the hearing upon sufficient
cause shown, or in refusing to hear evidence pertinent
and material to the controversy; that one or more of
In the event that the parties to an arbitration have, during the the arbitrators was disqualified to act as such under
course of such arbitration, settled their dispute, they may section nine hereof, and wilfully refrained from
request of the arbitrators that such settlement be embodied in disclosing such disqualifications or of any other
an award which shall be signed by the arbitrators. No misbehavior by which the rights of any party have
arbitrator shall act as a mediator in any proceeding in which he been materially prejudiced; or
is acting as arbitrator; and all negotiations towards settlement
of the dispute must take place without the presence of the
arbitrators. (d) That the arbitrators exceeded their powers, or so
imperfectly executed them, that a mutual, final and
definite award upon the subject matter submitted to
The arbitrators shall have the power to decide only those them was not made.
matters which have been submitted to them. The terms of the
award shall be confined to such disputes.
Where an award is vacated, the court, in its discretion, may
direct a new hearing either before the same arbitrators or
The arbitrators shall have the power to assess in their award before a new arbitrator or arbitrators to be chosen in the
the expenses of any party against another party, when such manner provided in the submission or contract for the
assessment shall be deemed necessary. selection of the original arbitrator or arbitrators, and any
provision limiting the time in which the arbitrators may make
Section 21. Fees of arbitration. - The fees of the arbitrators a decision shall be deemed applicable to the new arbitration
shall be fifty pesos per day unless the parties agree otherwise and to commence from the date of the court's order.
in writing prior to the arbitration.
Where the court vacates an award, costs, not exceeding fifty
pesos and disbursements may be awarded to the prevailing
party and the payment thereof may be enforced in like manner The judgment shall be docketed as if it were rendered in an
as the payment of costs upon the motion in an action. action.

Section 25. Grounds for modifying or correcting award. - In The judgment so entered shall have the same force and effect
any one of the following cases, the court must make an order in all respects, as, and be subject to all the provisions relating
modifying or correcting the award, upon the application of any to, a judgment in an action; and it may be enforced as if it had
party to the controversy which was arbitrated: been rendered in the court in which it is entered.

(a) Where there was an evident miscalculation of Section 29. Appeals. - An appeal may be taken from an order
figures, or an evident mistake in the description of made in a proceeding under this Act, or from a judgment
any person, thing or property referred to in the award; entered upon an award through certiorari proceedings, but
or such appeals shall be limited to questions of law. The
proceedings upon such an appeal, including the judgment
(b) Where the arbitrators have awarded upon a matter thereon shall be governed by the Rules of Court in so far as
not submitted to them, not affecting the merits of the they are applicable.
decision upon the matter submitted; or
Section 30. Death of party. - Where a party dies after making
(c) Where the award is imperfect in a matter of form a submission or a contract to arbitrate as prescribed in this Act,
not affecting the merits of the controversy, and if it the proceedings may be begun or continued upon the
had been a commissioner's report, the defect could application of, or notice to, his executor or administrator, or
have been amended or disregarded by the court. temporary administrator of his estate. In any such case, the
court may issue an order extending the time within which
The order may modify and correct the award so as to effect the notice of a motion to confirm, vacate, modify or correct an
intent thereof and promote justice between the parties. award must be served. Upon confirming an award, where a
party has died since it was filed or delivered, the court must
enter judgment in the name of the original party; and the
Section 26. Motion to vacate, modify or correct award: when proceedings thereupon are the same as where a party dies after
made. - Notice of a motion to vacate, modify or correct the a verdict.
award must be served upon the adverse party or his counsel
within thirty days after award is filed or delivered, as
prescribed by law for the service upon an attorney in an action. Section 31. Repealing clause. - The provisions of chapters one
and two, Title XIV, of the Civil Code shall remain in force.
All other laws and parts of laws inconsistent with this Act are
Section 27. Judgment. - Upon the granting of an order hereby repealed. If any provision of this Act shall be held
confirming, modifying or correcting an award, judgment may invalid the remainder that shall not be affected thereby.
be entered in conformity therewith in the court wherein said
application was filed. Costs of the application and the
proceedings subsequent thereto may be awarded by the court Section 32. Effectivity. - This Act shall take effect six months
in its discretion. If awarded, the amount thereof must be after its approval.
included in the judgment.
Approved: June 19, 1953
Section 28. Papers to accompany motion to confirm, modify,
correct, or vacate award. - 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 following papers with the
Clerk of Court;

(a) The submission, or contract to arbitrate; the

appointment of the arbitrator or arbitrators; and each
written extension of the time, if any, within which to
make the award.

(b) A verified of the award.

(c) Each notice, affidavit, or other paper used upon

the application to confirm, modify, correct or vacate
such award, and a copy of each of the court upon
such application.
NEW CIVIL CODE OF THE PHILIPPINES

CHAPTER 2

ARBITRATIONS

Art. 2042. The same persons who may enter into a

compromise may submit their controversies to one or more
arbitrators for decision. (1820a)

Art. 2043. The provisions of the preceding Chapter upon

compromises shall also be applicable to arbitrations. (1821a

Art. 2044. Any stipulation that the arbitrators' award or

decision shall be final, is valid, without prejudice to Articles
2038, 2039, and 2040. (n)

Art. 2045. Any clause giving one of the parties power to

choose more arbitrators than the other is void and of no effect.
(n)

Art. 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)
SPECIAL RULES OF COURT ON ALTERNATIVE c. Interim Measures of Protection;
DISPUTE RESOLUTION
d. Appointment of Arbitrator;
PART I
GENERAL PROVISIONS AND POLICIES e. Challenge to Appointment of Arbitrator;

RULE 1: GENERAL PROVISIONS f. Termination of Mandate of Arbitrator;

Rule 1.1. Subject matter and governing rules.-The Special g. Assistance in Taking Evidence;
Rules of Court on Alternative Dispute Resolution (the
"Special ADR Rules") shall apply to and govern the following h. Confidentiality/Protective Orders; and
cases:
i. Deposit and Enforcement of Mediated Settlement
a. Relief on the issue of Existence, Validity, or Agreements.
Enforceability of the Arbitration Agreement;
(A) Service and filing of petition in summary proceedings.-
b. Referral to Alternative Dispute Resolution The petitioner shall serve, either by personal service or
("ADR"); courier, a copy of the petition upon the respondent before the
filing thereof. Proof of service shall be attached to the petition
c. Interim Measures of Protection; filed in court.

d. Appointment of Arbitrator; For personal service, proof of service of the petition consists
of the affidavit of the person who effected service, stating the
e. Challenge to Appointment of Arbitrator; time, place and manner of the service on the respondent. For
service by courier, proof of service consists of the signed
f. Termination of Mandate of Arbitrator; courier proof of delivery. If service is refused or has failed, the
affidavit or delivery receipt must state the circumstances of the
g. Assistance in Taking Evidence; attempted service and refusal or failure thereof.

h. Confirmation, Correction or Vacation of Award in (B) Notice.-Except for cases involving Referral to ADR and
Domestic Arbitration; Confidentiality/Protective Orders made through motions, the
court shall, if it finds the petition sufficient in form and
substance, send notice to the parties directing them to appear
i. Recognition and Enforcement or Setting Aside of at a particular time and date for the hearing thereof which shall
an Award in International Commercial Arbitration; be set no later than five (5) days from the lapse of the period
for filing the opposition or comment. The notice to the
j. Recognition and Enforcement of a Foreign Arbitral respondent shall contain a statement allowing him to file a
Award; comment or opposition to the petition within fifteen (15) days
from receipt of the notice.
k. Confidentiality/Protective Orders; and
The motion filed pursuant to the rules on Referral to ADR or
l. Deposit and Enforcement of Mediated Settlement Confidentiality/Protective Orders shall be set for hearing by
Agreements. the movant and contain a notice of hearing that complies with
the requirements under Rule 15 of the Rules of Court on
Rule 1.2. Nature of the proceedings.-All proceedings under motions.
the Special ADR Rules are special proceedings.
(C) Summary hearing. - In all cases, as far as practicable, the
Rule 1.3. Summary proceedings in certain cases.-The summary hearing shall be conducted in one (1) day and only
proceedings in the following instances are summary in nature for purposes of clarifying facts.
and shall be governed by this provision:
Except in cases involving Referral to ADR or
a. Judicial Relief Involving the Issue of Existence, Confidentiality/Protective Orders made through motions, it
Validity or Enforceability of the Arbitration shall be the court that sets the petition for hearing within five
Agreement; (5) days from the lapse of the period for filing the opposition
or comment.
b. Referral to ADR;
(D) Resolution. - The court shall resolve the matter within a
period of thirty (30) days from the day of the hearing.
Rule 1.4. Verification and submissions. -Any pleading, Rule 1.7. Computation of time. - In computing any period of
motion, opposition, comment, defense or claim filed under the time prescribed or allowed by the Special ADR Rules, or by
Special ADR Rules by the proper party shall be supported by order of the court, or by any applicable statute, the day of the
verified statements that the affiant has read the same and that act or event from which the designated period of time begins
the factual allegations therein are true and correct of his own to run is to be excluded and the date of performance included.
personal knowledge or based on authentic records and shall If the last day of the period, as thus computed, falls on a
contain as annexes the supporting documents. Saturday, a Sunday, or a legal holiday in the place where the
court sits, the time shall not run until the next working day.
The annexes to the pleading, motion, opposition, comment,
defense or claim filed by the proper party may include a legal Should an act be done which effectively interrupts the running
brief, duly verified by the lawyer submitting it, stating the of the period, the allowable period after such interruption shall
pertinent facts, the applicable law and jurisprudence to justify start to run on the day after notice of the cessation of the cause
the necessity for the court to rule upon the issue raised. thereof.

Rule 1.5. Certification Against Forum Shopping. - A The day of the act that caused the interruption shall be
Certification Against Forum Shopping is one made under oath excluded from the computation of the period.
made by the petitioner or movant: (a) that he has not
theretofore commenced any action or filed any claim Rule 1.8. Service and filing of pleadings, motions and other
involving the same issues in any court, tribunal or quasi- papers in non-summary proceedings. - The initiatory
judicial agency and, to the best of his knowledge, no such pleadings shall be filed directly with the court. The court will
other action or claim is pending therein; (b) if there is such then cause the initiatory pleading to be served upon the
other pending action or claim, a complete statement of the respondent by personal service or courier. Where an action is
present status thereof; and (c) if he should thereafter learn that already pending, pleadings, motions and other papers shall be
the same or similar action or claim has been filed or is filed and/or served by the concerned party by personal service
pending, he shall report that fact within five (5) days or courier. Where courier services are not available, resort to
therefrom to the court wherein his aforementioned petition or registered mail is allowed.
motion has been filed.
(A) Proof of filing. - The filing of a pleading shall be proved
A Certification Against Forum Shopping shall be appended to by its existence in the record of the case. If it is not in the
all initiatory pleadings except a Motion to Refer the Dispute to record, but is claimed to have been filed personally, the filing
Alternative Dispute Resolution. shall be proved by the written or stamped acknowledgment of
its filing by the clerk of court on a copy of the same; if filed by
Rule 1.6. Prohibited submissions. - The following pleadings, courier, by the proof of delivery from the courier company.
motions, or petitions shall not be allowed in the cases
governed by the Special ADR Rules and shall not be accepted (B) Proof of service. - Proof of personal service shall consist
for filing by the Clerk of Court: of a written admission by the party served, or the official
return of the server, or the affidavit of the party serving,
a. Motion to dismiss; containing a full statement of the date, place and manner of
service. If the service is by courier, proof thereof shall consist
b. Motion for bill of particulars; of an affidavit of the proper person, stating facts showing that
the document was deposited with the courier company in a
c. Motion for new trial or for reopening of trial; sealed envelope, plainly addressed to the party at his office, if
known, otherwise at his residence, with postage fully pre-paid,
and with instructions to the courier to immediately provide
d. Petition for relief from judgment; proof of delivery.

e. Motion for extension, except in cases where an ex- (C) Filing and service by electronic means and proof thereof. -
parte temporary order of protection has been issued; Filing and service of pleadings by electronic transmission may
be allowed by agreement of the parties approved by the court.
f. Rejoinder to reply; If the filing or service of a pleading or motion was done by
electronic transmission, proof of filing and service shall be
g. Motion to declare a party in default; and made in accordance with the Rules on Electronic Evidence.

h. Any other pleading specifically disallowed under Rule 1.9. No summons. - In cases covered by the Special ADR
any provision of the Special ADR Rules. Rules, a court acquires authority to act on the petition or
motion upon proof of jurisdictional facts, i.e., that the
The court shall motu proprio order a pleading/motion that it respondent was furnished a copy of the petition and the notice
has determined to be dilatory in nature be expunged from the of hearing.
records.
(A) Proof of service. - A proof of service of the petition and case submitted in connection with petitions, counter-
notice of hearing upon respondent shall be made in writing by petitions (i.e., petitions to vacate or to set aside and/or
the server and shall set forth the manner, place and date of to correct/modify in opposition to petitions to
service. confirm or to recognize and enforce, or petitions to
confirm or to recognize and enforce in opposition to
(B) Burden of proof. - The burden of showing that a copy of petitions to vacate or set aside and/or correct/modify),
the petition and the notice of hearing were served on the motions, evidentiary issues and other matters that
respondent rests on the petitioner. arise during the course of a case. The legal brief shall
state the applicable law and the relevant
The technical rules on service of summons do not apply to the jurisprudence and the legal arguments in support of a
proceedings under the Special ADR Rules. In instances where party’s position in the case.
the respondent, whether a natural or a juridical person, was not
personally served with a copy of the petition and notice of f. "Verification" shall mean a certification under oath
hearing in the proceedings contemplated in the first paragraph by a party or a person who has authority to act for a
of Rule 1.3 (B), or the motion in proceedings contemplated in party that he has read the pleading/motion, and that
the second paragraph of Rule 1.3 (B), the method of service he certifies to the truth of the facts stated therein on
resorted to must be such as to reasonably ensure receipt the basis of his own personal knowledge or authentic
thereof by the respondent to satisfy the requirement of due documents in his possession. When made by a
process. lawyer, verification shall mean a statement under
oath by a lawyer signing a pleading/motion for
Rule 1.10. Contents of petition/motion. - The initiatory delivery to the Court or to the parties that he
pleading in the form of a verified petition or motion, in the personally prepared the pleading/motion, that there is
appropriate case where court proceedings have already sufficient factual basis for the statements of fact
commenced, shall include the names of the parties, their stated therein, that there is sufficient basis in the facts
addresses, the necessary allegations supporting the petition and the law to support the prayer for relief therein,
and the relief(s) sought. and that the pleading/motion is filed in good faith and
is not interposed for delay.
Rule 1.11. Definition. - The following terms shall have the
following meanings: Rule 1.12. Applicability of Part II on Specific Court Relief. -
Part II of the Special ADR Rules on Specific Court Relief,
insofar as it refers to arbitration, shall also be applicable to
a. "ADR Laws" refers to the whole body of ADR other forms of ADR.
laws in the Philippines.
Rule 1.13. Spirit and intent of the Special ADR Rules. – In
b. "Appointing Authority" shall mean the person or situations where no specific rule is provided under the Special
institution named in the arbitration agreement as the ADR Rules, the court shall resolve such matter summarily and
appointing authority; or the regular arbitration be guided by the spirit and intent of the Special ADR Rules
institution under whose rule the arbitration is agreed and the ADR Laws.
to be conducted. Where the parties have agreed to
submit their dispute to institutional arbitration rules,
and unless they have agreed to a different procedure, RULE 2: STATEMENT OF POLICIES
they shall be deemed to have agreed to procedure
under such arbitration rules for the selection and Rule 2.1. General policies. - It is the policy of the State to
appointment of arbitrators. In ad hoc arbitration, the actively promote the use of various modes of ADR and to
default appointment of arbitrators shall be made by respect party autonomy or the freedom of the parties to make
the National President of the Integrated Bar of the their own arrangements in the resolution of disputes with the
Philippines or his duly authorized representative. greatest cooperation of and the least intervention from the
courts. To this end, the objectives of the Special ADR Rules
c. "Authenticate" means to sign, execute or use a are to encourage and promote the use of ADR, particularly
symbol, or encrypt a record in whole or in part, arbitration and mediation, as an important means to achieve
intended to identify the authenticating party and to speedy and efficient resolution of disputes, impartial justice,
adopt, accept or establish the authenticity of a record curb a litigious culture and to de-clog court dockets.
or term.
The court shall exercise the power of judicial review as
d. "Foreign Arbitral Award" is one made in a country provided by these Special ADR Rules. Courts shall intervene
other than the Philippines. only in the cases allowed by law or these Special ADR Rules.

e. "Legal Brief" is a written legal argument submitted Rule 2.2. Policy on arbitration.- (A) Where the parties have
to a court, outlining the facts derived from the factual agreed to submit their dispute to arbitration, courts shall refer
statements in the witness’s statements of fact and the parties to arbitration pursuant to Republic Act No. 9285
citing the legal authorities relied upon by a party in a bearing in mind that such arbitration agreement is the law
between the parties and that they are expected to abide by it in opportunity or competence to rule on the issue of whether or
good faith. Further, the courts shall not refuse to refer parties not it has the competence or jurisdiction to decide a dispute
to arbitration for reasons including, but not limited to, the submitted to it for decision, including any objection with
following: respect to the existence or validity of the arbitration
agreement. When a court is asked to rule upon issue/s
a. The referral tends to oust a court of its jurisdiction; affecting the competence or jurisdiction of an arbitral tribunal
in a dispute brought before it, either before or after the arbitral
b. The court is in a better position to resolve the tribunal is constituted, the court must exercise judicial restraint
dispute subject of arbitration; and defer to the competence or jurisdiction of the arbitral
tribunal by allowing the arbitral tribunal the first opportunity
to rule upon such issues.
c. The referral would result in multiplicity of suits;
Where the court is asked to make a determination of whether
d. The arbitration proceeding has not commenced; the arbitration agreement is null and void, inoperative or
incapable of being performed, under this policy of judicial
e. The place of arbitration is in a foreign country; restraint, the court must make no more than a prima facie
determination of that issue.
f. One or more of the issues are legal and one or more
of the arbitrators are not lawyers; Unless the court, pursuant to such prima facie determination,
concludes that the arbitration agreement is null and void,
g. One or more of the arbitrators are not Philippine inoperative or incapable of being performed, the court must
nationals; or suspend the action before it and refer the parties to arbitration
pursuant to the arbitration agreement.
h. One or more of the arbitrators are alleged not to
possess the required qualification under the Rule 2.5. Policy on mediation. - The Special ADR Rules do
arbitration agreement or law. not apply to Court-Annexed Mediation, which shall be
governed by issuances of the Supreme Court.
(B) Where court intervention is allowed under ADR Laws or
the Special ADR Rules, courts shall not refuse to grant relief, Where the parties have agreed to submit their dispute to
as provided herein, for any of the following reasons: mediation, a court before which that dispute was brought shall
suspend the proceedings and direct the parties to submit their
a. Prior to the constitution of the arbitral tribunal, the dispute to private mediation. If the parties subsequently agree,
court finds that the principal action is the subject of however, they may opt to have their dispute settled through
an arbitration agreement; or Court-Annexed Mediation.

b. The principal action is already pending before an Rule 2.6. Policy on Arbitration-Mediation or Mediation-
arbitral tribunal. 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
The Special ADR Rules recognize the principle of
without the presence of that arbitrator. Conversely, no
competence-competence, which means that the arbitral
mediator shall act as arbitrator in any proceeding in which he
tribunal may initially rule on its own jurisdiction, including
acted as mediator.
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. 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 Special ADR Rules recognize the principle of separability
the sole arbitrator for the dispute or that the settlement
of the arbitration clause, which means that said clause shall be
agreement shall become an arbitral award, the sole arbitrator
treated as an agreement independent of the other terms of the
shall issue the settlement agreement as an arbitral award,
contract of which it forms part. A decision that the contract is
which shall be subject to enforcement under the law.
null and void shall not entail ipso jure the invalidity of the
arbitration clause.
PART II
SPECIFIC COURT RELIEF
Rule 2.3. Rules governing arbitral proceedings. - The parties
are free to agree on the procedure to be followed in the
conduct of arbitral proceedings. Failing such agreement, the RULE 3: JUDICIAL RELIEF INVOLVING THE ISSUE
arbitral tribunal may conduct arbitration in the manner it OF EXISTENCE, VALIDITY AND ENFORCEABILITY
considers appropriate. OF THE ARBITRATION AGREEMENT

Rule 2.4. Policy implementing competence-competence Rule 3.1. When judicial relief is available. - The judicial relief
principle. - The arbitral tribunal shall be accorded the first provided in Rule 3, whether resorted to before or after
commencement of arbitration, shall apply only when the place Rule 3.9. No forum shopping. - A petition for judicial relief
of arbitration is in the Philippines. under this Rule may not be commenced when the existence,
validity or enforceability of an arbitration agreement has been
A. Judicial Relief before Commencement of Arbitration raised as one of the issues in a prior action before the same or
another court.
Rule 3.2. Who may file petition. - Any party to an arbitration
agreement may petition the appropriate court to determine any Rule 3.10. Application for interim relief. - If the petitioner
question concerning the existence, validity and enforceability also applies for an interim measure of protection, he must also
of such arbitration agreement serving a copy thereof on the comply with the requirements of the Special ADR Rules for
respondent in accordance with Rule 1.4 (A). the application for an interim measure of protection.

Rule 3.3. When the petition may be filed. - The petition for Rule 3.11. Relief against court action. - Where there is a
judicial determination of the existence, validity and/or prima facie determination upholding the arbitration
enforceability of an arbitration agreement may be filed at any agreement.-A prima facie determination by the court
time prior to the commencement of arbitration. upholding the existence, validity or enforceability of an
arbitration agreement shall not be subject to a motion for
Despite the pendency of the petition provided herein, arbitral reconsideration, appeal or certiorari.
proceedings may nevertheless be commenced and continue to
the rendition of an award, while the issue is pending before the Such prima facie determination will not, however, prejudice
court. the right of any party to raise the issue of the existence,
validity and enforceability of the arbitration agreement before
Rule 3.4. Venue. - A petition questioning the existence, the arbitral tribunal or the court in an action to vacate or set
validity and enforceability of an arbitration agreement may be aside the arbitral award. In the latter case, the court’s review
filed before the Regional Trial Court of the place where any of of the arbitral tribunal’s ruling upholding the existence,
the petitioners or respondents has his principal place of validity or enforceability of the arbitration agreement shall no
business or residence. 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
Rule 3.5. Grounds. - A petition may be granted only if it is standard for review for arbitral awards prescribed in these
shown that the arbitration agreement is, under the applicable Special ADR Rules.
law, invalid, void, unenforceable or inexistent.
B. Judicial Relief after Arbitration Commences
Rule 3.6. Contents of petition. - The verified petition shall
state the following:
Rule 3.12. Who may file petition. - Any party to arbitration
may petition the appropriate court for judicial relief from the
a. The facts showing that the persons named as ruling of the arbitral tribunal on a preliminary question
petitioner or respondent have legal capacity to sue or upholding or declining its jurisdiction. Should the ruling of the
be sued; arbitral tribunal declining its jurisdiction be reversed by the
court, the parties shall be free to replace the arbitrators or any
b. The nature and substance of the dispute between one of them in accordance with the rules that were applicable
the parties; for the appointment of arbitrator sought to be replaced.

c. The grounds and the circumstances relied upon by Rule 3.13. When petition may be filed. - The petition may be
the petitioner to establish his position; and filed within thirty (30) days after having received notice of
that ruling by the arbitral tribunal.
d. The relief/s sought.
Rule 3.14. Venue. - The petition may be filed before the
Apart from other submissions, the petitioner must attach to the Regional Trial Court of the place where arbitration is taking
petition an authentic copy of the arbitration agreement. place, or where any of the petitioners or respondents has his
principal place of business or residence.
Rule 3.7. Comment/Opposition.-The comment/opposition of
the respondent must be filed within fifteen (15) days from Rule 3.15. Grounds. - The petition may be granted when the
service of the petition. court finds that the arbitration agreement is invalid, inexistent
or unenforceable as a result of which the arbitral tribunal has
Rule 3.8. Court action. - In resolving the petition, the court no jurisdiction to resolve the dispute.
must exercise judicial restraint in accordance with the policy
set forth in Rule 2.4, deferring to the competence or Rule 3.16. Contents of petition. - The petition shall state the
jurisdiction of the arbitral tribunal to rule on its competence or following:
jurisdiction.
 a. The facts showing that the person named as A ruling by the arbitral tribunal deferring resolution on the
petitioner or respondent has legal capacity to sue or issue of its jurisdiction until final award, shall not be subject to
be sued; a motion for reconsideration, appeal or a petition for certiorari.

b. The nature and substance of the dispute between Rule 3.21. Rendition of arbitral award before court decision
the parties; on petition from arbitral tribunal’s preliminary ruling on
jurisdiction. - If the arbitral tribunal renders a final arbitral
c. The grounds and the circumstances relied upon by award and the Court has not rendered a decision on the
the petitioner; and petition from the arbitral tribunal’s preliminary ruling
affirming its jurisdiction, that petition shall become ipso facto
d. The relief/s sought. moot and academic and shall be dismissed by the Regional
Trial Court. The dismissal shall be without prejudice to the
right of the aggrieved party to raise the same issue in a timely
In addition to the submissions, the petitioner shall attach to the petition to vacate or set aside the award.
petition a copy of the request for arbitration and the ruling of
the arbitral tribunal.
Rule 3.22. Arbitral tribunal a nominal party. - The arbitral
tribunal is only a nominal party. The court shall not require the
The arbitrators shall be impleaded as nominal parties to the arbitral tribunal to submit any pleadings or written
case and shall be notified of the progress of the case. submissions but may consider the same should the latter
participate in the proceedings, but only as nominal parties
Rule 3.17. Comment/Opposition. - The comment/opposition thereto.
must be filed within fifteen (15) days from service of the
petition. RULE 4: REFERRAL TO ADR

Rule 3.18. Court action. - (A) Period for resolving the Rule 4.1. Who makes the request. - A party to a pending
petition.- The court shall render judgment on the basis of the action filed in violation of the arbitration agreement, whether
pleadings filed and the evidence, if any, submitted by the contained in an arbitration clause or in a submission
parties, within thirty (30) days from the time the petition is agreement, may request the court to refer the parties to
submitted for resolution. arbitration in accordance with such agreement.

(B) No injunction of arbitration proceedings. - The court shall Rule 4.2. When to make request. - (A) Where the arbitration
not enjoin the arbitration proceedings during the pendency of agreement exists before the action is filed. - The request for
the petition. referral shall be made not later than the pre-trial conference.
After the pre-trial conference, the court will only act upon the
Judicial recourse to the court shall not prevent the arbitral request for referral if it is made with the agreement of all
tribunal from continuing the proceedings and rendering its parties to the case.
award.
(B) Submission agreement. - If there is no existing arbitration
(C) When dismissal of petition is appropriate. - The court shall agreement at the time the case is filed but the parties
dismiss the petition if it fails to comply with Rule 3.16 above; subsequently enter into an arbitration agreement, they may
or if upon consideration of the grounds alleged and the legal request the court to refer their dispute to arbitration at any time
briefs submitted by the parties, the petition does not appear to during the proceedings.
be prima facie meritorious.
Rule 4.3. Contents of request. - The request for referral shall
Rule 3.19. Relief against court action. - The aggrieved party be in the form of a motion, which shall state that the dispute is
may file a motion for reconsideration of the order of the court. covered by an arbitration agreement.
The decision of the court shall, however, not be subject to
appeal. The ruling of the court affirming the arbitral tribunal’s Apart from other submissions, the movant shall attach to his
jurisdiction shall not be subject to a petition for certiorari. The motion an authentic copy of the arbitration agreement.
ruling of the court that the arbitral tribunal has no jurisdiction
may be the subject of a petition for certiorari.
The request shall contain a notice of hearing addressed to all
parties specifying the date and time when it would be heard.
Rule 3.20. Where no petition is allowed. - Where the arbitral The party making the request shall serve it upon the
tribunal defers its ruling on preliminary question regarding its respondent to give him the opportunity to file a comment or
jurisdiction until its final award, the aggrieved party cannot opposition as provided in the immediately succeeding Rule
seek judicial relief to question the deferral and must await the before the hearing.
final arbitral award before seeking appropriate judicial
recourse.
Rule 4.4. Comment/Opposition. - The comment/opposition
must be filed within fifteen (15) days from service of the
petition. The comment/opposition should show that: (a) there
is no agreement to refer the dispute to arbitration; and/or (b) Rule 5.1. Who may ask for interim measures of protection. - A
the agreement is null and void; and/or (c) the subject-matter of party to an arbitration agreement may petition the court for
the dispute is not capable of settlement or resolution by interim measures of protection.
arbitration in accordance with Section 6 of the ADR Act.
Rule 5.2. When to petition. - A petition for an interim measure
Rule 4.5. Court action. - After hearing, the court shall stay the of protection may be made (a) before arbitration is
action and, considering the statement of policy embodied in commenced, (b) after arbitration is commenced, but before the
Rule 2.4, above, refer the parties to arbitration if it finds prima constitution of the arbitral tribunal, or (c) after the constitution
facie, based on the pleadings and supporting documents of the arbitral tribunal and at any time during arbitral
submitted by the parties, that there is an arbitration agreement proceedings but, at this stage, only to the extent that the
and that the subject-matter of the dispute is capable of arbitral tribunal has no power to act or is unable to act
settlement or resolution by arbitration in accordance with effectively.
Section 6 of the ADR Act. Otherwise, the court shall continue
with the judicial proceedings. Rule 5.3. Venue. - A petition for an interim measure of
protection may be filed with the Regional Trial Court, which
Rule 4.6. No reconsideration, appeal or certiorari. - An order has jurisdiction over any of the following places:
referring the dispute to arbitration shall be immediately
executory and shall not be subject to a motion for a. Where the principal place of business of any of the
reconsideration, appeal or petition for certiorari. parties to arbitration is located;

An order denying the request to refer the dispute to arbitration b. Where any of the parties who are individuals
shall not be subject to an appeal, but may be the subject of a resides;
motion for reconsideration and/or a petition for certiorari.
c. Where any of the acts sought to be enjoined are
Rule 4.7. Multiple actions and parties. - The court shall not being performed, threatened to be performed or not
decline to refer some or all of the parties to arbitration for any being performed; or
of the following reasons:
d. Where the real property subject of arbitration, or a
a. Not all of the disputes subject of the civil action portion thereof is situated.
may be referred to arbitration;
Rule 5.4. Grounds. - The following grounds, while not
b. Not all of the parties to the civil action are bound limiting the reasons for the court to grant an interim measure
by the arbitration agreement and referral to of protection, indicate the nature of the reasons that the court
arbitration would result in multiplicity of suits; shall consider in granting the relief:

c. The issues raised in the civil action could be a. The need to prevent irreparable loss or injury;
speedily and efficiently resolved in its entirety by the
court rather than in arbitration; b. The need to provide security for the performance
of any obligation;
d. Referral to arbitration does not appear to be the
most prudent action; or c. The need to produce or preserve evidence; or

e. The stay of the action would prejudice the rights of d. The need to compel any other appropriate act or
the parties to the civil action who are not bound by omission.
the arbitration agreement.
Rule 5.5. Contents of the petition. - The verified petition must
The court may, however, issue an order directing the inclusion state the following:
in arbitration of those parties who are not bound by the
arbitration agreement but who agree to such inclusion
provided those originally bound by it do not object to their a. The fact that there is an arbitration agreement;
inclusion.
b. The fact that the arbitral tribunal has not been
Rule 4.8. Arbitration to proceed.- Despite the pendency of the constituted, or if constituted, is unable to act or would
action referred to in Rule 4.1, above, arbitral proceedings may be unable to act effectively;
nevertheless be commenced or continued, and an award may
be made, while the action is pending before the court. c. A detailed description of the appropriate relief
sought;
RULE 5: INTERIM MEASURES OF PROTECTION
 d. The grounds relied on for the allowance of the executory temporary order of protection and require the
petition petitioner, within five (5) days from receipt of that order, to
post a bond to answer for any damage that respondent may
Apart from other submissions, the petitioner must attach to his suffer as a result of its order. The ex-parte temporary order of
petition an authentic copy of the arbitration agreement. protection shall be valid only for a period of twenty (20) days
from the service on the party required to comply with the
Rule 5.6. Type of interim measure of protection that a court order. Within that period, the court shall:
may grant.- The following, among others, are the interim
measures of protection that a court may grant: a. Furnish the respondent a copy of the petition and a
notice requiring him to comment thereon on or before
a. Preliminary injunction directed against a party to the day the petition will be heard; and
arbitration;
b. Notify the parties that the petition shall be heard on
b. Preliminary attachment against property or a day specified in the notice, which must not be
garnishment of funds in the custody of a bank or a beyond the twenty (20) day period of the effectivity
third person; of the ex-parte order.

c. Appointment of a receiver; The respondent has the option of having the temporary order
of protection lifted by posting an appropriate counter-bond as
determined by the court.
d. Detention, preservation, delivery or inspection of
property; or,
If the respondent requests the court for an extension of the
period to file his opposition or comment or to reset the hearing
e. Assistance in the enforcement of an interim to a later date, and such request is granted, the court shall
measure of protection granted by the arbitral tribunal, extend the period of validity of the ex-parte temporary order
which the latter cannot enforce effectively. of protection for no more than twenty days from expiration of
the original period.
Rule 5.7. Dispensing with prior notice in certain cases. - Prior
notice to the other party may be dispensed with when the After notice and hearing, the court may either grant or deny
petitioner alleges in the petition that there is an urgent need to the petition for an interim measure of protection. The order
either (a) preserve property, (b) prevent the respondent from granting or denying any application for interim measure of
disposing of, or concealing, the property, or (c) prevent the protection in aid of arbitration must indicate that it is issued
relief prayed for from becoming illusory because of prior without prejudice to subsequent grant, modification,
notice, and the court finds that the reason/s given by the amendment, revision or revocation by an arbitral tribunal.
petitioner are meritorious.
Rule 5.10. Relief against court action. - If respondent was
Rule 5.8. Comment/Opposition. - The comment/opposition given an opportunity to be heard on a petition for an interim
must be filed within fifteen (15) days from service of the measure of protection, any order by the court shall be
petition. The opposition or comment should state the reasons immediately executory, but may be the subject of a motion for
why the interim measure of protection should not be granted. reconsideration and/or appeal or, if warranted, a petition for
certiorari.
Rule 5.9. Court action. - After hearing the petition, the court
shall balance the relative interests of the parties and Rule 5.11. Duty of the court to refer back. - The court shall
inconveniences that may be caused, and on that basis resolve not deny an application for assistance in implementing or
the matter within thirty (30) days from (a) submission of the enforcing an interim measure of protection ordered by an
opposition, or (b) upon lapse of the period to file the same, or arbitral tribunal on any or all of the following grounds:
(c) from termination of the hearing that the court may set only
if there is a need for clarification or further argument.
a. The arbitral tribunal granted the interim relief ex
parte; or
If the other parties fail to file their opposition on or before the
day of the hearing, the court shall motu proprio render
judgment only on the basis of the allegations in the petition b. The party opposing the application found new
that are substantiated by supporting documents and limited to material evidence, which the arbitral tribunal had not
what is prayed for therein. considered in granting in the application, and which,
if considered, may produce a different result; or
In cases where, based solely on the petition, the court finds
that there is an urgent need to either (a) preserve property, (b) c. The measure of protection ordered by the arbitral
prevent the respondent from disposing of, or concealing, the tribunal amends, revokes, modifies or is inconsistent
property, or (c) prevent the relief prayed for from becoming with an earlier measure of protection issued by the
illusory because of prior notice, it shall issue an immediately court.
If it finds that there is sufficient merit in the opposition to the a. Where any of the parties in an institutional
application based on letter (b) above, the court shall refer the arbitration failed or refused to appoint an arbitrator or
matter back to the arbitral tribunal for appropriate when the parties have failed to reach an agreement on
determination. the sole arbitrator (in an arbitration before a sole
arbitrator) or when the two designated arbitrators
Rule 5.12. Security. - The order granting an interim measure have failed to reach an agreement on the third or
of protection may be conditioned upon the provision of presiding arbitrator (in an arbitration before a panel
security, performance of an act, or omission thereof, specified of three arbitrators), and the institution under whose
in the order. rules arbitration is to be conducted fails or is unable
to perform its duty as appointing authority within a
The Court may not change or increase or decrease the security reasonable time from receipt of the request for
ordered by the arbitral tribunal. appointment;

Rule 5.13. Modification, amendment, revision or revocation b. In all instances where arbitration is ad hoc and the
of court’s previously issued interim measure of protection. - parties failed to provide a method for appointing or
Any court order granting or denying interim measure/s of replacing an arbitrator, or substitute arbitrator, or the
protection is issued without prejudice to subsequent grant, method agreed upon is ineffective, and the National
modification, amendment, revision or revocation by the President of the Integrated Bar of the Philippines
arbitral tribunal as may be warranted. (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
An interim measure of protection issued by the arbitral period as may be agreed upon by the parties, or in the
tribunal shall, upon its issuance be deemed to have ipso jure absence thereof, within thirty (30) days from receipt
modified, amended, revised or revoked an interim measure of of such request for appointment;
protection previously issued by the court to the extent that it is
inconsistent with the subsequent interim measure of protection
issued by the arbitral tribunal. 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,
Rule 5.14. Conflict or inconsistency between interim measure each party shall appoint one arbitrator and the two
of protection issued by the court and by the arbitral tribunal. - arbitrators thus appointed shall appoint a third
Any question involving a conflict or inconsistency between an arbitrator. If a party fails to appoint his arbitrator
interim measure of protection issued by the court and by the within thirty (30) days of receipt of a request to do so
arbitral tribunal shall be immediately referred by the court to from the other party, or if the two arbitrators fail to
the arbitral tribunal which shall have the authority to decide agree on the third arbitrator within a reasonable time
such question. from their appointment, the appointment shall be
made by the Appointing Authority. If the latter fails
Rule 5.15. Court to defer action on petition for an interim or refuses to act or appoint an arbitrator within a
measure of protection when informed of constitution of the reasonable time from receipt of the request to do so,
arbitral tribunal. - The court shall defer action on any pending any party or the appointed arbitrator/s may request
petition for an interim measure of protection filed by a party to the court to appoint an arbitrator or the third
an arbitration agreement arising from or in connection with a arbitrator as the case may be.
dispute thereunder upon being informed that an arbitral
tribunal has been constituted pursuant to such agreement. The Rule 6.2. Who may request for appointment. - Any party to an
court may act upon such petition only if it is established by the arbitration may request the court to act as an Appointing
petitioner that the arbitral tribunal has no power to act on any Authority in the instances specified in Rule 6.1 above.
such interim measure of protection or is unable to act thereon
effectively.
Rule 6.3. Venue. - The petition for appointment of arbitrator
may be filed, at the option of the petitioner, in the Regional
Rule 5.16. Court assistance should arbitral tribunal be unable Trial Court (a) where the principal place of business of any of
to effectively enforce interim measure of protection. - The the parties is located, (b) if any of the parties are individuals,
court shall assist in the enforcement of an interim measure of where those individuals reside, or (c) in the National Capital
protection issued by the arbitral tribunal which it is unable to Region.
effectively enforce.
Rule 6.4. Contents of the petition. -The petition shall state the
RULE 6: APPOINTMENT OF ARBITRATORS following:

Rule 6.1. When the court may act as Appointing Authority. - a. The general nature of the dispute;
The court shall act as Appointing Authority only in the
following instances:
 b. If the parties agreed on an appointment procedure, denying the petition for appointment of an arbitrator may,
a description of that procedure with reference to the however, be the subject of a motion for reconsideration,
agreement where such may be found; appeal or certiorari.

c. The number of arbitrators agreed upon or the RULE 7: CHALLENGE TO APPOINTMENT OF

absence of any agreement as to the number of ARBITRATOR
arbitrators;
Rule 7.1. Who may challenge. - Any of the parties to an
d. The special qualifications that the arbitrator/s must arbitration may challenge an arbitrator.
possess, if any, that were agreed upon by the parties;
Rule 7.2. When challenge may be raised in court. - When an
e. The fact that the Appointing Authority, without arbitrator is challenged before the arbitral tribunal under the
justifiable cause, has failed or refused to act as such procedure agreed upon by the parties or under the procedure
within the time prescribed or in the absence thereof, provided for in Article 13 (2) of the Model Law and the
within a reasonable time, from the date a request is challenge is not successful, the aggrieved party may request
made; and the Appointing Authority to rule on the challenge, and it is
only when such Appointing Authority fails or refuses to act on
f. The petitioner is not the cause of the delay in, or the challenge within such period as may be allowed under the
failure of, the appointment of the arbitrator. applicable rule or in the absence thereof, within thirty (30)
days from receipt of the request, that the aggrieved party may
Apart from other submissions, the petitioner must attach to the renew the challenge in court.
petition (a) an authentic copy of the arbitration agreement, and
(b) proof that the Appointing Authority has been notified of Rule 7.3. Venue. - The challenge shall be filed with the
the filing of the petition for appointment with the court. Regional Trial Court (a) where the principal place of business
of any of the parties is located, (b) if any of the parties are
Rule 6.5. Comment/Opposition. - The comment/opposition individuals, where those individuals reside, or (c) in the
must be filed within fifteen (15) days from service of the National Capital Region.
petition.
Rule 7.4. Grounds. - An arbitrator may be challenged on any
Rule 6.6. Submission of list of arbitrators. - The court may, at of the grounds for challenge provided for in Republic Act No.
its option, also require each party to submit a list of not less 9285 and its implementing rules, Republic Act No. 876 or the
than three (3) proposed arbitrators together with their Model Law. The nationality or professional qualification of an
curriculum vitae. 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
Rule 6.7. Court action. - After hearing, if the court finds merit as arbitrator.
in the petition, it shall appoint an arbitrator; otherwise, it shall
dismiss the petition.
Rule 7.5. Contents of the petition. - The petition shall state the
following:
In making the appointment, the court shall have regard to such
considerations as are likely to secure the appointment of an
independent and impartial arbitrator. a. The name/s of the arbitrator/s challenged and
his/their address;
At any time after the petition is filed and before the court
makes an appointment, it shall also dismiss the petition upon b. The grounds for the challenge;
being informed that the Appointing Authority has already
made the appointment. c. The facts showing that the ground for the challenge
has been expressly or impliedly rejected by the
Rule 6.8. Forum shopping prohibited. - When there is a challenged arbitrator/s; and
pending petition in another court to declare the arbitration
agreement inexistent, invalid, unenforceable, on account of d. The facts showing that the Appointing Authority
which the respondent failed or refused to participate in the failed or refused to act on the challenge.
selection and appointment of a sole arbitrator or to appoint a
party-nominated arbitrator, the petition filed under this rule The court shall dismiss the petition motu proprio unless it is
shall be dismissed. clearly alleged therein that the Appointing Authority charged
with deciding the challenge, after the resolution of the arbitral
Rule 6.9. Relief against court action. - If the court appoints an tribunal rejecting the challenge is raised or contested before
arbitrator, the order appointing an arbitrator shall be such Appointing Authority, failed or refused to act on the
immediately executory and shall not be the subject of a motion challenge within thirty (30) days from receipt of the request or
for reconsideration, appeal or certiorari. An order of the court within such longer period as may apply or as may have been
agreed upon by the parties.
Rule 7.6. Comment/Opposition. - The challenged arbitrator or has devoted to the arbitration and taking into consideration his
other parties may file a comment or opposition within fifteen stature and reputation as an arbitrator. The request for
(15) days from service of the petition. reimbursement of expenses and for payment of a reasonable
compensation shall be filed in the same case and in the court
Rule 7.7. Court action. - After hearing, the court shall remove where the petition to replace the challenged arbitrator was
the challenged arbitrator if it finds merit in the petition; filed. The court, in determining the amount of the award to the
otherwise, it shall dismiss the petition. challenged arbitrator, shall receive evidence of expenses to be
reimbursed, which may consist of air tickets, hotel bills and
The court shall allow the challenged arbitrator who expenses, and inland transportation. The court shall direct the
subsequently agrees to accept the challenge to withdraw as challenging party to pay the amount of the award to the court
arbitrator. for the account of the challenged arbitrator, in default of which
the court may issue a writ of execution to enforce the award.
The court shall accept the challenge and remove the arbitrator
in the following cases: RULE 8: TERMINATION OF THE MANDATE OF
ARBITRATOR
a. The party or parties who named and appointed the
challenged arbitrator agree to the challenge and Rule 8.1. Who may request termination and on what grounds.-
withdraw the appointment. 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
b. The other arbitrators in the arbitral tribunal agree for other reasons fails to act without undue delay and that
to the removal of the challenged arbitrator; and arbitrator, upon request of any party, fails or refuses to
withdraw from his office.
c. The challenged arbitrator fails or refuses to submit
his comment on the petition or the brief of legal Rule 8.2. When to request. - If an arbitrator refuses to
arguments as directed by the court, or in such withdraw from his office, and subsequently, the Appointing
comment or legal brief, he fails to object to his Authority fails or refuses to decide on the termination of the
removal following the challenge. mandate of that arbitrator within such period as may be
allowed under the applicable rule or, in the absence thereof,
The court shall decide the challenge on the basis of evidence within thirty (30) days from the time the request is brought
submitted by the parties. before him, any party may file with the court a petition to
terminate the mandate of that arbitrator.
The court will decide the challenge on the basis of the
evidence submitted by the parties in the following instances: Rule 8.3. Venue. - A petition to terminate the mandate of an
arbitrator may, at that petitioner’s option, be filed with the
a. The other arbitrators in the arbitral tribunal agree to Regional Trial Court (a) where the principal place of business
the removal of the challenged arbitrator; and of any of the parties is located, (b) where any of the parties
who are individuals resides, or (c) in the National Capital
b. If the challenged arbitrator fails or refuses to Region.
submit his comment on the petition or the brief of
legal arguments as directed by the court, or in such Rule 8.4. Contents of the petition. - The petition shall state the
comment or brief of legal arguments, he fails to following:
object to his removal following the challenge.
a. The name of the arbitrator whose mandate is
Rule 7.8. No motion for reconsideration, appeal or certiorari. sought to be terminated;
- Any order of the court resolving the petition shall be
immediately executory and shall not be the subject of a motion b. The ground/s for termination;
for reconsideration, appeal, or certiorari.
c. The fact that one or all of the parties had requested
Rule 7.9. Reimbursement of expenses and reasonable the arbitrator to withdraw but he failed or refused to
compensation to challenged arbitrator. - Unless the bad faith do so;
of the challenged arbitrator is established with reasonable
certainty by concealing or failing to disclose a ground for his d. The fact that one or all of the parties requested the
disqualification, the challenged arbitrator shall be entitled to Appointing Authority to act on the request for the
reimbursement of all reasonable expenses he may have termination of the mandate of the arbitrator and
incurred in attending to the arbitration and to a reasonable failure or inability of the Appointing Authority to act
compensation for his work on the arbitration. Such expenses within thirty (30) days from the request of a party or
include, but shall not be limited to, transportation and hotel parties or within such period as may have been
expenses, if any. A reasonable compensation shall be paid to agreed upon by the parties or allowed under the
the challenged arbitrator on the basis of the length of time he applicable rule.
The petitioner shall further allege that one or all of the parties c. To allow the physical examination of the condition
had requested the arbitrator to withdraw but he failed or of persons, or the inspection of things or premises
refused to do so. and, when appropriate, to allow the recording and/or
documentation of condition of persons, things or
Rule 8.5. Comment/Opposition. - The comment/opposition premises (i.e., photographs, video and other means of
must be filed within fifteen (15) days from service of the recording/documentation);
petition.
d. To allow the examination and copying of
Rule 8.6. Court action. - After hearing, if the court finds merit documents; and
in the petition, it shall terminate the mandate of the arbitrator
who refuses to withdraw from his office; otherwise, it shall e. To perform any similar acts.
dismiss the petition.
Rule 9.6. Contents of the petition. - The petition must state the
Rule 8.7. No motion for reconsideration or appeal. - Any following:
order of the court resolving the petition shall be immediately
executory and shall not be subject of a motion for a. The fact that there is an ongoing arbitration
reconsideration, appeal or petition for certiorari. proceeding even if such proceeding could not
continue due to some legal impediments;
Rule 8.8. Appointment of substitute arbitrator. - Where the
mandate of an arbitrator is terminated, or he withdraws from b. The arbitral tribunal ordered the taking of evidence
office for any other reason, or because of his mandate is or the party desires to present evidence to the arbitral
revoked by agreement of the parties or is terminated for any tribunal;
other reason, a substitute arbitrator shall be appointed
according to the rules that were applicable to the appointment c. Materiality or relevance of the evidence to be
of the arbitrator being replaced. taken; and

RULE 9: ASSISTANCE IN TAKING EVIDENCE d. The names and addresses of the intended
witness/es, place where the evidence may be found,
Rule 9.1. Who may request assistance. - Any party to an the place where the premises to be inspected are
arbitration, whether domestic or foreign, may request the court located or the place where the acts required are to be
to provide assistance in taking evidence. done.

Rule 9.2. When assistance may be sought. - Assistance may be Rule 9.7. Comment/Opposition. - The comment/opposition
sought at any time during the course of the arbitral must be filed within fifteen (15) days from service of the
proceedings when the need arises. petition.

Rule 9.3. Venue. - A petition for assistance in taking evidence Rule 9.8. Court action. - If the evidence sought is not
may, at the option of the petitioner, be filed with Regional privileged, and is material and relevant, the court shall grant
Trial Court where (a) arbitration proceedings are taking place, the assistance in taking evidence requested and shall order
(b) the witnesses reside or may be found, or (c) where the petitioner to pay costs attendant to such assistance.
evidence may be found.
Rule 9.9. Relief against court action. - The order granting
Rule 9.4. Ground. - The court may grant or execute the assistance in taking evidence shall be immediately executory
request for assistance in taking evidence within its competence and not subject to reconsideration or appeal. If the court
and according to the rules of evidence. declines to grant assistance in taking evidence, the petitioner
may file a motion for reconsideration or appeal.
Rule 9.5. Type of assistance. - A party requiring assistance in
the taking of evidence may petition the court to direct any Rule 9.10. Perpetuation of testimony before the arbitral
person, including a representative of a corporation, tribunal is constituted. - At anytime before arbitration is
association, partnership or other entity (other than a party to commenced or before the arbitral tribunal is constituted, any
the ADR proceedings or its officers) found in the Philippines, person who desires to perpetuate his testimony or that of
for any of the following: another person may do so in accordance with Rule 24 of the
Rules of Court.
a. To comply with a subpoena ad
testificandum and/or subpoena duces tecum; Rule 9.11. Consequence of disobedience. - The court may
impose the appropriate sanction on any person who disobeys
b. To appear as a witness before an officer for the its order to testify when required or perform any act required
taking of his deposition upon oral examination or by of him.
written interrogatories;
RULE 10: CONFIDENTIALITY/PROTECTIVE Rule 10.7. Comment/Opposition. - The comment/opposition
ORDERS must be filed within fifteen (15) days from service of the
petition. The opposition or comment may be accompanied by
Rule 10.1. Who may request confidentiality. - A party, counsel written proof that (a) the information is not confidential, (b)
or witness who disclosed or who was compelled to disclose the information was not obtained during an ADR proceeding,
information relative to the subject of ADR under (c) there was a waiver of confidentiality, or (d) the
circumstances that would create a reasonable expectation, on petitioner/movant is precluded from asserting confidentiality.
behalf of the source, that the information shall be kept
confidential has the right to prevent such information from Rule 10.8. Court action. - If the court finds the petition or
being further disclosed without the express written consent of motion meritorious, it shall issue an order enjoining a person
the source or the party who made the disclosure. or persons from divulging confidential information.

Rule 10.2. When request made. - A party may request a In resolving the petition or motion, the courts shall be guided
protective order at anytime there is a need to enforce the by the following principles applicable to all ADR proceedings:
confidentiality of the information obtained, or to be obtained, Confidential information shall not be subject to discovery and
in ADR proceedings. shall be inadmissible in any adversarial proceeding, whether
judicial or quasi judicial. However, evidence or information
Rule 10.3. Venue. - A petition for a protective order may be that is otherwise admissible or subject to discovery does not
filed with the Regional Trial Court where that order would be become inadmissible or protected from discovery solely by
implemented. reason of its use therein.

If there is a pending court proceeding in which the information For mediation proceedings, the court shall be further guided
obtained in an ADR proceeding is required to be divulged or is by the following principles:
being divulged, the party seeking to enforce the confidentiality
of the information may file a motion with the court where the a. Information obtained through mediation shall be
proceedings are pending to enjoin the confidential information privileged and confidential.
from being divulged or to suppress confidential information.
b. A party, a mediator, or a nonparty participant may
Rule 10.4. Grounds. - A protective order may be granted only refuse to disclose and may prevent any other person
if it is shown that the applicant would be materially prejudiced from disclosing a mediation communication.
by an unauthorized disclosure of the information obtained, or
to be obtained, during an ADR proceeding. c. In such an adversarial proceeding, the following
persons involved or previously involved in a
Rule 10.5. Contents of the motion or petition. - The petition or mediation may not be compelled to disclose
motion must state the following: confidential information obtained during the
mediation: (1) the parties to the dispute; (2) the
a. That the information sought to be protected was mediator or mediators; (3) the counsel for the parties:
obtained, or would be obtained, during an ADR (4) the nonparty participants; (5) any persons hired or
proceeding; engaged in connection with the mediation as
secretary, stenographer; clerk or assistant; and (6) any
b. The applicant would be materially prejudiced by other person who obtains or possesses confidential
the disclosure of that information; information by reason of his/ her profession.

c. The person or persons who are being asked to d. The protection of the ADR Laws shall continue to
divulge the confidential information participated in apply even if a mediator is found to have failed to act
an ADR proceedings; and impartially.

d. The time, date and place when the ADR e. A mediator may not be called to testify to provide
proceedings took place. information gathered in mediation. A mediator who is
wrongfully subpoenaed shall be reimbursed the full
cost of his attorney fees and related expenses.
Apart from the other submissions, the movant must set the
motion for hearing and contain a notice of hearing in
accordance with Rule 15 of the Rules of Court. 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
Rule 10.6. Notice. - Notice of a request for a protective order the order is being questioned with the appellate courts.
made through a motion shall be made to the opposing parties
in accordance with Rule 15 of the Rules of Court.
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 Rule 11.4. Grounds. - (A) To vacate an arbitral award. - The
disobeys the order of the court to cease from divulging arbitral award may be vacated on the following grounds:
confidential information shall be imposed the proper sanction
by the court. a. The arbitral award was procured through
corruption, fraud or other undue means;
RULE 11: CONFIRMATION, CORRECTION OR
VACATION OF AWARD IN DOMESTIC b. There was evident partiality or corruption in the
ARBITRATION arbitral tribunal or any of its members;

Rule 11.1. Who may request confirmation, correction or c. The arbitral tribunal was guilty of misconduct or
vacation. - Any party to a domestic arbitration may petition any form of misbehavior that has materially
the court to confirm, correct or vacate a domestic arbitral prejudiced the rights of any party such as refusing to
award. postpone a hearing upon sufficient cause shown or to
hear evidence pertinent and material to the
Rule 11.2. When to request confirmation, controversy;
correction/modification or vacation. -
d. One or more of the arbitrators was disqualified to
(A) Confirmation. - At any time after the lapse of thirty (30) act as such under the law and willfully refrained from
days from receipt by the petitioner of the arbitral award, he disclosing such disqualification; or
may petition the court to confirm that award.
e. The arbitral tribunal exceeded its powers, or so
(B) Correction/Modification. - Not later than thirty (30) days imperfectly executed them, such that a complete,
from receipt of the arbitral award, a party may petition the final and definite award upon the subject matter
court to correct/modify that award. submitted to them was not made.

(C) Vacation. - Not later than thirty (30) days from receipt of The award may also be vacated on any or all of the following
the arbitral award, a party may petition the court to vacate that grounds:
award.
a. The arbitration agreement did not exist, or is
(D) A petition to vacate the arbitral award may be filed, in invalid for any ground for the revocation of a contract
opposition to a petition to confirm the arbitral award, not later or is otherwise unenforceable; or
than thirty (30) days from receipt of the award by the
petitioner. A petition to vacate the arbitral award filed beyond b. A party to arbitration is a minor or a person
the reglementary period shall be dismissed. judicially declared to be incompetent.

(E) A petition to confirm the arbitral award may be filed, in The petition to vacate an arbitral award on the ground that the
opposition to a petition to vacate the arbitral award, at any party to arbitration is a minor or a person judicially declared to
time after the petition to vacate such arbitral award is filed. be incompetent shall be filed only on behalf of the minor or
The dismissal of the petition to vacate the arbitral award for incompetent and shall allege that (a) the other party to
having been filed beyond the reglementary period shall not arbitration had knowingly entered into a submission or
result in the dismissal of the petition for the confirmation of agreement with such minor or incompetent, or (b) the
such arbitral award. submission to arbitration was made by a guardian or guardian
ad litem who was not authorized to do so by a competent
(F) The filing of a petition to confirm an arbitral award shall court.
not authorize the filing of a belated petition to vacate or set
aside such award in opposition thereto. In deciding the petition to vacate the arbitral award, the court
shall disregard any other ground than those enumerated above.
(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 (B) To correct/modify an arbitral award. - The Court may
to confirm that award. correct/modify or order the arbitral tribunal to correct/modify
the arbitral award in the following cases:
Rule 11.3. Venue. - The petition for confirmation,
correction/modification or vacation of a domestic arbitral a. Where there was an evident miscalculation of
award may be filed with Regional Trial Court having figures or an evident mistake in the description of any
jurisdiction over the place in which one of the parties is doing person, thing or property referred to in the award;
business, where any of the parties reside or where arbitration
proceedings were conducted. 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 b. The jurisdictional issues raised by a party during
issue submitted to them for resolution; or arbitration proceedings;

d. Where the award is imperfect in a matter of form c. The grounds relied upon by the parties in seeking
not affecting the merits of the controversy, and if it the vacation of the arbitral award whether the petition
had been a commissioner’s report, the defect could is a petition for the vacation or setting aside of the
have been amended or disregarded by the Court. arbitral award or a petition in opposition to a petition
to confirm the award; and
Rule 11.5. Form of petition. - An application to vacate an
arbitral award shall be in the form of a petition to vacate or as d. A statement of the date of receipt of the arbitral
a petition to vacate in opposition to a petition to confirm the award and the circumstances under which it was
same award. received by the petitioner.

An application to correct/modify an arbitral award may be Apart from other submissions, the petitioner must attach to the
included in a petition to confirm an arbitral award or in a petition the following:
petition to vacate in opposition to confirm the same award.
a. An authentic copy of the arbitration agreement;
When a petition to confirm an arbitral award is pending before
a court, the party seeking to vacate or correct/modify said b. An authentic copy of the arbitral award;
award may only apply for those reliefs through a petition to
vacate or correct/modify the award in opposition to the c. A certification against forum shopping executed by
petition to confirm the award provided that such petition to the applicant in accordance with Section 5 of Rule 7
vacate or correct/modify is filed within thirty (30) days from of the Rules of Court; and
his receipt of the award. A petition to vacate or correct/modify
an arbitral award filed in another court or in a separate case
before the same court shall be dismissed, upon appropriate d. An authentic copy or authentic copies of the
motion, as a violation of the rule against forum-shopping. appointment of an arbitral tribunal.

When a petition to vacate or correct/modify an arbitral award Rule 11.7. Notice. - Upon finding that the petition filed under
is pending before a court, the party seeking to confirm said this Rule is sufficient both in form and in substance, the Court
award may only apply for that relief through a petition to shall cause notice and a copy of the petition to be delivered to
confirm the same award in opposition to the petition to vacate the respondent allowing him to file a comment or opposition
or correct/modify the award. A petition to confirm or thereto within fifteen (15) days from receipt of the petition. In
correct/modify an arbitral award filed as separate proceeding lieu of an opposition, the respondent may file a petition in
in another court or in a different case before the same court opposition to the petition.
shall be dismissed, upon appropriate motion, as a violation of
the rule against forum shopping. The petitioner may within fifteen (15) days from receipt of the
petition in opposition thereto file a reply.
As an alternative to the dismissal of a second petition for
confirmation, vacation or correction/modification of an Rule 11.8. Hearing. - If the Court finds from the petition or
arbitral award filed in violation of the non-forum shopping petition in opposition thereto that there are issues of fact, it
rule, the court or courts concerned may allow the shall require the parties, within a period of not more than
consolidation of the two proceedings in one court and in one fifteen (15) days from receipt of the order, to simultaneously
case. submit the affidavits of all of their witnesses and reply
affidavits within ten (10) days from receipt of the affidavits to
Where the petition to confirm the award and petition to vacate be replied to. There shall be attached to the affidavits or reply
or correct/modify were simultaneously filed by the parties in affidavits documents relied upon in support of the statements
the same court or in different courts in the Philippines, upon of fact in such affidavits or reply affidavits.
motion of either party, the court may order the consolidation
of the two cases before either court. If the petition or the petition in opposition thereto is one for
vacation of an arbitral award, the interested party in arbitration
In all instances, the petition must be verified by a person who may oppose the petition or the petition in opposition thereto
has knowledge of the jurisdictional facts. for the reason that the grounds cited in the petition or the
petition in opposition thereto, assuming them to be true, do not
affect the merits of the case and may be cured or remedied.
Rule 11.6. Contents of petition. - The petition must state the Moreover, the interested party may request the court to
following: suspend the proceedings for vacation for a period of time and
to direct the arbitral tribunal to reopen and conduct a new
a. The addresses of the parties and any change hearing and take such other action as will eliminate the
thereof; grounds for vacation of the award. The opposition shall be
supported by a brief of legal arguments to show the existence which the arbitral tribunal may make a decision shall be
of a sufficient legal basis for the opposition. deemed applicable to the new arbitral tribunal.

If the ground of the petition to vacate an arbitral award is that In referring the case back to the arbitral tribunal or to a new
the arbitration agreement did not exist, is invalid or otherwise arbitral tribunal pursuant to Rule 24 of Republic Act No. 876,
unenforceable, and an earlier petition for judicial relief under the court may not direct it to revise its award in a particular
Rule 3 had been filed, a copy of such petition and of the way, or to revise its findings of fact or conclusions of law or
decision or final order of the court shall be attached thereto. otherwise encroach upon the independence of an arbitral
But if the ground was raised before the arbitral tribunal in a tribunal in the making of a final award.
motion to dismiss filed not later than the submission of its
answer, and the arbitral tribunal ruled in favor of its own RULE 12: RECOGNITION AND ENFORCEMENT OR
jurisdiction as a preliminary question which was appealed by a SETTING ASIDE OF AN
party to the Regional Trial Court, a copy of the order, ruling or INTERNATIONALCOMMERCIAL ARBITRATION
preliminary award or decision of the arbitral tribunal, the AWARD
appeal therefrom to the Court and the order or decision of the
Court shall all be attached to the petition. Rule 12.1. Who may request recognition and enforcement or
setting aside. - Any party to an international commercial
If the ground of the petition is that the petitioner is an infant or arbitration in the Philippines may petition the proper court to
a person judicially declared to be incompetent, there shall be recognize and enforce or set aside an arbitral award.
attached to the petition certified copies of documents showing
such fact. In addition, the petitioner shall show that even if the Rule 12.2. When to file petition. - (A) Petition to recognize
submission or arbitration agreement was entered into by a and enforce. - The petition for enforcement and recognition of
guardian or guardian ad litem, the latter was not authorized by an arbitral award may be filed anytime from receipt of the
a competent court to sign such the submission or arbitration award. If, however, a timely petition to set aside an arbitral
agreement. award is filed, the opposing party must file therein and in
opposition thereto the petition for recognition and enforcement
If on the basis of the petition, the opposition, the affidavits and of the same award within the period for filing an opposition.
reply affidavits of the parties, the court finds that there is a
need to conduct an oral hearing, the court shall set the case for (B) Petition to set aside. - The petition to set aside an arbitral
hearing. This case shall have preference over other cases award may only be filed within three (3) months from the time
before the court, except criminal cases. During the hearing, the the petitioner receives a copy thereof. If a timely request is
affidavits of witnesses shall take the place of their direct made with the arbitral tribunal for correction, interpretation or
testimonies and they shall immediately be subject to cross- additional award, the three (3) month period shall be counted
examination thereon. The Court shall have full control over from the time the petitioner receives the resolution by the
the proceedings in order to ensure that the case is heard arbitral tribunal of that request.
without undue delay.
A petition to set aside can no longer be filed after the lapse of
Rule 11.9. Court action. - Unless a ground to vacate an the three (3) month period. The dismissal of a petition to set
arbitral award under Rule 11.5 above is fully established, the aside an arbitral award for being time-barred shall not
court shall confirm the award. automatically result in the approval of the petition filed therein
and in opposition thereto for recognition and enforcement of
An arbitral award shall enjoy the presumption that it was made the same award. Failure to file a petition to set aside shall
and released in due course of arbitration and is subject to preclude a party from raising grounds to resist enforcement of
confirmation by the court the award.

In resolving the petition or petition in opposition thereto in Rule 12.3. Venue. - A petition to recognize and enforce or set
accordance with these Special ADR Rules, the court shall aside an arbitral award may, at the option of the petitioner, be
either confirm or vacate the arbitral award. The court shall not filed with the Regional Trial Court: (a) where arbitration
disturb the arbitral tribunal’s determination of facts and/or proceedings were conducted; (b) where any of the assets to be
interpretation of law. attached or levied upon is located; (c) where the act to be
enjoined will be or is being performed; (d) where any of the
In a petition to vacate an award or in petition to vacate an parties to arbitration resides or has its place of business; or (e)
award in opposition to a petition to confirm the award, the in the National Capital Judicial Region.
petitioner may simultaneously apply with the Court to refer
the case back to the same arbitral tribunal for the purpose of Rule 12.4. Grounds to set aside or resist enforcement. - The
making a new or revised award or to direct a new hearing, or court may set aside or refuse the enforcement of the arbitral
in the appropriate case, order the new hearing before a new award only if:
arbitral tribunal, the members of which shall be chosen in the
manner provided in the arbitration agreement or submission, a. The party making the application furnishes proof
or the law. In the latter case, any provision limiting the time in that:
 (i). A party to the arbitration agreement was Rule 12.5. Exclusive recourse against arbitral award. -
under some incapacity, or the said Recourse to a court against an arbitral award shall be made
agreement is not valid under the law to only through a petition to set aside the arbitral award and on
which the parties have subjected it or, failing grounds prescribed by the law that governs international
any indication thereof, under Philippine law; commercial arbitration. Any other recourse from the arbitral
or award, such as by appeal or petition for review or petition for
certiorari or otherwise, shall be dismissed by the court.
(ii). The party making the application to set
aside or resist enforcement was not given Rule 12.6. Form. - The application to recognize and enforce
proper notice of the appointment of an or set aside an arbitral award, whether made through a petition
arbitrator or of the arbitral proceedings or to recognize and enforce or to set aside or as a petition to set
was otherwise unable to present his case; or aside the award in opposition thereto, or through a petition to
set aside or petition to recognize and enforce in opposition
(iii). The award deals with a dispute not thereto, shall be verified by a person who has personal
contemplated by or not falling within the knowledge of the facts stated therein.
terms of the submission to arbitration, or
contains decisions on matters beyond the When a petition to recognize and enforce an arbitral award is
scope of the submission to arbitration; pending, the application to set it aside, if not yet time-barred,
provided that, if the decisions on matters shall be made through a petition to set aside the same award in
submitted to arbitration can be separated the same proceedings.
from those not so submitted, only that part
of the award which contains decisions on When a timely petition to set aside an arbitral award is filed,
matters not submitted to arbitration may be the opposing party may file a petition for recognition and
set aside or only that part of the award which enforcement of the same award in opposition thereto.
contains decisions on matters submitted to
arbitration may be enforced; or Rule 12.7. Contents of petition. - (A) Petition to recognize
and enforce. - The petition to recognize and enforce or petition
(iv). The composition of the arbitral tribunal to set aside in opposition thereto, or petition to set aside or
or the arbitral procedure was not in petition to recognize and enforce in opposition thereto, shall
accordance with the agreement of the state the following:
parties, unless such agreement was in
conflict with a provision of Philippine law a. The addresses of record, or any change thereof, of
from which the parties cannot derogate, or, the parties to arbitration;
failing such agreement, was not in
accordance with Philippine law;
b. A statement that the arbitration agreement or
submission exists;
b. The court finds that:
c. The names of the arbitrators and proof of their
(i). The subject-matter of the dispute is not appointment;
capable of settlement by arbitration under
the law of the Philippines; or
d. A statement that an arbitral award was issued and
when the petitioner received it; and
(ii). The recognition or enforcement of the
award would be contrary to public policy.
e. The relief sought.
In deciding the petition, the Court shall disregard any other
ground to set aside or enforce the arbitral award other than Apart from other submissions, the petitioner shall attach to the
those enumerated above. petition the following:

The petition to set-aside or a pleading resisting the a. An authentic copy of the arbitration agreement;
enforcement of an arbitral award on the ground that a party
was a minor or an incompetent shall be filed only on behalf of b. An authentic copy of the arbitral award;
the minor or incompetent and shall allege that (a) the other
party to arbitration had knowingly entered into a submission c. A verification and certification against forum
or agreement with such minor or incompetent, or (b) the shopping executed by the applicant in accordance
submission to arbitration was made by a guardian or guardian with Sections 4 and 5 of Rule 7 of the Rules of Court;
ad litem who was not authorized to do so by a competent and
court.
d. An authentic copy or authentic copies of the
appointment of an arbitral tribunal.
(B) Petition to set aside. - The petition to set aside or petition court shall set the case for hearing. This case shall have
to set aside in opposition to a petition to recognize and enforce preference over other cases before the court, except criminal
an arbitral award in international commercial arbitration shall cases. During the hearing, the affidavits of witnesses shall take
have the same contents as a petition to recognize and enforce the place of their direct testimonies and they shall immediately
or petition to recognize and enforce in opposition to a petition be subject to cross-examination thereon. The court shall have
to set aside an arbitral award. In addition, the said petitions full control over the proceedings in order to ensure that the
should state the grounds relied upon to set it aside. case is heard without undue delay.

Further, if the ground of the petition to set aside is that the Rule 12.11. Suspension of proceedings to set aside. - The
petitioner is a minor or found incompetent by a court, there court when asked to set aside an arbitral award may, where
shall be attached to the petition certified copies of documents appropriate and upon request by a party, suspend the
showing such fact. In addition, the petitioner shall show that proceedings for a period of time determined by it to give the
even if the submission or arbitration agreement was entered arbitral tribunal an opportunity to resume the arbitral
into by a guardian or guardian ad litem, the latter was not proceedings or to take such other action as in the arbitral
authorized by a competent court to sign such the submission or tribunal’s opinion will eliminate the grounds for setting aside.
arbitration agreement. The court, in referring the case back to the arbitral tribunal
may not direct it to revise its award in a particular way, or to
In either case, if another court was previously requested to revise its findings of fact or conclusions of law or otherwise
resolve and/or has resolved, on appeal, the arbitral tribunal’s encroach upon the independence of an arbitral tribunal in the
preliminary determination in favor of its own jurisdiction, the making of a final award.
petitioner shall apprise the court before which the petition to
recognize and enforce or set aside is pending of the status of The court when asked to set aside an arbitral award may also,
the appeal or its resolution. when the preliminary ruling of an arbitral tribunal affirming its
jurisdiction to act on the matter before it had been appealed by
Rule 12.8. Notice. - Upon finding that the petition filed under the party aggrieved by such preliminary ruling to the court,
this Rule is sufficient both in form and in substance, the court suspend the proceedings to set aside to await the ruling of the
shall cause notice and a copy of the petition to be delivered to court on such pending appeal or, in the alternative, consolidate
the respondent directing him to file an opposition thereto the proceedings to set aside with the earlier appeal.
within fifteen (15) days from receipt of the petition. In lieu of
an opposition, the respondent may file a petition to set aside in Rule 12.12. Presumption in favor of confirmation. - It is
opposition to a petition to recognize and enforce, or a petition presumed that an arbitral award was made and released in due
to recognize and enforce in opposition to a petition to set course and is subject to enforcement by the court, unless the
aside. adverse party is able to establish a ground for setting aside or
not enforcing an arbitral award.
The petitioner may within fifteen (15) days from receipt of the
petition to set aside in opposition to a petition to recognize and Rule 12.13. Judgment of the court. - Unless a ground to set
enforce, or from receipt of the petition to recognize and aside an arbitral award under Rule 12.4 above is fully
enforce in opposition to a petition to set aside, file a reply. established, the court shall dismiss the petition. If, in the same
proceedings, there is a petition to recognize and enforce the
Rule 12.9. Submission of documents. - If the court finds that arbitral award filed in opposition to the petition to set aside,
the issue between the parties is mainly one of law, the parties the court shall recognize and enforce the award.
may be required to submit briefs of legal arguments, not more
than fifteen (15) days from receipt of the order, sufficiently In resolving the petition or petition in opposition thereto in
discussing the legal issues and the legal basis for the relief accordance with the Special ADR Rules, the court shall either
prayed for by each of them. set aside or enforce the arbitral award. The court shall not
disturb the arbitral tribunal’s determination of facts and/or
If the court finds from the petition or petition in opposition interpretation of law.
thereto that there are issues of fact relating to the ground(s)
relied upon for the court to set aside, it shall require the parties Rule 12.14. Costs. - Unless otherwise agreed upon by the
within a period of not more than fifteen (15) days from receipt parties in writing, at the time the case is submitted to the court
of the order simultaneously to submit the affidavits of all of for decision, the party praying for recognition and
their witnesses and reply affidavits within ten (10) days from enforcement or setting aside of an arbitral award shall submit a
receipt of the affidavits to be replied to. There shall be statement under oath confirming the costs he has incurred only
attached to the affidavits or reply affidavits, all documents in the proceedings for such recognition and enforcement or
relied upon in support of the statements of fact in such setting aside. The costs shall include the attorney’s fees the
affidavits or reply affidavits. party has paid or is committed to pay to his counsel of record.

Rule 12.10. Hearing. - If on the basis of the petition, the The prevailing party shall be entitled to an award of costs,
opposition, the affidavits and reply affidavits of the parties, the which shall include reasonable attorney’s fees of the
court finds that there is a need to conduct an oral hearing, the
prevailing party against the unsuccessful party. The court shall provided that, if the decisions on matters
determine the reasonableness of the claim for attorney’s fees. submitted to arbitration can be separated
from those not so submitted, only that part
RULE 13: RECOGNITION AND ENFORCEMENT OF A of the award which contains decisions on
FOREIGN ARBITRAL AWARD matters not submitted to arbitration may be
set aside; or
Rule 13.1. Who may request recognition and enforcement. -
Any party to a foreign arbitration may petition the court to (iv). The composition of the arbitral tribunal
recognize and enforce a foreign arbitral award. or the arbitral procedure was not in
accordance with the agreement of the parties
Rule 13.2. When to petition. - At any time after receipt of a or, failing such agreement, was not in
foreign arbitral award, any party to arbitration may petition the accordance with the law of the country
proper Regional Trial Court to recognize and enforce such where arbitration took place; or
award.
(v). The award has not yet become binding
Rule 13.3. Venue. - The petition to recognize and enforce a on the parties or has been set aside or
foreign arbitral award shall be filed, at the option of the suspended by a court of the country in which
petitioner, with the Regional Trial Court (a) where the assets that award was made; or
to be attached or levied upon is located, (b) where the act to be
enjoined is being performed, (c) in the principal place of b. The court finds that:
business in the Philippines of any of the parties, (d) if any of
the parties is an individual, where any of those individuals (i). The subject-matter of the dispute is not
resides, or (e) in the National Capital Judicial Region. capable of settlement or resolution by
arbitration under Philippine law; or
Rule 13.4. Governing law and grounds to refuse recognition
and enforcement. - The recognition and enforcement of a (ii). The recognition or enforcement of the
foreign arbitral award shall be governed by the 1958 New award would be contrary to public policy.
York Convention on the Recognition and Enforcement of
Foreign Arbitral Awards (the "New York Convention") and The court shall disregard any ground for opposing the
this Rule. The court may, upon grounds of comity and recognition and enforcement of a foreign arbitral award other
reciprocity, recognize and enforce a foreign arbitral award than those enumerated above.
made in a country that is not a signatory to the New York
Convention as if it were a Convention Award. Rule 13.5. Contents of petition. - The petition shall state the
following:
A Philippine court shall not set aside a foreign arbitral award
but may refuse it recognition and enforcement on any or all of a. The addresses of the parties to arbitration;
the following grounds:
b. In the absence of any indication in the award, the
a. The party making the application to refuse country where the arbitral award was made and
recognition and enforcement of the award furnishes whether such country is a signatory to the New York
proof that: Convention; and

(i). A party to the arbitration agreement was c. The relief sought.

under some incapacity; or the said
agreement is not valid under the law to
which the parties have subjected it or, failing Apart from other submissions, the petition shall have attached
any indication thereof, under the law of the to it the following:
country where the award was made; or
a. An authentic copy of the arbitration agreement;
(ii). The party making the application was and
not given proper notice of the appointment
of an arbitrator or of the arbitral proceedings b. An authentic copy of the arbitral award.
or was otherwise unable to present his case;
or If the foreign arbitral award or agreement to arbitrate or
submission is not made in English, the petitioner shall also
(iii). The award deals with a dispute not attach to the petition a translation of these documents into
contemplated by or not falling within the English. The translation shall be certified by an official or
terms of the submission to arbitration, or sworn translator or by a diplomatic or consular agent.
contains decisions on matters beyond the
scope of the submission to arbitration;
Rule 13.6. Notice and opposition. - Upon finding that the In resolving the petition for recognition and enforcement of a
petition filed under this Rule is sufficient both in form and in foreign arbitral award in accordance with these Special ADR
substance, the court shall cause notice and a copy of the Rules, the court shall either [a] recognize and/or enforce or [b]
petition to be delivered to the respondent allowing him to file refuse to recognize and enforce the arbitral award. The court
an opposition thereto within thirty (30) days from receipt of shall not disturb the arbitral tribunal’s determination of facts
the notice and petition. and/or interpretation of law.

Rule 13.7. Opposition. - The opposition shall be verified by a Rule 13.12. Recognition and enforcement of non-convention
person who has personal knowledge of the facts stated therein. award. - The court shall, only upon grounds provided by these
Special ADR Rules, recognize and enforce a foreign arbitral
Rule 13.8. Submissions. - If the court finds that the issue award made in a country not a signatory to the New York
between the parties is mainly one of law, the parties may be Convention when such country extends comity and reciprocity
required to submit briefs of legal arguments, not more than to awards made in the Philippines. If that country does not
thirty (30) days from receipt of the order, sufficiently extend comity and reciprocity to awards made in the
discussing the legal issues and the legal bases for the relief Philippines, the court may nevertheless treat such award as a
prayed for by each other. foreign judgment enforceable as such under Rule 39, Section
48, of the Rules of Court.
If, from a review of the petition or opposition, there are issues
of fact relating to the ground/s relied upon for the court to PART III
refuse enforcement, the court shall, motu proprio or upon PROVISIONS SPECIFIC TO MEDIATION
request of any party, require the parties to simultaneously
submit the affidavits of all of their witnesses within a period of RULE 14: GENERAL PROVISIONS
not less than fifteen (15) days nor more than thirty (30) days
from receipt of the order. The court may, upon the request of Rule 14.1. Application of the rules on arbitration. - Whenever
any party, allow the submission of reply affidavits within a applicable and appropriate, the pertinent rules on arbitration
period of not less than fifteen (15) days nor more than thirty shall be applied in proceedings before the court relative to a
(30) days from receipt of the order granting said request. dispute subject to mediation.
There shall be attached to the affidavits or reply affidavits all
documents relied upon in support of the statements of fact in RULE 15: DEPOSIT AND ENFORCEMENT OF
such affidavits or reply affidavits. MEDIATED SETTLEMENT AGREEMENTS

Rule 13.9. Hearing. - The court shall set the case for hearing Rule 15.1. Who makes a deposit. - Any party to a mediation
if on the basis of the foregoing submissions there is a need to that is not court-annexed may deposit with the court the
do so. The court shall give due priority to hearings on petitions written settlement agreement, which resulted from that
under this Rule. During the hearing, the affidavits of witnesses mediation.
shall take the place of their direct testimonies and they shall
immediately be subject to cross-examination. The court shall
have full control over the proceedings in order to ensure that Rule 15.2. When deposit is made. - At any time after an
the case is heard without undue delay. agreement is reached, the written settlement agreement may be
deposited.
Rule 13.10. Adjournment/deferment of decision on
enforcement of award. - The court before which a petition to Rule 15.3. Venue. - The written settlement agreement may be
recognize and enforce a foreign arbitral award is pending, may jointly deposited by the parties or deposited by one party with
adjourn or defer rendering a decision thereon if, in the prior notice to the other party/ies with the Clerk of Court of
meantime, an application for the setting aside or suspension of the Regional Trial Court (a) where the principal place of
the award has been made with a competent authority in the business in the Philippines of any of the parties is located; (b)
country where the award was made. Upon application of the if any of the parties is an individual, where any of those
petitioner, the court may also require the other party to give individuals resides; or (c) in the National Capital Judicial
suitable security. Region.

Rule 13.11. Court action. - It is presumed that a foreign Rule 15.4. Registry Book. - The Clerk of Court of each
arbitral award was made and released in due course of Regional Trial Court shall keep a Registry Book that shall
arbitration and is subject to enforcement by the court. chronologically list or enroll all the mediated settlement
agreements/settlement awards that are deposited with the court
as well as the names and address of the parties thereto and the
The court shall recognize and enforce a foreign arbitral award date of enrollment and shall issue a Certificate of Deposit to
unless a ground to refuse recognition or enforcement of the the party that made the deposit.
foreign arbitral award under this rule is fully established.
Rule 15.5. Enforcement of mediated settlement agreement. -
The decision of the court recognizing and enforcing a foreign Any of the parties to a mediated settlement agreement, which
arbitral award is immediately executory. was deposited with the Clerk of Court of the Regional Trial
Court, may, upon breach thereof, file a verified petition with Arbitration Commission (CIAC), unless all parties to
the same court to enforce said agreement. arbitration, assisted by their respective counsel, submit to the
court a written agreement making the court, rather than the
Rule 15.6. Contents of petition. - The verified petition shall: CIAC, the body that would exclusively resolve the dispute.

a. Name and designate, as petitioner or respondent, Rule 17.2. Form and contents of motion. - The request for
all parties to the mediated settlement agreement and dismissal of the civil action and referral to arbitration shall be
those who may be affected by it; through a verified motion that shall (a) contain a statement
showing that the dispute is a construction dispute; and (b) be
b. State the following: accompanied by proof of the existence of the arbitration
agreement.
(i). The addresses of the petitioner and
respondents; and If the arbitration agreement or other document evidencing the
existence of that agreement is already part of the record, those
documents need not be submitted to the court provided that the
(ii). The ultimate facts that would show that movant has cited in the motion particular references to the
the adverse party has defaulted to perform records where those documents may be found.
its obligation under said agreement; and
The motion shall also contain a notice of hearing addressed to
c. Have attached to it the following: all parties and shall specify the date and time when the motion
will be heard, which must not be later than fifteen (15) days
(i). An authentic copy of the mediated after the filing of the motion. The movant shall ensure receipt
settlement agreement; and by all parties of the motion at least three days before the date
of the hearing.
(ii). Certificate of Deposit showing that the
mediated settlement agreement was Rule 17.3. Opposition. - Upon receipt of the motion to refer
deposited with the Clerk of Court. the dispute to arbitration by CIAC, the other party may file an
opposition to the motion on or before the day such motion is to
Rule 15.7. Opposition. - The adverse party may file an be heard. The opposition shall clearly set forth the reasons
opposition, within fifteen (15) days from receipt of notice or why the court should not dismiss the case.
service of the petition, by submitting written proof of
compliance with the mediated settlement agreement or such Rule 17.4. Hearing. - The court shall hear the motion only
other affirmative or negative defenses it may have. once and for the purpose of clarifying relevant factual and
legal issues.
Rule 15.8. Court action. - After a summary hearing, if the
court finds that the agreement is a valid mediated settlement Rule 17.5. Court action. - If the other parties fail to file their
agreement, that there is no merit in any of the affirmative or opposition on or before the day of the hearing, the court
negative defenses raised, and the respondent has breached that shall motu proprio resolve the motion only on the basis of the
agreement, in whole or in part, the court shall order the facts alleged in the motion.
enforcement thereof; otherwise, it shall dismiss the petition.
After hearing, the court shall dismiss the civil action and refer
PART IV the parties to arbitration if it finds, based on the pleadings and
PROVISIONS SPECIFIC TO CONSTRUCTION supporting documents submitted by the parties, that there is a
ARBITRATION valid and enforceable arbitration agreement involving a
construction dispute. Otherwise, the court shall proceed to
RULE 16: GENERAL PROVISIONS hear the case.

Rule 16.1. Application of the rules on arbitration. - Whenever All doubts shall be resolved in favor of the existence of a
applicable and appropriate, the rules on arbitration shall be construction dispute and the arbitration agreement.
applied in proceedings before the court relative to a dispute
subject to construction arbitration. Rule 17.6. Referral immediately executory. - An order
dismissing the case and referring the dispute to arbitration by
RULE 17: REFERRAL TO CIAC CIAC shall be immediately executory.

Rule 17.1. Dismissal of action. - A Regional Trial Court Rule 17.7. Multiple actions and parties. - The court shall not
before which a construction dispute is filed shall, upon decline to dismiss the civil action and make a referral to
becoming aware that the parties have entered into an arbitration by CIAC for any of the following reasons:
arbitration agreement, motu proprio or upon motion made not
later than the pre-trial, dismiss the case and refer the parties to a. Not all of the disputes subject of the civil action
arbitration to be conducted by the Construction Industry may be referred to arbitration;
 b. Not all of the parties to the civil action are bound third party has the power to make a binding resolution of the
by the arbitration agreement and referral to dispute), the herein rules on arbitration shall apply.
arbitration would result in multiplicity of suits;
Rule 18.4. Referral. - If a dispute is already before a court,
c. The issues raised in the civil action could be either party may before and during pre-trial, file a motion for
speedily and efficiently resolved in its entirety by the the court to refer the parties to other ADR forms/processes. At
Court rather than in arbitration; any time during court proceedings, even after pre-trial, the
parties may jointly move for suspension of the action pursuant
d. Referral to arbitration does not appear to be the to Article 2030 of the Civil Code of the Philippines where the
most prudent action; or possibility of compromise is shown.

e. Dismissal of the civil action would prejudice the Rule 18.5. Submission of settlement agreement. - Either party
rights of the parties to the civil action who are not may submit to the court, before which the case is pending, any
bound by the arbitration agreement. settlement agreement following a neutral or an early neutral
evaluation, mini-trial or mediation-arbitration.
The court may, however, issue an order directing the inclusion
in arbitration of those parties who are bound by the arbitration PART VI
agreement directly or by reference thereto pursuant to Section MOTION FOR RECONSIDERATION, APPEAL AND
34 of Republic Act No. 9285. CERTIORARI

Furthermore, the court shall issue an order directing the case RULE 19: MOTION FOR RECONSIDERATION,
to proceed with respect to the parties not bound by the APPEAL AND CERTIORARI
arbitration agreement.
A. MOTION FOR RECONSIDERATION
Rule 17.8. Referral - If the parties manifest that they have
agreed to submit all or part of their dispute pending with the Rule 19.1. Motion for reconsideration, when allowed. - A
court to arbitration by CIAC, the court shall refer them to party may ask the Regional Trial to reconsider its ruling on the
CIAC for arbitration. following:

PART V a. That the arbitration agreement is inexistent, invalid

PROVISIONS SPECIFIC TO OTHER FORMS OF ADR or unenforceable pursuant to Rule 3.10 (B);

RULE 18: GENERAL PROVISIONS b. Upholding or reversing the arbitral tribunal’s

jurisdiction pursuant to Rule 3.19;
Rule 18.1. Applicability of rules to other forms of ADR. - This
rule governs the procedure for matters brought before the c. Denying a request to refer the parties to arbitration;
court involving the following forms of ADR:
d. Granting or denying a party an interim measure of
a. Early neutral evaluation; protection;

b. Neutral evaluation; e. Denying a petition for the appointment of an

arbitrator;
c. Mini-trial;
f. Refusing to grant assistance in taking evidence;
d. Mediation-arbitration;
g. Enjoining or refusing to enjoin a person from
e. A combination thereof; or divulging confidential information;

f. Any other ADR form. h. Confirming, vacating or correcting a domestic

arbitral award;
Rule 18.2. Applicability of the rules on mediation. - If the
other ADR form/process is more akin to mediation (i.e., the i. Suspending the proceedings to set aside an
neutral third party merely assists the parties in reaching a international commercial arbitral award and referring
voluntary agreement), the herein rules on mediation shall the case back to the arbitral tribunal;
apply.
j. Setting aside an international commercial arbitral
Rule 18.3. Applicability of rules on arbitration.-If the other award;
ADR form/process is more akin to arbitration (i.e., the neutral
 k. Dismissing the petition to set aside an international receipt of the opposition or comment or upon the expiration of
commercial arbitral award, even if the court does not the period to file such opposition or comment.
recognize and/or enforce the same;
Rule 19.6. No second motion for reconsideration. - No party
l. Recognizing and/or enforcing, or dismissing a shall be allowed a second motion for reconsideration.
petition to recognize and/or enforce an international
commercial arbitral award; B. GENERAL PROVISIONS ON APPEAL AND
CERTIORARI
m. Declining a request for assistance in taking
evidence; Rule 19.7. No appeal or certiorari on the merits of an arbitral
award. - An agreement to refer a dispute to arbitration shall
n. Adjourning or deferring a ruling on a petition to set mean that the arbitral award shall be final and binding.
aside, recognize and/or enforce an international Consequently, a party to an arbitration is precluded from filing
commercial arbitral award; an appeal or a petition for certiorari questioning the merits of
an arbitral award.
o. Recognizing and/or enforcing a foreign arbitral
award, or refusing recognition and/or enforcement of Rule 19.8. Subject matter and governing rules. - The remedy
the same; and of an appeal through a petition for review or the remedy of a
special civil action of certiorari from a decision of the
p. Granting or dismissing a petition to enforce a Regional Trial Court made under the Special ADR Rules shall
deposited mediated settlement agreement. be allowed in the instances, and instituted only in the manner,
provided under this Rule.
No motion for reconsideration shall be allowed from the
following rulings of the Regional Trial Court: Rule 19.9. Prohibited alternative remedies. - Where the
remedies of appeal and certiorari are specifically made
a. A prima facie determination upholding the available to a party under the Special ADR Rules, recourse to
existence, validity or enforceability of an arbitration one remedy shall preclude recourse to the other.
agreement pursuant to Rule 3.1 (A);
Rule 19.10. Rule on judicial review on arbitration in the
b. An order referring the dispute to arbitration; Philippines. - As a general rule, the court can only vacate or
set aside the decision of an arbitral tribunal upon a clear
showing that the award suffers from any of the infirmities or
c. An order appointing an arbitrator; grounds for vacating an arbitral award under Section 24 of
Republic Act No. 876 or under Rule 34 of the Model Law in a
d. Any ruling on the challenge to the appointment of domestic arbitration, or for setting aside an award in an
an arbitrator; international arbitration under Article 34 of the Model Law, or
for such other grounds provided under these Special Rules.
e. Any order resolving the issue of the termination of
the mandate of an arbitrator; and If the Regional Trial Court is asked to set aside an arbitral
award in a domestic or international arbitration on any ground
f. An order granting assistance in taking evidence. other than those provided in the Special ADR Rules, the court
shall entertain such ground for the setting aside or non-
Rule 19.2. When to move for reconsideration. - A motion for recognition of the arbitral award only if the same amounts to a
reconsideration may be filed with the Regional Trial Court violation of public policy.
within a non-extendible period of fifteen (15) days from
receipt of the questioned ruling or order. The court shall not set aside or vacate the award of the arbitral
tribunal merely on the ground that the arbitral tribunal
Rule 19.3. Contents and notice. - The motion shall be made in committed errors of fact, or of law, or of fact and law, as the
writing stating the ground or grounds therefor and shall be court cannot substitute its judgment for that of the arbitral
filed with the court and served upon the other party or parties. tribunal.

Rule 19.4. Opposition or comment. - Upon receipt of the Rule 19.11. Rule on judicial review of foreign arbitral award.
motion for reconsideration, the other party or parties shall - The court can deny recognition and enforcement of a foreign
have a non-extendible period of fifteen (15) days to file his arbitral award only upon the grounds provided in Article V of
opposition or comment. the New York Convention, but shall have no power to vacate
or set aside a foreign arbitral award.
Rule 19.5. Resolution of motion. - A motion for
reconsideration shall be resolved within thirty (30) days from C. APPEALS TO THE COURT OF APPEALS
Rule 19.12. Appeal to the Court of Appeals. - An appeal to the The original copy of the petition intended for the Court of
Court of Appeals through a petition for review under this Appeals shall be marked original by the petitioner.
Special Rule shall only be allowed from the following final
orders of the Regional Trial Court: Upon the filing of the petition and unless otherwise prescribed
by the Court of Appeals, the petitioner shall pay to the clerk of
a. Granting or denying an interim measure of court of the Court of Appeals docketing fees and other lawful
protection; fees of P3,500.00 and deposit the sum of P500.00 for costs.

b. Denying a petition for appointment of an Exemption from payment of docket and other lawful fees and
arbitrator; the deposit for costs may be granted by the Court of Appeals
upon a verified motion setting forth valid grounds therefor. If
c. Denying a petition for assistance in taking the Court of Appeals denies the motion, the petitioner shall
evidence; pay the docketing and other lawful fees and deposit for costs
within fifteen days from the notice of the denial.
d. Enjoining or refusing to enjoin a person from
divulging confidential information; Rule 19.16. Contents of the Petition. - The petition for review
shall (a) state the full names of the parties to the case, without
e. Confirming, vacating or correcting/modifying a impleading the court or agencies either as petitioners or
domestic arbitral award; respondent, (b) contain a concise statement of the facts and
issues involved and the grounds relied upon for the review, (c)
be accompanied by a clearly legible duplicate original or a
f. Setting aside an international commercial certified true copy of the decision or resolution of the Regional
arbitration award; Trial Court appealed from, together with certified true copies
of such material portions of the record referred to therein and
g. Dismissing the petition to set aside an international other supporting papers, and (d) contain a sworn certification
commercial arbitration award even if the court does against forum shopping as provided in the Rules of Court. The
not decide to recognize or enforce such award; petition shall state the specific material dates showing that it
was filed within the period fixed herein.
h. Recognizing and/or enforcing an international
commercial arbitration award; Rule 19.17. Effect of failure to comply with requirements. -
The court shall dismiss the petition if it fails to comply with
i. Dismissing a petition to enforce an international the foregoing requirements regarding the payment of the
commercial arbitration award; docket and other lawful fees, the deposit for costs, proof of
service of the petition, the contents and the documents, which
j. Recognizing and/or enforcing a foreign arbitral should accompany the petition.
award;
Rule 19.18. Action on the petition. - The Court of Appeals
k. Refusing recognition and/or enforcement of a may require the respondent to file a comment on the petition,
foreign arbitral award; not a motion to dismiss, within ten (10) days from notice, or
dismiss the petition if it finds, upon consideration of the
grounds alleged and the legal briefs submitted by the parties,
l. Granting or dismissing a petition to enforce a
that the petition does not appear to be prima facie meritorious.
deposited mediated settlement agreement; and
Rule 19.19. Contents of Comment. - The comment shall be
m. Reversing the ruling of the arbitral tribunal
filed within ten (10) days from notice in seven (7) legible
upholding its jurisdiction.
copies and accompanied by clearly legible certified true copies
of such material portions of the record referred to therein
Rule 19.13. Where to appeal. - An appeal under this Rule together with other supporting papers. The comment shall (a)
shall be taken to the Court of Appeals within the period and in point out insufficiencies or inaccuracies in petitioner’s
the manner herein provided. statement of facts and issues, and (b) state the reasons why the
petition should be denied or dismissed. A copy thereof shall be
Rule 19.14. When to appeal. - The petition for review shall be served on the petitioner, and proof of such service shall be
filed within fifteen (15) days from notice of the decision of the filed with the Court of Appeals.
Regional Trial Court or the denial of the petitioner’s motion
for reconsideration. Rule 19.20. Due course. - If upon the filing of a comment or
such other pleading or documents as may be required or
Rule 19.15. How appeal taken. - Appeal shall be taken by allowed by the Court of Appeals or upon the expiration of the
filing a verified petition for review in seven (7) legible copies period for the filing thereof, and on the basis of the petition or
with the Court of Appeals, with proof of service of a copy the records, the Court of Appeals finds prima facie that the
thereof on the adverse party and on the Regional Trial Court. Regional Trial Court has committed an error that would
warrant reversal or modification of the judgment, final order, adequate remedy in the ordinary course of law, a party may
or resolution sought to be reviewed, it may give due course to file a special civil action for certiorari to annul or set aside a
the petition; otherwise, it shall dismiss the same. ruling of the Regional Trial Court.

Rule 19.21. Transmittal of records. - Within fifteen (15) days A special civil action for certiorari may be filed against the
from notice that the petition has been given due course, the following orders of the court.
Court of Appeals may require the court or agency concerned
to transmit the original or a legible certified true copy of the a. Holding that the arbitration agreement is inexistent,
entire record of the proceeding under review. The record to be invalid or unenforceable;
transmitted may be abridged by agreement of all parties to the
proceeding. The Court of Appeals may require or permit b. Reversing the arbitral tribunal’s preliminary
subsequent correction of or addition to the record. determination upholding its jurisdiction;

Rule 19.22. Effect of appeal. - The appeal shall not stay the c. Denying the request to refer the dispute to
award, judgment, final order or resolution sought to be arbitration;
reviewed unless the Court of Appeals directs otherwise upon
such terms as it may deem just.
d. Granting or refusing an interim relief;
Rule 19.23. Submission for decision. - If the petition is given
due course, the Court of Appeals may set the case for oral e. Denying a petition for the appointment of an
argument or require the parties to submit memoranda within a arbitrator;
period of fifteen (15) days from notice. The case shall be
deemed submitted for decision upon the filing of the last f. Confirming, vacating or correcting a domestic
pleading or memorandum required by the Court of Appeals. arbitral award;

The Court of Appeals shall render judgment within sixty (60) g. Suspending the proceedings to set aside an
days from the time the case is submitted for decision. international commercial arbitral award and referring
the case back to the arbitral tribunal;
Rule 19.24. Subject of appeal restricted in certain instance. -
If the decision of the Regional Trial Court refusing to h. Allowing a party to enforce an international
recognize and/or enforce, vacating and/or setting aside an commercial arbitral award pending appeal;
arbitral award is premised on a finding of fact, the Court of
Appeals may inquire only into such fact to determine the i. Adjourning or deferring a ruling on whether to set
existence or non-existence of the specific ground under the aside, recognize and or enforce an international
arbitration laws of the Philippines relied upon by the Regional commercial arbitral award;
Trial Court to refuse to recognize and/or enforce, vacate
and/or set aside an award. Any such inquiry into a question of j. Allowing a party to enforce a foreign arbitral award
fact shall not be resorted to for the purpose of substituting the pending appeal; and
court’s judgment for that of the arbitral tribunal as regards the
latter’s ruling on the merits of the controversy.
k. Denying a petition for assistance in taking
evidence.
Rule 19.25. Party appealing decision of court confirming
arbitral award required to post bond. - The Court of Appeals
Rule 19.27. Form. - The petition shall be accompanied by a
shall within fifteen (15) days from receipt of the petition
certified true copy of the questioned judgment, order or
require the party appealing from the decision or a final order
resolution of the Regional Trial Court, copies of all pleadings
of the Regional Trial Court, either confirming or enforcing an
and documents relevant and pertinent thereto, and a sworn
arbitral award, or denying a petition to set aside or vacate the
certification of non-forum shopping as provided in the Rules
arbitral award to post a bond executed in favor of the
of Court.
prevailing party equal to the amount of the award.
Upon the filing of the petition and unless otherwise prescribed
Failure of the petitioner to post such bond shall be a ground
by the Court of Appeals, the petitioner shall pay to the clerk of
for the Court of Appeals to dismiss the petition.
court of the Court of Appeals docketing fees and other lawful
fees of P3,500.00 and deposit the sum of P500.00 for costs.
D. SPECIAL CIVIL ACTION FOR CERTIORARI Exemption from payment of docket and other lawful fees and
the deposit for costs may be granted by the Court of Appeals
Rule 19.26. Certiorari to the Court of Appeals. - When the upon a verified motion setting forth valid grounds therefor. If
Regional Trial Court, in making a ruling under the Special the Court of Appeals denies the motion, the petitioner shall
ADR Rules, has acted without or in excess of its jurisdiction, pay the docketing and other lawful fees and deposit for costs
or with grave abuse of discretion amounting to lack or excess within fifteen days from the notice of the denial.
of jurisdiction, and there is no appeal or any plain, speedy, and
Rule 19.28. When to file petition. - The petition must be filed Trial Court concerned in such manner as the Court of Appeals
with the Court of Appeals within fifteen (15) days from notice may direct, and disobedience thereto shall be punished as
of the judgment, order or resolution sought to be annulled or contempt.
set aside. No extension of time to file the petition shall be
allowed. E. APPEAL BY CERTIORARI TO THE SUPREME
COURT
Rule 19.29. Arbitral tribunal a nominal party in the petition. -
The arbitral tribunal shall only be a nominal party in the Rule 19.36. Review discretionary. - A review by the Supreme
petition for certiorari. As nominal party, the arbitral tribunal Court is not a matter of right, but of sound judicial discretion,
shall not be required to submit any pleadings or written which will be granted only for serious and compelling reasons
submissions to the court. The arbitral tribunal or an arbitrator resulting in grave prejudice to the aggrieved party. The
may, however, submit such pleadings or written submissions if following, while neither controlling nor fully measuring the
the same serves the interest of justice. court's discretion, indicate the serious and compelling, and
necessarily, restrictive nature of the grounds that will warrant
In petitions relating to the recognition and enforcement of a the exercise of the Supreme Court’s discretionary powers,
foreign arbitral award, the arbitral tribunal shall not be when the Court of Appeals:
included even as a nominal party. However, the tribunal may
be notified of the proceedings and furnished with court a. Failed to apply the applicable standard or test for
processes. judicial review prescribed in these Special ADR
Rules in arriving at its decision resulting in
Rule 19.30. Court to dismiss petition. - The court shall dismiss substantial prejudice to the aggrieved party;
the petition if it fails to comply with Rules 19.27 and 19.28
above, or upon consideration of the ground alleged and the b. Erred in upholding a final order or decision despite
legal briefs submitted by the parties, the petition does not the lack of jurisdiction of the court that rendered such
appear to be prima facie meritorious. final order or decision;

Rule 19.31. Order to comment. - If the petition is sufficient in c. Failed to apply any provision, principle, policy or
form and substance to justify such process, the Court of rule contained in these Special ADR Rules resulting
Appeals shall immediately issue an order requiring the in substantial prejudice to the aggrieved party; and
respondent or respondents to comment on the petition within a
non-extendible period of fifteen (15) days from receipt of a d. Committed an error so egregious and harmful to a
copy thereof. Such order shall be served on the respondents in party as to amount to an undeniable excess of
such manner as the court may direct, together with a copy of jurisdiction.
the petition and any annexes thereto.
The mere fact that the petitioner disagrees with the Court of
Rule 19.32. Arbitration may continue despite petition for Appeals’ determination of questions of fact, of law or both
certiorari. - A petition for certiorari to the court from the questions of fact and law, shall not warrant the exercise of the
action of the appointing authority or the arbitral tribunal Supreme Court’s discretionary power. The error imputed to
allowed under this Rule shall not prevent the arbitral tribunal the Court of Appeals must be grounded upon any of the above
from continuing the proceedings and rendering its award. prescribed grounds for review or be closely analogous thereto.
Should the arbitral tribunal continue with the proceedings, the
arbitral proceedings and any award rendered therein will be
subject to the final outcome of the pending petition for A mere general allegation that the Court of Appeals has
certiorari. committed serious and substantial error or that it has acted
with grave abuse of discretion resulting in substantial
prejudice to the petitioner without indicating with specificity
Rule 19.33. Prohibition against injunctions. - The Court of the nature of such error or abuse of discretion and the serious
Appeals shall not, during the pendency of the proceedings prejudice suffered by the petitioner on account thereof, shall
before it, prohibit or enjoin the commencement of arbitration, constitute sufficient ground for the Supreme Court to dismiss
the constitution of the arbitral tribunal, or the continuation of outright the petition.
arbitration.
Rule 19.37. Filing of petition with Supreme Court. - A party
Rule 19.34. Proceedings after comment is filed. - After the desiring to appeal by certiorari from a judgment or final order
comment is filed, or the time for the filing thereof has expired, or resolution of the Court of Appeals issued pursuant to these
the court shall render judgment granting the relief prayed for Special ADR Rules may file with the Supreme Court a
or to which the petitioner is entitled, or denying the same, verified petition for review on certiorari. The petition shall
within a non-extendible period of fifteen (15) days. raise only questions of law, which must be distinctly set forth.

Rule 19.35. Service and enforcement of order or judgment. - Rule 19.38. Time for filing; extension. - The petition shall be
A certified copy of the judgment rendered in accordance with filed within fifteen (15) days from notice of the judgment or
the last preceding section shall be served upon the Regional final order or resolution appealed from, or of the denial of the
petitioner's motion for new trial or reconsideration filed in due Rule 20.1. Filing fee in petitions or counter-petitions to
time after notice of the judgment. confirm or enforce, vacate or set aside arbitral award or for
the enforcement of a mediated settlement agreement. - The
On motion duly filed and served, with full payment of the filing fee for filing a petition to confirm or enforce, vacate or
docket and other lawful fees and the deposit for costs before set aside an arbitral award in a domestic arbitration or in an
the expiration of the reglementary period, the Supreme Court international commercial arbitration, or enforce a mediated
may for justifiable reasons grant an extension of thirty (30) settlement agreement shall be as follows:
days only within which to file the petition.
PhP 10,000.00 - if the award does not exceed PhP
Rule 19.39. Docket and other lawful fees; proof of service of 1,000,000.00
petition. - Unless he has theretofore done so or unless the
Supreme Court orders otherwise, the petitioner shall pay PhP 20,000.00 - if the award does not exceed PhP
docket and other lawful fees to the clerk of court of the 20,000,000.00
Supreme Court of P3,500.00 and deposit the amount of
P500.00 for costs at the time of the filing of the petition. Proof PhP 30,000.00 - if the award does not exceed PhP
of service of a copy thereof on the lower court concerned and 50,000,000.00
on the adverse party shall be submitted together with the
petition. PhP 40,000.00 - if the award does not exceed PhP
100,000,000.00
Rule 19.40. Contents of petition. - The petition shall be filed
in eighteen (18) copies, with the original copy intended for the PhP 50,000.00 - if the award exceeds PhP
court being indicated as such by the petitioner, and shall (a) 100,000,000.00
state the full name of the appealing party as the petitioner and
the adverse party as respondent, without impleading the lower
courts or judges thereof either as petitioners or respondents; The minimal filing fee payable in "all other actions not
(b) indicate the material dates showing when notice of the involving property" shall be paid by the petitioner seeking
judgment or final order or resolution subject thereof was to enforce foreign arbitral awards under the New York
received, when a motion for new trial or reconsideration, if Convention in the Philippines.
any, was filed and when notice of the denial thereof was
received; (c) set forth concisely a statement of the matters Rule 20.2. Filing fee for action to enforce as a counter-
involved, and the reasons or arguments relied on for the petition. - A petition to enforce an arbitral award in a domestic
allowance of the petition; (d) be accompanied by a clearly arbitration or in an international commercial arbitration
legible duplicate original, or a certified true copy of the submitted as a petition to enforce and/or recognize an award in
judgment or final order or resolution certified by the clerk of opposition to a timely petition to vacate or set aside the
court of the court a quo and the requisite number of plain arbitral award shall require the payment of the filing fees
copies thereof, and such material portions of the record as prescribed in Rule 20.1 above.
would support the petition; and (e) contain a sworn
certification against forum shopping. Rule 20.3. Deposit fee for mediated settlement agreements. -
Any party to a mediated settlement agreement who deposits it
Rule 19.41. Dismissal or denial of petition. - The failure of the with the clerk of court shall pay a deposit fee of P500.00.
petitioner to comply with any of the foregoing requirements
regarding the payment of the docket and other lawful fees, Rule 20.4. Filing fee for other proceedings. - The filing fee for
deposit for costs, proof of service of the petition, and the the filing of any other proceedings, including applications for
contents of and the documents which should accompany the interim relief, as authorized under these Special Rules not
petition shall be sufficient ground for the dismissal thereof. covered under any of the foregoing provisions, shall be
P10,000.00.
The Supreme Court may on its own initiative deny the petition
on the ground that the appeal is without merit, or is prosecuted RULE 21: COSTS
manifestly for delay, or that the questions raised therein are
too insubstantial to require consideration. Rule 21.1. Costs. - The costs of the ADR proceedings shall be
borne by the parties equally unless otherwise agreed upon or
Rule 19.42. Due course; elevation of records. - If the petition directed by the arbitrator or arbitral tribunal.
is given due course, the Supreme Court may require the
elevation of the complete record of the case or specified parts Rule 21.2. On the dismissal of a petition against a ruling of
thereof within fifteen (15) days from notice. the arbitral tribunal on a preliminary question upholding its
jurisdiction. - If the Regional Trial Court dismisses the
PART VII petition against the ruling of the arbitral tribunal on a
FINAL PROVISIONS preliminary question upholding its jurisdiction, it shall also
order the petitioner to pay the respondent all reasonable costs
RULE 20: FILING AND DEPOSIT FEES and expenses incurred in opposing the petition. "Costs" shall
include reasonable attorney’s fees. The court shall award costs enumerated in Rule 1.1 of these Special ADR Rules have
upon application of the respondent after the petition is denied either been included and incorporated in these Special ADR
and the court finds, based on proof submitted by respondent, Rules or specifically referred to herein.
that the amount of costs incurred is reasonable.
In connection with the above proceedings, the Rules of
Rule 21.3. On recognition and enforcement of a foreign Evidence shall be liberally construed to achieve the objectives
arbitral award. - At the time the case is submitted to the court of the Special ADR Rules.
for decision, the party praying for recognition and
enforcement of a foreign arbitral award shall submit a RULE 23: SEPARABILITY
statement under oath confirming the costs he has incurred only
in the proceedings in the Philippines for such recognition and Rule 23.1. Separability Clause. - If, for any reason, any part of
enforcement or setting-aside. The costs shall include the Special ADR Rules shall be held unconstitutional or
attorney’s fees the party has paid or is committed to pay to his invalid, other Rules or provisions hereof which are not
counsel of record. affected thereby, shall continue to be in full force and effect.

The prevailing party shall be entitled to an award of costs RULE 24: TRANSITORY PROVISIONS
which shall include the reasonable attorney’s fees of the
prevailing party against the unsuccessful party. The court shall
determine the reasonableness of the claim for attorney’s fees. Rule 24.1. Transitory Provision. - Considering its procedural
character, the Special ADR Rules shall be applicable to all
pending arbitration, mediation or other ADR forms covered by
Rule 21.4. Costs. - At the time the case is submitted to the the ADR Act, unless the parties agree otherwise. The Special
court for decision, the party praying for confirmation or ADR Rules, however, may not prejudice or impair vested
vacation of an arbitral award shall submit a statement under rights in accordance with law.
oath confirming the costs he has incurred only in the
proceedings for confirmation or vacation of an arbitral award.
The costs shall include the attorney’s fees the party has paid or RULE 25: ONLINE DISPUTE RESOLUTION
is committed to pay to his counsel of record.
Rule 25.1. Applicability of the Special ADR Rules to Online
The prevailing party shall be entitled to an award of costs with Dispute Resolution. - Whenever applicable and appropriate,
respect to the proceedings before the court, which shall the Special ADR Rules shall govern the procedure for matters
include the reasonable attorney’s fees of the prevailing party brought before the court involving Online Dispute Resolution.
against the unsuccessful party. The court shall determine the
reasonableness of the claim for attorney’s fees. Rule 25.2. Scope of Online Dispute Resolution. - Online
Dispute Resolution shall refer to all electronic forms of ADR
Rule 21.5. Bill of Costs. - Unless otherwise agreed upon by including the use of the internet and other web or computed
the parties in writing, at the time the case is submitted to the based technologies for facilitating ADR.
court for decision, the party praying for recognition and
enforcement or for setting aside an arbitral award shall submit RULE 26: EFFECTIVITY
a statement under oath confirming the costs he has incurred
only in the proceedings for such recognition and enforcement Rule 26.1. Effectivity. - The Special ADR Rules shall take
or setting-aside. The costs shall include attorney’s fees the effect fifteen (15) days after its complete publication in two
party has paid or is committed to pay to his counsel of record. (2) newspapers of general circulation.

The prevailing party shall be entitled to an award of costs,

which shall include reasonable attorney’s fees of the
prevailing party against the unsuccessful party. The court shall
determine the reasonableness of the claim for attorney’s fees.
RULE A: GUIDELINES FOR THE RESOLUTION OF
Rule 21.6. Government’s exemption from payment of fees. - ISSUES RELATED TO ARBITRATION OF LOANS
The Republic of the Philippines, its agencies and SECURED BY COLLATERAL
instrumentalities are exempt from paying legal fees provided
in these Special ADR Rules. Local governments and Rule A.1. Applicability of an arbitration agreement in a
government controlled corporation with or with or without
contract of loan applies to the accessory contract securing the
independent charters are not exempt from paying such fees. loan. - An arbitration agreement in a contract of loan extends
to and covers the accessory contract securing the loan such as
RULE 22: APPLICABILITY OF THE RULES OF a pledge or a mortgage executed by the borrower in favor of
COURT the lender under that contract of loan.

Rule 22.1. Applicability of Rules of Court. - The provisions of Rule A.2. Foreclosure of pledge or extra-judicial foreclosure
the Rules of Court that are applicable to the proceedings of mortgage not precluded by arbitration. - The
commencement of the arbitral proceeding under the contract Rule A.5. Relief that may be granted by the arbitral tribunal. -
of loan containing an arbitration agreement shall not preclude The arbitral tribunal, in aid of the arbitral proceeding before it,
the lender from availing himself of the right to obtain may upon submission of adequate security, suspend or enjoin
satisfaction of the loan under the accessory contract by the lender from proceeding against the collateral securing the
foreclosure of the thing pledged or by extra-judicial loan pending final determination by the arbitral tribunal of the
foreclosure of the collateral under the real estate mortgage in dispute brought to it for decision under such contract of loan.
accordance with Act No. 3135.
The arbitral tribunal shall have the authority to resolve the
The lender may likewise institute foreclosure proceedings issue of the validity of the foreclosure of the thing pledged or
against the collateral securing the loan prior to the of the extrajudicial foreclosure of the collateral under the real
commencement of the arbitral proceeding. estate mortgage if the same has not yet been foreclosed or
confirm the validity of such foreclosure if made before the
By agreeing to refer any dispute under the contract of loan to rendition of the arbitral award and had not been enjoined.
arbitration, the lender who is secured by an accessory contract
of real estate mortgage shall be deemed to have waived his Rule A.6. Arbitration involving a third-party provider of
right to obtain satisfaction of the loan by judicial foreclosure. security. - An arbitration agreement contained in a contract of
loan between the lender and the borrower extends to and
Rule A.3. Remedy of the borrower against an action taken by covers an accessory contract securing the loan, such as a
the lender against the collateral before the constitution of the pledge, mortgage, guaranty or suretyship, executed by a
arbitral tribunal. - The borrower providing security for the person other than the borrower only if such third-party
payment of his loan who is aggrieved by the action taken by securing the loan has agreed in the accessory contract, either
the lender against the collateral securing the loan may, if such directly or by reference, to be bound by such arbitration
action against the collateral is taken before the arbitral tribunal agreement.
is constituted, apply with the appropriate court for interim
relief against any such action of the lender. Such interim relief Unless otherwise expressly agreed upon by the third-party
may be obtained only in a special proceeding for that purpose, securing the loan, his agreement to be bound by the arbitration
against the action taken by the lender against the collateral, agreement in the contract of loan shall pertain to disputes
pending the constitution of the arbitral tribunal. Any arising from or in connection with the relationship between the
determination made by the court in that special proceeding lender and the borrower as well as the relationship between the
pertaining to the merits of the controversy, including the right lender and such third-party including the right of the lender to
of the lender to proceed against the collateral, shall be only proceed against the collateral securing the loan, but shall
provisional in nature. exclude disputes pertaining to the relationship exclusively
between the borrower and the provider of security such as that
After the arbitral tribunal is constituted, the court shall stay its involving a claim by the provider of security for
proceedings and defer to the jurisdiction of the arbitral tribunal indemnification against the borrower.
over the entire controversy including any question regarding
the right of the lender to proceed against the collateral. In this multi-party arbitration among the lender, the borrower
and the third party securing the loan, the parties may agree to
Rule A.4. Remedy of borrower against action taken by the submit to arbitration before a sole arbitrator or a panel of three
lender against the collateral after the arbitral tribunal has arbitrators to be appointed either by an Appointing Authority
been constituted. - After the arbitral tribunal is constituted, the designated by the parties in the arbitration agreement or by a
borrower providing security for the payment of his loan who is default Appointing Authority under the law.
aggrieved by the action taken by the lender against the
collateral securing the loan may apply to the arbitral tribunal In default of an agreement on the manner of appointing
for relief, including a claim for damages, against such action arbitrators or of constituting the arbitral tribunal in such multi-
of the lender. An application to the court may also be made by party arbitration, the dispute shall be resolved by a panel of
the borrower against any action taken by the lender against the three arbitrators to be designated by the Appointing Authority
collateral securing the loan but only if the arbitral tribunal under the law. But even in default of an agreement on the
cannot act effectively to prevent an irreparable injury to the manner of appointing an arbitrator or constituting an arbitral
rights of such borrower during the pendency of the arbitral tribunal in a multi-party arbitration, if the borrower and the
proceeding. third party securing the loan agree to designate a common
arbitrator, arbitration shall be decided by a panel of three
An arbitration agreement in a contract of loan precludes the arbitrators: one to be designated by the lender; the other to be
borrower therein providing security for the loan from filing designated jointly by the borrower and the provider of security
and/or proceeding with any action in court to prevent the who have agreed to designate the same arbitrator; and a third
lender from foreclosing the pledge or extra-judicially arbitrator who shall serve as the chairperson of the arbitral
foreclosing the mortgage. If any such action is filed in court, panel to be designated by the two party-designated arbitrators.
the lender shall have the right provided in the Special ADR
Rules to have such action stayed on account of the arbitration
agreement.
HEIRS OF AUGUSTO L. SALAS, JR. vs. LAPERAL
REALTY CORPORATIONG.R. No. 135362December 13,
1999(320 SCRA 610)

FACTS:

Petitioner Salas Jr. and Respondent Laperal Realty

Corporation entered into an agreement for the latter to develop
and provide complete construction services on formers land.
Petitioner executed a special power of attorney in favor of
Respondent Corporation toexercise general control,
supervision and management of the sale of his land. On June
10,1989 Petitioner left his home for a business trip in Nueva
Ecija but never returned again.

Petitioner’s wife filed a petition for presumptive death of her

husband after seven years of absence. The trial court granted
her petition. On the other hand, Respondent Corporation
already subdivided the property owned by Salas Jr. to different
lot buyers. The heirs of Salas Jr. filed in the RTC of Lipa City
a Complaint for nullity of sale, reconveyance, cancellation of
contract and damages against Laperal RealtyCorporation and
lot buyers. Laperal Realty Corporation filed a motion to
dismiss on the ground that the heirs of Salas Jr. failed to
submit their grievance to arbitration as stated in the agreement
executed by Salas Jr. and Laperal Realty Corporation. The lot
buyers also filed a motion to dismiss based on the same
ground.

ISSUE:

(1) Whether or not the arbitration clause in the agreement

between Salas Jr. and Laperal Realty binds the heirs of the
former.

(2) Whether or not the trial court must dismiss the case or
must hear the case simultaneously.

HELD:

(1) A submission to arbitration is a contract. As such, the

Agreement, containing the stipulation on arbitration, binds the
parties thereto, as well as their assigns and heirs. But only
they. Petitioners, as heirs of Salas Jr., and respondent Laperal
Realty Corporation are certainly bound by the agreement.

(2) The arbitration agreement is valid, binding and enforceable

and not contrary to public policy so much so when there
obtains a written provision for arbitration which is not
complied with, the trial court should suspend the proceedings
and order the parties to proceed to arbitration in accordance
with the terms of their agreement. However it would be in the
interest of justice if the trial court hears the complaint against
all herein respondents and adjudicates petitioners rights as
against theirs in a singles and complete proceeding. The
petition is granted the trial court must proceed with the hearing
of the case
FIESTA WORLD MALL CORPORATION vs. LINBERG Finally, as a special affirmative defense in its
PHILIPPINES, INC. answer, petitioner alleged that respondent’s filing of the
complaint is premature and should be dismissed on the
G.R. NO. 152471 August 18, 2006 ground of non-compliance with paragraph 7.4 of the
FACTS: Contract which provides:

Fiesta World Mall Corporation, petitioner, owns and 7.4 Disputes

operates Fiesta World Mall located at Barangay Maraouy, If FIESTA WORLD disputes the amount specified by
Lipa City; while Linberg Philippines, Inc., respondent, is a any invoice, it shall pay the undisputed amount on or before
corporation that builds and operates power plants. such date(s), and the disputed amount shall be resolved by
On January 19, 2000, respondent filed with the arbitration of three (3) persons, one (1) by mutual choice,
Regional Trial Court (RTC), Pasig City, a Complaint for Sum while the other two (2) to be each chosen by the parties
of Money against petitioner. The complaint alleges that on themselves, within fourteen (14) days after the due date for
November 12, 1997, petitioner and respondent executed a such invoice and all or any part of the disputed amount paid
build-own-operate agreement, entitled "Contract Agreement to LINBERG shall be paid together with interest pursuant to
for Power Supply Services, 3.8 MW Base Load Power Plant" Article XXV from the due date of the invoice. It is agreed,
(the Contract). Under this Contract, respondent will construct, however, that both parties must resolve the disputes within
at its own cost, and operate as owner a power plant, and to thirty (30) days, otherwise any delay in payment resulting to
supply petitioner power/electricity at its shopping mall in Lipa loss to LINBERG when converted to $US as a result of
City. Petitioner, on the other hand, will pay respondent depreciation of the Pesos shall be for the account of FIESTA
"energy fees" to be computed in accordance with the Seventh WORLD. Corollarily, in case of erroneous billings, however,
Schedule of the Contract. LINBERG shall be liable to pay FIESTA WORLD for the cost
of such deterioration, plus interest computed pursuant to Art.
The complaint further alleges that respondent XXV from the date FIESTA WORLD paid for the erroneous
constructed the power plant in Lipa City at a cost of about billing.
P130,000,000.00. In November 1997, the power plant became
operational and started supplying power/electricity to Thereafter, petitioner filed a Motion to Set Case for
petitioner’s shopping mall in Lipa City. In December 1997, Preliminary Hearing on the ground that respondent violated
respondent started billing petitionr. As of May 21, 1999, the arbitration clause provided in the Contract, thereby
petitioner’s unpaid obligation amounted to P15,241,747.58, rendering its cause of action premature.
exclusive of interest. However, petitioner questioned the said This was opposed by respondent, claiming that
amount and refused to pay despite respondent’s repeated paragraph 7.4 of the Contract on arbitration is not the
demands. provision applicable to this case; and that since the parties
In its Answer with Compulsory Counterclaim, failed to settle their dispute, then respondent may resort to
petitioner specifically denied the allegations in the complaint, court action pursuant to paragraph 17.2 of the same Contract
claiming that respondent failed to fulfill its obligations under which provides:
the Contract by failing to supply all its power/fuel needs. From 17.2 Amicable Settlement
November 10, 1998 until May 21, 1999, petitioner personally
shouldered the cost of fuel (Lindberg should supply the fuel The parties hereto agree that in the event there is any
under the contract). Petitioner also disputed the amount of dispute or difference between them arising out of this
energy fees specified in the billings made by respondent Agreement or in the interpretation of any of the
because the latter failed to monitor, measure, and record the provisions hereto, they shall endeavor to meet
quantities of electricity delivered by taking photographs of the together in an effort to resolve such dispute by
electricity meter reading prior to the issuance of its invoices discussion between them but failing such resolution
and billings, also in violation of the Contract. Moreover, in the the Chief Executives of LINBERG and FIESTA
computation of the electrical billings, the minimum off-take of WORLD shall meet to resolve such dispute or
energy (E2) was based solely on the projected consumption as difference and the joint decision of such shall be
computed by respondent. However, based on petitioner’s binding upon the parties hereto, and in the event that
actual experience, it could not consume the energy pursuant to a settlement of any such dispute or difference is not
the minimum off-take even if it kept open all its lights and reached, then the provisions of Article XXI shall
operated all its machinery and equipment for twenty-four apply.
hours a day for a month. This fact was admitted by
respondent. While both parties had discussions on the Article XXI, referred to in paragraph 17.2 above, reads:
questioned billings, however, "there were no earnest ARTICLE XXI (JURISDICTION)
efforts to resolve the differences in accordance with the
arbitration clause provided for in the Contract." The parties hereto submit to the exclusive
jurisdiction of the proper courts of Pasig City,
 Republic of the Philippines for the hearing and of any action arising out of or in connection with the
determination of any action or proceeding arising stipulations of the parties in the Contract.
out of or in connection with this Agreement.

In its Order dated October 3, 2000, the trial court

denied petitioner’s motion for lack of merit. In this connection, since respondent has already filed
a complaint with the trial court without prior recourse to
Petitioner then filed a Motion for Reconsideration but arbitration, the proper procedure to enable an arbitration panel
it was denied in an Order dated January 11, 2001. to resolve the parties’ dispute pursuant to their Contract is for
the trial court to stay the proceedings. After the arbitration
Dissatisfied, petitioner elevated the matter to the proceeding has been pursued and completed, then, the trial
Court of Appeals via a Petition for Certiorari. On December court may confirm the award made by the arbitration panel.
12, 2001, the appellate court rendered its Decision dismissing
the petition and affirming the challenged Orders of the trial
court.

Petitioner’s Motion for Reconsideration of the above

Decision was likewise denied by the appellate court in its
Resolution dated February 28, 2002.

Hence, the instant Petition for Review on Certiorari.

ISSUE:

The sole issue for our resolution is whether the filing

with the trial court of respondent’s complaint is premature.

HELD:

Paragraph 7.4 of the Contract, quoted earlier,

mandates that should petitioner dispute any amount of energy
fees in the invoice and billings made by respondent, the same
"shall be resolved by arbitration of three (3) persons, one (1)
by mutual choice, while the other two (2) to be each chosen by
the parties themselves." The parties, in incorporating such
agreement in their Contract, expressly intended that the said
matter in dispute must first be resolved by an arbitration panel
before it reaches the court. They made such arbitration
mandatory.

It is clear from the records that petitioner disputed the

amount of energy fees demanded by respondent. However,
respondent, without prior recourse to arbitration as required in
the Contract, filed directly with the trial court its complaint,
thus violating the arbitration clause in the Contract.

It bears stressing that such arbitration agreement is

the law between the parties. Since that agreement is binding
between them, they are expected to abide by it in good faith.
And because it covers the dispute between them in the present
case, either of them may compel the other to arbitrate. Thus, it
is well within petitioner’s right to demand recourse to
arbitration.

We cannot agree with respondent that it can directly

seek judicial recourse by filing an action against petitioner
simply because both failed to settle their differences amicably.
Suffice it to state that there is nothing in the Contract
providing that the parties may dispense with the arbitration
clause. Article XXI on jurisdiction cited by respondent, i.e.,
that "the parties hereto submit to the exclusive jurisdiction of
the proper courts of Pasig City" merely provides for the venue
Gonzales v. Climax Mining Ltd. (2005) In this case, the complaint charged Climax Mining with
disregarding and ignoring provisions of the Addendum Contract,
FACTS: Jorge Gonzales is the claimowner of mineral deposits located in violating the purpose and spirit of the May 14, 1987 Letter of Intent and
the provinces of Quirino and Nueva Vizcaya. He entered into a co- Feb. 28. 1989 Agreement, and acting in fraudulent and oppressive
production, joint venture and /or production sharing letter-agreement manner against Gonzales. It was alleged that Climax-Arimco had
(May 14, 1987 Letter of Intent) with Geophilippines Ltd. and Inmex Ltd. committed to complete the Bankable Feasibility Study by 28 February
The agreement granted to Geophilippines and Inmex collectively, the 1992, but the same was not accomplished. Instead, Climax-Arimco,
exclusive right to explore and survey the mining claims for a period of 3 through false and insidious representations and machinations by alleging
years within which it could decide to take an operation agreement on the technical and financial capacity, induced Gonzales to enter into the
mining claims and/or develop, operate, mine and exploit the mining Addendum Contract and the FTAA in order to repeatedly extend the
claims and market minerals that may be derived therefrom. The parties option period within which to conduct the feasibility study.
renegotiated the May 14, 1987 Letter of Intent into the Feb. 28, 1989
Agreement wherein they extended the agreement to another 3 years. It is apparent that the Panel of Arbitrators is bereft of
jurisdiction over the Complaint filed by Gonzales. The basic issue in the
Thereafter, Gonzales, Arimco Mining Corporation, Complaint is the presence of fraud or misrepresentation allegedly
Geophilippines Inc., Inmex Ltd., and Aumex Philippines, Inc. signed a attendant to the execution of the Addendum Contract and the other
document designated as the Addendum to the May 14, 1987 Letter of contracts emanating from it, such that the contracts are rendered invalid
Intent and February 28, 1989 Agreement with Express Adhesion Thereto and not binding upon the parties. This constitutes fraud which vitiated
(hereafter, Addendum Contract). Under the Addendum Contract, Arimco Gonzales’ consent, and under Article 1390 of the Civil Code, is one of
Mining would apply to the Government of the Philippines for permission the grounds for the annulment of a voidable contract. Gonzales insists
to mine the claims as the Government’s contractor under a Financial and that the Complaint is actually one for the declaration of nullity of void
Technical Assistance Agreement (FTAA). Arimco Mining obtained the contracts. However, whether the case involves void or voidable contracts
FTAA and carried out work such. is still a judicial question. It may, in some instances, involve questions of
fact especially with regard to the determination of the circumstances of
Climax Mining executed the Operating and Financial
the execution of the contracts. But the resolution of the validity or
Accommodation Contract (between Climax-Arimco Mining Corporation
voidness of the contracts remains a legal or judicial question as it requires
and Climax Mining Ltd., and Australasian Philippines Mining Inc.
the exercise of judicial function. It requires the ascertainment of what
(APMI)) and Assignment, Accession Agreement (between Climax-Arimco
laws are applicable to the dispute, the interpretation and application of
Mining and APMI). Climax and APMI entered into a Memorandum of
those laws, and the rendering of a judgment based thereon. Clearly, the
Agreement whereby the former transferred its FTAA to the latter.
dispute is not a mining conflict. It is essentially judicial. The complaint
Gonzales filed before the Panel of Arbitrators a Complaint was not merely for the determination of rights under the mining contracts
seeking the nullity or termination of the Addendum Contract, the FTAA, since the very validity of those contracts is put in issue. The Complaint is
the Operating and Financial Accommodation Contract, the Assignment, not about a dispute involving rights to mining areas, nor is it a dispute
Accession Agreement, and the Memorandum of Agreement on the grounds involving claimholders or concessionaires. The main question raised was
of fraud, oppression and violation of the constitution. the validity of the Addendum Contract, the FTAA and the subsequent
contracts. The question as to the rights of the parties to the mining area
The Panel of Arbitrators dismissed the Complaint for lack of pursuant to these contracts is merely corollary to the main issue, and may
jurisdiction. MR was filed which was granted. It held that there was a not be resolved without first determining the main issue.
mining dispute between the parties.
Also, the fact that the dispute involves FTAAs does not mean
that it is exclusively within the jurisdiction of the Panel of Arbitrators.
The Complaint raised the issue of the constitutionality of the FTAA,
On appeal, the CA held that the Panel of Arbitrators does not have which is definitely a judicial question. The Panel of Arbitrators does not
jurisdiction. have jurisdiction over such an issue since it does not involve the
application of technical knowledge and expertise relating to mining.

Furthermore, arbitration before the Panel of Arbitrators is

ISSUE: Whether the complaint filed by Gonzales raises a mining dispute
proper only when there is a disagreement between the parties as to some
over which the Panel of Arbitrators has jurisdiction? or a judicial question
provisions of the contract between them, which needs the interpretation
which should be brought before the regular courts?
and the application of that particular knowledge and expertise possessed
by members of that Panel. It is not proper when one of the parties
repudiates the existence or validity of such contract or agreement on the
HELD/ RATIO: SC held that the complaint raises a judicial question ground of fraud or oppression as in this case. The validity of the contract
which should be brought before the regular courts. cannot be subject of arbitration proceedings. Allegations of fraud and
duress in the execution of a contract are matters within the jurisdiction of
A judicial question is a question that is proper for the ordinary courts of law. These questions are legal in nature and require
determination by the courts. A judicial question is raised when the the application and interpretation of laws and jurisprudence which is
determination of the question involves the determination of what the law necessarily a judicial function.
is and what the legal rights of the parties are with respect to the matter in
controversy. This is a question which involves the exercise of a judicial Therefore, the case should not be brought under the ambit of
function. the Arbitration Law. The complaint should have been filed before the
regular courts as it involved issues which are judicial in nature.
A mining dispute is a dispute involving a) rights to mining
area, b) mineral agreements, FTAAs, or permits and c) surface owners,
occupants and claimholders/ concessionaires. Under the Philippine
Mining Act of 1995 (RA No. 7942), the Panel of Arbitrators has
exclusive and original jurisdiction to hear and decide these mining
disputes.
GERARDO LANUZA v. BF CORPORATION, GR No. Based on our arbitration laws, parties who... are strangers to an
174938, 2014-10-01 agreement cannot be compelled to arbitrate.
Facts: BF Corporation argued that the courts' ruling that the parties
should undergo arbitration "clearly contemplated the inclusion
BF Corporation... collection complaint... against Shangri-La of the directors of the corporation[
and the members of its board... to construct for Shangri-La a
mall and a multilevel parking structure along EDSA... by BF Corporation also argued that while petitioners were not
October 1991, Shangri-La started defaulting in payment parties to the agreement, they were still impleaded under
Section 31 of the Corporation Code.[50] Section 31 makes
BF Corporation eventually completed the construction of the directors solidarity liable for fraud, gross negligence, and bad
buildings.[7] Shangri-La allegedly took possession of the faith.[51] Petitioners are not really third parties to the
buildings while still owing BF Corporation an outstanding agreement because they are being sued as Shangri-La's
balance representatives, under Section 31 of the Corporation Code.[
F Corporation alleged that despite repeated demands, Shangri- BF Corporation further argued that because petitioners were
La refused to pay the balance owed to it. impleaded for their solidary liability, they are necessary
BF Corporation alleged that despite repeated demands, parties to the arbitration proceedings.[
Shangri-La refused to pay the balance owed to it. In the manifestation dated September 6, 2007, petitioners
It also alleged that the Shangri-La's directors were in bad faith informed the court that the Arbitral Tribunal had already
in directing Shangri-La's affairs promulgated its decision on July 31, 2007.[55] The Arbitral
Tribunal denied BF Corporation's claims against them.
Shangri-La, Alfredo C. Ramos, Rufo B. Colayco, Maximo G.
Licauco III, and Benjamin C. Ramos filed a motion to suspend Issues:
the proceedings in view of BF Corporation's failure to submit issue... whether petitioners should be made parties to the
its dispute to arbitration, in accordance with the arbitration arbitration proceedings, pursuant to the arbitration clause
clause provided... in its contract,... Regional Trial Court provided in the contract between BF Corporation and Shangri-
denied the motion to suspend proceedings. La.
Court of Appeals granted the petition for certiorari and Ruling:
ordered the submission of the dispute to arbitration.
The petition must fail.
Aggrieved by the Court of Appeals' decision, BF Corporation
filed a petition for review on certiorari with this court. The Arbitral Tribunal's decision, absolving petitioners from
liability, and its binding effect on BF Corporation, have
Shangri-La filed an omnibus motion and BF Corporation an rendered this case moot and academic.
urgent motion for clarification, both seeking to clarify the
term, "parties," and whether Shangri-La's directors should be The mootness of the case, however, had not precluded us from
included in the arbitration proceedings and served with resolving issues so that principles may be established for the
separate demands for... arbitration. guidance of the bench, bar, and the public.
On July 28, 2003, the trial court issued the order directing Thus, we rule that petitioners may be compelled to submit to
service of demands for arbitration upon all defendants in BF the arbitration proceedings in accordance with Shangri-La and
Corporation's complaint.[25] According to the trial court, BF Corporation's agreement, in order to determine if the
Shangri-La's directors were interested parties who "must also distinction between Shangri-La's personality and their
be served with... a demand for arbitration to give them the personalities should be disregarded.
opportunity to ventilate their side of the controversy,
safeguard their interest and fend off their respective positions." This jurisdiction adopts a policy in favor of arbitration.
Arbitration allows the parties to avoid litigation and settle
The Court of Appeals further ruled that "excluding petitioners disputes amicably and more expeditiously by themselves and
in the arbitration proceedings . . . would be contrary to the through their choice of arbitrators.
policy against multiplicity of suits."
In view of our policy to adopt arbitration as a manner of
Petitioners argue that they cannot be held personally liable for settling disputes, arbitration clauses are liberally construed to
corporate acts or obligations favor arbitration.
The corporation is a separate being, and nothing justifies BF Petitioners' main argument arises from the separate personality
Corporation's allegation that they are solidarity liable with given to juridical persons vis-a-vis their directors, officers,
Shangri-La stockholders, and agents. Since they did not sign the
arbitration agreement in any capacity, they cannot be forced to
Petitioners also argue that they are third parties to the contract submit to the jurisdiction... of the Arbitration Tribunal in
between BF Corporation and Shangri-La.[40] Provisions accordance with the arbitration agreement. Moreover, they had
including arbitration stipulations should bind only the parties already resigned as directors of Shangri-La at the time of the
alleged default.
Indeed, as petitioners point out, their personalities as directors
of Shangri-La are separate and distinct from Shangri-La.
A corporation is an artificial entity created by fiction of law.
[76] This means that while it is not a person, naturally, the law
gives it a distinct personality and treats it as such. A
corporation, in the legal sense, is an individual with a
personality... that is distinct and separate from other persons
including its stockholders, officers, directors, representatives,
[77] and other juridical entities
Hence, a corporation's representatives are generally not bound
by the terms of the contract executed by the corporation. They
are not personally liable for obligations and liabilities incurred
on or in behalf of the corporation.
As a general rule, therefore, a corporation's representative who
did not personally bind himself or herself to an arbitration
agreement cannot be forced to participate in arbitration
proceedings made pursuant to an agreement entered into by
the corporation. He or she is... generally not considered a party
to that agreement.
However, there are instances when the distinction between
personalities of directors, officers, and representatives, and of
the corporation, are disregarded. We call this piercing the veil
of corporate fiction.
When there are allegations of bad faith or malice against
corporate directors or representatives, it becomes the duty of
courts or tribunals to determine if these persons and the
corporation should be treated as one. Without a trial, courts
and tribunals have no basis for... determining whether the veil
of corporate fiction should be pierced.
Hence, when the directors, as in this case, are impleaded in a
case against a corporation, alleging malice or bad faith on their
part in directing the affairs of the corporation, complainants
are effectively alleging that the directors and the corporation
are not acting as... separate entities.
In that case, complainants have no choice but to institute only
one proceeding against the parties. Under the Rules of Court,
filing of multiple suits for a single cause of action is
prohibited.
Hence, the issue of whether the corporation's acts in violation
of complainant's rights, and the incidental issue of whether
piercing of the corporate veil is warranted, should be
determined in a single proceeding. Such finding would
determine if the corporation is merely an... aggregation of
persons whose liabilities must be treated as one with the
corporation.
In this case, the Arbitral Tribunal rendered a decision, finding
that BF Corporation failed to prove the existence of
circumstances that render petitioners and the other directors
solidarity liable. It ruled that petitioners and Shangri-La's other
directors were not liable for... the contractual obligations of
Shangri-La to BF Corporation. The Arbitral Tribunal's
decision was made with the participation of petitioners, albeit
with their continuing objection. In view of our discussion
above, we rule that petitioners are bound by such decision.
Transfield (P) v. Luzon Hydro (R) | GR No. 146717 – 2006 securities, the drawing was made in good faith, under
| ADR | Tinga, J p: the mistaken assumption that the contractor, TPI, was in
default. Thus, the tribunal ruled that while the amount
1. Transfield Philippines (Transfield) entered into a turn-
drawn must be returned, TPI is not entitled to any
key contract with Luzon Hydro Corp. (LHC).Under the
damages or interests due to LHC's drawing on the
contract, Transfield were to construct a hydro-electric
securities.
plants in Benguet and Ilocos. Transfield was given the
10. The fact that the ICC Arbitral tribunal included the
sole responsibility for the design, construction,
proceeds of the securities shows that it intended to
commissioning, testing and completion of the Project.
make a final determination/award as to the said issue
2. The contract provides for a period for which the project
only in the Final Award and not in the previous partial
is to be completed and also allows for the extension of
awards. This supports LHC's position that when the
the period provided that the extension is based on
Third Partial Award was released and Civil Case No.
justifiable grounds such as fortuitous event.
04-332 was filed, TPI was not yet authorized to seek the
3. During the construction of the plant, Transfield
issuance of a writ of execution since the quantification
requested for extension of time citing typhoon and
of the amounts due to TPI had not yet been settled by
various disputes delaying the construction. LHC did not
the ICC Arbitral tribunal. Notwithstanding the fact that
give due course to the extension of the period prayed
the amount of proceeds drawn on the securities was not
for but referred the matter to arbitration committee.
disputed the application for the enforcement of the
4. Because of the delay in the construction of the plant,
Third Partial Award was precipitately filed. To repeat,
LHC called on the stand-by letters of credit because of
the declarations made in the Third Partial Award do not
default. However, the demand was objected by
constitute orders for the payment of money.
Transfield on the ground that there is still pending
arbitration on their request for extension of time.
5. The disposal of the forum-shopping charge is crucial to
the parties to this case on account of its profound effect
on the final outcome of the international arbitral
proceedings which they have chosen as their principal
dispute resolution mechanism. (International Chamber
of Commerce (ICC)
6. To enjoin LHC from calling on the securities and
respondent banks from transferring or paying the
securities in case LHC calls on them. However, in view
of the fact that LHC collected the proceeds, TPI, in its
appeal and petition for review asked that the same be
returned and placed in escrow pending the resolution of
the disputes before the ICC arbitral tribunal.
7. As a fundamental point, the pendency of arbitral
proceedings does not foreclose resort to the courts for
provisional reliefs. The Rules of the ICC, which
governs the parties' arbitral dispute, allows the
application of a party to a judicial authority for interim
or conservatory measures.
8. Section 14 of Republic Act (R.A.) No. 876 (The
Arbitration Law) recognizes the rights of any party to
petition the court to take measures to safeguard and/or
conserve any matter which is the subject of the dispute
in arbitration. In addition, R.A. 9285, otherwise known
as the "Alternative Dispute Resolution Act of 2004,"
allows the filing of provisional or interim measures
with the regular courts whenever the arbitral tribunal
has no power to act or to act effectively.
9. Meanwhile, the tribunal issued its Fifth Partial Award
29 on 30 March 2005. It contains, among others, a
declaration that while LHC wrongfully drew on the
DEPARTMENT OF ENVIRONMENT AND NATURAL its monetary claims. It also claimed that the issuance
RESOURCES (DENR) v. UNITED PLANNERS of said writ was premature since the RTC should
CONSULTANTS , INC., have first resolved its May 19, 2010 Motion for
G.R. No. 212081, February 23, 2015 Reconsideration and June 1, 2010 Manifestation and
Motion, and not merely noted them, thereby violating
FACTS: its right to due process.
 In an Order dated July 9, 2012, the RTC denied
 July 26, 1993 - Petitioner, through the Land petitioner’s motion to quash.
Management Bureau (LMB), entered into an  July 12, 2012 - Petitioner received the RTC’s Order
Agreement for Consultancy Services (Consultancy dated July 9, 2012 denying its motion to quash.
Agreement) with respondent United Planners Dissatisfied, it filed on September 10, 2012 a petition
Consultants, Inc. in connection with the LMB’s Land for certiorari before the CA, docketed as CA-G.R. SP
Resource Management Master Plan Project No. 126458, averring in the main that the RTC acted
(LRMMP). Under the Consultancy Agreement, with grave abuse of discretion in confirming and
petitioner committed to pay a total contract price of ordering the execution of the Arbitral Award.
P4,337,141.00, based on a predetermined percentage  March 26, 2014 - The CA dismissed the certiorari
corresponding to the particular stage of work petition on two (2) grounds, namely: (a) the petition
accomplished. essentially assailed the merits of the Arbitral Award
 December 1994 - Respondent completed the work which is prohibited under Rule 19 of the Special
required, which petitioner formally accepted on ADR Rules and (b) the petition was filed out of time,
December 27, 1994. However, petitioner was able to having been filed way beyond 15 days from notice of
pay only 47% of the total contract price in the amount the RTC’s July 9, 2012 Order, in violation of Rule
of P2,038,456.30. 19.2852 in relation to Rule 19.853 of said Rules
 October 25, 1994 - The Commission on Audit (COA) which provide that a special civil action for certiorari
released the Technical Services Office Report (TSO) must be filed before the CA within 15 days from
finding the contract price of the Agreement to be notice of the judgment, order, or resolution sought to
84.14% excessive. This notwithstanding, petitioner, be annulled or set aside (or until July 27, 2012).
in a letter dated December 10, 1998, acknowledged Aggrieved, petitioner filed the instant petition.
its liability to respondent in the amount of
P2,239,479.60 and assured payment at the soonest ISSUE:
possible time.
 For failure to pay its obligation under the  Whether or not the CA erred in applying the
Consultancy Agreement despite repeated demands, provisions of the Special ADR Rules, resulting in the
respondent instituted a Complaint against petitioner dismissal of petitioner’s special civil action for
before the Regional Trial Court of Quezon City. Due certiorari.
to the existence of Arbitration clause, the respondent
moved for the issue to be tried through arbitration. HELD:
The Arbitral Tribunal rendered its Award dated May
7, 2010 (Arbitral Award) in favor of respondent  The petition is DENIED, Republic Act No. (RA)
 Petitioner filed a motion for reconsideration. Arbitral 9285, otherwise known as the Alternative Dispute
Tribunal claimed that it had already lost jurisdiction Resolution Act of 2004,” institutionalized the use of
over the case after it had submitted to the RTC its an Alternative Dispute Resolution System (ADR
Report together with a copy of the Arbitral Award System) in the Philippines. The Act, however, was
 March 30, 2011, the RTC merely noted petitioner’s without prejudice to the adoption by the Supreme
aforesaid motions, finding that copies of the Arbitral Court of any ADR system as a means of achieving
Award appear to have been sent to the parties by the speedy and efficient means of resolving cases
Arbitral Tribunal, including the OSG, contrary to pending before all courts in the Philippines.
petitioner’s claim. On the other hand, the RTC  May 7, 2010, the Arbitral Tribunal rendered the
confirmed the Arbitral Award pursuant to Rule 11.2 Arbitral Award in favor of respondent. Under Section
(A)36 of the Special ADR Rules and ordered 17.2, Rule 17 of the CIAC Rules, no motion for
petitioner to pay respondent the costs of confirming reconsideration or new trial may be sought, but any
the award, as prayed for, in the total amount of of the parties may file a motion for correction of the
P50,000.00. From this order, petitioner did not file a final award, which shall interrupt the running of the
motion for reconsideration. period for appeal, Moreover, the parties may appeal
 June 15, 2011 - Respondent moved for the issuance the final award to the CA through a petition for
of a writ of execution, to which no review under Rule 43 of the Rules of Court.
comment/opposition was filed by petitioner despite
the RTC’s directive therefor. In an Order dated
September 12, 2011, the RTC granted respondent’s
motion. Petitioner moved to quash the writ of
execution, positing that respondent was not entitled to
CALIFORNIA AND HAWAIIAN SUGAR vs. PIONEER Issue:
INSURANCE 1. WON the RTC erred in denying California and Hawaiian et
GR No. 139273 | Nov 28, 2000 | Petition for Review on Certiorari | al.’s Motion to set for preliminary hearing [YES]
Panganiban 2. WON the arbitration clause is binding to Pioneer Insurance
Petitioners: California and Hawaiian Sugar Company, Pacific [YES]
Gulf Marine and CF Sharp & Company
Respondent: Pioneer Insurance and Surety Corp. Ratio:
1. True, Section 6, Rule 16 of the 1997 Rules, [11] specifically
Facts: provides that a preliminary hearing on the affirmative
 Nov 27, 1990 -  the vessel MV “SUGAR ISLANDER” defenses may be allowed only when no motion to dismiss
arrived at the port of Manila carrying a cargo of soybean has been filed.  Section 6, however, must be viewed in the
meal in bulk consigned to several consignees, one of which light of Section 3 of the same Rule,[12] which requires courts
was the Metro Manila Feed Millers Association. to resolve a motion to dismiss and prohibits them from
 Nov 30, 1990 – discharging of cargo from vessel to barges deferring its resolution on the ground of
commenced. From the barges, the cargo was allegedly indubitability.  Clearly then, Section 6 disallows a
offloaded, rebagged and reloaded on consignee’s delivery preliminary hearing of affirmative defenses once a
trucks. motion to dismiss has been filed because such defense
 Pioneer Insurance, however, claims that when the cargo should have already been resolved.  In the present case,
was weighed on a licensed truck scale a shortage of however, the trial court did not categorically resolve
255.051 metric tons valued at P1,621,171.16 was petitioners’ Motion to Dismiss, but merely deferred
discovered.  The above-mentioned shipment was insured resolution thereof.
with Pioneer Insurance against all risk in the amount of Indeed, the present Rules are consistent with Section 5,
P19,976,404.00.   Rule 16 of the pre-1997 Rules of Court, because both
 Due to the alleged refusal of California and Hawaiian et al. presuppose that no motion to dismiss had been filed; or in
to settle their respective liabilities, Pioneer, as insurer, paid the case of the pre-1997 Rules, if one has been filed, it
the consignee Metro Manila Feed Miller’s Association.   has not been unconditionally denied. Hence, the ground
 March 26, 1992 - as alleged subrogee of Metro, Pioneer invoked may still be pleaded as an affirmative defense even
filed a complaint for damages against California and if the defendant’s Motion to Dismiss has been filed but not
Hawaiian et al.   definitely resolved, or if it has been deferred as it could be
 Within the reglementary period to file an Answer, under the pre-1997 Rules.
California and Hawaiian et al. filed a Motion to Dismiss the A preliminary hearing is not mandatory, but subject to the
complaint on the ground that Pioneer’s claim is premature, discretion of the trial court. We note that the trial court
the same being arbitrable.   deferred the resolution of petitioners’ Motion to Dismiss
because of a single issue.  It was apparently unsure whether
 Pioneer filed its Opposition thereto and California and
the charter party that the bill of lading referred to was
Hawaiian et al. filed their Reply to Opposition.
indeed the Baltimore Berth Grain Charter Party submitted
 RTC: issued an Order deferring the hearing on the Motion
by petitioners.
to Dismiss until the trial and directing petitioners to file
Considering that there was only one question, which may
their Answer.  
even be deemed to be the very touchstone of the whole
 California and Hawaiian et al. then moved to reconsider case, the trial court had no cogent reason to deny the
said Order which was, however, denied by the RTC on the Motion for Preliminary Hearing.  Indeed, it committed
ground that the reason relied upon by California and grave abuse of discretion when it denied a preliminary
Hawaiian et al. in its Motion to Dismiss and Motion for hearing on a simple issue of fact that could have possibly
Reconsideration was a matter of defense which they must settled the entire case.  Verily, where a preliminary hearing
prove with their evidence. appears to suffice, there is no reason to go on to trial.
 California and Hawaiian et al. filed their Answer with
Counterclaim and Cross-claim alleging therein that Pioneer 2. There was nothing in Pan Malayan, however, that
did not comply with the arbitration clause of the charter prohibited the applicability of the arbitration clause to the
party; hence, the complaint was allegedly prematurely subrogee.  That case merely discussed, inter alia, the
filed.   accrual of the right of subrogation and the legal basis
 The trial court set the case for pre-trial on November 26, therefor. This issue is completely different from that of
1993. the consequences of such subrogation; that is, the rights
 Nov 15 & 16, 1993 – California and Hawaiian et al. filed a that the insurer acquires from the insured upon payment of
Motion to Defer Pre-Trial and Motion to Set for the indemnity.
Preliminary Hearing the Affirmative Defense of Lack of
Cause of Action for Failure to comply with Arbitration Dispositive: Petition granted, CA decision reversed. Case remanded
Clause, respectively.  to the RTC for preliminary hearing of California and Hawaiian et
 Pioneer  did not file an Opposition to the said Motion to Set al.’s affirmative defense.
for Preliminary Hearing.
 RTC: denied the motion to set for preliminary hearing
 California and Hawaiian et al.’s MR was denied by the
RTC.
 California and Hawaiian et al. filed a petition for certiorari
with the CA.
 CA: ruled that the arbitration clause did not bind Pioneer
Insurance, which is a mere subrogee of Metro Manila Feed
Millers Association citing Pan Malayan Insurance vs. CA
 Hence, this petition.
ASSET PRIVATIZATION TRUST v. VS., GR No. The Arbitration Committee went beyond its mandate and
121171, 1998-12-29 thus acted in excess of its powers when it ruled on the
validity of, and gave effect to, the proposed FRP.
Facts:
The development, exploration and utilization of the
mineral deposits in the Surigao Mineral Reservation
have been authorized by Republic Act No. 1828, as
amended by Republic Acts No. 2077 and 4167, by virtue
of which laws, a Memorandum of Agreement was drawn
on July 3, 1968,... whereby the Republic of the
Philippines thru the Surigao Mineral Reservation Board,
granted MMIC the exclusive right to explore, develop
and exploit nickel, cobalt and other minerals in the
Surigao mineral reservation.[1] MMIC is a domestic
corporation... engaged in mining with respondents Jesus
S. Cabarrus, Sr. as President and among its original
stockholders.
The Philippine Government undertook to support the
financing of MMIC by purchase of MMIC debenture
and extension of guarantees. Further, the Philippine
Government obtained a firm, commitment from the DBP
and/or other government financing institutions to
subscribed in MMIC and... issue guarantee/s for foreign
loans or deferred payment arrangements secured from
the US Eximbank, Asian Development Bank, Kobe
Steel, of amount not exceeding US$100 Million.[2]
DBP approved guarantees in favor of MMIC and
subsequent requests for guarantees were based on the
unutilized portion of the Government commitment.
Thereafter, the Government extended accommodations
to MMIC in various amounts.
Issues:
Hence, the instant petition for review on certiorari
imputing to the Court of Appeals the following errors.
ASSIGNMENT OF ERRORS
I
THE COURT OF APPEALS ERRED IN NOT HOLDIN
THE COURT OF APPEALS LIKEWISE ERRED IN
HOLDING THAT PETITIONER WAS ESTOPPED
FROM QUESTIONING THE ARBITRATION
AWARD, WHEN PETITIONER QUESTIONED THE
JURISDICTION OF THE RTC-MAKATI, BRANCH
62 AND AT THE SAME TIME MOVED TO VACATE
THE ARBITRAL AWARD.
Ruling:
The arbiters overstepped their powers by declaring as
valid proposed Financial Restructuring Program.
 NATIONAL STEEL CORPORATION vs. RTC OF NSC filed a Motion for Reconsideration but the same
LANAO DEL NORTE, BRANCH 2, ILIGAN CITY and was denied, thus the NSC elevated the case to the Supreme
E. WILLKOM ENTERPRISES, INC. Court.
G.R. No. 127004, March 11, 1999 ISSUE: Whether or not the lower court acted with grave
abuse of discretion in not vacating the
FACTS: arbitrator's award.
On November 18, 1992, Edward Wilkom Enterprises
Inc. (EWEI) together with Ramiro Construction and National RULING:
Steel Corporation (NSC) executed a Contract for Site The SC held that the RTC did not commit grave
Development. abuse of discretion in not vacating the award.

In the said contract EWEI and Ramiro Construction Upon entering into a Contract for Site Development,
jointly undertook to develop NSC’s Integrated Iron and Steel as stipulated in paragraph 19 thereof, EWEI and NSC
Mills Complex which is to be established at Iligan City and to mutually agreed that any dispute arising from the said contract
be finished on July 17, 1983. shall be submitted for arbitration. Thus, if a dispute should
arise from the contract, the Arbitration Board shall assume
But sometime in the year 1983, the services of jurisdiction and conduct hearings. After the Board comes up
Ramiro Construction was terminated thus, EWEI took over with a decision, the parties may immediately implement the
Ramiro's contractual obligation. Due to this and to other same by treating it as an amicable settlement. However, if one
causes deemed sufficient by EWEI, extensions of time for the of the parties refuses to comply or is dissatisfied with the
termination of the project were granted by NSC. decision, he may file a Petition to Vacate the Arbitrator's
decision before the trial court. On the other hand, the winning
Differences later arose, EWEI then filed Civil Case party may ask the trial court's confirmation to have such
No. 1615 before the RTC of Lanao del Norte, Branch 06, decision enforced.
praying essentially for the payments of P458,381.00 with
interest from the time of delay; the price adjustment as The SC reiterated that a stipulation to refer all
provided by PD 1594; and exemplary damages in the amount future disputes or to submit an ongoing dispute to an
of P50,000.00 and attorney's fees. arbitrator is VALID. Further, the Court stressed that voluntary
arbitrators, by the nature of their functions, act in a quasi-
NSC filed an answer with counterclaim. judicial capacity. As a rule, findings of facts by quasi-judicial
bodies, which have acquired expertise because their
On August 21, 1990, upon joint motion of both jurisdiction is confined to specific matters, are accorded not
parties, the RTC issued an order dismissing the said complaint only respect but even finality if they are supported by
and counterclaim in view of the desire of both parties to substantial evidence, even if not overwhelming or
implement Paragraph 19 of the contract, providing for a preponderant.
resolution of any conflict by arbitration.
In a Petition to Vacate Arbitrator's Decision before
Thereafter, in accordance with the order of the RTC the trial court, regularity in the performance of official
and pursuant to Paragraph 19 of the contract, EWEI and NSC functions is presumed and the complaining party has the
constituted an Arbitration Board. And after series of hearings, burden of proving the existence of any of the grounds for
the Arbitrators rendered a decision directing NSC to pay vacating the award.
EWEI P458, 381.00 representing EWEI's last billing No. 16
with interest thereon at the rate of 1-1/4% per month from However, the NSC failed to prove the existence of
January 1, 1985 to actual date of payment; P1,335,514.20 the grounds it relied upon. The allegations of NSC that there
representing price escalation adjustment under PD No. 1594, was evident partiality in the decision of the Arbitrators in
with interest thereon at the rate of 1-1/4 % per month from favor of EWEI and that there was mistaken appreciation of the
January 1, 1985 to actual date of payment; P50,000 as and for facts and application of the law by the Arbitrators, were both
exemplary damages; P350,000 as and for attorney's fees.; and found by the SC as untenable and unmeritorious. 
P35,000.00 as and for cost of arbitration.
As provided for by Section 24 of the Arbitration Law,
Aggrieved, the NSC filed a petition praying that the the grounds for vacating the arbitrator’s award are:
arbitrator’s award be vacated. The NSC posited therein that (a) award was procured by corruption, fraud or other
there was evident partiality in the aforesaid decision of the undue means;
Arbitrators and that there was mistaken appreciation of the (b) there was evident partiality or corruption in the
facts and application of the law by the Arbitrators. arbitrators of any of them;
(c) the arbitrators were guilty of misconduct in
However, the RTC affirmed the award of the Board refusing to postpone the hearing upon sufficient
of Arbitrators "en toto" and ordered that an entry of judgment cause shown, or in refusing to hear evidence
be entered pursuant to R.A. No. 876. Further, the RTC pertinent and material to the controversy; that
dismissed the petition of NSC praying that the arbitrator’s one or more of the arbitrators was disqualified to
award be vacated. act as such under section nine hereof, and
willfully refrained from disclosing such
 disqualification or of any other misbehavior by escalation is expressly allowed under P.D. No. 1594. The SC
which the rights of any party have been allowed payment since it is a basic rule in contracts that the
materially prejudiced; or law is deemed written into the contract between the parties
(d)  the arbitrators exceeded their powers, or so and that no prohibitory clause on price escalation was
imperfectly executed them, that a mutual, final indicated in the contract.
and definite award upon the subject matter
submitted to them was not made. The exemplary damages and attorney’s fees awarded by
the Board of Arbitrators were however deleted by the SC
According to the SC, NSC’s allegation that there was because NSC did not act in bad faith or in a wanton manner
evident partiality is untenable. As ruled in the case when it refused payment of the Final Billing No. 16. The
of Adamson vs.  Court of Appeals, the fact that a party was payment of legal rate of interest will suffice to compensate
disadvantaged by the decision of the Arbitration Committee EWEI of whatever prejudice it suffered by reason of the delay
does not prove evident partiality. Proofs other than mere caused by NSC. The award of attorney's fees is likewise
inference are needed to establish evident partiality. Here, NSC unjustified since it is a conclusion without a premise, its basis
merely averred evident partiality without any proof to back it being improperly left to speculation and conjecture. 
up. It was never deprived of the right to present evidence nor
was there any showing that the Board showed signs of any
bias in favor of EWEI. The decision must be sustained for it is
a well settled rule that the actual findings of an
administrative body should be affirmed if there is substantial
evidence to support them and the conclusions stated in the
decision are not clearly against the law and jurisprudence
similar to the instant case. Henceforth, every reasonable
intendment will be indulged to give effect such proceedings
and in favor of the regulatory and integrity of the arbitrators
act.

As to the ground of mistaken appreciation of facts

and law of the case, the SC likewise found it
unmeritorious.

NSC failed to prove that there was a failure on the part

EWEI to complete the work agreed upon which will determine
whether Final Billing No. 16 can be made chargeable to the
cost differential paid by NSC to another contractor. NSC
failed to substantiate such allegation of completion by another
contractor three unfinished items of works, actual quantities
accomplished and unit cost differential paid chargeable against
EWEI. Billing No. 16-Final would not have passed processing
payment unless there is really no such unfinished work, NSC
evaluation report with no adverse findings of unfinished work
consider the contract as completed. If at all, the unfinished
work may be additional or extra work awarded in 1984 to
another contractor at prices higher than the unit price tendered
by EWEI in 1982 and/or the discrepancy between actual
quantities of work accomplished per plans versus estimated
quantities of work covered by separate contract as expansion
of the original project. Also, under the contract, it is
incumbent upon the owner to send to contractor a letter within
seven (7) days after completion of the inspection to specify the
objections thereto. NSC failed to comply with such
requirement, and therefore, it would be unfair to refuse
payment to EWEI, considering that it had faithfully submitted
Final Billing No. 16 believing that its work had been
completed because NSC did not call its attention to any
objectionable aspect of their project.

As to the price escalation, the SC held it justified in

accordance with the cardinal rule that in the interpretation of
contracts that "if the terms of a contract are clear and leave no
doubt upon the intention of the contracting parties, the literal
meaning of its stipulations shall control." Additionally, price
Magellan Capital Management Corporation v. Zosa (G.R. law, as all other laws, is intended for the good and welfare of
No. 129916) everybody. In fact, what is being challenged by the plaintiff
Date: June 3, 2016 herein is not the law itself but the provision of the
Employment Agreement based on the said law, which is the
Facts: arbitration clause but only as regards the composition of the
panel of arbitrators.
Under a management agreement entered into, MCHC
appointed MCMC as manager for the operation of its business “From the foregoing arbitration clause, it appears that the two
and affairs. Pursuant thereto, petitioners and private (2) defendants [petitioners] (MCMC and MCHC) have one (1)
respondent Rolando Zosa entered into “Employment arbitrator each to compose the panel of three (3) arbitrators.
Agreement” designating the latter as President and CEO of As the defendant MCMC is the Manager of defendant MCHC,
MCHC. Respondent Zosa then was elected to a new position its decision or vote in the arbitration proceeding would
as MCHC’s Vice-Chairman/Chairman New Ventures naturally and certainly be in favor of its employer and the
Development to which he communicated his resignation on defendant MCHC would have to protect and preserve its own
the ground that it had less responsibility and scope and interest; hence, the two (2) votes of both defendants (MCMC
demanded that he be given termination benefits as provided in and MCHC) would certainly be against the lone arbitrator for
the Employment Agreement. MCHC communicated its non- the plaintiff [herein defendant]. Hence, apparently, plaintiff
acceptance to the resignation and advised respondent that the [defendant] would never get or receive justice and fairness in
agreement is terminated on account of the latter’s breach the arbitration proceedings from the panel of arbitrators as
thereof. Respondent invoked the Arbitration Clause of the provided in the aforequoted arbitration clause. In fairness and
agreement and both parties designated their arbitrators in the justice to the plaintiff [defendant], the two defendants (MCMC
panel. However, instead of submitting the dispute to and MCHC) [herein petitioners] which represent the same
arbitration, respondent filed an action for damages against interest should be considered as one and should be entitled to
petitioners before the RTC. Petitioners’s motion to dismiss only one arbitrator to represent them in the arbitration
was denied. Petitioners filed a petition for certiorari and proceedings. Accordingly, the arbitration clause, insofar as the
prohibition in the CA to which it was given due course. The composition of the panel of arbitrators is concerned should be
RTC in compliance with the decision, declared the arbitration declared void and of no effect, because the law says, “Any
clause in the agreement partially void and of no effect insofar clause giving one of the parties power to choose more
as it concerns the composition of arbitrators. Petitioners then arbitrators than the other is void and of no effect” (Article
filed this petition for review on certiorari. 2045, Civil Code).

Issue: “The dispute or controversy between the defendants (MCMC

and MCHC) [herein petitioners] and the plaintiff [herein
Whether or not the arbitration clause in the Employment defendant] should be settled in the arbitration proceeding in
Agreement is partially void and of no effect. accordance with the Employment Agreement, but under the
panel of three (3) arbitrators, one (1) arbitrator to represent the
plaintiff, one (1) arbitrator to represent both defendants
Ruling: (MCMC and MCHC) [herein petitioners] and the third
arbitrator to be chosen by the plaintiff [defendant Zosa] and
We rule against the petitioners. defendants [petitioners].

Even if procedural rules are disregarded, and a scrutiny of the We need only to emphasize in closing that arbitration
merits of the case is undertaken, this Court finds the trial proceedings are designed to level the playing field among the
court’s observations on why the composition of the panel of parties in pursuit of a mutually acceptable solution to their
arbitrators should be voided, incisively correct so as to merit conflicting claims. Any arrangement or scheme that would
our approval. Thus, give undue advantage to a party in the negotiating table is
anathema to the very purpose of arbitration and should,
“From the memoranda of both sides, the Court is of the view therefore, be resisted. Wherefore, premises considered, the
that the defendants [petitioner] MCMC and MCHC represent petition is hereby dismissed and the decision of the trial court
the same interest. There is no quarrel that both defendants are is affirmed.
entirely two different corporations with personalities distinct
and separate from each other and that a corporation has a
personality distinct and separate from those persons
composing the corporation as well as from that of any other
legal entity to which it may be related.  But as the defendants
[herein petitioner] represent the same interest, it could never
be expected, in the arbitration proceedings, that they would
not protect and preserve their own interest, much less, would
both or either favor the interest of the plaintiff. The arbitration