ALTERNATIVE DISPUTE

RESOLUTION
(Third Edition)

By:

JUSTICE GABRIEL T. ROBENIOL

Published by:

CENTRAL BOOK SUPPLY, INC.

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Philippines
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 Philippine Copyright, 2020

By

Justice Gabriel T. Robeniol

ALL RIGHTS RESERVED

BY THE AUTHOR
DEDICATION
No portion of this book may be copied or reproduced in
books, pamphlets, outlines, or notes, whether print~d,
mimeographed, typewritten, or in any other fqnn, for dis-
tribution or sale, without the written permission of the
author.
Any copy of this book without the corresponding number
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same.
For "Owa"

7
No. 658

ISBN 978-621-02-0963-1
Cover design by Ms. Gabrielle Anne D. Robeniol
Case research by Atty. Loverly A. Barquez

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 The system of alternative dispute resolution has gone through PREFACE
a progression of modifications owing to the passage of numerous
laws, statutes, rules, regulations and jurisprudence that have had
(To the Third Edition)
considerable effects on it. This dynamism is perhaps the reason
behind the apparent dearth of annotations on the subject ofjudicial I found in each of my students an individual reason to write
and statutory developments on dispute resolution. This book by the First Edition of this book in 2011.
Court of Appeals Justice Gabriel T. Robeniol is, thus, a welcome
Inspired by a responsibility shared by all writers t o keep
addition to the limited legal bibliography on alternative dispute
resolution. their readers abreast with the latest developments on their sub-
jects, the Second Edition was written and published in July
A magna cum laude graduate of the University of Santo 2015.
Tomas Faculty of Civil Law where he was my student and where
he currently teaches, Justice Robeniol's years of litigation experi- Since then, leading cases on Alternatiue Dispute Resolution
ence in the fields of civil, criminal, labor, insurance, and corporate have been enunciated by the Supreme Court defining new prin-
law, among others, make him an authority in the subject matter of ciples, clarifying previously debated theories, and strengthening
alternative dispute resolution. In this Third Edition of his book, he elcisting doctrines of which readers have to be apprised. A dis-
incorporates recent rulings of the Supreme Court as he presents cussion on the Kato.rungang Pambarangay, the system of me-
the basic principles, doctrines, and theories on alternative dispute diation and arbitration a t the grassroots level ordained under
resolution. Justice Robeniol's keen insight as to the significant as- the Local Government Code of 1991, will provide readers with
pects of the laws and jurisprudence on the subject is shown as he an immediately accessible reference material on said related
illustrates each legal provision with ease and simplicity. He skill- subject. A revision of this book is, therefore, timely and neces-
fully refers to existing literature to provide a precise rendition of sary.
facts, which are then emphasized by relevant case doctrines. There
can be no doubt that such methodology in writing makes this Third Thus, for the many who have been convinced of the benefits
Edition of Justice Robeniol's Alter114tiue Dispute Resolution a prac- of Alternative Dispute Resolution, and for those who are still to
tical reference book for any student of the law. be convinced, I again write through this Third Edition.
City of Manila, December 16, 2019. Manila, J anuary 2, 2020.

JUSTICE GABRIEL T. ROBENIOL

vi vii
 TABLE OF CONTENTS

Page

Dedication ................... ........................................................................ iii

Foreword ............................................................................................. v
Preface ................................................................................................. vii

CHAPTER 1. INTRODUCTION

Historical Note ......................................................................................... 1

Judiciary's Action .................................................................................... 2
Legislative Action .................................................................................... 4
Executive Branch's Contribution ........................... ................................. 4
The Alternative Dispute Resolution Act of 2004 ... ................................. 5
The Lawyer's Role .................................................................................... 8

CHAPTER 2. FUNDAMENTALS OF ALTERNATIVE

DISPUTE RESOLUTION

Alternative Dispute Resolution .............................. ................................. 9

State Policy on ADR ................................................................................ 10
Principles of ADR .................................................................................... 11
Objectives and Benefits of ADR ............ ................. ................................. 12
Features of ADR ...................................................................................... 12
Sources of ADR Rules ............................................................................... 15
Forms of ADR ........................................................................................... 16
Classification of Forms of ADR ............................................................... 18
Components of ADR ................................................................................. 19
Subject Matters of ADR ........................................................................... 20
Seat and Venue of ADR ........................................................................... 22
Basic Concepts ......................................................................................... 23

Concluding Acts or Agreements ..................................................... 23

ADR Proui.ders and Practitioners .................................................. 24
Preference for ADR ......................................................................... 25
Office for Alternative Dispute Resolution (0ADRJ 26

ix
 TABLE OF CONT ENTS
TABLE OF CONTENTS

Page Pas•
CHAPTER 6. INTERNATIONAL COMMERCIAL
CHAPTER 3. MEDIATION UNDER THE
ARBITRATION UNDER THE ADR ACT OF 2004 AND ITS
ADR ACT OF 2004
IMPLEMENTING RULES AND REGULATIONS
Mediation in General ........................................ ................................. ...... 28
International Commercial Arbitration ................................................... 70
Clauification of Mediation ............................................................ . 29 Coverage of IRR Provisions on !CA ...................................................... .. 70
Place of Mediation ......................................................................... . 30 Rules of Interpretation ........................................................................... . 72
Stages in Mediation ....................................................................... . 30 Rules on Receipt of Written Communications in !CA ............................ 73
Aduantagu of Mediation ............................................................... . 31 Waiver of the Right to Object in !CA ...................................................... 73
Confiden tiality in !CA ............................................................................ . 75
Confidential and Privileged Nature or Mediation Communication ........... 31 Due Process in !CA ................................................................................. . 75
lAgal Effects of Con{Ukntial and PrivUeged Nature ................... . 33 Place or Venue of!CA ............................................................................. . 76
~pticns Based on Agrttrmnt, Nature of ProceedilllfB,
Commencement of !CA Proceedings ....................................................... 76
Crirm or SocitJI. J1Uti« ........................................................ . 34 Language in !CA ...................................................................................... 77
Ezccptions Based on Public Policy ................................................. 35 Applicable Law in ICA ............................................................................ . 77
Limited Use ofExempted Evidence ................................................ 36 Appointing Authority in !CA ................................................................... 78
Arbitrators and Arbitral Tribunals in ICA ............................................. 79
Privilege of the Mediator ................................................................ 36
WaiverofConfidentiality ..........................,.................................... 37 Grounds for Challenge <>fan Arbitrator in !CA ........................... . 81
Procedure for the Challenge in !CA .............................................. . 81
TheM~ator ........................................................................................... . 38 Procedure in Ca# the Arbitrator Fails to Act in !CA .................. . 82
Dutiu and Functicns ofMediators ............................................... . 39 Jurisdiction of Arbitral Tribunal in !CA ............................................... . 83
Mediator's Costs and Fees ............................................................. . 41
Jurisdicticn Over the Subject Matter ............................................ 83
Mediated Settlement Agreements .......................................................... 41 Lack of J uri&diction ....................................................................... 83
Role of Counsel in Mediation ................................................................ .. 43 E:J:ttss ofJuriadiction ..................................................................... 85
Judicial Review of JurisdU:tiona.l 18Sue ....................................... . 85
CHAPTER 4. ARBITRATION IN GENERAL Jurisdiction Over the Parties .............................. .
·· · · · ······ ··~·· · ·········
87
Interim Measures in ICA ........................................................................ 87
Concept of Arbitration ............................. ....................................... ..... .... 46
Kinds of Arbitration .............. 47 Legal Representation in !CA ................................................................... 88
Rules of Procedure in ICA .......... ......................................... ......... ........... 89
Policy on Arbitration ............::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: 49
Objectives of Arbitration ......................................................................... 51 Determination of Rulea of Procedure ............................................. 89
Arbitrator ................................................................................................. 51 Costs in ICA ............................................................................................. 93
Arbitration Acreement ............................ ................................................ 52 Correction and lnt.erpretation ofICA Award 94
Doctrine ofSeparabiUty ........................................................................... 54 Setting Aside an !CA Award ..........................::::::::::::::::::::::::::::::::::::::::: 96
Due Process in Arbitral Proceedings ...... ............................. ............. .... .. 59
Time for Filing the Petition to Set Aside ....................................... 98
Judicial Review and Court Intervention ................................................ 59
Interim Measures in Arbitration ............................................................ 66 Recognition and Enforcement of ICA Awards and
Foreign Arbitral Awards ................................................................ 98

xi
x
 TABLE OF COm'EN'T'S TABU: OF CONTENTS

Page Pagt

Jurildicticn, Venia and Nature of Procadings ............................ 100 Correction, Interpretation and Additiona.1 Award by the
Arbitra.I Tribunal .......................................................................... 139
Grounds for Refusing Recognition and Procedure for Recognition
of Convention and As-in Convention Awards ............................. 101 Correction of the Arbitral Award by the Cou.r t ...................................... 142
Setting Aside an Arbitral Award .......................................................... 143
Groundlt for &fiuinc &ccgnil.Wn .............................................. . 103 Confirmation of Domestic Arbitral Awards .......................................... 146
Procedure for /recognition of Convention and As· in
Conuenlion .Awor<U ................................................ ········· ······ 107 CHAPTER 7. OTHER FORMS OF ADR
Legal Effect& ofNon-Conventfon Awards ............................................ . 109
Neutral and Early Neutral Evalua tion ................................................ 149
CHAPTER 6. DOMESTIC ARBITRATION Mini-Trial ............................................................................................... 151
Mediation-Arbitration ........................................................................... 152
Domestic Arbitration •.................................................................... ······ ·· 110 Combination and Innominate Forms of ADR ....................................... 153
Diaputea Covered by Rules on Domestic Arbitration ............. ······ ····· ··· 112
Due Process in Domestic Arbitration ............................................ ···· ···· 112 CHAPTER 8. SPECIAL RULES OF COURT ON
Place or Venue of Arbitration ......................................................... ····" · 114 ALTERNATIVE DISPUTE RESOLUTION
Language ............................................................................................... . 114
114 GENERAL PROVISIONS
Confidentiality ....................................................................... ······· ·········
Rules on Receipt of Writ ten Communications ..................................... . 115
115 Subject Matter and Coverage ................................................................ 155
Waiver of Objections ............................................................................. . Special Proceedings .......................................................••...................... 1156
Extent of Court Intervention .......................................................········ ·· 116
119 Summary Proceedings ........................................................................... 156
Representation .................. ·..···· ·········· ··...···.... ········ ················· ········ ···· ··· Non-summary Proceedings .................................................................. . 157
Arbitration Acreemen.t ............................................................. ·········· ··· 120
122 Jurisdiction and Venue ........................................................................ . 158
Determination of Applicable Rules of Procedure .................................
122 Fundamental Principles Adopted by the Special ADR Rules ............. . 158
Commencement of Arb itral Proceedings ....................................... ···· ···
Arbitrators and Arbitral Tribunals ...............................................·...... . 123 THE SPECIFIC COURT RELIEFS
Number ofArbitrators .................................................................. . 128
QuolificatioM and Disquali~tions .......................................... . 124 A. Judicial Relief Involving the Issues of Existence, Validity
Procedun for the Appointnunt ofArbitrators ............................. 125 and Enforceability of the Arbitration Agreement ........................ . 161
Ground$ for Chalhf18e .......................................................··· ···· ··· 127 Judicial Reluf Before Commencement of Arbitration ........... 163
Pl'O«durc for the Challenge ...............................................··· ··· ...· 128 Judicial RelufA/Ur Arbitration Commences ...................... . 165
Pro«durc in Ca. the Arbitrator Fails to Act ............................. 130
B. Referral to ADR .............................................................................. 169
Arbitral Proceedings ............................................................................. . 131 C. Interim Measures of Protection ..................................................... 173
Interim Meuurea .................................................................................. 187
Interim Measures of Prot.ection .............................................. 17<1
Multi-Party Arbitration ......................................................................... 138 Temporary Order of Protection or Temporary
Fees and Costa ....................................................................................... 139 Protective Measure ......................................................... . 176
Preference for Arbitration ................•....................................... 177

xii xiii
 TABLE OF CONTENTS TABLE OF CONT€N'l'S

Page Page

D. Appointment of Arbitrators ........................................ .................... 178 CHAPTER 10. SPECIAL RULES OF COURT ON
E. Challenge to Appointment of Arbitrator ....................................... 181 ALTERNATIVE DISPUTE RESOLUTION
F. Termination of Mandate of Arbitrator .......................................... 182
G. Assistance in Taking Evidence .......................................... ............ 184 PROVISIONS SPECIFIC TO MEDIATION
H. Confidentiality/Protective Orders .......................... ........................ 187 ANDOTHERFORMSOFADR
I. Confirmation, Reoognition, Enforcement, Correction,
Vacation or Setting Aside of Arbitral Awards ............................... 190 Provisions Specific to Mediation ............ ...................... ........... ....... ....... 229
Ia. Confirmation, Correction or Vacation of Domestic Deposit ofMediated Settlement Agreements ............................... 230
Arbitral Awards...................................................................... 190 Enforcement of Mediated Settlement Agreements ....................... 230
Causes ofAction and Grounds ...................................... 191 Provisions Specific to Other Forms of ADR .......................................... 231
Combination of Causes ofAction ................................. .. 193
Procedural Rules ............................................................ 195 CHAPTER 11. CONSTRUCTION DISPUTE
ARBITRATION
lb. Recognition, Enforcement or Setting Aside ofICA Awards.... 199
Causes ofAction ......................................................... .... 199 Construction Dispute ..... .................... ........................................... ......... 233
Grounds ................................................................ ....... ... 200 Construction Arbitration Under the ADR Act of2004 ......................... 233
Combination of Causes of Action ....................... ........ .... 201 The Construction Industry Arbitration Commission (CIACJ .............. 234
Procedural Rules ........................................................ .... 202 Jurisdiction of the CIAC ............. ................. .. ................................... ..... 237
Rules of Procedure in the CIAC ..........................•..................... ............ 245
le. Recognition and Enforcement of Foreign Arbitral Awards .. 205 Judicial Review of CIAC Decisions ................................................... .... 254
Procedural Rules ............................................................ 209 Costs of Arbitration .......... ................................................................ ..... 258

CHAPTER 9. SPECIAL RULES OF COURT ON Chapter 12. KATARUNGANG PAMBARANGAY

ALTERNATIVE DISPUTE RESOLUTION
A. THE BARANGAY JUSTICE SYSTEM
MOTION FOR RECONSIDERATION,
APPEAL AND CERTIORARI The Barangay Justice System and its Objectives ............................... . 259
Legislative History ................................................................................ 260
Motion for Reconsideration .................................................................. . 214
General Provisions on Appeal and Certiorari ..................................... . 216 B. LUPONG TAGAPAMAYAPA AND PANGKAT
Appeal to the Court of Appeals (Petition for Review) ......................... . 219 NG TAGAPAGKASUNDO
Special Civil Action for Certiorari (Petition for Certiorari) ................ . 221
Appeal by Certiorari to the Supreme Court (Petition for Lupong Tagapomayapa and Pangkat ng Tagapagkasund-0 ................ . 262
Review on Certiorari) ................................................................... 224 Composition, Qualifications and Term of Office .................................. 262
Constitution of the Pangkat 263
Disqualification and Termi~~;;~·~·f·M~~b~~~h;~..::::::::::::::::::::::::::::::: 263
Nature of Office of Lupon Members ...................................................... 264
Privileges of Lupan and Pangkat Members ......................................... . 265

xiv xv
 TABlE OF CONTENTS
T ABLE or Coz.rn:N'TS

Page Pog•

C. JURISDICTION OF THE LUPON Legal Effects of Amicable Set tlement and Arbitration Award ............ 310
Final and Executory ..................................................................... 310
Jurisdiction of the Lupon and Exclusions ............................................ 267 Repudiation and Nullification ..................................................... 310
Exclusion by Nature and Circumstances of the Dispute ...................... 270
Objects of Repudiation ................................................................. 311
Exclusion by Nature and Circumstances of the Parties ...................... 272
Barangay Conciliation is Mandatory But Not Jurisdictional .............. 275 F. INDIGENOUS MODES OF DISPUTE RESOLUTION
Mandatory .................................................................................... 275
Not Jurisdictional ........................................................................ 275 Recognition of Indigenous Modes of Dispute Resolution ..................... 313
Indigenous Modes Under the Katarungang Pambarongay Law ......... 314
TM Complaint is Premature ........................................................ 277
Rules for Indigenous Systems ............................................................... 315
Failu,.. ID Exhaust Administratiue Remedus ............................. 278
Optiona o{tM Court ..................................................................... 279 Special Provisions Under the Katarungang Pambarongay Law ......... 315
General Principles of Ba.rangay Conciliation ....................................... 317
D. FORMS OF DISPUTE RESOLUTION,
VENUE AND PROCEDURE APPENDICES
Forms of Dispute Resolution ............................................ ................ ... .. 281 A. R.A. No. 9285 (Alurnative Di.spute Resolution Act of 2004) ....... 321
Venue of Conciliation Proceedings ................................................ ........ 282
Procedure for Conciliation .......................... ........................................... 284 B. R.A. No. 876 (TJ1e Arbitration Law) ..................... ....................... 339
C. Implementini Rules and Regulations of the ADR Act of 2004 .. 350
Rules of Procedure ........................................................................ 285
Compul1t>ry Procuses and Conumpt .............................. ............ 289 D. UNCITRAL Model Law on International Commercial
Effects of Failu,.. or Refusal lo Appear ........................................ 290 Arbitration .................................................................................... 431

Personal Appearance of Parties and Prohibition on Counsels ............. 291 E. Special Rules of Court on Alternative Dispute Resolution ........ 460
F. E.O. No. 1008 (Construction Industry Arbitration Law) ............ 524
E. AMICABLE SETTLEMENT
G. CIAC Revised Rules of Procedure Governing Construction
Nature of the Amicable Settlement ...................................................... 293 Arbitration .....··...........···................................................... ............ 529
Enforcement, Execution and Rescission of the Amicable H. Republic Act No. 7160 (The Local Government Cotk of 1991) ..... 558
Settlement ................................................................................... . 294
I. Rules and Regulations Implementing the Local Govermment
Enforcement and Eucution of tlu Amicable Settlement ............ . 294 Code of 1991 ................................................................................. 566
Reacwion of IM Amicabu Settlement ......................................... 297
J. Katarungang Pambarangay Implementing Rules and Regu-
Procedure for Execution ....................................................................... . 298 lations ....................................................... .................................... 568
General Rules on Eucution ........................................................ . 298
Specific Rules on kcution ........................................................ . 300 K. Administrative Ci~ular No. 14-93 .............................................. 593
Properly Exempt From Execution by tM Lupon .......................... 308

xvii
xvi
 CHAPTER 1

INTROD UCTION

•Because conflict is inherent in human society. much ef.

fort has been expended by men and institutions in devising
ways of N!soluinc the same. With the progN!ss of civilization,
physical combat has been rukd out and instead, moN! specific
means have been evolved, such as recourse to the good offices of
a disintere8ted third party, whether this be a court or a private
1
indiui.dua.l or individuals. "

H istorical N ote

Judicial and legislative trends on dispute resolution consis-

tently lean towards the utilization of alternative means and meth-
ods implemented outside the court trial system.
The Civil Code of the Philippines (Republic Act No. 386),
which took effect on 30 August 1950,' contains provisions on com-
promises and arbitrations (Chapters 1 and 2, Title XN, Book IV)
which encourage litigants to agree upon a fair compromise and
authorize arbitration as a means of concluding controversies.

' Justi.ce Fkrida Ruth Romero, in Chung Fu Industries (PhilsJ, Inc.

u. Court ofAppeals, 206 SCRA 545 [1992), p. 549.
'Lara u. Del Rosario, G.R. No. L-6339, SO O.G. 1957.

.I
2 ALTERNATIVE DISPUTE RESOLUTION INTRODUCTION 3

On 19 June 1953, the Philippine Legislature enacted Republic ducting pre-trial conferences;' the utilization of the different modes
Act No. 876, otherwise known as "The Arbitration Law.• R.A. No. of discovery;• the strict proscription against forum-shopping,' the
876 did not revoke and instead supplemented the provisions of the abbreviation of proceedings for small claims cases: the use of judi-
New Civil Code on arbitration.' cial affidavits,' and the requirement for continuous trial. '0 More
On 10 May 1965, another milestone in Philippine alternative importantly, the Supreme Court passed administrative issuances
dispute resolution was achieved when the Philippine Senate encouraging the use of alternative dispute resolution through the
passed Resolution No. 71 adhering to the United Nations "Conuen· Philippine Mediation Center or through Judicial Dispute Resolu-
tion (JDRJ.
ti.on on the Recognition and Enforcement of Foreign Arbitral
Awards" of 10 June 1958. This Convention gave reciprocal recogni- To emphasize the Judiciary's resolve in strengthening the sys-
tion and allowed the enforcement of international arbitration tem of alternative dispute resolution, the Supreme Court, speaking
agreements between the parties of different nationalities within a through Mr. Justice Jose Vitug, in the case of La Naual Drug Cor-
contracting state. By such adherence, Philippine law has acknowl- poration u. Court ofAppeals," said that:
edged international arbitration as a system of settling commercial
disputes.' "In an effort to declog the courts of an increasing volume
of work load and, most importantly, in order to accord contend-
The Philippines was a signatory 1Xl the United Nations Com- ing parties with expeditious alternatives for settling disputes,
mission on International Trade Law (UNCITRAL) New York Con- the law authoriies, indeed encourages. out of court settlements
vention of21June1985 which adopted the "MO<kl. Law on Interna· or adjudications. Compromises and arbitration are widely
tional Commercial Arbitration.• By such act, the Philippines com- known and used as such acceptable methods of resolving ad-
mitted to adhere to the Model Law. versarial claims."
Despite the foregoing efforts of the Legislature in the promo-
Alternative dispute resolution methods like arbitration, me-
tion of alternative dispute resolution, the Judiciary continued to be
diation, negotiation and conciliation, are encouraged by the Su-
plagued with congested dockets. The sheer number of new cases preme Court." Arbitration, in particular, is regarded as the "wave
filed, coupled with the dearth ofjudges to man the first and second
of the future" in international civil and commercial disputes."
level courts, resulted in the volume of new cases filed far outnum-
bering the cases actually disposed of and resolved by our courts.
These circumstances contribute to the perennial problem of delay 'Rule 18, 1997 Rules of Civil Procedure.
in the delivery ofjustice to party litigants. 'Rules 23 to 29, 1997 Rules of Civil Procedure.
' Section 5, Rule 7 and related provisions of the 1997 Rules of Civil
Procedure.
Judiciary'• Action
' A.M. No. 08-8-7.SC !The Ru/£ ofProcedure for Small C!,aims Cases).
'A.M. No. 12-USC (Judicial Affidavit Rule).
The Judiciary's response to the problems of delay in the deliv-
" A.M. No. 15-06-10-SC (Revised Guidelines for Continuous Trial of
ery of justice C011$isted of, among others, the requirement of con- Crimincl Ca8"s).
" 236 SCRA 78 [1994], p. 82.
11
Insular Savings Bank v. Far Ea.st BGnk und Trust ComJ>Q.J'Y· 492
' Chung Fu IIUWstries (Phi/s.), Inc. v. Court of Appeals, id., p. 551, SCRA 145 [2006); Rey•• v. Balde II, 498 SCRA 186 [2006].
citing Umbao vs. Yap, 100 Phil. 1008 [1957]. " LM Power Engineering Corporation v. Capitol Industrial Construc-
' Del Mont.e Corporation-USA v. Court of Appeals, 351 SCRA 373 tion Groups, Inc., 399 SCRA 562 [2003]; BF Corporation v. Court of Ap·
[2001), pp. 380-381. peals, 288 SCRA 267 11998).
 INTROOUCTIO:< 5
4 ALTERNATIVE DISPUTE RESOLU110N

Legislative Action tion.• The said Rules has undergone various a mendments the lat-
est of which was approved in January 2019.
Special domestic legislations have been passed prescribing On 22 March 2010, the Executive Branch of Government,
arbitration. mediation and conciliation in a~c types of cases to Lhrough the Office or the Solicitor General, enacted the "Rules on
help decongest court dockets. For instance, the •Labor Code of the Alternative Dispute Resolution (ADR) for Disputes Between Na-
Philippines• (Presidential Decree (P.D.J No. •42, as amended) ~an· twnal Government Agencies.• Through these Rules, the Executive
dated the creation and constitution of the National Labor Relations Branch of Government reiterated its adherence to the policy of the
Commission (NLRC) which, together with its Arbitration Branch, law to encourage the amicable settlement of disputes through al-
has been dispensing arbitration service in cases involving unfatr ternative dispute resolution methods in lieu of adversarial ju.dicial
labor practice, termination of employment, conditions of employ- proceues even in disputes between national government a,g encies.
ment, damages arising &om employer-employee relationship, and
other labor-related disputes."
The Alte rna tiue D l•p u te ReBolutio n A c t of2004
Also, the "Local Government Co<k of 1991" (R.A. No. 7160) re-
quires conciliation, mediation or arbitration in the barangay level On 4 February 2004, Senate Bill No. 2671 and House Bill No.
before the Pangka.t ng Tagapaglt.asundo of would-be adverse par- 5654 were consolidated and enacted as the first comprehensive
ties in specified civil and criminal cases before resort to courts can alternative dispute resolution law in the Philippines - R.A No.
be had.• The principle of alternative dispute resolution in the 9285 entitled: "An Act to Jnstituticnalize the Use of an Alternative
barangay level had its roots in P.D. No. 1508 (Establishing a Sys· Dispute Resolution System in the Philippines and to Establish the
tem of Amicably Settling Disputes at the Barangay Level) whose Office for Alternative Dispute Resolution, and for Other Purposes."
provisions were re-enacted as part of the Lo<:al Government Code It is better known as the •Alternative Dispute Resolution Act of
of 1991. 2004.• It was promulgated on 2 April 2004 and became effective on
28 April 2004 after its publication on 13 April 2004." It is the gen·
&r:ecutioe B ranch'• Contribution era! law applicable to all forms of alternative dispute resolution
such as arbitration, med.i ation, conciliation, early neutral evalua·
The Executive Branch of Government also contributed im· tion, mini-trial, or any combination thereof. It recognizes the in·
mensely in the propagation of alternative dispute resolution. The ternational application of the alternative dispute resolution sys·
Construction Industry Arbitration CommiJaion (ClAC), created tem. It adopted the UNCITRAL Model Law on International
Wlder Executive Order (E .0 .) No. 1008 (Constriu:tion Industry Commercial Arbitration. It paved the way for the Philippines to be
Arbitration Law) dated 4 February 1985, is at the forefront in the a venue for international commercial arbitration.
arbitration of disputes arising &om or connected with construction The Supreme Court, in Korea Technologies Co., Ltd. u. Lerma,"
agreements. The CIAC, in the exercise of the powers granted it by en umerated a nd explained the salient features of R.A. No. 9285
Section 21 of E.O. No. 1008, approved and promulgated on 23 Au· applying and incorporating the UNCITRAL Model, namely:
gust 1998 the "Rules of Procedure Governing Construction Arbitra-

"Article 217.Labor Code of the Philippinoe. " Equitable PCI Banking C<>rporalion •· RCBC Capital Corporation,
~ Scetions 408 to 419, R.A. No. 7160 <TM Local Go••rnmenl Code of 574 SCRA 858 120081, p. 870.
1991). "642 SCRA 1 (2008], pp. 25-30.
6 ALTERl'IATIVE DISPUTE R ESOLUTION INTRODUCTION 7

"(1) The RTC mu.t refer to arbitrati<lll in proper cases For final domestic awards, which also need confirmation
by the RTC pursuant to Sec. 23 of RA 876 and shall be recog-
Undu Sec. 24, the RTC does not bsve jurisdiction over n ized al final and execurory decisions of the RTC, they may
dilputM that are properly the subject of arbitration pwsuant only be aaulled before the RTC and vacated on the grounds
to a.n. arbib'ation clouac, and mandates the rcfcrro.1 to :irbitr:l- provided under Sec. 2.5 of IlA 870.
tion In such cues x x x.
(5) RTC dedslon of auailed foreign arbitral award ap·
xxx xxx xx x pu lable
(S) Foreip lll'bltral awards must be confirmed by the
R1'C Sec. # of RA 9285 provides for an a ppeal before the CA
81 the nomedy of an aggrieved party in cases when the RTC
Fonicn arbitral awards while mut.ally stipulated by the 1et1 aside, rejects, modifies, or corrects an arbitral award, x xx.
parties in the arbitration clause to be final and binding are not xx x xxx
immediately enforceable or cannot be implemented immedi- "" x
ately. Sec. S5 of the UNCITRAL Model Law stipulates the re- Thereafter, the CA decision may further be a ppealed or
quirement for the arbit.ral award to be recognized by a compe- reviewed before this Court through a petition for review under
tent court for enforcement xx x. Rule 46 of the Rules of Court.•

"xx xxx xx x Pursuant to Section 52 of R.A. No. 9285 calling for the pas-
11. ia now clear that foreign arbitral awards when con· sage of implementing rules and regulations therefor, on 26 October
flrmod by the RTC are deemed not aa judgment of a foreign 2009, the Implementing Rules o.nd Regulations of the Alternative
court but aa a foreirn arbitral award, and when confirmed, are Dispute Resolution Act of 2004 (IRR) was approved by the Secre-
enforced as final and executory decisions of our courts oflaw. tary of Justice.
xxx xxx x xx In order to provide the courts with the procedural rules on the
(3) The RTC baa Jurlodlcllon to review foreign arbitral prosecution of ADR related actions and petitions, on 1 September
award• 2009, the Supreme Court passed and approved the "Special Rules
of Court on Alternative Dispute Resolution" (Special ADR Rules)
Sec. 42 in relation to Sec. 45 of R.A. 9285 designated and which took effect on 30 October 2009."
vested the RTC with specific authority and jurisdiction ID set
aside, reject, or vacate a foreign arbitnl award on grounds R.A. No. 9285 has been categorized as procedural law· hence
provided under AR. S4(2) of the UNCITRAL Model Law. xx x ita um Md &.he Special ADR Rules were considered ap~licabl~
xxx even to casea already pending during their passage.,.
x xx xxx
(4) Grounds for J udicial review different in dome•tic
and forelp arbitral awarda
xxx xxx xxx
For foreirn or international arbitral awards which must
be confirmed by the RTC, the grounds for setting aside, reject,
" Rule 26.1, Special Rules of Court on Alternative Dispute Resolu·
ing or vacatln& the award by the RTC are provided under Art. tlon (Speclol ADR RuluJ.
34(2) of the UNCITRAL Model Law.
,. ~portmtnJ of Fortign Affoirs v. BCA lnb!matio11131 Corp., G.R. No.
210868, JuDO 29, 2Gl6.
8 ALTERNATIVE D ISPUTE RESOLUTION

The Lawyer's Ro'U!

The combined efforts of the Executive, Legislative and Judi-
cial Branches of Government for the promotion of alternative dis- CHAPTER 2
pute resolution is an eloquent recognition and acceptance of the
need to· declog the courts' dockets. Lawyers, being an integral part
of the jrudicial system, have to t-0w the line and contribute to the
promotion of alternative dispute resolution. As part of their duties FUNDAMENTALS OF ALTERNATIVE
to the court, lawyers have to assist the courts in encour aging the DISPUTE RESOLUTION
parties to avail of alternative means of dispute resolution, As part
of their duties to their clients, lawyers have to explain the benefits
of the alternative dispute resolution system to them. Alterna tille Dispute Resolution
Lawyers may also play the role of alternative dispute resol u-
tion provider or practitioner. A lawyer, in view of his excellent In a broad sense, alternatiue dispute resolutwn CADR for brev-
communication skills, probity, and legal foresight, can be ap- ity) is a system, using means and methods allowed by law and
pointed as an arbitrator, mediator, conciliator or neutral evaluator. approved by the parties, for the purpose of resolving or facilitating
When performing duties as such, lawyers are expected to exert the resolution of disputes and controversies between them, in an
genuine and sincere efforts at bringing the parties to a settlement expeditious and speedy manner, without resorting to court adjudi-
within t he scope of their authority. In all instances when lawyers cation. This definition covers all forms and methods of resolving
are allowed to participate in the dispute :r esolution process, t hey disputes outside the court trial system. This definition covers not
have to perform their functions in good faith, with no other motive just arbitration, mediation, conciliation, early neutral evalua tion,
ex~pt that of securing fo~ ~e parties a speedy, inexpensive and mini-trial, or combinations thereof, but also includes similar :proc-
amicable settlement of their disputes and controversies. esses in quasi-judicial agencies such as the National Labor Rela-
tions Commission, Regional Offices of the Department of Labor
and Employment, Intellectual Property Office Mines and Geo-
sciences Bure~u, Insurance Commission and ~ther similar gov-
ernment agencies.
ADR, as defined in the ADR Act of 2004, means "any process
or procedure used to resolve a dispute or controversy other than by
acljudication of a presiding judge of a court or an officer of a gov-
ernment agency xx x in which a neutral third party participates to
assist in the resolution of issues xx x."'
Under this definition, arbitral proceedings conducted by the
above-mentioned administrative agencies exercising quasi-judicial

' Section 3, ADR Act.

9
 10 FlJNDAMENTALS OF AJ..TERNATJVE 11
DISPUTE RESO~UTION

power are not covered by the ADR Act of 2004. This does not mean, Similarly, in RCBC Capital Corporatum v. Banco de Oro Uni·
however, that similar procedures before quasi-judicial agencies are bank, Inc.,' the Supreme Court declared that:
not considered forms of arbitration, mediation or conciliation. They
"Alternative dispute resolution methods or AORs - like
are, except that they are not governed by the ADR Act of 2004
arbitration, media tion. negotiation and conciliation - are en-
there being specific laws and rules applicable to them. couraged by this Court. By enabling the parties to resolve their
disputes amicably, they provide solutions that are less time·
State Policy on ADR consuming, less tedious, less confrontational, and more produc-
tive of goodwill and lasting relationship. Institutionalization of
ADR was envisioned as 'an important means to achieve speedy
In the ADR Act of 2004, it is declared a State policy:
and impartial j ustice and declog court dockets.' The most im-
"x x x to actively proo:ote party autonomy in the resolution of portant feature of arbitration, and indeed, the key to its suc-
disputes or the freedom of the parties to make their own ar· cess, is the public's confidence and trust in the integrity of the
process. x x x ...
rangements to resolve their disputes. Towards this end, the
State shall encourage and actively promote the use of Altema· In a long line of cases, the Supreme Court has referred to al-
tive Dispute Resolution (ADR) as an important means to achieve
ternative dispute resolution in general, and arbitration in particu-
speedy and impartial justice and declog court dockets. As such,
the State shall provide means for the use of ADR as an efficient lar, as the "wave of the future in international relations."'
tool and an alternative procedure for the resolution of appropri·
ate eases. Likewise the State shall enlist active private sector Principks ofADR
participation in the settlement of disputes through AD!t xx x."'
The following are the principles of ADR:
In the case of lnsu/.ar Sauings Bank v. Far East Bank a.nd
Trust Company,' the Supreme Court declared the policy of the I . Promotion of party autonomy and self-determination in
Judiciary on ADR as follows: the resolution of dispures. The parties are given the freedom to
choose the form of ADR they desire to avail of. They are also given
"Alternative dispute resolution methods or ADRs _ like arbi· the discretion t o prescribe the procedure to govern the ADR proc-
tration, mediation, negotiatio.n and conciliation - are encouraged by ess.' Party autonomy extends to the choice of ADR providers or
the Supreme Court. By enabling the parties to resolve their disputes practitioners, the venue of proceedings, and, in most cases, the
aat!•ably, they provide ~!utions that are less time-consuming, less terms of the concluding agreements.
tedious, less confrontational, and more productive of goodwill and
lasting friendships. xx x. •
'687 SCRA 583 12012), pp. 627-628.
' Maria Luisa Park Association. Inc. u. Almendra•, 588 SCRA 663
(2009), p. 677; Korea Technologies Co., Ltd. u. urma, 542 SCRA 1 [2008),
p. 23; Frabelle Fishing Corporation u. Philippine ~rican Life Insurance
' Sec. 2, ADR Act. Company, 530 SCRA 543 (2007), p. 549; Reyes u. Balde II, id.; Fiesta World
' 492 SCRA 145 12006), p. 158; see also: LM Power Engineering Corp. Mall Corporation u. Linberg Philippines, Inc., id.; Sea·Land Service, Inc. u.
u. Capitol Industrial Construction Groups, Inc., 447 Phil. 705 (2003), p. Court of Appeals, 327 SCRA 135 (2000), p. 144; Gerardo Lanuza, Jr. v. BF
707, and 399 SCRA 562, p. 563; Reyes u. Balde II 498 SCRA 186 (20001, Corporation, G.R. No. 174938, October 1, 2014.
pp. 196-197; and Fiesta World Mail Corporntion 'u. Linberg Philippines, ' Department ofEnuironment and Natural Resources (DENRJ u. United
Inc., 499 SCRA 332 [2006), p. 339; Bases Conuersion Deuelopment Aut/!()r- Planners Consultants, Inc. (UCP[), G.R. No. 212081, February 23, 2015; Frue·
ity u. DMCI Project Deueloper1, Inc., G.R. Nos. 173137 and 173170, Janu- hau( Electronics Philippines Corporation u. Technology Electronics Assembly
ary 11, 2016. and Management Pacific Corporation, G.R. No. 204197, November 23, 2016.
12 F'uNDAMENTALS OF ALTERNATIVE 13
DISPUTE RESOLUTION

2. Recognition of ADR as an effi.ci.ent tool and an alternative 2. ADR utilizes means and methods allowed by law. ADR
procedure for tM resolunon of cases. ADR does not altogether .do usually takes the form of arbitration, mediation, conciliation, early
away with the court trial system. ADR me~ely. proVJde~ the parties neutral evaluation, or mini-trial. It may also be any combination of
with an alternative means of settling therr disputes m a manner the foregoing methods. The ADR Act of 2004 did not limit the
that is different, separate and independent from the court trial forms of ADR to the foregoing enumeration. Any means or method
system. aimed at resolving disputes outside the court trial system may be
3. Enlisting of private sector participation. The essence of recognized as an ADR form provided it is not contrary to law, mor·
ADR is that it usually requires the participation of third parties als, good customs, public order or public policy.
who do not necessarily dispense public service. Man,r ADR practi· 3. ADR is contractual in nature.' In keeping with the policy
tioners or providers hail from the private sector in various fields of of the law to actively promote party autonomy, the parties to a
endeavor. There is a growing trend towards private sector in· dispute are given the freedom to agree to resolve their dispute and
volvement in ADR. decide on the procedure therefor. ADR and its procedures are,
therefore, contractual in character. As such, any form of ADR that
Objective• and Benefits ofADR satisfies the essential requisites of a contract,.. and which is not
contrary to law, morals, good customs, public order or public pol-
The following are the objectives of ADR: icy," is allowable as a form of ADR.
1. Speedy and impartial justice. ADR has been judicially The consent to undergo ADR may be a pre-causal consent as
recognized as a tool for the speedy, inexpensive and amicable set· when the parties to a contract stipulate that any dispute that will
tlement of disputes.' arise from the contract shall be resolved by arbitration. The con·
2. Declogging of court dockets. The decongestion of court
sent may also be a present-causal consent as when the parties to an
dockets is the ultimate objective of ADR. In this sense, ADR and existing controversy voluntarily submit themselves either to arbi·
tration or mediation."
the court trial system, one being the alternative to the other, work
hand-in-hand to maximize the benefits from each other. 4. ADR avoids court trial. In principle, ADR is conducted
outside of the court trial system. It is in lieu of, and conducted
precisely to avoid, trial.
Feature• ofADR
1. ADR is a means used to resolve a dispute or controversy.
The objective of ADR forms, methods and processes is to resolve or 'Aboitiz Transport System Corporation v. Carlos A. Gothong Lines,
facilitate the resolution of a dispute or controversy in a speedy, Inc., 730 SCRA 178 (20141.
0
' "Art. 1318 (Civil Code of the Philippines). There is no contract
amicable and inexpensive manner.' A procedure which has for its
unless the following requisites concur:
purpose the temporary cessation of the discussion of issues in a
(1) Consent of the contracting parties;
controversy not leading to the final conclusion of the dispute is not
an ADR form. ADR should not be resorted to when the motive is to (2) Object certain which is the subject matter of the contract;
delay or suspend the proceedings rather than to put an end or (3) Cause of the obligation which is established."
" "Art. 1347 (Civil Code of tire Philippines). x x x.
facilitate the conclusion of the controversy. All services which are not contrary to law, morals, good customs,
public order or public policy may likewise be the object of a contract.•
' Reyes v. Balde II, id. " Fruehauf Electroni.cs Philippines Corporatwn v. Technology Elcc·
' Id. troni<$ A$sembly and ManagemenJ Pacific Corporatwn, id.

!o
16 FUNDAMENTALS OF ALTERNATIVE 17
DISPUTE RESOLUTION

4. International laws such as the UNCITRAL "Model Law the third party arbitral tribunal or arbitrator ; while the concluding
on International Commercial Arbitration," and the "Convention on mediated settlement agreement in a mediation proceeding is the
Recognition and Implementation of Foreign Arbitral Awards." voluntary agreement executed by the parties themselves.
5. General principles of law and equity. 3. Conciliation. Conciliation is the adjustment and settle-
ment of a dispute in a friendly, unantagonistic manner."
FormsofADR 4. Neutral and early neutral evaluation. Neutral evalua-
tion is an ADR process wherein the parties and their lawyers are
As enumerated under the ADR Act of 2004, the following are brought together to present summaries of their cases and receive a
the forms of ADR: non-binding assessment by an experienced neutral person with
expertise in the subject or in the substance of the dispute." Early
1. Arbitration. Arbitration is an "arrangement for taking neutral evaluation is availed of early in the pre-trial phase.
and abiding by the judgment of selected persons in some disputed
manner, instead of carrying it to established tribunals of justke, 5. Mini-trial. Mini-trial is a structured dispute resolution
and is intended to avoid the formalities, the delay, the expense and method in which the merits of a case are argued before a panel
vexation of ordinary litigation."" composed of senior decision makers, with or without the presence
of a neutral third person, after which the parties seek a negotiated
In its restricted sense, for purposes of the ADR Act of 2004, settlement."
arbitration is a voluntary dispute resolution process in which one
or more arbitrators, appointed in accordance with tbe agreement of 6. Any combination of the foregoing. Any combination of
the parties, or rules promulgated pursuant to the ADR Act, resolve the foregoing ADR forms, approved by the parties, not contrary to
a dispute by rendering an award.,. law, morals, good customs, public order or public policy, may be
implemented. An example of a combination ADR form is media-
2. Mediation. Med~ion _is a voluntary process in which a tion-arbitration or rned-arb, which is a two-step dispute resolution
mediator, selected by t.he disputing Parties, facilitates communica- process involving both mediation and arbitration." Another combi-
tion and negotiation, and assists the parties in reaching a volun- nation is a mini-trial conducted as a continuation of mediation
tary agreement regarding a dispute."
neutral or early neutral evalution or any other ADR process." '
The basic distinction between arbitration and mediation is that 7. Any other ADR form (lnnominate ADR Form). Any ar-
in the former, an arbitral tribunal or arbitrator evaluates evidence rangement agreed upon by the parties that satisfies the requisites
and the merits of the case and renders an arbitral award based on of ADR," complies with the essential requisites of a valid con-
his appreciation ~ereof; while in I.he latter, the parties to th<> con- t..ract,20 aJld iiS •'lot contrary W la\v, morals, good customs, public
troversy are conVlllced by a mediator to settle their controversy
through a voluntary agreement executed by the parties themselves
called a "mediated settlement agreement." In other words, the con- 90
cluding arbitral award in an arbitration proceeding is rendered by Black's Law Dictionary.
"Section 3(n), ADR Act.
"Section 3(u), ADR Act.
" Uniwide Saks Realty and Resources Corporation v. Titan-I/red.a "Section 8Ct), ADR Act.
Constructwn and Deuewpment Corporation, 511 SCRA 335 [20061, p. 356. "Article 7. 7(b), IRR.
"Section 3{d), ADR Act. "Section 3(a), ADR Act.
"Section 3(q), ADR Act. "Article 1318, Civil Code of the Philippi nes.
18 At.TtRXATtvt DCSPt.JTE Ruou.:no,._ FUNDAJllENTALS OF A~TERNATIVE 19
DISPUTE RESOLUTION

order and public policy," is an acceptable form of ADR. An agree- the obligation involved or subject matter of the dispute, are located
ment to resolve a dispute depending on the outcome, for instance, in the Philippines. Domestic arbitration is governed by R.A. No.
of a boxing match is tantamount to gambling which is contrary to 876 (The Arbitration Law). ADR is internotional, if the parties'
law. Therefore, such arrangement, apart from being void, cannot places of business are in different states; or the place of arhitration
be considered a form of ADR. is outside the Philippines; or the place where a substantial part of
the obligation is to be performed or the place where the subject
Classification ofForJM ofADR matter of the dispute is most closely connected is outside the Phil-
ippines; or the parties have agreed that the subject matter of the
1. As to the number of parties, ADR may be bilateral or bi- dispute relates to more than one country." International commer-
party when only two (2) contending parties are involved, or multi- cial arbitration is governed by the provisio"s of the ADR Act on
lateral or m-,,lti-pa.rty if there are more than two (2) contending International Commercial Arbitration. And, ADR is foreign if it is
parties involved. conducted outside the Philippines." It is submitted, however, that
it is more accurate to define a foreign arbitration as one whose seat
2. As w the number of issues involved, ADR may be simple is outside the Philippines. Foreign ADR is also governed by the
when only a aingle issue is involved, or complex if there are two or provisions of the ADR Act of 2004 on International Commercial
more issues involved. Arbitration. Based on these classifications, an international com·
3. As w the extent of the conclusi.on, ADR is either complete mercial arbitration conducted pursuant to the provisions of R.A.
when all the issues involved are resolved, or partial if only one or No. 9285 is domestic and international in character. On the other
some but not all the issues are resolved. In either case, the objec- hand, an international commercial arbitration whose seat is other
tive of the ADR form must be to resolve the dispute fully or par· than the Philippines is foreign and internatio:ial in character.
tially rather than merely suspend or defer the resolution of the 7. As to the permanence of the ADR provider or practitioner,
dispute.
ADR is either ad hoc if the existence of the ADR practitioner is
.4. As to the role of euidence in the proceedings, ADR is eui· only temporary for the purpose of a particular dispute or contro-
dentiary ~r merit·~ when the resolution of the dispute or con- versy, or instituti.onal if the ADR provider's existence is permanent
troversy involved reqwres the presentation of evidence and evalua- in character and is not dependent on any dispute or controversy.
tion of the merits of the case as in the case of arbitration· and it is
non-evidentiary or non-merit based if the merits of the c~se is not
indispensable in the resolution of the dispute as in the cooc of me- Components ofADR
diation.
The components of ADR are the following:
5. As to the pendency of a court case ADR is case-related if
conducted in connection with or as a pre-re~uisite to trial as in the 1. Contending partks who are involved in a dispute or con-
case of court-annexed mediation or court.referred mediation; and it troversy.
is independent if conducted irrespective of any pending court case 2. Dispute or oontroversy which is susceptible of being sub-
involving the issue. jected to ADR.
6. As IJ> the applicable law, ADR is domestic if the parties'
places of business, place of arbitration, and place of performance of
" Article 1.6, B(8), Implementing Rules and Regulations of the ADR
Act of2004. <IRR).
" Article 1347, Civil Code of the Philippines. "Rule l.ll(d), Special ADR Rules.
20 FUNDl\JllENTALS OF ALTERNATIVE 21
DISPUTE RESOLUTION

3. Form of ADR which may either be arbitration, mediation, for the declaration of nullity of marriage or the dissolu tion of the
conciliation, early neutral evaluation, mini-trial or any combina- conjugal partnership of gains or the absolute comm unity, the dis-
tion of the foregoing. tribution and disposition of the assets of the conjugal partnership
4. ADR provider or practitioner. An ADR provider is an in- of gains or the absolute community, custody of minor children
stitution or person accredited as mediator, conciliator, arbitrator, subject to court approval, and support pendente lite may, however,
neutral party evaluat.or, or any person exercising similar functions be the subject of ADR.
in sny ADR system.'° On the other hand, an ADR practitioner is an c. The jurisdiction of the courts. Jurisdiction over the sub-
individual acting as mediat.or, conciliator, arbitrator or ~eutral ject matter of a case is determined by law and is not dependent
evaluat.or'' who is not necessarily accredited as an ADR provider. upon the allegations of the parties," except in the case of jurisdic-
tion by est.oppel."
Subject Matters ofADR d. Future kgitime. Future legitime is inexistent and, hence,
cannot be waived. This principle is consistent with Articles 772" and
In line with the policy to encourage the use of ADR, in gen- 905" of the Civil Code of the Philippines.
eral, all adversarial disputes and controversies can be the subje~t
t. Criminal liability. Criminal liability is not s usceptible of
matter of ADR, except those which by law or reasons of public
ADR, although the civil liability arising from the offense and the
policy are declared not capable of being subjected to ADR. Under
separate civil liability for quasi-delict based on the act or omission
Section 6(b) t.o (h}, R.A. No. 9285, the following issues are not sus- constituting the offense, are proper subjects of ADR."
ceptible of ADR:
a. The civil status of persons. A person's status, whether "Art. 60. No decree oflegal separation shall be based upon a stipu-
married or capable of marriage, emancipated or not, legally capaci- lation of facts or a confession orjudgment.
tated or incompetent, is a matter determined by law and is not Jn any case, the Court shall order the prosecuting attorney or fiscal
subject t.o the discretion of the parties. assigned to it to take steps to prevent collusion between the parties and to
b. The validity of marriage or any ground for legal separa- take care that the evidence is not fabricated or suppressed.•
» People v. Vanzuela, 559 SCRA 234 [2008]; Salmorin v. Zaldivar,
tion. These are matters over which the State has a keen interest 559 SCRA 564 (2008).
to protect. Thus, in proceedings for the declaration of nullity of • Tijam, et aL v. Sibonghonoy, et al., 131 Phil. 556 (1968), p. 564; 23
marriage, or for legal separation, the public prosecutor is in- SCRA 29, pp. 35-36.
structed t.o conduct a summary proceeding in order to ensure that • "Art. 772 (Civil Code of the Philippines). Only those who at the
there is no collusion between the parties." During the proceedings time of the donor's death have a right to the legitime and their heirs and
successors in interest may ask for the reduction of inofficious donations.
Those referred to in the preceding paragraph cannot renounce their
"'Section S(b), ADR Act. right during the lifetime of the donor, either by express declaration, or by
:n Id. consenting to the donation.'
""Art. 48 [Family Code of the Philippines). In all cases of annul- " "Art. 905 [id.). Every renunciation or compromise as regards a fu·
ment or declaration of absolute nullity of marriage, the Court shall order ture legitime between the person owing it and his compulsory heirs is void,
the prosecuting attorney or fiscal assigned to it to appear on behalf of t he and the latter may claim the same upon the death of the former; but they
Stata to take ~ps to. prevent collusion between the parties and to take must bring to collation whatever they may have received by virtue of the
care that the evidence is not fabricated or suppressed. renunciation or compromise.•
In the cases referred to in the preceding paragraph, no judgment • Articles 29-35, 2176 and 2177, Civil Code of the Philippines, and Ar-
shall be based upon • stipulation of facts or confession ofjudgment." ticle 100, Revised Penal Code. Also, Article 2034 of the Civil Code provides:
22 FUNDAMENTALS OF ALTERNATIVE 23
0JSPlTI'E RESOl.UTION

f In general, these which, by law, canMt be compromised. hand is the actual site where the arbitration is being conducted.
Article 2035 of the Civil Code of Philippines is an example of a Henc~, it is possible for the venue or place of arbitration to be in a
provision oflaw prohibiting compromise. It states that: country different from that where the arbitration has its seat.
"ART. 2036. No compromise upon the following ques·
ti0J1s shall be valid: Basic Concepts
(1) The civil status of persons;
(2) The validity of a marriage or a legal separation; Concluding Acts or Agreements
(S) Any ground for legal separation;
(4) Future support; ADR proceedings are completed upon the execution of a con-
(5) Thejurisdiction of courts; cluding act or agreement. These concluding acts or agreements
(6) Future legitime.• may take the form of a mediated settlement agreement (or simply
•settlement agreement"') or a compromise agreement in the case of
It is ag.Unst public policy to waive or enter into a compro- mediation, a judgment based on compromise in the case of a court
mise regarding future su pport. In principle, support is the basis annexed mediation, or a waiuer or quitclaim in the case of concilia-
for life and sustenance which no one can contract away. However, tion. In the case of arbitration, they may take the forms of an arbi·
support pendente lite and accrued support, no longer being indis- traJ, award, award on agreed terms, consent award or award based
pensable for the life and sustenance of the person entitled there- on compromise.
to, may be the subject of a compromise and, hence, may be the An arbitrol award is the partial or final decision by an arbi-
subject of ADR. trator in resolving the issue fo a controversy."
Section 6, R.A. No. 9285 also mentions labor disputes in the A mediated settlement agreement is a contract executed by the
enumeration of issues which cannot be subjected to ADR under the mediating parties, with the assistance of their respective counsels,
ADR Act of 2004. This does not mean that labor disputes under the certified by the mediator, evidencing a successful mediation."
Labor Code of the Philippines (E.0. No. 442, as amended) and its
Implementing Rules and Regulations, are not susceptible of ADR. A compromise or compromise agreement is a contract whereby
the parties, by making reciprocal concessions, avoid litigation or
Section 6, R.A. No. 9285 merely enumerates the disputes over
which it is not applicable. Hence, while R.A. No. 9285 is not appli- put an end to one already existing." If the controversy subject
cable to labor disputes, they may still be the subject matters of matter of the compromise agreement is also the subject of litiga-
tion, the compromise agreement can be submitted to the court or
ADR under the auspices of the Labor Code and its Implementing
Rules and Regulations, but not under R.A. No. 9285. tribunal for approval, and such approval is usually contained in a
judgment based on compromise.
A waiver or quitclaim is a statement renouncing any right or
Seat and Venue ofADR
claim involved in a controversy by one party in favor of the other. If
The seat of ADR is the jurisdiction 1U1der whose law the pro- the waived right or claim is also the subject of litigation, the
ceeding is being conducted. The venue or place of ADR, on the other waiver and quitcl.Um can be submitted to the court or tribunal and
become the basis of the dismissal of the action or proceeding.
"There may be a compromise upon the civil liability arising from the "Section S(f), R.A. No. 9285.
offense, but such compromise shall not extinguish the public action for the "Section 17, id.
imposition of the legal penalty." ~Article 2028, Civil Code of the Phllippines.
24 FUNDA.\!ENTALS OF ALTERNATIVE 25
DISPUTE RESOLUTION

The concluding acts or agreements are not forms of ADR. Chap ter 9, Book I of the Administrative Code of 1987," which pro-
Rather, they constitute the part of the ADR prooeeding that com· vides:
pletes it.
"Sec. 38. Uability of SufNrior Officers.-{!) A public of-
ficer shall not be civilly lio.ble for o.cu done in the performance
ADR Providers and Practilwners of his official duties, unless there is a clear showing of bad
(oitb, malie<! or croso negligene<!." (Emphasis supplied)
Among the ADR providers and practitioners, the arbitrator is
unquestionably authorized to render a binding resolution of the
dispute between the parties and, as such, is bound to consider the Preference for ADR
merits of the controversy. On the other hand, the mediator is pre·
eluded from discussing the merits of the controversy and cannot There is a clear preference for the use of alternative d ispute
render a binding assessment of the dispute. resolution methods over the court trial system." Even before the
advent of the ADR Act of2004, Article 2030 of the Civil Code of the
The following neutral third persons are authorized to consider Philippines already instructs the courts to suspend proceedings if
the merits of the controversy and required to render a binding the possibility of settlement through the different modes of alter·
resolution of the dispute: native dispute resolution is present. Hence, even if a case is al-
l. Arbitrator; ready pending in court, either pa1ty may, before or during the pre-
2. Mediator-arbitrator in a mediation-arbitration proceed· trial, file a motion for the court to refer the parties to alternative
ing; and dispute resolution. And, even after the pre-trial, the parties may
jointly move for the suspension or dismissal of the action to allow a
a. The neutral third person in a mini-trial, neutral evalua· compromise agreement. Thus:
tion (neutral evaluator), combination of ADR forms, or
innominate ADR form, who, upon agreement of the par- "Article 2030. Every civil action or proceeding sho.11 be
ties, is directed to render a binding assessment. suspended:
(1) If willingness IA> discuss a possible compromise is
Arbitrators and arbitral tribunals do not fall under the classifi-
expressed by one or both parti~; or
cation of quasi-judicial bodies since they are constituted by virtue of
an arbitration agreement rather than by law. As such, their arbitral (2) If it appears that one of the parties, before the com-
mencement of the action or proceeding, offered to discuss a
awards are not reviewable through a petition for review or petition
po..ible compromise but the other party refused the offer.
for certiorari under Rules 43 and 65, respectively, of the Rules of
Court." The duration and terms of the suspension of the civil ac·
I.ion or proc:<>eding and similar matters shall be governed by
Neverth eless, the civil liability of ADR Providers and practi- 1uch provisiorut of the rules of court as the Supreme Court
tioners for acts done in the performance of their duties is the same shall promulgate. Said rules of court shall likewise provide for
as that for public officers a.s provided for under Section 38(1), the appointment and duties of amicable com pounders.•

" ~hauf Ekctronia Philippines <A>rporatWn v. Technalogy Elec- " Section 6, ADR Act; Article 1.5, IRR.
tronia Antmbly and Mam>gemm1 Pacific Corporotwn, supra .• which re- " Mobuhoy Holdings Corp. • · Sembcorp Logi$lics Umit«l, G.R. No.
examined ABS-CBN BroadCO$lilllJ Corporation u. World lnUracti~ Ndwork 212734, December 5 , 2018; Basea Conllerswn Deueiopnumt Authority v.
Sy•tema (WINS) Japan Co., Ltd, 544 SCRA 308 12008), pp. 318·320. DMCJ Projecl De..,lofNr•, Inc., supra.
 FUNOA.\IENTAl.$ OF ALTEIU"'ATIVE 27
26
DISPUTE RESOLUTION

A formal request or motion for suspension is not even indispen- Executive Director appointed by the President upon the recom-
sable. As long as the court is apprised of the existence of an arbitra- mendation of the Secretary of Justice."
tion agreement, trial should be suspended to allow arbitration to Among the principal objectives, powers and functions of the
proceed." OADR ar<! the following:
The Supreme Court, in the case of Koppel, Inc. u. Makoti Ro- 1. To promote, develop and expand the use of ADR in the
tary Club Foundation, Inc.," made a clear and categorical decla- private and public sectors through information, education
ration that judicial proceedings disregarding arbitration agree- and communication;.o
ments, conducted beyond the point when the parties should have
been referred to arbitration, are null and void, and the decisions 2. To assist the government to monitor. study and evaluate
rendered therein shall be set aside in order to allow the remand the use by the public and private sectors of ADR, and rec-
of the case to the trial court and the referral of the dispute to ommend to Congress needful statutory changes to de-
arbitration in accordance with the arbitration agreement. velop, strengthen and improve ADR practices in accor-
dance with world standards;"
If the alternative dispute resolution efforts materialize and
result in a settlement agreement, either party may submit the ag- 3. To act as appointing authority of mediators when the par-
reement to the court before which the action is pending•• and move ties agree in writing that it shall be empowered to do so;"
for the approval there<>f. If the court finds that the settlement and
agreement is not contrary to law, morals, public policy or public 4. To compile and publish a list or roster of ADR provid-
order, it shall approve the same and render judgment based ers/practitioners, and to compile a list or roster of foreign
thereon. Once so approved, either party may ask for the execution or international ADR providers/practitioners."'
of the agreement in· the same mann.er that a judgment is executed"
if <>ecessary to compel the other party to comply therewith.

Office for Alternative Dispute Resolution

(Sections 49 and 50, ADR Act; Articles 2.1 to 2.3, IRR)

In order to maximize the benefits of ADR and to ensure the

smooth and effective implementation of the provisions of the ADR
Act of 2004 and its IRR, as well as R.A. No. 876, the ADR Act of
2004 c~eated the Office for Alternative Dispute Resolution (OADR),
which is attached to the Department of Justice. It is headed by an

"Luzon Iron Devclop~nt Group Corp. and Consolidated Iron

Sands,
. . Ltd. l CoMtnmg and De·~lo
d Dv. Bridesto11e .. pme111 Corp. a.,-...,,-' Anoconda ~Section 49, ADR Act of2004; Article 2.1, IRR.
Mining an eve opm.ent rp., G.R. No. 220546 December 7 2016. @Section 49(a). ADR Act of 2004; Article 2.3, IRR.
"705 SCRA 142 (2013), pp. 167-169 ' ' " Section 49(a). ADR Act of2004; Article 2.3(b) and (cl IRR.
"Article 7 .5, IRR. . " Article 2.2(o), IRR. '
" Ruic 39, 1997 Rules of Civil Procedure. " ArLicle 2.3(1) and (g). IRR.
 "

MEDIATION UNDER THE ADR Ac:r or 2004 29

Likewise excluded from the coverage of the ADR Act is the

CHAPTER 3 conciliation conducted by the Lupong Tagapamayapa and Pangltat
II// Tagapagltaaundo under Chapter 7, Book III of R.A. No. 7160
<The Local Go~rnment CO<k of 1991), and the Judicial Dispute
MEDIATION UNDER THE ADR ACT OF 2004 &solution (JDR)" which is the mediation, conciliation and early
neutral evaluation process conducted by the judge of a pending
case after a failed court-annexed mediation and before the pre-trial
Mediation in Ge""ra.l stage.
(&ctions 7 and 8, ADR Act) These circumstances do not, however, exclude court-annexed
mediation and JDR as methods of ADR, except that they are not
Among the forms of alternative dispute resolution, mediation governed by the ADR Act of 2004.
and arbitration are the most common and popular.
The person who conducts the mediation is called the media-
Medi.atWn, as defined under the ADR Act of 2004 is "a volun- tor, and the parties thereto are the mediatwn parties. All other
tary process in which a mediator, selected by the disputing parties, parties who take part in the process are called non-party parti.t:i·
facilitates communication and negotiation, and assists the parties pants who can either be witnesses, resource persons or experts.
in reaching a voluntary agreement regarding a dispute. • 1 The same
definition is carried over to the Implementing Rules and Regula-
tions oft.he ADRAct of2004 (IRR).' Classification. of Mediation
Excluded from the coverage of the ADR Act is the court· As a form of ADR, mediation is non-evid.entiary or non ·merit
annexed mediation (CAM), which is a "mediation process conducted based. Compared with arbitration which takes into account the
under the auspices of the court."' It is conducted prior to the pre- merits of the case in the rendition of the arbitral award, mediation
trial "where the judge refers the parties to the Philippine Media- focuses on the facilitation of communication and negotiation be-
tion Center (PMC) for the mediation of their dispute by trained tween the parties in order to encourage them to voluntarily settle
and accredited mediators."' On the other hand, the ADR Act is their dispute. Indeed, a mediator must refrain from giving legal or
applicable to court-referred. med.iatwn, which is a "mediation or- technical advise or otherwise engaging in counseling advocacy, and
dered by a court to be conducted in accord8Jlce with the agreeme n t must abstain from expressing his personal opinion on the rights
of the parties when an action is prematurely commenced in viola- and duties of the parties and the merits of any proposal made.'
tion ofsuch agreement...
On the basis of the structure of the ADR provider, mediation
' Section 3(q), ADR Act. ia either institutWnal when administered by, and conducted under
' Article 1.6, B.6, IRR. the rules of a mediation institution, and ad hoc if it is othe r than
'Section 3(1), ADR Act; Article 1.6, B.3, IRR. institutional.'
' Coll.901idated and Revised Guidelines to Implement the Expanded
Coveraie of Court-Annexed Mediation (CAM) and Judicial Dispute Reso-
lution (JDR).
'Section 3(m), ADR Act; Article 1.6, B.4, IRR.
' See also &p~I, Inc. v. Malt:ati Rot4ry Club FowutoU.on, Inc., 105
SCRA 142 (2013), pp. 165-166.
' Article 3 .10, IRR.
28 ' Articl .. 1.6, B. l and 2, [RR.
so MEDIATIO!< UNDER THE ADR ACT OP 2004 31

All agreement to submit a dispute to mediation by an institu· The mediation process shall be held in private unless the par·
tion shall include an agreement:• ties consent to the presence of persons other than themselves, their
representatives and the mediator.
1. To be bound by the internal mediation and administrative
policies of euch inati tution: and The mediation shall be closed and concluded (ii by the execu·
tion of a settlement agreement by the parties; (ii] by th e withdrawal
2. To have such rules govern the mediation of the dispute
and for the mediator, tho parties and their respective of any party from mediation; or (iii] by th e written declaration of
counsels and non-party participants to abide by such rulea. the mediator that any further effort at mediation would not be
helpful.
Pl~e o{MecUatwn
Aduantages of Mediation
In order to promote self-determination and party autonomy of
the mediation partiea, they are given the freedom to agree on the In order to maintain the confidence of the mediation parties
place of mediation. In the absence of such agreement, the place of in the mediation process, and encourage them to avail of mediation
mediation shall be any place convenient and appropriate to all as a mode of settling their disputes, Section 8 of the ADR Act of
parties. This is the defaull uenuc of mediation... 2004 gave the following assurances:
1. Confidentiality in the mediation prooess;
Stages in. MecUation
2. Prompt, economical and amicable r esolution of disputes;
In general, the mediation process consists of the following and
stages:ll 3. The decision·mnklng authority rests in the parties.
1. Opening statement of the mediator;
2. Individual nanation by the parties; Confidential and Priuileged Nature
3. Exchange by the parties; ofMediation Communication
4. Summary ofi&euea; (Sections 9, 10, 11 and 12, ADR Act)
5. Generalization and evaluation of options; and The ADR Act of 2004 maintains the confidentiality of the me·
6. Closure. diation process by declaring that all information obtained through
mediation proceedingll are privileged and confidential in character.
The foregoing proceaa, however, is not obligatory and the par- They need not be part of the core issue of the mediation as long as
ties, under the principles of self-determination and party auto· they are related to or connected with the subject of the mediation ."'
nomy, may choose the procedure that will govern their mediation."
"A privilege is a rule of law that, to prot.ect a particular rela·
tionship or interest, either permits a witness to refrain from giving
testimony he otherwise could be expected to give, or permits some·
one, usually one of the parties, to prevent the witnesses from re·
•Section 16, ADR Act; Article S.19, IRR.
••Section 15, ADR Act.
"Article 3.17, IRR. u Federal Exprt/JJI Corporation u. Airfreigh.t 2100, Inc., O.R. No.
"Section 2, ADR Act; Article l .2(a), IRR. 216600, November 21, 2016.
82 ALTERNATIVE DISPUTE RESOLUTION MEDIATION U NDER THE ADR ACT OF 2004 SS

vealing certain information."" One way by which the ADR Act of Legal Effects of Confuiential and Privileged Nature
2004 is enforcing and guaranteeing this privilege is by declaring
certain information as confi.dential and, therefore, not capable of The legal effects of the confidential and privileged nature of
being disclosed. Another way of ensuring tbe privilege is by declar- information obtained during mediation are the following:
ing tbe privileged information inadmissible in evidence.
1. A party, mediator or non-party participant may refuse to
Under the ADR Act of 2004, confi.dential information is "any disclose and may prevent any other person from disclos-
information, relative to the subject of mediation or arbitration, ing confidential information."
expressly intended by the source not to be disclosed, or obtained
under circumstances that would create a reasonable expectation on 2. Confidential information shall not be subject to discovery
behalf of the source that the information shall not be disclosed."" and shall be inadmissible in any adversarial proceeding,
Confidential information is, therefore, either expressly con{i.dential whether judicial or quasi-judicial. However, evidence or
or impliedly confidennal. It is expressly confidential if the intention information that is otherwise admissible or subject to dis-
not to be disclosed is expressed by its source, and it is impliedly covery does not become inadmissible or protected from
confidentW.l if obtained under circumstances that would create a discovery solely by reason of its use in mediation.••
reasonable expectation on behalf of the source that the information 3. In an adversarial proceeding, the following persons in-
shall not be disclosed. volved or previously involved in mediation may not be
Confidential information includes:" compelled to disclose confidential information obtained
during mediation:"
1. Communication, oral or written, made in a dispute resolu-
tion proceeding, including any memorandum, note or a. Parties to the dispute;
work product of the neutral party or non-party partici- b. Mediator or mediators;
pant; c. Counsel for the parties;
2. An oral or written statement made or which occurs during d. Non-party participants;
the ?'~dia_tion ?r. ~or _purposes of considering, conducting, e. Any person hired or engaged in connection with me-
participating, UUtllltmg, continuing or reconvening me-
diation as secretary, stenographer clerk or assistant·
diation or retaining a mediator; and and ' '
3. Pleadings, motions, manifestations, written statements f. Any person who obtains or possesses confidential in-
and reports filed or submitted in arbitration or for expert formation by reason of his profession.
evaluation.
The foregoing list of confidential information is not exclusive In other words, practically all of the parties mediator
and may include others as long as they satisfy the requirements of and non-party participants are bound by the ~rohibitio~
expressed confidentiality or implied confidentiality. to disclose confidential information.

"&medial Law, by Oscar M. He1Tera, p . 315. " Section 9(b), ADR Act; Article 3.21(b), IRR.
" Section 3(h), ADR Act; Article 1.6, A(7 ), IRR. " Section 9(c), ADR Act; Article 3.2l(c), IRR.
" Id. " Section 9(d), ADR Act; Article 9.21(e), IRR.
84 ALTERNATIVE D ISPUTE RESOLUTION MEDIATION U NDER TH€ AOR ACT OF 2004 35

4. The protection under the ADR Act shall continue to apply 5. Communicotwn sought or offered to proue or disproue
even if a mediator is found to have failed to act impar- abUS<!, neglect, abandonment, or explcitation in a procttd·
tially.• ing in which a public agency is protecting the interest of
6. A mediator may not be called to testify to provide infor- an indiuidual protected by law. The violator cannot con-
mation gathered in mediation." ceal the abuse he has committed against a protected indi-
vidual by using the benefit of the ADR Act. However, this
exception does not apply where a child protection matter
Erttptione Based on Agreement, Nature of Proceedings, is referred to mediation by a court or a public agency
Crillu or Social Justice which participates in the child protection mediation .
The privilege does not attach to or exist in the following com- 6. Communication sought or offered to proue or disproue a
munications:22 claim or complaint ofprofesswnal misconduct or malprac-
tice filed against a mediator in a proceeding. The mediator
I. Those contained in an agreement euidenced by a record cannot be allowed to hide under the protective mantel of
authenticated by all partks to the agreement. This kind of confidentiality for his own misconduct or malpractice dur-
information is not confidential in the first place because ing the mediation.
the parties, by reducing their agreement into writing, 7. Communication so~ht or offered to proue or disproue a
have impliedly manifested their intention to make use of claim or complaint ofprofueional misconduct or malprac-
the written a11?'89ment for some future legal purpose. tice filed against a po.rty, non-party participant, or repre-
2. Those auailabk to the public or made during a session of sentatiue of a party based on conduct occurring durif18
mediation which is open, or ia required by law to be open, mediation. Like in the case of a mediator, the parties,
to the public. The fact that the mediation process was their representatives, or non-party participants cannot be
made or required to be open to the public is an indication allowed to hide under the protective mantel of confidenti-
that the parties do not intend or should not expect the ality for their own misconduct or malpractice during the
proceedings to be confidential. mediation.
3. A threat or statement of a plan to inflict bodily injury or
commit a crillu of vU>knce. The State has a greater inter· Exceptions Based on Public Policy
est to prevent acts of violence than to protect the confi-
dentiality ofinformation obtained in mediation. For reasons of public policy, the privilege cannot be invoked
4. Communication intentionally used to plan, attempt to for evidence that is shown before a court or administrative agency
commit, or commit, a crime, or conceal an on-going crime after a hearing in camera," to be not otherwise available, and there
or criminal activity. As in the immediately preceding ex- ia a need for that evidence that substantially outweighe the inter-
ception, the State has a greater interest to prevent the est in protecting confidentiality, and the mediation communication
commission of crimes than to protect the confidentiality of is sought or offered in:..
information obtained in mediation. 1. A court proceeding involving a crime or felony; or

'° Section 9(e), ADR Act; Article 3.21(e), IRR.

" Section 9(1), ADR Act; Article 3.21(1), IRR. n *Privately.. or '"in chambers.•
" Section ll(a), ADR Act; Article 8.28(a), IRR. " Section l l(b). A.DR Act; Article 3.23(b), IRR.
36 Al.T"ERNATIVE DISPUTE RESOLUTION MEOIATION UNDER TllE ADR ACT OF 2004 37

2. A proceeding to prove a claim or defense that under the 1. Where the mediation occurred or has terminated, or
law is sufficient to reform or avoid a liability on a contract where a settlement was reached; or
arising out of mediation.
2. As permitted to be disclosed u.nder Section 13 of the ADR
As in the case of the exceptions based on agreement, nature of Act, i.e., the disclosure of known facts that a reasonable
proceedings, crimes or social justice, evidence admissible by reason individual would consider likely to affect the impartiality
of exceptions based on public policy have the same limited extent of of the mediator, including financial or personal interest in
use.u the outcome of the mediation and existing or past rela-
tionship with a party or foreseeable participant in the
mediation."
Limited Use of Exempted Evidence
Notwithstanding the inapplicability of the privilege and the Waiver of Coll(i.dentiality
confidential nature of mediation communication in the foregoing
instances, only such portion of the communication necessary for The protection of confidentiality and privileged nature of me-
the application of the exception can be admitted in evidence. And diation communication prescribed under Section 9 of the ADR Act,
the admission of the evidence for the limited purpose of the excep- is susceptible of waiver.
tion does not render that evidence admissible for any other pur- The waiver can either be e.<pressed such as when it is con-
pose." tained in a record, or made orally during a proceeding by the
mediator and the mediation parties," or implied [ii by failing to
Privilege of the Mediator timely object to an objectionable question propounded during a
trial, or to a document being offered in evidence, or [iii by testify-
The mediator himself is bound by the confidential and privi- ing or presenting a wit ness to testify on confidential and privi-
leged nature of mediation communication. He is required to keep in leged information . Objections to the admissibility of evidence,
utmost confidence all confidential information obtained in the including objections by reason of Section 9 of the ADR Act, must
course of the mediation process, and to discuss issues of confidenti- be raised at the earliest opportunity; othenvise, they will be
ality with the mediation parties before beginning the mediation deemed waived.
proeess.21
Waiver can also come by way of estoppel such as when a non-
A mediator may not be compelled to provide evidence of a me- party participant himself discloses the erstwhile confidential in-
diation communication or testify in such proceeding ... He may not formation. Also, a person who discloses confidential information is
make a report, assessment, evaluation, re<:ommendation, finding or barred from invoking the privilege as to the remainder of the in-
other communication regarding a mediation to a court or agency or formation necessary to a complete understanding of the previously
other authority that will make a ruling on a dispute that is the disclosed information." Similarly, a person who discloses or makes
subject of a mediation, except:" a representation about mediation is pr.ecluded from asserting the
privilege to the extent that the communication prejudices another
"Section ll(d), AOR Act; Article 3.23(d), IRR.
" Id.
"Article 3.8, IRR.. ~Section 13, ADR Act; Article 3.7, IRR..
"Section ll(c), ADR Act; Article 3.23(c), IRR. " Section 10, ADR Act; Article 3.22, !HR.
" Sect.ion 12, ADR Act; Article 3.24, IRR. "Id.
 {
'

88 Al.Tl!RNATIVE DISP1.11'E RESOLUTION MEDIATION UNDER THE ADR Acr OF 2004 89

in the proceeding and it is necessary for the person prejudiced to rate, the mediation parties may ask for his withdrawal.
respond to the representation of disclosure." For this purpose, the mediator may be requested by a me-
These principles are rooted on fair play and equity such that a diation party to disclose his qualifications to mediate a
person who benefits from a disclosure ought not to prevent another dispute.
from diacloaing or securing the disclosure of the rest of the erst- 3. The mediator's impartiality is in question. An impartial
while confidential information as may be necessary to overcome settlement of the dispute is one of the objectives of the
the prejudice caused by the disclosure. ADR Act of2004.
4. The continuation of the process will uiolate an ethical
The Mediator standard.
(Section 13, ADR Act) S. The safety of any one of the portks will be jeopardized.
In consonance with the ADR policies of party autonomy and 6. The me~ is unabl.e to prouide eff1µ;ti11e se111ices.
self-determination, the mediation parties are given the freedom to 7. In case of confU.ct of interest.
select their mediator and they may request the Office for Alterna-
tive Dispute Resolution (OADR) to provide them with a list or 8. Other instances prouided for under the IRR.
roster of its certified mediators, and their resumes."
A mediator is generally precluded from making a report, as-
Tho role of the mediator is very crucial that his presence and sessment, evaluation, recommendation, finding or other communi-
competence must be ensured. If the mediator selected by the parties cation regarding a mediation. Unlike an arbitrator, he cannot rule
is unable to act for any re880n, the parties may, upon being informed upon the merits of a claim and render an award thereon except in a
of such fnct, select another mediator." A mediator who refuses to act mediation-arbitration where t!he mediator, upon an agreement <>f
aa such may withdraw or may be compelled to withdraw from the the parties in writing, is appointed as the arbitrator for the arbi-
mediation proceedin.gs under any of the following circumstances:'" tration phase of the proceedings.•
1. If any of the parties requests the mediator to withdraw.
This promotes and strengthens party autonomy and self- Duties and Functions of Mediators
determination in the selection of the mediator.
Apart from the general duty of mediators to conduct media-
2. The mediator does not have the qualifications, training
tion, mediators are required to perform the following:
and experience to enable him to meet the reasonable expec-
tations of the po~s. No special qualification by back· 1. Prior to mediation -
ground or profession is required of mediators .., However,
if a mediator is selected by the parties on account of his a. On competence. A mediator should maintain and
special qualifications which turn out to be false or inaccu- continually upgrade his professional competence in
mediation skills; ensure that his qualifications,
training and experience are known to and accepted
• 1d. by the parties; serve only when his qualifications,
" Article 8.3, IRR. training and experience enable him to meet the rea-
• Article 3.4, rRR.
•Article 3.5, lRR.
., Article 3.6, !RR. " Art.iclo 7.8(b), lRR; Rule 2.7, Special ADR Rules.

'
l
40 ALTERNATIVE DISPVT£ RESOLUTION MEDIATION UNDER THE ADR Acr OF 2004 41

eonable expectations of the parties and not to hold Mediator'• Costs and Feu
himself out or give the impression that he has quali-
fications, training and experience that he does not A mediator is allowed to charge costs, reasonable fees and
have; and, upon the request of a mediation party, charges against the parties but he is under obligation to fully dis-
disclose his qualifications to mediate a dispute.• close and explain the basis thereof.
b. On impartiality. Before accepting a mediation, the In an ad hoc mediation, the parties are free to make their own
mediator should make an inquiry that is reasonable arrangement# as to mediation costs and fees." In an institutional
under the circumstances to determine whether there mediation, mediation C06ts shall include the administrative
are known facts that a reasonable individual would charges or the mediation institution, mediator's fees and associated
consider likely to affect his impartiality; and disclose expensee.4'
any such fact known or learned as soon as practica- If the mediator withdraws from the mediation, he shall return
ble ... These disclosures may include a financial or any unearned fee and unused deposit. He shall not enter into a fee
pereonal interest in the outcome of the mediation arrangement contingent upon the results of the mediation or the
and any existing or past relationship with a party or amount of the settlement.. because by doing so, he acquires financial
foreseeable participant in the mediation. and personal interest in the outcome of the mediation which compro-
2. Du,.ing the mediatum - mises his impartiality. He, or any member of his immediate family or
his agent, shall not request, solicit, receive, or accept any gift or any
a. Confi.t:Untiality as above discussed. type of compensation other than the agreed fee and the reimburse-
b. On consent and self-determination. A mediator shall ment of the exponsea in connection with any matter before him.•
exert reasonable efforts to ensure that each party
understands the nature a nd character of t he media- Mediated Settlement Agreement.
tion proceedings, and that each party is free and able (Sectio11 17, ADR Act; Article 3.20, IRRJ
to make whatever choices he desires regarding his
participation in the mediation as well as his specific The concluding document in a successful mediation is called
settlement options." the mediated tettlement agreement or settlement agreement. It may
also take the form of a compromise agreement.
c. On promotion of respect and control of abuse of proc-
ess. The mediator shall encourage mutual respect be- In whatever form it may be, the concluding agreement has
tween the parties, and shall take reasonable steps, the effect or res judicata and, therefore, binding upon the parties
subject to the principle of self-determination, to limit whether or not it has been submitted to the court for approval.
abuses of the mediation process." However, there can be no execution of the concluding agreement
unless it has first been judicially approved." The parties, by mo-

"Article 3.25, IRR.

M Article 3.26. IRR.
•Article s.11. IRR.
•Section 13, ADR Act; Article 3.6, IRR. *Article 3.JS, IRR.
,. Section IS, ADR Act; Article 3.7, IRR. ""Article 2037 (Civil Codef. A compromise bas upon the parties the
" Article 33.9, IRR. effect and authority of,... judkola; but the"' shall be no execution except
"Article 3 .12, IRR. in compliance wit.h a judicial compromise.•
 r,

42 ALTERNATIVE DISPUTE RESOLUTION MEDIATWN UNDER THE ADR ACT OF 2004 43

tion., have to present the roncluding agreement to the proper court court, in which case, the court shall summarily proceed to
for approval and the rendition of judgment based thereon . The hear the petition in accordance with the Special ADR Rules.
court is called upon to approve the concluding agreement provided
it is not contrary to law, morals, good customs, public order and 5. The parties may agree in the settlement agreement that
public policy. Once judicially approved, the concluding agreement the mediator shall become a sole arbitrator for the dispute
may be enforced through a writ of execution. and shall treat the settlement agreement as an arbitral
award which shall be subject to enforcement under R.A.
"Being a by-product of mutual concessions and good No. 876 (The Arbitration Law).
faith of the parties, an amicable settlement has th e
for<:e and effect of res judkata even if not j u di- The deposit of the settlement agreement with the Regional
cially approved . It transcends being a mere contract Trial Court is not indispensable for the validity thereof. The de-
binding only upon the parties thereto, and is akin to a posit is purely voluntary on the part of the parties who may jointly
judgment that is subject of execution in accordance with or singly cause the deposit with the Regional Trial Court. The
the Rules. x x ..:"" deposit is required for the enforceability of the agreement. Unless
deposited, the petition to enforce the settlement agreeme.nt is pre-
The following principles apply to these concl'uding a_gree-
mature and can be dismissed on the ground that a rond1tion prece-
ments:"
dent for filing the claim has not been complied with.'° The Regional
1. A settlement agreement following a successful mediation Trial Court whereat the deposit is made will be the venue of the
shall be prepared by the parties with the assistance of petition to enforce the deposited settlement agreement."
their respective counsels, if any, and by the m ediator.
2. The parties and their respective rounsels, if any, shall sign R ole ofCoun11el in Mediation
the settlement agreement, and the mediator shall certify (Section 14, ADR Act)
that he bas explained the contents thereof to the parties in
a language known to them. Except as otherwise provided in the ADR Act or IRR, a party
may designate a lawyer or any other person to provide assistance
3 . If the parties agree, the settlement agreement may be in the mediation. This right may be waived but the waiver must be
jointly deposited by the parties or deposited by one party in writing and can be rescinded at any time."
with prior notice to the other party or parties, with the
Clerk of Court of the Regional Trial Court (a) where the The lawyer or counsel so designated shall have the following
principal place of business in the Philippines of any of the roles:"
parties is located; (b) if any of the parties is an individual,
where any of those individuals reside; or (<:) in the Na- 1. Collaborate with the other lawyer in working together to·
tional Capital Judicial Region. wards the common goal of helping their clients resolve
their differences to their mutual advantage.
4. Where there is a need to enforce the settlement agreement,
a petition may be filed by any of the parties in the same

" Section l(j), Rule 16, 1997 Rules of Civil Procedure.

"MigW!l v. Montanez, 664 SCRA 345 (20121, p. 350; emphasis sup· " Rule 16.5, Special ADR Rules.
plied. " Section 14, ADR Act; Article 3.14, IRR.
"Section 17, ADRAct; Article 3.20, IRR. " Article 3.15, IRR.

l.
 A1:r£RNAT!VE DISPUTE RESOLUTION MEDIATION UNDER TH£ AOR ACT OF 2004 45

2. Encourage and assist the client to actively participate in •!• Possible bargaining options but stressing the
positive discussions and cooperate in crafting an agree- need to be open·minded about other possibilities.
ment to resolve their dispute. •:• The best, worst, and most likely alternative,s to a
negotiated agreement.
3. Assist the client to comprehend and appreciate the media-
tion process and its benefits, as well as the client's greater 3 . Assist in preparing a compromise agreement that is
and personal responsibility for the success of mediation in ~ot contrary to law, morals, good customs, public order, or pub-
resolving the dispute. hc policy so that the same may be approved by the court, pay-
ing particular attention to the issues of voluntary compliance
4. Confer and discuss with the client the mediation process
of what have been agreed upon. or otherwise to issues of en·
and substance. forcement in case of breach.
In the Consoli.dated o.nd Revised Guidelines to Implement the 4. Assist, wherever applicable, in the prcparation of a
Expanded Coverage of Court-Annexed MediatU>n (CAM) o.nd Judi· manifestation of satisfaction of claims and mutual withdrawal
cial Dispute &solution (JDR) (A.M. No. 11-1-SC-PHIWA 11 of complaint and counterclaim as basis for the court to i$sue an
order of dismissal."
January 2011), albeit concernin.g CAM and JDR, the Sup;eme
Court defined the role oflawyers tn mediation as follows:

"Lawyers may attend mediation proceedings in the role

of adviser ru;-d consul~nt to .their clients, dropping their com-
bative role in _th~ a.dj.ud1c~tive Process, and giving up their
dominant role m Judictal trials. They must accept a less direc-
tive role in order to allow the parties more opportunities to
craft their own agreement.
In particular, they shall perform the following functions:
1. Help their clients comprehend the mediation process
and its benefits and allow them t.o assume greater personal re-
sponsibility in malting decisions for the success of mediation in
resolving the dispute.
2 . DiscuS& with their clients the following:

<* The substantive issues involved in the dispute .

.;.. Prioritization of resolution in t.erms of impor-
tance to client.
<· Understanding the position of the other side and
the underlying fears, concerns, and needs un-
derneath that position.
·~ Need for more information or facts to be gath-
ered or exchanged with the other side for in-
formed decision-making.
 ARBITRATION IN GENERAi. 47

As to the role of evidence and the merits of the case, arbitra-

tion is a merit/evidence based form of ADR.
CHAPTER 4 A completed arbitral proceeding is concluded by an .a rbitral
award constituting the partial or final decision by an arbit-rator in
resolving the issue in a controversy.' The arbitral award may come
ARBITRATION IN GENERAL in the form of an award on agreed terms, consent award, or award
based 011 compromise if the parties settled their dispute amicably.

Concept ofArbitration Kinds ofArbitration

Generally, there are two types of arbitration, compulsory and

As defined under the ADR Act, arbitration is a volunta ..y dis- voluntary. Arbitration is voluntary if it:
pute resolution process in which one or more arbitrators, appointed
in accordance with the agreement of the parties or rules promul- "x x x involves the reference of a dispute to an impartial body,
gated pursuant to the ADR Act, resolve a dispute by rendering an the members of which are chosen by tho pal'ties themselves,
award.' It has also been defined and distinguished from the court \vhfoh parties freely consent in advance to abide by the arbitral
trial system as follows: award issued after the proceedings where both parties had the
opportunity to be heard."'
"x x " [Al n arrangement ~or taking_and abiding by the judg·
ment of selected pc~sons in.some disputed matter, instead of On the other hand, compulsory arbitration is:
carrying it to esta~hshed tribunaU. of justice, and is intended
to avoid the ronnabtics, the delay• the expense and vexation of "x x x the process of settlement of (labor) disputes by a govern·
ordinary litigation. "2 ment agency which has the authority to investigate and to maike
an award which is binding on all parties, and as a mode of arbi-
The primary distinction between arbitration and mediation is tration where the parties are compelled to accept the resolution
that, in the former, it is the arbitrator that decides the dispute and of their dispute through arbitration by a third party.'"
renders an arbitra~ ~ward to conclude t he arbitral proceeding;
while in the latter, it 18 the parties themselves who enter into and As thus defined, the ADR Act and its IRR govern voluntary
execute a mediated settlement agreement to conclude the mediation arbitration but not compulsory arbitration.
proceeding.

• Section 3(1), R.A. No. 9285.

• Uniwide Sales Realty and Resources Corporation v. Tita;n-Jkeda
'Section 3(d), ADR Act, Article 1.6, A(3), IRR. Construction and Developmen.t Corporation, supra,· \Verr Corporation
'Uniwide Sales Really and Resources Corporation v. Tit<in-Ikcda faternational u. HigMond• Prime, Inc., G.R. No. 187543, February 8, 2017.
Construction a11d Development Corporation, 511SC:RA335 [20061, p. 356. 0
Benguet Corporation u. Departmen.t of Enuironn2e11t and 1Votural
Resources-Mines Adjudicatfon Boa.rd, 545 SCRA 196 [2008), pp. 209-?10,
citing Reformist Unfon of R .8. Liner, In~. v. NLRC, 266 SCRA 713 119971,
p. 723; Ludo & Luym Corporation u. S<Wrnido, 395 SCRA 451 120()3), PP·
46 457-458.
 I'

Alu!ITI\ATION '"' GENERAL 49

Of particular importance is the classification of arbitration An international arbitration is at the same time commercial if
based on the seat of arbitration and the presence of foreign ele- it covers matters arisin( from all relationships of a commercial
ments. Under this claasificetion, arbitration :s either domestic, nature, whether contractual or not,' in which case the arbitration
international commercial or foreign. is called international commercial arbitration. In defining the ex-
According to the ADR Act, arbitration is dcrrrestic if it is not tent of commercial relationships covered by this kind of arbitra-
international in character.' On the other hand, arbitration is inter- tion, the IRR sought to expand rather than delimit its coverage.
national if any of the following instances occu.r :' Hence, the IRR, instead of defining commercial relationships gave
examples thereof implyinr that the enumeration is merely descrip-
1. The parties' places of business, which at the time of the tive and not exclusive.
conclusion of the arbitration agreement, is in different An international commercial arbitration with the Philippines
states; as its seat is governed by the ADR Act and its IRR even if the place
2. The place of arbitration provided in the arbitration agree- of arbitration is outside the Philippines.
ment and in which the parties have their places of busi-
neea, is outAide the Philippines; Arbitration is foreign if its seat ia outside the Philippines even
if the place of arbitration is in the l:'hilippines. Therefore, an inter·
3. The place where a substantial part of the obligation is to national commercial arbitration whose seat is outside the Philip-
be performed or the place with which the subject matter pines is a foreign arbitration. Thia is true even if the place of arbi-
of the dispute is most closely connected. and in which the tration is in the Philippines as long as the seat of arbitration is not
parties have their places of business, is outside the Phil- the Philippines. The ADR Act and its IRR govern the recognition
ippines; or and enforcement of foreign arbitral awards.
4. The parties have expressly agreed that the subject matter In this book, an ICA with the Philippines as its seat is re-
of the arbitration agreement relates to more than one ferred to as plain •1cA • or "Pltilippine !CA." On the other hand, an
country. ICA whose seat is ou,side the Philippines is denominated as "for-
eign !CA."
Based on the foregoing definitions, arbitration is domestic if
the components of parties' places of business, ;>lace of arbitration, By providing for a system of arbitration of an international
place of performance of a substantial part of the obligation, and and commercial character, the ADR Act of 2004 opened the Philip-
place where the subject matter of the dispute is most closely con- pines as a venue for international commercial arbitration.
nected, are all located in the Philippines. Domestic arbitration is
governed by the Arbitration Law CR.A. No. 816), the Model Law, P olicy on Arbitration
and specific provisions of the ADR Act.
ln Korea Technologiu Co., Ltd. u. Lerma,• the Supreme Court
It is international if any the above~numerated instances is
had an opportunity to reiterate the judicial policy on arbitration in
present. Thus, if the parties' places of business, place of arbitration, the following manner:
place of performance of a substantial part of the obligation, or place
where the subject matter of the dispute is most closely connected, is 'Section 3Cg), Article 1.6, 8(4), lRR.
outoido tho Philippinoc, tho a.rbitrQtion ia in,terria.t ional io. cl1a1.·ucl~1·. ' 542 SCRA 1 (2008), p. 23; citing LM Power Engineering Corporo·
tion v. Capitol Industrilli Conatruction Groups, Inc., 399 SCRA 562 (2003).
'Section 32, ADR Act. See also: Maria Luisa Park Association, Inc. v. Almendros, 588 SCRA 663
'Article 1.6, BCBJ, IRR. [2009), p. 677; Fro/Hiie Fi.$hi"fl Corporotion v. Philippine American Lift
50 ALTERNATIVE DISPUTE R ESOLUTIOX ArullTRATIO~ IN GENERAL 51

"Being an inexpensive, speedy and amicable method of O bj ectives o f Arbitration

settli_n g disputes. arbitration - along with mediation, conci lin·
tion and negotiation - ia encouraged by the S upreme Cou rt. The basic objective of arbitration is to provide a speedy and
A.aide from unclogging judicial dockets, arbitration nlso hos· inexpensive method of settling disputes by allo,nng the parties to
tens the resolution of di1putes, especially of the commercinl avoid the formalities, delay, expense a n d aggravation which com·
kind. It la thus regarded u the 'wave of the future' in intcrna · monly accompany ordinary litigation, especially litigation which
tional civil and commercial disputes. Brushing aside a controc·
tual agreement calling for arbitration between the pnrtics goes through the h ierarchy of courts."
would be a step backw!ll'd."
Arbitrator
In Koppel, Inc. u. Makoti Rotary Club Foundation, Inc.:• the
Supreme Court, after declaring null and void all proceedings con· Arbitra tion is conducted by an arbitrator or an arbitrol tribu·
ducted by courts in violation of arbitration agreements, including nal composed of two (2) or more al'bitrators. An arbitrator is the
the decisions rendered therein, went on to s us tnin the stnte policy person appointed to render an award, alone or with others, in a
of encouraging alternative dispute resolution notwith standing the dispute that is the subject of an arbiti·ation agreement. H e must be
h arsh legal implica tions that th at policy may create. The Suprem e oflegal age, with full civil rights, and able to read and write."
Court said:
An arbitrator should be distinguished from an arbiter who is
"Thia Court is not unaware of the apparent ha rshness of bound by rules oflaw a nd equity in rendering an award, unlike an
the Decision that it le about to make. Nonethele-ss, this Court. arbitrator who may use his own discretion in the performance of
must make the same lf only to stress the point that, ln our J u · his functions. The Labor Arbiters of the Arbitration Branch of the
ri1d.i ctlon, bona fick a rbitration agreements are recog· N ational Labor Relations Commission are examples of nrbitcrs.
n lzed a.a valid;. and t hat laws, rul es and rc1itUlntio 11s do
exis t protecting and en suring their enforcem en t aa a As clarified in Fruehauf Electronics Philippines Corporation
matter or otate policy. Gone should be the days when court.& 11.Technology Electronics Assembly and Management Pacific Car·
treat otherwise valid arbitration agreemonts with disdain a nd porati.on,u arbitrators and arbitral tribunals are not q uasi-judicial
hostility, if not. ouu'\gll• 'feaU,usy,' and then get away with it. instrumentalities whose awards are reviewable under Rule 43
Courts should instead learn to treat alternative means of dis· (petition for review) or Rule 65 (petition for certiorari) of the Ru les
pute resolution as effective partners in tho adminis tration of of Court.
ju1tice and, in the case of arbitration agreements, to afford
them judicial restraint. Today, this Court only performs its When the appointment of an arbitrator cannot be secured de-
part lnupholding a once disregarded state policy.• spite the procedure agreed upon by the pa.r ties or the defaul t pro·
cedure prescribed by law and the rules, the appointment shall be
made by the appointing authority upon t he application of a party.

Insuranc.e Company, 530 SCRA 543 (20071, p. 549; Reye!i v. Balde II, 498 "Id.; •ee also De/ Monte Corporation -USA v. CGUrl of Appeals, 351
SCRA 186 (20061, pp. 196-197; F~sta World Mall Corporation 11. Linbers SCRA 373 120011, p . 382.
PhilippiMI, Inc., 499 SCRA 332 (2006), p. 339; Sea-Land Service, Iru:. u. • Fruehauf EltttroniJ:• PhUippines Corporation o. Technology Elec·
Court ofAppeal.a, 327 SCRA 135 120001; Gerardo Lanuza, Jr. v. BF Corpo- troni« Aatt:mbly and Man.ag.ement Pacific Corporo.tion, G.R. No. 204 197.
ration, C.R. No. 174938, October 1, 2014. November 23, 2016.
"705 SCRA 142 (2013), pp. 169-170; emphasis s upplied. u Id.
62 ALTBIUIATIVE DISPlltt RESOL\1110N AJtsrTRATION rN GENERAL 63

Arbitration AgreeJMnt Likewise, in Tun.c Processing, Inc. v. Philippine Kingford,

(ArtU:Les 4. 7 tc 4.9, IRRJ Inc.," the Supreme Court elucidated that:

An arbitr°'ion agreement ia the agreement of the parties to "'xx x When a party enters into n contract containing a foreign
submit to arbitration all or certain disputes which have arisen or arbitration clause and, 111 in this case, in fact submits itself to
which may ariae between them in reapect of a defined legal rela- arbitration, it become~ bound by the contract, by the arbitra·
tionship, whether contractual or not." By nature, an arbitration tion and by the result of the arbitration, conceding thereby the
agreement is contractual." Aa auch, it should have the essential capacity of tbe other perty to enter into the contract, partici·
pate in the arbitration and cause the implementation of the re·
elements of a contract, namely: (1) conaent of the parties freely
suJt. xx x.'"
given, (2) the cause or consideration, and (3) lawful object."
The Supreme Court explained the contractual nature of an ar- There are two (2 ) modes of submitting a dispute or contro-
bitration agreement in the caaa of Onncc Sugarcane Plonters' Asso· versy to arbitration dependin• on the existence or pendency of the
eiDti.on, Inc. (OSPAJ v. Court ofAp/)«111." Said the Court: dispute or controversy to be submitted for resolution, namely I.i i an
cwreem.ent to submit tc arbitraJion, and [ii] a submias-ion agree·
"x x x An agreement to arbitrate i. a contract, the relation of ment. These modes were differentiated in Orm.oc Sugarcane Plant·
the parties is contractual, and the rights and liabilities of the ers' Association, Inc. (OSPAJ 11. Court ofAppeals, supra, as follows:
parties are controlled by the law of contracts. In an agreement
for arbitration, the ordinary elemen~ of a valid contMet must "The foregoing provision !Section 2, R.A. No. 8761 speaks
appear. including an Bir6"m~nt to arbitrate some specific of two mode.a of arbitration: (a) an agreement to submit to arbi ..
tbin;g, and an agreome.nt to abide by the award either in ex- tration some future dispute usually stipulated upon in a civil
press language or by implication." ' contract between tho parties, and known as an agreement to
submit to arbitration-. and (b) a.n agreement to submit an ex.isf..
So also, in Cargill Philippines, Inc. v. San Fernando Regala ing matter of difference to arbitrators, termed the submission
Trading, Inc.," it was held that: agreenttn.t. x x x.•

""'. co.ntract is ~~!red for a.rbi11:8tion to take place and An arbitration agreement is a formal contract; hence, its va-
to be b111ding. Sublll18&lon to arbitration is a contract and a lidity is dependent on the contract being executed in a particular
clause in a contract providini that all matters in dispute he· form. An arbitration agreement "shall be in writing and subscribed
tween the parties shall be referred to arbitration is a contracL by the party to be charged, or by hia lawful agent."'°
The provision to submit to arbitration any dispute arising
therefrom and the relt.tiOnahip or the parties is part of the COD·
tract and is it.self a c:ontr~• "Ibe formal requirements or an ~ment to arl>itn!te
are therefore the following: ( a ) ft must he in writing and {b) it
must he subscribed by the parties or their representatives."''

"Article 1.6, A(4), IRR.

" Frlllhau{ Electronic• Philippines Corporation u. Technology Elec·
Ironies Assembly and Mano,geme11t Pacific Corporotion, supra. "667 SCRA 287 120121, p. 304.
"Article 1318, Civil Code of the Philippine.a. "Section 4, Arbitration Lew; Article 4.7, !RR.
"596 SCRA 630 120091, p. 640. " Ormoc Sugarcane Planters' A1-iation, Inc. (OSPAJ 11. C<>uN of
"641SCRA31 (2011), pp. 43-44. Appeals, •upra, p. 642.

l
54 ALTERNATIVE DISPUTE RESOl.UTION ARBITRATION JN GENERAL 55

An arbitration agreement is in writing if is contained in a separate agreement such that, even if the validity of the main
document signed by the parties; in an exchange of letters, telex, contract is challenged, the arbitration agreement or clause remains
telegrams or other means of telecommunication; or in an exchange of valid and enforceable.
statements of claims and defenses in which the existence of an
agreement is alleged by a party and not denied by the other." In Gonzales v. Climax Mining Ltd. (G.R. Nos. 161957 and
167994)," the Supreme Court explained the doctrine as follows:
An arbitration agreement may be included in the container
contract in which case it is referred to as an arbitratiott clause or a '"The separability of the arbitration agreoment is espe·
compromissoire,,. or may be constituted in a separate contract. It cially significant to the determination Of\vhether the invalidity
may also come in the form of a reference in a written contract to a or t.he main contract also nullifies the arbitration clause. In·
document containing an arbitration clause such as to make that deed, the doctrine denotes that the invalidity of the
clause part of the contract." main contract, also referred to as the -container' con-
tract, does not affect the validity of the arbitration
Arbitration clauses must be liberally construed consistent agreement. Irrespective of the f.o.ct that the main con-
with the policy of encouraging alternative dispute resolution meth- tract is invalid, the arbitration clause/agreement still
ods. Provided such clause is susceptible of an interpretation that remains valid and enforceable.• (Emphasis supplied)
covers the asserted dispute, an order to arbitrate should be
granted. Any doubt should be resolved in favor of arbitration." The foregoing ruling of the Supreme Court over-turned the
earlier ruling in the same case, Gonzales u. Climax Mining Ltd.
Doctrine of Separability (G.R. No. 161957)," wherein the Supreme Court held that:

Otherwise known as the doctrine of seuerability, the doctritte "Arbitration before the Panel of Arbitrators is proper
of separability enunciates that an arbitration agreement is inde- only when there is a disagreement bet\veen the parties as to
some provisions of the contract bet,veen them, 'vhich needs the
pendent of the main contact even if it is contained in an arbitration interpretation and the application of that particular knowledge
clause. The arbitration agreement or clause is to be treated as a and expertise possessed by members of that Panel. It is not
proper when one of the parties repudiates the existence
or validity of such contract or agreement on the ground
" Steamship Mutual Underwriting Associates (Bermuda) Ltd. u.
Sulpi<;jo Littes, Inc., G.R. No. 196-072, September 20, 2017. ·
of fraud or oppression as in this case. The validity of the
Insular Savings Bank v. Far East Bank and Trust Company, 492 contract cannot be subject of arbitration proceedings.
Allcgotions of fraud and duress in the execution of a
SCRA 145 (20061, p. 152; citing Custodio Parlade, "Alternative Dispute
Resolution Act of 2004, • 2004, p. 275. contract are matters within the jurisdiction of the ordi-
" Stronghold Insurance Company, Inc. v. Spouses Rune and Lea nary courts of law. These questions are legal in nature and
Stroem, G.R. No. 204689, January 21, 2015; Bases Conversion Develop· require the application and interpretation of la\VS and juris-
prudence \Vhich is necessarily a judicial function.
ment Authority v. DMCI Project Developers, bic., G.R. Nos. 173137 and
173170, January 11, 2016; Steamship Mutual Underwriting A••ociates xxx xxx xxx
(Bermuda) Ltd. v. Sulpicio Lines, bu:, supra.
16
LM Power E11gineering Corporation u. Capitol Industrial Construe·
tion Groups, Inc., supra, pp. 569-570; Gerardo Lanuza., Jr. v. BF Corpora·
tion, supra.; Ba&es Conversion Deve/,opment Authority v. DA1CI Project De·
velopers, Inc., supra; Camp John Hay Development Corporatio11 u. Charter "512 SCRA 148 (20071, p. 170.
Chemical and C-Oating Corporation, G.R. No. 198849, August 7, 2019. n 452 SCRA 607 120051, pp. 624·625.

i
56 AJ..TO!!RNATIVE DlSPUT& R&SOLUTION ARBITRATION I N GENERAL 57

We agree that the case should not be brought under the Gonzalea decided the issue in the negative. In holding
ambit of the Arbitration Law, but for a different reason. The that the PA-MGB was devoid of .any jurisdiction to take cogni-
question of validity of the contract containing the zance of the complaint for arbitration, this Court pointed out to
agreement to submit to arbitration will affect the appli· the provisions of R.A. No. 7942, or the Mining Act of 1995,
cabillty of the arbitration clause Itself. A party cannot which granted the PA-MGB with exclusive original jurisdiction
rely on the contract and claim rights or obligations un· only over m.i ning disputes, i.e., disputes involving ..rights to
der it and at th.e same time impugn its existence or va· mining areas, .. "'mineral agreements or permits, .. and "'surface
lldity. Indeed, litigants are enjoined from taking inconsistent owners, occupants, claimholders or concessi-Onaires" requiring
positions. As previously discussed, the complaint should have the technical knowledge and experience of mining authorities
been filed before the regular courts as it involved issues which in order to be resolved. Accordingly, since the complaint for
are judicial in nature.• (Emphasis supplied) arbitration in Gonz,a,le11 did n ot raise minin1 dl1putes as
contemplated under R.A. No. 7942 but only issues relat-
Explaining the justification for the reversal of the above- ing to the validity of certain mining related agreements,
quoted earlier ruling, the Supreme Court said in the subsequent this Court held that such complaint could not be arbi-
decision in G.R. Nos. 161957 and 167994 that: trated before the PA-MGB. It is in this context that we
made the pronouncement now in discussion:
"This bring.a us back to G.R. No. 161957. The adjudica-
tion of the petitic>n in G.R. No. 167994 effectively modifies part Arbitration before the Panel of Arbitrators is
of the Decision dated 28 Febl'Uary 2005 in G.R. No. 161957. pl'<lpt:r
90-\y when there is a disagreement between ille
parties as t.o some provisions of the contract betwC<!n
Hence, we now hold that the validity of the contract con- them, which needs interpretation and the application of
taining the agreement to auhmit to arbitration. does not that particular knowledge and expertise possessed by
affect the applicability of the arbitration clau&e itself. A members or that Panel. It is not proper when one of the
contrary ruling would suggeat that a party's mere repu- part~ repudiates the existence or validity of such con-
diation of the main contract is sulftcient to avoid arbi· tract or agreement on the ground of fraud or oppression
tr_ation. That is.~cUy the situation that the separability doc- as in this case. The validity of the contract cannot be
trine, as well as runsprudence applying it, seeks to avoid. x x x." the subject of arbitration proeeedin,gs. Allegations or
(Empbuis supplied) fraud and duress in the execution of a contract are mai.
ters within the jurisdiction of the ordinary oourt.s of law.
Tbe.e questions are legal iDI nature and require the
A more extensive explanation for the difference in the Gonza· applicatlon and Interpretation of laws and jurl$o
les de~sions was presented by the Supreme Court in Koppel, Inc. u. prudence which i.8 necessarily a judicial function.
Makat• Rotary Club .Foundation, Inc.,,. as follows: (Emphasis supplied)

"x x x The issue that confronted the Court then was The C@rt in Gonz(Jle• did nQt simply base its rejection
whether the PA·MGB (Panel of Arbitrators of the Mines and of the complaint for arbitration on the ground that the issue
G~ciences B~reau) has jurisdiction over that particular arbi- raised therein, i.e., the validity of contracts, is per se non·
tration com.plamt. S~ted otherwise, the question was whether arbitrable. The real consideration behind the ruling was
the complatnt for arbitration raises arbitrable issues that the the limitation that was placed. by R.A. No. 7982 upon the
PA-MGB can take cognizance of. jurisdiction of the PA-MGB as an arbitral body. Gonza·
lea rejected the complaint for arbitration because the
Issue raised therein Is not a mining dl4pute per R.A. No.
7942 and it is for thi• reason,. and only for this reason,
that such issue is rendered non·arb.itrable ~we
"Supra, pp. 159-161; emphasis supplied.
~n~~~~
\» 1¥\U\U
IJ \) 'W! \0 IL\,v-tc B l'i.lPF I·~
II' J ~·A 'I f.~ii ~ !i,,
'6

T.ANC~S-4..G
:~.s-·
58 ALTERNATIVE DISPUTE RESOLUTION ARBITRATION IN GENERAL 59

PA-MGB. As stated beforehand, R.A. No. 7942 clearly limited Due Process in Arbitral Proceedings
the jurisdiction of the PA-l\1GB only to mi11ing disputes."
The principles of administrative due process equally apply to
In Cargill Philippines, Inc. v. San Fernando Rega.la Trading, arbitral proceedings. Thus, in Equitable PCI Banking Corporation
20
Inc., the doctrine of separability was further explained in the v. RCBC Capital Corporation," the Supreme Court applied the
following manner: principles of administmtive due process in relation to the right to
cross-examine witnesses in an arbitral proceeding.
"xx x [A)n arbitration agreement which forms part
of the main contract shall not be regarded as invalid or
non-existent just because the ma in contract is invalid or Judicial Review and Court Interventi.on
did not come into existence, since the arbitration (Articlos 4.5 and 4.8, IRRJ
agreement shall be treated as a separate agreement in·
dependent of the maln contract. To reiterate a contrary There are three (3) types of judicial interuention in arbitration:
ruling would suggest that a party's mere repudiation of the Iii judicial assistance in arbitratio11; [ii) judicial review of arbitral
main contract is sufficient to avoid arbitration and that is ex- awards; and [iii) judicial review of court decisions in ADR related
actly the situation that the separability doctrine sought to cases. The first (judicial assfatance) allows the parties in an arbitra·
avoid. Thus, we find that even the party who has repudiated
the main contract is not prevented. from enforcing its arbitra·
tion to secure from the courts orders or processes that will aid in the
tion clause.• (Emphasis supplied) conduct of the arbitration. These include referral to arbitration,"
issuance of interim measures of protection.JJ assistance in taking
Also, in Koppel, Inc. v. Makoti Rotary Club Foundation, Inc., evidence," and issuance of confidentiality and protective orders."
supra., the legal implications of the doctrine of separability was The second (judicial review of arbitral awards) involves passing
explained as follows: upon, to the extent allowed and on grounds provided for by law, the
propriety of the arbitral award. The third (juaicial reuiew of court
"lJnd~r the. doctrine . of separability, an arbitration decisions in ADR related cases) involves the remedies available from
agreement •• considered as mdependent of the main contract. decisions or orders of the Regional Trial Courts and the Court of
Being a sep~ate contract in itself, the arbitration agreement Appeals rendered in the first two types ofjudicial i.nteivention.
may thus be m~okcd regardless of the possible nullity or inva·
lidity of the main contract. The decisions of an arbitral tribunal are subject to judicial re-
view. The inclusion of an arbitration clause in a contract does not
Once again instructive is Cargill, wherein this Court ipso facto divest the courts of jurisdiction to pass upon the findings
held that, as a further consequence of the doctrine of separabil·
ity, even lhe very party who re·pudiateo the main con·
tract may invoke its arbitration clause.#JO

" 574 SCRA 858 120081, pp. 890-893; citing CMP Federal Secu~ity
Agency, I11c. v. NLRC, 303 SCRA 99 [19991, pp. 109-110, and Quiambao v.
Court ofAppeals, 454 SCRA 17 120051, p. 40.
"' Rules 4.1 to 4.8, Special ADR Rules.
"641 SCRA 81 [2011], pp. 46-47; reiterated in Koppel, Irie. v. Maleati "' Rules 5.1 to 5.6, Special ADR Rules.
Rotary Club Foundation, Inc., id., pp. 161-162. " Rules 9.1 to 9.11, Spocial ADR Rules.
"Id., p. 162, emphasis supj)lied. " Rules 10.1to10.10, Spocial ADR Rules.
 "'

60 ALTERNATfVE lDISPUTE RESOWTION ArultTRATION IN GENERAL 61

of arbitral bodies, because awards are still judicially reviewable Corp-Oration v. Banco de Oro Unibank, Inc.,"" citing Asset Privatiza-
under certain conditions.,. tion Trust v. Court ofAppeals," as follows:
However, not every question of fact is reviewable by the
courts. The review of fact ual issues by the Supreme Court on mat- i.Judicial Review
ters arising from arbitration has been held limited. Thus:
At the outset, it must be stated that a review brought to
"Aware of the objective of voluntary arbibiltion in the labor· this Court under the Special ADR Rules is not a matter of right.
field, in the construction industry, and in any other area for that Rule 19.36 of said Rules specified the conditions for the exercise
matter, the Cowt will not assist one or the other or even both par- by this Court's discretionary review of the CA's decision.
ties in any effort to subvert or defeat that objective for their private Rule 19.36. Review discretwnary.-A review by the Su-
purposes. The Court will not review the factual findlncs of an preme Court is not a matter of right, but of sound judicial dis·
arbltral tribunal upon the artful allegation that such body cretion, which will be granted only for serious and compel·
had 'misapprehended fade' and will not pass upon Issues ling reasons resulting in grave p~udice to the ag-
which are, at bottom, iasuee of fact, no matter how cleverly grieved party. The following, while neit!her controlling nor
d..lsgui8ed they might be as 1egal question&' The parties fully measuring the cou~s discretion, indicate the serious and
here had recourse to arbitration and chose the arbitrators compelling, and necessarily, restrictive nature of the grounds
themselves; they must have had confidence In such arbitra- that will! warrant the exercise of the Supreme Court's discre-
tors. The Court will not, therefore, permit the parties to re- tionary !P"wcrs, when the Court of Appeals:
litlpte before it the illntea offacta previoualy presented and
argued before the A:rbib-81 Trlbun..i, oave only where a a. Failed to apply the applicable s tandard or test
clear showing Is made that, In reaching it. factual conclu- for judicial review prescribed in these Special ADR
olons, the Arbitral Tribunal committed an error 50 egre- R.ules in arriving at its decision resulting in substantial preju·
eioua and hurtful ~ on~ party as to constitute grave abuse dice to the aggrieved party;
of disct'etion resulting m lack or loss of jurisdiction. x x x b. Erred in upholding a final order ·Or decis ion despite
Any other, more relaxed. rule would result in setting at
the lack of jurisdiction of the court that rendered such final or-
naught the basic objective of a voluntary arbitration and der or decision;
would reduce arbitration to a largely Inutile lnatitutlon-~·
c. Failed to apply any provision, principle, policy or rule
The nature and extent of judicial review under the Special contained in these Special ADR Rules resulting in substantial
prejudice to the aggrieved party; and
ADR Rules was explained by the Supreme Court in RCBC Capital
d. Committed an error so egregious and harmful to a
party as: to amount to an undeniable excess of jurisdiction.
The mere fact that the petitioner disagrees with the
Court of Appeal's determination of questions of fact, of law or
both questions of fact and law, shall not wan'Snt the exercise of
the Supreme Court's discretionary power. The error imputed
"LM Power Engineerinc Corporatwn v. Capitol Industrial Construc-
tion Groups, Inc., 399 SCRA 562 (2003).
" Uniwilk Sales Realty and Resources Corporation u. Titan-Ikeda, • 687 SCRA 583 (2012), pp. 616-618; emphasis s upplied.
supra, pp. 362-363; see also National Power Corporation u. Alonzo·Legasto, • 300 SCRA 579, G.R. No. 121171, December 29, 1998. See alsoFrue·
443 SCRA 842 (2004), pp. 359-362. hauf E/.ectroni,cs Philippines Corporation u. Technology E/.ectronies A-mbly
and MaTUJgernent Pacific Corporatwn, supra.
62 ALTERNATl\1'£ DISPUTE: RESOLU'rION
ARBITRATION IN GENERAL 63

to the Court of Appeals must be grounded upon any of Rule 19.10. Rule on Judicial review on arbitration
the above prescribed ground& for review or be closely in the Phlllppinet.-As a general rule, the court can only va·
analogous thereto. cate or set aside the decision of an arbitral tribunal upon a clear
A mere general allegation that the Court of Appeals showing that the award suffers from any of the infirmities or
committed a r;erious and substantial error or that it has acted grounds for vacating an arbitral award under Section 24 of
with grave abuse of discretion resulting in substantial preju- fu.publlc Act No. 876 or under Rule 34 of the Mo!lel Law
dice t:o the petitioner without indicating with specificity the na· in • dome§tic arbitratjon. or for setting aside an award in an
ture of such error or abuse of discretion and the serious preju· international arbitration under Article 34 of the Model Law, or
dice suffered by the petitioner on account thereof, shall consti- for such other grounds provided under these Special Rules.
tute sufficient ground for the Supreme Court to di•miss out·
right the petition. (Emphasis suppBl!d)• If the l«!giioMI Trial Court is asked to set
aside an arbitral award in a domestic or intema·
Similarly, in Fruehauf Electronics Philippines Corporati.on v. tional arbitration on any ground than those
Technology Electronics Assem?ly and Management Pacific Corpora· provided In the Special ADR Rules, the court
tion.," the Supreme Court elucidated: shall entertain such ground for the setting aside or
non-recognition of the arbitral award only II the
s ame amounts to a yiol ation of public policy.
"As a rule, the award of an arbitrator cannot be set
aside for mere errors of judgment either as to the law or The court shall not set aside or vacate the
ae to the facts. Courts are without power to amend or award of the arbltral tribunal merely on the
overrule merely becauae of disagreeme nt with mat- ground that tbc arbitral tribunal committed
ters of law or facts determined. by the arbitrators. errors of fact, or of l aw, or of fact and law, as
They will not review the findings of law and fact con- the court substitute its judgment for that of
the arbitral tribunal.
tained in an award, and will not undertake t-0 substi•
tute their judgment for that of the arbitrators, since xx x xxx xx x
any other rule "'.0 .uid .make an award the commencement, In otheT words, simple errors of fact, of la'v,
not the end'. ~f liti1at1on. Errors oflaw and fact, or an er- or of fact and law committed by the arbitral tribu-
roneous .decJ8lOn o ma~ers submitted to the judgment of nal are not justiciable errors in this jurisdiction."
the arbitrators, are mBDft'icient to invalidate an
award fairly and honestly made. Judicial review of an Indeed, arbitration and court action are not in.compatible.
arbitration is, thus, more limited than J. udicial review of a They may proceed at the same time and independently of each
trial. other. They may even complement each other.
Nonetheless! an arbitral award is not absolute. Rule A court before which an action is brought on a matter which
19.10 of the. SpeC1al ADR R~les - by referring to Seeton 24 of is the subject of an arbitration agreement shall, if at least one
the Arb1t:ation Law and .Article 34 of the 198S United Nations party so requests not later than the pre-trial conference, or upon
Commission ~n International Tracie Law (UNCITRAL>Model the request of both parties thereafter, refer the parties to arbitra•
Law -: recogruzes the very limited exceptions to the autonomy tion unless it finds that the arbitration agreement is null and void,
of arb1tral awards.
inoperative or incapab le of being performed. The court does not
lose its jurisdiction over the case, and the judicial proceeding is
merely stayed until after the completion of the arbitral process in
.. Supro.
which case the court may then confirm the award of the arbitrator.
 ALTERNATIVE DISPUTE RESOLUTION
ARBITRATION IN GENERAL 65
64

ing their heirs and assignees. However, in the case of Gerar·do

This is t he ruling in the case of Benguet Corporation v. Departnwnt
Lanuza, Jr. v. BF Corporati.<m, 811.pra, the Supreme Court held that
of Environment and Natural Resources-Mines Adjudication Board,"
corporate representatives may be compelled to submit to arbitra-
wherein it was held that: tion proceedings pursuant to a contract entered into by a corpora-
•1n other words, in the event a case that should properly tion they represent if there are allegations of bad faith or malice in
be the subject of voluntary arbitration is erroneously filed with their acts warranting the piercing of the veil of corporate fiction.
the courts or quasi-judicial agencies, on motion for the defen·
dant the court or quasi-judicial agency sh.all determine Under the Special Rules of Court on Alternative Dispute
wheiher such contractual provision for arbitration is sufficient Resolution, the court may issue an order directing the inclusion in
and effective. If in the affirmative, the court or quasi-j udicial the arbitration of those parties who are not bound by the arbitra-
agency shall then order the enforcement of said provision. Be- tion agreement but who agree to such inclusion provided those
sides, in BF Corporation v. Court ofAppeals, we already ruled: originally bound by it do not object to their inclusion."
'In this connection, it bears stressing that !he The policy of party autonomy was recognized in delimiting
tower court has not lost its jurisdiction over the court intervention in arbitration. No court shall intervene in arbi-
case. Section 7 of Republic Act No. 876 provides
that the proceedings therein have only been stayed. tration proceedings except in the instances provided for under the
After the spe.:ial proceeding of arbitration has been ADR Act.'• This rule, while acknowledging the freedom of the par-
pu·rsued and completed, then the lower court may ties to determine the procedure for the settlement of their dispute,
confirm the award made.'" (p. 209) also recognizes that there are aspects of arbitration that require
the participation of the courts. For instance, the parties may apply
Prior to the ADR Act and its IRR, where the arbitration is with the courts for protective measures and the enforcement
multi-party, and one or more of the parties but not all of them are thereof;" assistance in taking evidence;•• arbitration assistance and
parties to the arbitration agreement, the court is given the discre- supervision;" determination of jurisdiction of the arbitral tribu·
tion to refuse a referral to ADR if arbitration will not be decisive nal;"0 recognition, enforcement and implementation of an arbitral
and speedy or if it will result to ~ultiplicity of suits, duplicitous award;" setting aside of an arbitral award;" appointment of and
procedure and unnecessary delay. Under the ADR Act and its challenge to arbitrato1·s;" and court intervention in case of failure
IRR, the court is directed to refer to arbitration those who are par- or impossibility of the arbitral tribunal oo act."
ties to the arbitration agreement, and proceed with the court action
as to those who are not bound by such arbitrati·o n agreement." As
a rule, only those parties who have agreed to submit a controversy
to arbitration may be compelled to submit to arbitration,~ includ-
"Rule 4.7, Special ADR Rules.
" 545 SCRA 196 [2008[; citing BF Corporation v. Court of Appeals, ~Articles 4.5 and 5.4, IRR.
288 SCRA 267, p. 285; see also Section 7, Arbitration Law. "Sections 28 and 29, ADR Act.
"Agan v. Philippine lnrernati.onal Air Terminals Co., Inc. , 402 "Article 4.27, IRR.
SCRA 612 [20031, pp. 647-648; citing Del-Monte Corpora.t ion-USA v. Court "Article 4.6, IRR.
of Appeals, 351 SCRA 373 12001), p. 381; and Sal<u, Jr. v. Laperal Realty '° Article 4.34, IRR.
Corporo!ion, 320 SCRA 610 (1999). "Article 4.35, JRR.
"Article 4.8, IRR. " Article 4 .34. IRR.
w Aboiti:z Transport Sysrem Corporation v. Carlos A. Gothong Lin.es, " Articles 5.lO(c) and (d), and 5.ll(a), IRR.
Inc., 730 SCRA 178 12014). "Article 5.13, IRR.
66 ALTERNATIVE DISPUTE RESOLUTJON ARBITRATION IN GENERAL 67

The Supreme Court, in the case of Koppel, Inc. v. i'vlakati Ro- othenvise known as the 'Alternative Dispute Resolution Act of
tary Club Foundation, Inc.," has categorically declared that non- 2004,' allows the filing of provisional or interim measures 'vith
compliance with the arbitration agreement renders null and void the regular courts whene\•er the arbitral tribunal has no po'ver
all the judicial proceedings conducted beyond the point when the to act or to act effectively."
case should have been referred to arbitration. Moreover, whatever
decision may have been rendered should be vacated and set aside, Complementation between arbitration and court action is best
and the case should be remanded to the court a quo, and then be exemplified in the area of interim measw"es. Interim measures, oth-
referred to arbitration pursuant to the arbitration agreement. erwise referred to in the ADR Act as "interim measures ofprotection"
Thus: or "proviswna.l reliefs," are ancillary remedies intended for the pro-
tection of the subject matter of the dispute. They are akin to the
"The violation by the McTC of the clear directives under provisional remedies under the 1997 Rules of Civil Procedure <Rules
R.A. Nos. 876 and 9285 renders invalid all proceedings it 57 to 61). They include but are not limited to preliminary injunction,
undertook in lhe ejectment case after the filing by the peti- appointment of receivers, detent ion of property, preservation of
tioner of its Answer with Counterclaim - the point '"hen the property, and inspection of property subject of the dispute."
petitioner and the respondent should have been referred to ar·
bitration. This case must, therefore, be remanded to the As a rule, interim measures are applied with and secured from
MeTC and be suspended at said point. Inevitably, the the arbitral tribunal. However, tbe·r e are instances when the arbitral
decisions of the MeTC, RTC and the Court of Appeals tribunal cannot grant the interim measure such as when the arbitral
must all be vacated- tribunal is not yet constituted, or when the arbitral tribunal already
The petitioner and the respondent must then be constituted bas no power to act or is unable to act effectively. In these
referred to arbitration pursuant to the arbitration instances, a party may apply for interim measures with a court
clause of the 2005 Lease Contract.• which may grant them. The petition for this purpose shall be gov-
erned by the Special ADR Rules."
Interim Measures in Arbitration A provisional remedy under the Rules of Court cannot exist
without a principal cause of action. Thus, preliminary attachment,
Recognizfog the inter-dependency of arbitral tribunals and preliminary injunction or a temporary restraining order, receiver-
courts, as well! as their processes, the Supreme Court held in Trans- ship, replevin, and support pe11dente lite, cannot exist independ-
field Philippines, Inc. v. Luzon Hydro Corporation'"' that: ently of their principal actions which could be an action for a sum
of money in the case of preliminary attachment, permanent injunc-
"As a fundamental point, the pendcncy of arbitral pro-
tion in the case of preliminary injunction, corporate rehabilitation
ceedings does not foreclose resort to the courts for provisional in the case of receivership, foreclosure of chattel mortgage in the
reliefs. The Rules of the ICC, which governs the parties' arbi-
tral dispute, allows the application of a party to a judicial au- case of replevin, and support in the case of support pcndente lite.
thority for interim or conservatory measures. Likewise, Section However, this principle is nQt tr11e for interim measures un-
14 of Republic Act (R.A.) No. 876 (The Arbitration Law) recog- der the ADR Act and its IRR. In the case of interim measures, a
nizes the rights of any party to petition the court to take meas· court cannot refuse to grant, implement or enforce a petition for an
ures to safeguard and/or conserve any matter which is the sub- interim measure on the sole ground that the petition is merely an
ject of the dispute in arbitration. In addition, R.A. No. 9285,

"Supra, pp. 168-169; emphasis supplied. " Article 4.17, IRR; Sections 28 and 29, ADR Act.
"490 SCRA 14 (2006), pp. 20-21.
" Article 4.9_. IRR.
 ••

68 ALTERNATIVE DISPUTE RESOLUTIO!<

ancillary relief and the principal action is pending with the arbitral
tribunal. While interim meaaures are categorized in the ADR Act
and IRR as ancillary remedies, they are different from provisional
remedies under the Rules of Court in that the application for in· CHAPTER 5
terim measures tiled before the regular courts can stand by them-
selves despite the pendency of the arbitration of the princ.i pal ac·
tion before the arbitral tribunal.0 INTERNATIONAL COMMERCIAL ARBITRATION
UNDER THE ADR ACT OF 2004 AND
ITS IMPLEMENTING RULES
AND REGULATIONS

The ADR Act of 2004 adopted the UNCITRAL Model Law on

International Commercial Arbitration and, by operation of Article
19 of the ADR Act, made the Model Law the governing statute for
international commercial arbitration (or "'ICA"') conducted in ac·
cordance with Philippine law.
In view of the adoption by reference of the Model Law, the
ADR Act of 2004 devoted some of its provisions on international
commercial arbitration to the harmonization of the principles con·
tained in the Model Law with existing Philippine laws, rules and
jurisprudence. Thus, the ADR Act of 2004 has provisions dealing
with legal representation in internationa) arbitration, confidential·
ity of arbitral proceedings, referral of court action to arbitration,
definition and functions of the appointing authority, the grant of
interim measures of protection, governing law, and the place and
language of arbitration.
In view of the adoption of the Model Law, the Implementing
Rules and Regulations of the ADR Act of 2004 (!RR) became the
repository not only of the rules implementing the ADR Act but also
the rules implementing the Model Law. The IRR was passed by the
Department of Justice on 26 October 2009 and took effect on 31
December 2009 tift<oen (15) days after the completion of its publica·
tion in at least two (2) newspapers of general circulation.' Hence,
1
Article 8.5, IRR.

m Article 4.6(c), JRR. 69

70 ALT&RNATIV& DtSPUT11 R"90LIJTl0t< 11"''TEL'fAT10)(AL Co.MMERC:lAJ.. AK.elTRAT10:"1 UNDER mE 71
ADR Acr OP 200< AND ITS 1Ml'L£M£Hn:<O R iii.ES M 'D ROOULATIONS

for a well·rounded coverage of the subject of international com mer. references to ..international comnurcial arbitration• or •1CA • in
cial arbitration, the discusaion1 in this book will be guided by the this Chapter shall pertain to Philippine !CA.
provisions of the IRR.
Coverage ofIRR Provision• on I CA
International Commercial Arbitration (Articles 4.1 to 4.6, IRR!

Arbitration is international if any of the following instances The provisions of Chapter 4 of the IRR, dealing with the sub-
occur:' ject of international commercial arbitration, or., applicable only to
international commercial arbitration conducted in accordance with
1. The parties' place• of bW1inesa, which Ill the time of the Philippine Law covering disputes that are not prohibited by Phi-
conclusion of the arbitration acree.m ent. is in different lippine law to be submitted for arbitration or a.re not covered by
states; other Philippine laws already providing for arbitration.' Note,
2. The place of arbitration provided in the arbitrat.ion agree- however, that the rules of procedure for international commercial
ment and in which the parti.,. have their places of busi- arbitration provided for under the ADR Act or ita IRR may also be
ness, is outside the Philippines; applied for international oommercial arbit.ralion oonducted outside
3. The place where a substantial part of the obligation is to the Philippines if they are adopted as the rules of procedure by the
be performed or the place with which the subject matter parties in the exercise of their privileges of party-autonomy and
of' the dispute is moet cloeely oonnocted, and in which the self-determination.
parties have their placee of buaineae, is outside the Phil- The provisions of the IRR on international commercial arbitra-
ippine&; or t.ion are tkfault rules, which meana that they are applicable only in
4. The parties have expre8"ly agreed that the subject matter the absence or in default of applicablo provisions contained in:
of the arbitration agreement relates to more than one 1. An agreement in force between the Philippines and other
c<1untry.
state or states;0 and
Arbitration is com~rclal if it covers matters arising from nil 2. An agreement between the parties on tho applicable rules.'
relationsh.ips of a commercial nature, whether contractual or not.~
The default nature of the provisions of the IRR was con-
An international commerci1>l arbitration with the Philippines 1Cioualy adopted in reoognition of the basic premises of party
as its seat is governed by the ADR Act and its IRR even if the place autonomy and self-determination. Be that aa it may, the same IRR
of arbitration is outside the Philippinea. On the other band, an recosnized the need for the Supr.,me Court to enact Special Rules
international oommercial arbitration wh06e seat is outside the of Court on ADR for proceedings which under the ADR Act are to
Philippines iB a foreign arbitration even if the place of arbitration be conducted by the oourts like uaiatance in taking evidence, set-
is in the Philippines. The ADR Act and its £RR govern only the
aspect of recognition and •nforoement of a foreign arbitral award.
'Artiele 4.1, IRR. It is submitted that tho phrase •conducted in the
This Chapter treats of international commercial arbitration PhilippincsJI! should be oon.strued to mean that tho eeat of the arbitration is
wh06e seat is the Philippines. Hence, unless otherwise specified, the Philippines in order for the AOR Act and the !RR to be applie&ble to
tho international commercial arbitration.
' Article 1.6, 11(8), IRR. • Article 4.l(a), IRR.
'Section S(g), Article 1.6, 8(4), IRR. ' Article 4.l(b), IRR.

J.
72 At.TF.IU\':\TIVE DISPUTt RESOLUTIOK 11'"TF:RNATION'AL COMMERCIAi. AROl'l'RA'rtON Ur-:ut:K THt: 73
:\OR A CT OF 2004 Ai.'IJO JTS 1MPl.,EMl~N"1' 1 /l:"O R ULES AND RE<HJLATJ0)1$

ting aside an arbitral award, and the enforcement of the a rbitr a1 Rules 011. R.ecei/Jl oflVritteri Con1.niunic<J.tion.s in !CA
9\VB.rd. (Al·ticle 4.3, IRR)

Very ofl:en, th& pa1·tics and the arbitrators in international

R .u les ofIn.t erpreta.tion
commercial arbitration are of different or va1·ied nationalities \Vith
(Article 4.2, IRR)
stations located in different countries. Also, tbe subject rnatter of
The follo,ving arc the rule$ in the interpretation of the ADR the dispute may be located in a differer~t 1;t.ate. Written co1nn1uni-
Act of 2004, the Model Law and the IRR: cations. electronic or otbervvise. therefore, play a vita) role in in-
ternati~nal con1n1ercial arbitration. Thos. the IRR devoted provi-
1. Interpretation. of the ADRAct. '_fhc court interpreting t h e sions on the delivery and 1·cceipt thereof.
ADR Act and its IRR shall have due 1·cgard to t h e policy of
the law favoring arbitration.r In line \Vi th the policy of party at1tonon1y, the governing rules
on the receipt of comn1unications 111 in intcrnutional comn1ercial
2. In.terpretatio1i of the Model Law. Regard should bo g iven arbitration a re those provided for by the parties in thcil' arbitra-
to the fact that the ~fodel La\v is of internationa l origin tion agrccn1ent. In default of such rules, co1nmonication is deemed
and there is a need for uniforn1ity in its interpretation." 1·eceived:
Hence, concepts and principles under the Model Law
should be understood in the light of their i nternational 1. If it is delivered to the addressee personally or at bis place
usage rather t han their ordinary domestic or local usage. of business, habitual rcsidcnc-e or 1naiHng address; or
3 . Interpretation. oft.h e IRR. 2. If there is none, if it is delivered by registered letter or
a.ny other means \Vhich provide a record of the atternpt. to
a . The same policies on the interpretation of the ADR dcHver it, to t he last. k.no\vn place of business, habitual
Act and Model Law are applicable. residence or Dlailing address.
b. Party autonomy should be promoted in the resolution
of the dispute. Unlike under the Revised Rules of Court where the date of fil-
ing a pleading is the date on \\•hich it is n'lailed, n under the IRR,
c. The freedom of the parties to determine certain issues \vritten communication is deemed received on the day it is "deliv-
includes the right to authorize a third party, incl uding ered" and not on tl1e day the n1ail is posted \vith the post office. 1t
an inshtution, to make that detcrtnination .
d. A reference to an agreement of the parties includes Waiver of the Right to Object i11 ICA
any arbitration rules refer1·ed to in that agreen1ent. (Al~U:le
4.4, IRR)
e. And, the rules applicable to claims are equally applicable
to oounterclairns-, and Lhu~ applicable to defenses are At; ~ cons:cquenoo of the meri tl~vidonee baGcd nature of arbi·
equally applicable to defenses against cow1terclaims.• tration, it is also procedurally driven. A set of r-ules, procedures.
conditions and requirements have to be ob$ervcd and compl.i ed
\Vith albeit not \vith the strictness of court proceedings. 111 view

' Section 25, ADR Act. 1

<1 Article 4.3, IRR.
•Section 20, ADR Act. 11
Sect.ion 3, Rule 13, 1997 Rules ofCiv"il Procedure.
' Article 4.2, IRR. •t Article 4.3(ii), IRR.
 'I

74 ALT!l\NATl'VI OlSP'trf"! RESOLt.rrtON l.NTEIUllATIONAL CoftiBIERCIAL ARnrTRATIO~ UNDER ms 75

AOR A CT Of' 2004 A.'ID ITS IMPLUIE:NTINC RUl..ES AND REOULAnONS

thereof, numerous objections to oon·complianoe with the rules. Conffden tiallty In I CA

procedu.rea, conditions and requirement& are to be expected in an l&ction 23, ADR Act; Artich 4.41, IRRJ
arbitral proceed;.,..
Arbitration ia d.ifTerent Crom mediation in that the latter is Aa in the caae of mediation, the proceedings, records, evi-
nol merit or evidence based and, therefore, not procedurally dence, and the arbitral award in a.n international commercial arbi-
driven. Hence, the ADR Act and IRR limited the application of the tration aro con.f idential and aM!l not be disclosed except
rule. on waiver in mediation proceedings to waivers or confidenti- l . With tbe conaent of the parties; or
ality and privilei:e only. On the other band, in the case of interna-
tional commercial arbitration, the 1RR expanded the application of 2. For the limited purpose of disclosing to the oourt relevant
the rules on waiver to include non.-compUance with the rules or documente in cues where retort to the oourt is allowed.
~uiremente. The protection i1 available u long u the information is related
Objection• to non-compliance with the rules or any req_\lire- to or connected with the dispute under arbitration. 11
ment under the arbitration 9"""ment must be raised without The court ma,y inue protective orders t.o prevent or prohibit
undue delay or within the time P"'scribed therefor , failing which, the disclosure of documents or information containing secret proc-
the rii:ht to object is deemed waived.''. This rule is based on the esses, developm.enta, research and other information where it is
equitable d octrine of estoppeL.. Under_this doctrine, an admission or shown that the applicant shall be materially prejudiced by an un-
representation cannot be ~.erued or d1aproved as against the person authoriud dioclosure thereof. Y
relying on it." Eatoppel <n 1xns happens when one, by his acts,
representation• or admiaaiona, or by his own silence when he ought
lO speak out intentionolly or through culpable negligence, induces Due Procell In ICA
another to b'ouove certain facta to exist and such other person re- (Artich 4.18, IRR.)
lies nnd act• on euch beli..C in a manner that he will be prejudiced
if the formor ie permitted to deny the e>cistence of such facts. Under AB tm assurnnco of impartiality and due process in the arbi-
thoso circumato.ncoe, the existence of the fact in issue cannot be tral proceedinf111, the !RR mandates that the parties shall be
denied or dill proved 88 against the party relying on it." treated equally and shaU bo given a full opportunity to present
their s ides." The cssonce of due process lies in the reasonable op-
The act of a party of p roceeding with the Bl'bitration notwith- portunity to bo heard ." It does nol require an actual presentation
standing the non-compliance with the rules or the arbitration of a psrty'e aide to a dispute. Due process ilJ complied with if a
agreement, or the failure of a party to raise an objection without party ilJ given an opportunity lO present his side of the dispute
undue delay in an arbitration, are examples of estoppel in pa is. In even if he does not actually avail of ouch opportunity. A party
either case, the act, omiaaion or silence giving rise to estoppel must should not be allowed lO derail o.nd delny nn arbitra l proceeding if
be unequivocal and intentional.•

• Article ' ·' · lRR.

" Ftdtrol &tp,.,. Corporation u. Airfreight 2100, Inc., G.R. No.
216600, November 21, 2016.
• BF Corporalion u. Manila lnumalional Airport Aldlwrity, 556 •Section 23. ADR Act; Article 4.41, lRR.
SCRA 684 (20081. " Article 4.18, lRR.
• El Oro Efl8roucr C""""°"ion u. Court of Appeals, "46 SCRA 42 "' Dcwlt>pme.111 Bank cf tht PAUippint• u. Ttslon, 645 SCRA 422
(2008). !20081: Rizal S.Curily & Pro«<ri.,. Servi«•. 1~ u. Maraan, 546 SCRA 23
• Rodi/and COMJrucllon Company, Inc. u. Mid·Pasig Land Deuekp- !20081; BorromA!O 8 roo. e.tau. Tnc. u. Oon:ia, 646 SCRA 543 (20081; Heirs
mcnl Corporation, 5'8SCRA1196 120081.
o(Cucr Maf'tUl/Jon u. Morcuigon, 6'8 SCRA 409120081.
76 ALTERNATlVE DJSPUTE RESOl.UTI0:-1' 11"TERX:\ T IOKAL CO)L\LERCJAL J\RBITRATION UNOER TH& 77
ADR J\CT OF 2004 A.'\'0 ITS }) Jl 'Ll~MEKTIKO RuLeS k'\ID Rf:CULATlONS

h e ha$ no real intention to present h is side b u t merely invokes due Langu.age in. ICA
process to prolong or prevent the procedure. !Article 4.22. IRR)
As part of due process, the arbitral tribunal in an interr'la~ The parties to an international co1n1nercial arbitra tion shall
tiona.l commer cial ar bitration is directed to give the parties so ffi- detern1ine the language or languages to be used during the s rbitral
cient advance notice of any h earing and of any meeting of the aJ"bi- proceedings, including th at fo r any ' vritten state inenti h earing,
tral tribunal for the purpose of inspectir.g goods, properties or a \vard. decision or other communicntion by the arbitral tribunal.
documents! ' AJso, a party is directed to communicate to the other 'The a~bitral tribunnl may order that any docun1entary evidence
party a ll state ments, documents or othe r information, including shall be acco1npanied by a translation thct eof in the language or
expert r epo.rts or evidentiary docu1nent, that h e \\•ill supply to t h e languages to be used in t he proceedings.
a rbitral tribunal.a
In default thereof, English sh all be used.2$
Place or Venue ofI CA
(ArtU:lc 1.20, IRR) Applicable Law i11 ICA
(Article 4.28, IRR)
The J>lace or venue of arbitration in an international cornn1er-
c'ial arbitration sh all oo that determined by th e p arties. The law a pplicable to the dispute should be distinguished
The default place of arbitratioll sh all be in Metro Manila, from the law a pplicable to U1e arbitral proceeding. The first is th e
unl ess the arbitral tribunal decides on a different place o f arbitra- substantive IB\Y u nder \Yhich the rights and obligations of the par·
tion to.king into consideration the circumst£nces of the case.,,,. ties \vill be determined, \Yhi1e the latter is the h1'" 'vhich \vill gov-
The cond uct of consultation among tlie m embers of tl\e arbi- ern the arbitral proceedings and vestjurisd ict.ion on the a rbitrator
or a rbitral tribun al.21 For instance, in an ICA \Vhere the parties
tral tribunn.l, a nd the hearing of 'vitnesses, experts or the parties,
\vhose principal place.s of business is outside the Philippines have
or tl1c inspection of goods, properties or documents shall be held.
chosen Philippine ltnv as the governing l ~l\v and the Philippines as
unless otbenvise dete~mined. by the~ Parties, at a piace considc1'ed
a ppropriate by the arb1tral tnbunal. 1 the seat of arbitration, the Jaw applicable to t he dispute is Philip-
pine Jaw (the Civil Code for instance), and t h e law applicable to the
arbitral proceeding is also Ph ilippine law <ADR Act and its IRR).
Co1n1ne11-ce111e1Z·t of ICA Proceedings
(ArtU:le 4.21) The parties in a n international conun erciaJ arbitration can
agree on the governing la\v that "ri11 be applied to the resolution of
Th e date of commencement of i nternational C-Omn1e rcial a rbi- their dispute. The govern iJ\g hnv gener ally refers to substantive
tration is to be determined by the p arties. la\V. Substantive lalu, distinguish ed fro1n conflicts of la" ' or priva te
The default date of commencemcllt ol arbitratio11 is the date international hl\v, is the }a,v or legal systc1n a pplicable to the con1-
on "·hich a. rcqucGt fot· t hat dispute to ~ l'efer red to arbit r a tion is pl0te )"~S.() ) utiOrl ()f thr <li ~pntP.. Cf>n{licts of lo tu 01· p rivate ititcrno·
r eceived by the respondent."' tional law, on the other hand, is "that part of the municipal h-t\V of
a s tate \\•hich directs cour ts and administrative agcncie!:i, \vhen
" Article 4.24(b), IRR.
12
Ar-Licl& 4.24(e), JRR.
" Article 4.20(a), !RR; Section 30, ADR Act. 115
Article 4.22, TRR; Section 31, ADR Act.
71
" Article 4.20(b), !RR; Section 30, ADR Act. A1ohu.hay Nol.dings Co,.p. v. Sentlx:orp Logistics £;,nited. G.R. No.
" Article 4.21, IRR. 212734, Dooomber 5, 2018.
 'I

78 ALT£RNA'l'lV'& DISPUTE RESOJ,..lJTION INTERNATIONAL COMbtfERCIAL ARBITRATION UNDER THE 79

AOR ACT OP 2004 AND ITS IMPLE:MENTlNG RULES AND RBOULAT'IONS

confronted with a legal problem involving a foreign element, tor, and the advisability of appointing an arbitrator who
\vhetber or not they should apply a foreign law or foreign l aws."-u is of a nationality different from those of the parties.n
In other word&, confl,icts of lo.w or private international la.w is the
eet of domestic laws that determines which between the domestic Where the parties have agreed to submit their dispute to in·
laws of two or more states should apply to the resolution of a dis- stitutional arbitration rules, and unless they have agreed t.o a
pute involving forei.g n elements.a different procedure, they shall be deemed to have agreed to the
In the absence of an agreement between the parties. the law procedure under such arbitration ru1es for the selection and ap-
determined by conflicts of law rules as determined by the arbitral pointment of arbitrat.ors.$1 Thus. in that situation, there is no need
tribunal to be applicable taking into account the terms of the con- to designate an appointing authority for purposes of the appoint-
tract and the usages of the trade, shall be applied.• ment of arbitrators.
And, in an ad hoc arbitration, unless a different procedure
Appointing Authority in ICA has been agreed upon by the parties, the default appointment of an
(ArtU:le 1.2, C[IJ, IRR) arbitrator shall be made by the National President of the Integ-
rated Bar of the Philippines (IBP) or his duly designated represen-
The appointing authority in an ICA is the person or insti tu- tative.31 The default appointing authority in this situation is the
tion named in the. arbitration agreement as such, or the regular IBP National President or his representative.
arbitration institution under 'vhose rules the arbitration is agreed
to be conducted," authorized to make the default appointment of Arbitrators and Arbilral Tribunals in ICA
arbitrators or the sole arbitrator.u In addition, the appointing au-
thority in an ICA has the following functions: (Articles 4. IO to 4.12, IRR)

1. Take the necessary measures to appoint an arbitrator in In line with the principles of party autonomy and self-deter-
case aey party, or the arbitrators already appointed, or mination, the parties in an international commercial arbitration
any third party fails to perform any function necessary for are free to determine the number of their arbitrators38 and the
the appointment of the arbitrator." procedure for their appointment." The default number of arbitra-
t-Ors is three (3). The following is the <kfault procedure for the ap-
2. Decide on the challenge against an arbitrator if the arbi- pointment of arbitrators:•
tral tribunal rejects the challenge."
1. In an arbitration with three (3) arbitrators, each party
3. Consider the qualifications of an arbitrator, the necessity shall appoint one arbitrator, and both appointed arbitra-
of ensuring impartiality and independence of the a r bitrn-
tors shall appoint the third arbitrator, failing which the
appointment shall be made by the appointing authority.
" PhilippiM Conflict ofLaws, by Edgardo L. Paras.
"Article 4.28(a), !RR.
"Article 4.28 Cb) and (eJ, IRR.
" Article 4.ll(e), IRR.
"Article 1.6,C(l), !RR. See also Mabuhay Holdings Corp. u. Sembcorp )G Section 26, ADR Act.
Logistics Limited) supra,.. n Id.
"Article 4.ll(c), IRR. 11
Article 4 .10, IRR.
"Article 4.II(d), !RR uArticle 4 .11, IRR.
~Article 4.12(c), IRR.
"Article 4. llCe), IRR.
 80 I ST&R....A1'10NAl. CO)lMt:RCLAl. A ROITRt\TIOS' U NDER Tf-IE 81
ADR A<,- of 2()0..l A."'"D ITS IMPLE,1ENTl~C RuLt:S "-"D RrouL.\TtOSS

2. In an arbitration with a sole arbitrator. the arbitrator Grou11d• for Cl1al/c11ge of on Arbitrator in /CA
sho.ll be oppointed, upon the request of a party, by the ap- (Article 4.12. IRRI
pointina authority.
A pe~n oppronchcd for possible Appointmen t as arbitrator
Where, under an appointment procedure agreed upon by the has the duty to disclose any circumstance likely to raise doubts
parties, a party, or the arbitrators already appointed, or a t hinl about hia impart iality or independen ce. This duty exists from the
party, indudin1 an institution, fails LO perform any function under time of lus appointment and subsists during the arbitral proceed·
eucb procedure preventing the appointment of any or all arbitra· ings. unless the parties ho\•e been previously infor1ned of the cir-
tors. the arbitration agreement shall go\lern the procedure. lf there cumstance affecting hie impartiality or independence.
is none, any party may request the appointing authority to take
An arbitrator may bo challenged only if circumstances exist
measures to appoint an arbitrotor.'1 The decision of the appointing
that give riao to a ju&tiliable doubt as to his Iii impa rtiality or in·
authority on thi• mnttu shall be immediately e:xecutory and s hall
dependence; or (ii) possession of the qualifications agreed upon by
not be subject to• motion for rtt0nsideration or appeal. the pnrtiea. His nolionality is not n ground for chailenge unless the
The appoint.inc authority shall consider the following factors parties specified it ns n qualification." A parly who appointed an
in the appointment or orbitrotora:0 arbitrator shall not bo ollowed to challenge tliat a•bit rator. This
l. Qualificationo required by lhe agreement of the parties; rule is llfOundcd on estoppel. However, estoppel does not apply
, ... here the ocl of nppointing '"es perfornled '"ithout t.he kno,,•ledge,
2. Considerations as arc likely to s~cure the appointrr1ertL of octuol or constructive, of t he ocluol facts,~ and except for reasons
on indepe ndent ond impartial arbitrator; and \Yhich the nppointing po rty become &\vtu·c of n.ftcr the a.ppointment
3. Jn the co.so of sole or third arbitrators the advisabi1 i ty of \VO S n1odo.•t
uppointin& ~n orbi!'t'a.t.o~ or a nationali.ty other than those
or tho pnrt1 e1. Thta JS intended to avoid bias that may
arise from ao-eolled ~on1etown" decisions . f>ruc:ed11re for tile Challenge in /CA
(Article 4.13, JRR)
l f o.ny purty is ~ot sotislied with the a ppointment of any,
eo1nc or all of th~ arbttrot.ors, he mny file a petition i n cou1·t c;:h:::ll- The proced ..1rc for the chollenge against an arbitrator in in·
lcnging the uppo•ntmont of \he orbitrators." ternational commc1~iol o.-bitration is thnt agreed up<m by the par·
Lies. 1'he follO\Yin g is t ho default procedure: 4•
Tbe nrblt.ro.l tribunol is deen1ed constit.uted when the solo ar-
bitrator or t.hc los t member or the panel of arbitrators ..vho has 1. 'fho challenging party 1hnll send a w1itten st.atement of the
been nominot.~d 1108 ?cce.ptcd his nomination and ..vritten con1mu- reasons ror cho chollcngc to the arbitral tribunaJ \vithin fif·
nicetion of tnu.d no1n1nnt1on and acceptance has been received by teen ( 15) dnye ofter becoming tl\Yt\re of the a>nstitution of
the party rnnking the request." the tttbitral tribunRI or oner becoming 3\Yare oftbe circum-

• Mabuh01 Hold111(1• Corp. •· S.mlxorp logi.s~. Limited, supro. .

' Article 4.ll(d). IRR. .. Equ;labl• PCT 8o11i1ng (;orporalu»1 c. RCBC Copitol CorpOTOliOll,
d Article 4.ll(e), !RR. 5'17 SCRA 868 120081.
• Article 4.11. lasLparo~ph, ffiR. 'Artide4. 12, IRR
"Section 281&), AOR Acc.
I • Article 4.13 , lllR
 !

82 A.l.T£RNATIVI D lSPUH RaoLUTION INT"&RNArtONAL Cor.,rM'&RClAL AR81TRATJON UNDER THE 83

ADR ACT OP 200< ANO ITS (lolPL.&MEt>,.ll'<G R ULES Al<1l ROOVl.ATIONS

stance coi>atitutin,r the ground for the challenge. There· The appointm•nt of tho aubotitute arbitrator shall be gov·
after, the arbitral tribunal shall decide the challenge. emed by the &L'lle rulea applicable in the appointment of the re-
2. Uthe challenre before the arbitral tribunal is not succ.,ss· placed arbitrator."
ful, the challenginr party may request the appointing au-
thority within thirty (80) days from notice of the decisfon Jun.diction ofArbitrol Tribunal in ICA.
rejedinJr the challenge, t.o decide the challenge, which de- (A.rticl• 4.16, IRRJ
cision aball be immediate)y executory, and not be subject
to a motion for reconsideration or appeal. Jurisdiction is the right to act or the power and authority to
A party may file a petition in court questioning the decision in hear and determine a caUM." In tho c8&e of an arbitral tribunal, it
the challenge arain.lt an arbitrator in accordance with the Special is the authority by virtue or whlch it can resolve disputes in an
Rules of Court on Alternative Dispute &solution. arbitration pl""OCtedinr by rendering an award thereon.
After a aucooaaful challenge, a subotitute arbitrator will have
to be appointed. The appointment of the substitute arbitrator shall JurisdictioA Ouer the Subject Maller
be governed by the same rules applicable to the appointment of the
replaced arbitrator.• The jurisdiction of an arbitral tribunal over the subject mat-
ter of the controversy is conferred by law. This law is the ADR Act
of2004 in the case of a rbitrotlon under the auspices tbereofinclud·
ProceduNI in Cose the Arbitrator Fcils 1<> Act in /CA ing an interneticnol commercial arbitration.
(Artie!. 4.14, IRRJ
There are two (2) instances when a court, quasi-judicial
The remedy of termination of mondate of an arbitrator should agency or arbitral tribunal acts without jurisdiction, name)y: (ii
be distinguished fl-om a challenge to an arbitrator which is prem· when it has no j urisdiction in the first place, in which case there is
ioed on partiality or lack of qualifications. U an arbitrator in an lack of juri•diction, or (ii) when it goes beyond its jurisdiction
intem_ational comm~rcial ~bitratioo becomes de jurel0 or de facto~• which it hod in the firot place, in which case it acted in excess of
unable to perform his functions or fails to act without undue delay Jurisdiction. Jn the case or courts, lack of jurisdiction or excess of
hie mandate tenM!a~a Iii if he .withdraws, or (ii) if the partie~ jurisdiction are tho propor grounds for a petition for certiorari as a
agree on th_• ~rm1":atio~. The Withdrawal of the arbitrator does special civil action under Rule 65 of the 1997 Rules of Civil Proce-
not carry wt th it an unph~d acceptance of the existence or veracity dure (as amended).
of the iJ'OUnd for the termination.
. ~f the controversy r~maina, any party may request the ap· Loclo ofJuri1diction
po1ntmg authority to decide on the termination of the arbitrator
which d!cieion shall ~· immediately exccutory, and not be suhjec; Tho jurisdiction or an arbitral tribunal includes the authority
to " motion (or l'l@COnl1d•1"&tion or appoctl. to rule on ita own juriadictionM in the same way that courts have
the po\ver to rule on motions to dismiss complaints or petitions·
• Art.icle 4.16, rRR.
.. By law. ~ ,richt* aa when an arbitrator i& appointed to a govern-
ment pMt prolubibnJ blm &om a:erdaing hla profession. u Articlo 4.16, !R.R.
" By fact or c:in:wnatance, as when an arbitrator becomes mentally u Gom~• u. Monu.lban, 648 SCRA 693120081.
or physically !ncapadta~ to di«ha'"i• hio runctiona. "Article 4. H(a), IRR.

.
84 ALTEll><ATtvll DISl'VTS R ESOl.l1TIOH INT'Ett.~ATIOSAL Co),J),(ERCIAL AJl8mtATION UNOCR ntE 85
ADR ACT or 2004 A!<D ns IM~'O Rut.a AND RsoutAno."5

baud on Jack ofjurisdiction." The arbitral tribur.al necessarily has iuue of juri&diction,u or is estopped by reason or hit active partici·
the power to rule on objectioiu to ita jurisdict:on such as those pation in the proceedbgs of the court whose jurisdiction he ques-
raised against the existence or validity of the arbitration agree· tions.~
ment or any condition precedent to the filing of a request for arbi· The rule is different, however, in a. cho.llengo against the ju·
tro.tion.." lte juriediction also includoa tho power to determine the riadiction of arbitral tribunals in an internationaJ com_merciaJ arbi·
admissibility, relevance, mat.orio.J.ity a.nd weight of any evidence,4 ' trntion. The challenge should be raised not later than the submis-
and the issuance of subpoena to compel the attendance of wit- sion of the statement of defense in the anawcr or in a motion to
nesses and the production of docu.mente... dismiss; otherwise, the objection is deemed waived." However, a
In detarmining the jurisdiction of an arbitral tribunal, the ar- party is not precluded from raising a jurisdictional challenge even
bitration agreement or arbitration clause should be treated as an i! he has participated in the appointment. of an arbitrator or has
independent and separate •8"9ement from the container agree- himself appointed one.•
ment, and, hence, the invalidity or the latter does not automati·
cal)y result in the nullity of the former. It la only in the event that
Exa.ss ofJurisdU:ti<Jn
the arbitration agreement or clau.ee 11 iteelf void, inexistent or
inoperative that the arbitral tribunal's jurisdiction may be ques- Where an arbitral tribunal which bu jurisdiction in the first
tioned.• place but exceeds the scope of its authority (UJCt•• of jurisdicti<JnJ.
In general, jurisdiction over the aubject matter being a matter a party may raise the objection ar aoon as the exerciae of jurisdic-
of Jaw,• cannot be waived and cannot be the subject of a compro- tion over a matter alleged to be beyond tbe seope of its authority
mise or the stipulation of the partiea." The issue of jurisdiction be<:omea apparent; otherwise, the objection will be deemed waived
may be raised at any stage of the proceedin1r•. e,·en on appeal, and unless the delay is justified.ti
1
ia not lost by waiver or estoppel.• It may be questioned even for the
fiNJt time on appMl. It ia only in exceptional instances that the
Supreme Court bas sustained waivers of or against the jurisdiction Judicial Reuiew ofJurisdictional lssu•
of a court such as when a party hu incurred lacbes in raising the
The decision of a court or quasi-judicial arency without juris-
diction over the subject matter is null and void ab initio. ln the
aame manner, the arbitral award of an arbitral tribunal which
u Section l(b), Rule 16, 1997 Rules ofClvU Procedure.
N Article 4.16(a), !RR. • T(jam u. Sibol1g.hon.oy, Z3 5CM 29 (19081, which RVl~Ut.ied an
" Article 4.19(c), IRR. exception•! case wherein the par1y in>'Okina lack ofj urilldlction only did so
•Article 4.27, IRR. after fifteen (15) years and wheo the - wu already elevated to lhe
• Gon.roka v. Clim= Mini1111 Lid.., 612 SCRA 148 (2007), p. 170; Court of Appeals. See also: Romago, Inc. u. Siem.,.. Buildi"lf T«/wJ/Dg.n,
Kt>ppd. Int:. o. MaAali 1lJXory Club F°"od4lion, l•c., 705 SCRA 142 Inc., 602 SCRA 656120001, p. 672, wherein the potiti...., oever ,.;sec! W:k
(2013), pp. 159-161. ofju.ri1d:iction u an issue until after a writ of execution hat been issued.
• Figuuoo v. />eqpl•, 558 SCRA 68 (2008); hople v. Vanzuela, 559 • H•irs of C.sar Marruigan o. Marcoigan, 548 SCRA ~9 12008);
SCRA 234 12008); Philippi"" Stock E=~. Int:. u. Ma.nUa Banlting La:yo v1. Triuim>, 551 SCRA 172 120081; L/COMCEN, /ncorporo.Ud u.
Corporation, 559 SCRA 352 (2008); SaJ.morin v. Zoldiuar, 559 SCRA 564 Foundation Speciali$U, lac., 531 SCRA 705 (20071.
(2008); •Article 4.16(b), IRR.
" Article 2035, CiV11 Codo oft.he Philippine•. • 1d.
"Sak• v. Barro, 673 SCRA 456 (2008). "Id.

il
86 1"1ERNAT10NAL CooDWO:IAL ARBITllAT100< UNDell fttB 87
AJ>R A r:r OF 2004 AND ns l>IPl.£l,1ti.'TINO Ruuis A>-1> REGtn..Ano..'S

does not have jurisdiction is alao null and void ab initio unless jurisdictional issue, may be challenged in court in the same m?"·
there is a waiver of the absence of jurisdiction. Petitions under ner and prooedure for challenging an arbitraJ award, i.e., setting
Rule 43 (petilU>n for reuiew) and Rule SO (petition for certiorari), aside or vacating an arbitral 9-,ard,
however, a.'"e not available against the arbitral awards."
The arbitral tribunal whO<!o acte are challenged for lack or ex· J uri.sdiction Ove.r the PartittJ
cess of jurisdiction may either (ii consider the challenge as a pro·
liminary question or a threshold issue and render a ruling thereon The jurisdiction of an arbitrnl tribunal over the person of the
before conducting the arbitration, or (iii defer the resolution parties in an arbitration is conferred by the consent of the parties
thereof until the rendition of the arbitral award and the resolution to 1ubmit to arbitration. Th.is :onsent mQy be contained either in
of the jurisdictional issue ahall form part thereof" especially in an agreement to submit to orbitro.tion (for pn-causal consent)
instances when the jurisdictional challen10 does not appear to be which is entered into at the time of the execution of an arbitration
indubitable. Unlike an arbitral tribunal, a court cannot defer the agreement or a contract which includea an arbitration clause, or in
rasolution of a motion to dismisa for tha reuon that the ground a 1ubmi..ion agrttm'"" (for preunl couiol consent) between par-
therefor does not appear to be indubitable.• ties who do not have an arbitiation qTffment or a contrect with
If the arbitral tribunal renden a preliminary ruling on the ju- an arbitration claU$0 but who nonetheless aaree to submit an exist-
risdictional issue, an aggrieved party may elevate the ruling for ina dispute or controversy to arbitration."
review by the Regional Trial Court within thircy ( 30) days from !·
receipt of the ruling, and the decision of the court therein shall be
immediately executory and not be eubject t.o a motion for reoonaid· Interim Mecuure• in ICA
ero.tion or appeal.n
(llrtk:le• 4.9 and 4.17, IRR)
The arbitration proceedinge may proceed notwithstanding the The procedure for granting interim measures in ICA is as fol-
pendency of a judicial action with the Regional Trial Court unless lows:
the court issues in the meantimo a temporary restraining order or 1. After the arbitral tribunal has b<len constituted, any party
a writ of preliminary iajunction cajoining tho conduct of the inter-
may request for the grant of interim meas1~re$. from the
national commercial 8l'bitration duri.11g the pendcncy of the court
arbitral tribunal ai:ainet the adverse party. This request
action or petition. shall be in writing transmitted by reasonable means to
On the other hand, if the arbitral tribunal defers the resolu· the arbitral tribunal and the advene p8l'ty, describing the
tion or the jurisdictional i..ue which will be resolved as part of the precise relief in appropriate detail, the ground therefor,
arbitral award, the order of deferment ia not ausceptible of judicial and the evidence supportin1 the requsat."
relief." However, the arbitral award, including the ruling on the 2. The relief may be granted in order to prevent in:"parable
loss (similar to prelirainary ir\junction); to pnMde secu·
• Fn.IL'oauf Ekdronia Ploilippinu Corporot;,,,, o. Ttduwlcgy Elec· rity for the performance of an obliption (aimilar ~ pre-
trOniu k#Jnbly and M~I Pod(K Corporo.til>n, G.R. No. 2(Ml97, liminary attachment~ to produce or preserve evidence
November 23, 2016.
•Article 4.16(e), IRR. " Ormoc S"lla~ Plantur' Auoei41iM, Inc. (OSPAJ ... Collrt of
-Section 3, Rule 16, 1997 Rules of Civil Procedure. Appool•, 596 SCRA 630 12009), p. 640.
" Artide 4.16(c), IRR. ~ Article 4.17(c)(i), IRR; Section 28(cXll, ADR AcL.
"Rule• 3.l(A), 3.20, 19.l, 19.lZ, and 19.26, SP<1cial ADR Rules. ~Article 4.17lc)(ivl, 1RR; Section 28(c)(iv), AOR Act.

.
•1
88 ALTERNA'IWB DlSJIU"nt REsoWTJON INTERNATIONAi. COMMERCIAi. ARJll-'110!< UNDBR Tiii 89
AOR ACT OP 2004 AND IT'S DlPLEM£1>'TINO Rlll.ES AND REOUl.\TIONS

(similar to the modes or discovery); or to com~! any other sented by a ~rson of his choice even if o non-lawyer. However, if a
appropriate act or omiaaion.1• non·IB\vyer is so appointed, he shall not be authoriz.ed to appear a.s
3. The grant or the interim measure may be con ditioned counsel in ony Philippine court or ony quasi-judicial body even if
upon the provision of security (similar to an attachment" such appearanoe is in relation to the arbitration jn which he ap-
or iJ\junct:on bond~ or any act or omiuion specified in poar1 ....
the ordar.•
4. The order either grantinr or denying the request for in- Rule. ofP rocedure in ICA
terim me..,ures shall be binding upon the parties and ei- (Anicle• 4.19, 4.23, 4.24, 4.25, 4.29 and 4.30, IRR)
ther party may 11.pply with the courts for aaaistance in im·
plementing or enforcinr it." Determinatum of Rules ofProcedul'c
5. A party who reC1l8es to comply with the order for an in-
terim m""8ure shall be liable for damageo reau.l ting from The general rule i1 that the partiea in an internatio:\al com-
non-compliance, includinr all ~ and reasonable nt- mercial arbitration are free to determine the rules that will rovern
tomey'1 fees paid in obtaining the judicial enforcement their arbitration proceedings.
thereof." A party who rel'u$es to comply with the cou.r t or• In default thereof, the arbitral tribunal sbaJl apply the "UN-
der compel~ng. compliance with an interim measure may CITRAL Arbitration Rules• adopted by the UNCITRAL on 28 April
be cited for ind<rect contempt of court." 1978 and the UN General Assembly on 16 December 1976, unless
6. Before th• coru;titu~on of the nrbitral tribunal, or to the the arbitral tribunal finds said Rules inappropriate, in which case,
exunt that the arbit.-al tribunal already constituted hu it shall determine the appropriate procedure.•
no power to act effectively, the interlln measure may be The prooedure in international commercial arbitracicn in de-
requested from the courto in accordance with the Special fault of an agreement or the parties is aa roUows:
Rules of Court on Alternative Dispute Resolution."
I.Statement of claims. Within tbe period agreed upon by
Legal Reprettenlatum in ICA the parties or determined by the nrbitral tribunal, the
<Sectwn 22, ADR .Att; Artide 4.40, 1RR) claimant •hall state the facts supporting his claim, the is-
sues and relief or remedy oought, and shall submit
As a rule, onl,y lawyers accredited by the Supreme Court can therewith or refer therein to relevant document.1.•
practice law in the Philippines. In an international commercial 2. Statement of defentt.S. In the same manner aneperiod,
arbitration conducted in the Philippines, a party may be repre- the respondent shall state bis defenses thereto and sub-
mit therewith or refer therein to relevant documente.•r
: .Arti~a 4.17(c)(ii), IRR; Section 28(cXii), ADR Ac~. 3. Default of tM parties. The failure of the claimant or re-
Sections 3 and4, Rule 57, 1997 Rules of Civil Prooodure spondent to communicate hie 1tatement of claims or de-
n Section 4, Rulo 68, 1997 Rul.. orCivil Procedure. ' renses as the case may be during the period tberefor, or
: Article 4.17(c) iii), IRR; S<ction 28<cXiiil, ADR Act.
Article 4.l 7(c)v) and (vi), IRR; Sect.ion 28(cXvl and (vi) ADR Act "Section 22, ADR Act; Article 4.40, IRR.
" Article 4.l7(cXvii), IRR; Section 28(cXvii), ADR Act. ' · "Article 4.19(a) o.nd (bl, IRR.
,. Sect.Ion S, Rule 71, 1997 Ruloa of Civil Procedure. "Article 4.23(a), IRR.
a Sect.ion 28(a), ADR Act. •I Id.

""
90 ALTERNATIVE DISPUTE RESOLUTION l !\"TERXA'r1o xA1 Co:-.1~1F.RC IA t An01TRATION Ur-ooEn T HE 91
AOR A CT OF 2004 A~D rrs I MPLEME1''Tl~O R ULES A:s'D REGUL.\TIO:'\'S

his failu re to appear at a hearing or to produce documeJ)- ho\vCve r, t hat an arbitral tribunal does not have con-
tary evidence, results in the default of the failing party. te1npt po\vers. The po,vcr to cite for direct or indirect
The default of the claimant for failure tc communicate his contempt is not OM of the powers granted by the AOR
statement of claims results in the termination of the pro- Act to an arbitral tri buna l. Hence, should a party or
ceedings. The default of the respondent to co1nmunicate \vi t.r.iess refuse to con1p ly \vith a subpoena issued by
rus statement of defenses shall not terminate the proceed- the arbitrnl tribulla1, the aggrieved party nlust invoke
ings and, instead, it shall proceed \vithout such failure be- judicial intetvention to cornpel con1plinnce \vith the
ing considered as an admission of t he claimant's a llega- subpoena and, ln th e event of failure to co1nply \vith
t ions. The fail ure of any party to appear during the hear- the court's directive, cite the refusing party in con-
ings, or to produce documents, amounts to a \Va.iver tc1npt of court. In t his case, it is the court's directive
t hereof and the a rbitral tribunal shall render an a'vard o n that h as been violated a nd, hence, the contemptuous
the b asis of evidence submitted to it.M act ...vas commi tted, not against t.he arbitral tribunal,
4. A1nendment of clai1n.s or defenses. The parties n1ay ainend but agninst t he cOul't itself.
or supplement t·h eir claims or defenses, as the case n1ay be1 <:. Expert. 1'he arbitral tl'ibunal n1ay appoint experts to
unless the a rbitral tribuna1 considers the amendn1ent in- report to it 011 specific issues, r equire the parties to
appropr1a . t e." provide th e expert \Vi th re levant information, access
5. flea.rings. The a rbitr al tribunal shaU detertnine \vhether to d ocu1n ents, goods or property, and require the ex-
to hol d oral hearings only, oral argum ents onJy, or just pert. to participate in the hearings for the refutation of
require the submission of documents, d u ring the appro- h is findings through questions propounded by the
priate at.ages of the arbitral proceeding,,, the dates of parties or the p1·e seotation of another expert.~ The
'\vhich the parties shalJ be given sufficien t advance no- expert in t his case is sin1ilar to a n ani.icus curiae or a
tlce.'1 In t he cond uct of hearings, the arbitral tribunal can "friend of the court."
avail of t he fo\\owing prerogatives in taking evidence: The expert referred to in the IRR is not the ex-pert
o:. Court as.sistonce in t.akfrig ttuiderice. The arbi tral tri· u11:tt1.ess called upon by t.h e parties then1selves to tes-
b~nal, or any party "ilh the approval of the arbitra l tify on 1nattcrs of opinion. J nstend, he is caJled upon
tr1b_unal, _may request from t he courts assistance in by the a rbitral tribunal itself to provide assistance to
taking cv1dence.n t he tribunal.
b. Subpoena. The arbitral tribunal has the power to is- 6. Conclusion/closure. An international oominercial a rbit ra-
sue s ubpoena in order to compel the attendance of tion proceeding may be concluded or closed in either of t\vO
'vitnesses (subpoena ad testifi,candunl) and the pro- ( 2) ways:
d uct.ion of documents (subpoena duces tecum)." Note,
a. By an award or s<!ttlement. In nrbitral proceedings
with more than one (1) arbitrator, the decision shall
• Article 4.25, fRR. be n1ade by a majority of th e n1embers. Questions or
" Ar<iclo 4.23(b), IRR. procedur e may, however, be decided by a presiding
" Artide 4 .24(a). ffiR.
" Article 4.24Ccl, IRR.
1
' Art.icle 4.27, IRR.

" Jd. ,. Ar t icle 4 .26, IRR.

92 Al.TER..'WATl\1'€: D ISPUTE RESOl..U1'10N l~TRRNA·no:-.:AL CoM::.1ERC1A1 ARorrR.ATfON UKot::K THE 93
AOR A CT or 200·~ :\:"'D rr.:; ];\Jf'L.EMf:N"TINC R ULES AXD RECUL..\TIONS

arbitrator if so auth ori2ed by the parties or by all The n.rbitral tribunal retains jurisdiction until the a\vard be·
members of the arbitral tribunal." comes final and executory. The arbitral a\vard beconlcs final and
If during the arbitral proceedings, the parties setLle cxccutory afl:er the Latest of:
their dispute. tho arbitral tribunal shall terminate the
proceedings, and, if requested by the parties and not ob- 1. The rendition of the arbitral a\vard.
jected to by the arbitral tribunal, record the settlement 2. The hearing on the quantification of the costs and ~h~ ~e­
in the Corm of an QJ'bilral a11J(lrd on agreed ternis \vhicl1 ter1nina.tion of the party liable therefor, or the d1v1s1on
shall be in the san1e form as a regulal' arbitral f.l\vard.~ thereof bet-.veen the parties, provided that a reservation
The a'vard shall be 1nade in \vriting, signed by the for such hearing and quantification has been made by the
sole arbitrator. or a majority of the arbitrators of the arbitral tribuna1.!i!I
arbitral tribunal provided that the reason for the 3. The expiration of the pe1;ods for correction and interpre·
omitted signature, the reasons upon \vhich it is based tation of the 8 ,vard , or fo r making an additional ~nvard
unless the parties agree othenvisc or is an a\V}lrd on (i.e., unless a different period is agreed upo1l by the pa:r·
agteed terms, and the d ate and place of arbitration tics or the periods a rc extended by the arbitraJ t ribunal.
are stated, and a copy delivered to each party."; 30 days from l'Cccipt of the award if initiated by a party,
b. Termination. The arbitral tribunal shaH issue an or· or 30 d ays from the date of the award if initia.t ed by. the
der for terrnination of t he a1·bitration \vhen lil the orbitral tribunal), ,vithout any par ty or the a.rb1t ral tr1bu·
~J~ima,ot withdraws his claim. unless the respondent nal av}1iling of the said remedies.'.,.
objects thereto on the basis of a legitimate interest in t\. Tf the said remedi~s are availed of by the parties or the
obtaining a final settlement of tl1c dispute;~ l i i ) the arbit1·al tribu nal, \vitJ1in the same periods stated above
parties agree to terminate the proceedings; or [iii) the counted from the date of the receipt of or issuance of the
arbitra1 tribunal fi nds t h at the continui1tion of the arbitral av.1ard as the case inay be.
proceedings has become unnecessary 01' irnpossible.
In these instances, the mandat<> of the arbitral tribunal ends Costs in ICA
except that, if the conclusion of tl1e proceedings is by ,... a.y of a 11
award or settlement, the arbitraJ tribunal's mandate extends [i) to Coots in an i nternational commercial a rbitration in clude only
correct and interpr et the $1\va.rd, (ii) to set aside an exclusive re.. the (i) fees of the arbitral t ribtinal; (iii travel and oth er expcns~s;
course agajnst t.he a1·bitral a\vard; or, (iiiJ when reser ved, to the (iii) cost of expert advise; (iv) travel and ot11er expenses of ,~.,1~ .
quantification of oosts and the dete~mination of the party liable nesses· (vi costs for legal r epresentation af1d assistance; and Iva)
fees a~d oxper\Ses of the appointing authority. " In all instan ce.s.
11
th erefor, or the d ivision thereof.
the costs shall be reo.sonable t.."lking into account the an1ount in
dispute, t he complexity of the s\lbject matter, 1.ho time spent ~l tho
" Article 4.29, !RR. arbitr ators, and any other relevant c1rcu1nstances oft.he case.
" Article 4.81, IRR.
~ Id.
M Al'tic:le 4.32, IRR.
ff A similar situation is provided fbr in Section 2. Ru1o J7 of the 1997 1
~
AJ·Licla 4.33, JRR.
Rules of Civil Procedure, i.e., if a counterclaiin has been pleaded by a defen· 1 1
'' Ar t icle 4.46(n). lRR.
dant. prior to the service upon hi1n of the plaintiff's motion for disn1issal. 1 11
' Article 4.46(b). lRR.
!!4 At.'MtRNATIVP. D 1i:iP1n"£ R ESOLUTION INTERNATIONAL COM:M£ RCIAL ARBM'RATION UNDER THE 95
ADR ACT or 2004 At.'JD ITS I~tPLEMENTING RULES A&'ID REOULATIONS

In prin'ciple, the costs shall be borne by the unsuccessful 2. Quantification of the costs and the determination of the
party. However, tho arbitral tribunal may apportion the costs if party liable therefor, or the divi.siort thereof between the
reasonable under the circumstances of the case. In the case of costs parties, provided that a reservation for such hearing and
for legal representation and assistance, the arbitral tribunal shall quantification has been made by the arbitral tribunal.
be free to determine which party shall bear such costs or may ap- 3. Correction of typographical and similar errors initiated by
portion them if reasonable. uo I
a party. A party may ask the arbitral tribunal for the cor-
In one case, the Supre.m e Court held that, where the peti- I! rection of the award within thirty (30) days from receipt of
tioner had a valid reason to institute the arbitral proceeding as he the award, and \vith notice to the other party, for any er.
believed that he was entitled to his claim, and the respondent can- ror in computation, clerical or typographical error, or
not be faulted for defending himself for perceived wrongful acts other errors of similar nature.
and oonditions, it is only fitting that both parties should share in
the burden of the cost of arbitration on a pro re.ta basis so as not to The same principle obtains in the proceedings before the
put a price on the right to litigate. - regul ar courts. As a rule, a regular court loss.es jurisdic.
tion over its judgment once it becomes executory e~cept to
implement or enforce the same, correct typographical er-
Correction and Interpreta.tion ofICA Award rors, or to issue orders or writs to preserve the judgment.
(Article 4.33, IRR) l\1oreover, the only exceptions to the principle of immuta-
bility of judgments, i.e., that final judgments may no
The arbitral award in an international commercial arbitration
does not become exeeutory until after the lapse of the period for its
amendment. Subject to any. agreement of the parties on the period&
II· longer be modified, are: (j] the correction of clencal errors,
[iil the so called nunc pro tune entries which cause no
05
prejudice to any party, and (iii) voidjudgments.'
for amendment of the arbitral award, or to the extended period
that may be granted by the arbitral tribunal therefor, an arbitral An error is typographical or clerical in charactar, and
award may be amended by the arbitral tribunal in any of the fol-
lowing manners:,.,,, I therefore correetible even after the decision has become
e.xeeuto~. if the error is occasioned by a mistake in ~py­
ing or typing, does not alter the substan~e of. the decls1on,
1. Agreement of the parti.es. The arbitration agreement may and does not affect or prejudice substantive nghts.
provide {or the instances when an amendment of the arbi- 4. Correction, of typographical error initiated by the arbitral
tral award is allowed. While this circumstance is not ex- tribunal. Within thirty (30) days from the date of the
pressly provided for under the ADR Act of 2004 or its IRR, award, the arbitral tribunaJ may motu proprio correct any
it is premised on the principle that the parties are free to typographical error therein.
determine the rules that will govern their arbitral pro-
ceedings. 5. /nterpret<Ui.on of the aWt>l'd. Within the same period for the
correction of typographical errors initiated by a party, the
parties may agree to request the arbitral tribunal to give an
•mArticle 4.46(d), lRR. intupretati.on of a specific point or part of the award.
Keppel ~bu Shipyard. Inc.. v. Pioneer Insurance and Surety Cor-
io.
poration, 601 SCRA 96 (2009), pp. 145-146; see al$O Filipinas (Pre·Fao
Bldg.) System.<, Inc. u. MRT Deve/opnuml Corporo.tion, 537 SCRA 609
[2007), pp. 641-642. '" Remos v. Ra.mos, 399 SCRA 43 (20031; Anastacio TuboUo Heirs v.
1
• Article 4.33, IRR. Raul Cabrera, 547 SCRA 289 120081.
96 .I I"°'T£R.~AnoNAL C<».o.1ERCIAL AJunTRAno:rrt UNDEB nm 97
·1 Al>R A cr Of' 2004 A.~0 ns WP\.&\18"'111'0Rui.a ""°
R!:cUV.Tt01''S

,I
If the arbitral tribunal finda the request for correction or contemplated by or not fallinr within the terms of the
interpretation justified, it aball make the correction or submission to arbitration, or ~ntai.ns decisions on
gjve the interpretation within thirty (30) da~ from re-
ceipt of the request, and the interpretation or correction
i matters beyond the sc:ope or the aubmiaaion to arbitra-
tion. subject to the application of the doctrine of seu-
shnll lform part of the award. ,,
11
erability I separability; or
,•
6. Additional award. Within tllirty (30) days :from receipt of d. The arbitration agreement was violoted because the
the award, a party, with notice to the other party, may re- composition of the arbitral trib unal or the arbitral
quest the arbitral tribunal to make IUl additional award as process was not in accordo.nce with the agreement of
to claims presented in the arbitra.I proceeding but omitted the parties, unless such aiiree ment was. in conflict
in the award. If justified, the arbib-al tribunal shall make with a provision of the ADR AC't from which the par-
the additional award within sixty (60) daya from receipt of ties cannot derogate, or, failing auch agreement, was
the request which ahall be! in the form of an arbitral award. not in accordance \vith the ADR Act;
Unlike a domestic arbitral award, an international commercial 2. Or the court finds that:
arbitral award cannot be cotNCted by the courts_ Only the arbitral
tribunal may eorrect an international commettial arbitral award. a . The subject of the dispute ia nol capabk of settle-
Courts can only set them a.side, - d recognition to them, or refuse ment under the laws of the Republic of the Philii>-
to rerogni.ze them. pine:§; Or
b. The award is in conflict with public policy of the Phil-
Setting A6i<k an I CA A.ward ippines.
(Article 4.34, /RR)
The foregoinr: instances show !hat, notwithstanding tho adoi>-
An international commcrcio.1 arbitral award may be set aside 1.ion and application of the Model Law aa part of the_ ADR Act and
through the rourts, particularly the Regional Trial Court, provided its IRR, Philippine Jnw on disputes not copoble of bclllf: made sub-
tho.t: 1111 ject to ADR and public policy are inviolable.
1. The J>8titioner fumishe11 proof that there was: Unlike the grounds for refusing recogniti~n of..IUl !CA or for-
eign arlbitral award which are declared exclu11ve, the f~re~oin.g
a. Defect in the arbitration 081"t•rrtent because a party p-ounds for setting aside an JCA award have not been ~darly
was under some incapacity or the aaid agreement is declared e xclusive. However, their e.nu.meration shows the in~~
not valid under the applicable law; to keep them exclusive. Moreover, under Rule 19.10 of~· Speoat
b. VW/ation of d~ p~• because the -petitioner was ADR Rules, no other r:round for oetting uide can be raJsed: excep
not given proper notioe of the appointment of an arbi- it it omounta to a violation of public policy. Rule 19.10, reqmnng as
trator or the arbitral proceeding, or was otherwise it does the element of violation of public policy for any other
unable to present hia case; ground. which is itaelf a specified c:round, therefore reinfon:es the
exclusivity of the grounds for setting aside an ICA award ...
c. Lack or """"" ofjuriodiction on the part of IM arbiuul
tribunal because the award deals with a dispute not '°'Article 4.36, IRR.
"" Fruehauf Electronics PhUippiMI (;orporalion u. T«JinOl.of1:y Electron·
"'Article 4 .34(a) and (bJ, lRR. let Aleemb(y and Mano,ge~nt Pacific Corporolion, •-Upra.

,j
98 A L Tf.RNATJVE D1srU'TE ResoLUTJON l '.\"T€ UN'A'r1o !"A1.. Co)l'.\IERCIAJ. ARu1 1'KATI O~ UNDER 1'H& 99
AOR A CT or 2 004 A~O ITS l)tJ'Lt:~ll':KTlr-:G R ULES A:"iD R ECULATfONS

In an international comm~rcial arbitra tion, the venue of set- of a don1estlc arbitrAI 8\vard. In \IA rious decisions of the Supreme
ting aside proceedings, as wen as for the recognition and enforce- Court, hov..•e\ler, the te1·n1s recognition a nd confirniation have beeo
1ncnt of a'vards, a nd any application for assistance and supervi- used intcrchongeably. 11 4
sion, excep t appeal, sh all be with t~c Regional Trial Court Iii
'vh crc the arbitration proceed ings took place; (ii) \vherc the asset to E1iforce1ne11t 1neans t he execution and in1plemcntation of the
be attached or levied upon , or the act :o be enjoined is located; [iii) foreign al'bitrnl 8\\lard through Philippine legal processes. It exists
where any of the parties to the dispute resides or h as h is place of '\"hen a plaintiff \vants courts to positively carry out and make
business; or (iv) in the National Capital Judicial Region, at the effecti,·e in the Phi lippincs a foreign judgme nt."n"
option of the a pplicant. 110 Although Article 4.35 of the IRR falls under Chapter 4 on In·
The court may, if requested by a party, suspend the setting ternntional Con11nercial Arbit1·ation, said Artic1e provides the r ules
aside proceedings for a period of time determined by it in order to for the recognition and e nforcement of "foreign arbitra.f al~nrds." A
give the arbitral tribunal an opportunity to resume the a rbit ra.l '"fcreig:i arbitrcil (.u vard," ;,s defined under the Special Rules of
proceedings or to take S\lCh other a.ction wtUch in the arbitral tri· Court on AJternnt ive Dispute .Resolut.ion, is "one n1ade in a <..-ou 1\try
b unal's opinion ,vilJ eliminat e the grounds for setting aside. 1H other than the Philippines."111: It is subn1itted, ho,vever, t.hot a more
accurate definition of a foreign c1rbUral au;ard is that it is one l'en·
dered in an a rbitratioo ,vhose seat is outside the Philippines.
Time for Filing the Peti.tion for &tting A•ide
Henc.c, ao lCA a'vard r endered in 8 1\ arbitral proceeding \vhose
seat is outside the Philippines, i.e., foreign !CA, is essentially a
The petition for settin~ aside must be filed ,vith.in three (3) fo reign arb it1·al a"vard.
months from the date on which t.h e party making that application
1·t:..:ttived tl1.., award, or from the <late On \vhic.h a 1·t:qu est for correc· A fnrt>ilJn arbitr<.rl c11L•nrd 1nus t go thmngh the process of"rec·
tion, interpretation or additlona.l a.\vard has been disposed of by the oga.ition" in order to be e ntitled to en(Orccment in the Philippines.
arbit-rul tJ·ibunal. '
11 On the other hand, a don1.estic arbitral auJard, \vhilc not requiring
r~cognition, generally h as to go through the process of "confirnia·
tion" prior to their in1ple n1entation. There is no need for Philippine
Recog11.ition a-nd Enforce1nent of ICA u.n d courts to give a rbitral a'vards rendered in a don1estic arbit ration
Foreig11 Arbitral Awards legal recognition unde r Philippine la\v apart frorn mere confirma-
(Article 4.35, !RR) tion.
R ecognition is t he means by \vhich a Philippine court gives le- On th e treatment of Philippine I C1\ a'vards 1 there is greater
~al acknow·l~~gemcnt to a foreign a.rbib·~1 .a\\•ard and confe rs upon kinship bet,veen a Philippine ICA a\\•ard and a foreign arbitr al
it the capab1hty to be enforced under Philippi ne law through Phil· award Inferr ing from the fact. that th e rules on r ecognition of for·
ippi ne legal processes. It means that "our courts will all~\v snid eign a:bitral a v.,ards ore C(>i\tained in Chapter 4 of the illR \vhlch
forei~ jud~ent .to be presented as a defen se to a local litiga·
governs Philippine ICA, there exists legal basis to require recogni-
tion. Confi1 rnotwn, on the other h and, is the Judlcial affirmation tion instead of just confirmation for Philippine ICA a\vards. ThQ
Supreme Court, in enacting the Special Rules of Court on Alterna-
tive Dis pute. Resol ution, categorically used the Le1·1n "recognition"
HO Article 4.38, ffiR.
111
Art icle 4.34(d), IRR. 11
' Korc<t ''l'ecllno/.ogies Co., Ltd. v. V.ru~(J., 542 SCRA l (20081, p. 29.
'" Article 4.85, JRR. Ul /d.
n~ Philippine Conflict of Latos, by Edgardo Paras. 1
" Rule 1.ll(d). Special AOR Rules.
 1,.,,..tt.X.\TIOXAL Co).o.tERCIAt.. ARBITKAno.' UsotR nnt 101
100
ADR ACT OF 20().f A."'0 ITS l\IPL.E.\JE.,"Tl~G Rt1.ES A.'"D R:OO...'UT10~"S

r:ither than •confirmation• for Philippine ICA 8\vards.111 :\1oreover. real actions or actions quasi tn f't'.n1J:u1 (iii) \\lhtre nny of the parties
in the same Special Rules of Court on Alt.emative Dispute Resolu- to the di1pute resides or has his pince of business (as in tho case of
t.ion, t.he grounds for the recognition of a convention 8\\•ard and as- personnl nctions); 1:" or (iv) in the National Cnpital Judicial Region,
in convention award 11_. are practically the aame as tho grounds for at the option of the applicant. ~ 1

tho rccognit.iol\ or setting asido of Philippine ICA awnrds. 11~ Except for the appeal. t be foregoing pl'ocecdings shall be
Whilo both Philippine !CA aw•rds and foreign !CA awards dee1ned as s pecial p roceediJtgs, like those for the scttleinent of
1·cquire recognition by Philippine court• similar to a foreign arbi- cstntcs, cschcat., gunrdians hip, trustees, ndoptlon, lrobcas cor·
tral U\vo.rd, the award in a Phi lippine ICA is ausccptible of vacation pus, chnngc or nrune, d0clarati01'1 of absence or death, and 111
can·
or setting aside by a Philippine court,•• but t he B\vard in a foreign ccll otion or correction of entries in the Civil Rcgistry. They
ICA is not susceptible of vacation or a.cttlng asido and can only be shall nlso be su1n n1ary in nature, 121 i.e., heoringa shall be c~n·
111
recognized or refused recogn.ition, it being essentially a foreign ducted principally o n the basis of the nffidnvits of the part1es
orbilral a.ward. and their \Vltncsses.
Oneill recognition is accordC!d by n Philippine court lO a for· In tho proceeding> for the recognilion 11nd enforcement of!CA
eien judgment, in effect, it is the decision, order or \vrit of the and foreign arbitral S\vards susceptible of recocnition. the court
Philippine court that is being enrorced. In the same manner an ah111! M?nd notice IA> the parties al their nddresae• on record in the
lCA award or a foreign arbitrnl award when extended recognition arbitration, or if any party cannot be &el"\'ccl whh notice at such
by the Regional Trial Court shall be enror<e«1 in lhe same manner address. at such party's last knO\~n address- The notice shall be
as final and executA>ry decisions or coun.a or law of the Philip· sent ftt least. fifi~n (15) days before the date Mt for initial hear·
pines.18 1ng.1•

JuriHdiclion, Venue and Natt1re of Proc~dings. 0 1'0u11tls for Refusing Recog11itio11 and
Procctlure for Recognition o(Co111;e11tio11
Jurisdiction over proceedings for the recognition and en· a11<i As· i11 Co11.ve11.tivn Awa1Yls
foi:cemont or lCA and foreign arbit1·al ll\vord&, vocating or setting
ns 1de an ICA a\vard, and Qny applicut..ion with a court for arbitra· Jn general, the conditions nnd requisites for tho t'Ccognition
tio.n ossistanoo theJ'eon, is vested by the ADll Act on the Regional ond en ror·ce1nent. of foreig,.1 judgm<utts in the Philippines e re:
Tnal Court.'g]
J. Proof of the forei!,'11 judgment;
Th e venue of th@ proceedings &hall be (ii \vhere the arbitra·
tion proceedings ore conducted; (ii( where tho asset to be attached 2. The judgment must be on o civil or con1n1crc1ol matter;
or levied upon, or the act to be enjoined, is located (as in the case of

" Rule 12, Special ADR Rules.

'" Section I, Rul~ 4, 1997 Ruln ofCivd Procedure.
1
" Rule lS.4, Special ADR Rules.
•• Rule 12.4, Special ADR Ru!... .. Se«ion 2, Rule 4, 1997 Rules ofCivd Pll'OClCdure
,. Rule 12, Special ADR Rul~. '" Article 4 38. IRR.
uo Rule 13.l 1, Special ADR Rules. ,., Ru)f'~ 72 to 109, RulesofCourL
'·'Article 4.35(3), !RR. ••Article 4.42, IRR.
•• Article 4.38, ffiR. ••Article 4.39, lRR.
104 At.TgRNA:TlVE DISPUTE RESOLUTION INTERNATIONAi,.. COM)IERCJAL ARBITRAT10N U NO&R 11iE 106
ADR ACT OF 2004 ANO ITS IMPl.EMENTING RULES Ai"«> REClfLATIONS

failing such agr.eement, was not in accordance with the vldual rights, whet.her of personal liability or of private
ADRAct; property. <En1phMis ours)
5. Defect in t/.,, award such as when it has not become bind- An older case, Ferrouini v. Gsell, defined public policy
ing on the parties or has been set aside or suspended by a for purposes of determining whether that part of the contract
court of the country in which the award was made.a.n under consideration is against public policy:
By 'public policy'. as defined by the courts in tho United
Or if there i8 a finding from the court that:
States and England. is intended that principle of the l aw
1. The subject of the dispu~ i• not capable of settlement un· which holds that no subject or citizen c.an lawfully do tbat
which has a tendency to be injurious to the public or
der the laws of the Republic of the Philippines; or against the public good, which may be termed the 'policy of the
2. The award is in conflict with public policy of the Philip· Oaw,• or 'public policy in relation to the administration of the law.'
pines. Public policy is the principle under which freedom of contract or
private dealing is restricted by law for the good of the public. In de-
The measure of violation of public policy as a ground to refuse termining whether a contract is oontrary to public policy the nature
recognition to a fo~eign arbitral award was described in Mabuhay of the subject matter det:ennine the source from which such ques..
Holdings Corporation "· Sernbcorp Logistics Limited'" as follows: lion is to be solved. (Emphasis ours and citation omitted)
In light of the foregoing and pursuant to the State's pol-
In Our j~ctfon, the Court ha.a yet to define public pol~ icy in favor of arbitration and enforcement of arbitral awarda,
icy and what 18 deen;ed contrary to public policy in an arbitra-
the Court adopts the majority and no.rrow approach in det.er-
tion caae. l-1.owever, 10 an old case, the Court, throU&h Juatice
mining whether enforcement of en award ia contrary to Our
Lawel, elucidated O? the term 'public policy' for purposes of do-
claring a oontract VOid: public policy. l\1ere errors in the interpretation of the Jaw or
factuaJ findings would not suffice to warrant refusal or en-
x x x At any rate, oourts should not rashly extend the rule forcement under the public policy eround. The illegaliy or im 4

which holds that a contract is void against public policy. The moraJity of the award must reach a certain threshold such
term. 'public policY' ie v~e and uncertain in meaning, that, enforcement of the same \vould be against Our State's
ftoatiDC and <:hangeable m connotation. It may be said. fundamental tenets of justice and morality, or would blatantly
however, that, tn general, a contraot which is neither prohi· be injurious to tho public, or the intercslll ofLbe SO<i~ty.
bited by Jaw nor condemned by judicial decision. nor contrary
to pubUc morals, contravenes no public policy. In the absence In the case of as-in convention awards, the applicant shall
of express legislation or constitutional prohibition, a court, in additionally present proof of comity and reciprocity between the
order to declare a contract void as agaimt public policy, must Philippines and the non-convention state where the ar-bitral award
find that the contract as to tha consideration or thing to be was rendered.
done, h as a tenden cy to injure the public, is a.rain.st t he
publio ,-ood, or contravenes eomo ee.tabllahed interests of Any other ground shall be disregarded by the court."' This
eociety, or is htcon:sistent with eound policy and good principle was a pplied by the Supreme Court in the case of Tuna
morala, or ~ds clearly to undennine the security of indi· Proassing, Inc. v. Philippine Kingford, Inc.,"' where it was held
that a foreign corporation not licensed to do business in the Philip-

"'Ruic 13.4, Special ADR Rules. u. Article 4 .36, IRR.

>• Supra., citing Gc.bru.l v. Monte de Piedad, 71 Phil. 497, 500 (1941), '" G.R. No. 186682, 29 February 2012: 667 SCRA 287, pp. 301·307·:
and Ferrauini u. Gsel~ 34 Phil. 697, 711-712 (1918). emphasis supplied .
106 lNTEAXAnoNAL Co.\DtBRCIAL AtunTttATION Uzr..~ nut 107
ADR A cr OF 200-4 AND ns htPl.£>1£1<r1NC Ruu:s "'"' Rlollt.ATK>NS

pines, and which is generally prohibited by tho Corporotit:Jn Code of by the arbit.ration and by the result or ft.rbitntion, cone.ding
the Philippines &om ftline suit in t.he Philippinea," ' has legal ca· thereby t.he capacity or the other pan:y to enter into tho con-
pacicy I<> aue under tbe provision• of the ADR Act of 2004. Thus: tract.. pon.icipate in the arbitration and cauae the impJementa-
tion of the re.suit.xx x
"Sec. 4S of th4 AlUrnatilH! Di1put~ Ruolution Ac' of 2004
provides that the opposing party in an application ror recogni· ., Clearly, on the matter of capacity to aue. a foreign
tlon and enforcement of the arbitrel award ma,y raise only arbitral a w ard should be respected not because lt 11 fa·
' vored over dome.sue law1 and procedureJ1, but boc.ause

...
thou ground.I that were enumer•ted under Article V of the
Ne w Yo'* ConwnJlon xx x. Republic Act No.. 928tl hu certaln.l,y er ued any con.ftlct
ot law question.
••• Finally, even a1tumina. onl.y for the eake of a.rgu.me.n~
Clearly. not: ooo o( these arou..nds touched on the capacity that the court a quo cornctly observed that the Modi.I Law. n.ot
to 1ue oft-he plltty 1eekine the reoognilion and onforcement of the New York Conuentio11, governs the 1ubject awc>.rd, poti·
U10 a.ward. tioner m1;y 8till Mek reco~nitio n and enfon:e.ment of the award
Pertinent proviaions of the Spttiol Ruk• of Collrl on Af. in Philippine court, eince the Model Law prescribes 1ub1tan·
,.t'fl4duc DispuU Rnolutil>n. which was promulga~ by the tially identical exclusive grou..ods for retutina remgnition or Ht•
Supreme Court. Ukewile support lhla pogition. forcement.
Rule 13.1 or the Special Ruleo Provides that '(e)l\Y party Premises conaidertd, petition er TPI, althourh no&ll·
to a foreign o.Ybit.rntloo may petitton the court to recognize and cent1Jed to do bu1inea1 In th e Phllippl_n e1, may eeek rec·
enforce a foreign arbltral award.' T~e content.a or tho petition ognitlon and e nforcement of the forelp arbitral award
are enum~ted in Rule 13.S. Ca~ty to sue ii not lncluded. in a ccordance with tho Alternati-vc Dltpute RnoluJlon
Oppoeitely, 111 tbe Rule on local arl>1tn1 a..-ani. or arbitrations Act of2()(U, •
I~ ln1~oes wb!" 'the P~ or arl>it.ation ill in the Philip-
ptn•. it t1 speci.ftcally reqw~ tha.t a petition \() d et.ermin.e
any question concerning the existence, validity and enforce- Procedure for Recognitkm ofConV<lnlwn
ability of such arbitration agreement' available to the parties and AB·in Convention A wards
~~ore th~ commenccmen;t of arbitration andlor petiUon for ~u­
dia.al relief ~ tho ruli_ng of the ~tral tribunal 00 9 pre- The procedure fort.he recognition and enforcement of conven·
liaunary question upholdillg or dechnJne ita juriadicdon• after lion and as-in convention awards is as follows:
arbit.ation bu already c:omm•noed •hould atlte 'the fad$
ehowlnr that tho persons named u petitioner or reepondent 1. Filing of application. The party relying upon Ill\ award
have Jegal capacity to aue or be sued.' or applying for its enforcement shall m. W'.ith the Jle.
Indeed, it ill in the best interest ofjuatico that ln the en- gional Trial Court tho original or duly authenticated copy
forcem•nt of a fore;,n arbitral award, we deny avallment by of the award and the original arbitration agreement. If
the loetog party o( the rule that ban foreign corporations not the award or agreement is not made in an offic:ial Ian·
l~naed to do buslneu ln the Philippine. from malnteining a guaec of the Philippines, the party shall supply a duly
au1t in our couri.. When a party cntera into a contract conta.in- certified translation thereof into ouch language.'"
in1 a foreign arbitrnLion cla use and, aa in this co.so in fa ct
submita itoelfto arbitrat.ion, it becom01 bound by tho ~otract, 2. R.ecognition. Onoo confirmed by re<:ognition, the foreign
arbitral award shall be enforced in the same manner as
"' Section 133, Corporation ~of tli. P/Ulippine..
>d Article 4.35(c), IRR.

'
lOS AL1'ERNA1'1V& DISPUTE R ESOLUTION l:.:Tt;lt:-.-ATIOX.•\I . C0:'.1)1f.l~C'I A I~ A P.Ul1"RATION UNDER TUE 109
AOR A C1' OV 200,i A:-:D ITS })IPl.£)1£ :-0:T ISC R ULES A.' '0 R EGUL:\T;IONS

finaJ and ex9Cutory decisions Of the COurts Of lD.\V Of the. -si::c. -IS. 1'./lPcl of fon-i1111 j11dl(1ner1ts or final orders.-
Philippines .u3 The effect of :i jt1dg:n1cnt or fina l order of u tribunal of a for(tign
country. huving j urisdictiOrl to 1'('-0d(l1• lhcjodg1ne nt or fintl l or·
3. Con.solid.a.tionlconcurren.t hearings. The parties a nd the dcr is as fol lo\vs:
arbitral tribunal may agree. on (i] the consolidation or pr o-
ceedings, or [ii) t he conduct of concurrent hcarit~gs \Vith Cu> In th<' case of a judg 1n e nt o r final Ol'der upon n spe·
other related arbitration p1'0ceedings, e .g .• petition ror the cific thing, 1hc judg1nent or final order is conc)usivc upon
non-recognition or rejection of the same arbitral a\vatd. '" the ti.tic to the thing; and
Cb> Cn c:u1:(' of a ju<lg111cnt or finnl order ugoj nst n pcl'•
1. Rejection I suspension. Tl1e Regional Trial Court, upon a the judgn1ent o r fi nQJ order is pt·esun1pti,,e evidence ot
Sl}Jl,
subs~quent. a pplication for rejection or suspension of the
a right as bct,veen the por·ties and their s uccessors in
enforceme1\t of the award, 1nay vac..'\re. or suspend t he e n - intcl"CSt by Sl•bsequent title.
forcement of the court decision to recojplize the a rbitral
a \vard and may also, on the a pplication of t be party claim- I n e ithe r C:'IRC. th(' judg1ucnt )r finnl order may be re•
ing recognition or enforcement, order the party seeking pellcd by ev·idcnce of \'/<lilt of ju.-isdictiun. '''unt of 1\0tice to t he
party, oollusi<111, fraud, or clear n1is:.ukc of hHv o r fact." (Em·
rejection or suspension to provide appropriate security 10 phasis s upplied)
or
like a bond for instance. In t.he case an as-in convention
ll\V:-;ird, the court may also remit the award to the a rbitra) Unde r Article 4 .37(a) of the IRR. in conjunction \vit.h Section
tribunaJ if t11e objections raised may be cured or recti- 48, Rule 39 of the 1997 Rules of Civil ·Procedul'e, 8. 1\on-convention
fied.1.&0
a'vard 'vhith does not qualify as an as-in oonvention a \vnrd is ei-
5. Appe(Lls. Tb.e. decision ~f the Rcr:.rio~aJ Trial Court l~COg­ ther "conclusive upon the titJe to a. thing" or, nt best, is a .. pre·
u.iz:i.n.g. e rU'ol"c.uig . vacat1ne- or setting naide an. n r bitra l ~u.mptivc Qvid cnce of a r ight as bct\veen the portioe t"nd their i:::nr.·
a\vard 1nay be a?pe~Jed to the Court of Appeals in accor- cessors in interest by subseque nt tit1e,"' provided there is no \Vant
dance 'vith the Spectal Rules on ADR. 'vhicl\ shall r equire of j urisdiction. oo \vant of notice, no collusion, no fraud and no
the appeali11g pa~y to post a counter-bond in favor c·f tl1 e cJea:r mis t ake of fact or \aw.
pt"evailing party u1 the arnount of the av..iard.1•~

Legal Effects ofNon-Convention Award.s

Non-convention av.. ards, unless they qualify to be as-in con-

1

vention awards, are not ent itled t-0 recognition or enforcement

u ndcr the ADR Act. They may, h owever, be given legal effect :n t he
Phili1>p;nes on the basis of Section 48, Rule 39 of the 1997 Rdes of
C ivil Procedure, \vhich provides that:

u:. Article 4.35(e), TRR.

i-.• Article 4.45, IRR.
10
Article 4.35(0, IRR.
,., Article 4.36(c), IRR.
1.-1t Article 4.37, JRR.
 Section 28 (Grant of Interim MeasuruJ
Section 29 (Further Authority for Arbitrotor to Grant
CHAPTER 6 Measures of Protection)
Section 30 <Place of Arbitration)
Section 31 (Language of Arbitration)
DOMESTIC ARBITRATION Section 32 (Laws Gouerning Domestic Arbitration)
Section 33 (Applicability of Domestic Arbitration);

Domestic Arbitration 4. IRR of the ADR Act; and

tJ. All other rules applicable to International commercial ar-
In general, arbitration is domestic if conducted in the Philip- bitration which may be given auppletory application in
pines. Specifically, arbitration ia dcmestic if the componen ts of the absence of s pecific applicable provisions.
parties' places of business, place of arbitration, place of perform-
ance of a substantial P~ of t~e obligation, and place where the The ADR Act of 2004 devoted only two (2) sections to domestic
subject matter of the dispute ta most cloeely connected, are all arbitration, namely Section 32, which distinguished domestic arbi-
located in the Philippines.' tration from international arbitration and declared that the "The
Domestic arbitration is governed by: Arbitration Law" <R.A. No. 876) remaina to be appli.cable to domes-
tic arbitrstion; and Section 33, which adopted certain provisions of
1. TM Arbitratwn Law CR.A. No. 876); the Model Law and the ADR Act on in\.ernational commercial arbi-
2. TM Motkl Law <Articles 8, 10, 11, 12, 13, 14, 18 and 19); tration to domestic arbitration.
S. The following provisions of the ADR Act on international The Arbitration Law (R.A. No. 876) took effect on 19 Decem-
commercial arbitration:' ber 1953.' It will, therefore, be observed that some of its provisions
are consistent with laws in effect et that time but are no longer
Section 22 (Legal Representation in I nternational necessarily so with present laws and rules. For instance, note the
Commercial Arbitration) reference in the Arbitration Law to the "Courts of First Instance"'
Section 23 (Confulentiality of Arbitration Proceedings) and the "Court of Industrial Relations,"' which are no longer exist-
Section 24 (Referral to Arbitration) ing and which have been replaced by the Regional Trial Courts and
Section 25 (Interpretation of the Act) the N11tional Labor Relations Commission, respectively.
Section 26 (Meaning of"Appointing Authority") In implementing the various provisions of the Arbitration
Section 27 (What Fun.ctiofUI May be Performed by Ap- Law, the Model Law, and the ADR Act, the ffiR has to harmonize
pointing AutJwrity) the different provisions of the foregning laws. The ffiR has to up-
date the provisions of the Arbitration Law and make it consistent
' Section 82, ADR Act; Article 1.6, 8(8), lRR. with existing laws and rules.
'~ona 31 aod 32, ADR Act; Article 6.1, !RR.

• Section 32, Arbitration Law.

'Sections 4, 5, 8 and 11, Arbitrstion Law.
110 •Section 3, Arbitration Law.

1
112 ALTERNATIVE DISPUTE RESOLUTION DOMESTIC ARBITRATION 113

It will also be observed that most of the provisions of the IRR tec.hnicalilies of procedure, albeit they are, at all times re-
on domestic arbitration are adopted from the same rules applicable quired, to adhere to the basic concepts of fair play. The Court
to international commercial arbitration. This is to be expected wrote in CMP Federal Security Agency, Inc. us. NLRC:
considering that both sets of rules and regulations were patterned 'While administrative tribunals exercising quasi·
after the Model Law. The task of the IRR is to abridge the differ- judicial powers, like the NLRC and Labor Arbiters, are
ences between the Model Law and the rules on international com- freed from the rigidity of certain procedural require-
mercial arbitration, on the one hand, and the provisions of the ments. they are nonetheless bound by law and practice to
older Arbitration Law, on the other. II observe the fundamental and essential requirements of
In order to facilitat~ the comparison between the principles,
procedures and rules on mtematlonal commercial arbitration and
li due process. The standard of due process that must be
met in administrative tribunals allows a certain degree
of latitude as long as fa.i rness is not ignored. Hence it is
those for domestic arbitration, the IRR will be used as the main not legally objectionable, for being violative of due proc-
guide in this chapter on domestic arbitration. ess, for the Labor Arbiter to resolve a case based solely
on the position papers, affidavit& or documentary evi·
Duputes Couered by Rulett on Domestic Arbitration dcnce submitted by the parties. The affidavits of wit-
(Article 5.1, lRR; Section 3, Arbitration Law) nesses in such case may take the place of their direct tes·
timony.•
Unlike the provisions of the ADR Act on international com- Of the same tenor is our holding in Quiambao u. Court of
mercial arbitration an~ . the rules corresponding thereto which Appeals:
cover only disputes ansmg from relationships of a commercial
nature,' the provisions and rules on domestic arbitration cover 'In resolving administrative cases, conduct of full·
blown trial is not indispensable to dispense justice to the
both commercial ~nd non-commercial disputes' provided they are parties. The requirement of notice and hearing does not
susceptible of arbitration and do not fall within the exclusive origi- connote full adversarial proceedings. Submission of posi-
nal arbitral jurisdiction of quasi-judicial agencies.• tion papers may be sufficient as long as the parties
thereto are given the opportunity to be heard. In admin·
D ue P rocess in Domestic Arbitration istrative proceedings, the essence of due process is
simply an opportunity to be heard, or an opportu ·
(Article 5.17, IRRJ nity to explain one's side or opportunity to seek a
reconsid eration or the action or ruling complained
. The parties t_o a do~es~c arbitration, like in the case of inter- of. This constitutional mandate is deemed satisfied
nation.al commercial ~rb1tration, are entitled to be treated equally if a person is granted an opportunity to seek re-
and with due process. On due process 1n a case involving a domes- cons ideration of an action or ruling. It does not re.-
tic arbitral proceeding, the Supreme Court h eld that: quire trial·type proceedings similar to those in courts of
justice. Where opportunity to be heard either through
"The well-settled rule is that administrative agencies ex- oral arguments or through pleadings is accorded, there is
ercising quasi-judicial powers shall not be fettered by the rigid no de nial of due process ...
(Equitable PCI Banking Corporation u. RCBC
• Article 1.6(8)(4), IRR. Capital Corporation, 574 SORA 858 (2008), pp. 890-892)
' Article 5 .1, IRR.
•Section 3, Arbit-r ation Law.
' Article 5 .15 in coajunction with Article 4.18, IRR.
 114
DoMSSTIC ARBITRA110N l15

P lace or Venue ofArbitration

(Article 6.19, IR.R) RuJ.e• on R eceip t of Written Communicationa
(Artich 5.2, IRRJ
Like in an international commercial arbitration, the place or
venue of a domestic arbitration is to be d etermined by the parties. The same rule prevailing in international commercial arbitra-
If there is no such agreement, then the arbitration shall be con- tion for the reception of evidence is applicable in a domestic arbi-
ducted in Metro Manila, unleaa the arbitral tribunal shall decide tration. In line with the policy of party autonomy, the general rule
on a different place taking into account the circumstancea of the on receipt of communications" in international commercial arbitra-
case and the convenience of the parties_,. tion as well as domestic arbitration is that provided for by the
parties in their arbitration agreement .
Language In the absence of s u ch an agreement, written communications
(Ankle tJ.21, mRJ amon11 the parties and the arbitrators shall be delivered person·
ally, by registered mail or courier service, and shall be deemed to
The rule i~ th! det.ermin~tion .of the language that will be be received on the date it is delivered at the addressee's address of
used in the arbitration proc~ lS the lame for domestic and record, place of business, residence or last known address."
international commercial arbitration, including the prerogative of
the arbitral tribunal ~ reqwre a translation of documentary evi- In consonance with prevailing Philippine procedural laws,
dence if not in the official langu.age, except that Filipino ii added to written communications and pleadings intended for a party repre-
English as a default language ID domestic arbitration." The incl _ sented by a counsel, should be addressed to his counsel."
sion of Filipino aa a .def~ult lan~age in a domestic arbitration ~s The use of electronic mail, facsimile transmiuion or other
understandable cona1denng that 1t 19 an official language in th electronic means is permitted as long as there is a record of the
Philippines. e sending and receipt of the com munication at the recipient's mail
box, and such electronic communication shall be deemed to have
ConfidenliaUty been received on the same date of its transmittal."
<Article 6.42, JRR)
Waiver of Olijection•
The arbitratio~ P<?ceeding~, records, evidence, arbitral a ward (Article 5 .3, IRR)
and other confidential information are privileged and shall not be
published except Iii with the consent of the parties· or (iii for the The rule on waiver of objections to non-<:<>mplianoe with a
limited purpose of discl~sing to U:,e court relev~t documents non-mandatory rule or any requirement under an arbitration
where resort to the court is allowed. The court may iHue protec- agreemen t for domestic arbitration is similar to the rule in inter-
tive orders to prevent or prorubit the disclosure of documents or national commercial a rbitration. A party may be estopped from
information containing secret processes, developments, research questioning non-compliance or is deemed to have waived his objec-
and other information. The rule ia the same i.n the case of interna- tion thereto if h e fails to raise the objection without delay or within
tional commercial arbitration. the time prescribed therefor (30 days if no period is prescribed),

•• Article 6 .19 in conjunction with Article 4.20, JRR. " Article 4.3, IRR.
" Article 5.21 in conjunction with Article 4.22, JRR. i. Article 5.2 in conjunction with Article 4.3, IRR.
"Article 5.42 in col'liunction with Article 4.41, IRR. " Article 5.2(c), IRR.
" Article 5.2, IRR.
116 ALTERNllTtvE OISMITE R£SOLl1TION 0oMY.'ITIC ARHITRATIO>I 117

provided he ~ows of such non-compliance." The act, o'."ission or bunal has no po\...-er to net or to net effecl.-i\-ely." (Transfield
silence giving rise to waiver or estoppel must be unequivocal and Philippines. Inc. ""· L11~011 H.)dro Corporation, 490 SCRA 14
intentional. 1• 12006), pp. 20-21; emphn•i• supplied; see also: Korea Technolo·
gi" Co., Ltc/. ""· 1..ormo. 542 SCRA l f2008J, pp. 35-36)
Ertent ofCourt lnter11ention Resort to court intervention from a domestic arbitral award
(Articles 5.4 ond 5.5, IRR) may also be had through Section 24 of R.A. No. 876 to vacote the
The same rule in international commercial arbitration on the arbitral award.
extent of court intervention obtains in domestic arbitration. No If the arbitral tribunal, in the exercise of its authority to re-
court shall intervene except in the instances allowed by the Arbi- solve or defer the resolution of the preliminary issue of its jurisdic-
tration Law, AOR Act nnd Special AOR Rules... tion over the arbitration agreement, decides to defer the resolution
Pursuant to the IRR. among ~hese instances are when, thirty thereof until the rendition of the arbitral award, none of the par-
(30) days having elapsed from receipt of the request for arbitration, t ies can se..k judicial relief from the deferment.. Motions for recon-
the appointing authority fail~ to perform functions imposed under sideration, appeals a nd pet,itions for certiorari are n ot available to
Article 5.lO(c) and (d) (Appoml17U!nl of Arbttrau>rs), Article 5.ll(a) challenge the decision of the arbitral tribunal to defer the resolu-
(Grounds for Chalknge), and ~icle 5.13 (Failure or Impossibility tion of the preliminary jurisdictional issues." The parties ~n,
to Act), in which cases the applicant may apply with the courts for however, a wait the rendition of the final arbitral award, and raise
the same relief. the jurisdictional issue before the courts in a proceeding for setting
Also, interim measure& may be requested or enforced through aside or vacating t he award.
the courts." Thus: The conditions for judicinl review of arbitral awards hove
been defined by the Supreme Court as follows:
"As o fundamentol point, the pendency of arbltral
proceedings does not foreclose resort to the courts for "x x x As a rule, the arbitrator'• award cannot be set.
provisional reliefs. The Rulca of the ICC, which governs aside for mere errort of judpent either as to the law or
the parties' arbitral dispute, allows the application of a as to the facts. Court• arc generaJJy without power to
party to a judicial authority for interim or conservatory amend or over.rule merely ~ause of disagreement
measures. Likewise, Section 14 of Republic Ac:t (R.A.) No. 876 with matters of law or fact• determined by the arbitra-
(The Arbitration Law) recogni"'9 the right$ of any party to pe- tors. They will not review the findings of Jaw and fact con-
tition the court to take measures to safeguard and/or conserve tained in an award, ond wiH not undertake to substitute their
any matter which is the subject of the dispute in arbitzation. Jn judgment for t.hat of the arbitrators. A contrary rule would
addition, R.A. No. ~. otherwise known 88 the 'Alternative make an arbitt'ation award the commence.meat, not the end~ of
Dispute Resolution Act of 2004,' allows the filing of provisional litigation. Errors of lnw and fact. or en erroneous decision on
or interim measures with the court.a whenever the arbitral tri- matters submitted to the judgment of the arbitrators, are in·
sufficient to invalidat.c an ov.•ard fairly and honestly made. Ju-
" Article 5.3, IRR. dicial review of an arbitration &\vard is, thus. more limited
111
Rockland Construction Co., Inc. u. Mid-Pasig Land Deuelopnient than judicial review of n l.rio.l.
Corporation, 543 SCRA 596 (2008).
" Article 5.4, IRR.
" Articles 5.8(b), 5.18 and 5.24, IRR in conjunction with Section
28(a), ADR Act. " Rule 3.20, Special ADR Rules.
118 ALTERNATIVE DISPUTE RESOLUTION D OMEST IC ARBITRATION 119

However, an arbitration award is not absolute and with- 'This court has emphasited that manifest disregard
out exceptions. Where the conditions described in Articles of the law is a very narrow standard of review. Anaconda
2038, 2039 and 2040 of the Civil Code applicable to both Co. u. District Lodge No. 27, 693 F. 2d 35 ((/'Cir. 1982). A
compromises and arbitrations are obtaining, the arbi· mere error in interpretation or application of the law is in-
trator's award may be annulled or rescinded. Addition· sufficient. Anaconda, 693 F. 2d at 37-38. Rather, the deci-
ally, judicial review of an arbitration award la war· sion must fly in the face of clearly established legal prece·
ranted when t h e complaining party haa presented proof dent. When faced \vith questions of law, an arbitration
of the exi1tence of any of the grounds for vacating, panel does not act in manifest disregard of the law unless
mo~ or correcting an award outlined In Sections (1) the a p plicable legal principle Is clearly defined
24 and 25 of R.A. No. 876, x x x.• <National Power Corpora- and not subject to reasonable debate; and (2) tbe
tion u. Alonzo-Legasto, 443 SCRA 842 (2004), pp. 359-360; em· arbitrators refused to heed that legal principle.
pbasis supplied; see also: Insu/.ar Saoi.ngs Bank o. Far East
Bank and Trust Company, 492 SCRA 145 (2006), pp. 155-156) Thus, to justify the vacation of en arbltral award
on account or "manifest disregard or the law,' the arbi·
Moreover, an arbitral awa.Jd may be vacated if made with ter's findings must clearly and unequivocably violate an
"manifest disregard of the Jaw.• Hence: established legal precedent. Anything less would not
suffice.• (Equitable PC/ Banking Corporotion o. RCBC Capi-
"Fint:\lly, it eho:t.1lrl be strassed that while o. court ia pt-e• tal C"rporotion, 574 SCRA 858 (20081. pp. 872-873. empbesis
eluded from overturning an award for errors in determination supplied, citing Asset Privatization Trust o. Court of Appeals,
of factual issues, nevertheless, if an examination of the record 300 SCRA 579 (1.998))
reveals no s·u pport whatsoever for the arbitrator's deterrnina·
tions, their award mu.st be. vae.ated. In the same manner, an
award must be vacated if it waa made in 'manifest di.$. Representation
regard of the law.' (emphllllis supplied) (Article 5.41[a), IRRJ

xxx xxx xxx The same rule on representation in international commercial

arbitration obtains in domestic arbitration. A party may appear by
Following Asset PriWJ.tization Truft, errors in law and himself or be represented or assisted by any person of his choice,
fact would not generally jll$tify the reversal of an arbitral provided that such representative, unless admitted to the practice
award. A party asking for the vacation of an arbitral award of Jaw in the Philippines, shall not be authorized to appear as
must show that any of the grounds for vacating, rescinding or counsel in any Philippine court or quasi-judicial body." A party
modifying an award are present or that the arbitral award ,;,as
desiring to be represented by counsel shall notify the other party or
made in manifest disregard of the law. Otherwise the Court is
duty-bound to uphold an arbitral award. ' parties of such intention at least five (5) days prior to the hearing."

xxx xxx

The US case of Merrill Lynch, Pierce, Fenner & Smith,

Inc. vs. Jaros expounded on the phrase 'manifest disregard of
the law' in the following wise:
" Sections 12 and 29, Arbitration :.aw, in conjunction with Article
4.37, IRR; also Articles 5.23(f) and 5.38, IRR;
" Article 5.4 l(a) in conjunction with Article 4.40, IRR.
120 ALTERNATrvE DISPUTE RESOLUTION DOMESTIC ARBITRATION 121

Arbitration Agreenumt An arbitration agreement must be in writing and subscribed

(Articles 5.6 and 5. 7, IRR; Sections 2 and 4, by the party sought to be charged, or by his lawful agent."
Arbitration Law)
A court before which an action is brought on a matter which is
the subject of an arbitration agreement shall, if at least one party so
As previously emphasized, an agreement to arbitrate is a con-
tract" and, as such, the arbitration agreement must satisfy the requests not later than the pre-trial conference, or upon the request of
essential requisites of a valid contract." both parties thereafter, refer the parties to arbitration unless it finds
that the arbitration agreement is null and void, inoperative or incapa-
Like in the case of mediation and international commercial ar- ble of being performed. If the parties so request in the same manner,
bitration, the consent to arbitrate can either be a pre-causal consent the court may stay the proceedings during the pendency of the arbi-
(agreement to submit to arbitration) such as when the parties agree tration." In such case, the court does not lose its jurisdiction over the
in a contract to settle by arbitration a controversy that will arise case and the proceedings are merely stayed to await the rendition of
between them; or a present causal con8'!nt (suhmission agreement) the arbitral award which shall be enforced by the court."
such as when the controversy already exists between the parties at
the time of the submission to arbitration." The submission and con- Moreover, even while the court proceedings are pending, the
tract shall be valid, enforceable and irrevocable except upon grounds arbitration can proceed and an award may be made thereon. The
provided by Jaw for the revocation of contracts." rule, however, is different where the issue involved is the challenge
to an arbitrator. In this case, the elevation of the incident to a
Of these grounds, the Arbitration Law and the IRR empha- court suspends the arbitration."
size the incapacity of a party. Where one of the parties to the con-
troversy is an infant, or a person judicially declared to be incompe- When the court action is multi-party, and one or more but not
tent, the dispute is not capable of arbitration, unless the referral to all of the parties are parties to an arbitration agreement, the court
arbitration is made by a ge.n eral guardian or a guardian ad litem. shall refer those who are parties to the arbitration agreement to
And the incapacity of a party cannot be invoked by a party who arbitration, and proceed with the court action as to those who are
knowingly entered into an arbitration agreement with an incapaci- not bound by such arbitration agreement." The court! ho~ever
tated party.,. may issue an order directing the inclusion in the arbitration of
those parties who are not bound by the arbitration agreement but
who agree to such inclusion provided that those originally bound
by it do not object to their inclusion ... In Gerardo Lanuza, Jr: v. BF
Corporation," the Supreme Court held that, as a ~esult of p1ercmg
the veil of corporate fiction, corporate representatives may be com-
u Cargill Philippines, Inc. v. San Fernando Regala Trading, Inc. , 641
SCRA 31 (2011), pp. 43-44; Aboitiz Transport System Corporation u. Carlos "Section 4, Arbitration Law; Article 5.6, IRR; see also Ormoc Sugar-
A Gothong Lines, Inc., 730 SCRA 178 12014); Fruehauf Ekctronics Philip· cane Planti!n; .Msociati-On, Inc. (OSPAJ u. Court ofAppeals, supra, p. 642.
pines Corporation v. TechllQ/ogy Ekctronics As8"mbly a"-Ct Management Pa- " Article 5.7(al. IRR; Section 7, Arbitration Law.
cific Corporation, O.R. No. 204197, November 23, 2016. " Benguet Corporation u. Department of Environ~nt and Na~u.ral
"Article 1318, Civil Code of the Philippines; Ormoc Sugarcane Re.sources.Mines Adjudication Board, 545 SCRA 196 12008), p. 209. citing
Planters' Association, Inc. (OSPAJ u. Court of Appeal• , 596 SCRA 630 BF Corporation v. Court ofAppeals, 288 SCRA 267 (1998), p. 285.
12009), pp. 689-640. " Section ll, Arbitration Law; Article 5.12(c) and (o), IRR.
,. Id. " Article 5.7 in conjunction with Article 4.8, IRR.
n Article 5.1, IRR. '' Rule 4.7, Special ADR Rules.
" Section 2, Arbitration Law; Article 5.1, IRR. ., G.R. No. 174938, October 1, 2014.
 I
122 AJ.TeRNATIVE DISPUTE RESOLUTION ~I 0oMESTIC ARBITRATION 123

I
pelled to submit to arbitration proceedings pursuant to a contract 2. In an ad hoc arbitration where there is a prior arbitration
entered into by the corporation they represent. So is the surety apeement, it is commenced upon the delivery by the
wbo8e surety bond incorporated by reference the container contract,• claimant to the respondent of a demand for arbitration.
or the aubflidiuy of a corporate ~ to the arbitration agreement." The demand for arbitration shall be in any form and shall
state the name, addr<lss and description of each of the
D etermina.tion ofApplicabk Ruk• ofProcedure parties· the description of the nature and circumstances of
(Article 6.18, TRRJ the dis~ute giving rise to the claim; the relief sought in-
cluding the amount of the claim; the relevant agreements
The determination of the applicable rules of procedure is es- including the arbitration agreement, a copy of which shall
sentially the ume for domestic arbitration and international com- be attached; and the appointment of the arbitrators
mercial arbitration. The parties are free to agree on the applicable and/or demand to appoint."
rulea of procedun, in the absence of which, the arbitral tribunal
may conduct the arbitration in the manner it considers appropri- Where there is no prior arbitration agreement, it is initi-
ate.• ated by one party through a demand upon th_e ou;ier ~
submit their dispute to arbitration, and arbitration ts
deemed commenced upon the agreement by the other
Commencement ofArbitral Proceeding11 party to aubmit the dispute to arbitration. ~e d~mAnci
(Sect.i on 5[a], ArbUratU>n Law; Arti.c/A 5.20, IR.RJ shall also require the respondent to name his arbitrator
In general, the commencement of arbitral proceedings is de- within a period which shall not be less than fifteen (15)
termined by the prior arbitration agreement between the parties. days from receipt of the demand.
Up to that extent, there is similarity between international com- The default rule in the case of international commercial arbi-
mercial arbitration and domestic arbitration on the commencement tration is that it is commenced on the date on which a request for
of arbitral proceedings." the dispute to be referred to arbitration is received by the respon-
The following are the specific rules for the commencement of dent," while that for domestic arbitration where there is no pnor
domestic arbitration:" arbitration agreement is reckoned from the d.a te when the other
party agreed to submit the dispute to arbitration."
1. In an institutional arbitration where there is no prior ar-
bitration agreement, it is commenced in accordance with
the arbitration rules of the institutional arbitrator. Arbilrato,.. and Arbitral Tribunal•
(Articles 6.9 to 6.14, IRR; Sections 8, 9, IO, 11 and 13,
Arbilrotion Law)
" Stronthcld lnaurance Company, Inc. u. Spouu• Rune and ua Number ofArbitrators
S troem, G,R. No. 204689, January 21, 2010.
., B,._ Conucroion Developmi!nl Authority v. DMCI Project Deuelop- Unless the parties have agreed otherwise, there shall be three
ua, Inc., O.R. Nos. 178137 and 178170, January 11, 2016. (S) arbitrators for domestic arbitration."
•Article 6.18 In coajunction with Article 4 .19, lRR; see also Depart·
nwtt of Enuironmanl ond Natural !Usourus (DENRJ u. U~ Plannus •
1
Section 6(al, A.rbitration Law.
~naultont1, l•c. fUPCI), O.R. No. 212081, February 23, 2015. " Article 4.21, IRR.
•Article 5.20 in collJunction with Article 4.21, IRR. "Article 6.29Cd), IRR.
"Article 6.20, nm. ~Article 5.9, IRR.
124 ALTERNATIV& DISPUTE RESOLUTION DOMESTIC ARBITRATION 125

Qualifications and DisqualifU:atwns. Procedure for the Appointment ofArbitrators

An arbitrator must: .. The parties in a domestic arbitration are free to agree on the
1. Be of legal age; procedure for the appointment of arbitrators'° except that, in order
2. Be i n full enjoyment of his civil rights; and to prevent undue advantage, an agreement or clause giving a party
the power to choose more arbitrators than the other is void." The
3. Know how to read and write. parties may, however, agree to empower the arbitrators already
The foregoing qualifications are prescribed in the Arbitration appointed to select and appoint additional arbitrators who shall sit
Law and in the IRR. However, they are not similarly required for with the original arbitrators."
international commercial arbitration except that an arbitrator in If there is no agreement for the appointment, the following
an international commercial arbitration may be challenged if he are the default rules:
does not possess the qualifications agreed to by the parties."
1. Appointment by the parti.es. In an arbitration with three
No person shall serve as an arbitrator in any proceeding if:"
(3) arbitrators, each party shall appoint one (1) arbitrator,
I. He is related by blood or marriage within the sixth degree and the two (2) arbitrators thus appointed shall appoint
to either party to the controversy; the third arbitrator within thirty (30) days from receipt of
2. He has or has had financial, fiduciary or other interest in a request to do so, failing which, the appointment shall be
the controv~rsy or cause to be decided, or in the result of made by the appointing authority."
the proceeding; In an arbitration with a sole arbitrator, the parties shall
3. He has personal bias which might prejudice the right of agree on the arbitrator, failing which, the appointment
any party to a fair and impartial award; or shall be made by the appointing authority upon the re-
quest of a party."
4. He has been selected to act as champion or to advocate a
party's cause. 2. Default appointment by appointing authority. The ap-
pointing authority in an ad hoc domestic arbitration, in
The reason for the foregoing disqualifications is the same as the absence of an agreement of the parties, is the Na-
in the case of international commercial arbitration, i.e., the arbi- tional President of the IBP or his duly authorized repre-
trator must be impartial and independent. In both domestic and sentative." In the case of institutional domestic arbitra-
international commercial arbitration, the arbitrator is required to tion, there is no need for an appointing authority for pur-
disclose these circumstances" and may be challenged on account poses of appointing arbitrators because the parties have
thereof." already designated the institutional ADR provider under
whose rules the arbitrator or arbitrators are to be selected.

" Section 10, Arbitration Law; Article 5.lO(a), IRR. See Frldhauf
Ekctronics PhilippiTU!s Corporation v. Techncloqy Electronics Assembly and .. Section 8, Arbitration Law; Article 5.lO(b), IRR.
Mant11Je-nt Pacific Corporation, supra. "Article 5.lO(j), IRR .
.. Article 4.12(b), IRR. See Mabulw.y Holdings Corpamtion u. Semb· "Section 9, Arbitration Law.
corp Logistics Limited, G.R. No. 212734, December 5, 2018. " Article 5.lO(c)(i), IRR. See Mabuhay Hol<li1'gs Corporation v.
"Section 10, Arbitration Law; Article 5.l()(a), !RR. &mbcorp Logistics Limired, supra..
" Article 4 .l2(a) in conjunction with Article 5.ll(a), IRR. "Article 5. lO(c)(ii), IRR.
"Article 4.12(b) in conjunction with Article 5. ll(b), IRR. "Article l.6(0)(i), !RR.
126 DoMESTIC ARBITRA110N 127

Where, under an appointment procedure agreed upon by extension not exceeding thirty (30) days to appoint an ar-
the parties, a party or the arbitrators already appointed, bitrator . M
or a third party, including an institution, or the multiple
claimants or multiple respondents, fail to appoint any ar- 4. Acceptance of appointment. An arbitrator, in accep~ng
bitrator or fail to perform any function entrusted to them his appointment, ehall submit an acceptance letter w~ch
preventing the appointment of any arbitrator, any party shall include statements that Iii he agrees to comply with
may request the appointing authority to appoint an arbi- the applicable law and rules of arbitration; [ii) he accepts
trator... The appointina authority may make the ap- the applicable arbitrator's feea; and [iii) he agrees to de-
pointment or give the appointing party who objects to a vote as much time and attention to the arbitration as the
default appointment time to make the appointment but circumstances m~ require ...
not more than thirty (80) days." The decision of the ap- S. Oath of orbitroJors. Before hearing any testimony, arbitra-
pointing authority on these matters shall be immediately tors shall take an oath to faithfully and fully hear and ezam-
executory and shall not be subject to appeal or motion for ine the matters i.n controveny and to make a just award ac-
reconsideration." The principle is the seme as that for in- cording to the best of their ability and understanding."
ternational commercial arbitration.•
In the case of sole arbitrators, Article 5.10 of the IRR ad- Grounds for Challenge
ditionally empowers the appointing authority to summon
the parties and their counsel to appear before it in order An arbitrator may be challenged only if: [ii circumstances ex-
to select and appoint the sole arbitrator, failing which, the ist that give rise to a justifiable doubt as to his ~partialit! or
appointing authority shall make the appointment." independence; (iii he d oes not pouess the qualifications pro~ded
In making a default appointment, the appoin ting author- for under the law or agreed to by the parties; [iii] he is disq".'alified
ity shall consider Iii the likelihood of securing an impar- to act as an arbitrator; or (iv] he refuses to respond to q".'estions by
tial and independent arbitrator; and [ii] the place of resi- a party regarding the nature and extent of his profoss1onal des.l-
dence or business of the arbitrator to ensure a speedy dis- ings with a party or h is counsel." The third (disqua_lifi,cation:J and
pensation of impartial justice and to moderate the cost of the fourth (refusal to answer) grounds are not proVlded fo~ m ~e
arbitration.•• rules on international commercial arbitration" but are proVlded or
in the rules on domestic arbitration based on Section 10 of R.A. No.
3. R.eque.st for appointment. The Request for Appointment 876.
with proof of delivery to the adverse party shall be filed
with the appointing authority.• Within seven ( 7 ) dll)'s The party appointing an arbitrator may challenge that arbi-
from receipt of the Request for Appointment, the adverse trator for reasons which the party became aware of after the •!>'
party may file his objections to the Request or ask for an pointment was made." Otherwise, he is already estopped from
challenging the appointment he himself made.
M Article 5.19Cd), IRR.
c Article 5.lO(n), IRR.
"Article 5.lO(e), IRR.
"Article 5.lO(h), IRR. " Article 5.lOCo), IRR.
" Article 4.ll(c), IRR. •Section lS, Arbitration Law.
" Article 5.lO(d), IRR. " Article 5.ll(b), IRR. Seo Mabuhay Holdings Corporation u.
Stmbcorp Logistics Limited, 1upro..
'' Article 5.l O(f), IRR. " Article 4.12, IRR.
" Article 5.lO(m), IRR. •Article 5.12Cel, IRR.

J
128 ALTERNATIVE DISPUTE RESOLUTION DO :">IE~"TIC AH-BITftATION 129

If an arbitrat<>r so appointed discovers the existence of any 2. Within fifteen (15) days from receipt of a challenge, the
circumstance that would create a presumption of bias or would challenged arbitrator may either accept or reject the chal-
render him a partial arbitrator, he shall immediately disclose such lenge . If he accepts it, he shall voluntarily withdraw as
information to the parties. The parties may agree in writing to arbitrator, :'f;
either (i] waive the presumptive disqualifying circumstance; or (ii)
declare the office of such arbitrator vacant and appoint a substitute 3. If he rejects the challenge, he shall communicate within
arbitrator in the same manner as the original appointment ."" the sa me period of fifteen (15) days his rejection of the
challenge and state the facts and arguments relied upon
In addition, where the presumptive evidence of bias consists t herefor." He shall be given an opportunity to be heard on
of prior professional or financial dealings with a party or h is coun- the matter."
sel, the arbitrator shall disclose such fact to the parties and shall
r~i;pond J'T"Omflt\y and in g:ood fe.ith to quP.:~tions from a party re 4. Notwithstanding the rejection of the challenge by the
garding the nature, extent and age of such dealings." The a rbitra- challenged arbitrator, within the same period of fifteen
tor's refusal to r esf-Ond is a ground to challenge him." (15) days, the parties may agree to the challenge and re·
place the challenged arbitrator."
Procedure for the Challenge 5. If the challenged arbitrator does not accept the challenge
or does not withdraw from his office, 1111d the parties do
The proced~re ~or .th~ challenge against an arbitrator in a not agree to the challenge, the arbitral tribunal shall de-
domestkarbitr~ticn.1s ~~milar to that provided for in international cide the challenge \vithin thirty (30) days from receipt of
commercial arb1trat1on. The ge?eral rule is that the procedure the notice of the decision rejecting the challenge."
that 1s agreed upon by the parties for challenging an arbitrator 6. If the challenge before the arbitral tribunal is not success-
shall be appbed. In default thereof, the following procedure shall ful, or a party or arbitral tribunal sha:I decline to act,
govern: within thirty (30) days from notice of the decision reject·
1. The challenging party shall send a written statement of ing the challenge, the challenging party may request the
the reasons for the challenge to the arbitral tribunal appointing authority to decide the challenge."
within fifteen (15) days after becoming aware of the con- 7. If the appointing authority shall fail to act on the chal-
stitution of the arbitral tribunal or after becoming aware lenge within thirty (30) days from the date of its receipt,
of the circumstances surrounding the ground for the chal- or within such further time as it may fix, the requesting
leng~.'' T he challenge shall be in writing and shall state party may, w ith notice to the parties, renew the request
specific facts that provide basis for the ground for the with the court."
challenge." A request for inhibition shall be deemed a 8. Until a decision is made by the challenged a rbitrator, the
challenge." parties, the arbitral tribunal, or the appointing authority,

"Sec~ion 10, Arbitration Law; Article 5.ll(c), IRR.

"' Article 5.ll(e), IRR.
" Article 5. I2(g), IRR.
" Id.
" Article 5.ll(bl, IRR. ,. Article 5. 12Chl, IRR.
"Article 4.I3, IRR. " Article 5. I2!il, IRR.
"Article 5.12(b), IRR. " Article 5. I2(b), IRR.
"Article t>.12(0, IRR. " Article 5.I2(c) and (k), IRR.
" Article 5.I2(d), IRR. " Article 5. I2(k), IRR.
130 ALT&RNATIVE DlSPUT& RESOLUTION D0>1F.ST1C AAAITIUITlON 131

as the case mny be, the arbitration proceeding shnll con· The appointment of a s ubstitute arbitrator, whether on ac·
tinue notwithstanding the challenge and the challenged count of a challenge procedure.• or on account of his failure or
arbitrator shall continue to participate therein as arbitra· impossibility to act,'" shall be governed by the same rules applica·
tor. However, once the challenge is elevated to the court, ble in the appointment of the replaced arbitrator."
the arbitration proceeding shall be suspended until after
the ccurt shall have decided the incident." Arbitra l P rocer:din.gs
9. The decision of the parties, the arbitral tribunal, the ap- (Arti.cles 5.21 to 5.32. /RR)
pointing authority or the court, in proper cases, to accept
or r eject a challenge shall be immediately execu tory and The dcfoult procedure in domestic arbitration is as follows:
is not subject to a ppeal or motion for reconsideration." I . Sta.tcmc11t of cla ims. As in international commercial nr·
10. The appointment of a s ubstitute arbitrator shall b e made bitration the claimant in n domestic arbitration is required to
pursuant to the procedure applicable to the appointment submit '~thin the time agreed upon by the parties or determined
of the 1nh\t•at.o• being replaced." by the arbitral tribunal his statement of cla ims including the sup-
porting facts., points at issue and the relief sought."
Procedure in Gou the Arbitrutor Failt to A d
2. Stateme11t of defenses. Jn the same manner and period,
As in the case of international commercial arbitration if an the respondent shall state his defenses ...
arbitrator in a dom~stic ar~itration becomes de ju.r e.. or de facto" 3. Amendment of claims or defense•. The parties may
unable to perform. his fun~ons or fails to act without undue delay, amend or supplement their claims or defenses, as the case may be,
his m andate ~·r":'ina!•• if bl he withdraws, or (ii) the parties agree unless the arbitrnl tribunal considers tho nmer,dment inappropri·
on the t ermu111bon. In orde~ to facilitate the volunta ry with· ate or dilatory...
drawal of an arbitrator, .the withdrawal will not car ry with it the
4. Hearing and written proceedings. In an ad hoc domestic
implication that the arbitrator involved accepted the existence or
v eracity of the ground for his termination. arbitration the procedure determined by the arbitrator with the
agreemer.t 'or the parties shall be followed. In an institutional d~­
If the oontroversy remains, any party may re:iuest the ap- mestic arbitration, the rules of procedure of the institutional arb1·
pointing a uthority to decide on the termination of the arbitrator, trator shall be followed which has been impliedly accepted by the
which decision shall be immediately executory, and shall not be parties on account of the designation of the inJtitut.ional arbitral
subject to a motion for reconsideration or appeal. tribunal.•
There is, however, a slight variance between the default P~
ccdure fot internll.tional conunercie.1 nrbitrotion and domos:tie arb1-

"Section 11, Arbitration Law; Article 5.12(c) and (o), !RR.

" Article 6.12(c) and (n), I RR. •Article 5. 12, IRR.
"Article 5.12(p), IRR. "'Article 6. \3, IRR.
.. Al, a matter of right or law, as when an e.rbitrntor hi appointed to a "Article 5.14, IRR.
government post prohibiting him from exercising bia profes;ion. "'Article 5.22(aJ in coajuoction with Article 4.23(a), IRR.
" Undor o color or right. as when an arbitmtor clai:ns t<> bo phyai· •1d.
cally incapacital<!d to discharge his function& h Article 5.22<bl in conjunction with Article 4.23Cbl, IRR.

., See al90 Article 4.14, IRR. ,. An.iclee 5.23(a) and 5 .18, IRR.
132 ALTERNATIVE DISPUTE RESOLUTION D 0 '.1.1ESTIC ARBITRATION 133

tration. In the case of the latter, the following procedure will be d. Defa1tlt of a party. Like in an international com-
followed: mercial arbitratio1>, if the claimant fails t> communicate his
a. Pre-Mo.ring conference. In order to expedite the arbi· statement of claims, the arbitral tribunal shall terminate the
tral proceedings, the parties in a domestic arbitration are re· proeo?edings. If it is the respondent who fails to communicate
quired to undergo a pre-hearing conference within thirty (30) his statement of defenses, the arbitral tribunal shall continue
days from the appointment of the arbitrator or the constitution the ?roceedings without treating such failure in itself as an
of an orbitral tribunnl during which they shall discuss the aclmi$gion of the claimant's 111lP.gAtinn~. If any party fails to
venue of the arbitration; manner of recording the proceedings; apPEar at a hearing or produce evidence, he shall be deemed
periods of communication of the statement of claim, answer, to have waived t hem, and the arbitral tribunal may continue
and answer to counterclaims, and the form and cGntents there· the proceedings and render an award based on the evidence
of; manner of offering evidence; delivery of certain types of before it. 1 1
1)1

communications; issuance of subpoena by the arbitral tribunal; e. Decisio1i on. ititerlocutory niatters. Decisions on in·
manner of rec:t;iving ex_p~rt testimony; possibility of applying terlocutory matters shall be made by the sole arbitrator or by
for interim re.lief; p~sibihty of site or ocular inspection; the the niajority of the arbitral tribunal. The arbitral tribunal
fees of the arbitral tribunal; and such other relevant matters." may authorize its chairman to issue or relEase its decision on
The possibility of~ compromise is not amo:ig those that interlocutory ma.tters. 10 1
.
t h e parties and the. arb1tral tr1"buna1 are required
· .
to discuss {. Consolidation or concu.rrent hearings. In conso·
· th~... p•e-heanng conference Thi s 1s
d ur1ng # • • •
· b ecause no arb1tra·
· nance with the authority of the parties to determine the rules
tor shall act as mediator •n any proceeding where he is acting of procedu1·e to be followed in arbitration, they may agree to
as an ar~itrator except w~ere, under a settlement agreement, consolidate the arbitration proceedings with other arbitration
the parties agree to constitute the mediator as an arbitrator proceedings or hold concurrent hearings. ' 01
under Section 17 of the ADR Act uf 2004."
g. Closure of hearing. After the hearing is closed, no
. b. . ThresMW. issues.. Issues on the jurisdiction of the ar· further motion, manifestation or submission may be allowed
b1tral tribunal over the clauns and counterclaims or the arbitra· except for post-hearing briefs and reply briefs, unless the ar·
bi!ity of the claims or counter~aims, shall be res~lved by the ar· bitral tribunal, mot" proprio or upon the request of a party,
b1tral tribu_nal as tJu:eshold .••sues if the partiEs so request, allows the re-opening of the hearing.'"
unless the issues are intertwined with factual issues that they
cannot be resolved ahead of the hearing on the merits." 5. Rules on ta/zing evidence. The following are the rules on
reception of evidence as well as the processe• that the arbitral
c. Hearing dates and postponements. The arbitral tri· tribunal nay employ in taking evidence:
bunal shall, in consultation \vith the parties fix the date and
time of the hearings. T_he hearings shall not' be postponed ex· a. Testimonial evidence. Witnesses, before giving tes·
cept with the conformity of the arbitrator and for good and timony, shall be required to take an oath or affirmation to tell
sufficient cause."

"' Article 5.24 in conjunction with Article 4.25, IRR; see also Section
" Article 5.23(b), IRR. 12, Arbitration Law .
•, Section 201 Arbitration Law; Article ti.23(r), IRR. w• Article 5.23(q), IRR.
"Article 5.23(i), IRR. '0~ Article 5.45 in conjunction with Article 4.45, IRR.
'"Section 12, Arbitration Law; Article 5.23(d) and (el, :RR. •MSections 16 and 17, Arbitration Law; Article 5.23(p), IRR.
134 ALTERNATIVE DISPUT£ Rf.SOLUTION 00Mt-:S'flC A RBITRAT I ON 135

the truth, the whole truth and nothing but the truth. The ar- pect to confidentiality, orders that may affect third parties,
bitral tribunal shall arrange for the transcription of the re- and exan1ination of debtors. ll"
corded testimony of the witnesses.'~ The parties may also
6. Decision."' The decision of an arbitral tribunal shall be
agree in writing to submit their dispute to arbitration other made by the sole arbitrator, or, unless otherwise agreed upon by
than by oral hearing."' the parties, by the majority of the arbitrators in a multi-arbitrator
b. Docu1rumtary evi<knce. Each party shall provide the proceeding. However, questions of procedure may be decided by the
other with copies of the statements or documents submitted to chairman of the arbitral tribunal if so authorized by the parties or
the arbitral tribunal. The arbitral tribunal may require the by all members of the arbitrnl tribunal. The arbitral tribunal shall
parties to produce such other necessary documents. The arbi- render its written award within thirty C30) da.vs after the closing of
tral tribunal shall receive as evidence all exhibits submitted by the hearings, the submission of the parties' respective briefs, or the
a party marked and identified at the time of the submission."' declaration by the arbitral tribunal that the proceedings have been
c. Subpoena. The arbitral tribunal shall have the po· closed. This period may be extended by the parties.
wer to issue subpoena duces tecum and ad testifica11<i111n. '" 7. Form a11d contents of the award.'" As in an interna·
d. Expert. The arbitral tribunal, as in the case of in· tional commercial arbit ration, the award in a domestic arbitration
ternati.<>na\ comm~~a\ af'bitr.at\~n, may appoint one or more shall be in writing, signed by the arbitrator, and shall st.a te ~he
experts to report to it 0 ~ speClfic issues, may require the par- date of rendition and the place of arbitration. In an arbitration
ties to submit relevant information or grant access thereto to with more than one (1 ) arbitrator, the award shall be signed by
such expert, and may grant the parties opportunity to ask majority of all the members provided that the reason for any omit·
questions of the expert an! present their own experts to tes· ted signature is stated. The award shall state the reason upon
tify on the points at is~ue. However, in the case of domestic which it is based unless the parties have agreed otherwise or the
arbitration, it is provided that, Upon the agreement of the a\vard is an a\vard on agreed terms, consent a\vard or aw~_rd based
parties, the finding of the expert enfaged by the arbitral tri- on compromise. A signed copy of the award shall be dehvered to
bunal shall be binding upon them and the arbitral tribunal.'"' each party.
e. Court assista.rn!e in taki11g evidenc;,. The same op· The award in a domestic arbitration need not be acknowl-
port~ni~y to avad of court ass1~tance in taking evidence avail· edged or sworn to under oath or affirmed by the arbitral tribunal
able m 1nternot1onal commorc1a.l arLitration is also available unless so required in writing by the parties. The !'"':ties ~ay re-
for domestic arbitration. The provisions of the IRR on domes· quire the arbitral tribunal to supply the omission w1tlun thirty (30)
tic arbitration specified some of those modes of assistance days from receipt of the award, or they may waive the effects
such as - issuance of subpoena duces tecum and ad te8 tifi.can'. thereof by not objecting thereto within tho snid period.'"
dum, interim or provisional reliefs, protective orders with res-

· ~ Article 5.27, !RR.

''" Section 12, Arbitration Law; Article 5.23(j), (kl and (u). IRR. "'Section 19 Arbitration Law; Article 5.29, IRR.
l(l(o Section 18, Arbitration Law. 111
Section 20: Arbitration Law; Article 5.31 in conjunction \vit.h Arti-
''"Section 15, Arbitration Law; Article 5.23(1), (m) and (n), IRR. cle 4 .31, !RR.
,., Section 14, Arbitration Law; Articlo 5.23(v), IRR. '" Article 5.3l(e), IRR.
"' Article 5.26, IRR.
'"' Article 5.26(c), IRR.
136 Ai.TERNATIV& DISPUTE R ESOLUTIOS Do>1EsT1c ARB1TRAT1os 137

8. Settle-nl. "' The rule is the same for the settlement of b. The agreement of tire parties to terminate the pro-
disputes whether the a rbitration is domestic or international, i.e., ceedings;
the proceedinp will be terminated by the execution of an arbitra l
award on agreed terms, consent award or award based on compro- c. The finding by the arbitral tribunal that the con -
mise which the p~rtiea may request to be recorded. Said form of tinuation of the proceeding has become unr.ecessary or impos-
award shall h ave the same sta t us and effect as any other award on sible; or
the merits. d. Not1-paymcnl of the required deposits in full. This
9. Termination of prt>Clldings. '"' Like in an international is not true for international commercial arbitration. Nonethe-
commercial arbitration, a domestic arbitration is terminated either less, this provision is based on the princip:e obtaining under
by: Philippine low that the payment of docket tees is necessary to
the oomplolion of the filing of complaints, appeals or petitions
a . W'tltdruwul of the clain& U.fal~::s::s the respondent ob· whenever required by the rules.
jects thereto for the purpose of prosecuting his counterclaims
or the arbitrrJ tribunal recognizes a legitimate interest on his
part in obtaining a final settlement of the dispute. The cir- Interim Meaaures
cumstance that the respondent has a counterclaim that he in- (Articles 5.8, 5.16 a11d 5,24, IRRJ'"
t?nds to pros?cu~e is also p~ovided for as a ground for objec-
tion to the d1sm1u al of act•ons upon motion of the plaintiff Similar to international commercial arbitration, the parties in
under Section 2, Rulo 17 of the 1997 Rules of Civil Procedure a domestic al"bitration may seek from the arbitrator or arbitral
which reads: ' tribunal intcriiu measures including preliminary injunction. np·
pointmont of receivers, detention of property, and preservation And
..Section 2. Di~mis~l upon motion of plain· inspection the1·eof, Either party may also secure assistance from
tlff;-Excopt ns proVJded m the preceding section the courts for the implementation of interim measures."'
complaint shall not be dismissed at the plaintiff's in~
stlln<"tl save upo~.approval of the court and upon such The same procedure as in intemational ccmmercial arbitra-
terms and cond1l1ons as the court deems prope If tion obtains for interim measures under a domestic arbitration,
counterclaim has b~n pleaded by a defendant p~or
the acrvico upon him of the plaintiffs motion for dis-
i: namely:

misan!, ~· dismiHal sh~ll be limited to the complaint. 1. After the arbitrnl tribunal has been constituted, any party
Tho disnussnl shall be without prejudice to the right of may request for the grant of interim measures from the
tho defendant tc prosecute his counterclaim in a sep • arbitrator or arbitral tribunal against the adverse party."'
rate acli,>n unless within fifleen (15) days from not·~ 2. '1110 relief may be granted in order to prevent irreparable
of the m:>tion be manifests his preference to have ~is loss (similar to preliminary injunction:; to provide secu-
coun,terclaim ~lvcd in the same. action. Unless oth· rity for the performance of an obligation (similar to pre-
erw1ae 1;ieci6ed 1n the order, a disrniSJlal under this liminary atl.achment); to produce or preserve evidence
paragraph ahnll be without prejudice. A class suit
shall not be dU!mis&ed or compromised without the
approval of the oourt.•
------ '"Article 6.24 ia exactly the same as Article 5.16 IRR.
"' Section 20, Ari>itration Law; Article 5.30 in col\iunction with Arti- "'Article 6.8<d) in cor\junction with Article 4.S<ct IRR.
cle 4.30, IRR. 11
' Article 5.&bl in col\iunction with Article 4.17(cXi), IRR; Sectfoil
'"Article 6.32 in conjunction with Article 4.23, IRR. 28(cXO. AOR Act.
138 ALT£11NATIVE DISPUTE REsOLU'nON DOMESTIC ARBITRATION 139

(similar to modes of discovery); or to compel any other ap· to implement procedural modifications as it shall deem appropriate
propriate act or omission. n• to address the complexities of the multi-party arbitration."'
8. The grant of the interim measure may be conditioned
upon the provision of security (similar to an attachment
121 Feet and Costs
bond1'° or injunction bond ) or any act or omission speci·
(Article 5.46, IRRJ
tied in the order."'
4. The order either granting or denying the request for in· The general rule is that the fees of the arbitrators in a domes·
terim measures shall be binding upon the parties and ei· tic arbitration shall be determined by the agreement of the parties
ther party may apply with the courts for assistance in im· in writing prior to the arbitration. In default of such an agreement,
plementi.ng or enforcing an interim measure. •ii the srbitrator's fees shall be determined in accordance with the
5. A party who refuses to comply with the order shall be li- applicable internal rules of the regular arbitration institution un·
able for damages resulting from no11-compliance, includ- der whose rules the arbitration is conducted; or in an a.d hoc arbi·
ing all expenses and reasonable attorney's fees paid in ob- tration, the Schedule of Fees approved by the Integrated Bar of the
taining judicial enforcement."' Philippines, if any, or the Schedule of Fees that may be approved
by the Office for Alternative Dispute Resolution.'"
6. Before the constitubtionalotrif~bhe arbitra! tribunal, or to the
extent that the ar itr. una_J already constituted has The costs of arbitration shall be determined by the arbitral
no power to act effectively~ the mterim measures may be tribunal.'"
requested from the co~ m accordance with the Special
Rules of Court on ADR. Correction, I n t erpretation and Additional
Award by the Arbitral Tribunal
Multi-Parly ArbitraHon. (Article 5.33, /RR: Ser.tions 17, ?..5
(Article 5.44, IRR) and 26, Arbitration Law)

The procedural rule for multi-party domestic arbitration is the Article 5.32 Cd) of the !RR emphatically states that "no motio~
same as in the case of international commercial arbitration. In a for reconsideration, correction and interpretation of award or addi·
multi-party domestic arbitration, the arbitral tribunal is empowered tional award shall be filed with the arbitral tribunal." This is prem·
ised upon the principle that when the arbitral tribunal renders its
"'Article 5.8(c)(ii) in conjunction with Article 4.17(c)(ii), IRR; Section final award, it loses jurisdiction over the dispute and the parties to
28(c)(ii), ADR Act. the arbitration. However, Section 17 of R.A. No. 876 specifically
••Sections 8 and 4, Rule 57, 1997 Rules of Cini Procedure. allows the continuation of the arbitral proceeding motu proprio by
'"Section 4, Rule 58, 1997 Rules of Civil Procedure. the arbitrators or upon motion of a party, upon good cause shown.
'"Article 5.8(c)(iii) in conjunction with Article 4.17(cXiii), IRR; Sec·
tion 28(c)(jii), ADR Act.
"'Article 5.8(c)(v) and (vi) in coajunction with Article 4.17(c)(v) and "'Article 5.44 in coajunction with Article 4.44, IRR.
(vi), IRR; Section 28(c)(v) and (vi), ADR Act. "'Article 6.46(a), IRR.
'"Article 6.8(c)(vii) in coajunction with Article 4.17(c)(vii), IRR; Sec· "'Article 5.46(cl, IRR; see also Keppel Cebu Shipyard, Inc. v. Pioneer
tion 28(c)(vii), ADR Act. Insurance and Surety Corporation, 601 SCRA 96 [2009], pp. 145·146; and
•~Article 5.8(b), IRR, in conjunction with Seciion 28(a), ADR Act; see Filipinas (Pre·Fo.b Bldg.) Systems, Inc. v. MRT Development Corporation,
also Korea Technologks Co., Ltd. v. Lerma, 542 SCRA l (2008], pp. 33-36. 537 SCRA 609 [20071, pp. 641·642.
140 ALTERNATIVE DISPUTE RESOLUTION DOMESTIC ARBITll.\ilON 141

Thus, the IRR provided for the amendment or modification of ceipt of the request, and the interpretation or correction
the arbitral award by the arbitral tribunal in the following in- shall form part of the award.'"
stances as exceptions to the general rule:
7. Additional award. Within thirty (30) days from receipt
1. Under tM arbitration agreement. If amendment is pro- of the award, a party, with notice to the other, may re- I
vided for in the arbitration agreement, the arbitral tribu- quest the aroitral tribunal to make an additional award
nal may cause the amendment of the award.'n as to claims presented in the arbitral proceeding but omit-
2. Failure lo resolvea.1~ issue. If the a1·bilr~) tribunal failed ted in the a\va rd. If justified, the a.rbitral tribunal shall
to resolve an issue, the parties may ask for the resolution make the additional award within sixty (60) days from re-
thereor.l• ceipt of the request which shall be in the form of an arbi-
tral awa_rd. 130
3. Quantification of costs. If the arbitral tribunal made a
reservation in the final award for the conduct of a hearing The first instan<e of amendment or modification (amendment
to quantify costs and to determine which party shall bear under the arbitration agreement) is not specifically mentioned
the costs or the apportionment thereof, it may supplement among the instances \\'hen an a\vard in an international commer-
the award by such quantification, determination and ap- cial arbitration may te modified or amended. However, considering
.
port1onmen t"'
. that the general rule in matters of arbitral procedure whether
4. Correction of typographical and similar errors initUited by international or domestic is the agreement of the parties, the arbi-
a party. A party may ask the arbitral tribunal for the tration agnement providing for the amendment of the arbitral
correction of the award, within thirty (30) days from re- award is a true exception to the general rule that a domestic arbi-
ceipt of the award, and with notice to the other party for tral award, once rendered, cannot be amended or modified.
any errors in computation, clerical or typographical e:.ror The rest of the instances when a modification or amendment of
or other errors of similar nature. 13:1 ' ll dome-stie Arhitral award can be mtarlA hy the arbitral tribunal are
5. Correction of typographical error initiated by the arbitral equally applicable to an international commercial arbitral award.'"
tribunal. Within thirty (80) days from the date of the The second instance (failure to resoke an issue) provided for
award, the arbitral tribunal may motu proprio correct any under Article 5.32(d) of the IRR, is practically the same as the
typographical error therein. us seventh instance (additional award) provided for under Article
6. Inte~pretation of the award. Within the same period, the 5.33(c) of the \RR. The only distinction is on the po!nt of e!:'pha;is.
pa~1es may agree to request the arbitral tribunal to give '\\'hile Article 5.32(dl uses the term unresolved issues, Article
an uuerpr:tat1on on a specific point or part of the award. 5.33(c) speaks of "claims" omitted in the award. Irrespective of the
If the arb1tral tribunal finds the request for correction or term used or the point of emphasis, the fact remains that a domes-
interpretation justified, it shall make the correction or tic arbitral award may be modified or amended m order to com-
give the interpretation within thirty (30) days from re- pletely resolve all matters involved in the dispute.
Unless any other period of time has been agreed upon by the
parties, the parties may ask for the correction, interpretation or the
"'Article 5.32(d), lRR.
'" Id.
''*' Az·ticle C.32(t!}. IRR. ••Article 5.33<n) (ii), IRR.
"'Article 5.33(aXi), IRR. '"Article 5.33(c), IRR.
" ' Article 5.33<b), IRR. ·~ Articles 4.32 and 4.33, IRR.
142 Al.TERNATIVB DISPUTE RESOLUTION D OMESTIC ARBITRATION 143

rendition of an additional award by the arbitral tribunal within tered.'" The judgment of the Regional Trial Court may be appealed
thirty (30) days &om receipt of the award."' The notice of a motion to the Court of Appeals through a petition for review."'
to vacate, modify or oorrect an award must be served upon the ad- The remedy of correction of an arbitral award by the courts is
verse party or hia oounael within thirty (30) days aft.er the award is not available in the case of international commercial arbitral
filed or delivered... awards which can be corrected or modified only by the arbitral
tribunal."'
Co~tion of tlul Arbitral Award by the Court
(Section 25, Arbitration Uiw) Settin1 Aside an A.rbitra l A ward
(ArlU:le 5.34, IRR; Arbitration Law)
The foregoing grounds for amendment or modification of an
arbitral award by the arbitral tribunol should be distinguished A domestic a rbitral award may be set aside through the
from the grounds for the amendmant or modification of an arbitral courta only on the following grounds:"'
award by the court. A oourt may amend or modify a domestic arbi-
tral award in the following instances:,. 1. The arbitral award was procured by oorruption, fraud or
other undue means;
1. Where there ia an eoident miscalculatU:m of figures, or an
evident mietake in 1?" ducription of any person, thing or 2. There was eoident partiality or corruption in the arbitral
property referred to m the award; tribunal or any of its members;
2 . Where the arbitrators have awarded upon a matter not S. The arbitral tribunal'~ was guilty of misconduct or any
submitted to them, not affecting the merits of the decision form of mwbehavior that has materially prejudiced the
upon tho mAtt..er AuhmittQd; or rights of any party;
3. Where the award is imperfect in a matter of form not af- 4. One or more of the arbitrators wos disqualified to act a~
fecting the merit& of the controversy, and if it has been a such and willfully refrained from disclosing such disquali-
oommisaioner'a report, the defect could have been amen- fication; or
ded or disregarded by the court. 5. The arbitral tribunal exceeded its powers, or so imperfectly
executed them such that a complete, final and definite
If the award upon a matter not submitted for arbitration, or if award upon the subject matter submitted to it was not
the imperfect form of the award, affects the merits of the decision made.
or controversy, the award should be vacated instead of merely
being amended or modified by the court. These grounds arc exclusive and the court cannot consider
any other ground unleea it amounts to a violation of public policy.'"
The judgment of the Regional Trial Court rendered in a mo-
tion to oonfirm, modify, oorrect or vacate an award shall have the
same force and effect as a judgment in an action and may be en- "' Section 28, Arbitration Lew.
forced as if it had been rendered in the oourt in which it is en- "' Article 5.38, IRR, and Section 29, Arl>itration Law, in col\junction
with Article 4.37. IRR; aho, Rule 19.12(e) and (0, Special ADR Rules.
"'Article 4 .33, IRR.
"' Article 5.33(a), IRR; Section 26, Arbitration Law. ,.. Article 5.36, IRR; Section 24. Arl>itration Law.
,.Id. "' "(e)rbitrator" ln Section U, Arl>itration Law.
.. Seetion 25, Arbitration Law. '" Rulu ll.4(A) and 19.10, Special ADR Rules.
144 ALTERNA'T1VB DISPIJT& RESOLllTlON Do~tt:STIC ARBITRATIOS 145

Compare the foregoing grounds with those applicable to the awards ~vhich have been declared exclusive,"' there is no express
setting aside of international commercia: arbitral awards, to wit: declaration that the foregoing grounds for !CA awards are simi·
1. The petitioner furnishes proofthot there was: larly exclusive. However, under the principle of expressio unius est
exclusio alterius, the enumeration of the foregoing grounds is
a. Defect in the arb~tration. agreement because a party
was under some incapacity or the said agreement is deemed exclusive.
not valid under the applicable law; The difference in the g1-ounds for setting aside an interna-
b. Violation of due procass because the petitioner was tional commercial arbitral award and a domestic arbitral award in
not given prope r notice of the appointment of an ar- the IRR is brought about by the fact that the Model Law and the
bitrator or the arbitral proceeding, or was otherwise ADR Act of 2004 which adopted the Model Law, were the bases for
unable to present hi.a case; the grounds for setting aside an international commercial arbitral
award, while R.A. No. 876 was the basis for the grounds for setting
c. J.A,ck or excess of jurlsdktion 011 the part of the arbi· aside a domestic arbit ral award.
tral tnbunal because the award deals with a d ispute
not contemplated by or not falling within the te That the subject of the dispute is not capable of settlement
b" · rms under Philippine law, or that the award is in con{lid with public
of ht e su mission to arbetration, or contains deci-
policy, being premised upon general principles of law, are applica-
sions ~n m~tters ~yond the scope of the submission
to. arbitratlon, ~U,bJect to :he application of the doc- ble to both international commercial arbitral awards and domestic
tnne of seuerab1/1ty I separability; or arbitral awards.
d. Violati~n. of the arbitr~tion agreemen.t because the
The court before which a petition for setting aside a domestic
compos1t1on of t~c arb1tral tribunal or the arbitrnl arbitrnl award is filed has the prerogative and option to s uspend
process ~as not m accordance with the agreement of the court proceedings in the following instances:
the parties, unless such agreement was in co n· t 1. The court may s us pend the setting aside proceedings to
with a provision of the ADR Act from which thenP~~­ give the arbitral tribunal nn opportunity to resume the
ties _cannot derogat~, or, failing such agreement , was arbitral proceedings or take such action which will elimi·
n ot m accordance wit h the ADR Act; nate the grounds for setting aside an award;"'
2 . Or the court finds that: 2. The petitioner or the oppositor may petition the court to re-
a. The subject of the dispute is Ml capable of settle- mit the case to the same arbitral tribunal for ihe purpose of
ment under the laws of the Republic of t he Phili • malting a new or revised final and definite awerd or to direct
pines; or P a new hearing before the same or new arbitral tribunal;"' or
3. If the ground for vacating an arbitral award does not af-
b. Th~. a"'.ard is in canflict with public policy of the
Ph1lipp1nes. ,.. fect the merits of the case and may be cured or remedied,
the adverse party may oppose the petition and instead re-
Unlike the grounds for setting aside domestic arbitral awards quest the court to suspend the vacation or setting aside
ond the grounds for refusing recognition of ICA or foreign arbitrai proceedings to give the arbitral tribunal an cpportunity t~

'"Rulo ll.1(A). Spccio• ADR Rulo and Articl~ 4.36, IRR.

'" Article 4.34, IRR. See Mobuhay NoJditrgs CorporoJion v. Scmbcorp 1
"' Article 5 .34, IRR.
Losistics Limited, 8upra.. ••Article 5.35(b), IRR.
146 ALTERNATIVE DISPUTE RBSOLUTION DO>t£S1'1C ARBITRATION 147

cure or N!medy the award or resume the arbitration pro- these petitions and motions is lod!ged with the Regional Trial Cou rt
ceedings or take such action as will eliminate the grounds Iii where the arbitration proceedings were conducted; [iii where the
for vacation or setting aside."° asset to be attached or levied or the act to be enjoined is located;
Jn the foregoing instances, opportunity is being given to the· (iii) where any of the parties resides or has his place of business; or
arbitral tribunal t.o cure any defect in its proceedings and award. [iv) in the National Capital Judicial Region, at the option of the
applicant.""
Confirmation of Domestic Arbitral Awards There is a likely confusion t hat may arise as to the venue of
(Articles 5.36 to 5. 39, IRR; Sections 22, 23 and 29, judicial proceedings arising from domestic arbitration. Article 5.39
Arbitration Law) of the IRR mentions the location of the asset or act involved and
the National Capital Judicial Region as possible venues for the
Unlike awards rendered in a foreign arbitration and Philip- confirmation of an arbitral award, vacating the arbitral award or
pine ICA which require the filing of a petition in court for recogni- securing court assistance measures, in a domestic arbitration. On
tkm and enforcement during.w~~h proof of entitlement to recogni- the other hand, Section 22 of R..A. No. 876 limited the choice of
tion must be presented, the Judicial affirmation of a domestic arbi- venue to the residence of the pa:rties, their places of business, or
tral award is made by filing a motion for confirmation and securing the place of arbitration. Ordinarily, the IRR, like any other rule or
an entry of judgment fro~ the court.'" The distinction is brought regulation which derives its efficacy from the substantive law
about by the fact that, m the case of a foreign arbitration the which it seeks to implement CR.A. No. 876), cannot provide for an
award is rendered by a foreign entity applying foreign law, 'thus additional venue apart from those specifically mentioned in R.A.
the need to go through the process of recognition and enforcement. No. 876. There is really no conflict because Section 47 of the ADR
And, in the case o.f a Philippine ICA award, the requirement for Act of 2004, which is itself a substantive law that the IRR must
recognition is provtded for in the UNCITRAL Model Law on Inter- implement, provides that the jurisdiction and venue of court pro-
~ational Commercial Arbitration"' which requirement was adopted ceedings shall be with the Regional Trial Court Iii where arbitra-
1n the ADR Act of 2004. On the other h and, an award in a domestic tion proceedings were conducted; [ii) where the asset to be attached
ar~itra?on is rendered by a Phi~ppine arbitral tribunal applying or levied upon or the act to be enjoined is located; (iii) where any of
Phibppme law. Hence, all that IS required in order to enforce e. the parties to the dispute resides or has his place of business; or
domestic award is to have it confirmed through a motion filed in (iv) the National Capital Judicial Region, at the option of the appli-
court. The confirmation of an arbitral award carries with it by cant.
neeessary implication the execution thereof."'
Similar to international commercial arbitration, proceedings
for the confirmation, vacation or setting aside of a domestic arbi-
tral award, and any application for arbitration assistance, except
appeal, shall be deemed as special proceedings. Jurisdiction ove:r

·~Article 5.35(c), IRR.

" 'Article 5.36, ffiR; Section 23, Arbitration Law.
"' Article 35, UNCITRAL Model Law on International Commercial
Arbitration.
"' Depart~TIZ of Environment and Natural Resoun:es (DENRJ u. '" Articles 5.39, IRR and Sect.ion 22, R.A. No. 876, in coajunction
United Planners Consultants, Inc. (UPCI), id. with Article 4.35(b), IRR.

'
.M
 On.ER FoJWS OF ADR 149

chosen ADR form .' On the other hand, if the ADR form is more
akin to arbitration than mediation, the specific provisions of the
IRR on arbHration <Chapter !I, IRR, and R.A. No. 876) shall have
CHAPTER 7 suppletory applicatio:n to the extent that they are not in conilict
with the agreement of the parties or the specific provisions of the
chosen ADR form.'
OTHER FORMS OF ADR For instance, if the neutral third person in these other forms
of ADR will merely a88ist the partie& in reaching a voluntary
agreement, the form of ADR used is akin to mediation and the
Among the various forms of ADR, arbitra tion and mediation provisions of the IRR on mediation shall have suppletory applica·
are undoubtedly the moat common and popular. Thus, specific laws tion. On the other ha.n d, if the neutral third person will have the
like R.A. No. 876 <The Arbitraticn Law) , and chapters of the ADR power to make a binding resolution on the dispute, the form of
Act of 2?04 and its ~ have been devoted specifically to them. Be ADR used is akin to arbitration and the provisions of the IRR. the
that as it may, parties are allowed to avail of other forms of ADR ADR Act of 2004 and R.A. No. 878 on domestic arbitration ahall
for the amicable resolution of their disputes. These other forms of have suppletory application.
ADR are the following: In sum, the rules for the other forms of ADR, in the order of
1. Early neutral evaluation applicability, are:
2. Neutral evaluation 1. The agreement of the parties;
3. Mini-trial
2. Provisions of the IRR specifically applicable to the par·
4 . Mediation-arbitration ticula r form ·o f ADR; and
!I. Combination th ereof
3. Provisions of the IRR on arbitration or mediation for
6. And any other ADR form.' other forms of ADR akin to arbitration and mediation, re·
In. consti.onance with the principle of party autonomy and self· spectively.
d ermmaoth
te · ·
n, . e provisions of the IRR on the foregoing forms of
~R appll'. only ~ the absence of an agreement between the par- Neutral and Ear ly N eutral EualuaJion
ties or the lDSufficteney thereof. (Artick 7. 6, IRRJ
. . The IRR ma_d e the ~pecific Provisions on arbitration and me·
diation su~pletorily a.pplicable to the other forms of ADR. If the Neutral eualuation is an ADR process wherein the parties and
AD~ ~orm 18 more akin to mediation than arbitration, the specific their lawyers 8l'e brought together to present summaries of their
provisions of th.e ~R on mediation (Chapter 3, IRR) shall have cases and to receive a non-binding aaaeasment by an experienced
a~ppletory application to the ~nt that they are not in conflict neutral person, with expertise in tho subject matter or substance of
with the agreement of the part1ea or the specific provisions of the the dispute.' Early neutral evaluation is availed of early in the pr&-
trial phase.
'Article 7.1, IRR.
' Article 7.2, IRR.
• Article 7.3, IRR.
148 'Article l.6(E)(l), IRR; Section S(n). AOR Act.
150 ALTERNATIVE DISPUTE RESOLUTION OTHER FORMS OF ADR 151

The agreement of the parties shall govern the conduct of the evaluation process. Generally, his opinion shall not be binding.
neutral or early neutral evaluation. In default of an agreem ent, the However . the neutral third person is reQuired to set forth how he
provisions of the IRR on neutral or early neutral evaluation shall would have ruled had the matter been subject to a binding proc-
apply. ess.10
Essentially, neutral and early neutral evaluation are alcin to
mediation and, hence, in the absence of an agreement between the Mini-Trial
parties or of specific provisions of the law or rules applicable to (Article 7. 7, IRRJ
them, the rules on mediation shall apply suppletorily. However,
the parties may, in the exercise of their right to party autonomy Mini-trial is a structured dispute resolution method in which
and self-determination, empower the neutral third person t o ren- the merits of a case are argued before a panel composed of senior
der a binding assessment in which case, the neutral or early neu- decision-makers, wit h or without the presence of a neutral third
tral evaluation becomes akin to domestic arbitration. Under this person, before which the parties seek a negotiated settlement."
situation, the rules on arbitration shall apply suppletori!y. The agreement of the parties shall govern the conduct of the pro-
Furthermore, if the parties cannot agree or fail to agree on ceedings, in the absence of which, the provisions of the IRR on
the qualifications of the neutral third person, the manner of his mini-trial shall be applicable." Mini-trial is essentially akin to
selection or the appointing authority therefor, or if the parties are mediation and, hence, Chapter 3 of the !RR on mediation is supple-
unable to make the selection despite their agreement on the forego- torily applicable," unless the panel of decision-makers, or the neu-
ing, either party may request the default appointing authority to tral third person, is given by the parties the authority to render a
make the appoin-ent.' The .default .appointing authority in this binding decision, in which case, the proceedings become akin to
case is the same as that for mternational commercial arbitration domestic arbitration and the IRR provisions on arbitration become
and domestic arbitra tion, i.e., the National President of the IBP or suppletorily applicable.
his reprEsentative.• A mini-trial may be conducted either as [ii a separate dispute
In a neutral evaluation, the parties are required to submit resolution process; or [iii as a continuation of mediation, neutral or
and exchange position papers containing the issues and statements early neutral evaluation or any other ADR process." In either case,
of the relevant facts and append thereto supporting documents and the proceedings may be conducted with or without the presence or
affidavits of witnesses.' In order to maintain the impartiality of the participation of a neutral third person . If one is chosen, he shall
neutral third person, there shall be no ex parte communication preside over the mini-trial."
between him and any party to the dispute.' Confidentiality of the The panel of senior executives or decision-makers shall be ap-
proceedings, communications and assessment shall also be main- pointed by the parties. They may choose one or more for each party
tained.' provided that the parties shall appoint an equal number of senior
The neutral third person shall issue a written evaluation or executives or decision-makers. i&
assessment within thirty (30) days from the conclusion of the
"Article 7.6(0, IRR.
"Article l .6(E)(3), IRR; Section 3(u), ADR Act.
' Article 7.6(b), IRR in conjunction with Section 26, ADR Act . " Article 7. 7(a), IRR.
' Articles l.6(CJ(l ), and 1.6 <DX2J, IRR. " Article 7 .7(g), IRR.
'Article 7.6(cJ, IRR. •• Article 7. 7(b), IRR.
'Article 7.6!g), IRR. "Article 7 .7(c), IRR.
• Article 7 .6(hJ, IRR. " Article 1 :t\dJ, UtH.
152 ALTERNATIVE DlSPUTE RESOLUTION
OTHER FORMS OF ADR 153

The parties shall submit a brief summary of the dispute, with the parties the merits of the dispute, may do so when duly
identifying the specific factual or legal issues, after which they
shall appear before the mini-trial panel members before whom appointed as an arbitrator in a mediation-arbitration."
their lawyers shall present their respective cases starting with the During the arbitration stage, the mediator who is authorized
claimant. Thereafter, the lawyers or the parties' representatives in writing to act as arbitrator shall make an appropriate disclosure
may offer rebuttal or sur-rebuttal arguments. The presentation-in- as if the arbitration proceeding had just commenced. He shall like-
chief shall be made without interruption for one (1) hour, and the wise take the appropriate oath or affirmation as an arbitrator."
rebuttal or sur-rebuttal shall be for thirty (30) minutes, unless a
different period is agreed upon by the parties. The panel members Combination and lnnominate Forma ofADR
may ask clarificatory questions after each presentation, rebuttal or
11
Sur-rebuttal. In the choice of allowable ADR forms," the parties are allowed
After the mini-trial, the panel members, with the assistance to avail of any com bination of ADR forms. The parties may even
of the neutral third person, shall negotiate a settlement of the come up with their own forms or methods which, albeit innomi·
dispute." nate, may be allowed by law as long as they satisfy the requisites
of ADR," comply with the essential requisites of a valid contract,''
and are not contrary to law, morals, p ublic policy, public order and
M ediati-On -Arbitration
good customs.'"
(Article 7.8, [RR)
As in the case of the nominate ADR forms, combinations and
Mediation:Arbi~ation (o~ ~d-arb) is a two step dispute reso- innominate ADR forms are governed principally by the agreement
lution process mvolVU\g mediation and then followed by arbitra- of the parties. In the absence of such agreement, the rules and
tion.1• procedure for mediation are suppletori]y applicable if the combina·
The proceedings shall be governed by the agreement of the tion or innominate ADR form is akin to mediation . The rules and
parties. In the absence of an agreement, and in view of its dual procedure for arbitration, on the other hand, apply suppletorily to
nature, its proceedings shall be governed by the rules on mediation combinations a n d innominate ADR forms that are akin to arbitra-
first, and thereafter, by the rules on domestic arbitration.'° tion.
As a rule, no arbitrator shall act as mediator, and no mediator
shal! act as arbitrator,_ at the same time in any proceeding." The
mediator so appointed is precluded from acting as arbitrator of the
same dispute, u~ess the ~arties have agreed in writing therefor."
Perforce, a mediator, while generally precluded from discussing

"Article 7.7(e) and (0, IRR.

" Article 7.7(g), IRR. "Article 3.10, IRR.
" Article 1.6(E)(2), £RR; Section 3(t), ADR Act. ••Article 7 .8(c), IRR.
" Article 7.B(a), IRR. ,. Article 7.1. IRR.
" Rule 2.6, Special ADR Rules. " Seotion 3, ADR Act.
" Article 7.8(b), IRR; Rule 2.7, Special AOR Rules. "Article 1318, Civil Code oftbe Philippines.
"Article 1347, Civil Code of the Philippines.
 SPECIAL RULES OF COUR"!' 165
ON ALTERNATIVE DISPUTE R ESOLUTION
- General Provisions -

The authority to enact rules of practice and procedure, ema-

nating as it does from the Constitution, renders the rules promul-
gated by the Supreme Cou rt applicable only to proceedings before
CHAPTER 8 Philippine courts and any quasi-judicial agency which may adopt
the rules in a suppletory ch aracter. Unlike the rul es of procedure
under th e ADR Act which may be adopted by the parties in pro-
SPECIAL RULES OF COURT ON ceedings conducted outside Philippine territorial jurisdiction in
ALTERNATIVE DISPUTE RESOLUTION accordance with the principles of party autonomy and self deter-
mination, the Special ADR Rules are applicable only in proceedings
in Philippine courts.
GENERAL PROVISIONS
The Special ADR Rules was passed and approved on 1 Sep-
tember 2009 and took effect after the completion or its publication
The ADR Act of 2004, R.A. No. 876 <Arbitraticn Law) the as required under Rule 26.1 thereof.
Model Law, and the Imple menting Rules and Regulations of the
ADR Act, deferred to the S~preme_ Court's authority to en act spe-
Subject Matter and Coverage
cial rules of procedure applicable in courts for specific areas and
(Rule I.I, Special ADR Rules)
aspects of ADR. The above-mentioned substantive laws, as well as
the other sources of ADR rules, however, are not the sources of the The Special ADR Rules govern the following judicial processes
authority of the Supreme Court to enact the Special Rules of Court and proceedings:'
on Alternative Dispute Resolution otherwise known as the "Special
ADR Rules.• Under the Constitution, the Supreme Court has the 1. Relief on the issue of existence, validity and enforceability
exclusive power and authority to promulgate rules of practice and of the arbitration agreement;
procedure' subject to the condition that they shall not diminish 2. Referral to alternative dispute resolution;
increase or modify substantive rights. ' 3. In terim measures of protection;
4. Appointm ent of arbitrator;
' "Article VIII, Section 6. The Supreme Court shall have the follow- 5. Challenge to appointment of arbitrator;
ing powers: 6. Termin ation of mandate of arbit rator;
xx x xxx xxx 7. Assistance in taking evidence;
(5) Promulgate rules concerning the prot«tion and en- 8. Confirmation, correction or vacation of award in dome.tic
forcement of constitutional rights, pleading, practice and proce- arbitration;
dure in all courts, the admission to the practice of law, the int& 9. Recognition a n d enforcement or setting aside of an award
grated bar, and legal ass istance to the under-privileged . Such rules in international commercial arbitration;
shall provide a simplified and inexpensive procedure for the speedy
disposition of cases, shall be uniform for all courts of th e s ame 10. Recognition and enforcement of foreign arbitral award;
grade, and shall not diminish, Increase, or modify substan - 11. Confiden tiality/protective orders; and
tive rights. x x x• (Emphasis s upplied)

154 • Rule 1.1, Special ADR Rules.

156 SPECIAL RULES OP CoU1n' 157
ON ALttRNATIVE D1sPUT£ RESOumON
- General Provi&ions-

12. Deposit and enforcement of mediated settlement agree- petitions are not allowed and shall not be accepted for filing, and if
ments. inadvertently accepted, should not be considered by the court:•
The foregoing specific reliefs are applicable only to domestic 1. Motion to dismiss (therefore, any ground for a motion to
arbitration and Philippine ICA, except referral to ADR, assistance dismiss must be pleadod in the answer in opposition to
in taking evidence and recognition of the arbitral award which are the petition or motion);
applicable also to foreign arbitration, including foreign ICA.
2. Motion for bill of particulars;
S. Motion for new trial or for reopening of trial;
Special Proceeding•
(Rule 1.2, Special ADR Ruleo) 4. Petition for relief from j udgment;
5. Motion for extension, except in cases where an ex parte
Except for the deposit of mediated settlement agreements, the temporary reatrainina order of protection has been issued
foregoing procedures are "special proceedings."' As such, jurisdic· (in which case the adverse party is amply protected from
tion over the persons of the parties is acquired by the court, not any delay that may be caused by the extension);
through the service of summons, but upon proof of compliance with
the jurisdictional requirements, i.e., that the respondent wae fur. 6. Rejoinder to reply (the reply, therefore, is the last plead-
nished a copy of the petition.' ing to be filed);
The petitioner is required to serve copies of the petition upon 7. Motion to declare a party in default; and
the respondent before it is filed in court. Service of the petition 8. Any other pleading specifically disallowed under any pro-
shall be made through personal service or by courier proof of which vision of the Special ADR Rules.
shall be attached to the petition.'
If inadvertently accepted for filing, any of the foregoing mo·
tions or pleadings may be expunged from the records of the case.
S ummary Proceeding•
(Rule 1.3, Special ADR Rules)
Non-•ummary P roceeding•
The proceedinge under the Special ADR Rules are generally (Rule 1.8, Special ADR Rulea)
summary and, therefore, are conducted by way of submission of
verified pleadings, affidavits and supporting documents, except for The proceedings under the Special ADR Rules which are gen·
the proceedings involving the confirmation, recognition and en· erally non-summary are the following:
forcement of arbitral awarda which are generally non-summary, 1. Confirmation, correction or vacation of award in domestic
and the deposit of mediated settlement agreements which is not a arbitration;
judicial proceeding.
2. Recognition and enforcement of an award in an interns·
As a consequence of the summary nature of the proceedings tional commercial arbitration; and
under the Special ADR Rules, the follo.,ing pleadings, motions or
3. Recognition and enforcement of a foreign arbitraI award.

~ Rulo 1.2, Special ADR Rulon.

• Rule 1.9, Special ADR Rules.
' Rule l .3(Al, Special ADR Rule8. ' Rule 1.6, Special ADR Ruloa.
158 ALTERNATIVE DISPUTE RESOLUTION
SPECIAL RULl!.S OP COUltT 169
ON A l.TERNATIVEDISPUTE RESOLUTION
- Ge-nernl Provisions -
The technical rules on the service of summons ordinarily ap-
plicable to regular oourt proceedings are not applicable under the justice, curbing a litigious culture and declogging oourt
Special ADR Rules. Instead, the Special ADR Rules require, for dockets.'
non-summary proceedings, that the initiatory pleading be filed 2. Preference for arbitration. The Special ADR Rules re-
direclly with the oourt which will then serve a copy thereof to the quires courts to refer to arbitration parties who have
respondent by pen10nal service or oourier. It the court action is agreed to submit their disputes to arbitration, and pre-
already pending, the initiatoiy pleading or motion shall be served cludes courts from re.fusing the referral for any of the fol-
by personal service or oourier upon the respondent before it is filed lowfog and other similar reasons:•
in oourt. In the event that courier service is not available, resort
may be had to s ervice by registered mail.' 11. The referral tends to oust a court of its jurisdiction;
The Special ADR Rules is. on e of the rules where filing and b. The court is in a bette r position to resolve the dispute
service of pleadinp by electroruc means may be allowed by agree- s ubject of the arbitration;
ment of the parties. Proof of filing and service thereof shall be c. The referral would result in multiplicity of au.i ts;
made in accordance with the Rules on Electronic Evidence.' d. The arbitration proceedin& hss not commenced;
e. The place of arbitration is in a foreign oountey;
Ju.-Udiction and Venue f. One or more of the issues are legal and one or more
arbitrators are not lawyers;
Jurisdiction over any of the Proceedings oovered by the Spe-
cial ADR Ruleo is lodged by law with the Regional Trial Courts g. One or more of the arbitrators are not Philippine na-
Generally, the venue. is either, [i) the place where any of the par: tionals; or
ties resides or has his place of business; [ii) the place where the h. One or more of the arbitrators are alleged not to pos-
asset or act involved is located, or [iii) the National Capital Judi- s ess the required qualification under the arbitrntion
cial Regfon, at the option of the petitioner. agreement or law.
3. Doctrine of separability I seuerabiUty. The arbitration
Fundanulntal Principlu Adopted clauae shall be treated aa an agreement independ.e nt of
by the Special ADR Rulu the oontract of which it form• part, and a decision that the
(Rules 2.1 to 2. 7, Sp«iaJ ADR Rulu) contract is null and void ohall not entail ipso jure the in-
validity of the arbitration clauMI."
The Special ADR Rules took into account the following fun-
damental policies, principles and objectives of ADR: 4. Freedom to agree on the prac«dure to be followed in tM
conduct of arbitral proceedings. Only in the absence of
1. Selfdetermination, party autonomy, and promotion of such an agreement may the arbitral tribunal conduct ar-
ADR as a means of resoluing disputes. The Special ADR bitration in the manner it considers appropriate."
Rules took into account the objective of ADR of achieving
a speedy and efficient resolution of disputes, impartial ' Rule 2.1, Special ADR Rules.
• Rule 2.2, Special ADR Rules.
" Rule 2.2, Special ADR Rules; HG aloo Oonzalu o. Clim.ax Mining
' Rule 1.8, Sped.al ADR Rules. Lid. , 612 SCRJ\ 148 12007), p. 170; Corsill Philipp"'- Inc. •· S<Jn F•r-
'Id. nan® RqioJa Trading, Inc. , 641 SCRA Sl 12011(, pp. 46-47.
u Rule 2.S. Special ADR Rules.
160 ALTERNATIVE DISPU'TE RESOLUTION SPECIAL Ruu:s OF CoURT 161
ON AL.TERNA11VE DISPUTE RESOLtJ'MON
- The Specific Court Reliefs -

5. The "competence - competence principle". Also referred to THE S PECIFIC COURT RELIEFS
as the *''liornpete~ - kompeto~" principle, 13 it in.etructs that
the arbitral tribunal should be accorded the first opportu-
nity or competence to rule on the issue of whether or not A. Jud.i cial Relief /1.volving the I stues of E:risunce,
it has the competence or jurisdiction to decide a dispute Validity a n d Enforceability of the
submitted to it for decision, including any objection with Arbitration Agreement
respect to the existence or validity of the arbit ration (Ru.les 3.1to3.22, Special ADR Rules)
agreement. The same principle calls upon the courts,
when asked to rule upon issues affecting the competence The j udicial relief referred to in Rule 3 of the Special ADR
or jurisdiction of an arbitral tribunal in a dispute brought Rules is a petition for j udicia.l determination of the existence, valid-
before it, either before or afu!r the arbitral tribunal is ity and/or enforceability of an arbitration agreement. The issues
constituted, to exercise judicial restraint and defer to the involved in these proceedings are:
competence or jurisdiction of the arbitral tribunal by al-
lowing the arbitral tribunal the first opportunity to rule 1. Existence of the arbitration agreement- whether or not
upon such issues.•• there is an arbitration agreement;
6. No _arbitr~tor ~hall act ~ mediator in any proceeding in 2. Validity of the arbitration agreement-whether or not the
which he is acti~ as ar~itrator. Conversely, no mediator ar bitration agreement complies with all the essential req· .
shall act as arbitrator m any proceeding in which he is uisites for a valid contract;
acting as mediator.''. However, where the parties to me- 3. Enforceability of the arbitration agreement-whether or
diation have _a greed m the written settlement agreement not the arbitration QgrQCment is enforceable in accordance
that the mediator shall beoome the sole arbitrator for the with Article 1403 of the Civil Code."
dispute or that the settlement agreement shall become an
arbitral award, the mediator-arbitrator shall issue the
" "Article 1403 [Civil Code of the Philippines!. The following con·
settlement agreement as an arbitral award which shall be
tracts are unenforceable, unless they are ratified:
subject to enforcement under the Jaw." (1) Those entered into in the name of another person by one who
has been given no authority or legal representation, or who has
acted beyond his powers;
(2) Those that do not comply with the Statute of Frauds as set forth
in this number. In the following cases an agreement herea..yter
made shall be unenforceable by action, unless the same, or some
not.e or memorandum thereof. be in writing, and subscribed by
the party charged, or by his agent; evidence, therefore, of the
agreement cannot be received without the \Yriting, or a secon··
" Mabuhay Holdings Corporation v. Sembcorp Logistic.• Limit•d.
G.R. No. 212734, December 5, 2018. dary evidence of its contents:
" Rules 2.2 and 2.4, Special ADR Rules. See Luzon Iron Developm.nt (a) An agreement that by its terms is not to be performed
Group C-Orporation and Consolidated Iron Sands, Ltd. v. Britkstone Mi.n · within a year from making thereof;
ing and Development C-Orporalion and Aoaconda Mining and Development (b) A special promise to answer for the debt, default, or miscar-
Corporation, G.R No. 220546, December?, 2016. riage of another;
"Rule 2.6, Special ADR Rules. (c) An agreement made in consideration of marria.ge, other
>II Rule i. 7' 8pecial A.D R Rules. thu.n u mutual promise to 1oan-y;
162 ALTERNAT!VE DISPUTE RESOLUTION S PECIAL R ULES OP COURT 163
ON A LTERNATIVE D1s pu·ri:: R~LUTIO-N
- The Specific Court Rclieft -

This judicial relief is applicable only to arbitration proeeed· rightly ordered the prtrties to procc~d to arbitration
ings conducted in the Philippines." in ncco•'Clance \\ ith the tcrtnt or their agreement
1

Proceedings ofthis nature are summary. Thus: (5"c. 6, Republic Act 876>. Rc1pondcnt's arguments
touching upon the merit.a or the dispute are im·
"Thi a apecial procee<Hng ia I.ho Procedural mechanism for properly roiscd herein. They should be a ddressed to
the enfo~ment. of the contract to arbitrate. The jurisdiction of lhe arbitrators. Thi.s p roceed.inf i• merely a
the courts in relation to Sec. 6 of R.A. No. 876 as well as the lummary remcd:y to enforce the agreement to
nature of the proceedings was expounded upon in Lo. Noval arbitrate. The duty of the court iii this case is
Drug Corporation • · Court of Appeal•. There it was held thnt not to re$o)ve the merits of the partieaJ claims
R.A. No. 876 explicitly confines the court's authority only to the but only to determine if they should proceed
deterDlination of whether or not there is nn agreement in writ· to a1·bitrntion or not.-
ing providing for arbitration. In the affirmative, the statute or-
dains that. the court shall issue an order 's ummarily dire-cling <0011>0/u• u. Climax M ining Ltd., 512 SCRA 148 (2007),
the parties to proceed with the arbitration in accordance \\dt,.h p. 169: emphasis supplied); sec 0110 : Aboitii Transport System
the term.a thereof.' If the court, upon tho other hand, finds that Corporation v. Carlos A. Go/hong Lino., Inc., 730 SCRA 178
no auch agreement exists, 'the proceeding shall be dismissed.' 12014), pp. 185-186.
The c i ted case also stressed that the proceedings are
summary in nature. The same thrQt was made in the ear-
lier case of Mindanao Porlland Ctnu11t Corp. v. McDono«1gh Judicial Relief Before Commencement ofArbitration
Conalruc&i.ot\ Co.. of Florida which held, thus: (Rules 3.2 to 3.11, Special ADR Rules)

. 'Since ~e~ obtains herein n written provi- The rules on judicial relief prior to the commencement of a rbi·
11on for 1;1rb1tration as we)) as failure on respon- tration apply when the following ci1·cu1nstances nre present:
dent'• part to comply therewith, tho court a quo
l . The arbitration proceeding has not yet commenced; and
2. There ill between the parties a dispute regarding the exis·
Cd) ~ agreement for the sale of goods, chattels or things in oc· tence, validity or enforceability of the arbitration agree-
t1on, at a pnce not le~ than five hundred pe505, unleu the
ment.
buyer ~ccept and receive part of such goods and chattels, or
tho eVldence. or some of them, of such things in action or
The procedur al rules are as follows:
pay at .the time aome ~rt or tho purchase money; but when
a ~e is. made by auction and entry is made by the auet.ion-
1. Petition. The initiatory pleading for judicial relief before
eer 1n_his sales book.. at the time or the so.le. of the amount
ond kind of property sold, terma of aale, price, names of the the commencement of llJ'bitrotion is a petition filed with the
purchaser and person on whoso account the sale is mode It Regional Trial Court where any of the parties resides or hos
ia 11 sufficient memorandu1n; ' his principal place of business." The petition should state
(e) An agreement for the leosing for a longer period than ono facts s howing Iii the legal capacity of the parties to sue and
year, or for the sale of real property or of an interest be sued; [ii) the nature and subst.anoc of the dispute; !iii] the
therein; grounds nnd circumstances relied upon by the petitioner;
CO A representation as to the crodit of a third person. and livl the relief sought. AJJ in all other initiatory pleadings
(3 ) Thoae whcro both parties are incapable of giving con5"nt to the under the Special ADR Rules, the petition must be verified
contract.•
" Ruic 3. 1, Special ADR Rules . • Rules 3.2 and 3.4, Special ADR Rulca.
164 ALTERNATIVE DISPUTE RESOWTION SPECIAL Ruu:s OP CoURV 165
ON A~TERNATIVE DISPUTE REsOLVTION
- The Specific Court RelieQ -

and must be accompanied by a certification of non-forum On the other hand, if the court finds the arbitration ag-
shopping.• An authentic copy of the arbitration agreement reement inexistent, invalid or unenforceable, the aggrie-
should be attached to the petition" unless the ground relied ved party may 6le a motion for reconsideration" or a peti-
upon is the non-existence or unenfon:eability of the arbitra- tion for certiorari under the Special ADR Rules." The dis-
tion agreement. A copy of the petition shall be served upon tinction is necessary in order to provide judicial remedy
the reepond ent before it is filed in court." for a ruling against the jurisdiction of an arbitral tribunal
The filing of the petition does not prevent the commence- in line with the state policy of giving preference to ADR.
ment of the arbitration, or the continuation thereof and
the rendition of an eward therein."
Judicial R-eliefAfter Arbitration Commences
2. Commentl<:Jpposition. Within fifteen (15) deys from ser- (Rule. 8.12 to 3.22, SfMcial ADR Rules)
vice of the petition, the respondent must file his comment
or opposition."' While the sub-title of Rule 3 of the Special ADR Rules state
8. Court action. In resolving the petition the court must that the judicial relief sought from the court. pertains to the "exis-
exercise judicial restraint and defer to the competence or tence, validity or enforceability" of the arbitration agreement, that
jurisdictio? o~ tl;'e .arb!tral tribunal to rule on its compe- is accurate only for judicial relief prior to the commencement of the
tence and J urisdiction. ar.bitration or at the latest, prior to the rendition by the arbitral
tribunal of a preliminary ruling on its jurisdiction. After the com-
4. R,eli6{ agal~t court a.ction. The determination by the mencement of the arbitration and the constitution of the arbitral
court up.hol~ng the 8ltlStence, validity or enforceability of tribunal, and after the arbitral tribunal has rendered a prelimi-
the arb1ti:ation ~eement . under these proceedings is nary ruling on its jurisdiction, the proper issue for judicial relief is
merely prtma facie. Such prima facie determinat' h whether or not the arbitral tribunal has jurisdiction over the arbi-
ever, sholll not bo subject to a motion for reeons1'd1eorna't. ow,; tral proceedings. Subsumed into the said issue is the existence,
a1n ert' · 11 ion,
appe. or c ioran, but .shall be without prejudice to validity or enforceability of the arbitration agreement upon which
the nght of any party to raise the same issues be' th emanates the jurisdiction and authority of the arbitral tribunal.
. al t "b al •Ore e
er b•tr n un or the court in a petition to vacat t
"d h b' al e or se The rules on judicial relief aft.er the commencement of arbi-
as1 e t ~ ar 1tr award which shall be resolved in accor-
dance with the standards set for such proceedings ... tration apply under the following circumstances:
1. The arbitration proceeding has already commenced, the
arbitral tribunal has been constituted and has rendered a
preliminary ruling on its jurisdiction; and
: Ruloa 1.6, 1.10 and 3.9, Special ADR Rules.
Rulea 3.6, Special ADR Rules. 2. A party desires to challenge the arbitral tribunal's ruling
• Rule l.3(A), Special ADR Rules. on the isaue of jurisdiction.
• Rule 3.8, Special ADR Rul..-.
"Rule 3.7, Special ADR Rulea. The commencement of arbitration is determined by the agree-
" Ru!..- 2.4 and 3.8, Special ADR Rules. ment of the parties," in the absmice of which, it is commenced in
•Rule 19. l, Special ADR Rulee.
"Rule 19.12, $pedal ADR Ru!..,.
'"Rules 19.26, Special ADR Rules. "Rule 19. 1, Special ADR Rules.
,. Rulea 2.4 and 8 .11, Special ADR Rules. • Rule 19.26, Special ADR Rules.
•Article 5.20. lRR.
 166 Al.T£RNATIVI! DISPUTE RESOLUTION Sri::c 1AL Ruu~s OF CoURT 167
ON Al.n:RNAT1VE D1sPt1T£ RESOLUTION
- Th• SPf'C':ific Court Reliefs-

accordance with the rules of the institutional arbitrator, or upon When the arbitration has commenced, but the arbitral
the delivery by tha claimant to the respondent of a demand for tribunal haa not yet been constituted, or although consti-
arbitration if there ia a prior arbitration agreement or, when there tuted, has not yet rendered a ruling on its jurisdiction,
ia no prior arbitration agreement, upon the agreement of the re- courts are eitjoined not to entertain any petition for judi-
spondent to submit the dispute to arbitration after being setved a cial relie f on the issue of jurisdiction or, if already pend-
demand to arbitrate.• ing, to refer the issue back to the arbitral tribunal once
Horeundn art the procedural rules: constituted. In view of the competence-competeni:e princi·
pk, courts are enjoined to exercise judicial restraint and
l . htitwn." Within thirty (30) days from receipt of the notice defer to the competence or jurisdiction of the arbitral tri-
of a ruling from an arbitral tribunal, an aggrieved party may bunal to rule on its competence or jurisdiction.•
file a petition with the Regional Trial Court (i) where the ar-
The filing and pendency of the petition for judicial relief
bitration is taking place, or [ill where any of the petitioners
ahall not be a cause for the court to eajoin the arbitration
or respondents has bia principal place of business or resi-
proceeding and the arbitral tribunal may proceed with the
dence, at the option of the petitioner, for judicial relie: from
the ruling of the arbitral tribunal on a preliminary question arbitration nnd render the award."
upholdina or declining its jurisdiction. 4. Relief against court action. The aggrieved party may
The petition shall state [i) the facts showing that the peti- file a motion for reconsideration" of the order of the
court, which &hall, however, not be subject to an appeal."
tioner or respondent has legal capacity to sue or be sued;
[ii] the natur~ and substance of the dispute; (iii) the An ordor affirming the jurisdiction of the arbitral tribu-
nal eholl not be subject to a petition for certiorari, but an
groun_da and ~umstances relied upon for the petition;
and [tv) the relief sought. The petitioner shall attach a order denying jurisdiction may be the subject of such a
oopy of the request for orbitratioo e&n<l t.h~ ruling of the petition" under the Special ADR Rules.
arbitrol tribunal. The respondents shall be furnished with If the orbitral tribunal, instead of rendering a prelimina~
..' a copy of the petition before it is filed." ruling on ita jurisdiction, decides to defer such ruling ~ti!
2. Commentloppositicn. The respondent should file his the rendition of the arbitral award, none of the parties
comment or opposition within fifteen (16) days from the con seek judicial relief from the deferment. Motions for
date of service of the petition.• reconsideration.'' appeal" and petitions for certiorari" :u-'.'
not available to challenge the decision of the arbttral tri·
3. Court ~lion. The court shall render judgment on the bunal to defer the resolution of the preliminary jurisdic-
basis of the pleadings filed and evidence submitted
within thirty (30) days from the time the petition is sub'.
mitted for resolution."
"Rul.. 2.4 and 3.8, Special ADR Rules.
"Rule 3.18, Special ADR Rules.
•Rule 19.1, Spedal ADR Rules.
• rtt. " Rule 19. 12, Special ADR Rules.
"Rul.. 3.12 co 3.16, Special ADR Rules. " Rulea 19.26 and 8.19. Special ADR Rules.
• Rule 1.3(AJ, $pedal ADR Rulea. "Rul• 19. 1 and 3. J(A), Special ADR Rules.
•Rule 3.17, SPfCW ADR Ru!... "Rule 19.12, Spteial ADR Rules.
"Rule 3.18, SP<CiaJ ADR Rulea. • Rule 19.26, Specia l AOR Rules.
168 ALn:RNA'TIVE DISPUTE RESOLUTION SPECIAi. R ULES OF COURT 169
0>1 ALTERNATIVE DISPUTE RESOLUTION
- The Sl)l."Cific Court ReUe(s -

tional issues." The parties can, however, await the rendi- An indispensable party is "a party who has such an interest
tion of the final arbitral award, and raise the same issues in the controversy or subject matter that a final a<ljudication
before the court in a proceeding for setting aside or vacat- cannot be made, in his absence, without injuring or affecting that
ing the award. interest."" The absence of an indispensable party renders all
subsequen t actions of the court null and void for want of author-
If, in the meantime that the resolution of the prelimi-
nary jurisdictional issue is deferred, or before the court ity to act, not only as to the absent parties but even as to those
present.u
could render any ruling thereon, the arbitral tribun al
renders the final arbitral award, the prospective or A necessary party is one who is not indispensable but "wh o
pending petition for judicial relief on the preliminary ju- ought to be join ed as a party if complete relief is to be accorded as
risdictional issue, will be rendered moot and academic to those who are already parties, or for a complete determination
and any. pending petition ~ught to be dismissed. Again: or settlement of the claim subject of the action.""
the aggneved party may rruse the same issues before the
court in a proceeding to set aside or to vacate the arbi- The circumstan ce that not all of the parties to the civil action
tral award ." are bound by the arbitration agreement or that referral to arbitra·
tion would result in multiplicity of suits are not grounds to deny
In a petition for judicial relief, the arbitrator or the m embers the referral of a pending action to arbitration. I n such situation,
of the arbi~al tribunal shall b~ nominal parties ... A nominal party the court may issue an order directing the inclusion in the arbitra-
is one who ts named as party tn an action although the real inter- tion of those parties who are not bound by the arbitration agree-
est is with some other party. Although the arbitrator or members ment but who agree to such inclusion provided those originally
of the arbitral tribunal are named as nominal parties in these bound by it do not object to their inclusion." The included parties
proceedings, th e real interest lies with the claimant and the re- are necessary parties to the arbitration proceedings because their
spondent who stand to be benefited or injured by any decision of non-inclusion, while not affecting the validity of the arbitration,
the court. As su ch, said parties are expected to actively pursue the will result in an incomplete determination or settlement of the
claim or oppose it as the case may be. As nominal parties, it is not claim subject of the arbitration .
mandatory for the arbitrator or members of the arbitral tribunal to
file pleadings or submissions for the consideration of the court." B. R eferral to ADR
A nominal party must be distinguished from a real party-in- <Rules 4.1 to 4.8, Special ADR Rules)
interest, an indispensable party, and a necessary party. A real
party·ir:· interest is "the party wh.o stands to be benefited or iajured
While the sub-title of Rule 4 of the Special ADR Rules is "Re-
ferral to ADR," tills Rule actually pertains to the referral of a pend-
by the Judgment or the party entitled to the avails of the suit.""
ing court action to arbitration rather than any other form of ADR.
The situation contemplated by this Rule is that where:

"' Rule 3.20, Special ADR Rules.

" Rule 3.21, Special ADR Rules. "Comes v. Leal &ally Centrum Co., Inc., 560 SCRA 545 12008); see
"Rule 3.22, Speeial ADR Rules. also San Pedro v. Ong, 569 SCRA 767 (2008).
49
/d. "San.tos v. Heirs of Dominga /lustre, 561 SCRA 120 [2008).
" Heirs of the Late Sps. Luciano P. Lim and Salud Nakpil Bautista $J Autoc.orp Group v. Intra Strata Assurance Corporation, 556 SCRA

v. The Presiding Judge of the Regwnal Trial Court of Quezon City, Br. 216, 250 (2008).
564 SCRA 852 (2008). "Rule 4 .7, Special ADR Rules.
170 ALTBRNA'l'MI DISPUTE RESOLUTION SPECIAL R UL£S OF CoURT 171
OS A LTERNATlll& DISPUTE RESOLllTION
- The Speclf'ic Court Reliefs -

1. There is already a pending court action; 1. Request/ motion. The pleading that initiates the referral
2 . There ia either a pn-actWn arbitroJion agreement or a to arbitration is a "request" or a "motion• and not a peti·
pTT&&nt·action arbiUution agreement; and tion beca use the rules on referral to ADR contemplate the
existence of a pending court action already initiated ei·
3. On& or both parties desire to undergo arbitration. ther by a complaint or a petition. Apart from the allege·
The arbib'ation agreement ia pn-action if executed prior to tiona and submissions in support of the request for refer-
the filing of an action, and it is pn"1tl-action if executed after the ro.I to arbitration, the motion shall contain an authentic
filing of the action. copy of the arbitration agreement and, as in the case of
Tb.is claaaification of arbib'ation agreements based on the litigated motions, must be served upon the respondent'"
time of execution relative to the 6ling of the action should be dis- and be set for hearing."
tinguiahed fi:oom the claaaification based on the time of execution 2. Comment I opposition. The comment or opposition must
relative to the existence of the diapute, i.e., pre-causal arbitration be filed within fi~een (15) days from service of the request
agreenumt (ajp"eement to aubmit to arbitration) or present-causal or motion and must show that [ii there is no agreement to
arbitration Q/ITTement (aubmi11ion agreement). For purposes of refer the dispute to arbitration; [iii the agreement is null
determining the timeliness of the request for referral to arbitration and void; or [iii) the subject matter of the dispute is not
and the number of the parties who are required to make the re· capable of settlement or resolution by arbitration."
quest, the relevant clnasification is that based on the time of the 3. Court action. The court may [i) grant the motion if it
execution of the ar~itration agreement relative to the filing of the finds prima fa.cie that there is a valid and enforceable ar-
action, i.e., pre·action or present·action arbitration aereement. On bitration ugrccment and th!lt the subject matter of the
the other hand, in determining the date of commencement of the dispute ie capable of arbitration; or [iii deny it if the court
arbitration, the pertinent classification is that based on the time of finds otherwise ... Either way, the court should stay the
the execution of the arbitration agreement relative to the existence judicial proceedings while the motion for referral is pend·
of the dispute, i.e., pre-causal or present-causal arbitration agre&- ing roeolution. Arbitral proceedings, however, may be
ment. commenced or continued, and an award may be made
IC there is n pre-action arb~tration a.11reement, which may ei· thereon, wbile the action ia pending in court.'°
ther be an agreement to submit to arbitration or a submission AJJ in the caae ofjudicial relief involving the. issu.es of exis-
agre.e ment, the requ~st for referral to arbitration may be made by tence, validity and enforceability of an arbitration agree·
any one of the pruti.e s not later than the pre-trial conference. A ment, the finding of the court that a valid and e?1orce~le
request made after the pr&-trial conference must be with the agree· arbitration agreement exists and that the dispute m -
men t of both parties. volved is capable of arbitration, resulting in the grant. of
In the c:aae of a present-ac.tion arbitration agreement, which is the motion for referral, is pri.ma faci.e and not conclusive
n&cessarily a submlasion IJllreement, the parties may request the upon the parties.
referral to arbitration at any time during the proceedings."
Hereunder are the procedural rules:
"Rule 1.3(A), Special ADR Rules.
"Rulee 4.2 and 4.3, Special ADR Rules.
" Rule 4.4, Special ADR Rulca.
" Rule 4.6, Special ADR Rule3.
"Rule 4.2, Special ADR Rulea. •Rule 4.8, Special ADR Rules.
172 ALTERNATIVB DISPUTE R ESOLUTION S PECIAL RULES OF COURT 173
ON A1: rERNAT1VE D1sPun: RESOLUTION
-The Specific Court Reliefs -

4. Relief against court action. The order granting the mo- who agree to such inclusion provided that those originally
tion for referral to arbitration shall be immediately execu- bound by it do not object to their inclusion.
tory and shall not be subject to a motion for reconsidera-
tion," appeal" or petition for certiorari under the Special In Koppel, Inc. v. Makati Rotary Club Foundation, Inc.,'' the
ADR Rules." On the other hand, an order denying the re- Supreme Court discussed the legal effects of the non-application
quest for referral, although not subject to appeal, may be of the arbitration clause to a case, as follows: (ii the judicial pro-
the subject of a motion for reconsideration" and a petition ceedings conducted beyond the point when the dispute should
for certiorari" under the Special ADR Rules. The oppor- have been referred to arbitration are rendered invalid; [ii) the
tunity to reverse a ruling adverse to arbitration is made decisions, including those of the appellate courts, must be vacated
available by way of a motion for reconsideration or a peti- and set aside; (iii( the case must be remanded to the court a quo
tion for certiorari under the said Rules. to be suspended at said point; and [iv) the petitioner and respon-
In accordance with the principle of preference for alternative dent must then be referred to arbitration pursuant to the ar-
dispute resolution, courts are prohibited from denying the request bitration clause. The foregoing implications can arise from a mere
for referral of some or all of the parties to arbitration for any of the apprisal of the court of the existence of an arbitration agr~ment
following reasons:" even without a formal motion or request for referral." The invoca-
tion of the arbitration agreement should, however, be made at the
l. Not all of the disp~tes subject of the civil action may be earliest opportunity and not for the first time before the Supreme
referred to arbitration;
Court.'°
2. Not all of the parties to the civil action are bound by the
arbitration agreement and referral to arbitration would
result in multiplicity of suits; C. I nte rim MeasureB of Protection
(Rules 5.1 to 5.6, Special ADR Rules)
3 . The issues raised in the civil action could be speedily and
efficiently resolved in its entirety by the court rather than The rules on judicial issuance of interim measures of protec-
in an arbitration; tion contemplate the situation:"
4. Referral to arbitration does not appear to be the most 1. Either [ii before the commencement of arbitration, ?r [ii]
prudent action; or after the commencement of the arbitration but pnor to
5. The stay of the action would prejudice the rights of the the constitution of the arbitral tribunal, or (iii] after the
parties to the civil action who are not bound by the arbi- arbitral tribunal's constitution but it has, no power to act
tration agreement. The court may, however, issue an or- or is unable to act effectively; and
der directing the inclusion in the arbitration of those par- 2. Where a party desires to secure interim measures of pro-
ties who are not bound by the arbitration agreement but tection.

~ 705 SCRA 142 (2013), pp. 168· 169.

" Rule 19.1, Special ADR Rules. "Luzon Iron Deoefopment Group Corporation and Consolidated Iron
"Rule 19.12, Special ADR Rules. Sando, Limited v. Bri~1Ston.e Min.irSG0 nd D•u•lopment Corporation nn.d
~ Rule 19.26, Special ADR Rules.
Anaconda MiniJl8 and Development Corporation, supra.
"Rule 19.1, Special ADR Rules. • Stro11.1Jh-0ld Insurance Company, Inc. v. Spouses Rune end Lea
"Rules 19.26 and 4.6, Special ADR Rules. Strotm, G.R. No. 204689, January 21, 2015.
" Rule 4.7, Special ADR Rules; see also Rule 2.2, Special ADR Rules. "Rule 5.1 and 5.2, Special ADR Rules.
174 ALTERNATIVE DISPUTE RESOLUTION SPECIAL RULES OF COURT 175
01' ALTERNATIVE DISPUTE RESOLUTION
- The Specific Court. Relief's -

A measure of protection may either be interim or temporary. coming illusory because of prior notice, and the court finds
that the reasons gjven are mgritorioug.''
Interim Measures ofProtection 2. Comment/opposition. The comment or opposition must
be filed within fifteen (15) days from service of the peti-
The parties may request from the court, among others, the tion.1•
11
following interim measures: 3. Court action. The court shall resolve the petition within
1. Preliminary injunction directed against a party to arbi- thirty (30) days from the [i) submission of the opposition,
tration; or [ii) upon the lapse of the period to file the same, or [iii)
2. Preliminary attachment against property or garnishment from the termination of the hearing that may be set if
there is need for clarification or further argumentation. ln
of funds in the custody of a bank or third person;
resohring the petition, the court is required to balance the
3. Appointment of a receiver; relative interests of the parties and the inconvenienres
4. Detention, preservation, delivery or inspection of prop- that may be caused."
erty; or If the basis for the petition for an interim measure is the
5. Assistance in the enforcement of an interim measure of non-constitution of the arbitral tribunal, the court, upon
protection granted by the arbitral tribunal which it can- being informed of the subsequent constitution of the arbi-
not enforce effectively. tral tribunal, shall defer action on the petition unless it is
established that the arbitral tribunal has no power to act
The following are the i:ules ~f procedure for the application for on any such interim measure of protection or is unable to
interilu 1neausureo of protection with -tho court:
act thereon effectively."
J. Petition: .Th~ applfoatio? for an interim measure of pro- The interim measure of protection issued by the court is
tect1on 1s 1mt1ated by filing a petition with the Regional without prejudice to the subsequent grant, modification,
Trial C-Ourt of the place where (i] any of the parties has amendment, revision or revocation thereof by the arbitral
his principal place of bus~s or residence; or [ii] any of tribunal."
the acts sought to be el\)omed are being performed or
threatened to be performed; or [iii] the r eal property sub- 4. Relief against court action. An order of the court grant-
ing or denying an interim measure may be the subject of a
ject of the arbitration is situated, at the option of the peti-
tioner.11 motion for reconsideration," appeal" via a petitio? for re-
view, or a petition for certiorari," under the Special ADR
Prior notice must be served upon the adverse party unless Rules. If the protective measure was issued in a proceed-
the petitioner alleges in the petition an application for an
ex parte temporary protective measure to the effect that
there is an urgent need to oithe~ (ii preserve property; [ii] ~ Rule 5.7, Special ADR Rules.
prevent the respondent from disposing of, or concealing, "Rule 5.8, Special ADR Rules.
the property; or [iii] prevent the relief prayed for from be- " Rule 5.9, Special ADR Rules.
"Rule 5.15, Special ADR Rules.
" Rule 5.9, Special ADR Rules.
" Rule 19.1, Special ADR Rules.
Ru l~
11 111
!l.6. Special ADR R.ules. RulP. 19.12. Special ADR Rule.51.
" Rule 5.S, Special ADR Rules. m Rule 19.26, Special ADR Rules.

·'
176 ALTl!ltNATIVB DISPUTE RESOLUTION SPECIAL RULES OF COURT 177
O:< ALTERNATIVE DISPUTE Rf!SOLl.mON
- The Spedtic: Court Retiers-

in&' whereat the adverse party was given an opportunity A TOP or TPM ia similar to a temporary restraining order
t.o be heard, the order of the court granting the petition (TRO) in that these measures are temporary in charact:Er, intended
shall be immediately e>:ecut.ory. Otherwise, the order of to enaure the efficacy of the principal relief (interim protective
the court ahall not be immediately executory, except if it meaaure for a TPO or TPM, or wril of preliminary injunction for a
ia a ttmporory prout:tiue measure." TRO), and h ave, as a general rule, a lifetime of twenty (20) days.
They are, however, different in the following respects:
Ttn'po,.01")' ON:lcr of Prot.ection. or
1. The efTectivity of a TOP or TPM is susceptible of exten·
Temporary Protective MCOJ1ure sion for not more than twenty (20) days, while a TRO is
non-e><tendible and becomes functlU o{icio after the lapse
A umporory prouctive mCOJ1ure (TPMJ, otherwise referred to
as temporary order of protection (TOP), ia an il\iunctive relief the of twenty (20) days from the service thereof.•
office of which ia to preserve property subject matter of the arbitra- 2. A bond is required for a TOP or TPM unlike a TRO which
tion, prevent the diepoaition or concealment thereof, or prevent the doee not pncrally require the posting of a bond. Instead,
relief prayed for from becoming moot and academic, during the a bond is required for the issuance ofa writ of preliminary
period that the court is resolving the application for the interim injunction ...
protective measure. A TOP or TPM is applied for ex porte, is im- 3. And a TOP or TPM may be lifted through the posting of a
mediately executory, and has a lifetime of only twenty (20) days counter-bond which is not true of a TRO. Instead, a
from ioeuanco u.n le81 extended for another twenty (20) days. A TOP counter-bond may lift a writ of preliminary iajunction."
or TPM may be issued by the court under the following condi-
tiona:12 Prefereru:e for Arbitrotwn
1. There le an urgent need to (i) preserve property; [iii pre-
vent the respondent from disposing of, or concealing the The rulea uu iui,.t,rirn Jntus.sw-es of protection rcoogni20 thG
property; or [iii} prevent the relief prayed for from being principle of preference for arbitration over judicial proceedings.
illueory because of prior notice; The following instances illustrate this principle:
2. The petitioner shall post a bond to answer for any damage 1. Any court order granting or denying an interim measure
that the respondent may suffer as a result thereof; of protection is without prejuclice to the subsequent grant,
modification, amendment, revision or revocation thereof
3. It shall be valid only for twenty (20) days l'rom the service
by the arbi tral tribunal...
on the party required to comply therewith, unless ex-
tended but not for more than twenty (20) days; 2. An interim measure of protection issued by the arbitral
4 . During the twenty (20) day period and any extension
tribunal shall, upon its issuance be deemed to ha_ve •P_SO
Jure modified, amended, revised or revoked an intenm
thereof, the court shall determine the propriety of issuing mea1ure of protection issued by the court to the extent
the principal interim protective measure requested; and
5. It e&11 be lifted by the respondent by posting an appropri-
ate counter-bond as determined by the court.
ft Sectton II, Rulo 118,
!WI Rules ofClvll P""""1u=
~Section 4, Rule 68, 1997 Rules of Civil Pro<:edure.
" Rule 5.1ll, Special ADR Rules. •Section 8, Rule 68, 1997 Rules of Civil Pro<:edure.
• Rule 6.9, Special ADR Ruleo. •Rule 6.13, Special ADR Ruloa.
178 ALTEltNA'l'IVE DISPUTE RESOLUTION s1 ..; c1A1. Rvu;s OF COURT 179
ON ALTER!"1\TIVE DISPUTE RESOLUTION
- Th e Specific Court Reliefs-

that it is inconsistent with the subsequent interim meas- duty as appointing authority within a reasonable time
ure of protection issued by the arbitral tribunal." from receipt of the request for appointment;
3. Any question involving a conflict or inconsistency bet,veen b. Where the arbitration is ad hoc and the parties failed
an interim measure of protection issued by a court and to provide a method for appointing or replacing an ar-
one issued by an arbitral tribunal shall be immediately bitrator. or substitute arbitrator, or the method
referred by the court to the arbitral tribunal which shall agreed upon is ineffective, and the National President
have the authority to decide such question." of the Integrated Bar of the Philippines ()BP) or his
4. The court shall defer action on any pending petition for an duly authorized representative foils or refuses to act
interim measure of protection filed by a party to an arbitra- within such pet~od as may be allowed under the per·
tion agreement arisi~g ~m or in connection with a dispute tinent rules of the IBP or within such period as may
thereunder upon bemg informed that an arbitral tribunal be agreed upon by the parties, or in the absence
has been constituted pursuant to such an agreement." thereof, within thirty (30) days from receipt of such
5. And the court shall assist in the enforcement of an in- request for a ppoint ment; or
terim measure of P'"?tection issued by the arbitral tribu- c. Where the parties agreed that their dispute shall be
nal which the tatter is unable to effectively enforce."' resolved by three arbitrators but no method of ap·
pointing those arbitrators has been agreed upon, and
the parties, and subsequently, the appointing author·
D. Appointment ofArbitratortt ity, fails or refuses to appoint the arbitrator within a
(Rules 6.1 to 6.9, Special ADR Rules) reasonable time from receipt of the request to do so.
The rules on the judicial appointment of arbitrators apply if: 2. And any party or the appointed arbitrators request the
court to act as the appointing authority and appoint the
1. There is a failure to appoint an arbitrator under the fol- arbitrator or third arbitrator as the case may be."
lowing circumstances:"
Hereunder are the rules of procedure for the judicial ap-
a. Where any of the parties in an institutional arbitra- pointment of arbitrators:
tion failed or refused to appoint an arbitrator or the
parties have failed to reach an agreement on ~he sole 1. Petiti.on. The petition for the appointment of an arbitra·
arbitrator (in an arbitration before a sole arbitrator), tor shall be filed with the Regional Trial Court Iii where
or when the two des1gnated arbitrators have failed to the principal place of business of any of the parties is lc.-
reach an agreement on the third or presiding arbitra- cated; !iii if any of the parties are individuals, where
tor (in an arbitration before a panel of three arbitra- those individuals reside; or [iii) in the National Capital
tors), and the institution under whose ru Jes arbitra- Judicial Region, at the option of the petitioner."
tion is to be conducted fails or is unable to perform its The petition shall state (i) the general nature of the dis·
pule; [iii a description of the procedure for the appoint-
., Id. ment of the arbitrators, if there is any, and the agreement
M Rule 5.14, Special ADR Rules.
containing such procedure; [iii) the number of the arbitra·
" Rule 5.15, Special ADR Rules.
"'Rule 5.6(e) and 5.16, Special ADR Rules. n Rules 6.1 and 6.2, Special ADR Rules.
" Rule 6.1, Special ADR Rules. " Rule 6.3, Special ADR Rules.
180 ALTERNATIVE DISPUTE Rl!:SOLUTION SPECIAL RULES OF CoURT 181
ON ALTERNATIVE DISPUTE RESOLUTION
- The S'pecific Court Relie(s -

tors agreed upon or the absence of such an agreement; (iv] E. Challenge to Appointment ofArbitrator
t he special qualifications of the arbitrators if there is any (Ru.Les 7.1 to 7.9, Special ADR Rules)
agreement thereon; [vi the fact that the appointing au-
thority, without justifiable cause, has failed or refused to The rules of procedure on the j udicial challenge to the ap-
act as such within the time prescribed or within a reason- pointmen t of arbitrators apply to the following situation:'"
able time, from the date a request was made; and (vi] the
petitioner is not the cause of the delay or in the failur'" to 1. The challenge to the appointment of an arbitrator ?ef?re
appoint the arbitrator. The petition should contain an au- the arbitral tribunal is not successful, and the appointing
thentic copy of the arbitration agreement, and proof that authority fail$ or refuses to act on the challenge within
the appointing authority has been notified of the filin.g of such period of time as may be allowed under the apphcable
the petition for appointment with the court ... The petition rule or, in the absence thereof, within thirty (30) days from
shall be served upon the respondent before it is filed in receipt of the request; and
court.• 2. The aggrieved party wants to secure judicial action on the
2. Comment I opposition. The comment or opposition must challenge.
!be filed within fifteen (15) days from the service of the pe-
tition.'° The procedure for the challenge to the appointment of an ar-
3. Court action. In a_dditiochn to making the appointment, bitrator before the court is as follows:
the court may reqwre ea part,y to submit a list of not
l ess than three (3) proposed arbitrators together with J. Petition. The petition for the judicial challenge shall be
their curriculum u~a.e from whom the court may appoint filed with the Regional Trial Court (ii where the ~~~c1pal
place of business of any of the parties is loc~ted, bl) if any
the arbitrator ... Pnor to the appointment, if the court is
informed that the appointing authority bas already made of the parties are in dividuals, where th~~e indl\'.1duals re-
an appointment, it shall dismiss the petition ." side, or (iii] in the National Capital Jud1c1al Region, at the
option of the petitioner.'°'
4. Relief against court action. The order of the court. ap-
pointing an arbitrator shall be immediately executory and The petition shall state (i) the name of the arbitrator chal-
shall not be the subject of a motion for reconsiderattion lenged and his address; [ii] the grounds for the challenge;
appeal or certiorari." An order of the court denying th~ (iii] the facts showing that the ground for the challenge
·p etition for appointment of an arbitrator may, however, has been expressly or impliedly rejected by the chall~n~ed
'b e the subject of a motion for reconsideration, appeal arbitrator; and (iv] the facts showing that the appol11j~g
through a petition for review, or a p-etition for certiorari'" authority failed or refused to act on the challenge. A
·u nder the Special ADR Rules. copy of the petition shall be served upon the respondent
before it is filed in court.,..
"Rule 6.4, Special ADR Rules.
" Rule l.3(A), Special ADR Rules.
" Rule 6.5, Special ADR Rules.
" Rule 6.6, Special ADR Rules.
"Rule 6.7, Special ADR Rules. '" Rule 7.2, Special ADR Rulo&.
"Rules 19.1, 19.12 and 19.26, Special ADR Rules. ""Rule 7.3, Special ADR Rules.
K > Rule 7.5, Special ADR Rules.
'"' Rules 19.1, 19.12, 19.26 and 6.9, Special ADR Rules. - Rulo l.S(A), Special ADR Rules.
182 ALTERNATIVE DISPUTE RESOLUTION S•;c:c1AL R u L£S OF CouRT 183
ON ALTEEINATIVE DISPUTE R ESOLUTION
- The SpecJfic Court Reliefs -

2. Comment I opposition. The challenged arbitrator or other 2. The arbitra tor, upon request of any party, fails or refuses
parties may file a comment or opposition within fifteen to withdraw from his office;
(15) days from service of the petition.'"
3. The appointing authority fails or refuses to decide on the
3. Court action. The court has any of the following options terminat ion of the mandate of the arbitrator within such
in resolving the petition:'°' period of time as may be allowed under the applicable
a. Grant the petition by removing the challenged arbi- rule or, in the· absence thereof, within thirty (30) days
trator if it finds merit in the petition; from the time tlhe request is brought before him;'" and
b . Dismiss the petition if there is no merit thereto; 4. Any party seeks judicial action in terminating the man-
c. Allow the challenged arbitrator to withdraw as arbi- date of the arbitrator.
trator; The relief for the termination of the mandate of an arbitrator
d. Accept the challe~ge and remove the arbitrator if [i] is different from a challenge to an arbitrator. In the judicial chal-
the partY or ~arties who named and appointed the lenge to an arbitrator, the arbitrator is sought to be removed on
challenged arb!trator agr~e to the challenge and with- the ground of partiality or non-compliance with the qualifications
draw the appointment; [ii] the other arbitrators in the required of him. In the judicial termination of the mandate of an
arbitral tri!"unal e,gree.. to the removal of the chal- arbitrator, the arbitrator who has been validly appointed has be-
lenged arbitrator; or lml the challenged arbitrator come incapable of perform ing his functions or bas become unable to
fails or refuses to submit his comment on the petition do so.
or the bnef of legal. arguments as directed by the The procedure for the judicial termination of the mandate of
court, or he fails to obJect to his removal. an arbitrator is as follows:
4. No relief against court action.Any order of the court re- 1. Petition. The petition shall be filed with the Regional
solving the petit!on shall be ~mediately executory and Trial Court [i] where the principal place of business of any
shall not be subJect to a motion for reconsideration ap- of the parties is located, (ii] where any of the parties who
peal or certiorari. IO'J •
are individuals reside, or (iii) in the National Capital Ju-
dicial Region, at the option of the petitione.r .'"
F. Termination ofMandate ofArbitrator The petition shall state [i] the name of the arbitrator
(Rules 8.1 f,o 8.8, Special ADR Rules) whose mandate is sought to be terminated; [ii] the
grounds for the termination; (iii] the fact that one or all of
The rules on the judicial termination of mandate of an arbi- the parties had requested the arbitrator to withdraw but
trator apply when:"' he failed or refused to accede; and [iv] the fact that one or
1. An arb_itrator becomes de jure or de facto unable to per- all of the parties requested the appointing authority to a~t
form his functions or for other reasons fail to act without on the request but is unable or has failed to act Wlthin
undue delay; thirty (SO) days from the request or within such period of
time as may have been agreed upon by the parties or al-
"" Rule 7.6, Special ADR Rules.
'" Rule 7.7, Special ADR Rules.
'°'Rules 19.1, 19.12 and 19.26, Special ADR Rules. •M Rule 8.2, Special ADR Rules.
"'Rule 8.1, Special ADR Rules. '" Rule 8.3, Special ADR Rules.
184 ALTERNATIVE DISPUTE RESOLUTI0:-1 SPE CIAL R ULES O F COURT 185
ON ALTE RNATIVE DISPUTE RESOLUTION
- 1'he Specific Cour" Reliefs -

lowed under the applicable rule."' A copy of the petition 2. A party desires to present evidence or the arbitral tribu-
shall be served upon the respondent before it is filed in nal ordered the taking of evidence, necessitating court as-
112
court. sistance; and
2. Comment/opposition. The comment or opposition must 3. The evidence is sought from a person, including a repre.
be filed within fifteen (15) days from senrice of the peti- sentative of a corporation, association, partnership or
tion.1" other entity, other than a party to the arbitration or its of-
3. Court actwn. The court shall grant the petition and ter- ficers, found in the Philippines.
minate the mandate of the arbitrator if it finds merit in When, however, arbitration has not yet commenced or the ar..
the petition; otherwise it shall dismiss the petition.'" If bitral tribunal has not yet been constituted, any person who de-
the petition is granted, a substitute arbitrator shall be sires to perpetuate his testimony or that of another may avail of
appointed according to th~ rules that were applicable to the rule on depositions before action or pending appeal under Rule
the appointment of th~ arbitrator being replaced ."' 24 of the 1997 Rules of Civil Pnu:edure"' which provides that:
4. No relief again$1 court action. Any order of the court re-
solving the petition shall be ~mmediately executory and "SECTION I. Depositions before action; petition.-A
person \vho desires to perpetua~ his O\vn testimony or that of
shall not be subject to a motion for reconsideration ap- another regarding any matter that n\ay be c~~i~blo in any
peal or petition for certiorari. ue '
court of the Philippines, nu1y file a verified petition in the ';°urt
of the place of the residence of any expected adverse party.
G. Assi.Ntance in Taking E vidence Examples of court assistance in taking evidenco are enumer-
(Rules 9.1to9.11, SpecialADR Rules) ated in Rule 9.5 of the Special ADR Rules. They correspond to the
different classes of evidence under the Rules of Court. Thus:
The specific relief for judici~J llBaiatance in taking evidence is
an exception to the principle that the Special ADR Rules is appli- 1. On testimonial euide11ce:
cable only to domestic arbitration and Philippine ICA. The relief is a . To comply with a subpoena ad testifica11dum;"' and
available whether the arbitration is domestic or foreign. b. To appear as witness before an officer for the taking of
The rules on judicial assistanco in taking evidence apply in his deposition upon oral examination or wntten inter-
the following situation: 111 rogatories. 120

1. There is a pending arbitration, whether domestic or for- 2. 011 documenta.r y evidence:

eign; a. To comply with a subpoena duces tecum; ... an d
b . To allow the examination and copying of documents."'
'" Rule 8.4, Special ADR Rules.
"' Ruic l.3(A). Special ADR Rules.
"' Rule 8.5, Special ADR Rules. "' Rule 9.10, SJl"<'ial ADR Rules.
'"Rule 8.6, Special ADR Rules. •~ Ruic 9.5(a), Special ADR Rules.
'" Rule 8.8, Special ADR Rules. "' Rule 9.5(b), Special ADR Rules .
'"Rules 19.1, 19.12, 19.26 and 8.7, Special ADR Rules. 1111
Rule 9.5(a), Special ADR Rules.
'" Rules 9.1 and 9.4, Special ADR Rules. '" Rule 9.5(d), Special ADR Rules.
186 ALTERHATM! DISPUTE RESOWTION SP&CIAL R vi..llS OF CoURT 187
ON ALT&RNATIV& DISPUTE RESOLUTION
- Th• SpeciCic Court Relief& -

3 . On rMl euitkn«: acta required are to be done."' A copy of the petition shall
To allow the phyaical examination of the condition of pet"- be served upon the respondent before it is filed in court.,.
sons, or the inspection of things or premises and, when 2. Comment/opposition. The comment or opposition must
appropriate, to allow the recording or documentation of be filod with.in fifteen (11>) days from service of the peti·
the conditions of persona, things or premises (i.e., taking ti on.
pbotolJ"epba, video recording or using other means of re-
cor~ or documentation).,..
3. Court action. If the evidence sought is not privileged and
is material and relevant, the court shall grant the request
The foregoing enumeration of the types of court assistance in for assiatance in taking evidence and shall order the peti-
taking 4Mdence under Rule 9.1> of the Special ADR Rules is not tioner to pe,y the costa attendant to such assistance.,,.
excluaive.1. . 4. Relief against court action. The order granting the re·
The arbitral tribunal is not clothed with authority to cite per- quest for auistance in taking evidence shall be immedi-
sons or partie• in contempt. However, the court may impose sanc- ately executory and not subject to a motion for reconsid-
tions including the citation for contempt, against persons who eration, appeal or petition for certiorari ..... If the court d".
violate its orders issued in assioting the arbitral tribunal in taking clines to grant assistance in taking evidence, the peti·
evidence."' tioner may file a motion for reconsideration, appeal by pe-
The procedure for judicial assistance in taking evidence is as tition for review or petition for certiorari"' under the Spe-
follows: cial ADR Rulee.
1. PetUlon. Tho peti~ion •~all ~e filed with the Regional
Trial Court where Iii arbitration proceedings are taking H. Con (Edentiality/Protectiue Ortkrs
place; (ii] tho witness resides or may be found· or [iii] (Rules JO.I to JO.JO, SpeciclADRRules)
tho evidence may be :found, at the option of tbe peti-
tioner.•• The protective order referred to under the rules on judicial en-
The pet!tion must .state [ii _the fact there is an on-going forcement of confidentiality is different from the interim pro~ve
arb1trat1on proceeding even if such proceeding cannot con· measures under Rule 6 of the Special ADR Rules. The protective
tinue due to •ome legal impediments· (ii] the arbitral tri- order under Rule 10 of the Special ADR Rules refers to the judicial
bunal ordered the taking of evidence ~r a party desires to enforcement of the confidential nature of information disclosed or
present evidence to the ar~itral tribunal; (iii) the materi- obtained during an ADR proceeding.
ality or relevance of the evtdence to be taken; and (iv) the The rulee on confidentiality and protective orders apply
namea and ~ddreaaea of the intended witnesses, place when:••
where the evtdcnce may be found, or the place where the 1. An ADR proceeding io pending;

"' Rule 9.6, Special ADR Rulea.

'" Rule 9.G(c), Special ADR Rules. •• Rule l.3(A), Special ADR Rules.
"' Rule 9.6, Special ADR Rulu.
'" Rule 9.G<e), Special ADR Rulea. - Rulea 19.1, 19.12 and 19.26, Special ADR Rules.
••Rule 9.11, Spec;.J ADR RulM. "' Ruleo 9.9, 19.1, 19. l2 and 19.26, Special ADR Rules.
•• Rule 9.3, Special ADR Rules . "' Rule 10.1, Special ADR Rules.
188 ALT6RNA1'IVE DISPUTE RESOLUTIO~
SPJ•:CJAI. R UJ..ES 0>' C OURT 189
o~ A1..:rERNA1'lV E DISPUTE RESOLUTION
- The Sp<"Cific Court Relic>fs -

2. A party, counsel or witness disclosed infonnation or was fo1· hearing in accordance with Rule 15 of the 1997 Rules
othenvise compelled to disclose informationi of Civil Procedure!,. \Vhcre the situation is more urgent,
3. The disclosure was made under circumstances that would such as when a question involving confidential informa-
create a reasonable expectation on behalf of the source, tion has already been propounded to a witness, a timely
that the information shall be kept confidential; objection must be raised by a party in the case who will be
4. The source of the information or the party who made the aggrieved by the disclosure before the question is an-
disclosure has the right to prevent such information from S\vered.
being disclosed; The petition or motion must state [ii that the information
5. The source of the information or the party who made the sought to be protected was obtained, or would be ob-
disclosure has not given his express consent to any disclo- tained, during an ADR proceeding; [iii the applicant
sure; an d would be materially prejudiced by the disclosure of that
6. The applicant would be materially prejudiced by an unau- infol'mation; [iii] the person or persons who are being
thorized disclosure of the information obtained, or to be asked to divulge the confidential information participated
obtained, during the ADR proceeding."' in the ADR proceedings; and [iv) the time, date and place
when the ADR proceedings took place."'
The benefit of the rule is available not just for arbitration pro- 2. Conune11t I opposition. The comment or opposition must
ceedings, but for all other forms of ADR. be filed within fifteen (15) days from service of the peti-
Hereunder is the procedure for the judicial enforcement of tion or motion. The comment or opposition may be accom-
confidentiality or protective measures: panied by proof that [i] the information is not confidential;
1. Petition o: motio~. If there is no pending court proceed- [iii the information was not obtained during an ADR pro-
ing in whi~h the mfor?'abon obtained in an ADR proceed- ceeding; [iii] there was a waiver of confidentiality; or [iv]
ing is requJJ"ed to be divulged or being divulged the initia- the petitioner or movant is precluded from asserting con-
tory pleading shall be a petition to be filed wlth the Re- fidentiality.'"
gional Trial Court of the place where the order may be 3. Court action. If the court finds the petition or motion
implemented. A copy of the petition shall be served upon meritorious, it shall issue an order enjoin ing t he persons
the respondent before it is filed in court."' involved from divulging confidential information.'" The
If there is already a pending court proceeding a separate court shall impose the proper sanction, including citation
petition_ will be i~proper because that will' amount to for contempt, against any person wno disobeys the order
~ult1~lic1ty of su~ts and forum-shopping. Under this of the court to cease from divulging confidential informa-
tion.140
sh1tuat1on, td~e applicandt should file with tne court where
t e procee mg 1s pen mg a - moti"on to enJoin
. . the d"iscIo-- 4. Relief against court action. The order enjoining the dis-
~!l!I' OT1:11 liUpprcss llie confidential information.'" Being a closure of confidential information shall be immediately
ht.gated motion, the movant is required to set the motion
"' Rule 10.6, Special ADR Rules.
1:11 /d.
,., Rule 10.4, Spocial ADR Rules.
·~• Rule 10.7. S pecia l ADR Rules.
'~ Ruic l.3(A), Special ADR Rules.
·~ Rule 10.8, Special ADR Rules.
"' Rule 10.3, Special ADR Rules. '" Rule 10.10, Special ADR Rules.
190 ALTERNATIVE DISPUTE RESOLUTION SPECIAL R ULES OF COURT 191
ON A1..TEHNA1·1v..-: DISPUTE Rt:SOLli'MON
- The Specific: Cuurt Reliaf&-

executory and may not be enjoined while the order is be- •recognition." "R ecngnition" pertains to the grant of legal effect by
ing questioned before the appellate courts. The order en- Philippine courts to an arbitral 8\\•ard \Vith foreign elements, i.e.,
joining or refusing to enjoin persons involved from divulg· either the arbitral tribunal that rendered the award is foreign, like
ing confidential information may be the subject of a mo- in the case of a foreign arbitral award, or the basis of the authority
141
tion for reconsideration or appeal via a petition for re· for rendering the a\vard is an international convention, treaty or
view under the Special ADR Rules, but not a petition for agreement, like in the case of an international commercial arbitral
certiorari. 142 8\Vard.1..,
A domestic a rbitrnl award carries with it the presumption
that it \vas rendea·ed in due course of the arbitration and is, there-
I. Confirmation, Recognition, En(orcenaent, fore, entitled to confirmation by the court.'" This presumption may
Correction, Vacation or Setting A8Ule be rebutted by evidence of the existence of any of the grounds for
of Arbitral Awards
vacating or setting aside the arbitral a\vard.
<Rules 11 to 13, Special ADR Rules)

Rules 11 to 13 of the Special ADR Rules govern the confirma- Causes of Action and Grounds
tion, recognition, enforce~ent, correction, vacation or setting aside
of arbitral awards. The circumstances covered by these rules are as Three (3) principal causes of action are covered by Rule 11 of
follows: the Special ADR Rules, namely:"'
1 · An arbitral. award has been rendered either · . d I. Co11fi.nnatio11 Qf the domestic arbitral award, the petition
t' . {"] PhT . m a 111 o-
mestic arb1tr~ io1!, u i ip~1ne ICA; or liiil foreign arbi· for which can be filed at any time after the lapse of thirty
tration resulting in a convention award or non conv t· (30) days from receipt by the petitioner of the arbitral
· h •t ~ . - en ion
award but wit comi 111.IJ,, r~ciprocity (as-in co1wention award, ,.. unless it is filed in opposition to a petition for
award). vacation in wl"Lich case the petition for confirmation may
be filed at any time after the filing of the petition for va-
2 . A p'.'rty seeks to l!l confir".', correct or va.cate the domestic
cation."' The p etition shall be granted unless there exist
arb1tral award; lnl recognize and enforce, or set aside the
grounds to vacate the arbitral award."'
Philippine !CA award; or (iii] recognize and enforce the
foreign convention award or foreign os-in convention 2. Correctio11 or modificatio1t of the domestic arbitral award,
award. the petition for which must be filed not later than thirty
C30J days from receipt of tho urbitrel award,"' unless the

la. Co11{irmation, Correction or Vac·ation of

Do1nestic Arhitral Aw<ird8 ·~ See Korea Teclmof.fJgU!s Co., Ltd. u. L<:rma. G<2 SCRA l 120081, p.
29, where ftoonfirmation" was, however, used interchangeably with .. n .:t.-os·
(Rules 11.1to11.9, Special ADR Rule.~)
nition."
'" Rule 11.9, Special ADR Rules.
The Special ADR Rules clarify that judicial affirmation of a
"' Rule 11.2, Special ADR Rules .
domestic arbitral award is done through •confirmation" and not "'Rule 11.2(AJ, Special ADR Rules.
"'Ruic ll.2<E>. Special ADR Rules.
"' Rules 19.1, 19.12 and 10.9, Sp;ltial ADR Rules. '"Rule 11.9, Special ADR Rules buts•• ScctiOI\ 2!!, Arbitratio~ Lnw.
'
0
Rule 19.26, Special ADR Rules. "' Rule l l.2<Bl, Special ADR Rules.
192 ALTERNATIVE DISPU1E RESOLUTION SP>:CI·"· R uu:s OF Cou1rr 193
ox Al..TERNATIVE DISPlITE RESOLUTION
- The Sp1."t:ific Court Relief$ -

correction is applied for as a supplementary relief to a pe- de finite award upon the subject matter submitted to
tition for confirmation in which case the correction may be th~m 'Vf.Hl not mnrf P.;
applied for at the same time as the filing of the petition
for confirmation. 1:;0 The grounds are as follo\vs:l-$ 1 f. The arbitration agreement did not exist, or is invalid
for any ground for the revocation of a contract or is
a. Where there was an evident miscalculation of figures othenvise unenforceable; or
or an evident mistake in the description of any per-
g. A party to the arbitration is a minor or a person judi-
son, thing or property referred to in the award;
cially declared to be incompetent, in which case, the
b. Where the arbitrators have awarded upon a matter petition shall be filed only on behalf of the minor or
not submitted to them, not affecting the merits of the the incompetent person, and shall allege that (ii the
decision upon the matter submitted; other party had knowingly entered into a submission
c. Where the arbitrators have omitted to resolve an is- or agreement with such minor or incompetent; and (ii]
sue submitted to them for resolution; or the submission to arbitration was made by a guardia:i
d . Where the award is imperfect in a matter of form not or guardian ad /item who was not authorized to do SG
affecting the merits of the controversy, and if it had by a competent court."'
been a commissioner's report, the defect cou ld have The foregoing grounds are exclusive and the court cannot con-
been amended or disregarded by the court. sider any other ground. •M
3. Vacation of the d~mestic arbitral award, the petition or
petition-in-opposition for which. must be filed not later Co1nbi11ation of Causes of Action
than thirty (30) days from,!eceipt of the arbitral award.
The grounds are as follows: The principle of combined reliefs is available in proceedings
allowing vacation or setting aside and correction of ~e arb~tral
a. The arbitral award was procured through corruption, award. These are the proceedings involving domes.tic arb~trel
fraud or other undue means;
awards and Philippine !CA awards, but not for foreign a~bi!-'al
b. There was evident partiality or corruption in the arbi- awards which can11ot be vacated or set aside. In brief, the pnnciple
tral tribunal or any of its members; allows the combination of two (2) or more reliefs to be pleaded in
c. The arbitral tribunal was guilty of misconduct or any the same proceeding. The initiatory relief is that whi~~ is ~leaded
form of misbehavior that has materially prejudiced in the initiatory petition, wh ile the rclief-in-opposit!.on is that
the rights of any party; prayed for in order to oppose the initiatory relief. A rebef may also
be a supplementary reli.ef as in the case of a prayer for co.rrecbon of
d. One or more of the arbitrators was disqualified to act an arbitral award in support of a petition for confirmation. And a
as such under the law and willfully refrained from relief may also be an alternative relief as in the case of a prayer for
disclosing such disqualification; correction as an alternative to a petition to vacate in opposition to
e. The arbitral tribunal exceeded its powers, or so imper- a petition for confirmation.
fectly executed them, such that a complete, final and
~~~~~~~~
1
~ Sae al"o Section 2, Arbitration Law.
"' Rule 11.2<0), Special ADR Rul... '" Ruic l l.4(A), Special ADR Rules. See Fruehauf Electronics Philip·
'" Rule 11.4(8), Special ADR Rules and Section 26, Arbitration Law. pines Corporation v. Tecluiolc:gy E/.cctro11ics Assc1nbly and Management
•m Rule ll.4(A), Special ADR Rules. P11r.i/i.c Corporn.J.inn,, O.R_ No. 204197, November 23. 2016.
194 ALTERNATIVE DISPUTE RESOLUTION SPECIAL R ULES OP CoURT 195
ON A LTERNATIVE DISPUTE RESOLUTION
- The SpecHic Court Reliefs-

Specifically, the following combinations are possible: longer seek the affirmative relief of vacating or modifying the
1. Confirmation I vacation. A petition for confirmation of a award.
domestic award can be opposed by a petition-in-opposition A petition for the vacation of a domestic arbitral award filed
seeking to vacate the award."' beyond the reglementary period shall be dismissed but that dis-
2. Confirmation I correction. A petition for confirmation of a missal will not render dismissible a petition-in-opposition seeking
domestic award may include a petition for the correction to confirm the arbitral award."' While the petition to vacate the
of the arbitral award."' The correction of the arbitral award was filed beyond the reglementary period, the petition-in-
award necessarily implies the confirmation of the cor- opposition to confirm the award not being confined to thirty (30)
rected or modified award. A petition for confirmation of days from receipt, has been filed on time and, therefore, is not
the award may also be opposed by a petition-in-opposition dismissible. Instead, the petition-in-opposition for confirmation
seeking the correction or modification of the award in or- will be considered a petition for confirmation filed in the first in-
der to make the award acceptable to the party moving for stance.
its correction. Combination is possible only in the following instances:
3. Vacation/corre~tion. A petition to vacate an award may l. If the petition to vacate, with a filing period of thirty (30)
include a petition for the correction of the domestic arbi- days from receipt of the arbitral award, is filed first as it
tral award._"' It may also ~e opposed by a petition-in-oppo- can be opposed by a petition-in-opposition for confirma-
sition seel<ing the correction or mO<lification of the award
tion which can be filed at any time after the petition to
in order to ~ake the award acceptable to the party seek·
ing its vacation. vacate has been filed.'"
2. Or if the arbitral award is received ahead by the party
4. Confirma.tionluacotionlcorrection. Combination number intending to confirm it and it is received later by the
(1) ~an carry a supplemental or alternative relief for cor-
rection. party intending to vacate it, in which case, the filing pe-
riod for the petition to set aside the arbitral award will
overlap with the filing period for the petition for confir-
While the foregoing combinations may come into play ·
. 1 .. th I d ma mation.
smg e. ~etit1on, e ru es o not allow the filing of petitions-in-
oppos1tion to vacate or oorrect a domestic arbitral award beyo d In the foregoing instances, the earlier petition can be opposed
the r~glementary. period for the filing of the petition had it be:n by a petition-in-opposition during the overlapping period.
filed m the first instance. Hence, a petition for confirmation filed The rules prohibit forum shopping and multiplicity of suits. If
more than thirty .<3~) days from receipt of the arbitral award, and a petition for confirmation is already pending before a court, no
therefore, filed within the r?glemen.t~ ~eriod for such petitions, petition-in-opposition seeking to vacate the same arbitral award
may no longer be opposed via a petition-in-opposition to vacate or may be filed with any other court. So also, if a petition for vacation
correct <:he award.'" TI?•does not, however, prevent the oppositor is already pen ding before a court, no petition-in-opposition seeking
from filmg an oppos1t1on to the petition except that he can no to confirm the same arbitral award may be filed with any other
court. Any such s ubsequent petition may be dismissed for being
"' Rule 11.2(0), Special AOR Rules. violative of the rule against forum shopping or consolidated with
'"Rules 11. 2(GJ and 11.5, Special AOR Rules.
1
•' Id. '"Rule l l.2CE), Special ADR Rules.
'" Rules 11.2(0) and CF), Special AOR Rules. 1
• 1d.
196 ALTERNATIVE DISPUTE RESOCUTION SPECIAL Rut.ES OF COURT 197
ON AL1'&RNA1'1V'£ DJS PUTE RESOLl.M'ION
- The Specific Court Relief• -

the petition filed earlier. If the petitions were filed simultaneously, tion, or a petition-in-opposition"' unless the period for the
upon motion of eit.b.~r (tArt.y, thA cases may hA c-Jln,:;olidated in ei. filing thcrcofhac prcocri.bcd.
1
ther court. " 3. Reply. The petitioner may file a reply within fifteen (15)
days from receipt of the comment or opposition, or a com·
Procedural Rules mentor opposition to the petition-in-opposition."'
Hereunder is the procedure for the judicial confirmation, cor- 4. Hearing. The proceeding for the confirmation, correction
rection or vacation of domestic arbitral awards: or vacation of domestic arbitral awards may be summary
or regular. Iftbe court finds through the petition or peti-
1. Petition. The initiat:Alry pleading for confirmation cor- tion-in-opposition thereto that there are issues of fact, it
rection or vacation of a domestic arbitral award ~ the shall require the parties to submit the affidavits of all
first instance is a petition to be filed with the Regional their witnesses (within a period of not more than fifteen
Trial Court having jurisdiction over the place [ii in which [15] days from receipt of the order) and reply affidavits
one of the parties is doing business; [ii] where any of the (within ten [10) days from receipt of the affidavits to be
parties resides; or [iiil where the arbitration proceeding replied to), attaching thereto the documents relied upon
was conducted... in support of the statements of fact contained in the affi-
The petition must state the [ii addresses of the parties davits. ' 00 Up to this stage, the proceedings are summary.
and any change thereof; [ii] the jurisdictional issues If the court finds that, on the basis of the petition, the op-
raised by a P~ during the arbitration proceedings; [iii] position, and the affidavits of the parties, there is a need
the grounds rebed upon; and [iv] the date of reeeipt of the to conduct an oral hearing, the court shall set the case for
ttrUitral award and U1c circumstances under \Vhich it was hearing during which, the affidavits of the witness"• •hall
received by the petitioner. The petition must contain an take the place of their direct testimonies and they shall be
authentic copy of the arbitration agreement an authentic immediately subjected to cross-examination."' Upon this
copy of the arbitral award, a certification' of non-forum stage, the proceedings become regular in character.
shopping, and an authentic copy of the appointment of the 5. Court acticn. "' The court may either confirm or vacate
members of the arbit.ral tribunal.'" the award. It shall confirm the award unless a ground ex-
Where, however. confirmation, correction or vacation of ists to vacate the domestic arbitral award. The confirma-
the domestic arbit.ral award is to be pleaded in opposition tion of an arbitral award carries with it by necessary im-
to a pe_ndi'.'g petifon, the oppository pleading to be filed is plication the execution thereof.'" The arbit.ral award car-
a pet•tion-in-oppositwn. ries with it the presumption that is has been issued in
2. Comment/oppositwnlpetition-in-opposition. If the peti-
tion is sufficient in form and substance, the court shall
cause notice and a copy of the petition to be delivered to "' Rule 11.7, Special ADR Rules.
'" Id.
the respondent. Within fifteen (15) days from receipt of "' Rule 11.8, Special ADR Rules.
such notice, the respondent may file a comment, opposi- i•' Id.
'"Rule 11.9, Special ADR Rules.
'" Rule 11.5, Special ADR Rules. 1
Department of Bnuironment and No.tuNil ResourcetJ (DENRJ v.
"
,., Rule 11.3, Special ADR Rules. Uni1td Planners Consulta.nt8, Inc. (rJPCl), G.R. No. 212081, February 23,
•N Rule 11.6, Special ADR Rules. 2016.
198 A1.TBRNATIV1' DISPUTE RESOLUTION SP&CIAL R ULES OP CoURT 199
ON ALTERl<ATIVE DISPUTB REsoLUTION
- Tho Specific Court Reliefs -

due courae of the arbitration and is subject to confirma- Tb. R ecognition, Enforce,,..,nt or &tJ:ing
tion by the court. Allide ofICA A........U
If the petition or pet:ition-in-(lpposit:ion to vacate the rRulea 12.l to 12.14, SpecialADRRu.les)
award contains an application for the court to refer the
case back to the arbitral tribunal that rendered the award Rule 12 of the Special ADR Rules governs the recognition and
for the purpose of makin& a new or revised award or to di- enforcement or setting aside of a Philippine !CA award.'" A foreign
rect a new hearing, or in an appropriate case, to order a !CA award ahall be treated as a foreign arbitral award, and it&
new hearing before a new arbitral tribunal, the members recoirnition and enforcement will be governed by Rule 13 of the
of which ahall be chosen in the manner provided in the Special ADR Rules.
arbitration allJ"'ement, or submission, or the law the In these discuaaione, reference to "JCA" or "Jntu7uJlional
court may 1J'4Dt auch reliefa. ' Commercial Arbitration• pertains to "Philippine /CA.• On the other
In any case, the court shall not disturb the arbitral tribu- hand, !CA whose seat is other than the Philippines are referred to
nal'• determination of facts and interpretation of the law. es "foreilJn /CA.•
6. Relief agai1t11t court action. The order of the court con·
firminir, vacat~g or correcting a domestic arbitral award Causes of Action
may~ .the eubJeC~ of a.'!:!'tion for reconsideration, appeal
or petition for certioran. The appeal referred to is nQt an The following are the exclusive causes of action covered by
ordinary appeal.under Rule 41 of the Rules of Court"' but a Rulo 12 of the Special ADR Rules:
petition for revtew with the Court of Appeals under the
Special ADR Rules. Also, the proper petition for certiorari l. Recognition and enforcement of an !CA award, the peti-
is that provided for under the Special ADR Rules and not tion for which can be filed at any time from receipt of the
under Rule 65 of the Rules of Court."' Section 29 of the award. The court shall grant the petition unless any cf
Arbitration Law limits the allowable appeal to questions the grounds for setting aside the arbitral award is estab-
oflaw only. lished ."'
If a timely petition to set aside has first been filed, the
oppositor must file therein and in opposition thereto the
petition for recognition and enforcement thereof within
the period for filing an opposition."'
2. Setting aside an JCA award, the petition for which should
be filed within three (3) months from the time the peti-
tioner receives a copy of the !CA award or the resolution
'" Rulea 19.1, 19.12 and 19.26, Special ADR Rules.
"' Fyfe v. Philippine Afrlinu, Inc., G.R. No. 160073 June 6 2016· of the arbitral tribunal for the correction or interpretation
Fnallou{ El«tl'Ollia Philipp/nu Colporatim v. Teduwrogy' ~ &: of the award or the rendition of an additional award if a
atm.b/y and MOIUJl«rrw"' Podfk Corporntion. aupra.
'" DtportrrwnJ of Env~nl Giid Natural ~ <DENRJ v.
Uniud PlanMrs Conaul1<>.1m, IM. ruPCO, aupra.; FnuJuw{ Eltttr<>nia ••Rule 12.1, Special ADR Rules.
Phi/ippinu Corpora/ion v. Ttthnolqzy Ekx:lronict Asum!Xy and Manogo-
mcnt Pacific C<>rporallon, aupra. •• Rul• 12.2CA>and 12.13, Special A.DR Rulea.
•• Rulee 12.2W and 12.6, Special A.DR Rules.
200 ALTE!INATIV& DtSPUTE RESOWT!ON SPECIAL Rut.ES OP CoURT 201
ON A LT£RNAT1VE DISPUTE Re:sownos
-The Specific Court Reliefs-

timely request has been filed therefor.'" It can also be only that part of the award which contains decisions
filed in oppoaition to a petition for recognition and en- on matters not submitted to arbitn.tion may be aet
forcement provided it is not yet time-barred."' Be that as aside or only that part of the award which contains
it may, the dismissal of a petition to set aside for being decisions on matters submitted to arbitration may be
time-barred shall not automatically result in the approval enforced; or
of the petition filed therein or in opposition thereto for the
recognition or enforcement of the same award. d . The composition of the arbitral tribunal or the arbi-
tral procedure was not in accordance with the agree-
Judicial correction or modification is not available for an ICA ment of the parties, unless such agreement was in
award. Arly other j udicial recourse ~a_inst an ICA award, such as connict with a provision of Philippine law from which
an appeal, petition for review or petition for certiorari, are disal- the parties cannot derogate, or, failing such agree-
lowed and shall be dismissed."' ment, was not in accordance with Philippine law;
2. Or the court finds that:
Grounds
a . The subject matter of the dispute is not capable of.s?t-
The grounds for setting aside an ICA award or to resist its en- tlement by arbitration under the law of the Phihp·
forcement which aro the same rn>unds for the non-recognition of pinee; or
foreign arbitral award&, are as follows:"' b. The recognition or enforcement of the award would be
1. Tho party makini the application furnishes proof that:
contrary to public policy.

a. A partY to the arbitration agreement was under some The foregoing grounds are similar to the grounds for the n~n­
incapacity, or the said agreement is not valid under recognition of foreign arbitrnl awards.,. thus showing that, while
tho law ~ ':"hi~h the parties have subjected it or, fail- !CA proceedlncs in the Philippines are domestic arb~tral proceed-
ing any md1cation thereof, under Philippine law; ings, ICA awards oro treated more like foreign arb1tral awards;
hence, the require ment for the recognition, rather than mere con-
b. The party making the application to set aside or resist firmation, of!CA awerds.
e"!'orcement was n~t given proper notice of the ap-
pointment of an arbitrator or of the arbitral proceed- A$ in the case of domestic arbitral awards, if a party to the
ings or was otherwise unable to present his case; !CA is a minor or a person judicially declared to be incompetent,
the petition to aet aside the ICA award shall be filed only on behalf
c. The award. deal~ with a dispute not contemplated by of the minor or the incompetent person, and shall allege that (i] the
or not fallmg within the terms of the submission to other party bad knowingly entered into a submissi.on. or agree'?ent
arbitration, or containa decisions on matters beyond with such minor or incompetent; and [ii] the subIDJSS1on to arbitra-
the scope of the eubmisaion to arbitration; provided tion was made by a guardian or guardian ad /item who was not
that, if the decisions on matters submitted to arbitra- authorized to do so by a competent court.
tion can be separated from those not so submitted,

' '" Rule 12.2(8), Special ADR Rulu.

'" Rule 12.6, Special ADR Ruloa.
'" Rule 12.5, Special ADR Rules.
'" Rule 12.4, Special ADR Rulee. ,. R11le 13.4, S~al ADR Ruleo.
202 ALTERNATIVE DISPUTE RESOLUTION SPECIAL. R ULES OF COURT 203
0.'< ALTERNATIVE DISPUTE RESOLUTION
-The Specific Court. Reliefs -

The court should disregard any other ground to set aside or Procedural Rules
enforce the arbitral award, unless it amounts to a violation of pub-
lic policy. un I. Petition. The petHion shall be filed with the Regional
Trial Court Iii where the arbitration proceedings were
Combination of Causes of Action conducted; liil where any of the assets to be attached or
levied upon is located; liii) whe1-e the act to be eajoined
will be or is being performed; liv) where any of the parties
The same principle allo,ving combinations of reliefs and the
dismissal of petitions or petitions-in-opposition seeking re·liefs filed to the arbitration resides or has his place of business; or
beyond the reglement.ary periods applicable to the confirmation (v) in the National Capital Judicial Region, at the option
enforcement or setting aside of domestic arbitral a\vards, are appli~ of the petitioner.•..-:
cable to international commercial arbitral awards. The petitions to set aside, for recognition and enforcement,
Hence, petitions for recognition and enforcement and setting to set aside in opposition to a petition for recognition or en-
aside of international commercial arbitral awards rendered in the forcement, and for recognition and enforcement in opposi-
Philippines may be. filed_ in the fkst instance. They may also be tion to a petition to set aside, shall be verified"' and shall
filed by way of petit1ons-m·oppos1bon. Considering that the period state Iii the addresses of record of the parties; (ii] that the
for filing a petition fo! the recognition of an !CA award is anytime arbitration agi·eement or submission exists; liii) the names
after it _has been. received_ by the part~ se~king its recognition, and of the arbitrators and proof of their appointment; liv] that
the penod for fihng a petition for setting tt aside is anytime within an arbitral award was issued and the date when the peti·
three (3) mon~s. from re~tpt ther~~f bi; the party seeking to set it tioner received it; and (v] the relief sought. The petitioner
aside, the poss1bili~ of filu~g a petition-in-opposition is greater and shall attach to the petition (i) an authentic copy of the arbi-
the· overlapping penod durmg which the petition-in-opposition can tration agreement; Iii] an authentic copy of the arbitral
be filed is longer, for !CA awards than those for domestic arbitral award; (iii] the verificstion and certification of non-forum
awards. shopping; and (iv] an authentic copy of the appointment of
the arbitrator or the members of the arbitral tribunal."' In
The proscription against forum shopping is als t · ti b-
served in the filing of these combined petitions 0
· · h b fil d ·
° s "t.cti. y ~
· nee a pe 1 on 1or
addition, the petition to set aside and petition to set aside
in opposition to a petition for recognition and enforcement
recognition _a~ e~n e .m court, the adverse party cannot file a should st.ste the grounds relied upon therefor."'
separate petition 1or setting aside, but must se k th t. 1· f b
fir t•t· - . . , e a re te y 2. Notice, opposition and reply. If the petition is sufficient
. tng a pe 1 1on-m-oppos1t1on 1or setting aside the arbitral award
in the same proceeding. Similarly, once a petition for setting aside in form and substance, the court shall cause a notice and
has been filed in court, the adverse pa.rty cannot file a scpa t a copy of the petition to be delivered to the respondent di-
p_e n· f< •• b
1 ~on or r~cogmt1on, ut must seek that relief by filing a peti·
ra e recting him to file an opposition thereto, including a peti-
tlon·m·oppos1tion for recognition in the same proceeding. tion for recognition or to set aside in opposition thereto, if
not yet time-barred, within fifteen (15) days from receipt
of the petition. The petitioner may file a reply within fif-

. '" Rule 19.10, Special ADR Rules. See Fr,,,,hauf Electronics Pltilip- •n Rul<> 12.3, Special ADR Rules.
p~nes Corporot1on u. Tecluwlogy Ekctnmics As8cmbly and Management Pa- "" Ruic 12.6, Special ADR Rul<>s.
cifu: Corporation, supra; Mabultay Hot.dings Corporati,on v. &mbcorp Logis· >M Rule 12.7(A), Special ADR Rules.
ticts Limited, supra. '" Rule 12.7<B), Special A.DR Rules.
204 ALTERNATIVE DISPUTE RESOLUTION
SPECIAL R ULES OF COURT 205
O:< ALTER:<ATIVE DISPUTE R£SOLl.iT10N
- The Specific Court Relief's-

teen (15) days from receipt of the opposition or petition in arbitral award and may award costs including attorney's
opposition. fees. The court shall not disturb the arbitral tribunal's de-
3. Hearing. The court may conduct the hearing through (i) termination of facts or interpretation of the law."°
the submission of briefs of legal arguments if the issue is 6. Relief from court actio11. The court order setting asi~e,
mainly one of law; or (ii) the submission of affidavits of
dismissing the petition to set aside, recognizing and en-
witness~•· reply af!idavits and documents in support
forcing, or dismissing the petition to recognize, an ICA
thereof if there are issues of fact relating to the grounds award may be the subject of a motion for reconsideration
relied upon for the petition. Up to this point, the proceed-
ings are summary in nature. or an appeal"'" by way of a petition for review with the
Court of Appeals under the Special ADR Rules, but not of a
If, on the basis of the petition, the opposition, the affida- petition for certiorari. 191
vits and reply affidavits, the court finds a need to conduct
an oral hearing, it shall ~et the case for hearing during A court order suspending the proceedings to set aside an
which the affidaVJts of witnesses sball take the place of !CA award and referring the case back to the arbitral tri-
their direct examination.'.. Upon this stage, the proceed- bunal, or adjourning or deferring a ruling on a petition to
ings become non-summary in character. set aside, or recognizing and enforcing an ICA award, are
susceptible of motions for reconsideration or petitions :Or
4. Suspension of the P'"'!ceedings. In a petition to set aside, certiorari'" under the Special ADR Rules.
the ~ourt: upon moti~n of a party, may suspend the pro-
ceedings 1n order to give the arbitral tribunal an opportu- A court order allowing a party to enforce an award pend-
nity to resume ing appeal, or adjourning or deferring a ruling on whetl:er
·u I'the ·arb1tral
h
proceedings or take sueh o ther
action has Wl e im1nat: ~· e grounds for setting aside. The to set aside, or recognize and enforce an ! CA award may
r.nurt. owe;.er;.,icanno d trect the arbitr~I tribunal to ro· be the subject of a petition for certiorari'" as provided in
visde. the ~ ;,t\ awar i°n? way or the other' revise its the Special ADR Rules.
fin ings o ~ ~rdcone us1ons of law' or othenvise en·
croach upon c m ependence of the arbitral t .b I.
making the final award. ri una m le. Recognition and Enforcement of
Foreign Arbitral Award•
Also, whe',' the _pre~in:'in 117 niling of an arbitral tribunal (Rules 13.l to 13.12, Specia/.ADR Rules)
afflrmmg /(~ ]llJ'/Bd1cbon.has been appealed to the court,
the .proceedul_gs for setting aside may be suspended to A foreign arbitral award is one that is made in a country
await the rubng of the court on such pending appeal or other than the Philippines.'" It includes an international commer-
may be consolidated with the earlier appeal.'" ' cial arbitral award rendered in an ICA whose seat is outside the
5. Judg~nt. Th~ arbitral award carries with it the pre-
sumption of havmg been made and released in due course "'Rules 12.13 and 12.14, Special ADR Rules.
and is s~bject to enforcement by the court."' In resolving "' Rules 19.l and 19.12, Special ADR Rules. See Fyfe v. Philippine
the petition, the court shall either set aside or enforce the Airlines, Inc.:- supra.; Fruehtzuf Electronics Plu.ltp~r.nes Corporation v. T~lt·
noJogy Electronics Assembly and MwUJge1ne.nt Pacific Corporation, supra.
'"Rules 12.9 and 12.10, Special ADR Rules. "' Rule 19.26, Special ADR Rules.
'" Rule 12.11, Special ADR Rules. '"' Rules 19. l and 19.26, Special ADR Rules.
,,. Rule 12.12, Special ADR Rules. '" Rulo 19.26, Spccinl ADR Rules.
'" Rule l. ll(d), Special ADR Ru!••·
206 ALTERNATJV& DISPUTE Res<>LUTION SPECIAL Rm.ES OF COURT 207
ON A LTE RNATIVE DISPUTE RESOLUTION
- The Specific Court Reliera -

Philippines. The recognition and enforcement of foreign arbitral under the authority and jurisdiction of another state. This is rooted
awards is governed by the 1958 New York Convention on the Rec- in the international law principle of equality among states. 191 Thus,
ognition and Enforcement of Foreign Arbitral Awards (New York no state can exercise the power to review, revise, amend, modify,
Convention) and Rule 13 of the Special ADR Rules. '" supplant, set aside, alter, revoke or cancel the decision of a foreign I
Rule 13 of the Special ADR Rules is applicable only to con- court or tribunal. All that Philippine courts may do is to recognize
vention and as·in convention. awards. A conuention award is a them or refuse to recognize them."' Thus, there is no rule or pro-
foreign arbitral award made in a state which is a party to the ceeding for the vacation or setting aside of foreign arbitral awards.
New York Convention . And an as~i..n. convention award is one
1116 As such, combination of reliefs is not available for foreign arbitral
which, although rendered in a state ~hich is not a party to the awards.
New York Convention, may be recognized and enforced by Philip- The grounds upon which Philippine courts may refuse recog·
pine courts by reasons of comity and reciprocity as if it is a con- nition and enforcement t.o foreign arbitral awards which, except for
vention award. no. l(e) below, constitute the same grounds for setting aside an
Rule 13 is not applicable to foreign arbitral awards rendered !CA award, are the following:'"
in a non-conven.~on _country which do~s not extend comity or recip-
rocity to the Phibppmes (Mn.-conuention awards). They may never- 1. The party making the application to refuse recognition
theless be recognized and enforced under Section 48, Rule 39 of the and enforcement furnishes proof that:
1997 Rules of Civil Procedure, which provides that: a. A party to the arbitration agreement was under some
incapacity, or the said agreement is not valid under
"SEC. 48, Effect offoreignjudgments or finai ordm.- the law to which the parties have subjected it Ot, fail-
The effect of a judgment or final order of a tribunal of a foreign
ing any indication thereof, under the law of the coun-
cou.n try. having jurisdiction to render the judgment or final or·
der i& as follows: try where the award was made;
(a) In the case of a judgment or final order upon a spe- b. The party making the application was not given
cific thing, the judgment or final order is concl usive upon prope.r notice of the appointment of an arbitrator or of
the title to the thing; and the arbitral proceedings or was otherwise unable to
(b ) In case of a judgment or final order against a per- present his case;
son, the judgment or final order is Presumptive evidence of c. The award deals with a dispute not contemplated by
a right as between the parties and their successorll in or not falling within the terms of the submission to
interest by subsequen t title. arbitration, or contains decisions on matters beyond
In either case, the judgment or final order may be re- the scope of the submission to arbitration; provided
pelled by evidence of want of jurisdiction, want of notice to the that, if the decisions on matters submitted to arbitra-
party, collusion, fraud, or clear mistake of law or fact.• (Em-
phasis supplied) ~' ..The principle is more fully fleshed out in the provision of the
Montevideo Convention of 1933 that 'states are juridically equal, eajoy the
Philippine courts do not have the authority to set aside, cor- same rights. and have equal capacity in their exercise. The rights of each
rect or modify foreign arbitral awards they having been rendered one do not depend upon the power it possesses to assure its exercise, but
upon the simple fact of its existence as a person under international law."•
('lntemationol Law," 1984 ed., by Isagani Cruz, p. 105).
"' Rule 13.4, Special ADR Rules. '" Rule 13.12, Special ADR Rules.
'"Article 4 . 36(AJ, IRR. "' Rule 13.4, Special ADR Rules.
208 ALTERNAT!VE DISPUTE RllSOLUTION SPE<:IAL RULES OF CoURT 209
ON ALTERNATIVE DISPUTE RESOLUTION
- The Specific Court Reliefs -

tion can be separated from those not so submitted, Procedura,l Rules

only that part of the award which contains decisions
on matters not submitted to arbitration may be re- The following are the procedural rules in petitions for the rec-
fused recognition; ognition or enforcement of convention and as-in convention foreign
d. The composition of the arbitral tribunal or the arbi- arbitral awards:
tral procedure was not in accordance with the agree-
ment of the parties, or, failing such agreement, was I. Petition. The petition can be filed at any time after re-
not in accordance with the law of the country where ceipt of the foreign arbitral award and shall be filed with
arbitration took place; or the Regional Trial Court [i] where the assets to be at-
tachArl nr levied upon a.re )oeQted ; {iii where the act to be
e. The award has not yet become binding on the parties enjoined is being performed; Uii) where the principal
or has been set aside or suspended by a court of the place of business in the Philippines of any of the parties
country in which that award was made; is located; (iv) if any of the parties is an individual,
where any of those individuals resides; or [vi in the Na-
2 . Or the court finds that: tional Capital Judicial Region, at the option of the peti-
a. The subject m~tter .of the dispute is not capable of set- tioner.201
tlement by arb1trab.on under Philippine law; or The petition shall state [ii the addresses of the parties; (iii
b. The recognition or enforcemen~ of the award would be in the absence of any indication in the award, the country
contrary to public policy. where the arbitral award was rendered and whether such
country is a signatory to the New York Convent~on; an~
No other ground shall be considered by the court. This ex- [iii) the relief sought. The petition should contain an l•I
clusionary rule was applied by the Supreme Court in the case of authentic copy of the arbitration agreement; !iii an '.'u-
Tuna Processing, Inc. u. Philippine Kingford, Inc.,"" where the thentic copy of the arbitral award, and [iii] a translation
issue for resolution was: "does a foreign corporation not licensed of the arbitral award or the agreement certified by an offi-
to do business in the Philippines have legal capacity to sue under cial, sworn translator, or a diplomatic or consular agent, if
the provisions of the Alternatiue Dispute Resolution Act of 2004?• these documents are not in English."'
The Supreme Court answered in the affirmative and held that
2. Notice and opposition. If the petition is sufficient in form
"the opposing party in an application for recognition and en-
forcement of the [foreign) arbitral award may raise only those and substance, the court shall cause notice and a copy of
grounds that were enumerated under Article V of the New York the petition to be delivered to the respondent who may file
Conuention, x x x not one of [which) x x x touched on the capacity a verified opposition thereto within thirty (30) days from
to sue of the party seeking the recognition and enforcement of the receipt of the notice and petition."'
award." 3. Hearing. The court may conduct the hearing through [ii
the submission of briefs oflegal arguments if the issue is
mainly one of law; or [ii] the submission of affidavits of

"' Rules 13.2 and 13.3, Special ADR Ruin

'M Rule 13.5, Special ADR Rules.
"' 667 SCRA 287 (2012), pp. 301-307; emphasis supplied. "" Rules 13.6 and 13.7, Special ADR Rule3.
210 ALTERNATIVE DISPUTE RESOLU'f!ON SPECIAL R ULES OF CoURT 211
ON ALTERNATIVE DISPUTE fu:SOLlJTION
- The Specific Court Reliefs -

witnesses, reply affidavits and documents in s upport 5. Relief from court action. The court order recognizing
thereof if there are issues of fact relating to the grounds and enforcing, or refusing to recognize or enforce, a for-
relied upon for the petition. The proceeding is summary eign arbitral award, may be the subject of a motion for
up to this stage. reconsideration and an appeal' .. through a petition for
If, on the basis of the petition, the opposition, the affida- review under the Special ADR Rules, but not a petition
vits and reply affidavits, the court finds a n eed to conduct for certiorari.in• However, a court order allowing a party
an oral hearing, it shall set the case for hearing during to enforce a foreign a rbitral award pending appeal is
which the affidavits of witnesses shall take the place of susceptible of a petition for certiorari"' under the same
their direct examination.'°' From this stage, the proceed- Rules.
ings are non-summary.
4. DecU;k>n. As in the case of an international commercial
arbitral award, it is presumed that a foreign arbitral
award was made ~nd released in due course of the arbi-
tration and is subJect to enforcement by the court."' Hav-
ing been rendered by a foreign arbitral tribunal over
which Philippine co~~ ~o not have jurisdiction, the lat-
ter do not l;u.•ve the JUd_ietal power to set aside, annul, va-
cate, or modify the fo~e>.gn arbitral award. Neither can the
court disturb ~he arbitral tribunal's determination of facts
or interpretation of the law."'
In resolving the peti~i_on, the court shall either [i) recog-
nize and enforce; or [uj refuse to recognize or enforce the
foreign arbitral award,'" depending on the presence or
absence of any of the grounds to refuse the recognition or
enforcement.
The court may acljourn or defer the rendition of a decision
if in the meantime an application for the setting aside or
suspension of the award has been made with a competent
authority in the country where the award was made. The
court, upon the application of the petitioner may require
the other party to give suitable security.'" '

,.. Rules 18.8 and 18.9, Special ADR Rules.

"' Rule 18.11, Special ADR Rules.
"" Id. "' Rules 19.l and 19.12, Special ADR Rules.
11>t Id.
,,. Rule 19.26, Spacial ADR Rules.
"'Rule 18.10, Special ADR Rules; Saction 42, ADR Act. 111 /d.
 Si'F.CIAI. RULES Ot' COUR'f 213
ox A t T r;H!\ATIVE D1SPL.TE Ri::SOLUTIOK
- ) lotion fur R('c<:nsidcr::uio1l, Appcnl nnd Certiorari -

3. S pecial Civil Action for Certiorari (Rules 19.26 to 19.35,

id.); and
CHAPTER 9 4. Appeal by Certiorari to the Su preme Court (Rules 19.36
to 19.42, id.).
SPECIAL RULES OF COURT ON Under Rule 22.1 of the Special ADR Rules, "(t)he provisions of
ALTERNATIVE DISPUTE RESOLUTION the Rules of Court that are applicable to the proceedings enumer·
atcd in Rule 1.1 of these Special ADR Rules have either been in-
cluded and incor porated in these Special ADR Rules or specifically
referred to (tl h c r 4i 1\.'' In othei· \ V(>rds;, nll nllo\vablA ::in d Applicabl e
MOTION FOR RECONSIDERA2'1UN
remedies from jud icial issuances of the Regional Trial Courts and
APPEAL AND CERTIORARI '
the Court of Appeals in ADR related cases have been enumerated
in Rule 22. l of the Special ADR Rules. Hence, following the statu-
As an indication of the importance given by the J d .. tory construction principle of exprcssio unios est exclu.sio alterius,
ADR the Supreme Court included in the Special ADR ~ >~1ary to unless an intended judicial remedy is provided for in the Special
cific 'provisions on motions for reconsideration appealsu ess s~e·l ADR Rules, that 1·emedy cannot be availed of. This position was
· · d f · • . pec1a
civil actions for cert1oran, an pe itions for revie\v on cert· . sustained by the Suprc1ne Court in Deparnwnt of Env1:ro11nient and
fron: decisions in ADR related cases. The inclusion of th iora'.' Natural Resources (DENRJ u. United Planners Consultants, Inc.
. d by the publi 1· ese provi-
sions \Vas occas1one . . . . c po icy to promote ADR d (UPC/).' as follows:
make ADR as expeditious, inexpensive least d . an
. I . I . . ' a versanal and "Further, let lt be clarified that - contrary to petitioner's
effective as possib e m reso ving disputes a nd conh· . . '
I d I · h . ..ove1s1es. 1n- stance - resort to the Rules of Coul"t even in a supp1etor-y ca~
stead of mere Y ec i:f'"g t ~ P~fvisions of the 1997 Rules of Civil
1
Procedure supp1eto~ Y :pp ica e t~ ADR related cou rt proceed-
pacity is not a llowed . Rule 22.l of the Special ADR Rules ex-
plicitly provides that '(tJhe provisions of the Rules of Court that
ings, thefSAD up~med : r .' ~ r~ogmt1on of the special and peculiar arc applicable ta the proceedings enumerated in Rule 1.1. of
nature o an e JU c1 proceedings necessitateri b ti these Spcciol ADR Rules have either been included and in·
enacted as part of the Special ADR Rules specific provi;;'o iem, corpor·ated in these Special ADR Rules or specifi.cally r e·
. d 1c1a
t h ese JU . an d n10d es a f review.
. . I remed tes ns on
{erred to herein.''! Be.sides. Rule 1.13 thereof provides that 'li h1
oituat.ion" "'here no SJ)t=\:ifit 1·ulc i$ provided und'in- tho Special
t<ule !9 ofrthe ~P ~cial.ADRhRules covers the remedies avail-
1
a ble to parties 1or c a eng1ng t e orders, decisions or · d ts
ADR Rules, the court sha11 resolve such n1at.ter $un1marily and
ren?ered by the Regio.nal Tria l Courts on matters relati~~ t~~t~r­
be guided by the spirit and i 11tent of the Special ADR Rules
and the ADR La\vs.' ,,
nattn dispute resolution. These remedies are:
1. Motion for reconsideration (Rules 19.l to 19. 11 s ·1 The judicial remedies provided for under Rule 19 of the Spe-
ADR Rules); • pecia cial ADR Ru les shou ld be distinguished fro m those available
against an order, action, inaction or a\vtu·d of an arbitrator, arbi·
2. Appeal to the Court of Appeals <Rules 19.12 to 19.25, id.);
' G.R. No. 212081, February 23, 2015. See also Fruehauf Electronics
Philippines CorporatU:ni v. Tceluu>i.ogy Elect.rouics Assen1bl.y and lt1anagernent
212 Pacific Corporation, G.R. No. 204197, November 23, 2016.
1
See Rule 22. 1 of the. Special ADR Rules; e 1nphasis supplied.
214 ALTERNATIVE DISPUTE RESOt.UTION SPECIAL R ULES OF CoURT 215
ON A L.TERNATIVE DISPUTE RESOLtmON
- Motion ror Reconsideration, Appeal and Certiorari -

tral tribunal or mediator as the case may be which have been dis- 11. Dismissing the petition to set aside an international
cussed in the previous chapters. commercial arbitral award even if the court does not rec-
ognize and/or enforce the same;
M o tion fo r R econ1ide r ation 12. Recognizing and/or enforcing, or dismissing a petition to
(Rules 19.1 to 19.11, Special ADR Rules) recognize and/or enforce an international commercial ar-
bitral award;
Ordinarily, a motion for reconsideration under Rule 37 of the 13. Declining a request for assistance in taking evidence;
1997 Rules of Civil Procedure may be filed on the grounds that the 14. Adjourning or deferring a ruling on a petition to set aside,
findings or conclusions of the judgment or final order "are not sup- recognize and/or enforce an international commercial ar-
ported by evidence or xx x are contrary to law."' bitral award;
On the other band, a party aggrieved by a ruling of the Re- 15. Recognizing and/or enforcing a foreign arbitral award, or
gional Trial Court in an ADR related proceeding, may file with the refusing recognition and/or enforcement of the same; and
same Regional Trlal C'.0 =t: a .m~tion for reconsideration from the 16. Granting or dismissing a petition to enforce a deposited
following orders or rulings, within fifteen Cl5) days from receipt of mediated settlement agreement.
thereof:'
1. That the arbitration agreement is inexistent invalid or The motion shall be in writing, filed with the court and
unenforceable pursuant to Rule 3.lO(B); ' served upon the other party or parties who shall have a .no?'-
extendible period of fifteen (15) days from receipt thereof within
2. Upholding or reversing the arbitral tribunal's jurisdiction
pursuant to Rule 13.19; which to file an opposition or comment.• The opposition or com-
ment is the last pleading allowed to be filed . The court shall re-
3. Denying a request to refer the parties to arbitration· solve the motion for reconsideration within thirty (30) days from
4. Granting or denying a party an interim measure ~f pro- receipt of the opposition or comment or the expiration of the pe-
tection; riod to file the same.' As in motions for reconsideration under
5. Denying a petition for the appointment of an arbitrator· Rule 37 of the 1997 Rules of Civil Procedure, second motions for
6. Refusing to grant assistance in talting evidence; ' reconsideration are prohibited.'
7. Eajoining or refusing to eajoin a person from divulging No motion for reconsideration shall be allowed from the fol-
confidential information; lowing rulings and orders of the Regional Trial Court:'
8. Confirming, vacating or correcting a domestic arbitral 1. A prima facie determination upholding the existence, va-
award; lidity and enforceability of an arbitration agreement pur-
9. Suspending the proceedings to set aside an international suant to Rule 3.1 (A);
commercial arbitral award and referring the case back to 2. An order referring the dispute to arbitration;
the arbitral tribunal;
3. An order appointing an arbitrator;
10. Setting aside an international commercial arbitral award;

'Rule 19.3, Special ADR Rules.

' Section 1, Rule 37, 1997 Rules of Civil Procedure. 'Rule 19.4, Special ADR Rules.
• Rule 19.1, Special ADR Rules. ' Rule 19.5, Special ADR Rules.
• Rule 19.2, Special ADR Rules. ' Id.
216 ALTERNATIVE DISPUTE RESOLUTION SPECIAL Rlll.ES OF CoURT 217
ON ALTERNATIVE DISPUTE R ESOLUTION
- Molion (or Reconsjderation, Appeal and Certiorari -

4. Any ruling on the challenge to the appointment of an ar• parture by a lower court, as to call for ao exer-
bitrator; cise or the power of supervision.•.l.J
5. Any order resolving the issue of the termination of the
mandate of an arbitrator; and 4. And s pecial civil action for certiorari (petition for certio-
rari) to the Court of Appeals under Rule 65 of the 1997
6 . An order granting assistance in taking evidence.
Rules of Civil Procedure on the ground of grave abuse of
discretion amounting to lack or excess of jurisdiction
Gem!ral Proviawn• on Appeal a•d Certiorari when there is no appeal or any plain, speedy and ade-
quate remedy under the ordinary course oflaw."
Under the 1997 Rules of Civil Procedure, the modes of review
by the Court of Appeals and the Supreme Court of decisions or When the Special ADR Rules speaks of appeals and petitions
orde.r s of the Regional Trial Courts are: for certiorari of rulings of the Regional Trial Court to the Court of
Appeals, or petitions for review on certiorari of the resolutions or
1. Ordinary appeal by notice of appeal under Rule 44 of the decisions of the Court of Appeals to the Supreme Court, it refers to
1997 Rules of Civil Procedure to the Court of Appeals on

2.
.
errors of fact, or mixed fact and law· ••
Petition for review to the Court of Appeal d Rul 42 of
petitions akin to those under Rule 42 (petition for review to the
Court of Appe als); Rule 45 (petition for review on certiorari to the
Supreme Court); and Rule 65 (petition for certiorari to the Court of
the 1997 Rulea of Civil Procedure d s .~ er f the 0 _ Appeals) of the 1997 Rules of Civil Procedure. Ordinary appeal,
. al Trial Court d . on ecis1ons o e ""'"'
~o~ di f ren ered m the exercise of its appellate such as that taken to the Court of Appeals from a decision of the
Jun5 c ion, on e1Tors of fact, or mixed fact and law;" Regional Trial Court rendered in the exercise of its original exclu-
3. Appeal by certiorari (petition for review on certiorari) di· sive jurisdiction, is not available under the Special ADR Rules."
rect to th~ ~upreme Court under Rule 45 of the 1997 The Regional Trial Court, in passing judgment over actions invol·
Rules of C1VJl Procedure on pure questions of law" such ving ADR, is not exercising its original jurisdiction. Rather, it is
as: acting as a review court for decisions, orders and awards of the
arbitral tribunal. Hence, ordinary appeal to the Court of Appeals is
~(a) When the court a quo has decided a not an available r emedy.
q~estion of substance, not theretofore deter- There are distinctions, however, between the foregoing m odes
~ed by the Supreme Court, or has decided it
in a way, ~robably not in accord with the appli·
of appeal and r eview under the 1997 Rules of Civil Procedure and
cable decl81ooa of the Supreme Court; or those to which they may be similar to under the Special ADR Rules.
(b) When the court a quo has so far de- In the allowable appeal or review in ADR related cases, the
parted from the accepted aod usual course of j u- appellate or reviewing court must take into account the following
dicial proceedings, or ao far sanctioned such de- principles which should have been observed by the Regional Trial
Court whose order or decision is under review:

" Section 2(a), Rule 41, 1997 Rules of Civil Procedure " Section 6, Rule 45, 1997 Rules of Civil Procedure.
" Section 2(b), Rule 41, and Section 2, Rule 42, 1997 Rules of Civil " Sect ion l , Rule 65, 1997 Rules of Civil Procedure.
Procedure. " Fyfe 11. PhilippiM Airlines, Inc., G.R. No. 160073, June 6, 2016;
11
Section 2(c), Rule 41, and Section 1, Rule 45, 1997 Rules of Civil Pnuhauf Ekctronics Philippines Corporoticn v. Technalqfy Electronics As-
Procedure. •ml>IJ! and ManlJIJement Pacific C<NP""'tion, tWpm.
218 ALT&RNATIVE DISPUTE RESOLUTION
SPEC IAL Rt"LES OF CoURT 219
0 1' A1.TM<1'ATl\'E D1sren: RESOumor;
- '.\Int ion (or lteroM1deration. Appeal ond Certiorari -

l. A party to arbitration is precluded from filing an appeal

tral award" because it was rendered by an entity outside
or a petition for certiorari questioning the merits of an ar-
Philippine jurisdiction.
bitral award.,. This is because an agreement to refer a
dispute to arbitration is tantamount to an implied agree-
ment that the arbitral award shall be final and binding. Appeal l o the Court of Appeals (Petitio11 f or RevieuJ)
Moreover, the court shall not set aside or vacate an award (Rules 19.12 to 19.25, Sj)ecial ADR Rules)
merely on the ground that the tribunal commi:ted errors
of fact or law, ns the court cannot substitute its judgment An appeal from final orders and judgments of the Regional
for that of the nrbitral tribunal." Trial Courts in ADR related cases to the Court of Appeals under
Rules 19.12 to 19.25 of the Special ADR Rules is akin ton petition
2. Appeals thro~gh ~titions fo~ ~eview and special civil ac- under Rule 42 of the 1997 RuJes of Civil Procedure which is based
tions for ccrtioran from decIS1ons of the Regional Trial
on errors of fact or mixed fact and lnw." The appeal is denomi-
Court are exceptional remedies. They shall be allowed
noled in the 1997 Rules of Civil Procedure as well as in the Special
only in lhe ins~ances provided under the Special ADR
ADR Rules as u "petition for review."
Rules and only rn the manner prescribed therein." More-
over, they are mutually exclusive remedies such that re- Although similar to a Rule 42 petition, the a_llowed ~ppenl to
course to one precludes recourse to the other.•• the Court of Appeals from the decisions of the Regional Tnal Co~rt
in ADR related cases is not based on Rule 42 or 45, but on Section
s. As n general rule, the grounds and infirmities provided 26 of the ADR Act of 2004. Indeed:
for under R.A. No. 876 (Arbitration Law), the Model Law,
und the SpcciaJ ADR Rules for vacating or setting as i11P. n "Rule 45 is not the remedy available to petitioncra aa tho
domestic arbitral award or an international commercial 1woper rnode of oppcnl assa iling the decision of the RTC con-
arbitrnl award, as the case may be, are exclusive. No firming nn a rbitro l awaJ-d is an appeal before the CA pursuant
other ground can be raised therefor except if it amounts to lo Sec. 46 of Republic Act No. (RA) 9285, otherwise known. ns
a violation of public policy. 20 lhc Alternatit¥! Dispute Resolution Act of 2004, x x x.• (Equ~ta­
ble PCT Ba11/d11g Corporation v. RCBC Capital Corporat1011,
4 . The court can deny recognition and enforcement of a for- 574 SORA 858 (20031, pp. 870-871; see also: &rea Tcc/1nolo-
eign arbitral award only upon the grounds provided for in gies Co., Ltd. u. L<mra, 542 SORA 1 (20081)
Article VI of the New York Convention." The court does
Under the Special ADR Rules, the petition for r~view to tho
not have the power to vacate or set aside a foreign arbi-
Courl of Appeals shall be allowed only from the following orders of
U1e Regional Trial Court:"
" Rule 19.7, SpeciaJ ADR Rules. a . Granting or denying an interim measure of protection;
" Ruic 19.10. Special ADR Rul.,..
" Ruic 19.8, Special ADR Rules. b. Denying a petition for appointment of an arbitrator;
' Ruic 19.9, Special ADR Rules. c. Denying a petition for assistance in ta.k ing evidence;
• Rule 19.10, Special ADR Rules. See also Tuna Processing, Inc. u.
Ph1lippi11e Kingford, I~. G.R. No. 185582, February 29. 2012; Fruehauf
ElecJromes Plrihppirte11 Corporation u. Tttlrnology Ekctronics Assembly and
Ma.~agement Pac.fie Corporatkm, aupra; Mabuhay Holdings Corp. u.
" Rule 19.11. Special ADR Rules.
Sembcorp Logistic& LimJled, OJl. No. 212734, December 5, 2018.
" Section l, Ruic 45 of the 1997 Rules of Civil Procedure.
" Tuna Processing, Inc. u. Philippine Kingford, Inc., supro.
" Rui c 19.12. Special ADR Rules.
220 ALTERNATIVE DISPUTE RESOLUTION S1•ECIAL R ULES OF C OURT 221
OX ALT ERNAT IVE DISPUTE RESOLUTION
- ~lotion fo r Rccon.sidcrnlion , Appeo1 ond Certiorari -

d. Enjoining or refusing to enjoin a person from divulging unless the Court of Appeals directs otherwise." This rule is differ·
confidential information; ent from a petition for review und.er Rule 42 of the 1997 Rules of
e. Confirming, vacating or correctingirnodifying a domestic Civil Procedu1·e wh ich stays the judgment or final order appealed
arbitral award; from" except in certain ins t a nces s uch as in cases governed by the
Rules on Summary Procedure, or when the prevailing party avails
f. Setting aside a.n international commercial arbitral award; of the remedy of execution pending appeal,"' or when t he Rules of
g. Dismissing the petition to set aside an international com- Court or the law prov ides othenvise. Precisely, the Special ADR
mercial arbitTation award even if the court does not de- Rules pr ovides one instance when the law a od the Rules specifi-
cide to recognize or enforce such award; cally proscribe the s tay of the judgment, award, final order or reso-
h. Recognizing and/or enforcing an international commer cial lution subject of the appeal.
arbitr al award; Another d istinction of the appeal under this Rule with that
i. Recognizing and/or enforcing a foreign arbitral award; under Rule 42 of t he 1997 Rules of Civil Procedure is that the
party appealing t he decision or final or der of the Regional Tt;al
j. Refusing recognition and/or enforcement of a foreign arbi-
Court under the Specia l ADR Rules shall be required to post a
tral award;
bond in favor of the prevailing pa rty equal to the amount of tJ1e
k. Granting or dismissing a petition to enforce a deposited award." Otherwise, the petition may be dis missed." This is not
mediated settlement agreement; and true for a Rule 42 petition.
I. Rever~~g the ruling of the arbitral tribunal upbolding its
jurisdiction.
Special Civil A ction for Certiorari
The appeal shall be_filed wi.thin fifteen (15) days from notice (Petition for Certiorari)
of the decision of the Regional Trial Court or th e denial of the peti- (Rules 19.26 to 19.35, Special ADR Rules)
tioner 's motion for r econsideration," by filing a verified petition for
revie\v, 24 The s pecial civil action for certior ari from the orders, deci-
sions or judgments of the Regional Trial Court in ADR related
The Court of App eals may give due course to the petition if it cases to the Court of Appeals is that referred to in Rules 19.26 to
finds prima facie that the Regional Trial Court has committed an 19.35 of t he Speci al ADR Rules and not the petition under Rule 65
error that would warrant ~e reversal or modification of the judg· of the Ru les of Court,°" although both are based on the same
rnent, final order or resolut1_o n sought to be reviewed.>' Thereafter, grounds, i.e., the Regional Trial Cou r t acted without or m excess of
the Court of Appeals may d1rect the transm ittal of records , set the its jurisdiction, or w ith grave abuse of discretion amounting to lack
case for oral a rguments, require the submi ssion of memoranda,
and render judgment.
The filing of th e appeal under this Rule shall not stay the " Rule 19.22, Special ADR Rules.
" Section 8(b), Rule 42, 1997 Rules of Civil Proced LLre.
award, judgment, linaI order or resolution sought to be reviewed " Section 2(a), Rule 39, 1997 Rules of Civil Proced ure.
" Rule 19.25, Special ADR Rules.
" Id.
" Rule 19.14, Special ADR Rules. " Depa rtment of Environment and Natura.I Resources (DENRJ v.
" Rule 19.15, Special ADR Rules. United Planners Con.sulta.nts, Inc. (UPC/}, G.R. No. 212081, February 23,
" Rule 19.20, Specia l ADR Rules in conjunction Section 6, Rule 42 of 2015; Fruehauf Electronics Plti/ippines Corporation u. Techno/.ogy Electronics
the 1997 Rules of Civi l Procedure. Assembly and Managenwnt Pacific Corporation, supra.
222 ALT~RNATIVE DISPUTE RESOLUTION S1•ECIAJ. Ruu~ oF CornlT 223
O~ ALT£1tNATIVE 01SPUTf: R ESOLUTION
- ~lotio n for RC'considcralion, Appeal and Certiornri-

or excess of jurisdiction, and there is no appeal or any plain, speedy Again, unl ike a petition for certiorari under Rule 65 of the
and adequate remedy under the ordinary course oflaw.~' 1997 Rules of Civil Procedure which can be filed within sixty (60)
days from notice of the judgment, order or resolution sought to be
Unlike a petition for certiorari under Rule 65 of the 1997
assailed,"° the special civil action for certiorari under the Special
Rules of Civil ProcedUI'e which can cover any and all kinds of grave
ADR Rules must be filed within fifteen (15) days from notice of the
abuse of discretion committed by a tribunal, board or officer exer-
cising judicial or quasi-judicial functions, the special civil action for j udgment, order or resolution sought to be annulled or set aside,
without the benefit of any extension of time to file the same."
certiorari under the Special ADR Rules is limited to grave abuse of
discretion in the following orders of the Regional Trial Cow·t in Moreover, the erroneous filing of a special civil action for certiorari
ADR related proceedings:,. under Rule 65 will not to ll the 15-day period to file the proper peti·
tion for certiorari under Rule 19 of the Special ADR Rules.
a. Holding that the arbitration agreement is inexistent in-
valid or unenforceable; ' In a petition w1cler Rule 65, the tribunal that issued the as·
sailed judgment. order or resolution shal l be named as a public
b. Reversing t.h e arb~tral ~bunal's preliminary determina- respondent to the petition although he is considered merely as a
tion upholding its JUr1Sdict1on; nominal party. Hence, it is the duty of the p.rivate respondent to
c. Denying the request to refer the dispute to arbitration; apperu· and defend in his behalf and in behalf of the public respon-
Granting or refusing an interim relief; dent."" Moreover, unless specifically required by the reviewing
d. court, the public respondent shall not appear in or file an answer
e. Denying a petition for the appointment of an ar b't
1 rator; or comment to the petition or any pleading therein."
f. Confirming, vacating or correcting a domestic arbitral The same principles obtain in a special civil action for certio·
award; reri under the Special ADR Rules. The arbitral tribltnal shall be
g. Suspen~ng th~ proceedings to set aside an international named as a party although it is merely a nominal party. As a
commercial arb1tra1 award and referring the case back to nominal party, the arbitral tribunal is not required to file any
the arbitral tribunal; pleading or written submission to the court except if such filing or
submission will serve the interest of justice.'° However, in petitions
h. Allowing a party to enforce an international commercial involving the recognition and enforcement of a foreign arbitral
arbitral award pending appeal;
award, the arbitral tribunal shall not even be included as a nomi-
i. Adjow·_tting or deferring a ruling on whether to set aside, nal pacty, but it s hall be notified of the proceedings and be fur.
recognize and/or enforce an international commercial ar· nished with court processes." This is because Philippine courts do
bitral award; not have jurisdiction over the foreign arbitral tribunal.
j. Allowing a party to enforce a foreign arbitral award pend·
ing appeal; end
k. Denying a petition for assistance in taking evidence. " Section 4, 1997 Rules of Civil Procedw·e.
" Rule 19.28, Special ADR Rules; see also: Department of Enviro11·
",.,., and Natu,.al Resources (DENRJ v. United Planners Consultants, foe.
(UPC!), supra.
" Section 5, Rule 65, 1997 Rules of Civil Procedure.
. " Ru le 19.26, Special ADR Rules; Section 1, Rule 65, 1997 Ru les of " td.
Civil Procedure (as amended). '" Rule 19.29, Special ADR Rules.
" Rule 19.26, Special ADR Rules. " ld.
224 ALTERNATIVE 01SPIJT£ RESOLtrno:s SPF.CIAL Ruu:s or CoL"RT 225
m: Al .TF.RSATl\'E DISPL"TE R£sol.l1TION
- ~lot1nn (nr Rf>oronsideration. AppeaJ and Cenlorari -

As in the case of a petition under Rule 65, the filing of a spe- 7-12-SC (4 December 2007)." As in the case of a petition under Rule
cial civil action for certiorari under the Special ADR Rules does not 45, the appeal by certiorari under the Special ADR Rules is
stay the proceedings of the lower court or arbitral tribunal. Thus, grounded on pure question s of law. The petition, whether u~der the
the arbitral tribunal or tho lower court, notwithstanding the filing 1997 Rules of Civi l Procedure or the Special ADR Ru les, 16 not a
and pendency of a special civil action for certiorari may continue matter of righ t und mny be granted on ly for serious and compelling
with the arbitrnl proceedings and render an award thereon. The reasons resulting in gmve prejudice to the aggrieved party."
pre>ceedings and award under this 6ituatie>n, he>wever, is subject te>
the final outcome of the pending petition for certiorari." Rule 45 of the 1997 Rules of Civil Procedw·e illustrated the
instances when an appea l by certiorari to the Supreme Court is
Unlike Rule 65 of the 1997 Rules of Civil Procedure which a l- warranted t her eunder, lo wit:"
lows the institution of petitions for certiorari from orders or judg-
ments of any inferior court, Rules 19.26 to 19.35 of the Special "ta> When the court a quo has decided a question of aubstonce
ADR Rules speak only of such petitions to the Court of Appeals not theretofore de1ermined bv the Supreme Court, or has
from orders, decisions or j~dgments of the Regional Trial Courts in decided it in a way probabl)· not in accord with law or
ADR related cases. The silence of the Special ADR Rules and the with the :ippl,cable decisions of the Supreme Court; or
exclusionary rule under Ru~e 22_.1 thereof preclude the filing of (b) When the court. a qua has so far departed. from I.he nc·
special civil actions for certiorari from orders, decisions or judg- cc1>tcd and usual course of judicial proceedings, or 1!0 far
ments of the Court of Appeals to the Supreme Court. Besides, the sanctioned s uch depnrture by a lower court, llB lo call for
availability of the remedy of a petition for review on certiorar i from on exercise of th~ power of supervision."
orders, decisions or judgments of the Court of Appeals to the Su- Similarly, the Special ADR Rules also deemed it best to ill_us-
preme Court under Rules 19.36 to 19.42 of the Special ADR Rules. trate instead or enumerate the instances when u iwtition fo·· review
constituting as it does a speedy and adequate remedy under the on certiorari of the decision of the Court of Appeals to the Supreme
ordinary course of law, precludes a special civil action for certio-
Court may be granted, namely, when the Court of Appeals:..
rari. Thus, the remedy of a party aggrieved by a final resolution or
decision of the Court of Appeals in an ADR related case is to file a • JU· d'
•a. Foiled to apply the applicable standard or test :or . 1 ~.18 I
petition for review on certiorari with the Supreme Court under the review prescribed in these Special ADR Rul~ ·~ amving
ADRAcl. a l 1ta decision resulting in substantial prcJud1cc to the
nggricved pnn.y;
Appe al by Certiorari to the S uprem e Court b. Erred in upholding a final order or decision Mspite the
(Pe tition for R eview 01t Certiorari) lack .of juried ction of the court that rendered such final
(Rules 19.36 t.o 19.42, Special ADR Rules) order or d~1sion;

The appeal by oertiorari t.o the Supreme Court from the final
orde rs, resolutions and decis ions of the Court of Appeals in ADR " Section l Ru ic 45 1997 Rules of Civil Procedure.
related cases provided for under Rules 19.36 to 19.42 of the Special " Rulo 19.S6, Spcci~I ADR Ru les in conjunction with Section 6'. Rule
ADR Rules is akin to a "petition for review on certiorari" under Rule 45, 1997 Ru les of Civil Procedure; See also: RCBC Capital Corporot 1 ~1~ v.
Boneo de Oro U11ibonk, Inc., 687 SCRA 583 12012), pp. 616·618, citing
45 of the 1997 Rules of Civil Procedure, as amended by A.M. No. 07- Asset Privatization Trust v. Court of Appeals. G.R. No. 12117 l, December
29, 1998.
•Section 6, Ruic 45. 1997 Rules of Civil Procedure.
" Rule 19.32, Special ADR Rules. " Rule 19.36. Speciol AOR Rules.
226 ALTERNATIVE DISPUTE R ESOLUTI01' SPECIAi. RULES OF CounT 227
o:--i ALn:R:<ATIVE DISPUTE RF.SOLU1'10N
- ~lo tion for Rccons.iderntion, Appenl and Certiorari -

c. Failed to apply any provision, principle, policy or rule d. Committed an error so egregious and harmful to a
contained in these Special ADR Rules resulting in sub- party as to amount to an undeniable excess ofjurisdiction.
stantial p~ejudice to the aggrieved party; and
The mere fncL that the petitioner disagrees with the
d. Committed an error so egregious and harmful to a party
as to amo'.mt to an undeniable excess of jw·isdiction.• Court of Appears determination of questions of fact, of law or
both questions or facl and law. s hall not warrant t he exercise of
tbe Supreme Cou rL's discretionary power. The error imputed
The nature and extent of judicial review through a petition to the Court of Appeals must be ground ed u pon any of
for review under the Special ADR Rules was explained by the Su- the above prescribed grounds for review or be closely
preme Court in RBCB Capital Corporation u. Banco de Oro Uni- analogous thel"eto.
bank, lnc.," as follows:
A mere general allegation that the Court of Appeals
committed a serious and substantial error or that it has acted
"Judicial Reuiew
with grave abuse of disci'etion resulting in substantial preju-
dice to the petitioner without indicating with specifidty the ~a­
At the outset, it must.be stated that a review brought to ture of such error or abuse of discretion and the senous preJU-
tbis Cour~ under the Special ADR Rules is not a matter of dice suffered by the petitioner on account the1'eof, s~all. consti-
right. Rule 19:36 of safd Rules ~pecitied the conditions for the tute sufficient ground for the Supreme Court to dismiss out·
exercise by this Court 8 discretionary review of the CA's deci- right the petition. (Emphasis supplied)"
sion.
Rule 1 9.3~. Reuiew discretionary. - A review by the The petition shalJ be filed with the Supreme Court within fif-
Supreme Court 15 n.ot a matter of right, but of sound judicial teen (15) days from notice of the Court of Appeal's jud?D"ent or
discretion, wruch will be granted only for serious and com- final order or resolution appealed from, or from the. de~al ~f the
p elli n g r easons resultin~ in grave pr ejudice to t he ag- petitioner's motion for new trial or reconsideration, without
grieved p~ty. The fo}Jtiwing, while neither controlling nor prejudice to a motion for the extension the1·eof for a period of thirty
fully measunng the court's discretion, indicate the serious and (30) days for justifiable reasons."
compelLing, and necessarily, restrictive nature of tbe grounds
that will warrant the exercise of the Supreme Court's discre- The Supreme Court may 1nol11 proprio deny the p~tition on
tionary powe1·s, when the Court of Appeals: the ground that it is without merit, or is prosecute~ manifestly for
delay, or that the questions raised therein are to? ~substantial to
a. Failed to apply the applicable standard or t est require consideration .,, which is also true for petitions under Rule
for judicial review prescribed in these Sp ecial ADR 45 of the 1997 Rules 'or Civil Procedure." Otherwise, the Supr eme
R ules in arriving at its decision resulting in substantial pteju- Court may give the petition due course, require the ele~ation of the
dice to the agW.eved pa1ty; complete records of the case or specified parts thereof.'· a nd render
b. Erred in upholding a final order or decision despite judgment thereon.
tbe lack of jurisdiction of the court that l"endered such final or-
der or decision;
c. Failed to apply a ny provision, principle, policy or rule
contained in tbe•e SIJ"Cial ADR Rules resulting in substantial
prejudice to the aggrieved party; and "Rule 19.37, Special ADR Rules.
" Ru le 19.38. Special ADR Rules.
•• Rule 19.41, Special ADR Rules.
" Section 5, Rule 4 5, 1997 Rules of Civil Procedure.
"Supra., pp. 615-618; emphasis supplied. " Ru le 19.42, S1>ecial ADR Rules.
228 ALTERNATIVE DISPUTE RESOLUTION

While the Special ADR Rules provides for petitions for review
on certior ari from the resolutions and decisions of the Court of
Appeals to the Supreme Court, it is silent on the availability of a
petition for review on pure questions of law direct from the Re- CHAPTER 10
gional Trial Courts to the Supreme Court which is allowed under
Rule 45 of the 1997 Rules of Civil Procedure."' Rule 19.37 of the
Special ADR Rules speaks only of judgments, final orders or reso-
lutions of the Court of Appeals as being reviewable in a petition for SPECIAL RULES OF COURT ON
review on certiorari thereunder. Considering that the Special ADR ALTERNATIVE DISPUTE RESOLUTION
Rule s are s pecific rules while the 1997 Rules of Civil Procedure are
of general application, the Special ADR Rules prevail under this
situation. Indeed, the unavailability of a Rule 45 petition from a PROVISIONS SPECIFIC TO MEDIATION
final order or judgment of the Regional Trial Court in ADR rela ted
cases to the Supreme Court has been put to rest in Equitable PCI
AND OTHER FORMS OF ADR
Banking Corporation v. RCBC06 Capital Corporation" and Korea
Technologies Co., Ltd. u. Lerma.
ProviBions S pecific to Mediation
Hence, a petition for review direct to the Supreme Cou rt (Rules 14 to 15, Special ADR Rules)
from a judgment, final order or resolution of the Regional Trial
Court in the ADR related cases enumerated in Rule 1.1 is not The general rule is that the rules of procedure for court pro-
available.'" ceedings relative to arbitration are also applicable to mediation,' to
a dispute subject to construction arbitration,' and to other forms of
ADR if more akin to arbitration than mediation,' whenever appro-
priate or are not inconsistent with the specific rules therefor.
Rules 14 to 15 of the Special ADR Rules govern the situ~tion
where the parties to mediation entered into and executed wntten
mediated settlement agreements. The parties may require 8?-Y of
the following processes or proceedings regarding the mediated
settlement agreements:
1. Deposit of mediated settlement agreements; and
2. Enforcement of the mediated settlement agreements.

' Rule 14.l, Special ADR Rules.

' Rule 16.1, Special ADR Rules.
' Rule 18.3, Special ADR Rules.
"Section l, Rule 45, 1997 Rules of Civil Procedure.
"574 SCRA 858 [2008), pp. 870-871.
.. 542 SCRA 1 [2008).
" Rule 19.8, Special ADR Rules. 229
230 ALTERNATIVE DISPUTE RESOLUTION SPECIAL RULES OF COURT 231
ON A LTE RNATIVE D ISPUTE RESOLUTION
- P rovi1ion1 Specific to Mediation and Other Forms of ADR-

These rules, however, do not cover mediated settlement ag- The verified petition s hall [ii name and designate as peti-
reements or compromise agreements arrived at in court-annexed tioner and respondent all parties to the mediated settlement
mediation' where the agreement is subject to the approval of the agreement and those who may be affected by it; and [ji) state the
court and is made part of the judgment based on compromise. addresses of the petitioner and the respondent, and the ultimate
facts that would show that the adverse party has defaulted in the
Deposit of Mediated &ttk1111!nt Agree1111!nts performance of his obligations under the agreement. The petition
(Rules 16.1to16.4, Specic.lADRRules) should contain an authentic copy of the mediated settlement
agreement and the certificate of deposit.'
In order for the mediated settlement agreement to be enforce-
The adverse party may file an opposition to the petition
able by judicial action, it must be deposited with the proper Clerk within fifteen ( 15) days from receipt of notice or the service of the
of Court of the Regional Trial Court. At any time after a mediated petition.
settlement agreement has been reached in a proceeding which is
not court-annexed, the agreement may be deposited by the parties The court shall conduct a summary hearing to determine
jointly or by one of them with notice to the other with the Clerk of whether or not the mediated settlement agreement is valid and the
Court of the Regio~~ 1:risl
Court Ii] where the principal place of respondent has breached the agreement in whole or in part, and
business in thi: P~ipp~es. o.f any of the parties is located; (ii] if render judgment accordingly by either enforcing the agreement or
any of the parttee is an ~dividual, where any of those individuals dismissing the petition.'
r esides; or [iii] in the National Capital Judicial Region.'
The Clerk of Court of every Regional Trial Court is required Provi•ion • Specific to Other Forms ofADR
to keep a Registry Book wherein to list or enroll chronologically all (Rules 18.1 to 18.6, Special ADR Rules)
the mediated settlement agreements or settlement awards that are
deposited with the court, including the names and addresses of the Rule 18 of the Special ADR Rules apply ~ early .neu~al
pa.r ties and the dates of enrollment of the agreements. He shall evaluation ' neutral evaluation , mini-trial ' mediation-arb1trat1on,
10
issue a Certificate of Deposit to the party making the deposit.' any combination of ADR forms, or any other ADR form.
The general rule is that the rules of procedure applicable to
Enforcement ofMediated &ttk1111!nt Agree1111!nts the different forms of ADR shall be those agreed upon by the par-
(Ruks 16.6 to 16.8) ties. In the absence of such an agreement, the specific rules on
these forms of ADR s hall be applicable. In default thereof, the ru~es
Any of the parties to a mediated settlement agreement which on mediation shall suppletorily apply to the forms of ADR whi~
was deposited, may, upon breach thereof, file a verified petition to are more akin to mediation than arbitration, and the rules on arb1·
enforce the agreement with the court where the agreement was tration for those which are more akin to arbitration than media-
deposited.' If the agreement has not yet been deposited , the peti· tion."
tioner has to deposit the agreement first before filing the petition
in court.

' Rule 16.11, Special ADR Rules. ' Rule 15.6, Special ADR Rules.
' Rules 16.1 to 16.3, Special ADR Rules. ' Rule 15.7, Special ADR Rules.
' Rule 15.4, Special ADR Rules. '° Rule 18.1, Special ADR Rules.
' Rule 16.6, Special ADR Rules. " Rulea 18.2 and 18.3, Special ADR Rules.
232 ALTERNATIVB DISPUTE RESOLUTION

Thus, where the neutral third party in a neutral evaluation or

in a mini-trial merely a88ists the parties in reaching a voluntary
agreement, the ADR form is akin to mediation and the rules on CHAPTER 11
mediation will have euppletory application. On the other hand, if
the neutral third party is given the power to render a binding reso-
lution of the dispute, the ADR form is akin to arbitration and CONSTRUCTION DISPUTE ARBITRATION
hence, the rules on arbitration will have suppletory application. '

Con1tru.ction DU-pute

Construction refers to ·a11 on-site works on buildinp or alter-

ing structures, from land clearance through completion including
excavation, erection and assembly and installation of compone:it.s
and equipment."'
Under the Revised Rules of Procedure Governing Construction
Arbitration (CIAC Reuised Rules) a construction di.spure shall include
"those between or among parties to, or who are otherwise bowid by,
an arbitration agreement, directly or by reference, whether such par-
ties are project owner, contractor, subcontractor, fabricator, project
manager, design professional, consultant, quantity surveyor, bonds-
man or issuer of a.n insurance policy in a construction project."'

Comtru.cti-On Arbitration Under the ADR Act of 2004

{Sections 34 to 39, ADR Act of2004; Rules 17.1to17.8,
Sped.al ADR RuksJ
The ADR Act of 2004 not only affirmed the oriJinal and exclu-
sive jurisdiction of the Construction Industry Arbitration Commis-

' Fort Bonifacio Development Corporation 11. Soro"8on., 587 SCRA

613 (2009), p. 621, citing Fort Bonifacio Development Corporatum 11. Do·
mingo, G.R. No. 180766, 27 February 2009, 580 SCRA 398, and Gammon
Philippines, !tic. 11. Metro Rail Tran.sit Deuelopmen.t Corporation, 481
SCRA 209 (2006], pp. 218-219; see also Romago, Inc. 11. Siemens Building
Technologies, Inc., 60 2 SCRA 656 (2009], p. 670.
'Section 2.2, CIAC Revised Rules; based on Section 35, ADR Act.

233
 Co:<STRUCTION DISPUTE .ARBITRATION 235
234 A.t.TERNATIVE DISPUTE RESOLUTION

sion (ClAC) over construction disputes, but also strengthened it to wise known as the "Co11structio1i Industry Ai·bitration Law." It is
include "those between or among parties to , or who are otherwise the quasi-judicial agency accorded with the jurisdi~tio':' to resol~e
bound by, an arbitration agreement, directly or by reference disputes arising from contr acts involving construction m the Phil·
whether such parties are project owner, contractor, subcontractor, ippines.
quantity surveyor, bondsman or issuer of an insu rance policy in a The CIAC is an agency under the Construction Industry Au-
construction project," and even if the arbitration is commercial in thority of the Philippines (ClAP) and is administr~tively attach?d
character.• to the Department of Trade and Industry. It consists of a Chrur-
Moreover, the ADR Act of 2004 directs the Regional Trial man and two (2) members.'
Courts before which is pr esented a construction dispute for resolu· The policy and obj ective of the ClAC is to "provide a fair and
tion, upon b ecoming aware that t he parties h ad entered in to an expeditious settle ment of construction disputes through a i:ion·
arbitration agreement., motu proprio or upon motion m ade not later judicial process which e.n sures harmonious and friendly rel~tions
than the pre-trial, not just to dismiss the case, but also to refer the between or among the parties.... Its m ission has ~n su~ctly
parties to arbit ; ation by th~ CIAC, unless all the parties to the described in Gammon Philippines, Inc. u. Metro Rail Transit De·
arbitra tion, assisted by their respective counsels, submit to the uelopment Corporotion,'0 as follows:
court a wri tten agreement making the court the body t hat will
r esolve the dispute.' "The Construction Industry Arbitration Commission
(CIAC) was created in recognition of the constructi~~ indus-
The request for the dismissal of the action and t he r eferral to try's contribution to national development goals. Reahz1?g that
the CIAC for arbitration shall be made through a verified motion delays in the resolution of construction industry d1Sputes
that shall Iii contain a statement showing t hat the dis pute is a would also hold up the country's development, Executive Orde_r
construction dispute; (iii be accompanied by proof of the existence No. 1008 (EO 1008) expressly mandates the CIAC to ~xpedi­
of the arbitration agreement unless it is already part of the records tiously settle construction industry disputes and, fo~ t~1s. pur·
of the ca se ; and [iii) contain a notice of hearing.• pose, vests upon the CIAC original and exclusive Jurisdiction
over disputes arising from, or connected with, contrac~ ~n~red
The other party may file an opposition to the motion on or be- into by parties involved in construction in the Pluhppmes,
fore the date set for th e hearing of t he motion.• whether the dispute arises before or after the completion of the
An order d ismissing the case and referring the dispute to ar- contract, or af\er the abandonment or breach thereof. " " x."
bit ration by the ClAC is immediately executory.'
The CIAC has the following functions:"

The Construction Industry Arbitration 1. To for mul ate and adopt an arbitration program for the
Commission (CIAC) construction industry;

At the forefront of construction dispute arbitra t ion is the

' Section 5, E.O. No. 1008. . . d
CIAC created by virtue of Executive Order (E.0.) No. 1008, other· • Uniwide Sales Realty and Reso11rc<J8 Corporation I/. Ti.tan-Ike a
Construction and Developme11 t Corporation, 511 SCRA 335 (20061, P· 357;
' Section 35, R.A. No. 9285; eee also Section 2.1, ClAC Revised Rules. Comp John Hay Development Corporation u. Charter Chemical and Coat·
•Section 39, ADR Act; Rule 17. l , Special ADR Rules. ing Corporation, G.R. No. 198849, August 7, 2019.
'Rule 17.2, Special ADR Rules. " 481 SCRA 209 [2006). p. 212; see also: LICOMCEN Incorporated 11.
' Rule 17.3, Special ADR Rules. Foundation Speci.alists, Inc., 647 SCRA 83 [20111, p. 96.
'Rule 17 .6, Special ADR Rules. " Section 6, E.O. No. 1008.
236 ALTERNATIVE DISPUTE RESOLUTION CONSTRUCTION DISPUTE ARBITRATION 237

2 . To enunciate policies and prescribe rules and procedures it was to meet the very situation presented by the
for construction arbitration; quasi-judicial functions of the voluntary arbitrators
here. as well as the subsequent arbitrator/arbitral
3. To supervise the arbitration program, and exercise such t ribunal operating under the Construction Industry
authority related thereto as regards the appointment, re- Arbitration Commission, that the brooder term 'in·
placement or challenging of arbitrators; and strumentalities' was purposely included in [Section
4. To direct its officers and employees to perform such func- 9 of B.P. Big. 129 as amended by R.A. No. 7902).
tions as may be assigned to them from time to time. An 'instrumentality' is anything used as a
means or agency. Thus, the terms governmental
The nature and character of the CIAC has been defined in the 'agency' or 'instrumentality' are synonymous in the
case of Metro Construction, Inc. v. Chatham Properties, Inc.," in sense that either of them is a means by which a
this wise: government acts, or by \Vhich a certain government
act or function is performed. The word 'instrumen·
"xx x In the first place, It Is a quasi-judicial agency. A tality,' with respect to a state, contemplates an au-
quasi-judicial agency or body has been defined as an organ of thority to which the state delegates governmental
government other ~han a co~rt and other than a legislature, power for the performance of state function.•
which affe<:ts the ng~ts of pnvate parties through either adju-
dication or rule·makmg. x x x The CIAC's primary function
is that of a quasi-judicial agency, which Is to adjudicate Jurisdiction of the CIAC
claims and/or determine rights in accordance with pro·
cedures set forth in E.O. No. 1008. The jurisdiction of the CIAC is conferred by E.O. No. 1008."
Specifically, Section 4 thereof provides that:
xxx xxx xxx
x x x Further, it is a quasi-judicial agency or in- "SECTION 4. Jurisdictio11.-The CIAC shall have
strumentality. The decision in Luzon Deuelopme11t Bank vs. original and exclusive jurisdiction over disputes arising fro~,
Luzon Development Bank Employees, shed light on the matter, or connected with contracts entered into by parties involved m
thus: construction in th~ Philippines, whether the dispute arises be·
fore or after the completion of the contract, or after the aban·
Assuming arguendo that the voluntary arbi- donment or breach thereof. These disputes may involve gov-
trator or the panel of voluntary arbitrators may not ernment or private contracts. x x x"
be strictly considered as a quasi-judicial agency, The jurisdiction of the CIAC may include but is not lim·
board or commission, still both he and the panel ited to violation of specifications for materials and workman·
are comprehended within the concept of a 'quasi- ship; violation of the terms of agreement; interpretation and/or
judicial instrumentality.' It may even be stated that application of contractual provisions; amounts of damages and
penalties; commencement time and delays; maintenance and
"365 SCRA 697 [2001), PP· 722-724, emphasis supplied; citing defects; payment default of employer or contractor and changes
Tropical Homes, Inc. v. National Housing Authority, 152 SCRA 540 [19871; in contract cost. "' 14
Antipolo Realty Corp. u. NHA, 153 SCRA 399 [1987); Solid Homes, Inc. u.
Payawal, 177 SCRA 72 (1989); Luzon Deuelopment Ba11k v. L112on Deuel·
opment Bank Employees, 249 SCRA 162 [1995). See also CE Constru.cti.on
Corporation v. Araneta Center, Inc., G.R. No. 192725, August 9, 2017; " Heunghwa lndu..try Co., Ltd. u. DJ Builders Corporation, 673
Department of Public Works and Highways v. CMC!Monark!PacirictHi· SCRA 240 [2008), p. 259.
Tri-Joint Venture, G.R. No. 179732, September 13, 2017. "See also Sections 2.1 and 2.1.1 of the CJAC Revised Rules.
238 .ALTERNATIVE DISPUTE RESOLUTION C ONSTltuCTION DISPIJl'E ARBITRATION 239

In LICOMCEN, Incorporated 11. Foundation Specialists, Inc.," In fact, nll that is required for the CIAC to acquire
th" Supreme Court discussed the ju.-isdictiou uf th" CIAC as fol- jurisdiction is Eor the part,iee to a c:on.etruction contract
lows: to agree to submit their dispute to arbitration.xx x
xxx xxx xxx
"Thejurisdictton of the CIAC
In HUTAMA-RSEA Joi11t Operotio11s, !tic. u. Citro Metro
The CIAC was created through Executive Order No. 1008 Manila Tollways Corporation ,"' the Court declared that 'the
(E.0. 1008), in recognition of the need to establish an arbitral bare fact thnt the parties x x x incorporated an arbitration
machinery that would expeditiously settle construction indus- clause in (their contract! is sufficient to vest the CIAC \vith ju-
try disputes. The prompt resolution of problems a.-ising from or risdiction over nny construction controversy or claim between
connected with the construction industry was considered nec- the parties. 'l'he arbitration clause in the construction
essary and vital for the fulfillment of national development contract ipso facto vested the CIAC with ju1·isdiction.'
goals, as the construction industry provides employment to a
large segment of the national labor force and is a leading con- xxx xxx xxx
tributor to the gross national product." xx x If the CIAC's jurisdiction can neither be enlarged nor di-
xx~ xxx xxx minished by the parties it also cannot be subjected to a cond•·
tion precedent. GC-61° requires a party disagreeing with
The jurisdiction ~f courts and quasi-judicial bodies is de- LICOMCEN's d ecision to 'officially give notice to contest such
tennined by the Constitution and the law." It cannot be fixed decision through arbitration' within 30 days from receipt of
by the will of.th? ~arties ~ a dispute;" the parties can neither the decision. However, FSl's April 15, 1998 letter is not the no-
expand nor dimimsh a tnbunal's jurisdiction by stipulation or tice contemplated by GC-61; it never mentioned FSl's plan to
agreement. The text of Section 4 of E.O. No. 1008 is broad submit the dispute to arbitration and instead requested
enough to cover any dispute arising from, or connected Liiith LICOMCEN to reevaluate its claims. Notwithstanding FSl's
construction contracts, whether these involve mere contractual failure to make a proper and timely notice, LICOMCEN's de,ci-
money claims or execution of the works. " x x x The CIAC's ju- sion (embodied in its March 24 1998 letter) cannot become fi-
risdiction cannot be limited by the parties' stipulation that only nal and binding' so as to precl~de resort to the CIAC arbit~a­
disputes in connection with or arising out of the physical con- tion. To reiterate, all that is required for the CIA? t~ acqmre
struction activities (execution of the lllorks) are arbitrable be- jurisdiction is for the parties to agree to submit their dispute to
fore it. voluntary arbitration:

"647 SCRA 83, [2011), pp. 96-100. See also Federal Builders, Inc. u. '[T)he mere existence of an arbitration
Power Factors, Inc., G.R. No. 211504, March 8, 2017. clause in the construction contract is consid·
"E.O. 1008 (1985), Whereas clauses. ered by law as an agreement by the parties to
"B.F. Homes, Inc., tt al. u. Manila Electric Company, G.R. No. submit existing or future contl'Oversies be-
171624, December 6, 2010, 636 SCRA 495, citing Ciuil Service Commission tween them to CIAC jurisdiction, without any
u. Albao, G.R. No. 155784, October 13, 2005, 472 SCRA 548, 555. qualification or condition precedent. To affirm
" Municipality of Sogod u. Rosal, G.R. Nos. 38204 and 38205, Sep- a condition precedent in the construction contract,
tember 24, 1991, 201 SCRA 632. which would effectively suspend the jurisdiction of
" "E.0. No. 1008 does not distinguish between claims involving pay· the CIAC until complinnce therewith, would be in
ment of money or not; E=ll.ent Quality Apparel, Inc. u. Win Multi·Rich conflict with the intention of the law and rules to
Builders, [TU!., G.R. No. 175048, February 10, 2009, 578 SCRA 272, 280, automatically ve st CIAC with jurisdiction over a
citing Parlade, The Lall! and Practice of Conciliation and Arbitration of
Construction Disputes, (2001 ed.), p. 89. " G.R. No. 180640, April 24, 2009, 586 SCRA 746, 760-761.
240 ALTERNATIVE DISPUTE RESOLUTION C ONSTRUCTION DISPUTE ARBITRATION 241

dispute should the construction contract contain an jurisdiction of the regular courts, complaints for construction dis-
arbitration clause."' putes, including the breach of construction contracts, must be filed
with the CIAC, provided that the parties agree to submit their
The CIAC is given the original and exclusive juris-
diction over disputes arising from, or connected with, con- dispute to arbitration.
tracts entered into by parties involved in construction in the Indeed, the doctrine of primary jurisdiction dictates prior re-
Philippines." This jurisdiction cannot be altered by stipula- course to the CIAC for construction disputes and parties over
tions restricting the nature of construction disputes, appoint· which it has acquired jurisdiction. The same doctrine precludes
ing another arbitral body, or making that body's decision final courts from resolving construction disputes over which jurisdiction
and binding.• has been initially lodged with the CIAC by reason of its special
In principle, the CIAC has jurisdiction over the construction knowledge, experience and services to determine technical and
dispute, and not the contract." It also has jurisdiction over the intricate matters of fact." Thus, the CIAC's findings of fact, as in
reformation of contracts." the case of other quasi-judicial agencies, are generally accorded
great respect, if not finality, by the courts, having been rendered by
Excluded from the CIAC's jurisdiction are disputes arising an agency in a better position to pass judgment thereon."'
from employer-employee relationships which are covered by the
Labor Code of the Philippines... Also excluded from the CIAC's The passage of R.A. No. 9285 <ADR Act of 2004), which re·
jurisdiction are cl~ms for moral damages, exemplary damages, quired the confirmation of domestic arbitral awards, did not alter
opportunity or busmess_Iosses in addition to liquidated damages, the character of CIAC decisions as final and executory. In J Plus
. "'
Asia Development Corporation u. Utility Assura.nce Corporatwn,
and attorney's fees, which are non-arbitrable, unless the parties
acquiesce or mutually ~~ee to submit these issues for arbitration the Supreme Court clarified that:
and to abide by the decision of the arbitrator thereon.••
"x x x Since R.A. No. 9285 explicitly excluded
E.0. No. 1008 is a special law. Hence, it takes precedence CIAC awards from domestic arbitration awards
over Batas !:~mbansa Blg. 13!) Or the "Judiciary Reorganization that need to be confirmed to be executory, said
Act of 1980, ii f i /Jerai law which vests jurisdiction to the Metro- awards are therefore not covered by Rule 11 of the
politan or Municipal Trial Courts, and Regional Trial Courts over Special ADR Rules as they continue to be governed
certain civil actions, including those for breach of contract. Thus by EO No. 1008, as amended and the rules of pro-
while ordinarily, civil actions for breach of contract are within th~
cedure of the CIAC. xx x"

" Id., at p. 763.

n E.O. 1008, Section 4. " Maria Luisa Park Association, Inc. v. Almendras, 588 SCRA 663
" National Irrigation Administration v. Court of Appeals, 318 SCRA 120091; Drilon u. De Venecia, Jr., 594 SCRA 749 (20091; Montanez v. Pro-
255 (19991, p. 267, reiterated in Metropolita11 Cebu Water District v. Mac- vincial Agraria11 Reform Adjudicator (PARAD), Negros Occide11tal, 600
tan Roch Industries, Inc., 675 SCRA 577 (2012), p. 597. SCRA 217 120091; Office of the Ombudsman u. Heirs of Margarita Vda. De
'' Metropolitan Cebu IVater District v. Mactan Rock Industries, Inc., Ventura, 605 SCRA 1 120091; Philippine Science High School·Cagayan
supra. Valley Campus v. Pirra Construction Enterprises, G.R. No. 204423, Sep-
" Section 4, E.O. No. 1008; Section 2.2.2, CIAC Revised Rules; see tember 14, 2016; Pro Builders, /nc., v. TC Universal Busine88 Ventures,
also Romago, Inc. v. Siemens Building Technologies, blc. , 602 SCRA 656 Inc., G.R. No. 194960, February 3, 2016.
(20091, p. 670. ,. Republic v. Far East Enterprise·s, Inc., 597 SCRA 75 (2009); Lu·
"Ga.mmon Philippines, Inc., supra, p. 223. mayna v. Commission on Audit, 601 SCRA 163 120091.
"Reyes v. Balde JI, 498 SCRA 186 (20061, p. 195. 00
700 SCRA 134 (2013), pp. 146-147.
242 ALTERNATIVE DISPUTE RESOLUTION
CoNSlRlJCTION DISPUTE ARBITRATION 243

For the ClAC to acquire jurisdiction, the parties to a dispute CIAC to acquire jurisdiction may be a pre-causal consent or a pre·
must be bound by an arbitration agreement in their contract or sent causal consent.
subsequently agree to submit the same to voluntary arbitration."
Plainly, the ClAC has original and exclusive jurisdiction over dis· Once jurisdiction has been acquired by the CIAC, the r efusal
putes arising from or connected with construction contracts en· of one party to participate in the proceedings will not pre~ent the
tered into by parties that have agreed to submit their dispute to CIAC from proceeding wi th the case and issuing an award in favor
voluntary arbitration,"' and even if the parties have designated of one of the parties. This principle was explain ed by the Supreme
another arbitration institution or arbitral body." The jurisdiction Court in Metropolitan Cebu Water District 11. Macta11 Rock Indus·
of the CIAC is dependent on the agreement and consent of the tries, Ille.," as follows:
parties to the construction contract to submit their dispute to arbi-
tration and, absent such consent, the ClAC cannot validly proceed "Section 4 2 cf the Revised Rules of Procedure Governing
Construction ~bitration (CIAO Rules) specifically provides
against a party for lack of jurisdiction." Absent such an agreement that where the judsdiction of the CIAC is properly invo.ked by
contained in an arbitration agreement, or consent expressed or the filing of a Req·, est for Arbitration in accordance with the
implied subsequent to the accrual of the cause of action , t h e juris· CIAC Rules, the failure of a r espondent to appear, which
diction over the construction dispute will remain with the regular amounts to refu sal to arbitrate, will not stay the pro·
courts. cccd ini:s, notwithstanding the absence of the respon·
There are t_wo acts which vest the CIAC w ith jurisdiction over dent or the lack of participation of such party. In such
a construction dispute. coses, the CIAC is mandated to appoint the arbitrator/a
in accordance with the Rules, and the arbitration pro•
"x x x One is the Presence of en arbitration clause in a ceedings shall continue. The award shall then be made
const r
uction contract
. ',
and the Oth or .1s the a~r.,ernen t. uf t h e after rcceivinir the evidence of the claimant.
parties to submit the dispute to the CIAC.""" In such a case, all is not lost for the party who did not
participate. E ven after failing to appear, a respondent Is
Wbere there is a n existing arbitration agreement, a subse- still given t he o pportunity, under the CIAC Rules, to
quent consent by the parties would be superfluous and unneces· have the proceedings reopened and be allowed to P~·
sary ... In other words, the consent to arbitration necessary for the sent evidence, although with the qualification that this
Is done before an award is issued:

'4 .2. l In the event that, before award, the

" Section 2.3, CIAC Revised Rules. Respondent who had not earlier questioned the ju-
"LJCOMCEN, lncorporoted u. Foundation Specialists, Inc., supro.; risdiction of the Tribunal, appears and offers to
see also Philroclt, Inc. u. Construction Industry Arbitration Commission, present his e\'idence, the Arbitral Tribunal may, for
359 SCRA 632 12001), p . 640. reasons that justifies (sic) the failure to appear, re-
., Section 4 .1, CIAC Revised Rules. open the proceedings, require him to file his answer
,. Uy 11. Court ofAppeo'8, 494 SCRA 535 (2006), p. 545. with or without counterclaims, pay the fees, where
required under t hese Rules. end allow him to pre-
• Heungl11JKJ Industry Co., Ltd. 11. DJ Builders Corporation, supro.;
sent his evidence, with limited right to cross exam-
see also HUTAMA·RSEA Joint Operotions, Inc. u. Citra Metro Manila ine witnesses already (sic) in the discretion of the
r. llways Corporation, 586 SCRA 746 12009], pp. 754-755; Camp John Hay Tribunal. Evidence already admitted shall remain.
v:celopment Corporotion u. Charter Chemical and Coating Corporation, The Tribunal shall decide the effect of such contro-
supra.,. Heungllwa I n d ustry Co., Ltd., supro.
"Supro., pp. 600-601; emphasis supplied.
 244 ALTERNATIVE DIS PUTE RESO!.UTIO:< C O:<!:o"fltUCTIO:< DISPUTE ARnlTRllTlON 245

verting evidence presented by the Respondent on CIAC has actively participated in the proceedings before the CIAC,
evidence alrendy admitted prior to such belated ap- even going to the extent of seeking affirmative relief, such active
pearance.' participation is tantamount to an invocation of, or at least an ac·
Thus, under the ClAC Rules, even with· quiescence to the CIAC's jurisdiction, nohvithstanding that that
out the participation or one of the parties in party initially assai led the CIAC'sjurisdiction."
the procee~lnire, the ClAC le still required to
proceed with the hearing of the construction
dispute.• Rules of Procedure in the CIAC

In fact, it has been held that the CIAC may continue with the In the proceedings before the CIAC, judicial rules of evidence
arbitration even though only one of the parties requested for a.r bi· are not controllin.g and the technicalities of law or procedure may
t ration,.. or even if both parties have withdrawn their consent to be disregarded in order to ascertain the facts in each and every
arbitrate.'" case by every reasonable mean.s ." The arbitral tribunal of the
CIAC is mandated to "act according to j ustice and equity and mer~
An arbitrati?n agreement or a submission to arbitration m ust
its of the case, without regard to technicalities or legal forms anu
be in writing but it need not be signed by the parties as long as the
· · c1ear.that need not be bound by any technical rule of evidence.""
intent is . the part'•es agree to submit a present
• or future
controversy arising from a construction contract to arbitration The Briefly, the following are the procedural rules in the CIAC:
agreement may even be in the form of exchange of letters se~t by · ·t•tatory
1. Complaint !request for arbitratia1i. The 1~1 . plead·
post or telefax, .tel~xes, telegr;ima, electronic mail or any other ing is n complaint or request for arbitration which m':'st
mode of communicatJon."
be filed with the Secretariat of the CIAC." The complaint
In the event ~at a party has already filed a complaint before or request for arbitration must allege the existence of the
the regular courts involvmg a dispute within the jurisdiction of the arbitration agreement or subsequent submiss · ·ion, a copy
..
CIAC, the proper procedure to enable the CIAC to decide on the of which should be attached to the complaint or request.
disp':'te is to request the stay or suspension of the judicial action as 2. Answer. Within three (3) days from such filing, the Se-
provided ~or ~nder the Arbitration Law CR.A. No. 876). Moreover, cretariat shall transmit to the respondent a re~~e~t fo~
the. court ~s dir~~d by the ADR Act not just to dismiss the com· his answer attaching thereto a copy of the comp am .an
plaint falling within the CIA C's jurisdiction, but also to refer the . ,. . h · dice to extensions
case to the CIAC." supporting documents. · Wit out preJU (l S) d
of time if warranted, the respondent has fifteen ays
The principle of jurisdiction by estoppel is equally applicable
to the CIAC. When a party to an arbitration conducted by the 0
LICOMCEN Incorporated v. Foundation S~cia/ists, Inc., supra., p.
721; also Romogo, lf!c. v. Siemens Building Technologiea, Ince" supra.: p.
672; and Philrock, Inc. v. Construction Industry Arbitration ommrsston,
.. National .lrrigotion Administration, supra., cited in Metropolitan supra., pp, 641-64 2.
Cebu !;ate: District v. Mactan Roc/1.Iridustries, In,;., supra., p. 601. "' Section 1.3, CIAC Revised Rules. . l
Phi/rock, Inc. v. CoT111truct1on Industry Arbitration Commission, "Section 13 5 CIAC R · d Rules See Metro Rail Tran!ll Dcve op·
359 SCRA 632 [2001), pp. 641-642, cited in Metropolitan Cebu Water Dis·
. . , ev1se · oo 01 January
ment Corporatton v. Oamm071 Philippines, /Tic., G.R. No. 2 4 •
trict v. Mactan Rock Industries, Inc., supra., p. 601. 17, 2018.
"'Section 4.1.8, CIAC Revised Rulea. See Federal Builders, Inc. v. .. Sect.ion 3.1, ClAC Revised Rules.
Power Factors, Inc., supra. *Section 2.3 .1, ClAC !Wvised Rules.
" Rule 17.1, Special ADR Rules. " Sect.ion 3.3, CIAC Revised Rules.
246 ALTERNATIVE DISPUTE RESOl..lJTIOX COJ-:STRUCTION DISPUTE ARBITRATION 247

from receipt of the request for arbitration or complaint such agreement ... Each party shall submit the names of
within which to file his answer thereto including therein not more than six (6) nominees from CIAC-accredited ar-
such counterclaims as he may assert," of which the com- bitrators in the ol'der of their preference for appointment
plainant shall be furnished a copy.'' as arbitrators."
The failure of the respondent to file an answer or his re- For sole arbitrators the CIAC shall appoint among the
fusal to arbitrate shall not stay the proceedings as long as parties' nominees the common nominee provided he is
the jurisdiction of the CIAC has been properly invoked by available and not disqualified. In the absence of a common
the filing of the request for arbitration in accordance with nominee, or when the common nominee is disqualified, and
the CIAC Revised Rules. In such case, the CIAC shall ap- the parties fail to agree on another nominee, the CIA?
point the arbitrators, continue with t h e proceedings, re- sh all itself appoint the sole arbitrator or constitute an arb1-
ceive the evidence of the claimant, and render an award tral tribunal."
based thereon... For arbitral tribu nals, the CIAC shall appoint one arbitra-
If, before !he a.ward, the respondent appears and offers to tor from the claimant's nominees, and one from the re-
present his evidence, the arbitral tribunal may, for justi- spon dent's nominees. It shall a lso choose the third ar~itr~­
fiable reasons, reopen the proceedings require the re- tor subject to the parties' confirmation in w~ting with!n
sponde~t to file his answer with or \vith~ut counterclaims, five (5) working days from notice of the appomtme~t, f~1l­
allow him to present evidence a d t h" r "ted ing which, the appointment is deemed a~cepted;. Said third
right to cross examin . • n gran im a 1~1
proceedings.•• e Witnesses al ready presented m the arbitrntor ehnll be the chairman of the tribunAL
A non-accredited foreign arbitrator may be appointed if one
3. R~pl~. The claimant may file a reply to the counterclaim party is an international party which is one ~hose p~ace of
witlun ~fteen Cl5) days from the date of receipt of the an- business is outside the Philippines. Such fore1~ arb1t~ator
swer with counterclaim." should not be of the same nationality as the international
4. Appointment .and acceptance of arbitrators. One (1) or party."'
t~ee (3) arb1trato~ accredited by the CIAC may be ap- The arbitrators chosen must communicate to the ~IA:C
pointed ~o settle a d1~pute ~epending on the agreement of their acceptance or refusal of their appointme~t ~th1.n
the parties, or the discretion of the CIAC if there is no five (5) days from receipt thereof. If no .communication is
received within said period, the appointment ~hall be
deemed accepted. If an arbitrator refuses or declines the
appointment the CIAC shall appoint a replacement from
.. Section 5.1, CIAC Revised Rules. the list of th~ pai'ty who nominated him or, if there is none,
" Section 5.2, CIAC Revised Rules.
. ." Section 4.2, CIAC Revised .Rules; see also Metropolitan Cebu Water from the list of accredited arbitrators...
District u. Ma:t~n Rock Industries, Inc., supra., pp. 600-601; National
Irrigation Admmr.strot~on ~· Court of!"PJ-ls, supra.; Phi/rock, Inc. u. Con· "Sections 9.1, 9.11.1and9.1.2, CIAC Revised Rules.
struction Industry Arbitration Comm.r.ss1on, supra., pp. 641-642; Hermghwa "Sections 9.1. l and 9.2 and 9.3, C!AC Revised Rules.
Ind1tstry Co., Ltd. u. DJ Builders. Corporatwn, supra., pp. 254-260. "Sections 9.2 and 9.2.1, ClAC Revised Rules.
" Section 4.2.l, CIAC Revised Rules; see also Metropolitan Cebu Wa· " Section 9.3, CIAC Revised Rules.
ter District u. Mactan Rock Industries, Inc.. supra., pp. 600-601. "Section 9.4, ClAC Revised Rules.
" Section 5.3, CIAC Revised Rules. "Section 10.3, CIAC Rovised Rules.
 ALTERNATIVE DISPUT~ RESOLUTION CONSTRUCTION DISPUTE A.rulITRATION 249
248

5. Challenge to arbitrators. A challenge to an arbitrator, shall select bi s replacement.'" The CIAC's decision to re·
including a motion for inhibition or a request for disquali· tain or replace an arbitr ator shall be final."
fication or replacement which shall be treated as a chal- 6. Preliminary conference and terma of reference. The arbi-
lenge, shall be in the form of a complaint under oath, stat- trator or arbitra.l t ribunal shall set the case for prelimi·
ing distinctly the facts complained of, supported by affi· nary conference, similar to a pre-trial," not l atAr than fif.
davits, and accompanied by such documents as may sub- teen <15) days after their appointment during which the
stantiate the said facts." The challenge should be filed at following matters shall be considered:"
any time after the challenged arbitrator's appointment
but befor~ t~e lapse of the original ten (10) day period for a. Possibility of amicable settlement;
the subm1ss1on of memoranda or draft decision under Sec· b. Necessity or desirability of amendment to plead·
tion 13.16, Rule 13 of the CIAC Revised Rules without ings;
00
extensions. '
c. Obtaining stipulations or admissions of facts
The challenge shall be based on the following grounds: and/or documents to avoid unnecessary proof;
a. R:elationsbip by blood or marriage within the d. Limitation of the number of witnesses;
sixth degree of either party to the controversy, or e. Suggested formulation of issues by the parties;
to co~els within the fourth degree, computed f. Application for interim relief, appointment of ex·
according to the rules of civil law;
p erts and necessity of site inspection; and
b . Financial, fiduciary or other interest in the con·
troversy; g. Such other matters as may aid in the just and
speedy disposition of the case.
c. Partiality or bias·
A draft copy of the Terms of Reference (TOR) shall be a~­
d. J1WJmpe~nce, or 'professional misconduct; a nd tached to the notice of preliminary ~~fe~n~~- This
e. Other just and valid reasons affecting independ· document functions like a pre-trial order m Judicial pro-
ence, integrity, impartiality and interest.11 ceedings and controls the proceedings unless corrected for
manifest errors by a motion filed not later than the h ear·
The challenged arbitrator will be given an opportunity to
ing date ... It shall include the following:"
b~ ~ear?, and, subject to the approval of the CIAC, to in·
hibit himself wilhout admitting the existence of the a. The full names of the parties, and t heir respec·
ground of the challenge, motion or request. 62 tive counsels, if any;
U~on removal or inhibition, the CIAC shall promptly ap-
po1~t the replacement, unless h e is the third member, in
which case, the first two members of the arbitral tribunal
., Section 9.6.4, CIAC Revised Rules.
.. Section 9.6.5, CIAC Revised Rules.
•• Rule 18, 1997 Rules of Civil Procedure.
"Sections 9.6, 9.6.1 and 9.6.2, CIAC Revised Rules. •Section 11.1, CIAC Revised Rules.
"'Section 9.6, CIAC Revised Rules. " Section 7, Rulo 18, 1997 Rules of Civil Procedure.
., Id. "Sections 11.l and 11.4, CIAC Revised Rules .
., Section 9.6.3, CIAC Revised Rulos. •Sections 11.4 nnd 11.4.1, CIAC Revised Rules .
250 ALTERNATIVE DISPUTE RESOLUTION C O:-ISTRUCTJ0:-1 DISPUTE ARBITRATION 251

b. The addresses and contact numbers of the par· cedure for the introduction of evidence and shall
ties/counsels, to which notifications or communi· not be bound by technical rules." It shall be
cations arising in the course of the arbitration within its discretion to determine the order of
may be validly made; presentation of evidence. Generally, the party
c. A summary of the parties' respective claims; who seeks to enforce a right or establish a claim
shall be required to present his evidence first."
d. Full statement of admitted facts and documents;
e. The issues to be resolved in question form; Instead of a formal hearing, the parties may
agree to submit the issues for resolution after
f. The arbitrators' full names· the filing of pleadings, evidence, memoranda or
g. The place where the ar~itration proceedings draft decisions'" similar to a summary judgment
shall be held; under Rule 35 of the 1997 Rules of Civil Proce-
h. '!he brea~down, schedule of payments, and shar· dure.
mg of arbitration fees· The arbitral tribunal shall require the simulta·
i. Such other p rt· 1 ' neous submission of affidavits of witnesses in
arbitral . a 1cu ars as may be required by the
die •. tribunal for the proper and speedy adju· lieu of their direct testimonies attaching thereto
8 •10n of the case. supporting documents. The arbitral tribunal may
~h:!i!:n~ed by the ~~es, their counsels and the arbi· ask clarificatory questions of the witnesses at
any stage of the proceedings."
f TO after finalization."' Notwithstanding the ab-
s~nc:e 0 a r. R. the arbitration shall proceed on the basis of The arbitral tribunal may, motu proprio or upon
t e issues ormulated by the pleadings filed by the parties." motion of a party, conduct site inspection, order
7. Arbitration. proceedings. the production of real or documentary evidence,
require any person to testify, issue interim meas·
a.Venue, ckite and time. The venue date and time ures or provisional reliefs, or appoint legal or
of the arbitral proceedings shali be mutually
technical experts."
agreed upon by the parties and the arbitral tri·
bunal. In case of disagreement, the choice of After the presentation and offer of evidence by th_e
venue by the arbitral tribunal shall prevail." parties, the parties may be directed by ~he ,:rbt·
b. Quorum. In an arbitration with three (3) arbi· tral tribunal to make a brief oral summation.
trators, two (2) members of the arbitral tribunal d. Draft decision or final memorandum. If any or
shall comprise a quorum for the purpose of con· both parties so desire, they may submit not later
ducting a hearing." than ten (10) calendar days from the termination
c. Presentation. of evidence. The arbitral tribunal
shall at all times adopt the most expeditious pro· "Sections 13.5, 13.10, 14.l and 15.1, CIAC Revised Rules.
"Sections 13.3, 13.4 and 13.5, CIAC Revised Rules.
"Section 13.17, CIAC Revised Rules.
" Section 11.4.2, CIAC Revised Rules. "Sections 13.6 and 13.7, CIAC Revised Rules.
" Section 11.5, CIAC Revised Rules. " Metro Rail Transit Development Corporation v. Gammon Philip·
"Section 12.l, CIAC Revised Rules. pines, Ttic., supra.
"' Section 13.1.1, CIAC Revised Rules. "Section 13.15. CIAC Revised Rules.
252 ALTERNATIVE DISPUTE RESOLUTION CONSTRUCTION D ISPUTE ARBITRATION 253

of the hearing, their draft decision or final within the said fifteen (15) day period ... A motion for recon-
memorandum of arguments.•• sideration and new trial are prohibited pleadings...
e. Closing of the hearings. After the submission of As a rule, the jurisdiction of the arbitral tribunal is ter-
the draft decision or the final memorandum, the minated upon the finality of the decision," order or award
proceedings shall be deemed closed unless the except in the following instances:
arbitral tribunal mctu proprio or upon the re-
a. When a timeUy motion for correction has been
quest of any party at any time before the award
filed•' in which case jurisdiction will continue un-
is rendered, and on good cause shown, reopen
the bearing, in which case, the effective date of til the resolution of the motion and the finality of
the closing of the hearing shall be the date of the corrected award; and
closing of the reopened hearing." b. Notwithstanding the finality of the award, ~e
arbi tral tribunal retains jurisdiction to exercise
8. Award. The award shall be rendered promptly by the
executory powers, which include "the determina-
arbitral tribunal within thirty (30) days from the time the
case is submitted for resolution but not more than six (6) tion of the sufficiency of the bond [stay of execu-
months from the date of signing of the TOR, or in the ab- tion), approval of the surety or bonding company,
sence of a TOR, not more than six (6) months from the satisfaction of the award, quashal of ~e exe~u­
date of the last preliminary conference called for the pur- tion partial execution, issuance of alias wnts,
'
assessment ·
of properties levied, appo~ · t m~nt of
f
pose of finali:zing or signing the TOR. There shall be no
extension of this period unless approved by the CIAC.82 a quantity surveyor or assessor, examination o
banks, debtors of the judgment debtor and_ any
The award shall be in writing and signed by the arbitral person holding properties or assets of the JU~g­
tribunal or a majority of its members. It shall contain the ment debtor, and issuance of subpo~a ad testifi.-
issues involved, a brief statement and discussion of the candum and subpoena duces tecum.
facts, and the authority relied upon for the resolution or
disposition of the case.13 9. Execution of the award. The arbitral tribunal, o~ th~~~
maining members ther·eof, or, if there are none, t e ..
A dissent from the decision of the majority or a portion itself shall rrwtu proprio or upon motion of the prevailing
thereof shall be in writing specifying the portion dissented part;, issu~ a writ of execution of a final. and executory
from with a statement of the reasons therefor, and shall decision, order or award requiring any shenff or p~per of-
be signed by tlhe dissenting member." ficer to execute said decision, order or final award.
The final arbi:tral award shall become executory upon the
lapse of fifteen (15) days from receipt thereof by the parties,
unless a timely motion for correction is filed by any party
"Sections 17.1, 17.1.1, and l S..l, CIAC Revised Rules. .
" Section 17.2 CIAC Revised Rules; see also: Department of Envi-
ronment and Natur~l Resources (DENRJ v. United PlanMrs Consultants,
•• Section 13.16, CIAC Revised Rules. Inc. (UPC/), G.R. No. 212081, February 23, 2015.
"Sections 13.13 and 13.14, CIAC Revised Rules. " Section 16.6, CIAC Revised Rules.
" Section 16.1, CIAC Revised Rules. " Section 17.1, CIAC Revised Rules.
" Sections 16.2 and 16.3, CIAC Revised Rules. "Section 18.8, CIAC Revised Rules.
.. Section 16.2, CIAC Revised Rules. " Section 18.5, CIAC Revised Rules.
254 Al..TERNATIVB DISPUTE R ESOLUTION CONSTRUCTION DISPUTE ARBITRATION 255

If the decision, order or final award is appealed, the exe- eventually transposed into the present CIAC Redsed Rule
cution may be 11tayed upon Approval by the arbitral tribu- which direct.It thRt '" petition for re.view from a final award
nal, or the remaining members thereof, with the concur- may be taken by any of the parties within fifteen (15) daya
rence of the CIAC, of a bond posted by the petitioner in an from receipt thereof in accordance with the provisions of Rule
amount equal to the award, conditioned upon the per- <13 of the Rules of Court. Notably, the current provision is in
formance of the judgment of the appellate court in case it harmony with the Court's pronouncement that 'despite statu·
upholds the award in whole or in part." tory provisions making the decisions of eertain administra·
tive agencies 'final.' (the Court) still takes cognizance of peti·
tions showing want of jurisdiction, grave abuse of discretion,
Judicial R eview ofCIAC Deci•iona violation of due process, denial of substantial justice or erro·
neoua int erpretation of the law' and that, in parti<ular, 'vol-
A petition for review from a final award of the CIAC may be untary arbitrators, by the nature of their functions, act in. a
taken by any of the parties to the Court of Appeals within fifteen quasi-judicial capacity, such that their decisions are within
( 15) days from receipt thereof in accordance with Rule 43 of the the scope of judicial review.-
Rules of Court." Thia petition is based on errors of fact or mixed
fact and law. The development of this remedy from the decisions of The petition shall not stay the execution of the final award
unless the Court of Appeals issues a temporary restraining order
the CIAC was explained in the case of Asian Construction and
Development Corporation u. Sumitomo Corporation" as follows: and/or a writ of preliminary iajunction." The petitioner may als.o
post a bond with t h e CIAC in an amount equal to the award, condi·
•A brief exegesis on the development of the procedural tioned upon the performance of the appellate court's judgment. The
rules iOverning CIAC cases clearly shows that a final award execution of the award shall be stayed upon the approval of the
rendered by the Arbitral Tribunal is not absolutely insulated bond by the CIAC."
from judicial review.
Tho availability of a petition for review under Rule 43 pre-
To begin, Executive Order No. (E.0.) 1008, which vests cludes the remedy of a petition for certiorari under Rule 65, and
upon the CIAC original and exclusive jurisdiction over dis- the filing of an erroneous petition for certiorari will not toll the 15·
putes arising from, or connected with, contracts entered into
day period to file a petition for review ...
by parties involved in construction in the Philippines, plainly
states that the arbitral award 'shall be final and inappealable Generally, in the absence of any showing of grave abuse of
except on queations of law which shall be appealable to the discretion, courts must sustain the factual findings of the CIAC
(Court]. Later, however, the Court, in Revised Administrative arbitrator this being in accordance with the establish~ prin~ip~e
Circu.lar (RAC) No. 1·95, modified this rule, directing that the that the determination of certain questions of fact falling within
appeals from the arbitral award of the CIAC be first brought the peculiar technical expertise of an administrative agency must
to the CA on queationa of fact and law.' This amendment w 118 be accorded great respect if not finality by the courts." The court

" Section 18.6, CIAC Revised Rules. .. Sections 18.2 and 18.4, CIAC Revised Rules.
" Secdona 18.2 and 18.4, CIAC Revised Rules. See also: J Plus &io ,. Section 18.6, CIAC Revised Rules.
Deuelopnunt Corporation 11. UtUity Assurance Corporation, supra.; De· ,. Depart~nt of Enuironm6nt ond Natural Resourtts (DENRJ 11.
parllTUnt of Erwlronment ond Noturol /Usources (DENRJ 11. Uniud Plan· United Planturs Consultants, Inc. (UPCD, supra.
TU!f'S Consultant., Inc. (UPCI), 1upra. " PhUippiTU! Nation.al Construction Corporation u. Court of Appeala,
" 704 SCRA 332 (20131, pp. 344-346, citing F.F. Cruz & Co., Inc. u. 512 SCRA 684 (2007] , p. 698; PhUippine Science High School-Cagayon
HR Conatruction Corp., 668 SCRA 302 [20121, p. 315; and PhUroclt, Inc. u. Volley Campus 11. Pirra Construction Enterprisn, aupra; Pro Buildert, Inc.
Construction Industry Arbitration Commission, supra., pp. 643-644 . u. TC Unluersal BusiTU!ss Ventures, Inc., supra.
256 ALTERNATIVE DISPUTE RESOLUTION C ONSTRUCTION DISPUTE ARBITRATION 257

will not interfere in matters which are addressed to the sound tors are final and conclusive and not review-
discretion of government agencies entrusted with the regulation of able by this Court on appeal.ffl
activities coming under the special technical knowledge and train-
ing of such agencies.'" However, as exceptions to the foregoing rule, factual findings
of construction arbitrators may be reviewed by the Supreme Court
As held in Uniwide Sales Realty and Resources Corporation 11.
when the petitioner proves affirmatively that:
Titan-Ikeda Construction and Deuelcpment Corporation:"
"x x x ( 1) the award was procured by corruption, fraud or
"x x x. The Court will :n ot review the factual findings of
other undue means; ( 2) there was evident partiality or corrup-
an arb1tral tnbunal upon the artful allegation that such body tion of the arbitrators or of any of them; (3) the arbitrators
had 'misapprehended ~acts' and will not pass upon issues
w.hic~ are, at bottom, U1sues of fact, no matter how cleverly
were guilty of misconduct in refusing to hear evidence perti-
d1sgwsed they may be as 'l<!gal questions.' The parties here nent and material to the controversy; (4) one of the arbitrators
had recourse to arbitration and chose the arbitrators them- were disqualified to act as such under Section nine of Republic
selves; they must have had confidence in such arbitrators. The Act No. 876 and willfully refrained from disclosing such dis-
~ourt ~·II not, therefore, permit the parties to relitigate before qualifications or of any other misbehavior by which the rights
it the ·~sues 0~ facts previously presented and argued before of any party have been materially prejudiced; or (5) the arbi-
trators exceeded their powers, or so imperfectly executed them,
the Arbitral .Tnbunal•. save only where a clear showing is
that a mutual, final and definitive award upon the subject
made t!tat, m reaching its factual conclusions, the Arbi-
matter submitted to them was not made.
tral Tribunal committed an error so egregious and huri-
~I to one ~art>: as to constitute a grave abuse of discre- Other recognized exceptions are as follows: (1) when
tion resultJ.Dg m lack or loss ot jurisdiction. x x x Any there is a very clear showing of grave abuse of discretion re-
oth~r, more. relaxed rule wo11ld result in setting at naught the sulting in lack or excess of jurisdiction as when a party was
basic ?bJective of a v~luntary arbitration and would reduce ar- deprived of a fair opportunity to present its position before the
b1trat1on to a largely inutile institution.• Arbitral Tribunal or when an award is obtained through fraud
or the corruption of arbitrators, (2) when the findings of the
Also, in Shinryo (Philippines) Compan l 11 RRN I Court of Appeals are contrary to those of the CIAC, and (3)
rated,'"' it was held that: y, nc. • ncorpo· when a party is deprived of administrative due process.""'

"As reit.erat_e<J by the Court in IEX International, Inc. u.

Government Service l11surance System, to wit: "' Uniwick Sales Realty a 11d Resources Corporation 11. Titan-Ikeda
'It is settled that findings of tact of quas i- Co11structio11 and Development Corporation, supra., pp. 345-346; citing
j'.'dlclal bodies, ~~ich h!'ve acquired exper- Davi.d u. Construction Industry Arbitration Commission, 435 SCRA 654
tise because thear Jurischction is confined to 120041, p. 666; Megaworld Globus Asia, Inc. u. DSM Construction and
specific matters, are generally accorded not Development Corpora.lion, 424 SCRA 179 120041, p. 198; Hi-Preci.sion Steel
only respect, but also t'mality, especially when Center, Ille. u. Lim Kim Steel Builders, Inc., 228 SCRA 397 (19931, p. 405;
Metro Construction, Inc. u. Chatham Properties, foe., 365 SCRA 697
affirmed by the Court of Appeals. In particu-
)2001); Sltinryo (Philippines) Company, Inc. v. RRN Incorporated, 634
lar, factual findings of construction arbitra-
SCRA 123 12010); and Metropolitan Cebu Water District u. Mactan Rock
------- Industries, Inc., supra.; We" Corporation l11wrn.atwnol u. Highlands Prime,
.. First Lepanto Ceramics, Inc. u. Court of Appeals, 253 SCRA 552 Inc., G.R. Nos. 187543 and 187580, February 8, 2017; B.F. Corporaticn and
11996), p. 558. Honori.o Pineda 11. Form-Eze Sysrems, Inc., G.R. No. 192948, December 7,
,. 511 SCRA 335 (2006), pp. 362-363, emphasis supplied. 2017; Malayan Insurance Company, Ille. 11. St. Fro.ncis Square Realty Corpora·
'"' 634 SCRA 123 )2010), p. 130, emphasis supplied. lion, G.R. Nos. 198916-17, and 198920-21, January 11, 2016.
258 ALTERNATIVE DISPUTE RESOLUTION

Costs ofArbitration
In the case of Philippine National Construction Corporation
vs. Court of Appeals,'., the Supreme Court had occasion to reiterate CHAPTER 12
the general rule in determining which party ought to bear the costs
of arbitration before the CIAC. Said the Court:
KATARUNGANG PAMBARANGAY
"In respect of the costs of arbitration, Sec. 5, Article XV of
the Rules of Procedure Governing Construction Arbitration,.,
states:
A. THE BARANGAY JUSTICE SYSTEM
Decisum as to Cost of Arbitrction. -l n the
case of non-monetary claims or where the parties
agreed that the sharing of fees shall be determined The Barangay Justice System
by the Arbitrator(s), the award shall, in addition to and its Objectives
dealing with the merits of the case, fix the cost of
arbitration, and/or decide which of the parties shall The purpose of the barangay justice system is to "discoura_ge
bear the cost(s) or in what proportion the cost(s)
shall be borne by each. the indiscriminate filing of cases in court in order to decongest ~ts
clogged dockets and, in the process, enhance the qual tty. of'JUStee
1
Rule 142 of the Revised Rules of Court of the Philippines dispensed by it."' In Aquino v. Aure,' the objective of the barangay
governing the imposition of costs likewise provides the following: justice system was explained by the Supreme Court as follows:
'Section 1. Costs ordinarily follow the result
of suit.-Unless otherwise provided in these rules, "The barcngay justice system was established prim~~ly
costs shall be allowed to the prevailing party as a as a means of easing up the congestion of cases in ~e judicial
matter of course, but the court shall have the power courts. This could be accomplished through a proceeding be!o,:
for special reasons, to adjudge that either party the ba.rangay courts which, according to the one who conceiv
shall pay the cost of an action, or that the same the system, the late Chief Justice Fred Rwz Castro, IS ~sse~­
tially arbitration in character· and to make it truly effective, it
§hall be divided, aa may be equitable.' ' · pnmary
·
should also be compulsory. With this ob'iec.t 'ive ofthe
.
In the instant case, there is no basis for assessing the ar- barangay justice system in mind, it would ~e w~olly m keeping
bitration costs against one party or the other, as the parties' with the underlying philosophy of Pres1dent1al Decree No.
prayers were only partially granted. We find it is just and equi- 1508, otherwise known as the Katarungang Pambarangay
table that both parties equally share the costs of arbitration."
' Quiros v. Arjona, 425 SCRA 57 (2004), p. 63; see also Morata v. Go,
125 SCRA 444; Galuba. v. Laureta, 157 SCRA 627 (1998), P· ~3.4.
' 546 SCRA 71 (2008), pp. 79-80, emphasis supplied; c1tmg People v'.
Caruncho, 212 Phil. 16, 127 SCRA 16 (1984]; Galuba v. Laureta, supra.,
'°' 514 SCRA 569 (2007), pp. 574-575. See also B.F. Corporation and and Moreta v. Go, supra .. See also: Wee v. Castro, 562 SCRA 695 (2008), P·
Honoria Pineda v. Form-Eze Sy/dems, Inc., supra. 706; Racpan v. Barraga·Haigi, G.R. No. 234499, June 6, 2018.
,., Section 5, Rule XV of the Rules of Procedure Goveming Construe·
tion Arbitration was carried over to the CIAC Revised Rules as Section
16.5 thereof. 259
260 ALTERNATIVE DISPUTE R ESOLUTJON KATARUNGANG PA!\IBARANOAY 261
- The Barangay Justice System -

Law, and the policy behind it would be better served if an out.- 1 January 1992.• The repeal, however, did not do away with the
of-court settlement of the case is reached voluntarily by the barangay justice system because R.A. No. 7160 provided for the
parties.
same system originally established under P.D. No. 1508.
The primol'Clial objective of Pre.idential Decree
No. 11508 i1 to reduce th.e number of court litigations and By virtue of Section 421 of R.A. No. 7160, the Secretary of
prevent the deterioration of the quality of justice which Justice was empowered to promulgate the rules and regulations
hu been brought by the indiscriminate filing of cases in implementing the provisions of the Local Government Code of 1991
the co\ll"Q. To ensure this objective, Section 6 of Presidential on the Katarungang Pambarangay. Likewise, Article 201 of the
Decree No. 1508 required the parties to undergo a conciliation Rules and Regulations Implelllenting the Local Government Code
procesa before the Lupon Chaimuzn or the Pangkat ng Toga· of 1991 directed the Secretary of Justice to promulgate the rules on
pagl<oaundo as a precondition to filing a complaint in court the Katarungang Pambarangay which shall form part of the said
1ubject to certain exceptions x x x. The said section has been Rules and Regulations.
declared compulsory in nature.
Presidential Decree No. 1508 ('Establishing a System of Thus, on 1 June 1992, the Katarungang Pamborangay Im-
Amicably Settling Di1putes at du! Barangoy Level') is now in- plementing Rules and Regulations, otherwise known as the Kota-
corporated in Republic Act No. 7160, otherwise known as The rungong Pambarongoy Rules, was promulgated by the Oepa:tment
Local Government Cod.e, which took effect on 1January1992." of Justice and took effect upon its publication in the Official Ga-
zette.
Legi11latiue Hi1tory R.A. No. 9285, otherwise known as the "Alternative Dispute
Resolution Act of 2004• (ADR Act) did not repeal, amend or modifY
The barangay justice system had its roots with PTesidential the jurisdiction of the Lupon under the Katarungang Pambaran·
Decree (P.O.) No. 1508 (11 June 1978). Recognizing the time- gay Law' and, hence, the provisions of the Local Government Code
honored tradition of amicably settling disputes at the family and thereon remain effective.
barangay level, P.O. No. 1508 established a system therefor by
officers of the barangay in order to help alleviate the courts of
docket congestion. In brief, P .O. No. 1508 required for certain dis-
putes the conduct of conciliation a t the barangay level before any
complaint can be filed the with the regular courts.
The law directed the creation in the barangay of a Lupong
Tagaparrw.yapa' composed of the Punong Barangay as chairman
and not leas than ten (10) nor more than twenty (20) members
from whom parties can chose the members of the Pangkat ng Ta·
gopagle<Jllundo' or the conciliation panel.
P .O. No. 1608 was repealed by R.A. No. 7160 otherwise
known as the Local Gouernment Code of 1991' which took effect on

• Section l (a), P.O. No. 1508.

• Section 1(0, P.D. No. 1508. 'Section 536, R.A. No. 7160.
' Section 534(b), R.A. No. 7160. ' Section 53, ADR Act.
262 ALTERNATIVE lDISPUTE RESOLUTION KATARUNGANG PAMBARANGAY 263
- Lupong Tagapama,yapa and Pangkat og Tagapagkasundo -

B. LUPONG TAGAPAMAYAPA AND Lupon members shall hold office until a new Lupon is consti-
PANGKAT NG TAGAPAGKASUNDO tuted on the third year following their appointment unless sooner
terminated by resignation, the transfer of their residence or place of
work, or the withdrawal of their appointment by the Pu.n ong Baran·
Lupong Tagapamayapa and gay with the concurrence of the majority of the members of the Lu-
Pangkat ng Tagapagkaaundo pon. u A vacancy in the Lupon shall be filled by the Punong Blll'an-
gay through the appointment of a qualified person. Such appointee
The Lupong Tagapamayapa ("Lupon") is the body organized
in every barangay composed of the Punong Barangay as Chairman shall hold office only for the unexpired portion of the term of his
and not less than ten (10) nor more than twenty (20) members predecessor."
from which the members of the Pangkat ng Tagapagkasundo
("Pangkat•) shall be chosen.' The Lupon shall exercise administra- Constitution of the Pangkat
tive supervision over the Pangkat. •
The Pangkat is the conciliation panel constituted from the For each dispute brought before the Lupon, the parties shall
Lupon membership for every dispute brought before the Lupon a:nd choose three (3) members thereof who shall constitute the Pangkat.
consists o~ three (3) members chosen by agreement of th e dispu- If the parties fail to agree on the membership of the Pangkat, the
tants, or if no suc;!1 agreement is reached, drawn by lot by the chairman of the Lupon shall determine the members of the Pang·
Punong Barangay. kat by drawing lots. The members of the Pangkat shall elect from
among themselves the chairman and secretary of the Pangkat."
The Pangkat shall convene not later than thr·ee (3) days from its
Composition, Qualifications and constitution.
Term of Office

. To quali~ for appointment to the Lupon, a person must have Disqualification and T e rmination of Membership
his a~tmal rets~dence ohr placed of work in the barangay for which the
appom en JS soug t an must possess perso al h cte · ti' Any member of the Pangkat may be disqualified upon the ini-

as
a i::. :
th t. di tehis . bill ii
.ty ~wta . :I: n c ara ns cs
or ..the task of conciliating disputes such
m tgnti ' fiunpartib' ty, mdependence of mind, sense of fair-
tiative of a party on the ground of relationship, bias, interest, or
any other similar grounds. The disqualification shall be resolved by
ness, repu the affirmative vote of the majority of the Pangkat. The decision or.
. a on or pro ity and other relevant cons1·derat'ions l"k me
tact, patience, resourcefulness, flexibility and 0 pen mm · dedn
ess. this matter shall be final. ' 6
Furth h
· puermore,
mg blic office.e11must not be expressly prohibi'ted by law from h o Id- Membership in the Pangkat shall terminate upon cessation of
membership with the Lupon by reason of the expiration of term, re-

' Section 399(a), R.A. No. 7ll60; Rule II(a)• ""

"'a.ta.rungang pamba.ran· "Section 400, R.A. No. 7160; Sections 4 and 7(c). Rule IV, Katarun-
gay R u 1es. gang Pambarangay Rules.
• Section 402, R.A. No. 7160; Section 7 Kata.run p b " Section 401, R.A. No. 7160; Sections 4 and 5, Rule IV, Kata.run·
Rules. ' gang am arangay
gang Pa.mbara.ngay Rules.
" Section 404, R.A. No. 7160; Rule II(b), Katarungang p b "Section 404, R.A. No. 7160; Section 1, Rule V, Katarungang Pam·
Rules. . am arangay
barangay Rules.
"Section 399(b), R.A. No. 7160; Section 1, Rule IV, Katarungang "Section 410(d), R.A. No. 7160; Section 4, iRule V, Katarunga.ng
Pambarangay Rules. Pambarangay Rules.
264 ALTERNATIVE DISPUTE RESOLUTION KATARUNGANG PAJ\IBARANGAY 265
- Lu pong Tagapamayapa and Pangkat ng Tagapagkasundo-

signation, transfer of residence or place of work, or withdrawal of to the Punong Barangay, the Members of the Sangguniang
appointment by the Purumg Barangay with the concurrence of a ma- Barangay, or Kagawads, and members of the Lupong Ta-
jority of the members of the Lupon." Any vacancy occuning in the gapamayapa are now considered not merely as agents
Pangkat shall be filled, not by the Lupon member appointed to replace of, but as persons in authority.•
the terminated, transferring or resigning member, but by the Lupon
member chosen by the parties from among the remaining members of The legal implication of the foregoing principle is that an as-
the Lupon. In case of failure of the parties to agree on a common sault upon a member of the Lupon, while performing hls official duty
choice, the vacancy shall be filled by lot to be drawn by the Lupon or on the occasion thereof, constitutes the felony of Direct Assault
.
chamnan. " defined and penalized under Article 148 of the Revised Penal Code.'°
If, on the same occasion, an agent of the Lupon member is himself
assaulted, that will also constitute the felony of Direct Assault.
Nature ofOffice ofLupon Members Moreover, if, on the same occasion, a person who comes to the aid of
As provided in Section 406(a) of R.A. No. 7160, Lupon "mem- the Lupon member or his agent is assaulted, that will constitute the
bers, while in the performance of their official duties or on the felony of Indirect Assault under Article 149 of the Revised Penal
occasion thereof, shall be deemed as persons in authority, as de- Code."
fined in the Revised Penal Code."" Similarly, Section 388 of the
same law states that "(flor purposes of the Revised Penal Code, xx x Privileges of Lupon and Pangkat Members
members of the Lupong Tagapamayapa in each ba rangay shall be
deemed as persons in authority in their jurisdictions x x x. •
1. Persons in authority. As above discussed, members of
In the case of People 11. Sum," it was held that, in view of R.A. the Lupon, including Pangkat members, are consider~d as
No. 7160, members of the Lupon are now considered not merely as persons in authority under the Revised Penal Code while in
agents of persons in authority, but are themselves persons in au-
the performance of their duties or on the occasion thereof.
thority. Thus:
2. E conomic benefits. Lupon members shall gener~y s~rve
•xx x Section 388 of the Local Government Code of 1991 without compensation but they shall be entitled to mcentives
x x x expre&sly provides, in part, that '[flor purposes of the Re- granted under the Local Government Code of 1991. When in the
vised Penal Code, the punong barangay, sangguniang baran- performance of their duties the Lupon members, whether in public
gay members, and member& of the lupong tagapamayapa in or private employment, shitll be deemed to be on official time and
each barangay &hall be deemed a& persons in authority in their
jurisdictions .. .' This law expands the definition of a person in
authority under the Revised Penal Code wherein among the
barangay officials, only the barangay captain or chairman, now
called Punong Barangay, is expressly considered a person in
authority, as provided in Article 152 thereof. Tbus, in addition '° Article 148 [Revised Penal Code). Direct assaults.-A:ny person or
persons who x x x shall attack employ force, or seriously intimidate or
resist any person in authority ~r any of bis agents, while engaged in the
"Section 400, R.A. No. 7160. performance of official duties, or on occasion of such performance, x x x.
" Section 405, R.A. No. 7160; Sections 1 and 2, Rule V, Katarungang "Article 149 [Revised Penal Code). Indirect assau.lts.- x x x any per-
Pambarangay Rules. son who shall make use of force or intimidation upon any person coming to
" See also Section 8, Rule IV, Katarungang Pambarangay Rules. the aid of the authorities or their agents on occasion of the commission of
,. 277 SCRA 127 [1997], pp. 155-156; emphasis supplied. any of the crimes defined in the next preceding article.
266 ALTERNATIVE DISPUTE RESOLUTION KATARUNCANC PAMBARANGAY 267

shall not suffer from any diminution in compensation or allowance C. JURISDICTION OF THE LUPON
from their employment.''
Being Lupon members, Pangkat members are also generally
not entitled to compensation except for the incentives that granted Jurisdiction of the Lupon and Exclusions
them under the Local Government Code of 1991, and the economic
In general, the Lupon shall have jurisdiction over all di~putes
or other incentives under a system to be provided by the Depart- involving parties who are actually residing in the same city or
ment of the Interior and Local Government. And, when in the per- municipality. Section 408 of R.A. No. 7160 defined the jurisdiction
formance of their duties, the Pangkat members, whether in public
of the Lupon as follows:
or private employment, shall likewise be deemed to be on official
time, and shall not suffer from any diminution in compensation or "SEC. 408. Subject Matter for Amicable Settlement; Ex·
allowance from said employment." ceptions Therein.-The lupon of each barangay shall have au-
3. Legal advice. The Punong Barangay, or any Lupon or thority to bring together the parties actually residing in ~e
Pangkat member, w~enever necessary for the exercise of their same city or municipality for amicable settlement of all dis-
putes xx x.•
functions in the admmi~tration of the Katarungang Pambaran-
gay, may see~ le.gal advice on matters involving questions of law The same Section 408 excluded the following disputes from
from the provincial legal officer, city legal officer or prosecutor, or the jurisdiction of the Lupon:
the municipal legal officer. Any such advice on any of the provi-
sions of the Katarungang Pambarangay Rules may be elevated by "(a ) Where one party is the government or any subdivi·
the Punong Barangay, Lupon or Pangkat member to the Secre- sion or instrumentality thereof;
tary of Justice for review." (b) Where one party is a public officer or employ8?, and
the dispute relates to the performance of his official functions;
(c) Offenses punishable by imprisonment exceeding ~ne
(1) year or a fine exceeding Five thousand pesos (P5,000.00),
(d) Offenses where there is no private offended party;
(e) Where the dispute involves real properties located in
different cities or municipalities unless the parties thereto
agree to submit their differences to amicable settlement by an
appropriate !upon;
CO Disputes involving perties who actually reside in
barangays of different cities or municipalities, exc:ept where
such barangay units adjoin each other and the parties thereto
agree to submit their differences to amicable settlement by an
appropriate !upon;
"Section 406(b), R.A. No. 7160; Section 9, Rule IV, Katarungang (g) Such other classes of disputes which the President
Pambarangay Rules. may determine in the interest of justice or upon the recom·
u Section 406(b), R.A. No. 7160; Section 5, Rule V, Katarungang mendation of the Secretary of Justice.
Pambarangay Rules. The Court in which non-criminal cases not falling
" Section 408, R.A. No. 7160; Sections 1 and 2, Rule X, Katarungang within the authority of the !upon under this Code are filed
Pambarangay Rules.
268 ALTERNATIVE DISPlilTE RESOLUTION KATARUNGANG PAMBARANGAY 269
- Jurisdiction of the Lupon-

may, at any time before trial, motu proprio refer the case to (3) Where the dispute involves real properties located in
t he !upon concerned for amicable settlement.• different cities and municipalities, unless the parties thereto
agree to submit their difference to amicable settlement by an
Section 4 12 of the same law further exempts the following appropriate Lupon;
disputes from the r equirement of a pre-litigation conciliation and )4) Any complaint by or against corporations, partner·
allows the direct filing t h er eof with the courts: ships or juridical entities, since only individuals shall be par·
ties to Barangay conciliation proceedings either as complain·
"SEC. 412. Conciliation.- x xx ants or respondents )Sec. 1, Rule VI. Katarungang Pamba.raci-
(b) Where the parties may go directly to court.- The par·
gay Rules);
ties may go directly to court in the following instancea: 151 Disputes involving parties who actually reside in
barangay s of different cities or municipalities, except where
(1) Where the accused is under detention; such barangay units adjoin each other and the parties thereto
agree to submit their differences to amicable settlement by an
(2) Where a person has otherwise been deprived
appropriate Lupon;
of personal liberty calling for habeas corpus
proceedings; 161 Offenses for which the law prescribes a maximum
penalty of imprisonment exceeding one year or a fine of over
( 3) Where. actions are coupled with provisional five thousand pesos CIPJ6,000.00);
remedies such as preliminary injunction, at-
tachment, delivery of personal property and (7) Offenses where there is no offended party;
support perukn~ lite; and ' (81 Disputes whore urgent legal action is necessary to
prevent injustice from being committed if further continued,
(4) Where the action may otherwise be barred by
the statute of limitations. Specifically the following:
x xx xx x: [a) Criminal cases where the accused is under po-
xxx" lice custody or detention [See Sec. 412(b)(l),
Revised Katarungang Pambarangay Law);
A comprehensive enumeration of the disputes excluded from
the jurisdiction of the Lupon was made by the Supreme Court in [bl Petitions for habeas corpus by a person ille·
Agbayani vs. Court ofAppeals," to wit: gaily deprived of his rightful custody ov~r ~­
other or e person illegally deprived of his hb-
erty or one acting in his behalf;
"fl] Where one party is the government, or any subdivi·
sion or instrumentality thereof; [cl .
Ac t tons coup1ed WI'th provisional remedies
d .such
as preliminary iajunction, attachment, . e1ivery
(2) Where one party is a public officer or employee and of personal property and support dunng the
the dispute relates to the performance of his official func.t ions; pendency of the action; and
(d i Actions which may be barred by the Statute of
Limitations.
"674 SCRA 358 (2012), PP· 373-374, citing Administrative Circular (91 Any class of disputes which the President may ?e·
No. 14-93 issued by the Supreme Court on July 15, 1993 entitled: "Gui.de· termine in the in terest of justice or upon the recommendation
lines on the Katarungang Pambarongay Conciliation Procedure to Prevent of the Secretary of Justice;
Circumvention of the Reuised Katarungang Pambarangay Law {Sections
399-442, Chapt.er Vil, Title I, Book Ill. R.A No. 7160, otherwise known as (10) Where the dispute arises from t.he Comprehensive
the Local Gouernment CO<h of 1991]. • Agrarian Reform Law (CARL) (Secs. 46 & 4 7, R.A. 6657);
270 ALTERNATIVE D ISPUTE RESOLUTION KATARUNCANO PAMBARANCAY 271
- Jurisdiction of the Lupon-

(11] Labor disputes or controversies arising from em- situated. However, even in such cases, the parties may voluntarily
ployer-employee relations [Month)la u. Escayo, 171 SCRA 442; submit their dispute for conciliation by the appropriate Lupon if
art. 226, Labor Code, as amended, which grants original and they so desire. The case shall be brought in the barangay where
exclusive jurisdiction over conciliation and mediation of dis- the real property or larger portion thereof is situated."' Once con-
putes, grievances or problems to certain offices of the Depart-
ment of Labor and Employment; ciliation is availed of, the parties lose their right to directly file
their cases in court without first terminating or completing the
(12) Actions to annul judgment upon a compromise
conciliation proceedings before the Lupon. The completion or ter-
which may be filed directly in court [See Sanchez us. {Judge]
Tupaz, 158 SCRA 459].• mination of the conciliation proceedings is required to avoid the
dismissal of the action by reason of forum shopping and non-
The jurisdiction of the Lupon and Pangkat is, therefore, de- exhaustion of administrative remedies.
termined by two (2) factors, namely: [i) the nature and circum- 3. Actions coupled with provisional remedies." Because. of
stances of the dispute, and [ii) the nature and circumstances of the the urgency involved in the resolution of provisional remedies
parties. All disputes, whether civil or criminal in nature, fall pleaded in the complaint or petition, actions coupled with provi-
within the authority of the Lupon unless they are excluded there- sional remedies are excluded from the jurisdiction of the Lupon.
from on the basis of the nature and circumstances of the dispute Otherwise, the time spent for conciliation proceedings bef?re the
and of the parties. Lupon might render the provisional r emedies prayed for meffec-
tual, nugatory or moot.
Exclusion by Nature and Circumstances 4. Actions that may be barred by the statute of limitations."°
of the Dispute In order to avoid the prescription of civil or crim~al. action~, R.A.
No. 7160 provides for the suspension of the prescnptive penods of
Based on the nature and circumstances of disputes, the fol- offenses and causes of action from the time of the filing of the com-
lowing disputes are excluded from the jurisdiction of the Lupon: plaint with the Punong Barangay which will resume upon rece~pt
by the complainant of the complaint or the certificate of repudia-
1. Offenses punishable by imprisonment exceeding one (1) tion or certification to file action issued by the Lupon or Pangkat
year or a fine exceeding P5,()()0.00.'" The gravity of the offense secretary. The interruption of the prescriptive period shall, h~w­
charged as determined by the imposable penalty therefor takes the ever, not exceed sixty (60) days from the filing of the complaint
case out of the jurisdiction of the Lupon, and justifies the direct with the Punong Barangay."
referral of the dispute to the proper prosecutor's office or the
courts. Notwithstanding the interruption of the prescrip~ve periods,
there may be instances when the conciliation proceedmgs may go
2. Disputes involving real properties located in different cit- beyond the sixty (60) day period of interrupt~on. If the sixty (60)
ies or municipalities, unless the parties voluntarily submit them- day period interrupting the prescriptive penod for offenses and
selves to conciliation before an appropriate Lupon.21 The efficacy of
conciliation by the Lupon is significantly reduced when the prop-
erty involved in the dispute lies outside the territorial limits of the "Section 3(c), Rule VI, Katarungang Pambarangay Rules.
city or municipality where the barai1gay constituting the Lupon is "Section 412(3), R.A. No. 7160. See also Blardony, Jr. u. Coscul·
luela, Jr., 182 SCRA 825 (1990), p. 829; Racpan u, Barraga·Haigi, supra.
26
"Section 412(4), R.A. No. 7160.
Section 408(c), R.A. No. 7160. "Section 410(c), R.A. No. 7160; Section 11, Rule VI, Katarungang
"Section 408(e), R.A. No. 7160. Pambarangay Rules.
272 ALTERNATIVE DISPUTE RESOLUTION KATARUNGANG PAMBARANGAY 273
- Jurisdiclion of the Lupon -

causes of action is about to lapse, a party may be allowed to file in "(a) Who may initiate proceedings. - Upon payment of
court the appropriate civil or criminal action which is i.n danger of the appropriate filing fee, any individual who bas u
prescribing. This situation should constitute an exception to the cause of action against another individual involving
principle that administrative remedies should not only be availed any matter within the authority of the !upon may com-
of but must be completed before resort to the courts can be taken."' plain, orally or in writing, to the I upon chairman of the
Otherwise, the purpose of pre-litigation conciliation before the barangay. •<Emphasis supplied!
Lupon will be defeated if actions which are about to prescribe will
be required to undergo and complete the barangay conciliation The Katarungang Pambarangay Rules specifically provides
process. The party seeking to elevate to the court the case in dan- that only individuals shall be parties to conciliation proceedings
ger of prescribing should, however, first terminate the conciliation either as complainants or respondents. No complaint by or against
proceedings. If not, the complaint will be dismissible for forum corporations, partnerships or other juridical entities shall be filed,
shopping and non-exhaustion of administrative remedies. received or acted upon by the Lupon,"' including estates of de-
ceased persons ."
5. Disputes arising from the Comprehensive Agrarian Re-
form Law, labor disputes under . th~ Labor Code, and actions to Perforce, only individuals are required by law to undergo pre-
annul judgment upon a compromise. These disputes are governed litigation conciliation and cases involving juridical persons are
by special laws or special rules that provide for their resolution and excluded from the requirement. This principle was settled in the
the procedure thereof. case of Vda. De Borromeo v. Pogoy,"' as follows:
6. Such other classes of disputes which the President may de- "x x x lRJeferral of a dispute to the Barangay Lupon is
termine in the interest of justice or upon the recommendation of the required only where the parties thereto are ~ndividu­
Secretary of Justice. als.' An 'individual' means a single human being as
contrasted with a social group or institution.' Obvi-
Exclusion by Nature and Circumstances ously, the law applies only to cases involving
natural persons, and not where any of the par•
of the Partie1 ties is a juridical person such as a corporation,
partnership, corporation sole, testate or intestate es-
The following circumstances attending any or all of the par- tate, etc .. "
ties to a dispute exempt the dispute from the requirement of prior
conciliation by the Lupon: 2. Where one party is the government, a subdivis_ion or in-
strumentality thereof." The Lupon is an instru~entality of !11.e
1. Where one or both parties is a juridical person. The pre- barangay which, in turn, is a local government umt and a subdivi-
litigation barangay conciliation presupposes that both parties are sion of government . As such, t h e Lupon will be in conflict of inter-
natural persons. Section 4 10(a) of R.A. No. 7160, which is an al- est to hear and conduct conciliation over disputes involving the
most verbatim recitation of Section 4(a) of P.D. 1503, reads: government of which it is an instrumentality.

" Montanez v. Provincial Agrarian Reform Aqjudicator (PARAD), "Section l, Rule VI, Katarungang Pambarangay Rules.
Negros Occidental, 600 SCRA 217, citing Asia International Auctioneers, Inc. " Uy v. Estate of Vipa Fernandez, G.R. No. 200612, April 5, 2017.
v. Parayno, Jr., 540 SCRA 536 (2007}. " 126 SCRA 217 (1983], p. 221, emphasis supplied.
"Agbayani v. Court ofAppeals, supra. " Section 408(a), R.A. No. 7160.
276 ALTERNATIVE DISPUTE RESOLUTION KATARUNOANO PAMBARANOAY 277
-Jurisdiction of the Lupon -

Lupon although it did not undergo the pre-litigation conciliation. The Complaint is PremD.ture
In Aquino u. Aure," it was held that:
The requirement for barangay conciliation is merely a proce-
"x x x [T)he conciliation proceu is not a jurisdictional dural technicality." The abse.n ce thereof only affects the sufficiency
requirement, so lhat non-eompllance therewith cannot
of the cause of action" and r enders the complaint dismissible on
aft'ect the juriadictlon which the court h as otherwise
acquired over the eubject matter or over the person of the ground of failure to comply with a condition precedent pursu-
the defendant. ant to Section l (j), Rule 16 of the Rules of Court. The institution of
the action, whether civil or criminal, without complying with the
AA enunciated in the landmark case of Roya/es u. Inter- requireme.n t merely renders the action premature for failure to
mediate Appellate Court: exhaust all administrative remedies.•
'Ordinarily, non-compliance with the condi- The proper ground to assert against an action filed without
tion p~dent by P.O. 1508 could affect the suffi- the parties undergoing the requisite barangay conciliation is not
ciency of the plaintiff's cause of action and make his that the court has no jurisdiction over the subject matter of the
complaint vulnerable to dismissal on ground oflack claim or over the offense charged, but that the filing of the com-
of cause of action or prematurity; but the same plaint or information is premature since a condition sine qua non
wo uld not prevent a court of competent juris- has not been complied with."
diction from exercising ita power of acijudica-
tion over lhe cue before it, where the defen- Si.n ee the failure to comply with the requisite barangay con-
dant.a, as ln this caae, failed to object to su ch ciliation is not jurisdictional but only renders the complaint prema-
exercise of ju.rilldlction in their answer and ture, such objection may be waived and a party may be estopped
even during the entire proceedings ci quo. from challenging the complaint on that ground if he fails to file a
While petitionen could have prevented the trial
ccurt from exercisin1 jurisdiction over the case by sea-
sonably taking exception thereto, they instead in·
voked th~ very aame_iurisd!ction by filing an answer "CoU>rce u. Court of Appea.J.s, 129 SCRA 210 [19841; Gonzales u.
and seeking affirmative relief from it. What is more Court ofAppeals, supra.
they participated in the trial of the case by cross'. .. Goluba u. Laureta, supra; Lansangan u. Caisip, G.R. No. 212987,
examining respondent Planas. Upon t h - prem· Auguat 6, 2018; Sobo.y u. People, G.R. No. 192150, October 1, 2014.
iee., petitioners cannot now be allowed belat- • Villodor, Jr. u. Zabala, 545 SCRA 325 [20081, p. 339, citing &rbo
edly to Mlopt an inconsistent posture by attack- u. Pablo, <174 SCRA 686 12005).
ing the ju.ri9diction of the court to which they • Amonii the grounds for a motion to dismiss a civil action under
had 11\lbmitted t.hem8elvea voluntarily. x x it Section l, Rule 16 of the Rules of Court are:
(Emphasis supplied)" "(b) That the court has no jurisdiction over the subject matter
of the claim;
"546 SCRA 71 [2008), pp. 82-83, emphasis supplied, citing Presco u. xxx xxx xxx
Court of Appeah, 192 SCRA 282 (19901; and IWyoJ.es u. Intermediate Ap- (j) That a condition precedent for filing the claim has not
pelJate Court, 212 Phil. <132, 127 SCRA <170 119841. See also Santos v. been complied with.•
Lumboo, 519 SCRA 408 120071; citing the cases of Roya/es u. lnterm.ediou
Appellate Court, 1upra.; Sta. Rosa Realty Developmn&t Corporation v.
Amante, 463 SCRA 432 12005); and Ballaru II u. Bolising, 328 SCRA 36
120001.
 ALT£RNA11VB DISPUTE RESOLUTION IV.TAAUNGANG P AMBAAANGAY 279
278
-Jurisdiction oflhe Lupoo-

timely motion to dismiss the complaint." This principle was ex- same as that resulting from non-exhaustion of administrative
plained in Santos v. Lumbao"' where it was held that: remedies.

"Emphasis mu.It be given to the fact that the petitioners "It is true that the precise technical effect of failure to
could have prevented the trial court from exercising jurisdiction comply with the requirement of Section 412 of the Local ?ev-
over the case had they filed a Motion to Dismiss. However, in- emmcnt Code on barangay conciliation (previously contwned
stead of doing so, they invoked the very same jurisdiction by fil- in Section 5 of Presidential Decree No. 1508) is much the same
ing an answer seeking an affirmative relief from it. Worse, the effect produced by non-exhaustion of administrative remedies -
petitioners actively participated in the trial of the case by pre- the c:omplaint becom es aftlicted with the vice of prema-
senting their own witnesses and by cross-examining the wit- turity; and the controver sy there alleged is no t ripe for
n e - presented by the respondent.a Spouses Lumbao. It ia ele- judi c ial determinatio n . The complaint becomea vulnerable
mentary that the active participation of a party in a case pend- to a motion to dismiss."
ing a11alnst him before a court is tantamount to recognition of
that court's jurisdiction and a willingne19 to abide by the resolu-
tion of the case which will bar said party from later on impugn- Options of the Court
ing the court's jurildiction. It is also well-settled that the non-
reterral of a ~ for baranpy conciliation when so re- Considering t h at the absence of pre-litigation conciliation is
quired under the law ls not jurUclictlonal in n a ture and not jurisdictional, the dismissal of the complaint on tha~ ground
may therefore be deemed waived If not raised seasonably shall be without prejudice" t o t h e re-filing of the complaint. aft.er
iD a motion to dlamiu. Hence, herein petitionen can no compliance with the requirement. Moreover, since the defect 1S not
lo nger rai.ee the defense of no n-compliance with the jurisdictional and can be waived, it is submitted that the .court
b aranPY concllladon proceedings to seek the dl&m.issal
cannot di.amiss the complaint motu proprio but only upon motion of
of the complaint ftled by the reapondents Spouses Lum-
bao, because they already waived the said defenae when the defendant. Thus, the options available to the court are:
they tailed to file a Motion to Diam.In.•
1. !Dismiss the complaint for failure to state a cause of a ction
upon motion of the defendant;"
Foilure to Exhaust Administrative Remedies 2. Suspend the proceedings upon petition of any party for the
case to be referred to barangay conciliation; and/or
As explained in Aquino v. Aure," the precise technical effect of
3. Refer the case motu proprio to barangay conciliation, ap-
non -compliance with the pre-litigation conciliation process is the
plying by a nalogy Section 408(g), last paragraph, R.A. No.
7160, which provides that:"

"P~fla{kir u. Pania, 117 SCRA 953 (1982); Royah• v. lnler~diatc "Section 2 . Subject maUer for amicable settlement;
Appellate Court, supra.; Peregrino u. Pania, 138 SCRA 72 (1984); Corpus 11. exception thereto.-
Court of Appeals, 274 SCRA 275 (19971; Dui u. Court of Appeals, 261
SCRA 472 (19961.
"Supra., pp. 421-423, emphasis supplied; citing the cases of Royalea "Uy u. Javellana, 680 SCRA 13 (2012), pp. 34-35.
u. l nU!rmediale Appellate Court, supra. ; Sta. Rosa Realty Ikvelopment "Ro:yaln v. Intcrm«iiau Appellate Court, supra.; Gonzales u. Court
Corporation u. AmariU, supra.; and Bailares 11 11. Balisi.Ja(/, 11upro. ofAppeah, •upra.
.. Supra., p. 82, emphasis supplied; citing Uy v. Contrera•, 237 SCRA "See also Section 2 Oaat paragraph), Rule VI, Katarungang Pam·
167 (1994) . barongay Rulea.
280 ALTERNATIVE DlSPUTE RESOLUTION KATARUNGANG PAMBARANGAY 281

xxx xxx xxx D. FORMS OF DISPUTE RESOLUTION,

VENUE AND PROCEDURE
The court in which non-criminal cases not falling
within the authority of the !upon under this Code are
filed may, at any time before trial nuitu proprio refer Forms ofDispute Resolution
the case to the lupon concerned for amicable settle-
ment." There are two (2) forms of alternative dispute resolution
(ADR) which the Lupon chairman or the Pangkat, as the case may
be, can conduct, namely:

1. Conciliation/mediation. Generally, the Lupon chairman

or the Pangkat can conduct conciliation or mediation leading to-
wards an amicable settlement in order to resolve a dispute. The
Lupon chairman or the Pangkat will not decide the dispute brought
to them or render an award thereon. They are vested only with
conciliation functions.•• They can only encourage the parties to
voluntarily arrive at an amicable settlemen t.
2. Arbitration. At any stage of the proceedings, the parties
may agree to undergo arbitration by the Lupon chairman or the
Pangkat provided that the parties agree in writing that they shall
abide by the award thereon. While the Lupon chairman, acting as
a sole arbitrator, or the Pangkat acting as a panel of arbitrators,
can conduct arbitration, arbitration is not commonly undertaken
because of lack of awareness of the intrica cies of the arbitral pro-
cedure and the apprehen sion of rendering an award that cannot
withstand legal challenge.
The agreement to arbitrate may be repudiated within five (5)
days from the date thereof. If no repudiation of the agreement to
arbitrate is made within the said period, the arbitration award
shall be made after the lapse of the said period."
As a general rule, the Lupon chairman or the Pangkat cannot
exert compulsion upon the parties to resolve the dispute through
an amicable settlement. However, if the parties have entered into a
settlement agreement, or have agreed in writing to undergo arbi-
tration and an arbitration award has been rendered, the Lupon

"Gonzales v. Court ofAppeals, supra.

"Section 413, R.A. No. 7160.
282 ALTERNATIVE DISPUTE RESOLUTION KATA.RUNGANG P~IBA.RANOAY 283
- Forms of Dispute Rosolutiou,
Venue and Procedure -

chairman or the Pcmgkat has the authority to compel compliance within their jurisdiction, including disputes involving real proper-
with or cause the execution of the settlement or the award.'° ties. Thus:

"The Court gave the following elucidation on the jurisdic·

Venue ofConciliation Proceedin11• lion of the Lupong Tagapamayapa In Tavora v. Hon. Veloso:
The venue of the conciliation proceedings shall be:.. 'The foregoing provisions are quite clear. Sec-
tion 2 specifies the conditions under which the Lu-
1. Where the parties reside in the same barangay, the dis- pon of a barangay 'shall have authority' to bring to-
pute shall be brought in said barangay; gether the disputants for amicable settlement of
their dispute: The parties must be 'actually n!Sid·
2. Where the parties reside in different barangays in the ing in the same city or municipality.' At the same
s&llle city or municipality, the dispute shall be settled in the baran- time, Section 3 - while reiteratinir that the dispu·
gay where the rupondent or any of the respondents actually re· tants must be 'actually residing in tM same baron·
sides, at the choice of the complainant; gay' or in 'different barangays' within the same dty
3. Dispute& lnvolVing real property shall be brought for set- or municipality - unequivocably declares I.bat the
Lupon shall have 'no authority' over disputes 'in·
tlement in the barangay where the real property or larger portion
thereofis situated; or volving parties who actually reside in barangays of
different cities or municipalities,' except where such
4. Disputes arising at the workplace where the contending barangays acijoin each other.
parties are employed or at the institution where such parties are Thus, by express statutory inclusion and
enrolled for study shall be brought in the barangay where such exclusion, the Lupon shall have no jurisdic-
workplace or institution is located. tion over clieputes where the partiea an ~ot
actual resident& of the aame city or 111U111ci·
Ob~ections to the venue shall be raised during the mediation pality, except where the baran1aya in which
proceedings before the Punong Barangay• otherwise the same they reside adJoln each other.
shall be deemed waived. ' ' It is true that immediately after specifying
the barangay whoae Lupon shall take cognizance of
In Torbela 11. Rosario.6' the Supreme Court clarified that ac-
a given dispute, Sec. 3 of PD 1608 adds:
tual reaiden~ of the par?~s ~the ~me barangay, or in barangays
of the s~e city or ~~<;t~ali?'• or m acljoining barangays in dif· 'However, all disputes which involve ~
ferent cities or muruc1palit1es, IS a requirement for the exercise of property or any interest therein shall be brought an
jurisdiction by the Lupon chairman or Pangkat over all disputes the barangay where the real property or any part
thereof is situated.'
Actually, however, thia added sentence is just an ordi·
•Section 417, R.A. No. 7160. nary proviso and should operate as such.
'°Section 409, R.A. No. 7160; SecLiun 3, Rule VI, Katarungang Pam· The operation of a proviao, as " rule, 1hould be limi~ tn
barangay Rules. its normal function which is to restrict or vary the operation of
" 661 SCRA 633 (2011), pp. 656-657, emphasis supplied, citing the principal claUB~, rather than expand its scope, in the ab-
Tavora v. Hon. Veloso, 202 Phil. 943, 117 SCRA 613 (19821. See also: sence of a clear indication to the contrary.
Penaflor v. Panis, supra.
284 ALTEfu'IATIVE DISPUTE RESOLUTION l{,\TARUNGANC PAMBARANGAY 285
- Forms of Dispute Resolution.
Venue and Procedure -

'The natural and appropriate office of a pro- Rules of Procedure

viso is .•. to except something from the enacting
clause; to limit, restrict, or qualify the statute in The following is the procedure for conciliation before the Lu·
whole or in part; or to exclude from the scope of the
pon and Pangkat:
statute that which otherwise would be within its
terms.' (73 Am Jur 2d 467.)
1. Comp la i11t. U pon payment of the appropriate filing fee,
Therefore, the quoted proviso should simply be deemed to a party may complain orally or in writing to the Lupon chairman."'
restrict or vary the rule on venue prescribed in the principal Even if the complaint lodged is verbal, it shall be recorded by the
clauses of the first paragraph of Section 3, thus: Although Lupon secretary in the record book of complaints in the order it
venue is generally detennined by the residence of the was received , including the names of the parties, the date and time
parties, disputes involving real properties shall be it was filed, the nature of the case, and the disposition thereof. ..
brought in th~ b~rangay wher? the real property or any 2. Answer. The respondent shall answer the complaint also
~art thc:reof is situated, notwithstanding that the par·
orally or in writing, by denying specifically the material averments
ties res~de el~where in the same city/municipality.'
(Emphasis supphedY of the complaint and/or alleging any lawful defense. He may also 06
interpose a counterclaim"' against the complainant, a cross claim
~h~ original parties in Civil Case No. U-4359 (the Tor·
bela s1bhngs and the spouses Rosario) do not reside in the against a co-respondent, or a third party complaint"' against one
s:ime baran~~Y· ~r in the different barangays within the same who is not yet a party to the proceedings." Notwithstanding the
city or ~':'mc1~ahty, or in dif'.e~ent barangays of different cities verbal character of an answer, its contents shall be recorded by the
or ~umcip~ht1es but !""e adjoining each other. Some of them Lupon or Pa11gkat secretary as part of the minutes of the proceed·
reside outs1dc Pangasman and even outside of the country al- ings ...
together.xx. x Resultantly, the Lupon had no Jurl · ·sd·IC t•JOO
over the •t•dispute
, and barongay conci'lt'at•ion was no t a
th fi .
pre-cond l ion •Or e ihng of Civil CaS<! No. U-4S:>g.•
" Section 4 IO(a), R.A. No. 7160; Section 4, Rule VI, Katarungang
Procedure for Conciliation Pambarangay Rules.
" Section 2(a), Rule Ill, Katarungang Pambarangay Rules.
""A counterclaim is any claim which a defending party may have
. The settleme~t pro~eedings shall be open to the general pub·
against an opposing party." (Section 6, Rule 6, Rules of Court)
he and conducted in an informal but orderly manner with t •
gard to technical rules of evidence, and as best calcul~ted ~u ffiret
" "A cross-claim is any claim by one party against a co-party arising
out of the transaction or occurrence that is the subject matter either of the
a fair settlement of the dispute and bring about a har e · ec original action or of a counterclaim therein. Such cross-claim may include
. hi b h . monious
rel a t ions p etween t e parties. Upon the request of a part a claim that the party against whom it is asserted is or may be liable to
upo~ the initiative of t~e Pu~ong Barangay or the Pangkat, yt~~ the cross-claimant for all or part of a claim asserted in the action against
public may be exclu~ed in the interest of privacy, decency or public the cross-claimant." <Section 8, Rule 6, Rules of Court)
morals. The proceedings shall be recorded by the Lupon or Pangkat ""A third (fourth, etc.) party complaint is a claim that a defending
secretary as the case may be." party may, with leave of court, file against a person not a party to the
action, called the third (fourth, etc.) party defendant, for contribution,
indemnity, subrogation or ony other relief, in respect of his opponent's
claim:, (Section 11, Rule 6, Rules of Court)
Section 5. Rule VI. Kata.ru.nga11g Pambarangay Rules.
"Section 7, Ruic VI, Katarungang Pambarangay Rules. "Sections 2(b) and 4(b), Ruic 111, Kcitar1111ga11g Pambarangay Rules.
286 ALTERNATIVE DISPUTE RESOLUTION KATARUNGANG PMIBARANGAY 287
- Forms of Dispute Resolution.
Venue and Procedure -

3 . Mediation by Lupon chairman. Upon receipt of the com· deemed a waiver of the right to challenge on said grounds. The
plaint, the Lupon chairman shall, within the next working day, repudiation of the agreement to arbitrate shall be sufficient basis
summon the respondent(s), with notice to the complainant(s) for for the issuance of the certification to file the action in court."
them and their witnesses to appear before him for a mediation of Tbe arbitration award shall be made after the lapse of the pe-
their conflicting interests. If he fails in his mediation effort within riod for repudiation and within ten ( 10) days thereafter.'"
fifteen ( 15) days from the first meeting of the parties before him, he
shall forthwith set a date for the constitution of the Pangkat.10 6. Settlement or resolution. If there is no agreement to ar·
bitrate, the Pangkat shall arrive at a settlement or resolution of
4. Conciliation by the Pangkat. The Pcmgkat shall convene the dispute within fifteen {15) days from the day it convenes. This
not later than three (3) day~ from its constitution, on the day and period may be extended at the discretion of the Pangkat but not
hour set by the Lupon chrurman. It shall hear both parties and exceeding fifteen (15) days unless in clearly meritorious cases. "
their witnesses , aimplify the issues, and explore all possibilities for
amicable settlement.. It may issue summons for the personal ap- 7. Form of settlerrumt and award. All settlements, whether
pearance of the parties and their witnesses." It shall exert all ef- by mediation conference or arbitration, shall be in writing, and in a
forta to conciliat~ the parties within fifteen (15) days from their language or dialect known to the parties. Settlements by mediation
initial confrontation, which period may be extended in the Pang· or conciliation shall be signed by the parties and attested by the
kat's discretion for another period not exceeding fifteen {15) more Punong Baran.gay or Pangkat chairman, as the case may be, that
days, except in clearly meritorious cases." such settlement was agreed upon by the parties freely and volun·
tarily, after a full understanding of its terms and an intelligent
. 5. Arbitrati.on. At 8;11Y time during the mediation proceed- awareness of the legal consequences thereof. The arbitration award
ings before the Lupon cham1:1an and the conciliation proceedings shall be signed by the Punong Baranga;y or all the members of the
before the Pangkat, the parties may agree in writing to undergo
Pangkat, as the case may be."
arbitration by the Lu~on. chairman or the Pangkat, as the case may
be, and agree to abide by the arbitration award ..,, The Punong When a party's consent is vitiated by fraud, violence or in ·
!larangay or the Pangkat, as the case may be, shall, after the hear- timidation, he may, within ten (10) days from the date of the set-
ing, render the award not e~lier than the sixth day but not later tlement repudiate the same by filing with the Punong Baran.gay a
than the fifteenth day followmg the date of such agreement." sworn statement to that effect. Such repudiation shall be sufficient
basis for the issuance of the certification for filing a complaint in
The agreement to arbitrate may be repudiated within five (5)
court or any governmen t office for adjudication.
days from the date ther eof. Repudiation shall be made by filing
with the Lupon chairman a statement to that effect sworn to before Failure to repudiate within the aforesaid period shall be
~ on the ground. that the ~n~e1:1t of the repudiating party was deemed a waiver of the right to challenge on said grounds."
vitiated .by fraud , VIOience or mtimidation. The failure to repudiate 8. Certificate authorizing the filing of an action in court. If
the arbitration agreement within the aforesaid period shall be there is no settlemen t or compromise agreement arrived at, a certi-

,. Section 4l()(b), R.A. No. 7160; Section lO(a), Rule VI , Katarungang " Sections 413 and 418, R.A. No. 7160; Section 12, Katarungang
Pambarangay Rules. Pambarangay Rules.
" Section 4 l O(d), R.A. No. 7160. " Section 4 13, R.A No. 7160.
: ~on l O(b), Rule VJ, Katarungang Pambarangay Rules. " Section 410(e), R.A. No. 7160.
Section 413, R.A. No. 7160; Section 9, Rule VI, Katarungang Pam· "Sections 411 and 413, R.A No. 7160; Section 13, Rule VI, Katarun-
baranga;y Rulet. gang Pambarangay Rules.
" Section l O(c), Rulo ill, Katarungang Pambarangay Rules. " Section 14, Rule VI, Katarungang Pambarangay Rules.
288 ALTERNATIVE DISPUTE RESOLUTION IV.TARUNCANC PA?>lBARANCAY 289
- Forms of Dispute Resolution,
Venue and Procedure -

fication to that effect shall be issued by the Lupon or Pangkat sec· H the mediation or conciliation efforts before the Punong
00
retary, attested to by the Lupon or Pang/tat chairman. The certifi· Borangay prove unsuccessful, there having been no agreement.to
cation will serve as authority for the parties to file their case before arbitrate ," or where the respondent fails to appear at the media·
the proper courts. tion proceedings before the Punong Barangay,,. the Puncng Baran·
The certification for filing a complaint in court or any gov- gay should not cause the issuance at this stage of a certification to
ernment office must be issued by the following barangay authori· file action. Instead, he should constitute the Pang/tat before whom
ties:" mediation conciliation or arbitration proceedings shall be held.
And, it is ~pon the failure of conciliation, mediation or arbitration,
a . The Lupon secretary and attested by the Lupon chairman ss the case may be, before the Pangkat that the certification to file
(Punong Barangay), certifying that a confrontation of the action may be issued.
parties has taken place and that a conciliation or settle- 9. Transmittal of settlement or arbitration award. The set·
ment has been reached, but the same has been subse- tlement or arbitration award shall be transmitted by the Lupon
quently repudiated;.. secretary to the appropriate city or municipal court within five (5)
b . The PCJll/lltat secretary and attested by the Pangkat days from the date of the award or from the lapse of th_e ten (~0)
chairman, certifying that a confrontation of the parties day period for the repudiation thereof, and shall furnish copies
took place but no conciliation/settlement has been thereof to each of the parties to the settlement and the Lupon
reached; or that no personal confrontation took place be- chairman."
fore the Pangkat through no fault of the complainant;" The same periods for transmittal to the referring court will
c. The Punong Barangay, as requested by the proper party apply for amicable settlements reached in a case referred by the
on the ground of failure of settleme.n t where the dispute court motu proprio to the Lupon for amicable settlement although
involves members of the same indigenous cultural com· not falling within the authority of the Lupon. •
munity, or where one or more of the parties to the afore-
said dispute belong to the minority and the parties mutu·
ally agreed to submit their dispute to the indigenous sys· Compulsory Processes and Contempt
tem of amicable settlement, and there has been no set-
The Lupon and Pangkat have the power to issue s°:'11mons
tlement as certified by the datu, tribal leader or elder to
against parties and to compel the attendance of the parties and
the Punong Barongay of the place of settlement...
witnesses in their proceedings.
They however do not have the power to cite for contempt. If
• • p kat
a party or witness refuses to appear before the Lupon or ang •
the Lupon or Pangkat chairman, as the case ~a! be, .ma:l'. ap~ly
'°Section 412, R.A. No. 7160. with the proper Metropolitan, Municipal or Municipal Circuit Trial
" As discussed in Supreme Court Administrative Circular No. 14-93
entitled: "GuideliMs on the Katarunga.ng Pomba.rongay Conciliation Pro-
cedure To Prevent the Circumvention of the &viMd Kotarungang Pam· "Section l (c), Rule III , Kotarungang Pamborangay Rules.
f)arangay Law [&clion.a 399422, Chaptu Vil, Titk J, Boolt Ill, Republ.~ •Section 8(a), third paragraph, Rule Vl, &larungang Pambarongay
Act No. 7160, olherwiu Jmown as the Local Government Code of 1991}." Rules .
., Section 2(h), Rule Ill, Katarungang Pambarongay Rules. "Section 419, R.A. No. 7160; Section 16, Rule VI, Kat.arungang
00
Section 4(0, Rulo III, Katarungang Pa.mba.rangay Rulea. Pambarangay Rules.
" Sections 1, 4 and 5, Rule IX, Katarungang Pambarangay Rules. "Section 16, Rule Vl, Kotarungang Pambarangay Rules.
290 ALTERNATIVE DISPUTE RESOLUTION KATARUNGANG PAMBARANGAY 291
- Forms of Dispute Resolution,
Venue and Procedure -

Court for the citation of the refusing party or witness as for indi- Furthermore, the failure of the respondent to appear at the
rect contempt of court.'° The same remedy is available to a con- mediation proceedings before the Punong Barangay will result in
tending party against a witness who fails or willfully refuses to the mandatory constitution by the Punong Barangay of the Pang·
appear when summoned. kat. The further refusal or willful failure of the respondent to ap-
pear before the Pangkat, as determined by the latter after due
Effects of Failure or Refusal to Appear notice and hearing, shall be sufficient basis for the issuance of a
certification for filing the complainant's cause of action in court or
If the complainant refuses or willfully fails to appear for me- with the proper government agency or office...
diation, conciliation or arbitration despite due notice and without
justifiable reason, his complaint may be dismissed. Such dismissal Personal Appearance of Parties
shall bar the complainant from seeking judicial recourse for the and Prohibition on Coun8els
same cause of action as that involved in the barangay conciliation."
If it is the res~ndent who refuses or willfully fails to appear In all proceedings before the Lupon and Pangkat, the parties
for conciliation. despite due notice and without justifiable reason, are required to appear in person without the assistance of counsel
any counter~aim he has ~ade ,that arises from or is necessarily or the intervention of anyone." Lawyers of parties are precluded
connected WJth ~e .complainants action, e.g., compulsory counter- from appearing or participating in the proceedings,. unles~ ~ey
claim, may be d1s~1ss.ed. He shall also be barred from filing a com- are the parties or witnesses themselves, or they are the provmcial,
pulsory counterclaim in the judicial action that may be filed by the city or municipal legal officer, or prosecutor requested to. ren~er
complaina.n t." legal advice to the Lupon." Representatives of parties are likewise
A c~unterclaim ~ any claim which a defending party may precluded from appearing in the proceedings except for minors and
have ag1Unst an opposing party." It is compulsory if, being cogni- incompetents who may be assisted by their next of kin who are
non-lawyers ... Thus, a minor cannot be represented by a lawyer-
zable by the regular courts of justice (or the Lupon or Pangkat in
the case of b.arangay conciliation proceedings), it arises out of or is parent.
~onnected WJth the tran~action or occurrence constituting the sub- In Ledesma u. Court of Appeals,.. the Supreme Court, quo.ting
~ect ~att.er ~f the opposing party's claim and does not require for Opinion No. 135, s. 1981, of the then Minister of Justice, explained
its adjudication the presence of third parties of whom the court (or the reason for the requirement of personal appearance by the par-
the Lupon. or Pangkat) ~an~ot ac~uire jurisdiction. A compulsory ties, to wit:
counterclaim must be within the Jurisdiction of the court (or the
Lupon or Pangkat) both as to the amount and the nature thereof."' "x x x Section 9 of P.D. 1508 mandates personal confrontation
All other counterclaims are permissive in character. of the parties because:

"Article 199, Rule XXVI, Administrative Order No. 270 (Rules and " Section 8, Rule VI. Katarungang Pambarangay Rules.
R.egulations Implementing thl! Local Government Code of 1991); Section " Section 415, R.A. No. 7160; Section 6, Rule VI, Katarungang Pam·
8(a), ~)(2.3), and (b)(3.4) Rule VI, Katarungang Pambarangay Rules . barangay Rules.
Section 8, Rule VI, Katarungang Pambarangay Rules. " Section 415, R.A. No. 7160.
" Id .. "' Section 407, R.A. No. 7160.
01
Section 6, Rule 6 Rules of Court.
s:
"' Section 7, Rule Rules of Court.
"Section 415, R.A. No. 7160.
• 211 SCRA 753 (1992), p. 759; emphasis supplied.
2 92 Al.T&RNATIVE DISPUTE R ESOLUTION KATARUNGANG P AMBARANOAV 293

•x x x a pereonal confrontation between the

partlee without the intervention of counsel or
E. AMICABLE SETI'LEMENI'
repreeentative would p nerate spontaneity
and a favorable disposition to amicable set-
tlemen t o n the part of the disputants. In other Nature of the Amic able Settlement
words, tho eaid procedure is deemed conducive to
the successful resolution of the dispute at the An amicable settlement arrived a t during the conciliation is
bar&nill>' level.• binding between the parties. It is immediately executory upon its
perfection provided it is not contrary to law, good morals, public
The reason for the atrict prohibition on the appearance of order and public policy. It has the force and effect of res judica~
la wyers in the proceedings before the Lupon or P angkat is not that even if not judicially a pproved. It is akin to a judgment th~t !s
lawyers have nothing to contribute to the proceedings, or that their eubject to execution in accordance with the Rules of Court. Thls 1s
p a rticipation is detrimental to the conciliation efforts, but to mini- the principle enunciated in the case of M iguel v. Montal'lez''° where
mize the influence of technical rules of procedure and evidence in it was held that:
the hearings and the negotiations for an amicable settlement.
This is no~ ~o .say, howev?r• that lawyers have a bsolutely no "It is true that an amicable settlement reached at the
r ole in the conciliation proceedings. Their crucial r ole is to encour· barangay conciliation proceedings, like the Ka8und"°:ng PIJ/J·
age their clients to actively participate in the conciliat ion and aayos in this case, is binding between the contractmg par·
t ies and, upon Its p erfection, is Immediately exeeutory
maintain an honest and sincere desire to resolve the dispute in an ln1ofar a s it Is not contrary to law, morals, good cue·
amicable manner . toms, public order and public policy. This is in accord with
the broad precept of Article 2037 of the Civil Code, uiz:
'A compromise has upon the parties the effect
and authority of res judicata; but there shall be no
execution except in compliance with a judicial com·
promise.'

Being a by-product of mutual concessions and good (aith

of the parties, an amicable settlement h as the force and
effect of res j udU:a.ta even if not judicially approved. It
tranacenda being a m ere contract blndinir upon the par-
ties thereto, and is akin to a judglnent that ie subject to
execution in a ccordance with the Rules. Thus, under Sec-
tion 4 17 of the Local Government Code, such amiceble settle-

•• 664 SCRA 345 12012), pp. 350-351, emphas~ suppli~; citing&:

public u. Sandiganbayan. 226 SCRA 314 (1993); Quuw u. Ar,JOna, •UP'!'•
and Mani.la International Airport Authority (MIAAJ v. ALA l ndustrru
Corporation, 422 SCRA 603 12004). See also CotedriUa v. Louron, 696
SCRA 341 [20131, pp. 353-354, citing Chaun u. Court of Appeal11, 453
SCRA 843 120051.
294 ALTERNATIVE DISPUTE RESOLUTION KATARUNGANG PAMBARANGAY 295
- Amicable Settlement-

mentor arbitration award may be enforced by execution by the "x x x In Santos u. Judge Isidro, the Court observed that
Barangay Lupon within six (6) months from the date of the special and exceptional circumstances, the imperatives
settlement, or by filing an action to enforce such settlement in of substantial justice, or facts that may have transpired
the appropriate city or municipal court, if beyond the six- after the finality of the judgment which would render
month period." its execution unjust may warrant the suspension of exe-
cution of a decision that has become final and execu-
tory. In the case at bar, the ends ofjustice would be frustrated
Enforcenu!nt, E:cecution and Rescission if a writ of execution is issued considering the uncertainty of
of the Amicable Settlement the object of the agreement. To do so would open the possibility
of error and future litigations.•
In the event of failure or refusal of a party to comply with the
amicable settlement or arbitration award, the following are the The amicable settlement or arbitration award may be en-
remedies available to the other party: forced by execution by the Lupon within six (6) months from the
date of the settlement, the receipt of the award, or the date. the
1. Enforcement by the Lupon within six (6 ) months from the obligation stipulated in the settlement or adjudged in the arbitra-
date of the settlement agreement, or the date of receipt of tion award becomes due and demandable. Thereafter, the settle-
the award, or the date when the obligation therein be- ment or award may be enforced by action in the appropriate city or
comes due and demandable, whichever is later; municipal court in accordance with the Rules of Court.'°'
2. Execution by action in court after the lapse of the six- The two-tiered execution of the amicable settlement or arbi-
month period; and tration award was explained in the case of Vidal u. Escueta'°'
where it was held that:
3. Rescission under Article 2014 of the Civil Code in the case
of amicable settlements.
"Section 417 of the Local Government Code provides a
mechanism for the enforcement of a settlement of the parties
Enforcement and Execution of the before the Lupon. It provides for a two-tiered mode o.f enforce·
Amicable Settlement ment of an amicable settlement executed by the parties before
the Lupon, namely, (a) execu tion of the Punong Barangay
which is quasi-judicial and mmmary in nature on mere
The general rule is that, where no repudiation of the amicable
motion of the party/parties entitled thereto; and (b) by
settlement is made or no petition for the nullification of the arbi- an action in regular form, which remedy i• judicial. Un-
tration award is filed within ten (10) days from the date of the der the first remedy, the proceedings are covered by the LGC
settlement or the date of receipt of the award the amicable settle- and the Katarungang Pambarangay Implementing Rul.es and
ment or award attains the status of finality' and it becomes the Regulations. The Punong Barangay is called upon: during the
ministerial duty of the court to implement and enforce it.'01 The hearing to determine solely the fact of non-comJ?hance of the
rule, however, is. not inflexible and admits of exceptions which terms of the settlement and to give the defaulting party an-
were enumerated m the case of Quiros u. Arjona"" as follows: other chance at voluntarily complying with his obligation un-

0
0
Section 1, Rule VII, Katarungang Pam.barangay Rules; see also:
' ' " Section 417, R.A. No. 7160; Section 2, Rule VU, Katarungang
Chauez u. Court ofAppeals, id., p. 849. Pambarangay Rules.
'"'Supra., pp. 63-64, emphasis supplied; citing Philippine Veterans "' 417 SCRA 617 (2003), pp. 629-630, emphasis supplied. See also
Bank u. Intermediate Appell.ate Court, 178 SCRA 645 (1989). Chauez u. Court ofAppeals, supra., p. 851; and Miguel v. Montafiez, supra.
296 ALTERNATIVE DISPUTE RESOLUTION l<ATARUNOANO PAMBARANOAY 297
- Amicable Settlement-

der the settlement. Under the second remedy, the proceedings tion in the MTC, in derogation of the objective of Section 417 of
are governed by the Rules of Court, as amended. The cause of the LGC. The law should be construed and applied in such a
action is the amicable settlement itself, which, by operation of way as to reflect the will of the legislature and attain its objec·
law, bas the force and effect of a final judgment.• tive, and not to cause an injustice. As Justice Oliver Wendell
Holmes aptly said, 'courts are apt to err by sticking too closely
The six (6) month period for execution is reckoned from the to the words of the law where these words support a policy that
date of the settlement if the obligation under the settlement is due goes beyond them. The Court should not defer to the letter that
and demandable on the date of the settlement; otherwise, the six- killeth but to the spirit that vivifieth.'
month period should be reckoned from the date the obligation be- In light of the foregoing consideration, the time line in
comes due and demandable. The foregoing principle was discussed Section 417 should be construed to mean that if the obliga·
in the case of Vidal v. Escueta'"' as follows: tion in th e settlem ent to be enforced is due and de·
mandable on the date of the settlement, the six-month
"Section 417 of the LGC grants a party a period of six period should be counted from the date of the .,.,ule·
months to enforce the amicable settlement by the Lupon ment; otherwise, if the obligation t o be enforced is due
through the Punong Barangay before such party may resort to and d emandable on a date other than the date of the
filing an action with tbe MTC to enforce the settlement. The settlem ent, the six-month period should be counted
o!
raison d' e~ the. law is to afford the parties during the six- from the date the obligation becomes due and demand·
month penod time hoe, a simple, speedy and less expensive en- able." (pp. 630-631; emphasis supplied)
forcement of their settlement before the Lupon.
The ~me line of six months is for the benefit not only of An amicable settlement reached in a case referred by a court
the complainant, but also of the respondent. Going by the plain for conciliation by the Lupon shall be enforced through execution
words of Section 417 of the LGC, the time line of six months by the said court. '00
should be computed from the date of the settlement. However
if applied to a particular case because of its peculiar circum'.
stances, the computation of the time line from the date of the Rescission of the Amicable Settlement
settlement may be arbitrary and unjust and contrary to the in-
tent of the law. To illustrate: Under an amicable settlement The two-tiered mode of enforcement provided under Section
made by the parties before the Lupon dated January 15, 2003, 417 of R.A. No. 7160 does not preclude the remedy of rescission
the respondents were obliged to vacate the subject property on under Article 2014 of the Civil Code which provides:
or before September 15, 2003. If the time line of six months
under ~ectioo 417 were to be strictly and literally followed, the "If one of the parties fails or refuses to abide by the_ com-
complainant may enforce the settlement through the Lupon promise, the other party may either enforce the compromise or
only up to July 15, 2003. But under the settlement, the re- regard it as rescinded and insist upon his original demand."
spondent was not obliged to vacate the property on or before
July 15, 2003; hence, the settlement cannot as yet be enforced. Hence in the event of failure or refusal of a party to comply
The settlement could be enforced only after September 15, with the ~icable settlement the other party may also avail of the
2003, when the respondent was obliged to vacate the property.
By then, the six months under Section 417 shall have already remedy of rescinding the ami~able settlement. This is the ruling of
,.,
elapsed. The complainant can no longer enforce the settlement the Supreme Court in the case of Chavez v. Court of Appea l s
through the Lupon, but had to enforce the same through an ac- wherein it was held that:

,,. Section 2, Rule VII, Katarungang Pambarangay Rules.

'" Supra. at pp. 630-631. ,., Supra., pp. 851-852; emphasis supplied.
298 ALTERNATIVE DISPUTE RESOLUTION KATARUNOANG PAJ\WARANOAY 299
- Amicable Settlement-

"x x x IT)he Revised Katarungang Pambara.ngay Law 2. Notice to the other party. Upon receipt of the motion for
provides for a two-tiered mode of enforcement of an amicable execution, the Punong Barangay shall set the motion for hearing
settlement, to wit: (a) by execution by the Punong Barangay on a date agreed to by the movant, which shall not be later than
which is quasi-judicial and summary In nature on mere motion five (5) days from the date of the filing of the motion, and of which
of the party entitled thereto; and (b} an action on regular form,
which remedy is judicial. However, the mode of enforce- hearing the other party shall be immediately provided with no·
men.t does not rule out the right of rescission under Ar· tice. 110
ticle 2014 of the Civil Cod& The availability of the right of 3. Hearing on the motion. During the hearing on the motion,
rescission is apparent from the wording of Sec. 417 itself which the Punong Barangay shall ascertain whether or not the terms of
provides that the amicable settlement 'may' be enforced by the settlement or award have indeed not been complied with and, if
execution by the lupon within six (6) months from its date or
so, he is required to strongly urge the non-compliant party to per·
by action in the appropriate city or municipal court, if beyond 111
that period. The use of the word 'may' clearly makes the proce- form his obligations under the settlement or award.
dure provided in the &uised Katarungang Pambarangay Law 4. Issuance of the notice of execution. Within five (5) days
directory or merely optional in nature." from the date of the hearing, the Punong Barangay shall deter-
mine whether or not voluntary compliance can be secured. If, afl;er
Procedure for Execution the lapse of the said period, no voluntary compliance is perfo~ed
by the obliged party, the Punong Barangay shall issue a n~tice ~f
General Ruks on Execution execution under the name of the Lupon. The notice shall intelli-
gently refer to the settlement or award upon which it is based and,
The procedure for the execution of the amicable settlement or if it is for the payment of money, it shall state the am~unt actually
the arbitration award before the courts, including those arrived at due thereunder, or otherwise, the terms thereof which must be
after being referred for conciliation before the Lupon by a court complied with. 112
having c-ompetent jurisdiction, shall be governed by the Rules of 5. Execution. If no voluntary compliance is made by the
Court. 108 party obliged within the period granted by the Punong Barangay,
On the other hand, the procedure for execution of the amica· execution shall follow in accordance with the specific rules on exe·
hie settlement or the arbitration award before the Lupon. is gov· cution provided for under the Katarungang Pambarangay Rules.
erned by the Local Government Code and the Katarungang Pam- 6. Entry of satisfaction of settlement or award. Upon the sa~­
barangay Rules. The procedure is as follows: isfaction of the settlement or award, either by voluntary compli·
ance or execution such fact shall be entered into the records by the
1. Initiatory pkading. Within six (6) months from the date of Punong Baranga; or the Lupon secretary on the basis of the return
the settlement, or the date of receipt of the award, or the date the of the Punong Barangay of an execution satisfied, or upon the fil·
obligation stipulated in the settlement or adjudged in the arbitra·
tion award becomes due and demandable, a party may initiate the
execution of an uncomplied amicable settlement or arbitration
award by filing a motion for that purpose with the Punong Baran·
gay, copy furnished the other party. 10• "' Sec.tion 2, paragraph 1, Rule VII, Katarungang Pambarangay
Rules.
"' Section 2, paragraph 2, Rule VII, Katarungang Pambarangay
"' Section 2, Rule VII, Kaiarungang Pambarangay Rules. Rules.
,,. Section 3, Rule VII, Katarungang Pambarangay Rules. "'Section 5, Rule Vll, Katarungang Pambarangay Rules.
300 ALTERNATIVE DISPUTE RESOLUTION KJ\TARUNCANC PA!llBARANCAY 301
- Amicable Settlement -

ing by the prevailing party of an admission of satisfaction of the in the barangay belonging to the obliged party sufficient to satisfy
settlement or award. iu the settlement or award from the proceeds of the sale th.e reof with
legal interest.
Specific Rules on Execution During the service of the notice of execution, and there be~
sufficient personal property not exempt from execution, the party
Amicable settlements and arbitration awards may call for dif- obliged is given the privHege to choose which of the personal prop-
ferent methods of execution by the Lupon. It could range from a erties may be taken possession ahead of the others.
simple obligation to pay money, the delivery or restitution of prop- On the other hand, if there is not enough personal property to
erty, the co1weyance of land, the delivery of deeds or documents, or satisfy the settlement or t he award, the party obliged shall not
such other specific act mandated by the settlement agreement or have the right of choice i.n the order of taking possession,. ~d the
arbitration award. The following are the specific rules on execu- deficiency shall be satisfied in accordance with the provtS1ons of
tion:
the Rules of Court, to wit:
J. Payment for money.'" If the execution calls for the pay-
"Section 36. Examinati.on of jud(/rrunt obligor when
ment of money, the party obliged shall be given a period of five (5)
judgment unsotisfied.. -When the return of the writ of execu-
days within which to make a voluntary payment. This is done tion issued against property of a judgment obli,gor, or any one
through the service <if the notice of execution with a demand for of the several obligors in t he same judgment, shows tha~ the
voluntary compliance. After the lapse of the said period, and there judgment remains unsatisfied, in whole or in part, the Judg-
being no comple~ voluntary compliance, the Punong Barangay ment obligee, at any time after such return is made, shall ?e
shall take possession of personal (or movable) properties"' located entitled to an order from the court which rendered the said
judgment, requiring such judgment oblleor to appear and be
examined concerning bis property and income before ~uch
'" Section 11, Rule VlI, Kotorull{loll(l Pamborongoy Rules court or before a commissioner appointed by it, at a speafied
::: ~!on 6(a), R~~ VU, Katorungo"'1 Pom.borangoy Rul~. time and place; and proceedings may thereupon be had for.the
Article 416 [CLvil Code of tbe Philippines). The following things application of the property and income of the judgment obligor
are deemed to be personal properties: towards the satisfaction of the judgment. xx x.
(1) Those m~vables susceptible of appropriation which are not
Section 37. E:cominotion of obligor of judgment obli-
Included m the preceding article [on real or immovable prop- gor.-When the return of a writ of execution against the P~P­
erties);
erty of a judgment obligor shows that the judgment remains
(2) Real property which by any special provision of law is consid- unsatisfied, in whole or in part, and upon proof to the satisfac-
ered as personal property;
tion of the court which issued the writ, thst a person, corpora-
(S) Forces of nature which are brought under the control of sci- tion, or other juridical entity has property of auchjudgment ~b­
ence; and
Jigor or is indebted to rum the court may, by an order, reqwre
(4) In general, all thing.a which can be transported from place to
such person, corporation, ~r other juridical entity, .or_ any offi-
place without impairment of the real property to which they cer or member thereof, to appear before a comm~s1oner ~P­
are fixed. pointed by it, at a time and place within the provm~ or city
Article 417. The following are also considered as personal property: where such debtor resides or is found, and be exammed con-
(1) Obligations and actions which have for their object movables cerning the same. The service of the order shall bind all credits
or demandable sums; and due the judgment obligor and all money and property of the
(2) Shares of stock of agricultural, commercial and industrial en- judgment obligor in the possession or in the control of such
tities although they may have real estate."
S02 ALTERNATIVE DISPtlTE RESOLUTION KATARUNGANG PAMBAllANGAY sos
- Amicable Settlement-

penion, corporation, or juridical entity &om t.be time oft.be ser- are had, as mortgacor or mortgagee or otherwise, and his in·
vice; xx x. terest therein can be ascertained without controversy, the re-
Section 38. Enf"'"nunt of attendance and conduct of ceiver may be ordered to sell and convey such real estate or in·
emminanon.-A party or other person may be compelled, by tereat of the obligor therein; x x x.
an order or subpoena, to attend before the court or commis- Section 43. Proceedings wMn intkbtedMss tknied or
sioner to testify as provided in the two preceding sections, and another peraon claim$ the property.-lfit appears that a penion
upon failure to obey euch order or subpoena or to be sworn. or or corporation alleged to have property of the judgment oblieor
to answer as a witness or to subscribe his deposition, may be or to be indebted to h im, claims an interest in the property ad-
punished for contempt as in other cases. x x x. verse to him or denies the debt, the court may authorize, by an
Section 39. Obligor may pay execution against obli· order made to that effect, the judgment obligee to institute an
gee.-Aiter a ~t of execution a&ainst property has been is- action against such person or corporation for the recovery of
sued, a person tndebted to the judgment obligor may pay to the such interest or debt, forbid a transfer or other disposition of
sheriff boldin& the writ of execution the amount of his debt or such interest or debt within one hundred twenty (120) days
so much thereof aa .may .be neceaaary to satisfy the judgment in from notice of the order, and may punish disobedience of such
the manner preecnbed in eection 9 of this Rule, and the sher- order aa for contempt. x x x."
iff's receipt shall be a Sufficient discharge for the amount so
paid o: directed to be credited by the judgment obligee in the While there is no specific mention in R.A. No. 7160 or the
execution. Katarungang Pambarangay Rules of the procedure for the ex~cu·
Section 40. Order for application of property and in· tion of settlements or awards for the payment of money against
come to satisfaction of J~ent.-The court may order any real (or immovable) properties,"" neither do they prohibit such
property of the J~d~ent obltgor, or money due him, not ex-
empt from execution, In the hands of either himself or another
pe.rson, or of a .corpo_ration or other juridical entity to be ap- "'"Article 415 (Civil Code of the Philippines]. The following are
phed to the satisfaction of the judgment, subject to any prior Immovable property:
ri&hta over such property. (1) Land, buildings, roads and constructions of all kinda adhered
to the soil;
. If, upon investigatio~ of his current income and expenses, (2) Trees, plants, and growing fruits while they are attached to
1t appears tb~t the earntngs of the judgment obligor for his the land or form an integral part of an immovable; .
J>?rsOn&.! services are more than necessary for the support of (3) Everything attached to an immovable in a fixed ~er, m
his fanuly, the court may order that he pay the judgment in such a way that it cannot be separated therefrom without
6.xed monthly installments a~d upon his failure to pay any breaking the material or deterioration of the object;
auch installment when due Wlthout good excuse may punish (4 ) Statues, reliefs, paintings or other objects for use or oma·
him for indirect conte.m pt. '
mentation, placed in a building or on lands by the owner of
Section ~l. Appoillttmnt of re<:eiuer.-The court ~y the immovable in such a manner thet it reveals the intention
~ppolnt a receiv~r of the property of the judgment obligor, and to attach them permanenUy to the tenements; .
1t may alao ~orbid a transfer or other disposition of, or any in- (5) Machinery, receptacles, instruments or implements tnten~oo
terference with, the property of the judgment obligor not ex- by the owner of the tenement for an industry or works which
empt &om execution. may be carried on in e building or on a piece of land, and
which tend direcUy to meet the needs of the said industry or
. Se_etion 4.2. Sau of cucertainable interest of judgTMnt worka;
obl1gor in rtal eatote.-lf it a ppears that the judgment obligor (6) Animal houses, pigeoo-bouses, beehives, fish ponds or breed·
has an intereet in real estate in the place in which proceedings ing places of similar nature, in case their owner has placed
them or preserves them with the intention to have them per-
304 ALTERNATIVE DISPUTE RESOLUTION KATARUNGANG PA?oteARANGAY 305
- Amicable Settlement -

execution or exempt real properties from execution. Instead , the At any time before personal property is actually sold on exe-
Katarungang Pambarangay Rules makes execution against real cution, the party obliged may prevent the sale from proceeding by
properties available by making the provisions of the Rules of Court paying the amount required by the order of execution."' If no such
on execution of judgments suppletorily applicable if personal prop- payment is made, the execution sale shall proceed as follows:
erty is not sufficient to satisfy the settlement or award. In such
case, Section 9(b), Rule 39 of the Rules of Court may be supple- a. Notice of sale. Prior to the sale of personal property
torily applied. It pr ovides that: on execution, notice shall be given by posting immediately
upon taking possession thereof a writt.en notice of the time
"Section 9. Execution of judgrrumts for money, how en- and place of the sale in three (3) public places in the barangay
forced.- where the sale is to take place, for not less than twenty-four
xxx xx.x xxx (24) hours prior to the sale in the case of perishsble property,
(b) Satisfcction by leuy. - If the judgment obligor cannot and for not less than five (5) nor more than ten (10) days prior
pay all or part of the obligation in cash, certified bank check or to the sale in case of any other personal property.'"
other mode of payment acceptable to the judgment obligee, the b. Manner of sale. " 0 All sales of person~ prope~. un-
officer shall levy upon the properties of the judgment obligor of der execution must be [ii made at public auction, and (11] to
every kind end nature whatsoever which may be disposed of the highest bidder. The public auction shall be condu~d be-
for value end not otherwise exempt from execution giving the tween Sam and 5pm at the place indicated in ~e notice of
latter the option to immediately choose which property or part
thereof may be levied upon, sufficient to satisfy the judgment. sale. The auction shall be conducted within the view of those
If the judgment obligor does not exercise the option, the officer attending the sale.
shall first levy on the personal properties, if any, and then on The party obliged has the right to attend an~ participat.e
the real properties if the pel'IJOnal properties are in suf- in the sale. In the same manner that the party obliged has the
ficient to anawer for the judgment. x x x" (Emphasis sup- right to choose the order of the property to be executed
plied)
against, he also has the right to direct the order in which per-
sonal proper ty shall be sold. The auction shall ei;id after suffi-
Besides, there is no express provision under the Katarungang
cient property has been sold to satisfy the execution.
Pambarangay Rules that exempts real pr operties belonging to the
party obliged from execution by the Lupon. 111 In order to ensure the impartiality of the Punong Baran-
gay, the Lupon secretary, or the members of ~e Lupon, ~on.e
of them can be purchasers or be interest.ed directly or indi-
manently attached to the land, and forming a permanent part rectly in the auction sale.
of it; the animals in these places are included; c. Disposition of the proceeds of the ~a.le. Unless the
(7) Fertilizer actually used on a pieoe ofland; purchaser in the public auction is the prevailing party hun-
(8) Mines, quarries, and slag dumps, while the matter thereof self, the Punong Barangay shall pay to the prevailing party so
forms part of the bed, and waters either running or stagnant; much of the proceeds of the sale as will satisfy the settle~ent
(9) Docks and structures which, though floating, are intended by or award, and deliver the excess, if any, to the party obliged.
their nature to remain on a fixed place on a river, lake or
coast;
(10) Contracts for public works, and servitudes and other real '"Section 8, Rule VII, Katarungang Pambarangay Rules.
rights over immovable property.• "'Section 9(a), Rule VII, Katarungang Pambarangay Rules.
'"Section 7, Rule VII, Katarungang Pambarangay Rules. 120
Section 9(b). Rule VII, Katarungang Pambarangay Rules.
306 ALTERNATIVE DISPUTE! RESOLUTION KATARUNGANG PM>mARANGAY 307
- Amicable Settlement-

If the purchaser is the prevailing party himself, he shall pay specific act, and the party obliged fails to comply therewith within
to the party obliged only such amount as exceeds the amount the time specified, the Punong Barangay may direct the Lupon
of the settlement or award.'" secretary to perform the act at the cost of the disobedient party and
d. Conveyance to purchaser of personal property. Upon the act when so done shall have like effects as if done by the dis-
payment by the purchaser of personal property capable of obedient party."' The foregoing procedure was adopted from a
manual delivery, the Punong Barangay conducting the public similar procedure under the Rules of Court on the execution of
auction must deliver the property to the purchaser and, if de- court judgments directing the conveyance of property, delivery of
sired by the purchaser, execute and deliver to him a certifi· deeds or other specific acts. ""
cate of sale. The sale conveys to the purchaser all the rights 4. Other cases of execution. In all other cases of execution
which the party obliged had in such property on the day the not provided for under Rule VII of the Katarungang Pambaralll/CY
execution was levied."' Rules, the applicable provisions of the Rules of Court shall supple·
2 . Delivery or restitution of property.,,. If the amicable set· torily apply. " ' Specifically, Sections 10 and 11, Rule 39 of the Rules
tlement or arbitration award being executed calls for the delivery of Court provide that:
or restitution o~ pro~erty located in the barangay where the con-
ciliation or arbitration proceedings was conducted, the Punong "Section 10. Execution ofjudgmi!nls for specific act.-
Barangay thereof shall oust the person against whom the settle- (a) Conveyance, delivery of deeds, or other spec.ific acts;
ment or. award h~ been rendered and place the party entitled vesting ti.tie. - If a judgment directs a party to execute a con·
thereto ~ possession of such property. If the property involved is veyance of land or personal property, or to deliver deeds or
other documents, or to perform any other specific act in con·
located m another barangay, but of the same city or municipality ncction therewit.h, a.Jid t.he party fail& to comply within the
as the barangay where the conciliation or arbitration proceedings time specified, the court may direct the act to be done at the
wer~ ~o~ducted, the .Pu"'?ng Barangay of the barangay where the cost of the disobedient party by some other person appomted
conciliation and arbitration proceedings was conducted shall not by the court and the act when so done shall have like effect as
implement the execution himself. Instead, he shall authorize the if done by the party. If real or personal property is situated in
!'unong Barangay of the barangay where the property is located to the Philippines, the court in lieu of directing a convey~~e
implement the ouster and placing of possession. thereof may by an order divest title of any party and vest tt m
others, which shall have the force and effect of a conveyance
Th_e foregoing proced~re is especially applicable to ejectment executed in due form oflaw.
proceedings and for the delivery of personal property. The principle
(b) Sale of real or personal property. - If the judgment
was .adopted fro~ the procedure for the ouster and delivery of pos- be for the sale of real or personal property, to sell su7h pr?p-
session that obtams for the execution of court judgments under the erty, describing it, and apply the proceeds in confol'Dllty wtth
Rules of Court."' the judgment.
3. C:onueyance of land, delivery of deeds, or other specific act. (c) Delivery or restitution of real property. - The officer
If the amicable settlement or arbitration award calls for the con- shall demand of the person against whom tile judgment for the
veyance of land, or the delivery of deeds or doCllments, or any other delivery or restitution of real property is 1'?ndered and all per-
sons claiming rights under him to peaceably vacate the prop-
'" Section 9(c), Rule VII, Katarungang Pambarangay Rules.
'" Section 10, Rule VII, Katarungang Pambarangay Rules. ,,. Section 6(d). Rule VII, Katarungang Pambarangay Rules.
"' Section 6 (b) and (c). Rule VII, Katarungang Pambarangay Rules. ,,. Section lO(a), Rule 39, Rules of Court.
"'Section lO(c) and (e), Rule 39, Rules of Court. '" Section 12, Rule VII, Katarungang Pambarangay Rules.
308 ALTERNATIVE DISPUTE RESOLUTION
KATARUNGANG PA.MBARANGAY 309
- Amicable Settlement -

erty within three (3) working days, and restore possession

b. Tools and implements necessarily used by him in his
thereof to the judgment obligee; otherwise, t!he officer shall
oust all such persons therefrom with the assistance, if neces- trade or employment;
sary, of appropriate peace officers, and employ such means as c. Two horses, or two cows, or two carabaos, or other beasts
may be reasonably necessary to retake possession, and place of burden, such as the debtor may select, and necessarily
the judgment obligee in possession of such property. Any costs, used by him in his ordinary occupation;
damages, rents or profits awarded by the judgment shall be
satisfied in the same manner as a judgment for money. d. His necessary clothing, and that of all his family;
(d) Removal of improvements on property subject of exe- e. Household furniture and utensils necessary for house-
cutWn. - When property subject of the execution contains im- keeping, and used for that purpose by the debtor;
provements constructed or planted by the judgment obligor or
his agent, the officer shall not destroy, demolish or remove said f. Provisions for individual or family use sufficient for four
improvements except upon special order of the court issued (4) months;
upon motion of the judgment obligee after due hearing and af- g. 'T he professional libraries of attorneys, judges., physicians,
ter the former baa failed to remove the same within a reason-
able time fixed by the court. pharmacists, dentists, engineers, surveyors, clergyroen,
teachers and other professionals;
(e) Delivery ofpersonal property. - In judgments for the
delivery of personal property, the officer shall take possession h. One fishing boat, net and other fishing para:iihemalia of
of the same and forthwith deliver it to the· party entitled the party obliged who is a fisherman, by the lawful use of
thereto and satisfy any judgment for money as therein pro- which he earns a livelihood;
vided.
i. So much of the earnings of the party obliged for his per-
. Section ~l. Eucuticn of special judgments.-When a sonal services within the month preceding the levy as are
Judgment reqUU'es the performance of any act other than those
mentioned in the two preceding sections, a certified copy of the necessary for the support of his family;
judgment shall be attached to the writ of execution and shall j. Lettered gravestones;
?e served by the officer upon the party against whom the same
1s rendered, or upon any other person required thereby, or by k . All monies, benefits, privileges, or annuities accruin~ or
law, to obey the same, and such party or person may be pun- in any manner growing out of any life insurance, provided
ished for contempt if he disobeys such judgment.• the proceeds therefrom shall not exceed o:ne hundred
thousand pesos (Pl00,000.00);
Property Exempt From Execution by the Lupon 1. The right to receive legal support, or money or property
obtained as such support, or any pension or gratuity from
By express provision of the Katarungang Pambarangay the government; and
Rules, except as may be provided for by law, the following proper-
m . Copyrights and other properties especially exempted by
ties and no other shall be exempt from execution by the Lupon:"'
law.
a. The debtor's family home constituted in accordance with
the Family Code; But no article or species of property mentioned in the forego-
ing enumeration shall be exempt from execution issued upon a
settlement or award for its price or for a mortgage thereon.
"' Section 7, Rule VII, Katarungang Pambarangay Rules.
310 ALTERNATIVE DISPUTE RESOLUTION ]{,\TARUNGANG P AMBAR.\NGAY 311
- Amicable Scttlc1ncot -

The foregoing exemptions were adopted from an analogous grieved party may only resort to a court action after he has repudi-
provision in the Rules of Court exempting certain properties ated the settlement.
from execution arising from a judgment of a court.'"
Objects ofRepudiatioll
Legal Effects of Amicable Settlement
and Arbitration Award A distinction should be made among the repudiation of an
amicable settlement, repudiation of an agreement to arbitrate, and
Final and Executory the repudiation or nullification of an arbitration award.
Repudiation. of an amicable settlement. If the parties in a
The amicable settlement or arbitration award shall have the conciliation proceeding before the Lupon or Pa11gkat entered into
force and effect of a final judgment of a court upon the expiration of an amicable settlement, but it turns out that the consent of one
ten (10) days from the date of the settlement, or the date of receipt party to the amicable settlement was vitiated by fraud, violence or
of the award, or the date the obligation stipulated therein becomes intimidation, such party may repudiate the amicable settlement or
due and demandable, unless a proper repudiation of the settlement compromise agreement within ten (10) days from the date
has been made ~r a petition to nullify the award has been filed thereof.'" In that event, there is a failure of th~ conciliation, ~d
with the proper city or municipal trial court.'"' the corresponding certificate authorizing the fihng of the case m
court shall be issued.
Repudiation and Nullification Repudiatioll of the agreement to arbitrate. If the parties, in-
stead of proceeding with the conciliation, agreed to undergo arbi-
Repudiation of the settlement or the nullification of the arbi- tration before the Lupoll chairman or Pangkat, but the consent of
tration award is not available in the conciliation of a dispute re- any of the parties to the agreement to arbitrate was sec~red
ferred by a court to the Lupon for amicable settlement. In this case, through fraud, coercion or intimidation, such party may repudiate
the compromise settlement agreed upon by the parties shall be the agreement to arbitrate within five (5) days from the agreement
submitted to the court and upon approval thereof have the force by serving to the Lupoll chairman or the Pangkat a sworn state-
and effect of a judgment of said court."' ' ment to that effect. In this situation, conciliation shall not resume.
A petition in court for nullification is not available against an Instead, the certificate authorizing the filing of the case in court
amicable settlement. A petition for nullification refers to an arbi- shall be issued."'
tration award and not to an amiicable settlement. "To allow court Repudiation !nullification of the arbitral award. If the par-
actions assailing unrepudiated amicable settlements would exacer- ties have entered into a completely valid agreement to arbitrate,
bate congestion of court dockets .•,,. There is no judicial relief for and an arbitration award is rendered by the Lupoll chairman or
the nullification of an amicable settlement because the remedy of Pangkat, the party aggrieved by the award cannot repudiate the
repudiation supplants the remedy of a court annulment. An ag- award by serving a sworn repudiation with the Lupon ch.airman or
129
the Pangkat as in the case of the repudiation of an amicable set-
Section 13, Rule 39, Rules of Court. tlement or of an agreement to arbitrate. These remedies, while
"'Section 416, R.A. No. 7160; Section l, Rule VII, Katarungang
Pambarangay Rules. See also Galuba v. Laureta, supra.
"' Sections 408(g) and 416, R.A. No. 7160. "' Section 416. R.A. No. 7160.
'" Goluba v. Lcmreta, supm., pp. 633-634. "' Secliona 413 a nd 4 l 8 , It.A . No. 7160.
312 ALTERNATIVE DISPUTE R ESOLUTION KATARUNCANG PAMBARANOAY 313

available against settlement agreements and agreements to arbi- F. INDIGENOUS MODES OF DISPUTE
trate, are not available to a party seeking the repudiation or nulli- RESOLUTION
fication of the arbitration award itself. Instead, the repudiation or
nullification of the arbitration award should be addressed to the
proper city or municipal court through a petition to nullify the Recognition of I ndigenous Modes
arbitration award filed within ten (10) days from the date ofDispute R esolution
thereof. 136
Indigenous modes of dispute resolution have been in place long
before any legislation on dispute settlement has been enacted. They
have preceded the alternative dispute resolution methods provided
for under the Civil Code, Arbitration Law (RA. No. 876) and ADR
Actof2004 CR.A. No. 9285).
Some of them have survived and evolved into the present-day
indigenous modes of dispute resolution. They consist mostly of
dialogues between the contending parties moderated by a re·
spected elder or a group of respected elders. They are imbued .~th
religious and ceremonial elements such as the invocation of divine
guidance, opening and closing rituals, and concluding gatherings.
The proceedings are generally open to all members of the
community. Apart from the parties, their families ~d th~ con-
cerned members of the community are allowed to part1Clpate in_ t:he
proceedings. There are, however, indigenous cultural commumt1es
whose members prefer a less public proceeding limited only to the
aggrieved party, the offender and the community elder. The dis-
pute resolution process is usually held in the tribal ho~e, or ~he
house of the datu, chieftain, or elder, or in an open area m full VIew
of the other members of the community. Nowadays, the proceed-
ings are commonly held in the barangay halls.
By their continued existence and the strict adherence by the
indigenous cultural communities to which they apply, these indige-
nous modes of dispute resolution have shown their consistency,
dynamism and efficacy at settling disputes at the tribal community
level. There is, therefore, every reason for the law to tap into these
indigenous systems, adopt them as part of the legal modes of dispute
resolution available among indigenous people, and strengthen them
in order to supplement the common forms of alternative dispute
resolution.
,,. Section 416, R.A. No. 7160.
 ALTERNATIVE DISPUTE RESOLUTION KATARUNOANO PAMBARANGAY 315
314
- lndlgenou1 Mode. orDlspui. Raolulioo-

Thus, R.A. No. 7160 (l'h.e Local Gowmment Code of 1991), leaders shall certify as to their respective cultural communities'
through its Section 399, recognized the existence and availability indigenous systems of settlini disputes.
of indigenous systems of dispute resolution and made them appli- These systems shall be recognized by law without prejudice ~
cable in baran&a.Y8 where a majority of inhabitants are members of the applicable provisions of the Katarungang Pamboraf18ay Law.
indigenous cultural communities. Section 899 provides that: In other words, whenever applicable, the indigenous systeuui of
dispute resolution shall be observed and implemented, and _the
"CO In barsngaye where majority of the inhabitanta are Katarungang Pambarangay Rules shall have suppletory applica-
memben of indigenous cultural communitie11, local systems of tion.
settline dlaputee throueh their councila of datus or elders shall
be recocnized without prejudice to the applicable proviaione or
this [Local OovemmentJ Code.• Rule• for lndtgenoru S~aterru

Implementing the foregoing mandate of R.A. No. 7160, the Generally, the indigenous systems ofdiapute resolutio_n cover
Katarungang Pamborangay Rules provide that: the procedure for conciliation or mediation proper, but are silent on
the documentation, reportorial and adminis~ative ~uiremen~
"Section 1 [Rule IX]. Local system of dupute settlement. which, in turn, shall be governed by the speaal proVJSlone of th
- xxx. Katarungang Pambarangay Rules on indigenous system•. In the
Diaputes between members of the 18me indigenoua cul- absence of specific provisions under the indigenous 1yatems of
tural community shall be aettled in accordance with the cua- dispute resolution and the Katarunga.ng PambaraTLgay Rules, the
tome and traditimui of that particular cultural community xx x.• general provisions of the same Rules shall apply. Hence, the or~er
of applicability of rules for indigenous systems of dispute resolution
lndigenoiu Modes UIUUr llte is as follows:
Katarunt1an6 Pambaranlfay LaU1 l. The indigenous system as certified by the datu. tribal
leader, elder or similar leaders;
RA. No. 7160 directed the establishment and application of a
local system of settling disputes among members of indigenous 2. Specific provisions of the Katarungang Pambarangay
cultural communities which recognizes and applies their custom& Rules; and
and traditions."' Implementing the said directive, the Katarun· 3. Gene.ral provisions of the Katarungang Pambcrangay
gang Pamborongay Rules instituted an indigen ous system of set- Rules.
tling disputes in barangaya where the members of these cultural
communities constitute the majority of inhabitants as determined
S~cta.l Provision• Under the
by the Provincial Office of the National Statistics Office. Kotarungang Pambarangay Law
Such communities are required to register the names of their
recognized dattu1, tribal leaders, eldel"I or similar leaders with the R.A. No. 7160 contains special proviaiollll on the indigenous
office of their respective city or m unicipal mayors. [n tum, the systems of dispute resolution, to wit:
council composed of these datus, tribal leaders, elders or similar

,.. Section 412(c), R.A. No. 7160. '" Section l, Rule IX, Kato.runganll PambGrongay Rules.
316 ALTERNATIVE DISPUTE RESOLUTION KATARVNOANO PAMBARANGAY 317
- Indigenous Modes of Dispute Resolut.ion -

1. Determination of applicable rules. If the parties to a dis·

p ute are both members of the same indigenous cultural commu-
nity, the dispute shall be settled in accordance with the certified
.
selves to mediation conciliation or arbitration procedures under
the general rules of the Katarungang Pambarangay. "'
5. Certificate to file action. If no settlement has been
customs and traditions of their particular community. If one or reached by the parties whether under the indigenous system of
more of the parties to the dispute belong to the minority of the dispute settlement or under the gen eral rules of the Katarungang
community, submission to the indigenous system of amicable set- Pambarangay, the Punong Barangay to whom the certificate of
tlement shall be subject to the mutual agreement of all the parties. non-settlement has been transmitted shall, upon the request of the
In the absence of such an agreement, the general settlement pro-
proper party, issue the certificate to file action in court or a~fro­
cedures provided for under the Katarungang Pambarangay Rules priate government office on the ground offailure of settlement.
shall apply."'
2. Attestation of successful settlement. In case of a success-
ful settlement under the indigenous system of settling disputes, Gener a l P rin c iples of Barangay Con ciliatron
the council of datus, tribal leaders or elders shall attest to the set-
tlement and transmit the attested copy to the Punong Barangay of Unless inconsistent with the procedure of the certified indig~·
the place where the dispute should have been settled as provided nous system of dispute resolution and the foregoing special proVI-
under the general rules on venue of the Katarungang Pambaran· sions of the Katarungang Pambarangay Law, the following general
gay.'.. principles applicable to barangay conciliation have suppletory
application to the indigenous systems:
Upon the expiration of ten (10) days from the date of receipt
of the attested copy by the Punong Barangay without a repudiation 1. Barangay conciliation is mandatory but not jurisdictional.
having been institu ted in accordance with the general rules of the 2. The requirement for a certification to file action ~~r a
Katarungang Pambarangay, the attested settlement shall have the failed conciliation is likewise required under the indige-
same force and effect as a settlement arrived at under the Kata· nous systems of dispute resolution.
rungang Pambarangay Law."0
3. Cases exempt from barangay conciliation by reaso:. of~e
3. Failure of settlement. On the other hand, if the indige- nature and circumstances of the parties, or of the isf ~e,
nous system of settlement fails, the datu, tribal leader or leader are similarly exempt from the indigenous systems 0 s-
concerned shall issue a certification that the settlement has failed pute resolution.
and transmit the same to the Punon,g Barangay of the place of · g or participating in
settlement determined under the general rules on venue."' The 4. Lawyers are precluded from appeann .
barangay secretary shall transmit a copy of each settle ment and the proceedings under the indigeno~s systems of dispute
certificates of non-settlement to the proper local trial court.'" resolution except if they are the parties themselves.
4. Settlement under the general rules. Notwithstanding 5. The rules for the repudiation of the settleme?t agree~ent,
such failure, the parties may still mutually agree to submit them· the agreement to arbitrate, and the arbitration awar a~­
plicable to barangay conciliation in general are al.so appli·
cable to the indigenous systems of dispute resolution.
"' Section l, Rule IX, Katarungang Pambarangay Rules.
,., Section 2, Rule IX, Katarungang Pambarangay Rules.
''° Section 8, Rule IX, Kat,arungang Pambarangay Rules.
'" Section 4, Rule IX, Kat,arungang Pambaran.gay Rules. '"Section 4, Rule IX, Katarungang Pambarangay Rules.
'" Section 6, Rule IX, Katarungang Pambaran.gay Rules. "' Section 5, Rule IX, Katarungang Pa.mbarangay Rules.
818 ALTERNATIVE DISPUTE RESOLIJTION

6. The procedure for the execution of the settlement agree-

ment or arbitration award applicable to barangay con·
ciliation in general, including the exemption of certain
properties from execution, is also applicable to indigenous
systems of dispute resolution.

The procedure for the documentation, recording, issuance of

certifications, and the transmittal of records and certifications
applicable to barangay conciliation in general are also applicable to
indigenous systems of dispute resolution.

APPENDICES
 APPENDIX "A"

REPUBLIC ACT NO. 9285

AN ACT TO INSTITUTIONALIZE THE USE OF AN ALTERNATIVE

DlSPUTE RESOLUTION SYSTEM JN THE PlttLIPPINES AND
TO ESTABLISH THE OFFICE FOR ALTERNATIVE DJSPtrrE
RESOLUTION, AND FOR OTHER PURPOSES.
Be it enacted by the Senate and Houu of Representatives of the PhUippines
in Congress assembled:

CHAPTER 1 - GENERAL PROVISIONS

SECTION t. Title.-This set shall be known as the •AJternative

Dispute Resolution Act of 2004.•
SEC. 2. Declaration of Policy.-It is hereby declared the policy
of the State to actively promote party autonomy in the resolution of dis·
putes or the freedom of the parties to make their own arrangements to
resolve their disputes. Towards this end, the State ahall encourage and
actively promote the use of Alternative Dispute Reeolution (ADR) as an
important means to achieve speedy and impartial justice and de-clog court
dockets. As such, the State shall provide means for the use of ADR as an
efficient. tool and an alternative procedure for the resolution. of ~~pro~ria~
casee. Likewise, the State shall enlist active private sector partic1piitiOD Ii\
the settlement of dispute& through ADR. Thie Act shall be without preju·
dice to the adoption by the SuprelXle Court of any ADR system, euch aa
mediation, conciliation. arbitration, or any combination thereof as a mean.a
of achieving speedy and efficient means of resolving cases pending before
all courts in the Philippines which shall be pemed by such rules as the
Supreme Court may approve from time to time.
SEC. S. Definition of Term..-For purpoees of thie Act, the
term:

321
322 ALTERNATIVE DISPUTE RESOLUTION APPENDIX • A. 823
REPUBLIC ACT NO. 9286

(a) "Alternative Dispute Resolution System• means any process or (!) "Convention Award" means a foreign arbitral award made in a
procedure used to resolve a diapute or controversy, other than by adjudica· Co11vention State;
tion of a presiding judge of a court or an officer of a government agency, u
(j) "Convention State• means a State that ia a member of the New
defined in this Act, in which a neutral third party participates to assist in
York Convention;
the resolution of issues, which includes arbitration, mediation, concilia·
tion, early neutral evaluation, mini·trial, or any combination thereof; (k) "Court• as referred to in Article 6 of tbe Model Law shall mean
(b) "ADR Provider" means institutions or persons accredited as me-
a Regional Trial Court;
diator, conciliator, arbitrator, neutral evaluator, or any person exercising (I) "Court-Annexed Mediation" means any mediation process con-
similar functions in any Alternative Dispute Resolution system. This is ducted under the auspices, of the court, after such court has acquired
without prejudice to the rights of the parties to choose nonaccredited indi· jurisdiction of the disput.e;
viduals to act as mediator, conciliator, arbitrator, or neutral evaluator of (m) "Court-Referred Mediation• means mediation ordered by a
their diaput.e. Whenever referred to in this Act, the term • ADR practi- court to be conducted in accordance with the Agreement of the Parties
tioners" shall refer to individuals acting as mediator, conciliator, arbitra- when an action is prematurely commenced in violation of auch agreement;
tor or neutral evaluator;
(n) "Early Neutral Evaluation" means ADR process wherein parties
(c) "Authenticate" means to sign, execute or adopt a symbol or en- and their lawyers are brought together early in a pre-trial phase to pre-
crypt a record in whole or in part, intended to identify the authenticating sent summaries of their cases and receive a nonbinding assessment by an
party and to adopt, accept or establish the authenticity of a record or term; experienced neutral person, with expertise in the subject [or) in the sub-
(d) "Arbitration• means a voluntary disput.e resolution process in etance of the dispute;
which one or more arbitrators, appointed in accordance with the agree- (o) "Government Agency" means any governmental .~ti?'! office or
ment of the parties, or rules promulgated pursuant to thia Act, resolve a officer, other than a court, that is vested by law with qu881-JUdic1al power
dispute by rendering an award;
or the power to resolve or adjudicat.e disputes involving the government,
(e) "Arbitrator" means the person appointed to render an award its agencies and inatrumentalitiea, or private persons;
alone or with others, in a dispute that ie the subject of an arbltratio~ (p) "International Party" shall mean an entity whose ~lace o~ b.usl-
agreement;
neas ia outside the Philippines. It shall not include a domestic ~bsidiary
(f) "Award" means any partial or final decision by an arbitrator in of such international party or a co-venturer in a joint venture Mt~ a ~
resolving the issue in a controversy; which has its place of business in the Philippines. The ~':Ill ~oreign arbi-
(g) "Commercial Arbitration•-An arbitration ls "commercial" if it trator shall mean a person who is not a national of the Ph1lippmes.
covers matter arising from all relationships of a commercial nature, (q) "Mediation• means a voluntary process in which a media~r•. se-
whether contractual or not; lected by the disputing parties, facilitates communication and negoti~tion,
(h) "Confidential information• means any information, relative to and assists the parties in reaching a voluntary agreement regarding a
the subject of mediation or arbitration, expressly intended by the source disput.e.
not to be diecloeed, or obtained under circumstances that would create a (r) "Mediator" means a person who conducts mediation;
reasonable expectation on behalf of the source that the information shall Cs) "Mediation Party" means a person who ~pates in a media-
not be disclosed. It shall include (1) communication, oral or written, made tion and whose consent is necessary to resolve the dispute;
in a dispute resolution proceedings, including any memoranda, notes or
work product of the neutral party or non-party participant, as defined in (t) "Mediation-Arbitration• or Med-Arb is a two-step dispute resolu-
this Act; (2) an oral or written statement made or which occurs during tion process involving both mediation and arbitration;
mediation or for Pllrp08e8 of considering, conducting, participating, initiat· (u) "Mini-trial" means a atructured dispute resolution method in
ing, continuing or reconvening mediation or retaining a mediator; and (3) which the merits of a case are argued before a panel comprising.lot1 senior
pleadings, motions, manifestations, witness statements, reports filed or decision makers with or without the presence of a neutral thitd person
submitted in an arbitration or for expert evaluation; after which the parties seek a negotiated settlement;
324 ALTERNATIVE DISPUTE RESOl.UTION APPENDIX "A· 325
REPUBLIC ACT NO. 9U6

(v) "Model Law" means the Model Law on International Commer- CHAPTER 2 - MEDIATION
cial Arbitration adopted by the United Nations Commission on l nterna·
tional Trade Law on 21 June 1985; SEC. 7. Scope.- The provisions ofthia Chapter shall cover volun·
(w) "New York Convention" means the United Nations Convention tary mediation, whether ad hoc or institutional, other than court-annexed.
on th• Recognition a.nd Enforcemont of Fo...,icn Arbitrol Awarda approved The term ..mcdiatiuu" •hull includt! cunciliKl.iou.
in 1958 and ratified by the Philippine Senate under Senate Resolution No.
SEC. S. Application and l nterpretotion.- ln applyi~ and con·
71;
atru.i ng the provisions of this Chapter, consideration must be givei;i to the
(x) "Non-Convention Award" means a foreign arbitral award made need to promote candor of parties and mediators through contiden~ality of
in a State which is not a Convention State; the mediation process, the policy of fosterin&' prompt, econ~aucai. and
(y) "Non-Convention State" means a State that is not a member of amicable resolution of disputes in accordance with principles ~f~ntegn~ of
the New York Convention; determination by the partiea, and the policy that .the deciSlon-making
authority in the media tion process rests with the paztiu.
( z) "Non-Party Participant" means a person, other than a party or
mediator, who participates in a mediation proceeding as a witneaa, re- SEC. 9. Con/fdentlallty of l nformolion.-'lllforma.tion ~tained
source peraon or expert; through mediation proceedings s h all be subject to the following pnnciples
(aa) "Proceeding" means a judicial, administrative, or other adjudi· and guidelines:
cative process, including related pre-hearing or post-bearinir motions, Ca) Information obtained through mediation shall be privileged and
conferences a nd discovery; confidential.
(bbl "Record" means an information written in a tangible medium (b) A party a mediator or a nonparty participant may re~se_ to
or stored in an electronic or other similar medium, retrievable in a per- disclose and may 'prevent any' other person from disclosing a mediation
ceivable form; and communication.
(cc) "Roster" means a list of persons qualified to provide ADR ser~ Cc) Confidential Information shall not be subject to di~v;'Jaiand
vices as neutrals or to serve as arbitrators. shall be inadmissible in any adversarial proceeding, whether JU 1 d .or
SEC. 4. Bl«lrollic Signature• in Glob4l and B·Commerce !•
quasi-judicial. However , evidence or information that ?therwise 8~
sible or subject to discovery does not become inadauss1ble or pro
Act.- Tbe provisions of the Electronic Signatures in Global and &-
from discovery solely by reason ofits use in a mediation.
Commerce Act. and its Implementing Rules and Regulations shall apply tD
proceedings contemplated in this Act. Cd) In such an adversarial proceeding, the following perso~ ~
volved or previously involved in a mediation. mll)' not be _compe
SEC. 6. Liability of ADR Proulder• a n d Practlllonere. - The
ADR providers and practitioners shall have the same civil liability for acts
disclose confidential information obtained dunnir mediation. Cl) ~~e P';:'
ties to the dispute· (2) the mediator or mediators; (8) the counse 0 :,: . e
done in the performance of their dutiea as that of public officers as pro- parties; (4) the no~party participants; (5) any persons hi.red or engag ::.
vided in Section SS, Chapter 9, Book I of the Administrative Code of 1987. connection with the medf.a tion as secretary, stenoirrapher, clerk ~r BM
SEC. 6. Bzceptlon to the Appl~otlon of thU. Act.-The provi· tant; and (6) any other person who obtains or poasessea confidential info,..
sions of this Act shall not apply to resolution or settlement of the follow· mation by reason of his/her profession.
ing: (a) labor disputes covered by Presidential Decree No. 442, otherwise Ce) The protections of this Act shall continue to apply even if a me-
know~ aa the Labor Code of the Philippines, as amended and its Imple- diator is found to have failed to act impartially.
menting Rules and Regulations; (b) tho civil status of persons; Cc) the CO A mediator may not be called to testify to provide information
validity of a marriage; (d) any ground for legal separation; Ce) the jurisdic· gathered in mediation. A mediator who is wrongfully subpoenaed shall be
tion of courta; CO future legitime; (g) c riminal liability; and (h) those which reimbursed t he full cost of his attorney's fees and related expenses.
by Jaw cannot be compromised.
326 ALTERNATIVE DISPUTE RESOLUTION APPENDIX ~A· 327
REPUBLIC ACT NO. 9286

SEC. 10. Walver of Conff;Untuillty.-A privilege ari1ing from (7) sought or offered to prove or disprove a claim or complaint
the confidentiality of information may be waived in a record, or orally of professional mlaconduct or malpractice flied againat a party, non·
durina a proceeding by the mediator aod the mediation parties . party participant, or reprewntative of a party hued on c:onduct oc-
A privilege arialng from \be confidentiality of information may lik& curring during a mediation.
wise be waived by a nonparty participant if the information is provided by (b) There is no privilege under Section 9 if a court or ~tz:a·
such nonparty participant. tive agency. finds, after a hearing in camera, that the party.-~ dis·
A penon who diecloaea confidential information shall be precluded covery of the proponent of the evidence hat abown that the evidence is not
from asserting the privilege under Section 9 of thia Chapter to bar disclo- otherwise available, that there is a need for the evidence that subs~·
sure of the rut of the information neceteary to a complete underetanding tially outweighs the interest in protecting confidentiality, and the media·
of the previously discloeed information. If a pe.-.on suffers los• or damage tion communication la 1ought or offered in:
aa a result of the dilcloeure of the confidential information, he ehall be
entiUed to damagu in a judicial proceeding against the person who made (1) a court proceeding involving a crime or felony; or
the cliacloeure. (2) a proceeding to prove a claim or defen.ae that und~ ~he
A person who dieclosea or mam a representation about a mediation law is sufficient to reform or avoid a liability on • contract anamg
is precluded from asserting the privilege under Section 9, to the extent out of the mediation.
that the communication prejudices another person in the proceeding and it 'd
(c) A mediator may not be compelled to pl'OV'I e evi
·deoce of a me-
is neceaaary for the person prejudiced to respond to the repreaentation of diation communication or testify in such proceeding.
diacloaure.
Cd) If a mediation communication is not privileged un~er .an :x":1:"
SEC. 11. B:meptiotM lo Prtvlleae.- tion In subsection (a) or (b), only the portlon of the commumcati: ~~
(a) There la no privilege agalnat disclosure under Section 9 if me- aary for the application of the exception for nondiacloa~ may a of
diation communication ia: ted. ~ admiaaion of particular evidence for the lim.ited P~ co:
e11Ception does not render that evidence, or any other mediatiOn
(1) in an agreement evidenced by a record authenticated by munlcatlon, admissible for any other purpose.
all partiu to the agreement;
SEC. 12 Proh 1'blled Mediator Beport..-11. me<Dator may not
(2) available to the public or that is made during a session of
make a report,' aa&e88ment, evaluation, recommendati·on, ' ....,, or other
find;""
a mediation which is open, or is required by law to be open, to the
commuruca · t'ion regard ing a mediatlon
· to a coun~ or ....
6 -o"" or other author-
- .-' of ediati
public;
ity that may make a ruling on a dispute that ia the 1ubJect a m on.
(8) a threat or statement of a plan t.o innlct bodily lajury or except:
commit a crime of violence; (a) Where the mediation occurred or bu terminated, or where a
(4) intentionally used to plan a crime., attempt to commit, or ..,ttJement was reached .
commit a crime, or conceal an ongoing crime or criminal actlvity; (b) Ali permitted to be disclosed under Sectlon 13 ofthb Chapter.
(15) eought or offered to prove or disprove abuM, neglect,
abandonment, or exploitation in a proceeding in which a public SEC. 13. Mediolor'e DU<:loeun onAI Conf1ic_I o( lnl<!rnt.-The
mediation ahall be guided by the following operative pnnaplea:
agency 11 protecting the interest of an individual p.rot.ect.ed by law;
but thia ezception does not apply where a child protection matter ill (a ) Before aocepting a mediation, an individual who is requested to
refeJTed to mediation by a court or a public agency participate. in eerve as a mediator ehall:
the child protection mediation.; ( l) make 80 inquiry that le reasonable under the circum·
(6) eought or offered to prove or disprove a claim or complaint stances to determine whether there are any known fa~ tha.t ~ rea·
of profeaalonal misconduct or malpractice filed against mediator in a soneble Individual would consider likely to affect the 1mpart1ality of
proceeding; or the mediator, including a financial or peuonal interest in the out·
328 ALTERNATIVE DISPUTE R ESOLUTION APPENDIX "A" 329
REPUBLIC ACT NO. 9286

come of the mediation and any existing or past relationship with a the contingency of breach to avoid conflicting interpretations of the agree-
party or foreseeable participant in the mediation; and ment.
(2) disclose to the mediation parties any s uch fact known or (b) The parties and their respective counsels, if any, shall sign the
learned as soon as is practical before accepting a mediation. settlement agreement. The mediator shall certify that he/she explained
(b) If a mediator learns any fact described in paragraph (a) (1) of the contents of the settlement agreement to the parties in a language
this section after accepting a mediation, the mediator shall disclose it as known to them.
soon as practicable. At the request of a mediation party, an individual who (c) If the parties so desire, they may deposit such settlement agree-
is requested to serve as mediator shall disclose his/her qualifications to ment with the appropriate Clerk of a Regional Trial Court of the place
mediate a dispute. where one of the parties resides. Where there is a need to enforce the
. This Act does not require that a mediator shall have special qualifi- settlement agreement, a petition may be filed by any of the parties with
cations by background or profession unless the special qualifications of a the same court, in which case, the court shall proceed summarily to hear
mediator are required in the mediation agreement or by the mediation the petition , in accordance with such rules of procedure as may be promul·
parties. gat.ed by the Supreme Court.
(d) The parties may agree in the settlement agreement that the
. SEC •. 14. Participation in Mediation. -Except as otherwise pro· mediator shall become a sole arbitrator for the dispute and shall treat the
vided m this Act, a party may designate a lawyer or any other person to settlement agreement as an arbitral award which shall be subjec~ to ~n­
?rovi~~ assistance in the mediation. A waiver of this right shall be made forcement under Republic Act No. 876, otherwise known as the Arbitration
m wn~mg by the part?' waiving it. A waiver of participation or legal repre- Law, notwithstanding the provisions of Executive Order No. 1008 for
sentation may be rescinded at any time.
mediated dispute outside of the CIAC.
SEC. 15. PUu:e of Mediati<>n.-The parties are free to agree on
the place of mediation. Failing such agreement, the place of mediation CHAPTER 3 - OTHER ADR FORMS
shall be any place convenient and appropriate to all parties.
SEC. 16. Effect of Agreement to Submit Dispute to Mediation SEC. 18. R eferral of Dhpute to Other ADR Fo~a.-The pa~es
may agree to refer one or more or all issues arising in a dispute or dunng
Under lnstitu_tio?al Rules.-An agreement to submit a dispute to me- its pendency to other forms of ADR such as but not limited. to (~) the
~ation by an. l~stitution shall include an agreement to be bound by the evaluation of a third person or (b) a mini-trial, (c) mediation-arbitration, or
mternal mediation and administrative policies of such institution. Fur-
a combination thereof.
ther'. a? agreement to submit a dispute to mediation under institutional
med1at1on rules shall be deemed to include an agreement to have such For purposes of this Act, the use of other ADR f~rms s~all be !'ov·
~es go~em the ';llediation of the dispute and for the mediator, the par- emed by Chapter 2 of this Act except where it is combmed wit~ arbitra-
ties, their respective counsel, and nonparty participants to abide by such tion in which case it shall likewise be governed by Chapter 5 of this Act.
rules. In case of conflict between the institutional mediation rules and the
provisions of this Act, the latter shall prevail. CHAPTER 4 - INTERNATIONAL COMMERCIAL
ARBITRATION
SE~ •. 17. Enforcement of Mediated Settlement Agreements.-
The med1at1on shall be guided by the following operative principles:
SEC. 19. Adoption of the Model Law on International Com·
(a) A settlement agreement following successful mediation shall be mercial Arbitration.-International commercial arbitration shall be
prepared by the Parties with the assistance of their respective counsel, if governed by the Model Law on International Commercial Arbitration (the
any, and by the mediator. "Model Law") adopted by the United Nations Commission on International
The parties and their respective counsels shall endeavor to make the Trade Law on June 21 1985 (United Nations Document A/40/17) and rec·
terms and conditions thereof complete and make adequate provisions for ommended for enactn:ent by the General Assembly in Resolution No.
 330 ALTERNATIVE DISPUTE RESOLUTION APPENDIX MA. 331
REPUBLIC ACT NO. 9285

40/72 approved on December 11, 1985, copy of which is hereto attached u SEC. 25. In terpretation of the Act.-In interpreting the Act, the
Appendix •A".
court shall have due regard to the policy of the law in favor of arbitration
SEC. 20. lnterprf!lotion of Model Law.- ln interpreting the Where action is commenced by or against multiple parties, one or more of
Model.Law,_ re~ a~all be had to its intemattonal origin and to the need whom are parties to an arbitration agreement, the court shall refer 14
for uniformity in it.a interpretation and resort may he made to the trauaux arbitration those parties who are bound by the arbitration agreement
preparatol"U• and the report of the Secretary General of the United Na· although the civil action may continue as to those who are not bound by
tlona Commiaaion on International Trade Law dated March 25 1985 enti- such arbitration arreement.
tled, "International Commercial Arbitration: Analytical Com~ntory on SEC. 2S. M eaning of "Appotntmg Authority."-"Appointing
Draft Trade idenli{led by reftnnce number A / CN. 91264. • Authority" as used in the Model Law shall mean the person or institution
SEC. 2 1. Com,,..rcial Arbltratw n. -An arbitration is "commer- named in the arbitration agreement as the appointing a uthority; or the
cial" If It covers matters arising from all relationships of a commercial regular arbitration institution under whose rules the arbitration is eereed
~ature, whether contractual or not. Relationships of a commercial nature to be conducttd. Where the parties have agreed to submit their dispute to
include, but are not limited to, the following transactions: any trade trans- institutional arbitration rules, and unless they have agreed to a different
action. for the au?ply or exchanee of goods or services; distribution agree· procedure, they shall be deemed to bsve agreed to the procedure under
o:
~e~ta, co_nstruction works; commercial representation or agency; factor-
ing, !e~~ng, consul.ting; engineering; licensing; investment; financing;
such arbitration rules for the selection and appointment of arbitrators. In
ad hoc arbitration, the default appointment of an arbitrator shall be made
banking'. insuran.ce; Joint venture and other forms of industrial or business by the National President of the Integrated Bar of the Philippines (IBP) or
cooperation; carnage of goods or passengers by air , sea, rail or road. his duly authori:ted representativ e.
SEC. 22. ~gal Reprtteentation in Intem.attonal Arbttra- SEC. 27. What Function• May be Performed f,y Appointing
tton.- In international arbitration conducted in the Philippines, a party Authortty. - The funct ions referred to in Articles ll(S), 11(4), 18(3) and
may ~ presented by ~ny person of his choice: Prouided, Th at such repre- 14(1) of the Model Law shall be performed by the Appointing Authority,
sentative, unless admitted to the practice of law in the Philippines, shall unless the latter shall fail or refuse to act within thirty (SO) days from
not bo 11uth?ri~ to app.:ur as counsel In any Philippine court, or any rocolpt of tho rcqu""t in which c..- the applicant may renew the applica-
other q~asl-~ud!cial body whether or not such appearance is in relation to tion with the Court.
the arbitration 1n which he appears.
SEC. 28. Grant of Interim M&Mure of Protect ion.-(&) It ie not
. S~C. 23. ~n/t~ntloUty of Arbitra.tton Proceedtnge.-The incompatible with an arbitration agreement for a party to request, before
arb1trat1on Proceedings, including the records, evidence and the arbitral constitution of the tribunal from a Court an interim measure of protection
aw~, shall be considered confidential and shall not be published except and for the Court to grant ~uch measure. Aft.er constitution of the arbitral
~1) with the consent of the parties, or (2) for the limited purpose of disclos- tribunal and during arbitral proceedings, a request for an interim ?1eas~
ing to the court of relevant documents in cases where resort to the court is of protection, or modification thereof, may be made with the arb1tral ~­
allowed hei:eln: Prouided, howeuer, That the court in which the action or bunal or to the extent that the arbitral tribuna1 bas no power to act or IS
~e appeal 11 pending may iuue a protective order to prevent or prohibit unable to act effectively, the request may be made with the Court. Tho
d1eclosure of documents or information containing secret processes, devel- arbitral tribunal is deemed constituted when the sole arbitrator or the
opments, re&earch ~d other information where it is shown that the appli· third arbitrator, who has been nominated, bas accepted the nomination
cant shall be matenally prejudiced by an authorized disclosure thereof. and written communication of said nomination and acceptance has been
received by the party malring the request.
. . SEC. 24. . Referral to ArbUration.-A court before which an ac-
(b) The following rules on interim or provisional relief shall be ob-
tion is brought JD a matter which is the subject matter of an arbitration
eerved:
a~ent shall, if at least one party so requests not later that the pre-
trial conference, or upon the request of both parties thereafter refer the Cl) Any party may request that provisional relief be granted
parties to arbitration unless it finds that the arbitration agreem~nt is null against the adverse party.
and void, inoperative or Incapable of being performed.
332 ALTERNATIVE D ISPUTE RESOLUTION APPENDIX "A" 333
REPUBLIC ACT NO. 9285

(2) Such relief may be granted: otherwise agreed by the parties, meet at any place it considers appropriate
(i) to prevent irreparable loss or iajury: for consultation among its members, for hearing witnesses, experts or the
(ii) to provide security for the performance of any obli- parties, or for inspection of goods, other property or documents.
gation; SEC. Sl. Language of the Arbitration.-The parties are fr~ to
(iii)to produce or preserve any evidence; or agree on the language or languages to be used in the arbitral i:>~~ngs.
Failing such agreement, the language to be used shaJI be E~ghsh ?1 111~r­
(iv) to compel any other appropriate act or omission. national arbitration, and English or Filipino for domestic arbitration,
(3) The order granting provisional relief may be con ditioned unless the arbitral tribunal shall determine a different or another lan·
upon the provision of security or any act or omission specified in the guage or languages to be used in the proceedings. This agreement o~ de-
order. termination, unless otherwise specified therein, shall apply to any wntten
(4) Interim or provisional relief is requested by written appli-
statement by a party, any hearing and any award, decision or other com·
cation tran9mitted by reasonable means to the Court or arbitral tri· munication by t he arbitral tribunal.
bunal as the case may be and the party against whom the relief is The arbitral tribunal may order that any documentary evidence
sought, describing in appropriate detail the precise relief, the party shall be accompanied by a translation into the language or languages
against whom the relief is requested, the grounds for the relief, and agreed upon by the parties or determined in accordance with paragraph 1
the evidence supporting the request. of this Section.
(5) The order shall be binding upon the parties.
CHAPTER 5 - DOMESTIC ARBITRATION
(6) Either party may apply with t he Court for assistance in
implementing or enforcing an interim measure ordered by an arbi·
tral tribunal. SEC. 32. Law Governing Dome•tic Arbitratlon.-Domestic ';'l'-
bitration shall continue to be governed by Republic Act No. 876, otherwlse
(7) A party who does not comply with the order shall be liable known as "The Arbitration Law" as amended by this Chapter. The term
for all damages resulting from noncompliance, including a ll expenses "domestic arbitration" as used herein shall mean an arbitration that is not
and reasonable attorney's fees, paid in obtaining the order's judicial international as defined in Article 1(3) of the Model Law.
enforcement.
SEC. SS. Applicability to Domestic Arbitration.-Artides 8,
SEC. 29. Further Authority for Arbitrator to Grant I nterim 10, 11, 12, 13, 14, 18 and 19 and 29 to 32 of the Model Law and ~ect1ons 22
Metuure of Protection.-Unless otherwise agreed by the parties the to 31 of the preceding Chapter 4 shall apply to domestic arbitration.
arbiti:al tr!bunal may, at the request of a party, order any party to' take
such intenm measures of protection as the arbitral tribunal may consider CHAPTER 6 - ARBITRATION OF CONSTRUCTION
~ecessary in respect of the subject matter of the dispute following the rules DISPUTES
ID Section 28, paragraph 2. Such interim measures may include but shaJI
not be limited to preliminary injunction directed against a party, appoint- SEC. 34. Arbitration of CoMtruction Duputes: Governing
ment of receivers or detention, preservation, inspection of property that is Law.-The arbitration of construction disputes shall be governed by Ex-
the subject of the dispute in arbitration. Either party may apply with the ecutive Order No. 1008, otherwise known as the "Construction Industry
Court for assistance in implementing or enforcing an interim measu.r e Arbitration Law.•
ordered by an arbitral tribunal.
SEC. 35. Coverage of the Law.-Construction disputes . which
SEC. 30. Place of Arbitration.-The parties are free to agree on fall within the original and exclusive jurisdiction of the Construction In-
the place of arbitration. Failing such agreement, th e place of arbitration dustry Arbitration Commission (the "Commission") shall include t~ose
shall be in Metro Manila, unless the arbitral tribunal, having regard to the between or among parties to, or who are otherwise bound ~y, an arb1~a­
circumstances of the case, including the convenience of the parties shall tion agreement, directly or by reference whether such parties are prOJ.ect
decide on a different place of arbitration. The arbitral tribunal may, u nless owner, contractor, subcontractor, fabricator, project manager, design
334 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "A" 335
REPUBLIC ACT NO. 928S

professional, consultant, quantity surveyor, bondsman or issuer of an CHAPTER 7 - .ruDICIAL REVIEW OF

insurance policy in a construction project. ARBITRAL AWARDS
The Commission shall continue to exercise original and exclusive ju·
risdiction over construction disputes although the arbitration is "commer- A. DOMESTICAWARDS
cial• pw-suant to Section 21 uf this Act.
SEC. 40. Confirmation of Award. -The confirmation of a do-
SEC. 36. Authority to Act as Mediator or Arbitrator.-By mestic arbitral award shall be governed by Seetion 23 ofR.A. No. 876.
written agreement of the parties to a dispute, an arbitrator may act as
mediator and a mediator may act as arbitrator. The parties may also agree A domestic a rbitral award when confirmed shall be enforced in ~e
in writing that, following a successful mediation, the mediator shall issue same manner as final and executory decisions of the Regional Trial Court.
the setUement agreement in the form of an arbitral award. The recognition and enforcement of an award in an international com.mer·
cial arbitration shall be governed by Article 35 of the Model. Law. ~e
SEC. 37. Appointment of Foreign Arbitrator.-The Construc- confirmation of a domestic award shall be made by the Regional Trial
tion Industry Arbitration Commission (ClAC) shall promulgate rules to Court in accordance with the Rules of Procedure to be promulgated by the
allow for the appointment of a foreign arbitrator or co-arbitrator or chair· Supreme Court.
man of a tribunal a person who has not been previously accredited by A CIAC arbitral award need not be confirmed by the Regional Trial
CIAC: Provided, That:
Court to be executory as provided under E.O. No. 1008.
(a) the dispute is a construction dispute in which one party is an
international party; SEC. 41. Vacation Award. - A party to a domestic arbitrati?n
may question the arbitral award with the appropriate Regional Trial
(b) the person to be appointed agreed to abide by the arbitration Court in accordance with the rules of procedure to be promulgated by the
rules and policies of CIAC; Supreme Court only on those grounds enumerated in Section 2~ of Repub·
(c) he/she is either co-arbitrator upon the nomination of the inter- lie Act No. 876. Any other ground raised against a domestic arb1tral award
national party; or he/ahe is the common choice of the two CIAC-accredited shall be disregarded by the Regional Trial Court.
arbitrators first appointed, one of whom was nominated by the intema·
tional party; and B. FOREIGN ARBITRAL AWARDS
Cd) the foreign arbitrator shall be of different nationality from the
international party. SEC. 42. Application of the New York Convention.-The !"ew
York Convention shall govern the recognition and enforcement of arbitral
SEC. 38. ApplU:ability to Construction Arbitration.-The awards covered by the said Convention. The recognitio~ and enf~rcement
provisions of Section 17(d) of Chapter 2, and Scctionc 28 and 29 of this of $uch Arb;tral awards ehaJI be fiJ9d with Rogional Trial Court m accor-
Act shall apply to arbitration of construction disputes covered by this dance with the rules of procedure to be promulgated by th~ Supreme
Chapter. Court. Said procedural rules shall provide that the party relymg O~ _the
award or applying for its enforcement shall file with the court the ongmal
SEC. 39. Court to Dismiss Ccue Involving a Construction or authenticated copy of the award and the arbitration agreement. If the
Dispute.-A Regional Trial Court before which a construction dispute is award or agreement is not made in any of the official languages, the party
filed shall, upon becoming aware, not later than the pre-trial conference, shall supply a duly certified translation thereof into any of such lan·
that the parties had entered into an arbitration agreement, dismiss the guages.
case and refer the parties to arbitration to be conducted by the CIAC,
unless ~oth parties, assisted by their respective counsel, shall submit to The applicant shall establish that the country in which foreign arbi·
the Regional Trial Court a written agreement exclusively for the Court, tration award was made is a party to the New York Convention.
rather than the CIAC, to resolve the dispute. If the application for rejection or ~uspension of ~fo~emen.t of 8:°
award has been made, the Regional Trial Court may, 1f 1t considers it
proper, vacate its decision a nd may also, on the application of the party
336 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "A" 337
REPUBLIC ACT NO. 9285

claiming recognition or enforcement of the award, order the party to pro- SEC. 48. Notice of Proceeding to Parlie..-ln a special proceed-
vide appropriate security. ing for recognition and enforcement of an arbitral award, the Court sball
send notice to the parties at their address of record In the arbitration, or if
SEC. 43. Rttognition and Enforcement of Forelgn ArbUnJl any party cannot be served notice at such addreu, at such party's last
Ar.oa....U Not Covered b,)' tM NeUJ Yor.lr Con uen tion.- The recognition known address. The notice shall be sent at least fift.ffn (15) days before
and enforcement of foreign arbitral awards not covered by tho New York the date set for the initial hearing of the application.
Convention shall be done in accordance with procedural rules to be prom·
ulgated by the Supreme Court. The Court may, on grounds of comity and
CHAPTER 8 - MISCELLANEOUS PROVISIONS
reciprocity, recognize and enforce a non-convention award as a convention
award.
SEC. 49. Office for Alternative Dl.apute R e•olution.-:-There is
SEC. 44. Foreign Arbitral Award Not F oreign Judgment.-A hereby established the Office for Alternative Dispute Resolution as an
foreign arbit ral award when confirmed by a court of a foreign country, attached agency to the Department of Justice (00J) which s~ ~ave a
shall be recognized and enforced as a foreien arbitral award and not as a Secretariat to be headed by an Executive Director. The Executiv~ D~r
judgment of a foreign court. A foreign arbitral award, when confirmed by aball be a ppointed by the President of the Philippines. The obJectives of
the Resional Trial Court, shall be enforced in t he same manner as final the Office are:
and executory decisions of courts of law of the Philippines. (a ) To promote, develop and expand the uH of ADR in the private
SEC. <15. R(jection. of a Forelgn. ArbUral Award. - A party to a and public sectors; and
foreign arbitration proceeding may oppose an application for recognition (b) To assist the government to monitor, study and evaluate the
and enforcement of the arbitral award in accordance with the procedural use by the public and the private sector of ADR, and recommend to Con·
rules to be promulgated by the Supremo Court only on those grounds gress needful statutory ch anges to develop, stronlflhen and improve ADR
enumerated under Article V of the New York Convention. Any other practices in accordance with world standards.
ground raised shall be disregarded by tho Rec:ional Trial Court.
SEC. 50. P oUHtr• and Function• of the Offlce for Alternatiue
SEC. •e. Appeal from Court Decuion.s on. Arbitral Awarda.- Di•pute Resolution. - The Office for Alternative Di1pute Resolution shall
A decision of the Regional Trial Court confirming, vacating, setting aside, have the following poweno and functions:
modifying or correcting an arbitral award may be appealed to the Court of
Appeals in accordance with the rulea of procedure to be promulgated by (a) To formulate s tandards for the trsinina of the ADR practitio-
the Supreme Court. ners and service providers;
(b) To certify that such ADR practitionen and ADR service provid-
The losing party who appeals from the judgment of the court con-
firming an arbitral award shall be required by the appellate court to post a ers have undergone th e professional training provided by the Office;
counterbond executed in favor of the prevailing party equal to t he amount (c) To coordinate the development, implementation, monitoring,
of the award in accordance with the rules to be promulgated by the Su· and evalua tion of government ADR programs;
preme Court. (d) To charge fees for their services; and
SEC. <17. Venue and Juri•dlction. -Proceedings for recognition (e l To perform such acts as may be neceaaary to carry into effect
and enforcement of an arbitration agreement or for vacation, aettini aside, the provisions of this Act.
correction or modification of an arbitral award, and any application with a
court for arbitration assistance and supervision shall be deemed as special SEC. 51. Approprlation-.-Tbe amount necessary to car:Y.out
proceedings and shall be filed with the Regional Trial Court (i) where the provisions of this Act shall be included in the General Appropnations
arbitration proceedings are conducted; (ii) where the asset to be a ttached Act oflhe year following its enactment into law and thereafter.
or levied upon, or the act to be eajoined is located; (iii) where any of the SEC. 52. lmplementln.g Rule• and Regulationa (lRR).-
parties to the dispute resides or has his place of business; or (iv) in the Within one (1) month aft.er the approval of this Act, the Secretary of Jus-
National Capital Judicial Region, at the option of the applicant. tice shall convene a committee that shall formulate the appropriate rules
338 ALTERNATIVE DISPUTE RESOLUTION

and regu)ationa neceuary for the implementation of this Act. The commit-
tee, compoeed of representatives from:
(a) The Department of Justice;
APPENDIX "B"
(b) The Department of Trade end Industry;
(c) The Department of the Interior and Local Government;
REPUBLIC ACT NO. 876
(d) The preaidentofthe Integrated Bar of the Philippines;
(e) A representative from the arbitration profession;
(f) A representative from the mediation profession; and AN ACT TO AUTHORIZE THE MAKING OF ARBITRATION AND SUB-
MISSION AGREEMENTS, TO PROVIDE FOR THE APPOINT·
(g) A representative from the ADR organizations MENT OF ARBITRATORS AND THE PROCEDURE FOR ARBI-
. shall, wi~n thrff (3) months after convening, submjt the mR to the TRATION IN CIVIL CONTROVERSIES, AND FOR OTHER PUR-
Jomt ~ngreas1onal Oversight Committee for review and approval. The POSES
Oversight Committee shall be composed of the Chairman of the Senate
~mmittee on .Justice and Human Rights, Chairman of the House Com- SECTION 1. Short Title.-Thls Act shall be known as "The Ar-
!111ttee on Justice, and one (1) member each from the Majority and M;nor- bitration Law.•
1ty ?f both Houses. The Joint Oversight Committee shall become functua
ofic10 upon approval of the IRR. SEC. 2. P erson• and matters •uf:iiect to arbUratlon.- Two or
more persons or parties may submjt to the arbitration of one or more
. SEC. CiS. App~kabillty of the Katarungang Pambarangay.- arbitrators any controversy existing between them at the time of the sub·
1:1'•SAct shall not be interpreted to repeal, amend or modify the jurisdic- mission and which may be the subject of an action, or the parties to any
tion of. the Katarunga.fl(I Pa.mbaransa.y under Republic Act No. 7160, contract may in such contract agree to settle by arbitration a controversy
otherwise known ll8 the "Local Government Code of 1991." thereafter arising between them. Such submjssion or contract shall be
valid, enforceable and irrevocable, save upon such grounds as exist at law
SEC. 54. Repealing Clause.-All laws, decrees, executive orders for the revocation of any contract.
rules and regulations which are inconsistent with the provisions of thi~
Act are hereby repealed, amended or modified accordingly. Such submission or contract may include question arising out of
valuations, appraisals or other controversies which may be collateral,
. SEC. 511.. . SeparabUl.ty Clause.- If for any reason or reasons, any incidental, precedent or subseque.n t to any issue between the parties.
portion or provts1on of this Act shall be held unconstitutional or invalid all
A controversy cannot be arbitrated where one of the parties to the
other parts or provisions not affected shall thereby continue to remai~ in
full force and effect. controversy ia an infant, or a person judicially declared to be inco~!>8tent,
unless the appropriate court having jurisdiction approve a petition for
~EC. G~- ~~tiuily.-This act shall take effect fifteen ( 15) days permission to aubmjt such controversy to arbitration made by the general
~ ·~ publication ln at least two (2) national newspapers of general guardian or guardian ad l item of the infant or of the incompetent.
cll'Culation. But where a person capable of entering into a submission or contract
baa knowingly entered into the same with a penon incapable of 80 doing,
Approved: April 2, 2004. the objection on the ground of incapacity can be taken only in behalf of the
person ao incapacitated.

339
340 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "B" 341
REPUBLIC ACT NO. 876

SEC. 3. Controversie• or C<Uea not subject to the prouiaio,.. (c) In the case of the submission of an existing controversy by the
of thts Act.-This Act shall not apply to controversies and to cases which filing with the Clerk of the Court of First Instance having jurisdiction, of
are subject to the jurisdiction of the Court of Industrial Relations or which the submission agreement, setting forth the nature of the controversy, and
have been submitted to it as provided by Commonwealth Act Numbered the amount involved, if any. Such submission may be filed by any party
One hundred and three, as amended. and shall be duly executed by both parties.
SEC. 4 . Form of arbitration agreement.- A contract to arbi· (d) In the event that one party neglects, fails or refuses to arbitrate
trate a rontroversy thereafter arising between the parties, as well as a under a submission agreement, the aggrieved party shall follow the prGce·
submission to arbitrate an existing controversy shall be in writing and dure prescribed in subparagraphs (a) and (b) of this section.
subscribed by the party sought to be charged, or by his lawful agent.
SEC. 6. Hearing by courl.-A party aggrieved by ~e f"?~· ne·
The making of a contract or submission for arbitration described in glect or refusal of another to perform under an agreement m.wnt;mg pro-
section two hereof, providing for arbitration of any controversy, shall be viding for arbitration may petition the court for an order directing that
deemed a consent of the parties to the jurisdiction of the Court of First such arbitration proceed in the manner provided for in s.uch. agreement.
Instance of the province or city where any of the parties resides, to enforce Five days notice in writing of the hearing of such appbcation shall be
such contract or submission. served either personally or by registered mail upon the party 10 defa';'1t.
SEC. 6. Preliminary p rocedu re.-An arbitration shall be insti· The court shall hear the parties and upon being satisfied that the malring
tuted by: of the agreement or such failur; to comply therewith is not in issue, shall
make an order directing the parties to proceed to arbitration in accordance
(a) In the case of a contract to arbitrate future controversies by the with the terms of the agreement. If the making of the agreement or default
service by either party upon the other of a demand for arbitration in ac· be in issue the court shall proceed to summarily hear such .1ssu~. If the
cordance with the contract. Such demand shall be set forth the nature of finding be that no agreement in writing providing for arb1trat1on was
the controversy. the amount involved, if any, and the relief sought, to- made, Ol' that there Is no default In the proceeding thereunder, .~" pro-
gether with a true copy of the contract providing for arbitration. The de- ceeding shall be dismissed. If the finding be that a written provision for
mand shall be served upon any party either in person or by registered arbitration was made and there is a default in proceeding thereun~er, an
mail. In the event that the contract between the parties provides for the order shall be made summarily directing the parties to proceed with the
appointment of a single arbitrator, the demand shall be set forth a specific arbitration in accordance with the terms thereof.
time within which the parties shall agree upon such arbitrator. If the
contract between the parties provides for the appointment of three arbitra· The court shall decide all motions, petitiom or application~ filed ~­
tors, one to be selected by each party, the demand shall name the arbitra· der the provisions of this Act, within ten days after such motions, peti·
tor appointed by the party malring the demand; and shall require that the tions, or applications have been heard by it.
party upon whom the demand is made shall within fifteen days after SEC. 7. Stay of civil action.-If any suit ~r. proceeding be
receipt thereof advise in writing the party malting such demand of the brought upon an issue arising out of an agreement P"?vtd.mg for .the arb•·
name of the person appointed by the second party; such notice shall re- tration thereof, the court in which such suit or proceeding JS pe~du~g, upon
quire that the two arbitrators so appointed must agree upon the third being satisfied that the issue involved in such suit or p~eeding 1~ re~er­
arbitrator within ten days from the date of such notice. able to arbitration, shall stay the action or proceeding until an arbitration
(b) In the event that one party defaults in answering the demand, bas been had in accordance with the terms of the agreement: Prouided,
the aggrieved party may file with the Clerk of the Court of First Instance That the applicant, for the stay is not in default in proceeding with s uch
having jurisdiction over the parties, a copy of the demand for arbitration arbitration.
under the contract to arbitrate, with a notice that the original demand was SEC. 8. Appointment of arbitraton.-If, in the co~trac~ for ar·
sent by registered mail or delivered in person to the party against whom bitration or in the submission described in section two, provts1on ts made
the claim is asserted. Such demand shall set forth the nature of the con· for a method of naming or appointing an arbitra~r or arbi~ators, such
troversy, the amount involved, if any, and the relief sought, and shall be method shall be followed; but if no method be provtded therein the Court
accompanied by a true copy of the contract providing for arbitration. of First Instance shall designate an arbitrator or arbitrators .

. ... .
342 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "B• 343
REPUBLIC ACT NO. 876

The Court of First Instance shall appoint an arbitrator or arbitra· If, aft.er appointment but before or during hearing, a pe~on ap-
tors, as tha cau mo.y be, in the following iiutances: pointed to serve as an arbitrator shall discover any cireum~tsnce:i l~ly to
(a) If the parties to the contract or submission are unable to agree create a presumption of bias, or which he believes mieht d11qualify him as
upon a single arbitrator; or an lmpsnial arbitrator the arbitrator shall immediately dlaclose such
(b) If an arbitrator appointed by the parties is unwilling or unable
information to the parti~s. Thereafter the parties mo.y agree in writing:
to serve, and bis successor has not been appointed in the manner in which (a) to waive the presumptive disqualifying circumstances; or
he was appointed; or (b) to declare the office of such arbitrator vacant. Any such vacancy
(c) If either party to the contract fails or refuses to name his arbi· aha!! be filled in the same manner as the original appointment was made.
trator within fifteen days after receipt of the demand for arbitration; or SEC. 11. Ch a llen ge of arbitrators.-The arbitrators_ may .be
(d) If the arbitrators appointed by each party to t he cont ract, or ap- challenged only for the reasons mentioned in the precedin.g section which
pointed by one party to the contract and by the proper Court, shall fail to may ha•e arisen aft.er the arbitration agreement or were unknown at the
agree upon or to select the third arbitr ator. time of arbitration.
Ce) The court shall, in its dac:retion appoint one or three arbitra· The challenge shall be made before them.
tors, according to the importance of the controversy involved in any of the
Ir they do not yield to the challenge, the challenging Pu:>' may re-
preceding cases in which the agreement is silent as to the number of arbi·
tratore. new the challenge before the Court of First Instance of the provlllce or:ty
in which the challenged arbitrator, or, any oft.hem, if there be more an
(f) Arbitrators appointed under this section shall either accept or one, resides. While the challenging incident is disc~d before the~:!i
decline their appointments within seven days of the receipt of their ap- the hearing or arbitration shall be suspended, and 1t shall be con .
pointments. In cue of declination or the failure of an arbitrator or a.r bitra· immediately after the court baa delivered an order on the challenging
tors to duly accept their appointments the parties or the court, aa the case incident.
may be, shall proceed to appoint a substitute or substitutes for the arbitra·
tor or arbitrators who decline or failed to accept his or their appointments. SEC. 12. P rocedure by arbitrators.-Subjact ~ the te";'5~the
1ubmiesion or contract, i£ any are epceified tben:ain, ~.rtntrA~: e pa.rti88
SEC. 9. AppoinhMnt of additional arbitraU>rs.-Wbere a sub- prescribed herein must, within five days aft.er appointment . ~ fifteees
mission or contract provides that two or more arbitrators therein desle· to the controversy reside within the same city or province, or wi_thin t n
nated or to be thereafter appointed by the parties, may select or appoint a days after appointment if the parties reside in diff'erent pnMDces. se a
person as an additional arbitrator, the selection or appointment must be in time and place for the bearing of the matters submitted to them.. and m':
writing. Such additional arbitrator must sit with the original arbitrators cause notice thereof to be given to each of the parties. The hean;~c;:"' .
upon the hearing. poatponed or adjourned by the arbitrators only by a~ment o ~
ties· otherwise adjournment may be ordered by the arbitrators upon eir
SE C. 10. Qua llff.cationa of a rbitrator•.-An.y person appointed
to serve as an arbitrator must be of legal age, in full-enjoyment of his civi.1
ow~ motion o~ly at the hearing and for good and sufficient cause. 1:10
acijournment shall extend the hearing beyond the day fixed in the s~nus·
rights and know bow to read and write. No person appointed to eerved as
1ion or contract for rendering the award, unless the time 8? ~xed is ex·
an arbitrator shall be related by blood or marriage within the sixth degree tended by the written agreement of the parties to the 1ubtmss1on or con·
to either party to the controversy. No person shall serve as an arbitrator in tract or their attomeya, or unless the parties have continued with the
any proceeding if be has or has bad financial, fiduciary or other interest in
arbitration without objection to auch adjournment..
the controversy or cause to be decided or in the result of the proceedine, or
bas any personal bias, which might prejudice the right of any party to a The hearing may proceed in the absence.of any ~ who: after due
fair and impartial award. notice, fails to be present at such hearing or fruls to obtain an adJournment
thereof. An award shall not be made solely on the default of a party. The
No party shall select as an arbitrator any person to act as his cham· a.r bitrators shall require the other party to submit such evidence as they
pion or to advocate his cause. may require for making an award.
344 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "B" 345
REPUBLIC ACT NO. 876

No one other than a party to said arbitration, or a person in the be the sole judge of the relevancy and materiality of the evidence offered. or
regular employ of such party duly authorized in writing by said party, or a produced, and shall not be bound to conform to the Rules of Court pertain·
practicing attorney-at-law, shall be permitted by the arbitrators to repre- ing to evidence. Arbitrators shall receive as exhibits in evidence any docu-
sent before him or them any party to the arbitration. Any party desiring to ment which the parties may wish to submit and the exhibits sh"!l 1:"'
be represented by counsel shall not ify the other party or parties of such properly identified at the time of submission. All exhibits shall rei:nam m
intention at least five days prior to the hearing. the custody of the Clerk of Court during the course of the arbitration and
The arbitrators shall arrange for the taking of a stenographic record shall be returned to the parties at the time the award is made: The arl>i·
of the testimony when such a record is requested by one or more parties, trators may make an ocular inspection of any matter or prenuses which
and when payment of the cost thereof is assumed by such party or parties. are in dispute, but such inspection shall be made only in the presen~e of
all parties to the arbitration, unless any party who shall have rece1Ved
Persons having a direct interest in the controversy which is the sub-
ject of arbitration shall have the right to attend any hearing; but the at- notice thereof fails to appear, in which event such inspection shall be made
tendance of any other person shall be at the discretion of the arbitrators. in the absence of such party.
SEC. 16. Briefs.-At the close of the hearings, the arl>itrators
SEC. 13. Oath of arbitrators.-Before hearing any testimony, shall specifically inquire of all parties whether they have any further proof
arbitrators must be sworn, by any officer authorized by law to administer
or witnesses to present; upon the receipt of a negative reply from all P~­
an oath, faithfully and fairly to hear and examine the matters in contro-
ties, th e arbitrators shall declare the hearing closed unless the parties
versy and to make a just award according to the best of their ability and
have signified an intention to file briefs. Then the hearing shall be clo~d
understanding. Arbitrators shall have the power to administer the oaths
by the arbitrators after the receipt of briefs and/or reply bnef~. Definite
to all witnesses requiring them to tell the whole truth and nothing but the
time limit for the filing of such briefs must be fixed by the arbitrators at
truth in any testimony which they may give in any arbitration hearing.
This oath shall be required of every wit ness before any of his testimony is the close of the hearing. Briefs may filed by the parties within fifteen days
heard. after the close of the oral hearings; the reply briefs. if any, shall be filed
within five days following such fifteen-day period.
SEC. 14. S ubpoena and •ubpoena duces t ecum.-Arbitrators
SEC. 17. R eopening of hearing.-The hearing may be reopened
shall have the power to require any person to attend a hearing as a wit·
by the arbitrators on their own motion or upon the request of any party,
ness. They shall have the power to subpoena witnesses a nd documents
when the relevancy of the testimony and the materiality thereof has been upon good cause, shown at any time before the award is ~ndered. ~en
hearings are thus reopened the effective date for the c~os1ng of the ear-
demonstrated to the arbitrators. Arbitrators may also require the retire·
ings shall be the date of the closing of the reopened heanng.
ment of any witness during the testimony of any other witness. All of the
arbitrators appointed in any controversy must attend all the hearings in SEC. 18. Proceeding in lU!u of hearing.-The parties to. a su?-
that matter and hear all the allegations and proofs of the parties; but an mission or contract to arbitrate may, by written agreeme~t, subnut ~~~
award by the majority of them is valid unless the concurrence of all of dispute to arbitration by other than oral hearing. The parties may. su mi
them is expressly required in the submission or contract to arbitrate. The an agreed statement of facts. They may a lso submit their respec:t1ve con-
arbitrator or arbitrators shall have the power at any t ime, before render- tentions to the duly appointed arl>itrators in writing; this shall include a
ing the award, without prejudice to the rights of any party to petition the statement of facts, together with all documentary ~roof. Parties m~ also
court to take measures to safeguard and/or conserve any matter which is submit a written argument. Each party shall provide all othe': parties to
the subject of the dispute in arbitration. the dispute with a copy of all statements and d~uments sub?11tt~ ~ the
arbitrators. Each party shall have an opportunity to reply m wnting to
SEC. 15. Hearing by arbUrators.-Arbitrators may, at the com· any other party's statements and proofs; but if such party fails to do so
mencement of the hearing, ask both parties for brief statements of the within seven days after receipt of such statements and proofs, he sh~! be
issues in controversy and/or an agreed statement of facts. Thereafter the deemed to have waived his right to reply. Upon the delivery to the arbitra-
parties may offer such evidence as they desire, and shall produce such tors of all statements and documents, together with any reply statements,
additional evidence as the arbitrators shall require or deem necessary to the arbitrators shall declare the proceedings in lieu of hearing closed.
an understanding and determination of the dispute. The arbitrators shall
346 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "B" 347
REPUBLIC ACT NO. 876

SEC. 19. Time for remkring award.-Unless the parties shall arbitrated may a pply to the court having jurisdiction, as provided in sec·
have stipulated by written agreement the time within which the arbitra· tion twenty-eight, for an order confirming the award; and thereupon the
tors must render their award, the written award of the arbitrators shall be court must grant such order unless the award is vacated, modified or
rendered within thirty days after the closing of the hearings or if the oral corrected, ss prescribed herein. Notice of such motion must be served upon
hearings shall have been waived, within thirty days after the arbitraton the adverse party or his attorney as prescribed by law for the service of
shall have declared such proceedings in lieu of hearing closed. This period such notice upon an at.t orney in action in the same court.
may be extended by mutual consent of the parties.
SEC. 24. Grouncla for vacating award.-In any one of the fol·
SEC. 20. Fonn and contents of award.-The award must be lowing cases, the court must make an order vacating the award upon the
made in writing and signed and acknowledged by a majority of the arbi· petition of any party to the controversy when such party proves affirma-
trators, if more than one; and by the sole arbitrator, if there is only one. tively that in the arbitration proceedings:
Each party shall be furnished with a copy of the award. The arbitrators in
their award may grant any remedy or relief which they deem just and (a) '!'he award was procured by corruption, fraud, or other undue
means; or
equitable and within the scope of the agreement of the parties. which shall
include, but not be limited to, the specific performance of a contract. (b) '!'hat there was evident partiality or corruption in the arbitra·
In the event that the parties to an arbitration have, during the tors or any of them; or
cou:se of such o.rbitration, settled thelr dispute, they may request of the (cl That the arbitrators were guilty of misconduct in refu•ins to
arbitrators that such settlement be embodied in an award which shall be postpone the hearing upon sufficient cause shown, or in refusing to hear
signed by the arbitrators. No arbitrator shall act as a mediator in any evidence pertinent and material to the controversy; that one or more of the
proceeding in which he is acting as arbitrator; and all negotiations to- arbitrators was disqualified to act as such under section nine hereof, and
wards settlement of the dispute must take place without the presence of willfully rEfrained from disclosing such disqualifications or of any o~er
the arbitrators. misbehavior by which the rights of any party have been matenally preJU·
The arbitrators shall have the power to decide only those matters diced; or
which have been submitted to them. The terms of the award shall be (d ) '!'hat the arbitrators exceeded their powers, or so imperfe~tly
confined to s uch disputes. executed them, that a mutual, final and definite award upon the sub;ect
The arbitrators shall have the power to assess in their award the ex- matter submitted to them was not made.
penses of any party against another party, when such assessment shall be Where an award is vacated, the court, in its discretion, may d!-rect a
deemed necessary. new hearing either before the same arbitrators or before a new a~itrator
or arbitrators to be chosen in the manner provided in the sub!DlSsion or
SEC. 21. Fees of arbltra.tion.-The fees of the arbitrators shall contract for the selection of the original arbitrator or arbitrators, and_ any
be fifty pesos per day unless the parties agree otherwise in writing prior to provision limiting the time in which the arbitrators may make a dec1S1on
the arbitration.
shall be deemed applicable to the new arbitration and to commence from
SEC. 22. Arbitration deemed a special proceeding.-Arbitra· the date of the court's order.
tion under a contract or submission shall be deemed a special proceeding, Where the court vacates an award, costs, not exceeding fifty pesos
of which the court specified in the contract or submission, or if none be and disbursements may be awarded to the prevailing party and the pay·
specified, the Court of First Instance for the province or city in which one ment thereof may be enforced in like manner as the payment of costs upon
of the parties resides or is doing business, or in which the arbitration was the motion in an action.
held, shall have jurisdiction. Any application to the court, or a judge
thereof, hereunder shall be made in the manner provided for the making SEC. 25. Groundll for modifying or correcti.ng award.;--In any
and hearing of motions, except as otherwise herein expressly provided. one of the following cases, the court must make an order modifying or
correcting the award, upon the application of any party to the controversy
SEC. 28. Conff.rmation of award.-A> any time within one which was arbitrated:
month after the award is made, any party to the controversy which was
 348 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "B" 349
REPUBLIC ACT NO. 876

(a) Where there was an evident miscalculation of figures, or an evi- SEC. 29. Appeakl.-An appeal may be taken from an order made
dent mistake in the description of any person, thing or property referred to in a proceeding under this Act, or from a judgment entered upon an award
in the award; or through certiorari proceedings, but such appeals shall be limited to ques-
(b) Where the arbitrators have awarded upon a matter not submit- tions of law. The proceedings upon such an appeal, including the judgment
ted to them, n ot affecting the merits of the decision upon the matter sub- thereon shal l be governed by the Rules of Court in so far as tbey are appli-
mitted; or cable.
(c) Where the award is imperfect in a matter of form not affecting SEC. 30. Death of parfy.-Where a party dies after making a
the merits of the controversy, and if it had been a commissioner's report, submission or a contract to arbitrate as prescribed in this Act, the proceed-
the defect could have been amended or disregarded by the court. ings may be begun or continued upon the application of, or notice to, his
The order may modify and correct the award so as to effect the intent executor or administrator, or temporary administrator of his estate. In ~ny
thereof and promote justice between the parties. such case, the court may issue an order extending the time within which
notice of a motion to confirm, vacate, modify or correct an award must be
SEC. 26. Motion to vacate, modify or correct award: wMn served. Upon confirming an award, where a party has died since it ~~s
made. - Notice of a motion to vacate, modify or correct the award must be filed or delivered, the court must enter judgment in the name of the ongi-
served _upon the ad~erse party or his counsel within thirty days after nal party; and the proceedings thereupon are the same as where a party
award is filed or delivered, as prescribed by law for the service upon an dies after a verdict.
attorney in an action.
SEC. 31. Repealing Clause.-The provisions of chapters one and
. ~EC. 27. Ju~ent. -Upon the granting of an order confirming, two, Title XIV, of the Civil Code shall remain in force. All other laws and
mod1~g ~r correcting an award, judgment may be entered in conformity parts of laws inconsistent with this Act are hereby repealed. If any proVi·
the~wi~ m the court wherein said application was filed. Costs of the sion of this Act shall be held invalid the remainder that shall not be af-
application and the proceedings subsequent thereto may be a warded by fected thereby.
the court in its discretion. If awarded the amount thereof must be in-
cluded in the judgment. • SEC. 32. Effectivit;y.-This Act shall take effect six months after
its approval.
SEC. 28. Papera to accompan;y motion to confirm, modlfy,
co~~ or vaca~e award. -The party moving for an order confirming, Approved: June 19, 1953
mo~1fyi~g, correc~mg, 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 su~mission, 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 copy 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 order
of the court upon such application.
The judgment s hall be docketed as if it were rendered in an action.
The judgment so entered shall have the same force and effect in all
respects, as, and be subject to all the provisions relating tA>, a judgment in
an action; and it may be enforced as if it had been rendered in the court in
which it is entered.
 APPENDIX "C" 351
DEPARTMENT CIRCULAR NO. 98

Article 1.2. Declaration of Policy. It is the policy of the State:

APPENDIX "C" (a) To promote party autonomy in the resolution of disputes or ~e
freedom of the parties to make their own arrangements to resolve theu-
disputes;
DEPARTMENT CffiCULAR NO. 98 (s. 2009) Cb} To encourage and actively promote the use of Alternative Dis·
IMPLEMENTING RULES AND REGULATIONS OF THE pute Resolution ("ADR") as an important means to achieve speedy and
ALTERNATIVE DIS PUTE RESOLUTION ACT OF 2004 impartial justice and to declog court dockets;
(c) To provide means for the use of ADR as an efficient tool and an
Whereas, purslllillt to Section 52 of Republic Act No. 9285, other· alternative procedure for the resolution of appropriate cases; and
wise known as the "Alternative Dispute Resolution Act of 2004" ("ADR (d) To enlist active private sector participation in the settlement of
Act"), the Secretary of Justice is directed to convene a Committee for the disputes through ADR.
formulation of the appropriate rules and regulations necessary for the
implementation of the ADR Act. Article 1.3. Exception to the Application of th~ ADR Act.
The provisions of the ADR Act shall not apply to the resolution or settle·
Wbere&.R, the Committee WQ.G composed of represcntative-5 from the
ment of the following:
Department of Justice, the Department of Trade and Industry, the De·
partment of the Interior and Local Government, the President of the Inte- (a} labor disputes covered by Presidential Decree No. ~2, 0 ~~;
grated Bar of the Philippines, a representative from the arbitration pro- wfae known as the "Labor Code of the Philippines, as amended • an 1
fession, a representative from the mediation profession and a representa· Implementing Rules and Regulations;
tive from the ADR organizations. (b) the civil status of persons;
Wherefore, the following rules and regulations are hereby adopted (c) the validity of marriage;
as the Implementing Rules and Regulations of Republic Act No. 9285.
(d) any ground for legal separation;
IMPLEMENTING RULES AND REGULATIONS OF THE (e) the jurisdiction of courts;
ALTERNATIVE DISPUTE RESOLUTION ACT OF 2004 CO future Jegitime;
CR.A. N o. 9285) (g) criminal liability;
Pursuant to Section 52 of Republic Act No. 9285, otherwise known as (h) those disputes which by law cannot be compromised; and
the "Alternative Dispute Resolution Act of 2004" C"ADR Act"), the follow· (i) disputes referred to cou~nnexed mediation.
ing Rules and Regulations (these "Rules") are hereby promulgated to
implement the provisions of the ADR Act: Article 1.4. Electronic Signatures In Glob~ and E·Co~·
merce Act. The provisions of the Electronic Signature~ in Global an~ ~
CHAPTER 1 Commerce Act, and its Implementing Rules and Regulations shall app Y
GENERAL PROVISIONS proceedings contemplated in the ADR Act.
Article 1.5. Liability of ADR Provid~r~c~iti??ers. The
RULE l - P olicy and Application ADR providers/practitioners shall have the same CIVll hab1ht~ for acts
.Article 1.1. Purpose. These Rule~ a.re promulgated to prescribe done in the performance of their official duties as that of pub~1~ offi~rs
the procedures and guidelines for the implementation of the ADR Act. as provided in Section 38( 1) Chapter 9, Book I of the Adrmmstrativ.e
Code of 1987, upon a clear showing of bad faith, malice or gross negh·
gence.

360
 352 ALTERNATIVE DISPUTE R ESOLUTION APPENDIX "C" 353
DEPARTMENT CIRCIJLAR NO. 98

RULE 2 - Definition of Terms (a) communication, oral or wri~n. 1nade in a dispute resolu·
tion proceeding, including any memoranda, notes or work
Article 1 .8. Definition of Terms. For purposes of these Rules, product of the neutral party or non-party participant;
the terms shall be defined as follows:
(b) an oral or written statement made or which OCCU'l"S during
A. Terms Applicable to all Chapters mediation or for purposes of considering, co~ducting: ~­
ticipating, initiating, continuing or reconvemng mediation
1. ADR Provider means the institutions or persons accredited as or retaining a mediator; and
mediators, conciliators, arbitrators, neutral. evaluators or any person (c) pleadings, motions, manifestations, witness statements,
exercising similar functions in any Alternative Dispute Resolution system. reports filed or submitted in arbitration or for expert
This is without prejudice to the rights of the parties to choose non- evaluation.
accredited indi"!duals to act as mediator, conciliator, arbitrator or neutral
evaluator of their dispute. 8. Counsel means a lawyer duly admitted to the pract~ce of law in
the Philippines and in good standing who represents a party m any ADR
2. Alternative Dispute Resolution System means any process process.
or procedure used to resolve a dispute or controversy, other than by adju-
dication of a presiding judge of a court or an officer of a government 9. Court means Regional Trial Court except insofar as otherwise
a.g~ncy, as defi~ed: in the ADR Act, in which a ne utral third person par- defined U"Dder the Model Law.
~cipates t:<>. as.s1st ID the resolution of issues, including arbitration, media- 10. Government Agency means any governme~tal enti~, o~ce
tion, concihation, early neutral evaluation, mini-trial or any combination or officer, other than a court, that is v.ested ~y law ".'1th q_uast-Judic~~
thereof. power or the power to resolve or adjudicate disputes mvolvmg the g
3. Arbitration means a voluntary dispute r esolution process in emment, its agencie~ and instrumentalities or private persons.
which one or more arbitrators, appointed in accordance with the agree- 11. Model Law means the Model Law on International Commer·
ment of the parties or these Rules, resolve a dispute by rendering an cia.l Arbitration adopted by the United Nations Commission on Interna-
award. tional Trade Law on 21June1985.
4 .. Arbitra.tlon. Agreement means an agreement by the parties 12. Proceedings means a judicial, administrative or ?ther a<\!udi-
to ~ubm1t to .arbitration all or certain disputes which have arisen or cative process, including related pre-hearing or post heanng motions,
which may anse between them in respect of a defined legal relationship, conferences and discovery.
whether ~ontt:actual or n.o t. An arbitration agreement may be in the form 13. Record means information written on a tangibl~ medium .0 r
of an arbitration clause ID a contract or in the form of a separate agree- st.ored in an e lectronic or other similar medium, retrievable m a perceiv-
ment. able form.
5. Authenticate means to sign, execU"te, adopt a symbol or encrypt 14. Roster means a list of persons qualified to provide ADR ser·
a record in whole or in part, intended to identify the authenticating party vices as neutrals or to serve as arbitrators.
and to adopt, accept or establish t he authenticity of a record or term.
15. Special ADR Rules means tbe Special Rules of Court on Al-
6. Award means any partial or final decision by an arbitrator in ternative Dispute Resolution issued by the Supreme Court on September
resolving the issue or controversy. 1, 2009.
7. Confide ntial Information means any information, relative t.o
the subject of mediation or arbitration, expressly intended by the source B. Terms Applicable to the Chapter on Mediation
not to be disclosed, or obtained under circumstances that would create a
1. Ad hoc Mediation means any mediation other than institu-
reasonable expectation on behalf of the source that the information shall
not be disclosed. It shall include: tional or court-annexed.
 354 ALTERNATIVE D ISPUTE R ESOLUTION APPENDIX ·c· 355
DEPARTMENT CIRCULAR NO. 98

2. Insti.t utional Mediation means any mediation administered 3. Arbitration means any arbitration whether or not administered
by, and conducted under the rules of, a mediation institution. by a permanent arbitration institution.
3. Court.Annexed Mediation means any mediation process con· 4. Commercial Arbitration means an arbitration that covers
ducted under the auspices of the court and in accordance with Supreme matters arising from all relationships of a commercial nature, whetber
Court approved guidelines, after such court has acquired jurisdiction of
the dispute. contractual or not. Relationships of a commercial nature include, but are
not limited to, the following commercial transactions: a~y ~ad~ transac-
4. Court-Referred Mediation means mediation orde:red by a tion for the supply or exchange of goods or services; d1stnbution agree·
court to be conducted in accordance with the agreement of the parties ments; construction of works; commercial representation or agency; fac~r·
when an action is prematurely commenced in violation of such agreement. ing; leasing: consulting; engineering; licensing; investme.nt; finan.cmg;
5. Certified Mediator means a mediator certified by the Office for banking; insurance; joint venture and other fo~ ofindW:trial or business
ADR as havin.g successfully completed its regular professional training cooperation; carriage of goods or passengers by BJr, sea, rBJl or road.
program. 5. Convention Award means a foreign arbitral award made in a
6. Mediation means a voluntary process in which a mediator, se- Convention State.
lected by the disputing parties, facilitates communication and negotiation, 6. Con vention State means a state that is a member of the N'ew
and assists the parties in reaching a voluntary agreement regarding a York Convention.
dispute.
7. Court (u nder the Model Law) means a body or organ of the
7. Mediation Party means a person who participates in a media- judicial system of the Philippines (i.e., the Regional Trial Court, Court of
tion and whose consent is necessary to resolve the dispute . Appeals and Supreme Court).
8. Mediator means a person who conducts mediation. 8. International Arbitration means an arbitration where:
9. Non-.P arty Participant means a person, other than a party or (a) the parties to an arbitration agreement have, at the. time ~f
mediator, who participates in a mediation proceeding as a witness, re- the conclusion of that agreement, their places of business m
source person or expert.
different states; or
C. Tenns Applicable to the Chapter o n International Com· (b) one of the following places is situated outside t~e Philip-
merclal Arbitration pines in which the parties have their places ofbusmess:
(i) the place of arbitration if determined in, or pursuant
1. Appointing Authority as used in the Model Law shall mean to, the arbitration agreement;
the person or institution named in the arbitration agreement as the ap- (ii) any place where a substanti~ part of the obligations
pointing autharity; .or the regular arbitration institution under whose of the commercial relationship is to be perfor~ed or
rules the arbitration is agreed to be conducted. Where the parties have t-he place with which the subject matter of the dispute
agreed to submit their dispute to institutional arbitration rules, and is most closely connected; or
unless they have agreed to a different procedure, they shall be deemed to
have agreed to the procedure under such arbitration rules for the selection (c) the parties have expressly agreed that the subject matter of
and appointment of arbitrators. In ad. hoc arbitration, the default ap- the arbitration agreement relates to more than one country.
pointment of an. arbitrator shall be made by the National President of the For this purpose:
Integrated Bar of the Philippines (IBP) or his/her duly authorized repre-
sentative. (a) if a party has more than one place of business, the place of
business is that which has the closest relationship to the
2. Arbitral Tribunal (under the Model Law) means a sole arbi· arbitration agreement;
trator or a panel of arbitrators.
(b) if a party does not have a place of business, reference is to
be made to his/her habitual residence.
356 Al.TERN"TlVE DISPUT£ Rt:soLUTION APPENDIX ·c· 357
OEPARTMElfT CIRCULJ\R NO. 98

9. New York Coa'VeD.tloa means the United Natiorui Convention and Exchange Commie.sion (SEC) and engeged in, among otbeni,_arbitra·
on the Recognition and Eni>rcemeot of Foreign Arbitral Awards approved tlon of disputes in t he Philippine• on a regular and permanent basis.
in 1958 and ratified by the Philippine Senate under Senate Resolution No. 11. Requeet for Appol.ntment mean• the letter-request to th•
71. appointing authority of either or both parties for the appointm~nt of arbl·
10. Noa.Convention Award meana a foreign arbitral award trator/1 or of the two arbitraton first appointed by the parties for the
made In a etate, which U. noL a Convention State. appointment of the third member of an arbitral tribunal.
11. Non-Convention State means a state that is not a member of 12. Repre1entative is a person duly authorized in writing by a
the New York Convention. party to a dispute, who could be a counsel, a person In bia/ber e~ploy or
any other person of his/her choice, duly authorized to represent 881d party
D. Tenn• Applicable to the Chapter on Domeatlc Arbitra· in the arbitration proceedings.
ti on
13. Respondent meane the person/a against whoa> the claimant
1. A4 hoc Arbitration means an arbitration administered by an commence/a arbitration.
arbitrator and/or the parties themselves. An arbitration administered by 14. Written Communication rneana the pleading, motion, m~
an institution shall be regarded BS an ad hoc arbitration If such inatitutlon featatlon, notice, order, award and any other document or paper aubmi
is not a permanent or regular arbitration institution in the Philippines. or filed with the arbitral tribLtnal or delivered to a party.
2. Appointing Authority lo Ad Boe Arbitration means, in tbe
E. Terms Applicable to the Chapter on Other ADR Jl'orme
absence of an agreement, the National President of the IBP or his/her duly
authorized representative.
1. Early Neutral Evaluation meana an ADR . process 'al
wherein
h
3. Appointing Authority Guldellnea means the eet of rules ap- partiea and their lawyers are brought tojlether early tn the ~re-~n P ase
proved o~ adopted by an appointing authority for the making of a Request to present summaries of their cases and to receive a non·brnd1.11g as~
for Appotntment, Challenge, Termination of the Mandate of Arbitrat«/1 ment by an e><perienced neutt'al person, with expertiae in the subject
and for taking action thereon. matter or substance of the dispute.
4 . Arbitration meana a voluntary dieput.e resolution proceaa In 2. Mediation-Arbitration or Med·Arb Is a two-•~P di~pute reeo-
which one or more arbitraton, appointed In accordance with the agree- lutlon process involving mediation and then followed by arbitration.
ment of the parties or th!se Rules, resolve a dispute by renderinc an 3 Minj.•-'-1 tructured dispute resolution method in
award. · ...... mean.a a 1 el · · of senior
which the merita of a case are argued before a pan comprtatn_g
6. Arbltral TribUDal means a sole arbitrator or a panel board or decision-makers, with or without the presence of a neutral third peraon,
committee of arbitrators. ' before which the parties seek a negutiated aettlement.
6. Claimant means a person/a with a claim against another and
who commence/a arbitratloa againet the latter. CHAPTER t
THE OFFICE FOR ALTERNATIVE DISl'UTE RESOLUTION
7 . .Court means, unlea otherwise specified in theae Rules, a Re-
gional Trial Court. RULE 1 - Oftloe for Altematlve Dispute Reeolullon (OADR)
8. Day means calendar day.
Article t .1. E•tablialunent of the Oftlce for Alternative Di..
9. DomeatJo Arbitration means an arbitration that is not intel"' pute Reeolutlon. There ie hereby established the OADR as an_agency
national BS defined in Article 1(3) of the Model Law. attached to the Department of Juatice. It shall have a Sec:etariat and
10. In.stitutional Arbitration means arbitration administered by shall be headed by an Executive Director, who shall be appointed by the
an entity, which la regiatered aa a domestic corporation with the Securities President of the Philippines, taking into consideration the recommend&·
tion of the Secretary of J uatlce.
356 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "C~ 357
DEPARTMENT CIRCULAR NO. 98

9 . New York Convention means the United Nations C-Onvention and Exchange Commission (SEC) and engaged in, among others, arbitra-
on the Recognition and Enforcement of Foreign Arbitral Awards approved tion of disputes in the Philippines on a regular and permanent basis.
in 1958 and ratified by the Philippine Senate u nder Senate Resolution No. 11. Requ est for Appointment means the letur_-request to th.e
71. appointing auth ority of either or both parties for the appointmo:nt of arb1·
10. Non-Convention Award means a foreign arbitral award trator/s or of the two arbitrators first appointed by the parties for the
made in a stat.a, which is not a Convention State. appointment of the third member of an arbitral tribunal.
11. Non-Convention State means a state that is not a member of 12. Representative is a person duly authorized in writing by a
the New York Convention. party to a dispute, who could be a counsel, a person in his/her en;iploy or
any other person of his/her choice, duly authorized to represent S8Jd party
O. Term• Applicable to the Ch a pter on Domestic Arbltra- in the arbitration proceedings.
tion
13. Res pon d ent means the personls against whom the claimant
1. Ad hoc Arbitration means an arbitretion administered by an commencels arbitration.
arbitrator and/or the parties themaelvea. An arbitration administered by 14 . Written Communication means the pleading, motion, mani-
an institution shall be regarded as an ad hoc arbitration if such institution festation, notice, order, award and any other document or paper sub=tted
is not a permanent or regular arbitration institution in the Philippines. or flied with the arbitral tribunal or delivered to a party.
2. Appointing Authority in Ad Hoc Arbitration means, in the
absence of an agreement, the National President of the IBP or hia/her duly E. Terms Applicable to the Chapter on Other ADR Forms
authorized representative.
1. Early N eutral EvaluatioD means an ADR process. wherein
3. Appolntlnr Autho~t?' Guidellnee means the set of rules ap- parties and the·ir lawyers are brought together early in the ~re-~ phase
proved o~ adopted by an appointing authority for the making of a Request to present summaries of their cases and to receive a non-~inding 888';9 5 •
for Appomtment, Challenge, Termination of the Mandate of Arbitrator/a ment by an experienced neutral person, wit h expertise in the subiect
and for talcing action thereon. matter or substance of the diep ute.
. 4. Arbitration ~eans a voluntary dispute resolution proceaa in 2. Mediation-Arbitrat ion or Med-Arb is a two-s~p ~pute reso-
which one or moi:e arbitrators, appointed in accordance with the agree- lution process involving mediation and then followed by arbitration.
ment of the parties or these Rules, resolve a dispute by rendering an
award . 3. Mini-trial means a structured dispute resolution method . in
· · of seruor
which the merits of a case are a rgued before a panel compns~g
5. Arbltral Tribunal means a sole arbitrator or a panel board or decision-makers, with or without the presence of II neutral third person,
committee of arbitrators. ' before which the parties seek a negotiated settlement.
6. Claimant means a person/a with a claim against another and
who commence/a arbitration against the latter. CHAPTER 2
THE OFFICE FOR ALTERNATIVE DISPUTE RESOLUTION
7. Court means, unless otherwise specified in these Rules a Re-
gional Trial C-Ourt. ' RULE 1 - Office fo r Alternative Dispute ReeoluUon (OADR)
8. Day means calendar day.
Article 2.1. Eatabllahment of the Office Cor Alternative Dis-
9 . Domestic Arbitration means an arbitration that is not inter- pute Resolution. There is hereby established tho OADR as an. agency
national as defined in Article 1(3) of the Model Law. attached to the Department of Justice. It shall have a Sec~etartat and
10. Inelltutional Arbitration means arbitration administered by aball be headed by an Executive Director, who shall be appointed by the
an entity, which is registered as a domestic co~poration with the Securities President of the Philippines, taking into consideration the recommenda-
tion of the Secretary of Ju•tice.
358 .ALTERNATIVB DISPUTE RESOLUTION APPENDIX uc• 359
DEPARTMENT CIRCULAR NO. 98

Article 2.2. Powen of the OADR. The OADR shall have the (e) To compile and publish a list or roster of ADR provide~.ac­
following powers: titioners, who have undergone training by the OADR, or by such ~g
(a) To act aa appointing authority of mediators and arbitrators providersfinstitutions recognized or certified by the OADR as performmg
when the parties agree in writing that it shall be empowered to do so; functions in any ADR system. The list or roster shall include tbe ad·
dresses, contact numbers, e-mail addresses, ADR service/a rendered <e:g.
(b) To conduct seminare, symposia, conferences and other public arbitration, mediation) and experience in ADR of the ADR provid-
fora and publish proceedinp of said activities and relevant materi- ers/practitioners;
alsrulformation that would promote, develop and expand the use of ADR;
(f) To compile a list or roster of foreign or international ADR pro-
(c) To establish an ADR library or resource center where ADR laws, viden/practitionens. The list or roster shall include the addre:ises~ contact
rules and regulatione, jurisprudence, books, articles and other information numbers e-mail addresses ADR service/a rendered (e.g. arbitration, me-
about ADR in the Philippines and elaewhere may be stored and accessed; diation) ~nd experience in AnR of the ADR providers/practitioners; and
(d) To establish a training pr'Ogl'8ms for ADR providerslpractitfo· (g) To perform such other functions as may be assigned to it.
ners, both in the public and private sectors; and to undertake periodic and
continuing training proerams for arbitration and mediation and charge Article 2.4. Divieiorui of the OADR. The OADR shall have tbe
feea on participants. It may do so in cotljunction with or in cooperation following staff and service divisions, amona others:
with the IBP, private ADR organizations, and local and foreign govern- (a) Secretariat - shall provide necessary support and disc~~
ment offices and agencies and international organizations; such other functions and duties as may be directed by the Executive rec-
(e) To certify those who have suocessfully completed the regular tor.
professional tnlining programa provided by the OADR; (b) Public Information and Promotion Division - shall. be
(f) To chari:e fees for services rendered such as, among others, for charged with the dissemination of information, the promotion .or ~e IDl·
training and certifications of ADR providers; portance and public acceptance of mediation, conciliation, arb1trat~on. or
(g) To accept donationa, cranta and other assistance from local and any combination thereof and other ADR forms aa a means of acb!7
foreign sources; and speedy and efficient means of resolving all disputes and to help in e
promotion, development and expansion of the use of ADR.
(h) To exercise such other powers as may be necessary and proper
to carry into effect the provisions of the ADR Act. (cl Training Division - shall be charged with the formulation. of
effective standards for the training of ADR practitioners~ co~uct 0~=:
Article 2.3. Functlone of the OADR. The OADR shall have the inp in accordance with such standards; issuance of certifications 0
following functions: ing to ADR practitioners and ADR service providers who have ~nde~gon~
(a) To promote, develop and expand the use of ADR in the private the professional training provided by the OADR; and the ~rd1nation °
and public sectors through information, education and communication; the development, implementation, monitoring and evaluation of govern-
ment and private sector ADR programs.
(b) To monitor, study and evaluate the use of ADR by the private
and public sectors for purposee ot: among others, policy formulation; (d) Records and Library Division - shall be charged with the
establishment and maintenance of a central repository of ADR laws, ~es
(c) To recommend to Congress needful statutory changes to de- and regulations, jurisprudence, books, articles, and other information
velop, strengthen and improve ADR practices in accordance with interna- about ADR in the Philippines and elsewhere.
tional professional standards;
(d) To make studies on and provide linkages for the development, RULE 2 - The Adviaory Council
implementation, monitoring and evaluation of government and private
ADR program• and secure information about their respective administra- Article 2.5. Composition of the Advisory Coun~iL There is
tive ruleslproceduree, problems encountered and how they were resolved; a1ao created an Advisory Council composed of a representative from each
of the following:
360 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "C" 361
DEPARTMENT CIRCULAR NO. 98

(a) Mediation profesaion; RULE 2 - Selection of a Mediator

(b) Arbitration profession;
(c) ADR organizations; Article 3.3. Freedom to Select Mediator. The parties have
Uie ll:'eedom to select their mediator.
(d) IBP; and
The parties may request the OADR to provide them with a list or
(e) Academe. roster or the resumes of ita certified mediators. The OADR may be re-
The membera of the Council, who shall be appointed by the Secre- quested to inform the mediator of his/her selection.
tary of Justice upon the recommendation of the OADR Executive Director, Article 3.4. Replacement of Mediator. I~ the mediator .-
shall choose a Chairman from among themselves. lected is unable to act as such for any reason, the parties may, upon beine
Article 2.6. Role of the Advisory Council. The Adviaory informed of such fact, select another mediator.
Council shall advise the Executive Director on policy, operational and Article 3.5. Refusal or Withdrawal of Mediator. A medi~tor
other relevant matters. The Council shall meet reeularly, at least once may refuse from acting as such, withdraw or may be compe~ed ~ with·
every two (2) months, or upon call by the Executive Director. draw, from the mediation proceedings under the following c1rcum·
stances:
CHAPTER 3
MEDJATION (a) If any of the parties eo requests the mediator to withdraw;
(b) The mediator does not have the qualifications, training and ex-
RULE 1 - General Provisions .
penence .
to enable bun/her to meet the reasonsble expectations of the
parties;
Article 3.1. Scope of Application. These Rules apply to volun·
tary mediation, whether ad hoc or institutional other than court·annexed (c) Where the mediator's impartiality is in question;
mediation and only in default of an agreement ~f the parties on the appli- (d) If continuation of the process would violate any ethical stan·
cable rules. darda;
These Rules shall alao apply to all csses pending before an adminis- (e) If the safety of any of the parties would be jeopardized;
trative or quasi-judicial agency that are 1ubsequently agreed upon by the CO It the mediator is unable to provide efl'ective services;
parties to be referred to mediation.
(g) In case of conflict of interest; and
~cle 3.2. Statement of Polley, In applying and construine (h) In any of the follow1nf . . if the mediator is satisfied
the proVJeions of these Rules, consideration must be given to the need to 1natances,
that;
promote candor of parties and mediators through confidentiality of the • lD • g ood faith••
mediation p~ss, the policy of fostering prompt, economical and amicable (i) one or more of the parties ialare not actiJllr
resolution of disputes in accordance with principles of integrity of deter· (ii) the parties' agreement would be illegal or involve the com-
mination by the parties and the policy that the de<:ielon-making authority miaaion of a crime;
in the mediation proceee rests with the parties.
(ill) continuing the dispute resolution would give rise to an ap-
A party may petition a court before which an action is prematurely pearance of impropriety;
brought in a matter which is the subject of a mediation agreement, if at
least one party so requests, not later than the pre-trial conference or upon
(iv) continuing with the process would cause ai~cant harm
to a non- participating person or to the public; or
the request of both parties thereafter, to refer the parties to mediation in
accordance with the agreement of the parties. (v) continuing diacussions would not be in the best interea~ of
the parties, their minor children or the dispute resolution
process.
362 Al.TERNAT!VB DISPUTE RESOLUTION APPENDIX ·c· 363
DEPARTMENTCIRC1.JLAR NO. 98

RULE I - Ethical Conduct ot a Mediator the ecope of confidentiality and the extent of confideoti~ty provided in
any private sessions or caucuses that the mediator holds with a patty.
Article S.8. Co1Dpetan ce. It ia not required that a mediator shall
have special qualifications by beck&round or profeuion unless the special Article 3 .9. Consent and Self-DetermJnation. (a) A mediator
qualification1 of a mediator are required in the mediation agreement or by 1hall make reasonable efforts to en.sure that each patty undentanda the
the mediation parti•. However, the certified mediator shall: nature and character of the mediation proceedinp includin& private cau-
CUllU, the issues, the avai lable options, the alternatives ID non·!4ttlehmele~t,
(a) maintain and continually upgrade his/her professional compe- and that each party is free and able to make whatever cbo1cea ~ e
tence in mediation •ldlla; deolrea regarding participation in mediation generelly and re1arding
(b) en1ure that hi~er qualifications, training and experience are 1pecific settlement options.
known to and accepted by the parti18; and If a mediator believes that a party, who ia not represented by coun·
(c) eerve only when hialher qualifications, training and experience eel, ii unable to understand, or fully participate in, the mediation proceed-
enable him/her to meet tbA! reasonable expectations of the parties and inp for any reuon, a mediator may either:
ehall not hold hlmaelflbenelt out or give the impntSSion that he.'she has (i) limit the scope of the mediation proceedings in a manner
qualification•, trainlnc and ftperie~ that he.'she does not have. · te•. and/or
· · to parti'. c1pa
consistent with the party's ability
Upon the request of a mediation party, an individual who is re- recommend that the party obtain appropriate us1atanca
quested to aerve aa mediator •hall disclose his/her qualifications to medi- in order to continue with the process; or
ate a dispute.
(ii) terminate the mediation proceedings.
Article 3.7, lmparciallty. A mediator shall maintain impartial- Cb) A mediator shall recognize and put in mind that the pri~
ity. re1pon1ibility of resolving a dispute and the shapinr of a voluntary an
(a) Before acceptios a mediation, an individual who is requested to uncoerced settlement rest& with the parties.
eerve as a mediator 1hall:
Article 3.10. Separation or Mediation from CouneelinS: and
Ci) make an Inquiry that ia reasonable under the circum- Legal Advice. (a) Except in evaluative mediation or when the partial 10
stances to determine whether there are any known facts reque1t, a mediator shall: .
that a reasonable individual would consider likely to effect (iJ refrain from giving legal or technical advice and otheiwise
the impartiality of the mediator, including a financial or engaging in counseling or advocacy; and
peraonal lnterut in the outcome of the mediation and any
e~i~g or .past relationship with a party or foreseeable (ii) abstain from expressing his/her pel'IOnal o~nion on the
participant m the mediation; and rights and duties of the parties and the menu of acy pro-
(ii) diecloee to the mediation parties any such fact known er posal made.
learned 81 eoon as ia Practicable before accepting a media· Cb) Where appropriate and where either or both partlaa ere not rep-
ti on. raented by counsel, a mediator shall:
(b) If a mediator learns any fact described in paragraph (a) Ci) of (i) recommend that the parties aeek outside profeuional ad-
this Artide atUr acceJ>l.illi a mediation, the mediator shall diacloee it 88 vice to help them make informed deciJrion and to under-
aoon 88 practicable to the mediation parties, •tand the implications of any propo$81; and
(ii) 1 uggeat that the parties aeek independent legal. and/or
Article 8.8. Conftdentiallty. A mediator shall keep in utmoet
technical advice before a settlement agreement ia signed.
confidence all confidential information obtained in the course of the me-
diation proceae. (c) Without the consent of all parties, IUld for a reaaon~ble time un-
der the particular circumstance, a mediator who ~ ~ra~ticee another
A mediator •hall diacuu i88uea of confidentiality with the mediation pcofeaion shall not establish a professional relationship 1n that other
partiea before becinnlng the mediation process including limitationa on
364 ALTERNATIVE DISPUTE RESOLUTION APPENDIX ·c· 365
DEPARTMENT CIRCULAR NO. 98

profession with one of the parties, or any person or entity, in a subs tan• (i) The mediation process as euentially a ne~tiation be-
tially and factually related matter. tween the parties assisted by the~r ~~tive la'1:':;
Article 3.11. Charglug of Fees. (a) A mediator shall Cully dis- and facilitated by a mediator. etress1nir its 4!fe~n~ . ht-
litigation, its advantages and benefits'. ~e c 1enta e1g
close and explain to the parties the basis of coet, fees and charges. ened role in mediation and responsibil~ty for ~ta. success
(b) The mediator who withdraws from the mediation shall return to and explaining the role of the lawyer 10 msdiation pro-
the parties any unearned fee and unused deposit. ceedings.
(c) A mediator •ball not enter into a fee agreement which is contin· (ii) The substance of the upcoming mediation, such as:
gent upon the results of the mediation or the amount of the settlement. (aa ) The substantive usues involved in ~e dispute and
Article 3.12. Promotion of Respect and Control of Abuse of . . . ·
their pnontization · terma of importance to
m
Proce88. The mediator •hall encourage mutual respect between the his/her client'• real interests and needs;
parties, and shall take reuonable steps, subject to the principle of self. <bbl The study of the other party's position in ;;1•::;; to
determination, to limit abuses of the mediation process. the issues with a view to understanding e er-
Article 3.13. Soliclt.tion or Acceptance of Any Gitt. No me- lying interests, fears, concerns and needs;
diator or any member of a mediator's immediate family or his/her agent (cc) The information or facts to be gathered or ~u::.:
shall request, solicit, receive or accept any fift. or any type of compensation from the other aide or to be exc~ged tha
other than the agreed fee and eXpenses in connection with any matter necessary for informed decision-making; .
coming before the mediator.
<dd) The possible options for settlement but ·~:
RULE 4 - RoJe of Parties and Their Counsel•
the need to be open-minded about other poss
ties; and to
Article 3.14. Designation of Counsel or Any Pereon to Aaaiat (ee) The best, worst and most likely alternatives a
Mediation. Except as otherwise provided by the ADR Act or by these non-negotiated settlement.
R.,J.,s, " P"rty may deeignato a lawyer or any other person to provide
asaistance in the mediation. A waiver of this right shall be made in writing Article 3.16. Other Matters which the Counsel aball do to
by the party waiving it. A waiver of participation or legal representation Assist Mediation. The lawyer: cl' t will
may be rescinded at any time. (a) shall give support to the med1a • tor ~. that
. bis/her 1en
fully understand the rules and processes of mediation; .
Article 3.115. RoJe of Counael. (a) The lawyer shall view his/her . th . portance of speaking for
role in mediation as a collaborator with tbe other lawyer in working to- (b) shall impress upon hislh~r. c_llent e ·~ decisions during the
gether toward the common goal of helping their clients resolve their dift'er- himselt7herself and taking respona1b1hty for making
ences to their mutual advantage. negotiations within the mediation process; . to
· advice or suggestions
(b) The lawyer shall encourage and assist his/her client to actively (c) may ask for a recess in ord~r tothagivehialher client is unable to
participate in positive discussions and cooperate in crafting an agreement his/her client in private, if h&'she perceives t
to resolve their clispute. bargain effectively; . . · th
. d th mediator put in wnting e
(c) The lawyer must assist his/her client to comprehend and appre- (d) shall assist his/her client an e fta.tiea have entered into.
ciate the mediation process and its benefits, as well as the client's greater terms of the settlement agreement that the ..-- ttlement agreement
personal respon9ibility for the suceess of mediation in resolving the dis- The lawyers shall see to it that the terms of the S:blic order or public
pute. are not contrary to law, morals, good customs, P
policy.
(d) In preparing for participation in mediation, the lawyer shall
confer and discuss with his/her client the following:
366 ALTERNATIVE DISPUTE RESOLUT ION APPENDIX "C" 367
DEPARTMENT CIRCULAR NO. 98

RULE 6 - Conduct of Mediation RULE 7 - Effect of Agreeme nt to Submit Diapute

to Mediation Under Institutional Rules
Article 3.17. Articles to be Considered in the Conduct of Me-
d iation. (a) The mediator shall not make unt ruthful or exaggerated Artic le 3.19. Agreement to Submit a Dispute to M~ation
claims about the dispute resolution proce99, it• costs and benefits, its by an Instit ution. An agreement to submit a dispute to med1~tion by
outcome or the mediator's qualifications and abilities during the entire an institution shall include an agreement to be bound by the internal
mediation process.
mediation and administrative policies of such institution. Furtb~r, .an
(b) The mediator shall help the parties reach a satisfactory resolu- agreement to submit a dispute to mediation under institutional mediation
tion of their dispute but bas no authority to impose a settlement on the rules shall be deemed to include an agreement to have such rules govern
parties. the mediation of the dispute and for the mediator, the parties, their re-
(c) The parties shall personally appear for mediation and may be spective counsels and non-party participants to abide by such rules.
assisted by a lawyer. A party may be represented by an agent who must
have full authority to negotiate and settle the dispute. RULE 8 - Enforcement of Mediated
Settlement Agreements
(d) The mediation process shall, in general, consist of the following
stages: Article 3.20. Operative Principles to Guide. Mediation. The
(i) opening statement of the mediator; mediation shall be guided by the following operative pnnc1ples:
(ii) individual narration by the parties; (a) A settlement agreement following successful mediation shall h;e
(iii) exchange by the parties; prepared by the parties with the assistance of their respective counsels, if
any, and by the mediator. The parties and their respecti•e counsels shall
(iv) swnmary of issues; endeavor to make the terms and conditions of the settlement agreement
(v) generation and evaluation of options; and complete and to make adequate provisions for the contingency of breach to
(vi) closure. avoid conflicting interpretations of the agreement.
(b) The parties and their respective counsels, if any, shall sign. the
(e) The me~ation _Proceeding shall be held in private. Persons, settlement agreement. The mediator shall certify that he/she explruned
other than the parties, their representatives and the mediator may attend the contents of the settlement agreement to the partie3 in a language
only with the consent of all the parties. '
known to them.
(0 The mediation shall be closed:
Cc) If the parties agree, the settlement agreement. may ~e jointly
(i) by the execution of a settlement agreement by the parliell; deposited by the parties or deposited by one party wi.th pnor .notice to the
(ii) by the withdrawal of any party from mediation; and other party/ies with the Clerk of Court of the Regional Trial Court (a)
where the principal place of business in the Philippines of any of the par·
(iii) by the written declaration of the mediator that any fur. ties is located; (b) if any of the parties is an individual'. ~here a~y of those
ther effort at mediation would not be helpful. individuals resides; or (c) in the National Capital Judtctel R~~on. Where
there is a need to enforce the settlement agreement, a petition may be
RULE 6 - Place of Mediation filed by any of the parties with the same court, in which ca~, the court
shall proceed summarily to hear the petition, in accordance with the Spe·
Article 3.18. Agreement of Parties on the Plac e of Media- cial ADR Rules.
tion. The parties are free to agree on the place of mediation. Failing such (d) The parties may agree in the settlement agreement that the
agreement, the place of mediation shall be any place convenien t a nd ap- mediator shall become a sole arbitrator for the dispute and shall treat the
propriate to all parties. settlement agreement as a n arbitral award which shall be subject to en·
forcement under Republic Act No. 876, otherwise known as "The Arbitra·
tion Law', notwithstanding the provisions of Executive Order No. 1008, s.
368 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "C" 369
DEPARTMENT CIRCULAR NO. 98

1985, otherwise known as the "Construction Industry Arbitration Law" for (b) With the consent of the mediatioo parties, a privilege arising
mediated disputes outside of the Construction Industry Arbitration Com- from the confidentiality of information may likewise be waived by a non-
mission. party participant if the information is provided by such non-party partici-
pant.
RULE 9 - Confidentiality of Information
(c) A person who discloses confidential information shall be pre-
Article 3.21. Confidentiality of Information. Information ob- cluded from asserting the privilege under Article S.21 (Confulentiality of
tained through mediation proceedings shall be subject to the following Information) to bar disclosure of the rest of the information necessary to a
principles and gtridelines: complete understanding of the previously disclosed information. If a p~r­
son suffers loss or damage as a result of the disclosure of the confidential
(a) Information obtained through mediation shall be privileged and information, he/she shall be entitled to damages in a judicial proceeding
confidential. against the person who made the disclosure.
(b) A party, mediator, or non-party participant may refuse to dis- (d) A person who discloses or makes a representation about a me-
close and may prevent any other person from disclosing a confidential diation is precluded from asserting the privilege mentioned in Articl.e S.21
information.
to the extent that the communication prejudices another person m the
(c) . Confi~e~tial _information shall not be subject to discovery and proceeding and it is necessary for the person prejudiced to respond to the
shall. ~e ':°.'1dIIll.8s1ble 10 any adversarial proceeding, whether judicial or representation or disclosure.
quas1-Judic1al. However, evidence or information that is otherwise admis-
sible o: subject to discovery does not become inadmissible or protected
from d iscovery solely by reason of its use in a mediation.
Article 3.23. Exceptions to the Privilefe of Confidentialit~
of Informat ion. (a) There is no privilege against disclosure under Arti-
cle 3.21 in the following instances:
(d) In s':'ch an. adversarial proceeding. the following parson• in-
v~lved or prevto~ly involved in a mediation may not be compelled to
(I) in an agreement evidenced by a record tluthenticated by
disclose confidential information obtained during the mediation: all parties to the agreement;
(i) the parties to the dispute; (ii) available to the p ublic or made during a session of a me-
diation which is open, or is required by law to be open, to
(ii) the mediator or mediators; the public;
{iii)the counsel for the parties; (iii) a threat or statement of a plan to inflict bodily iajury or
(iv) the non-party participants; commit a crime of violence;
(v) any person hired or engaged in connection with t he media- (iv) intentionally used to plan a crime, attempt to co~i~, or
tion as secretary, stenographer, clerk or assistant; and commit a crime, or conceal an ongoing crime or cnmmal
activity;
{vi) any other person who obtains or possesses confidential in-
formation by reason of his/her profession. (v) sought or offered to prove or disprove ~bu9;8, ne~lect,
abandonment or exploitation in a proceeding l? wh!ch a
(e) The protections of the ADR Act shall continue to apply even if a public agency is protecting the interest of an md1vtdual
mediator is found to have failed to act impartially. protected by law; but this exoeption does not ~PP~Y where
(f) A mediator may not be called to testify to provide confidential a child protection matter is referre~ ~ me~1ation by. a
information gathered in mediation. A mediator who is wrongfully subpoe- court or where a public agency partlClpates m the child
naed shall be reimbursed the full cost of his/her attorney's fees and related protection mediation;
expenses.
(vi) sought or offered to prove or disprove a ~aim or com~laint
Article 3.22. Waiver of Confidentiality. Ca) A privilege arising of professional misconduct or malpractice filed against a
from the confidentiality of information may be waived in a record or orally mediator in a proceeding; or
during a proceeding by the mediator and the mediation parties.
370 ALTERNATIVE D ISPUTE R ESOLUTION APPENDIX ·c· 371
DEPARTMENT CIRCULAR NO. 98

(vii) sought or offered to prove or disprove a claim or complaint diation cost and fees. In default thereof, the schedule of cost and fees to be
of profeuional misconduct or malpractice filed again4t a approved by the OADR shall be followed.
party, non·party participant, or representative of a party Article 3.26. F ees and Cost of Intltutlonal Mediation. (a) In
based on conduct occuning during a mediation. institutional mediation mediation cost shall include the administrative
0

(b) If a court or administrative agency finds, after a hearing in charges of the mediatio n institution under which t he parties have agreed
camera, that the party AMlrlng discovery of thft proponent nf the evidence Lo b" bou111l, mediator's fees and associated "xJJ"nsea, if any. In defa..tt of
has shown that the evidence is not otherwise available, that there is a agreement of the parties aa to the amount and manner of payment. of
n.eed for the evidence that substantially outweighs the interest in protect.- mediation·a cost and fees the same shall be determined in accordance W1th
in& confidentiality, and the mediation communication is sought or offered the applicable internal 'rules of the mediation service providers under
in: whose rulea the mediation is conducted.
(i) a court proceeding involvin1 a crime or felony; or (b) A mediation service provider may determine such mediation fee
(ii) a proceeding to prove a claim or defense that under the as is reasonable taking into consideration tho following factors, among
law is sufficient to reform or avoid a liability on a contract others:
arising out of the mediation. (i) the complexity of the case;
(c) A mediator m•y not be compelled to provide evidence of a me- ( ii) the number of hours spent in mediation; and
diation communication or testify in such proceeding.
(iii) the training, experience and stature ofmediaton;.
(d) If a mediation communication is not privileged under an excep-
tion in sub-section (a) or (b) hereof, only the portion of the communication CHAPTER 4
neceuary for the application of the exception for non-disclosure me,y be INTERNATIONAL COMMERCIAL ARBITRATION
admitted. The admiasion of a particular evidence for the limited purpose of
an exception does not render that evidence, or any other modiatlon com· R ULE 1 - General Provisions
munication, admissible for any other purpose.
Article 4.1. Scope o f Applicatio n. (a) Thi5 Chapter a~plie• to
Article 3.24. No n-Reporting o r Communication by Mediator. international commercial arbitration, subject to any agreement ID force
A med.i ator may not make a report, asaesament, evaluation, recommenda· between the Philippines and other state or states.
tion, finding or other communication regardin1 a mediation to a court or (b) This Chapter applies only if the place or seat of .arbitration is
agency or other authority that may make a ruling on a dispute that is the the Philippines and in default of any agreement of the parties on the ap-
subject of a mediation, except:
plicable rules.
(a) to state that the mediation occurred or has terminated, or (c) Th.i s Chapter shall not affect any other law of the Philippines by
where a settlement was reached; or virtue of which certain disputes may not be submitted.~ arbitration ur
(b) as permitted to be disclosed under Article 3.23 (Exc.ptions to may be submitted to arbitration only according to provlSIODS other than
the Priuikge of Con{UknJiaUty of lnforlTUltion). those of the ADR Act.
The parties may, by an agreement in writing, stipulate that the set- Article 4.2. Rules of I.nterpretatio n. (a) International ~m­
tlement agreement shall be sealed and not disclosed to any third party merclal arbitration shall be governed by the Model Law on International
including the court. Such stipulation, however, shall not apply to a pro- Commercial Arbitration.
ceeding to enforce or set aside the settlement agt'eement.
(b) In interpreting this Chapter. regard shall~ had .to :11e.in~rna­
RULE 10-Fees and Co.t of Mediation tional origin of the Model Law and to the need for unafonmty ID its inter·
pretation. Resort may be made to the trouawc preparoU>iru and the Report
Article 3.26. F ees and Cost of Ad hoc Mediation. In ad hoc of the Secretary-General of the United Nations Commission on Inter~a­
mediation, the pa.r ties are iree to make their own arrangement as to me- tional Trade Law dated March 1985 entitled, "International Commel'Clal
372 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "C" 373
DEPARTMENT CIRCULAR NO. 98

Arbitration: Analytical Commentary on Draft Text identified by reference therefor, within such period of t ime, shall be deemed to have waived the
n umber A/CN. 91264". right to object.
(c) Moreover, in interpreting this Chapter, the court shall have due Article 4.5. Extent o f Court Intervention. In matters gov-
regard to the policy of the law in favor of arbitration and the policy of the erned by this Chapter. no court shall intervene except where so provided
Philippines to actively promote party autonomy in the resolution of dis- in the ADR Act. Resort to Philippine courts for matters within the scope of
putes or the freedom of the parties to make their own arrangement to the ADR Act shall be governed by the Special ADR Rules.
resolve their dispute.
(d) Where a provision of this Chapter, except the Rules applicable Article 4.6. Court or Other Authority for Certain Functions
to the substance of the dispute, leaves the parties free to determine a of Arbitration Assistance and Supervision. (a) The functions. re-
certain issue, such freedom includes the right of the parties to authorize a ferred to in paragraphs (c) and (d) of Article 4.11 (Appointment of Arbitra-
third party, including an institution, to make that determination . tors) and paragraph (c) of Article 4.13 (Challenge Procedure) and para-
graph (a) of Article 4.14 (Failure or fntpo$$ibility to Act) shall he performed
(e) Where a provision of this Ch apter refers to the fact that the par- by the appointing authority as defined in Article 1.6 Cl, unles11 the latter
ties have agreed or that they may agree or in any other way refers to an shall fail or refuse to act within thirty· (30) days from receipt of the request
agreement of the parties, such agreement includes any arbitration rules in which case the applicant may renew the application with ~e court. The
referred to in that agreement. appointment of an arbitrator is not s ubject to appeal or motion for recon-
(f) Where a provision of this Chapter, other than in paragraph (a) sideration.
of Article 4.25 <Default of a Party) and paragraphs (b) (i) of Article 4.32 (b) The functions referred to in paragraph (c) of Article 4.16 (c)
(Termination of Proceedings), refers to a claim, it also applies to a counter- (Competence of Arbitral Tribunal to Rule on its Jurisdiction), ~econd para-
claim, and where it refers to a defense, it also applies to a defense to such graph of Article 4.34 (Application for Setting Aside an Excluswe Recourse
counter-claim ..
Against Arbitral Award), Article 4.35 (Recognition and Enforcement?,
Article 4.3. Receipt of Written Communic ations. (a) Unless Article 4.38 (Venue and Jurisdiction), shall be performed by the appropn-
otherwise agreed by the parties: ate Regional Trial Court.
(i) any written communication is deemed to have been re- (c) A Court may not refuse to grant, implement or enf~rce a petition
c~ived if it is delivered to the addressee personally or at for an interim measure, including those provided for in Article 4.9 CA~b;·
hialher place of business, habitual residence or mailing trntion Agreement and Interim Measures by Court), Article. 4.11 ~j(';'n~
address; if none of these can be found after making a rea- ment ofArbitrators), Article 4.13 <Challenge Procedure), Article~ "ti ou.
sonable inquiry, a written communication is deemed to Assistance in Taking Euidence), on t~e i:ole gro?°d _that th~ e~ ;nu::
have been received if it is sent to the addressee's last merely an ancillary relief and the pnnc1pal action JS pending Wlt
known place _of business, habitual residence or mailing ad- arbitral tribunal.
d:ess by registered letter or any other means which pro-
vides a record of the attempt to deliver it; RULE 2 - Arbitration Agreement
(ii) the communication is deemed to have been received on the Article 4.7. Definition and IForm of Arbitration Agreement.
day it is so delivered.
The arbitr ation agreement, as defined in Article 1.6 A4, shall be. in wnt-
(b) The provisions of this Article do not apply to communications in ing. An agreement is in writing if it is contained in a document signed by
court proceedings, which shall be governed by the Rules of Court. the parties or in a n e xchange of letter.s, telex, telegrams or other me~ns of
telecommunication which provide a record of the agreement, or in an
Article 4 .4. Waive r of Right to Object. A party who knows exchange of statements of claim and defense in which the existence of an
that any provision of this Chapter from which the parties may derogate or agreement is alleged by one party and not denied by another. The refei;-
any requirement under the arbitration agreement has not been complied ence in a contract to a document containing an arbitration clause consti-
with and yet proceeds with the arbitration without stating the objections tutes an arbitration agreement provided that the contract is in writing and
for such non-<:ompliance without undue delay or if a time limit is provided the reference is such as to make that clause part of the contract.
374 ALTEJINATIVE DISPUTE RESOLUTION APPENDIX "C" 375
DEPARTMENT CIRCULAR NO. 98

Article 4.8. Arbitration Agree ment and Substantive Claim (b) The parties are free to agree on a procedure of appointing the
B e fore Court. Cal A court before which an action is brought >n a matter arbitrator or arbitrators, subject to the provisions of paragraphs (d) and (e)
which is the subject of an arbitration agreement shall, if at least one party of this Article.
so requests not later than the pre-trial conference, or upon the request of (c) Failing such agreement.:
both parties thereafter, refer the parties to arbitration unless it finds that
the arbitration agreement is null and void, inoperative or incapable of (i) in a n arbitration with three (3) arbitrators, each party
being performed. shall appoint one arbitrator, and the two (2) arbitrators
thus appointed shall appoint the third arbitrator; if a
(b) Where an action referred to in the previous paragraph has been party fails to appoint the arbitrator within thirty (30)
brought, arbitral proceedings may nevertheless be commenced or contin- days of receipt of a request to do so from the oth~r P~·
ued, and an award may be made, while the issue is pending before the or if the two (2) arbitrators fail to agree on the third arbi-
court.
trator within thirty (30) days of their appointment, the
(c) Where the action is commenced by or against multiple parties, appointment shall be made, upon request of a party, by
one or more of w!'om. are parties to an arbitration agreement, the court t h e appointing authority;
shall refer to arbitration those parties who are bound by the arbitration
(ii) in an arbitration with a sole arbitrator, if the parties are
agreement althou~h th.e civil action may continue as to those who a re not
bound by such arb1trat1on agreement. unable to agree on the arbitrator, he/she sh~. be ap-
pointed, upon request of a party, by the apPQmtmg au-
Article 4:9. ~itration Agreement and Interim Measures by thority.
Court. (a) It is not incompatible with an arbitration agreement for a (d) Where, under an appointment procedure agreed upon by the
party to ~uest from a court, before the constitution of the arbitral tribu- parties,
nal or dunng arbitral proceedings, an interim measure of protection and
for a court to grant such. measure. (i) a party fails to act as required under such procedure, or
(b) To the ex~nt that the arbitral tribunal has no power to act or is (ii) the parties, or two arbitrators, are unable to reach an
una~le to. act effectively, a request for interim measures of protection , or agreement expected of them under such procedure, or
modification thereof as p rovided for, and in the manner indicated in, Arti- (iii) a third party, including an institution, fails to perform
cle 4 .17. (Power of Arbitral Tribunal to Order Interim Measures), may be any function entrusted to it under such procedure,
made with the court.
any party may request the appointing authority to take the necess.ary
The rules on interim or provisional relief provided for in paragraph measure to appoint an arbitrator unless the agreement on the appoint-
(c) of Article 4.17, of these Rules shall be observed. ment pnx:edure provides other me~ns for securing the appointment.
A party may bring a petition under this Article before the court in (e) A decision on a matter entrusted by paragraphs (c) and (dl of
accordance with the Rules of Court or the Special ADR Rules. this Article to the appointing authority shall be immediately executory
and not be subject to a motion for reconsideration or appeal. The appoint·
RULE 3 - Composition of Arbitral Tribunal ing authority shall have in appointing an arbitrat.or, due reg1mi to a.ny
qualifications required of the arbitrator by the agreement ?f the parties
~icle 4.10. Number of Arbitrators. The parties are free to and to such considerations as are likely to secure the appointment of .an
determine the number of arbitrators. Failing such determination, the independent and impartial arbitrator and, in th~ ca~ of a sole. or_ third
number of arbitrators shall be three (3). arbitrator, shall take into account as well the adV1sab11ity of appointing an
Article 4.11. Appointment of Arbitrators. (a) No person shall arbitrator of a nationality other than those of the parties.
be precluded by reason of his/her nationality from acting as an. arbitrator, A party may bring a petition under this Article before the court in
unless otherwise agreed by the parties. accordance with the Rules of Court or the Special ADR Rules.
376 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "C" 377
DEPARTMENT CIRCULAR NO. 98

Article 4 .12. Grounds for Chsllenge. (a) When a person is ap- termination of the mandate, which decision shall be immediately execu-
proached in connection with his/her possible appointment as an arbitrator, tory and not subject to motion for reconsideration or appeal.
he/she shall disclose any circumstance Ii kely to give rise to justifiable (b) If, under this Article or paragraph (b) of Article 4.13 (Challenge
doubts as to his/her impartiality or independence. An a rbitrator, from the Procedure), an arbitrator withdraws from his/her office or a P~ agrees to
time of his/her appointment and throughout the arbitral proceedings shall, the termination of the mandate of an arbitrator, this does n.ot unpl! accep·
without delay, disclose any such circumstance to the parties unless they tance of the validity of any ground referred to in this Article or tn para·
have already been informed of them by him/her. graph (b) of Article 4 .12 (Grounds for Challenge).
(b) An arbitrator may be challenged only if circumstances exist that
give rise to justifiable doubts as to his/her impartiality or independence, or Artic le 4.15. Appointment of Substitute Arbitrator. Where
if he/she does not possess qualifications agreed to by the parties. A party the mandate of an arbitrator terminates under Articles 4.13 (Cha~knge
may challenge an arbitrator appointed by him/her, or in whose appoint- Procedure) a nd 4.14 (Failure or Impossibility to Act) or because of ~s/he~
ment he/she has participated, only for reasons of which he/she becomes withdrawal from office for any other reason or because of the revocation~
his/her mandate by agreement of the parties· or ·many other case .of terllll-
aware after the appointment bas been made.
nation of his/her mandate, a substitute arbitrator shall be appom~ ac-
Artiele ·US. Challenge Procedure. (a) The parties are free to cording to the rules that were applicable to the appointment of the arb1tra·
agree on a procedure for challenging an arbitrator, subject to the provi- tor being replaced.
s ions of this Article.
(b) Failing such agreement, a party who intends to ch allenge an RULE 4 - Jurisdiction of Arbitral Tribunal
arbitrator shall, within fifteen (15) days after becoming aware of the con- . •-b·~-• to Rule
stitution of the arbitral tribunal or after !becoming aware of any circum- Article 4 .16. Competence of= i..-... Tribunal
. . . .on·on its
stance referred to in paragraph (bl of Article 4.12 <Grounds for Challenge), Juris diction . (a) The a rbitral tribunal may ~e on its own J.~o":1th~
send a written statement of the reasons for the challenge to the arbitral including any objections with respect to the eXJstence or_ vali ,'ty t
tribunal. Unless tbe challenged arbitrator withdraws from his/her office or arbitration agreement or any condition precedent to the fih~g 0 a reques
. .
for arbitration. For that purpose, an arb'tr
1 a ti on.clause' dwhich
t offorms part
the other
the other party agrees to the challenge, the arbitral t ribunal shall decide
on the challenge. of a contract shall be treated as an agree'?ent t~depen e°at the contract
terms of the contract. A decision by the arb1tr~ tn~u:"al ~th b'tration
(c) If a challenge under any procedure agreed upon by the parties is null and void shall not entail ipso jure the mvahd1ty o e ar 1
or under the procedure of paragraph (b) of this Article is not successful,
the challenging party may request tbe appointing authority, within thirty clause. . . . hall
(30) days after having received notice of the decision rejecting the chal- (b) A plea that t h e arbitral tribunal does not have jfunds;bctio(~e
s in
.
be rruS>ed not later than the sub mission
. . of th ~ statement odedeiense i. .,
from raising
lenge, to decide on the challenge, which decision s hall be immediately
executory and not subject to motion for reconsideration or appeal. While an Answer or Motion to Dismiss). A party is not prec1u . . ted in the
such a request is pending, the arbitral tribunal, including the challenged such plea by the fact that he/she has appointed'. or P~=· is exceed·
arbitrator, may continue the arbitral proceedings and make a n award. appointment of, an arbitrator. A plea th_at the arbitral th tte alleged
ing the scope of its authority shall be. ra1."ed as soon 8:6 t e ma bi~al ro-
A party may bring a petition under this Article before the court in to be beyond the scope of its authonty is rrused dunn~ the ar ~f't
accordance with the Rules of Court or the Special ADR Rules. ceedings. The arbitral tribunal may, in either case, admit a 1ater P1ea 1 1
Article 4 .14. Fslllll'e or Impossibility to Act. (a) If an arbitra- considers the delay justified.
tor becomes de ju.re or de fru:to unable to perform h is/her functions or for (c) The arbitral tribunal may rule on a plea. refen:ed to in paroa~
other reasons fails to act without undue delay, his/her mandate terminates graph (b) of this Article either as a preliminary ques~on or in an. aw~t .t
if he/she withdraws from his/her office or if the parties agree on the termi· the merits. If the arbitral tribunal rules as a prehmmary question a~
nation. Otherwise, if a controversy remains concerning any of these has jurisdiction, any party may request, wit!1in thii:t>" (30) daysd::id:
grounds, any party may request the appointing authority to decide on the having received notice of that ruling, the Regional Trial Court to .
the matter, which decision shall be immediately executory and n ot subject
378 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "C" 379
DEPARTMENT CIRCULAR NO. 98

to motion for reconsideration or appeal. While such a request is pending, (v) The order either granting or denying an application for
the arbitral tribuoal may continue the arbitral proceedings and make an interim relief shall be binding upon the parties.
award.
(vi) Either party may appJy with the court for assistance in
Article 4.17. Power of Arbitral Tribun.a l to Order Inte rim implementing or en forcing an interim measure ordered by
Measures. (a) Unless otherwise agreed by the parties, the arbitral tri· an arbitral tribunal.
bunal may, at the request of a party, order any party to take such interim (vii) A party who does not comply with the ord~r shall be lia~le
measures of protection as the arbitral tribunal may consider necessary in for all damages resulting from noncompliance, 10clud1ng
respect of the subject matter of the dispute following paragraph (c) of this all expenses, a~d reasonable attor ney's fees, paid in ob-
Article. Such interim measures may include, but shall not be limited to, taining the order's judicial enforcement.
preliminary iajunction directed against a party, appointment of receivers,
or detention, preservation, inspection of property that is the subject of the
dispute in arbitration. RULE 5 - Conduct of Arbitral Proceedings

(b) After constitution of the arbittal tribunal, and during arbitral Article 4.18. Equal Treatment of Parties. The parties sh~ be
proceedings, a request for interim measures of protection, or modification treated with equality and each party shall be given a full opporturuty of
thereof shall be made with the arbitral tribunal. The arbitral tribunal is presenting h is/her case.
deemed constituted when the sole arbitrator or the third arbitrator who
has been nominated, has accepted the nomination and written com~uni· Article 4.19. Determination of Rules of Procedure. (a) Sub·
cation of said nomination and acceptance has been received by the party ject to the provisions of this Chapter, the parties are free to agree on the
maldng the request. procedure to be followed by the arbitral tribunal in conducting the pro·
ceedings.
(c) The following rules on interim or provisional relief shall be ob-
served: (b) Failing such agreement, the arbitral tribuoal may, s~bject to
this Chapter, conduct the arbitration in such manner as it considers ap·
(i) Any Party may request that interim or provisional relief propriate. Unless the arbitral tribunal considers it inappropriate, the
be granted against the adverse party. UNCITRAL Arbitration Rules adopted by the UNCITRAL on 28 April
(ii) Such relief may be granted: 1976 and the UN General Assembly on 15 December 1976 shall apply
(aa) To prevent irreparable loss or iajury; subject to the follow;ng clarification: All referen ces to the "Secretary·
General of the Permanent Court of Arbitration at the Hague• shall be
(bb) To provide security for the performance of an obli- deemed to refer to the appointing authority.
gation;
(c) The power conferred upon the arbitral tribunal includes the
(cc) To produce or preserve evidence; or power to determine the admissibility, relevance, materiality and weight of
(dd) To compel any other appropriate acts or omissions. any evidence.
(iii) The order granting provisional relief may be conditioned Article 4.20. Plac e of Arbitration. (a) The parties are free to
upon the provision of security or any act or omission agree on the place of arbitration. Failing such agreement, the place. of
specified in the order. arbitration shall be in Metro Ma.n ils unless the arbitral tribunal, having
(iv) Interim or provisional relief is requested by written appli· regard to the circumstances of the case, including the convenience. of the
cation transmitted by reasonable means to the arbitral parties, shall decide on a different place of arbitration.
tribunal and t he party against whom relief is sought, de- (b) Notwithstanding the ru le stated in paragraph (a) of this p~vi­
scribing in appropriate details of the precise relief, the sion, the arbitral tribunal may, unless otherwise agreed ~y the parties,
party against whom the relief is requested, the ground for meet at any place it considera appropriate for consultat10':' amo~g its
the relief, and the evidence supporting the request. members, for hearing witnesses, experts or the parties, or for mspection of
goods, other property or documents.
380 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "C" 381
DEPARTMENT CIRCULAR NO. 98

Article 4 .21. Commencement of Arbitral Proceedings. Un- bunal may rely in making its decision shall be communicated to the par-
less otherwise agreed by the parties, the arbitral proceedings in respect of ties.
a particular dispute commence on the date on which a request for that Article 4 .25. Default of a Party. Unless otherwise agreed by
dispute to be referred to arbitration is received by the respondent.
the parties, if, without showing sufficient cause,
Article 4.22. Lansuage. (a) The parties are free to agree on the .
(a ) the c 1a1man t Iia1.1s to communicate his statementCl.a'
of claimnd
in ac-
language or languagea to be used in the arbitral proceedings. Failing such De
cordance with paragraph (a) Article. 4.23 <Statement . of . •m a •
agreement, the language to be used shall be English. This agreement, fense), the arbitral tribunal shall tenrunate the proceedings,
unless otherwise specified therein, shall apply to any written statement by
(b) the respondent fails to communi~te hi~ e~:~ta~:ft~~~:
a party, any hearing and any award, decision or other communication by
the arbitral tribunal. fense in accordance with paragraph (a) Article 4 · 3 ;: 'th ut
and Defense) the arbitral tribunal shall continue the proce ings WJ • o
(b) The arbitral tribunal may order that any documentary evidence • dm' · of the claimant's allegations;
treating such failure in itself as an a 1ss1on
shall be accompanied by a translation into the language or languages
agreed upon by the parties or determined by the arbitral tribunal in ac- (c) any party fails to appear at a heann · g or to produce
roceed'documen- d
cordance with paragraph (a) of this Article. tary evidence, the arbitral tribunal ~ay continue the P ings an
make the award on the evidence before it.
Article 4.23. Statements of Claim and Defense. (a) Within
the period of time agreed by the parties or determ.i ned by the arbitral .
Article 4.26. Expert A ppom . &ed by . theal t Arbitral
'bunal Tribunal.
tribunal, the claimant shall state the facts supporting his/her/its claim, the Unless otherwise agreed by the parties, the arbatr n • . .
points at issue and the relief or remedy sought, and the respondent shall (a) may appoint one or more experts to report to it on spec1fic 1s-
state his/her/its defense in respect of these particulars, unless the parties suea to be determined by the arbitral tribunal; or
have otherwise agreed as to the required elements of such statements. The . th pert any relevant information
parties may submit with their statements, all documents they consider to (b) may require a party to give e ex t documents goods or
be relevant or may add a reference to the documents or other evidence or to produce, or to provide access to, any relevan '
they will submit. other property for his/her inspection. if
. ·f party so requests or
(b) Unless otherwise agreed by the parties, either party may amend Unless otherwise agreed by the parties, 1 8 rt shall after delivery
or supplement his/her claim or defense during the course of the arbitral the arbitral tribu nal considers it n~s~, the ·~::ring wh~re the parties
proceedings, unless the arbitral tribunal considers it inappropriate to of his/her written or oral report, participate~ a · d to present expert wit-
allow such amendment having regard to the delay in making it. have the opportunity to put questions ~ him an
ne&aes in order to testify on the points at issue.
Article 4.24. Hearing and Written Proceed ings. (a) Subject . . in Taking Evidence. The ar·
to any contrary agreement by the parties, the arbitral tribunal shall decide Article 4.27. Court Assistance fth arbitral tribunal may
whether to hold oral hearings for the presentation of evidence or for oral bitral tribunal or a party with the approv~ 0 ~ taking evidence. The
argument, or whether the proceedings shall be conducted on the basis of request from a court of the Philippii;ie~ assistan:~~ and according to its
documents and other materials. However, unless the parties have agreed court may execute the request within its compe
that no hearings shall be held, the arbitral tribunal shall hold such hear- rules on taking evidence.
ings at an appropriate stage of the proceedings, if so requested by a party. th power to require any person to
The arbitr al tribunal shall have . e 'b al shall have the power
(b) The parties shall be given sufficient advance notice of any hear· attend a hearing as a witness. The arb1tral t;:'";evancy of the testimony
ing and of any meetin,g of the arbitral tribunal for the purposes of inspec· to subpoena witnesses and documents when t e :ated to it. The arbitral
tion of goods, other property or documents. and the materiality thereof has been demons witness during the testi-
tribunal may also require the retirement of any
(c) All statements, documents or other information supplied to the mony of any other witness. . .
arbitral tribunal by one party shall be communicated to the other party. A party may b nng . t't' under this Section before the court m
Also, an expert report or evidentiary document on which the arbitral tri· a pe 1 ion . ADR R les
accordance with the Rules of Court or the Specia1 u ·
382 AJ..TERNf.TfVE DISPUTE RESOLUTION APPENDIX ·c· SSS
DEPARTMENT CIRCULAR NO. 98

Article .C.28. Rule1 Applicable to the S ubs tance of Dis pute. (c) The award sha.11 state its date and the place of arl>itration aa de·
(a) The arbitral tribunal shall decide t.be dispute in accordance with such !ermined in accordance with paragraph (a) of this Article. The award abal.1
rules of law u are chosen by the parties as applicable to the substance of be deemed to have been made at that place.
the dispute. Any desi11D4Uon of the law or legal system of a given state
shal.1 be construed, unless otherwiae expressed, as directly referring to the (d) After the award is made, a copy signed by the arbitrators in ac-
substantive law of that atate and not to its conflict of laws rules. cordance with paragraph (a) oftlm Article shall be delivered to each pal1;y.
(b) Failing any dea¥m1tloo by the parties, the arbitral tribunal Arilo l c 4 .32. T e rminati on o f Prooeedinp. (a) Ti.. ubim..I
shall apply the law determined by the conflict of laws rules which it con· proceedings are terminated by the fina.l award or by an order of the arbi·
aiders applicable. ' tral tribunal in accordance with paragraph (b) of this Article.
(c) The arbitral tribunal shall decide ex aequo et bono or as amiable (b) The arbitral tribuna.1 ahal.1 issue an order for the termination of
compoaitcur only if the parties have expressly authorized it to do so. the arbitral proceedings when:
. (d) ln all cases, the arbitral tribunal shall decide in accordance (i) The claimant with draws hls/her/its claim, unleaa the re-
with the terms of the contract and shall take into account the usages of the spondent objects thereto and the arbitral tribunal recog·
trade applicable to the transaction. niud a legitimate interest on hls/berlits part in obtaining
a final settlement of the dispute;
. Articl e '-·~:· D~cla\on·Makina b y Panel of Arbitrators. In
ar~~:~
1
~= .:~~11ID~re
8
than one arbitrator, any decision of the
(ii) The parties agree on the termination of the proceedinp;

ar .aon' ty of a ll its ine b e, unless otherwise agreed by the parties, by (iii) The arbitra.1 tribuna.1 finds that the continuation of the
a miv m era. However q t• f d be proceedings bas f'or any other reason become unneceseary
d 'ded by a presiding azb' tr . • ues ions o proce ure may
.:::,,bera of the arbitral trib~n:i~r, if 80 au thorized by the parties or all or impossible.
(c) T he mand ate of the a rbitra.1 tribuna.1 ends with the termination
Artic le .C.80. Settlement If d .
parties settle the dispute th i,. • u_rmg arb'1tral proceedmgs,.
the
of t he arbitral proceedings, subj ect to the provisions of Articles 4.SS <Cor·
reclion and Interpretation ofA ward, A dditional Award) and paragraph. (d)
ceed' d 'f ' e ar itral tribunal shall t ermin ate the pro·
trib : an •:O. ~ques:d by th~ Parties and not objected to by the arbitral
10 of Article 4 .34 <Application for Setting Asich an E:ixlusive Recourse agomat
un • reco e ae ement m the form of an arbitra.1 award on agreed Arbitrol Awa.rd).
terms.
(d) Notwithstanding the foregoing, the arbitral tribuna.1 may, ~or
. . An aw~ on agreed terms aha.II be made in accordance with the pro- special reasons, reserve in the final award or order, a bearing to quantify
~~tons of ~c~ 4h.31 CForm and Contents of Award), and sha.11 state that COits and determine w h ich party aha.II bear the costs or th~ di~ision
1 18 an aw . uc an award has the sazne status d ffi t oth thereof as may be determined to be equitable. Pen ding determmation of
award on the merits of the case. an e ec as any er I.bis issue, t he award aha.II not be deemed final for purposes of appeal,
vacation, correction, or any post-award proceedings.
Article ~J:ll .. ~ona and Conten l• of Award. <a> Tbe award
shal.1 be m~de ID wntmg and shall be a~ed by the arbitrator or arbitre· Article 4..33 . Correction and Interpretation of Award, Addi·
tors. In a~i~al Proceedinp with more than one arbitrator, the signatures tlonal Award. (a) Within thirty (30) days from receipt of the award,
o~ the nuuonty of all membens of the arbitral tribunal sha.11 suffice, pro- unless another period of time baa been agreed upon by the parties:
vtded that the reason for 8J1Y omitted signature is stated. (i) A party may, with notice to the other party, request ~e
Cb>. The award shall state the reasons upon which it is baaed, unless arbitral tribuna.1 to correct in the award aey errors in
the partie& have agreed that no reasons are to be given or the award is an computation, any clerical or typogniphica.1 errors or any
aw~ on agreed terms under paragraph (a) of Article 4 .20 (Place of Arbi· errors of similar nature;
trat1on). (ii) A party may, if so agreed by the parties and with notice to
the other party, request the arbitra.1 tribunal to give an
interpretation ofa specific point or part of the award.
384 ALTERNATIVE DISPUTE RESOLUTION APPENDIX ·c· 385
DEPAR'l'JllENT CIRCULAR NO. 98

(b) If I.he arbitral tribunal considers the request to be justified, it submitted to arbitration can be aepara~ from
aball make the com!Ction or eive the interpretation within thirty (30) days those not so submitted, only the part of the award
from receipt of the request. The interpretation shall form part of the which contains decisions on matters not submitted
award. to arbitration may be set aside; or
(c) The arbitrd tribunal may correct any error of the type referred lddl the composition of the arbitral tribunal or the arbi-
to in paraaraph (a) cl thia Article on its own initiative within thirty (30) tral procedure was not in accordance with the
days from the date of the award. agreement oi the parties, unless such agreement
Cd) Unleaa otherwise agreed by the parties, a party may, with nc> was in conflict with a provision of the ADR Act
tice to the other party, request, within thirty (30) days of receipt of the from which the parties cannot derogate, or, failine
award, the arbitral tribunal to make an additional award as to claims such agreement, was not in accordance with the
presented In the arbitral proceedings but omitted from the award. If the ADRAct;or
arbitral tribunal considers the request to be justified, it shall make the Cii) the Court finds that:
edditional award within aixty (60) days.
(aa) the subject-matter of the dispute i4 not capable of
(el The arbitral tribunal may extend, if necessary. the perind of 3Cttlcmcnt by arbitratinn under the Jaw Of the
time within which it shall make a COITection, interpretation or an add.i- Philippines; or
tional award under paragraphs (a) and (b) of this Article.
(bbl the nward is in conflict with the public policy of
CO The provislons of Article 4.31 (Form and Contents of Award)
the Philippines.
shall apply to a correction or interpretation of the a ward or to an addi-
tional award. Cc) An application for setting aside may not be ma~e after three
months have elapsed from the date on which the party malting that ap~li­
Article 4.S4. Applica tion for Setting Aside an Exclusive Re- catlon had received the award or if a request had been made under Article
cours e against Arbltral Award. (a) Recourse to a court against an 4.3S (Correction and Interpretation of Award, Additwnal ~ward) ~m the
arbitral award may be made only by an application for setting aside in date on which that request has been disposed of by the Arb1tral Tribunal.
accordance with the aecond and tb.ird paragraphs of this Article.
(d) The court, when asked to set aside an award, mil>'., where ap-
(b) An arbitral award may be aet aside by the Regional Trial Court propriate and so requested by a party, suspend the settin~ aside proc_eed·
only if: inp for a period of time determined by it in order ~ give the arb1tral
Ci) the party making the application fum.ishes proof that: tribunal an opportunity to resume the arbitral p~~n~ or to take such
other action as in the arbitral tribunal's opinion will elimmate the grounds
(aa) a party to the arbitration agreement was under for setting aside.
aome incapacity; or t.he said agreement is not valid
under the law to which the parties have subject.eel (e) A party may bring 8 petition under this Article before the court
it or, failing any indication thereon, under the law in accordance with the Special ADR Rules.
of the Philippines; or
R ULE 6 _ Recognition and En.(orcement of Awarda
(bb) the party making the application was not given
proper notice of the appointment of an arbitrator Articl e 4.35. Recognition and En.Corcem en t. <~>. A (oorelet,1 ~
or of the arbitral proceedings or was otherwise un- bitral award shall be recogn.ized as binding and, ~pon petition m. -;mt1ng
able lo pTl!Mnt hi5 cese; or to the Regional Trial Court, ehall be enforced subj~ to the P!<?vts1ons of
(cc) the award deals w.itb a dispute not contemplated this Article and of Article 4 .36 (Groltilds for Refusing RttOf{111tion or En-
by or not falling within the terms of the submis- forcement).
sion to arbitration, or contains decisions on mat. (b) The petition for recogn.ition and enforce~ent of such a:tiitral
tel'll beyond the scope of the submission to arbitra- awards shall be filed with the Regional Trial Court m accordance with the
tion, provided that, if the decisions on mattera Spedal ADR Rules.
386 ALTERNATIVE DISPUTE RESOLUT ION APPENDIX "C" 387
DEPARTMENT CIRCULAR NO. 98

(i) Convention Award - The New York Convent ion shall gov- (a) The parties to the arbitration agreement were, under the law
ern the :recognition and enforcement of arbitral awards applicable to them, under some incapacity; or the said agreement is not
covered by said Convention. valid under the law to which the parties have subjected it or, failing any
The petitioner shall establish that the country in wh ich indication thereon, under the law of the country where the award was
made; or
the foreign arbitration award was made is a party to the
New Yor:k Convention. (b} the party against whom the award is invoked was not given
(ii) Non-Convention Award - The recognition and enforce· proper notice of the appointment of an arbitrator or of the arbitral pro-
ment of foreign a rbitral awards not covered by the New ceedings or was otherwise unable to pl!'esent his case; or
York Convention shall be done in accordance with proce- (c) the award deals with a dispute not contemplated by or not fal-
dural rules to be promulgated by the Supreme Court. The ling within the terms of the submission to arbitration , or it contains deci-
court may, on grounds of comity and reciprocity, recognize s ions on matters beyond the scope of the submission to arbitration, pro·
and enforce a non-convention award as a convention vided that, if the decisions on matters submitted to arbitration can be
award. separated from those not so submitted, that part of the award which con-
(c) The party relying on an award or applying for its enforcement tains decis ions on matters submitted to arbitration may be recognized and
shall file with the Regional Trial Court the original or duly authenticated enforced; or
copy of the award and the original arbitration agreement or a duly au- (d) the composition of the arbitral tribunal or the ~bitral P':~
thenticated copy thereof. If the award or agreement is not made in an dure was not in accordance with the agreement of the parties or, f8lling
official language of the Philippines, the party shall supply a duly certified such agreement, was not in accordance with the law of the country where
translation thereof into such language. the arbitration took p lace; or
(d) A foreign arbitral award when confirmed by a court of a foreign (e) the award has not yet become binding on the parties or has been
country, shall be recognized and enforced as a foreign arbitral award and set aside or suspended by a court of the country in which, or under the law
not as a judgment of a foreign court. of which, that award was made.
(e) A foreign arbitral award when confirmed by the Regiona.1 Trial Recognition and enforcement of an arbitral award may also be re-
Court, shall be enforced in the same manner as final and executory deci- fused if the Regional Trial Court where recognition and enforcement is
sions of courts oflaw of the Philippines. sought finds that:
(t) If the Regional Trial Court has recognized the arbitral award (a} the subject-matter of the dispute is not capable of settlement by
but an application for (rejection and/or) suspension of enforcement of that arbitration under the law of the Philippines; or
award is. su~sequ~ntly made, the Regional Trial Court may, if it considers
(b) the recognition or enforcement of the award would be contrary
the apphcat1on to be proper, vacate or suspend the decision to enforce that
award and may also, on the application of the party claiming recognition to the public policy of the Philippines.
or enfor~ment of .t hat award, order the other party seeking rejection or A party to a foreign arbitration proceedi~ may oppo~e an applica-
suspension to provtde ap_p ropriate security. tion for recognition and enforcement of the arb1tral award ID accordance
with the Special ADR Rules only on t h e grounds enumerated under para·
Articl e 4.36. Grounds for Refusing R ecognition or Enforce- graphs (a) and (c) of Article 4 .35 (Recognition and En(orcement). Any other
ment.
ground raised shall be disregarded by t he Regional Trial Court.
A. CONVENTION AWARD. B. NON-CO NVENTION AWARD·
Recognition or enforcement of an arbitral award, made in a state, (a) A foreign arbitral award rendered in a state which is not a
which is a party to the New York Convention. may be refused. at the re· party to t he New York Convention will be recognized upon proof of the
quest of the Party against whom it is invoked, only if the party furnishes existence of comity and reciprocity and may be treated as a convention
to the Regional Trial Court proof that: award. If not so treated and if no comity or reciprocity exists. the non-
388 ALTERNATIVE DISPlJTE RESOWTIO~ APPENDLX "C" 389
DEPARTillE1''T CIRCULAR NO. 98

convention award cannot be recognized and/or enforced but may be Cc) where any of the parties to the dispute resides or has its place of
deemed as presumptive evidence of a right as bEtween the parties in ac- business; or
cordance with Section 48 of Rule 39 of the Rules of Court.
(d) in the Nation al C a pital Judicial Region at the optioc of the ap-
(b) If t he Regional Trial Court has recognized the arbitral award plicant .
but a petition for suspension of enforcement of t hat a ward is subsequently
made, the Regional Trial Court may, if it considers the petition to be Article 4.3 9 . Notic e of Proceedings to Parties. Jn a special
proper, suspend the proceedings to enforce the award, and may also, on proceeding for recognit ion and enforcement of an arbitral award, the court
the application of th e party claiming recognition or enforcement of that shall send notice to the parties at their address of recerd in t:.e arbitra-
award, order the other party seeking suspension to provide appropriate tion, or if any party cannot be served notice at such address, at such
security. party's last known address. The notice shall be sent a t least fifteen Cl5)
days before the date set for the initial hearing of the application.
Cc) If the petition for recognition or enforcem ent of the arbitral
award ia filed by a party and a counter-petit ion for the r ejection of the Article 4 .4 0. Lega l Representation in Interna tional Com ·
arbitral award is filed by the other party, the Regional Trial Court may, if m ercia l Arbitrat ion. In in ternationa l commercial arbitration con-
it considers the counter-petition to be prope r but the objections t hereto ducted in t h e Philippines, a party may be represe nted by any person or
may be rectified or cured, remit the award to the arbitral tribunal for his/her/ill! choice: P rovided, that such representative, unless admitted to
appropriate action and in the meantime s uspend the recognition and the practice of law in the P hilippines, shall not be authorized to appear as
enforcement proceedings and may also on the a pplication of the petitioner counsel in any P hi lip pine court or any other quasi-judicial body whether or
order th e counter-petitioner to provide appropriate security. not s uch appearance is in relation to the arbitration in which he/she ap-
pears.
Article 4.S7. Appeal from Court Decision on Arbitral Awards.
A declsio~ of tho R~gional Trial Court recognizing, enforcing, vacating or Article 4.41. Con fidentiality of Arbitration Proceedings.
settlnc asido an nrbitral a ward may be appealed to the Cou rt of Appeals in Tho a rbitration p roceed ings, including the records, evidence and th e a rbi-
accordanco with the rulea of procedure to be promulgated by the Supreme tral nwnrd, shall be con s idered confidential and sh all not be publ.ished
Court. except:
. The losin.g party wh.o appeals from the judgment of the court recogniz.. Co) with the consent of t he parties; or
ing and enforcing an arbitrol award shall be · d b th Co rt r A
cals to post a bo . require Y e u o P- (b) for the limited pu rpose of disclosing to the court rclevnnt docu-
P . counter- nd executed 10 favor of the prevailing party equal
to the amount of the award in accordance with the Special ADR Rules. ments in cases where resort to the court is allowed herein.
Prot·ided, howeuer, that the court in which the action or the appeal is
..Any stipulation by the parties that the a rbitral tribunal's award or
pendinc may issue 8 protect ive order to prevent or prohibit disclosure of
d.ecJS1on ~hall .be ~nal, ~d therefore not appealable, is valid. Such stipula-
tion carnca with it a wruver of the right to 8 al fj b'tral ard documents or informat ion containing secret processes, developments,
b t ' th t · d' . ppe rom an ar i aw research nnd oth er informntion where it is shown that the applic.a nt shall
U WI OU Pl'CJU 100 to Judicia l review by way of certiorari unde.r Rule 65
of the Rulea of Court. bo materially prejudiced by an authorized disclosure thereof.
Article 4 .4 2 . S ununary Nature of Proceedin gs Befo re the
. Arlie.lo 4 .38. Ve n ue and Jurisdic tio n. Proceedings for recogni-
Court. A pet ition for recognition and enforcement of awards brought
ti~n and enfo~ment of an a rbitration Bgl'eellJent or for vacation or setting
before the court shall be beard and dealt with summarily in accordance
asi~e of an arbitral award, and any application with a court for arbitntion
11u1sto~eo 11nd eupcrvieion, except appeal, sha:! be deemed as special with t he Special ADR Rules.
proceedings and shall be filed with the Regional Trial Court where: Article 4 .4 3. Dea th of a Party. Where a party dies after mak-
(a) the arbitration proceedings are conducted; ing a submission or a contract to arbitrate as prescribed in these Rules,
tho proceeding may be begun or continued upon the applicat.ion of, or
.. Cb) . where t he asset to be attached or levied u pon, or the act to be notice to, his/her executor or administra tor, or temporary administrator of
eDJoined is located; his/her estate. In any s u ch case, the court may issue en order extending
390 ALTERNATIVB DISPUTE RESOL.UTION APPENDIX ~c• 391
DEPARTMENT CIRCULA!l NO. 98

the time within which notice of a motion to recognize or vacate an award :m atter, the time spent by the arbitrators and an.y other relevant drcum·
must be served. Upon reco111izing an award. where a party has died since stances of the case.
it wae filed or delivered, the court must entet" judgment in the name of the
original party; and the proceedings thereupon are the same as where a If an appointing authority has been agreed upon by the parties and
party dies after a verdict. it auch authority has issued a schedule of fees for arbitratora in interna·
tional casea which it adminiaters, the arbitral tribunal in fudng its fees
Article 4.44. Multi·Party Arbitration. When a single arbitra- eball take that schedule of fees into account to the eztent that it conaiders
tion involves more than two parties, the foregoing rules, to the el<tent appropriate in the circumstances of the case.
possible, shall be used, subject to such modifications consistent with this If such appointing authority has not issued a schedule of Ceea for ar-
Chapter as the arbitral tribunal shall deem appropriate to address possi- l>itratora in international cases, &DY pwty JMy, at any time request the
ble complexities or a multi-party arbitration. appointing authority to furnish a statement aettiq forth the basia for
Article 4.45. Consolidation of Proceeding• and Concurrent establishing fees which is customarily followed in international cases in
Hearings. The parties and the arbitral tribunal may agree - which the authority appoints arbitrators. If the appointing authority
consenta to provide such a statement, the arbitral tribunal, in fixing ita
(a) that the arbitration proceedings shall be consolidated with feea, shall take such information into account to the extent that it consid·
other arbitration proceedings; or
ers appropriate in the circumstances of the case.
(b) that concurrent hearings shall be held, on such terms as may be
(c) In cases referred to in the second and third aub-paragraphs of
agreed.
paragraph (b) of this Article, when a party so requests and the appointing
Unle~s the parties agree to confer such power on the arbitral tribu- authority conaenta to perform the function, the arbitral tribunal shall fix
nal, the tribunal bas no power to order consolidation of arbitration pro· its fees only aft.er consultation with the appointing authority which may
ceedings or concunent hearinp. make any comment it deems appropriate to the arbitral tribunal concern·
Article 4.46. Coate. (a) The arbitral tribunal shall fix the coata ing the fees.
of arbitration in its award. The term "costs• include only: (d) Except as provided in the next sub-paragraph ofthis paragraph,
(i) The fees of th.e arbitral tribunal to be stated separately the coats of arbitration shalJ, in principle, be borne by the unsuccessful
party. However, the arbitral tribunal may apportion each of such costa
~ to each arbitrator and to be fixed by the tribunal itself between the parties if it determines that apportionment la reaaonable,
m accordance with paragraph (b) of this Article;
taking into account the circumstances of the case.
(ii) The travel and other expenses incurred by the arbitra·
tors; With respect to the costs of le,al representation an.d assiatanC-: re-
ferred to in paragraph (c) of paragraph (a) (iii) of this Article, the arbttral
(iii) The coats of expert advice and of other assistance re- tribunal, taking into account the circumstances of the case, shall be free to
quired by the arbitral tribunal; determine which party shall bear such costs or may apportion such costs
(iv) The travel and other expenses of witnesses to the eztent between the parties if it determines that appointment is reasonable.
such expenses are approved by the arbitral tribunal; When the arbitral tribunal issues an order for the termination of the
(v) The costs for legal representation and assistance of the arbitral proceedings or makes an award on agreed terms, it sh8:'1 fix the
successful party if ouch coat.a were claimed during the ar· costs of arbitration referred to in paragraphs (b), (c) and (d) of this Article
bitral !'roceedinp, and only to the extent that the arbi· in the context of that order or award.
tral tribunal determines that the amount of such costs is (e) The arbitral tribunal, on it& establishment, may requeat each
reaeonable; party to deposit an equal 8Illount as an advance for the costs referred to In
(vi) Any fees and expenses of the appointing authority. paragraphs (i), (lil and (Iii) of paragraph (a) of this Article.
(b) The fees of the arbitral tribunal shall be reasonable in amount, During the course of the arbitral proceedings, the arbitral tribunal
taking into account the amount in dispute, the complexity of the subject may request supplementary deposits from the part.iee.
392 ALTERNATM! DISPUTE RESOLUTION APPENDIX Mc• 393
DEPARTMENT CIRCULAR NO. 98

If an appointing authority has been agreed upon by the parties and sh~! be valid, enforceable and irrevocable, save upon such grounds as
when a party so requests and the appointing authority consents to perform eiaat at law for the revocation of any contract.
the function, the arbitral tribunal eball fix the amounts of any deposits or ~uch submission or contract may include questions arising out of
supplementary deposits only after consultation with the appointing au- valuations, appraisals or other controversies which may be collateral,
thority which may make any comment.a to the arbitral tribunal which it incidental, precedent or subsequent to any dispute between the parties.
deems appropriate concerning the amount of such deposits and supple-
mentary deposits. A controversy cannot be arbitrated where one of the parties to the
controversy is an infant, or a person judicially declared to be incompetent,
If the required deposit.a are not paid in full within thirty (30) days af·
unless the appropriate court having jurisdiction approved a petition for
!'8r receipt of the requ!8t, the arbitral tribunal shall so inform the parties permission to submit such controversy to arbitratioa made by the general
in order that ~e reqwred payment may be made. If such payment is not
guardian or guardian ad litem of the infant or of the incompetent.
made, the arb1tral tribunal may order the suspension or termination of the
arbitral proceedings. But where a person capable of entering into a submission or contract
has knowingly entered into the same with a person incapable of ao doing,
~r the award ~as been made, the arbitral tribunal shall render an
accounting to the parties of the deposits received and return any unex- the objection on the ground of incapacity can be taken only in behalf of the
pended balance to the parties. person so incapacitated.
Article 5.2. Delivery and Receipt of Written Communica-
CHAPTER 5 tions. (a) Except u otherwise agreed by the parties, a written communi-
DOMEsnc ARBITRATION cation from one party to the other or to the arbitrator or to an arbitration
Institution or from the arbitrator or arbitration institution to the parties
RULE 1- General Provision• ahall be delivered to the addressee personally, by registered mail or by
courier service. Such communication shall be deemed to have been re-
Article tu. Scope of Appl' tl ceived on the date it is delivered at the addressee's address of record, place
which Is not international 88 defined':' on. (a) Domestic. arbitration,
continue to be governed b Re b . paragraph ca of Article 1.6 ahall of business, residence or last known address. The communication, as ap-
Arbitration Law" 89 uni dJ~ he Act No. 876, otherwise known ae "The
14 18 and 19 and 29 to s~ 0 f thy the ADR Act. Articles 8, 10, 11, 12, 13,
propriate, shall be delivered to each party to the arbitration and to each
arbitrator, and, in institutional arbitration, one copy to the administering
ADR Act are 8 ,_.;5ca1J
..--
. be! Model Law and Sections 22 to 31 of the
Yapp1tea e to domestic arbitration.
inatitution .
(b) During the arbitration proceedings, the arbitrator may order a
In the absence of a specific appl"1 bl . .
cable to international "al ~ e provision, all other rules appli- mode of delivery and a rule for receipt of written communications different
commem arbitration
tory manner to domestic arbitration. may
be r d·
app ie m a supp e-
I Ii-om that provided in paragraph (a) ofthia Article.
(c) If a party is represented by counsel or a representative, written
dispu:!)is Thia Cha.i;:r s~allt\ aedpp!?' to do_mestk arbitration whether the communications for that party shall be delivered to the address of record
. commerci '. as e n tn Section 21 of the ADR Act, or non- of such counsel or representative.
co~ercial, by an arbitrator who is a private individual appointed by the
parties to hear and resolve their dispute by rendering an award· Provided (d) Except as the parties may agree or the arbitrator may direct
that, although a construction dispute may be c __,_, ·t ha!•! •:- otherwise, a written communication may be delivered by electronic mail or
to be overned b E 0 omme'"""• t a con .....ue facsimile transmission or by such other means that will provide a record of
g Y · · No. 1008, a.1985 and the rules promulgated by the
Construction Industry Arbitration Commission. the sending and receipt thereof at the recipient's mailbox (electronic in-
box). Such communication shall be deemed to have been received on the
(c) Two ~r more pel'llOns or parties may submit to arbitration by same date of its transmittal and receipt in the mailbox (electronic inboxl.
one or more. ~•trators any controversy existing between them at the time
of the subnussion and whim may be the subject of an action; or the parties Article 5.3. Waiver of Right to Object. (a) A party shall be
to any contract may in such contract agree to settle by arbitration a con- deemed to have waived his right to object to non-compliance with any non-
troversy thereafter arising between them. Such submission or contract
 ALT&RNATIVB DISl'OT& RESOLUTION APPENDIX •c- 395
D&PARTMENT CIRCl.ll.AR NO. 98

mandatory provision of these Rules (from which the parties may derogate) the court. The parties shall be referred to arbitration unles.o the couzt
or any reQuirement under the arbitration agreement when: Ands that the arbitration agreement is null and void, Inoperative or inca-
(i) he/she/it knows of such non-compliance; and pable of being performed.
(ii) proceeda with the arbitration without stating hia/herlita Cb> Where an action referred to in parqraph (a) of this Article has
~bj~ons .to .•~ch non-compliance without undue delay or been broueht, arbitral proceedings may nevertheleu be commenced or
1~ a time-limit 18 provided therefor, within 1uch period of continued, and an award may be made, while the iaaue ie pendinc before
time. the court.
(b) If an act le required or allowed to be done under thia Chapter Cc) Where the action is commenced by or apiDat multiple parties,
ualeas the applicable rule or the agreement of the parties provides a dif: one or more of whom are parties to an arbitration agreement, the court
ferent period for the act to be done, it ahall be done within a period of ahall refer to arbitration those partiea who are bound by the arbitration
thirty (30) days from the date when such act could have been done with agreement although the civil action may continue u to those who are not
lepl effect. bound by auch arbitration &F&ement.
Artic~e 6.4 . Exknt of Co~ Intervention. In raatters gov- Article 5.8. Arbitration Agreement and Interim Meuurea by
erned by thia Chapter, no oourt shall tnterveoe except in a ccordance with Court. (a) It ia not incompatible with an arbitration agreement for a party
the Special ADR Rulel. to request from a court, before the con1titution of the arbitral tribunal or
durin1r arbitral proceedinp, an interim meaaure of protection and for a
Article 15.6. Court or Other Authority for Certain Functi court to grant such meuure.
ot Arbitration AHlatance and Supervhlon. The functions referre:1:
in paragraphs (c) ".nd (d) of Article 5.10 (Appointment of Arbitrolo/"$), (b) After the constitution of the arbitral tribunal and d uring arbi·
paragraph (a) of _Article 5.11 (G,.,,,.nd1 for Challnge) and par•graph (a) of tral proceedings, a request for an interim meaaure of protection, or modifi-
Article 5.13 <Fiul~IW or ltnp0$sibility to Act), shall 'be performed by the cation thereof, may be made with the arbitral tribunal or to the erlent
a ppointlnc authon ty, uni~ the latt.er •hall fail or refuse to act within that the arbitral tribunal hae no power to ect or ia unable to act elfecti>1ely,
thirty (30) days &om ..oe1pt ot the ,_ • . . the requeat mAy be 1nade w ith the murt.
may renew the application with the ~~eat Ul which case, the apphcant
(c) The following rules on interim or proviaional relief ahall be ob-
served:
RULE 2-Arbitratlon ~ment
(i) Any party may request that Interim or provisional relief
Article 11.8. .Form ol Arbitration Agreement. An arbitration be granted against the adverae party.
·agreement
d shall '--' b th An &greement 18
be m writing. • · writ"
tn 1ng1·c 1"t 11con
• tained (ii) Such relief may be granted:
ta a ocument a,.~ Y e parties or in an exchange of letters, telex, (aa) To prevent irreparable lou or injuey;
telegrams or other _mearui of telecommunication which provide a rea>nl of
the. qreem.~t, or in an •xchanee or •tatementa of claim and defe11.1e iD (bb ) To provide eecurity for the performance of an obli·
whichtheeXiBtenceofanagreementiaaJleged b rt nd td "ed ration;
by the other. The reference in a contract to ay done pa Yt a tain~ . eru (cc) To produce or preserve evidence; or
b• • 1 · ocumen con n1ng an
ar itrtra!i~n.c a~~ conat.idtuthtea ~ arbitration agreement provided that the (dd) To compel any other appropriate act or omisaiona.
con ac 18 m wn nr an e reaerence la auch a 8 to ke that la part
of the contract. ma c use (iii) The order granting provisional relief may be conditioned
upon the provision of security or any act or omiaaion
Article 11.7. Arl>ltration Acreement and Subetantive Cl.aim specified in the order.
~o~ <;:ourt. . (aJ A party to an action may request the court before (iv) Interim or provisional relief le requested by written appli-
"'.hi~ it 18 pend1nr to stay the action and to refer the diapute to arbitrs· cation traaemitted by reasonable means to the arbitral
ti~n m accordance with their arbitration aareement not later than the pre-
tnal conference. Thereafter, both parties may make a similar request with tribunal and the party againat whom relief ia aought, de-
396 Al..TERNATIVB DISPUTE RESOLu"TION APPENDIX "C" 897
DEPARTMENT CIRCULAR NO. 98

scribinc in appropriate d.e tail of the precise relief, the mission, a provision is made for a method of appointing an arbitrator or
party again.st whom the relief is requested, the ground for arbitrators, such method !hall be followed.
the relief, and the evidence supporting the request.
(c) Failing such agreement,
(v) The order either "1lllting or denying an application for
interim relief shall be binding upon the parties. (i) in an a rbitration with three (3) arbitrators, each party
shall appoint one (1) arbitrator, and th_e two ~2) arbl~·
(vi) Either party may apply with the court for assistance in tors thus appointed shall appoint the thi~ ~·tr~tor; if a
implementinc or enforcing an interim measure ordered by party fails to appoint the arbitrator wtthi.n thfrty (30)
an arbitral tribunal. days of receipt of a request to do so from the ~ther ~·
(vii) A party who does not comply with the order shall be liable or if the two arbitrators fail to agree on the third arb1tra·
for all damages, resulting from noncompHance, including tor within thirty (30) days of thefr appoin.t ment, the ap-
all expenses, and niasonable attorney's fees, paid in ob- pointment shall be made, upon request of a party, by the
taining the order's judicial enforcement. appointing authority;
(d) Unloaa otherwise aped by the parties, the arbitral tribunal (ii) in an arbitration with a sole arbitrator, if the parties are
may, at the request of a party, order any party to take such interim meas- unable to agnie on the arbitrator, he/she sh~! be ap-
ures of protection as the arbltral trib unal may consider necessary in re· pointed, upon request of a party, by the appointing au·
apect of the subject matter of the disp ute following the Rules in this Arti· thority.
cle. Such interim meaaurea mil)' include but shall not be limited to pre· (d) Where, under an appointment procedure agreed upon by the
liminary IJ\iunction directed against a party, appointment of receivers or parties,
detention, preservation, inspection of property that is the subject of the
dispute in arbitration. Either party may apply with the court for assis· (i) a party fails to act or appoint an arbitrator 88 required
tance in Implementing or enforcing an interim meuure ordered by an under such procedure, or
arbitral tribunel. (ii) the parties or two (2) arbitrators, are unable to appoint
an arbitra~r or reach an agreement expected of them un·
R ULE 3 - Composition of Arbitr al Tribunal der such procedure, or
(iii) a third party including an institution, fails to appoint an
Article G.9. Number of Arbitrators. The parties are free to de·
termine the number of arbitrators. Failing such determination, the num·
to
arbitrator or perform any function entrusted to it under
ber of arbitrators shall be three (3). such procedure, or
(iv) The multiple claimants or the m~tiple "?'pondents ia/are
Article 6.10. Appointment o f Arbitrators. (a) Any person ap- unable to appoint itsftheir respective arb1trato~, any ~
pointed to serve 88 an arbitrator muat be of legal age, in full ertjoyment of may request the appointing authority to appoint an arb1·
hialher civil rights and knows bow to read and write. No person appointed trator.
to serve 88 an arbitrator shall be related by blood or marriage within the
sixth degree to either party to the controversy. No person shall serve 88 an In making the appointment, the appointing authority. shall s~on
arbitrator in any proceeding ifhefshe has or has had financial, fiduciary or the parties and their respective counsel to appear before •.llld authonl>'. on
other interest in the controversy or cause to be decided or in the result of the date, time and place set by it, for the purpose of.sel~ng and appo.'°t.-
the proceedini, or has any personal bias, which might prejudice the right ing a sole arbitrator. If a sole arbitrator is not appotnted tn s':'ch meeting,
of any perty to a fair and impartial award. or the meeting does not take place because of the.absence of ei~er or both
parties despite due notice, the appointing autbonty shall appotnt the sole
No party shall select as an arbitrator any person to act as hWber arbitrator.
champion or to advocate his/her cause.
(e) If tho default appointment of an arbitrator is objected to by a
(b) The parties are free to agree on a procedure of appointing the party on whot1e behalf the default appointmen~ is to be ~~de, ~d the
arbitrator or arbitrators. If, in the contract for arbitration or in the sub- defaulting party requests the appointing authonty for additional time to

4
398 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "C" 399
DEPARTMENT CIRCULAR NO. 98

appoint hia/her arbitrator, the appointina authority, having regard to the (1) arbitretor by all claimants and one (1) arbitrator by all respondents.
circumstances, mll)' efve the requesting party not more than thirty (30) The third arbitrator shall be appointed as provided above.
days to make the appointment. If all the claimants or all the respondenta cannot decide among
If the objection of a party is baaed on the ground that the party did themselves on an arbitrator, the appointment shall be made for them by
not fail to chooea and appoint an arbitrator for the arbitral tribunal, there the appointing authority.
shall be attached to the objection the appointment of an arbitrator to· (k) The appointing authority may adopt Guidelines for the making
gether with the latter's acceptance thereof and curriculum vita.. Other· ofa Request for Appointment.
wise, the appointing authority shall appoint the arbitrator for that party.
(I) Except as otherwise provided in the Guidelines of the ap~inting
(f) In making a default appointment, the appointing authority ehall authority, if any, a Reques t for Appointment shall include, u apphcable,
have regard to aucb considerations as are likely to secure the appointment the following:
of an independent and impartial arbitrator. In order to achieve speedy and
impartial justice and to moderate the coat of arbitration, in choosing an (i) the demand for arbitration;
arbitrator, the appointing authority shall give preference to a qualified (ii) the name/a and curmula vitae of the appointed arbitra·
person wbo bu a place of residence or business in the same general local· tor/a;
ity as the agreed venue of the arbitration and who is likely to accept the Ciii) the acceptance of his/her/its appointment of the appointed
arbitrator's r- agreed upon by the parties, or as fixed in acccrdance
either with the internal guidelines or the Schedule of Fees approved by the arbitrator/a;
administering institution or by the appointing authority. (iv) any qualification or disqualification of the arbitrator as
(g) The appointing authority shall give notice in writing to the par- provided in the arbitration agreement;
ties of the appointment made or its inability to comply with the Request (v) an executive summary of the dispute which should indi·
for Appointment and the reasons why It la unable to do so, in which later cate the nature of the dispute and the parties thereto;
case, the procedure deecribed under Article 5.5 (Court or Other Authority (vi) principal office and officers of a corpora.t a party;
for Certain Functions of Arbitra.tion AHi8tance and Supervision) 1hall
apply. (vii) the person/s appearing as counael for the party/ies; and

Ch) A decision on a matter entrusted by this Article to the appoint- (viii) inform.a tion about arbitrator's fees where there is an ag-
ing authority shall be immediately executory and not subject to appeal or reement between the parties with re1pect thereto.
motion for reconsideration. The appointing authority shall be deemed to In institutional arbitretion, the request shall include such ~er in·
have been given by the parties discretionary authority in making the formation or particulars as the administering institution shall require.
appointment but in doing so, the appointing authority shall have due (m) A copy of the Request for Appointment shall be delivered to the
regard to any qualification or disqualification of an arbitrator/a under adverse party. Proof of such delivery shall be included _in'. and shall form
paragraph (a) of Article 5.10 (Appointment of Arbitrators) as well as any part of, the Request for Appointment filed with the appointing authonty.
qualifications required of the arbitrator/a by the agreement of the parties
and to such considerations as are likely to secure the appointment of an (n ) A party upon whom a copy of the Requea~ for Ap~intment is
independent and impartial arbitrator. communicated may, within seven (7) days of its receipt, file with the ap-
pointing authority hislher/itl objectioo/s to the Request. or ask for an ex·
(i) The chairman of the arbitral tribunal shall be selected in acccr- ten1ion of time, not exceeding t hirty (30) days ~m receipt of the request,
dance with the agreement of the parties and/or the rules agreed upon or, to appoint an arbitrotor or act in accardanoe with the procedure agreed
in default thereof, by the arbitrators appointed. upon or provided by these Rules.
(j) Any clause giving one of tho parties the power to choo1e more Within the aforementioned periods, the party acoking the _extension
arbitrators than the other is void. However, the rest of the BIP'Oement, If ehall provide the appointing authority and the adverse ~arty wit!' a copy
otherwise valid, shall be construed as pormlttlng the appointment of one of the appointment of his/her arbitrator, the latter's curriculum u1tae, and
the latter's acceptance of the appointment. In the event that the said party
400 ALTERNATIVE DISPUTE REsoLUTION APPENDIX "C" 401
DEPARTMENT CIRCULAR NO. 98

fails to appoint an arbitrator within said period, the appointing authority (c) If, after appointment but before or durinf hearing, a per80n ap-
shall make the default appointment. pointed to serve a s an arbitrator shall discover any circumstance likely IA:>
(o) Ar. arbitrator, in accepting an appointment, shall include, in create a presumption of bias, or which he/she believes m.ight dilqualifY
hie/her acceptance letter, a statement that: him/her u an impartial arbitrator, the arbitrator ahall Immediately dis-
(i) he/ahe agrees IA:> comply with the applicable law, the arbi- close s uch information to the parties. Thereafter, the parties me.y aa:ree in
writing:
tration rules agreed upon by the parties, or in default
thereof, these Rules, and the Code of Ethics for Arbitra- Ci) to waive the presumptive disqualifying circumatanOOI; or
tors in Domest ic Arbitration, if any; (ii) to declare the office of such arbitrator vacant. Any such
(ii) helabe accepts as compensation the arbitrator's fees vacancy shall be tilled in the same manner the original
agreed upon by the parties or as determined in accor- appointment was made.
danc<1 with the rules agreed upon by the parties, or in de- (d ) After initial disclosure is made and in the course of the arbitra·
fault thereof, these Rules; and tion proceedings, when the arbitrator discovers circumstances that are
(iii) he agrees IA:> devote as much time and attention to the ar- likely to create a presumption of bias, he/she shall immediately diacloae
bitration as the circumstances may require in order IA:> thoee circumstances to the parties. A written disclosure is not required
achieve the objective of a speedy, effective and fair resolu- where it is made during the arbitration and it appears in a written record
tion of the dispute. of the arbitration proceedings.
Article 6.11.. G~und~ for Challenge. (a) When a person is ap- (e) An arbitrator who has or has had financial or professional deal·
proached in connection with hill/her possible appointment as an arbitralA:>r inge with a party to the arbitration or to the counsel of either party shall
diaclose in writin&' such fact to the parties, and shall, in good faith,
dhe/ahe
b shall dlacloae
· .any circumstance likely "'•- give
· ·
nse t o JUS
· tifi able'
o~i~ 8~ to hJ::'er impartiality, inde~ndence, qualifications and dia- promptly respond to questions from a party regarding the nature, extent
qu ca on1. S.:bitralA:>r, from the time of his/her appointment and and airo of such financial or professional dealings.
throu11hout tho arbatral proceedinl!S shall ·th t d l di I
such circumatancea to•'- . • ' w1 ou e ay, sc ose any Article 6.12. C h allenge Procedure. Ca) The parties are free IA:>
wie parties unless they have already been informed agree on a procedure for challenging an arbitrator, subject to the provi-
of th em by himlher.
sions of parairraph Cc) of this Article,.
A person, who Is appointed b.
closure made in aocord . a~ an ~ itrator notwithstanding the dis- (b) Failing such agreement, a party who intends IA:> challenge an
writln& and provid ance with this Article, shall reduce the disclosure IA:> arbitrator shall, within fifteen (15) days after becoming aware of the con-
8
arbitration . a copy of such written disclosure to all parties in the etitution of the arbitral tribunal or after becoming awart1 of any circuro•
stance refen-ed to in paragraph (b) of Article 5.11 (GroulllU for Cludkl'llfe),
(b) An arbitrator may be challenged only if: aend a written statement of the reasons for the challenge to the arbitral
Ci) circwnatan . . . . . tribunal. Unless the challenged arbitralA:>r withdraws from hill/her office or
to hialh . - elDSt that give nse to Justifiable doubts as the other party agrees to the challenge, the arbitral tribunal shall decide
er unpartiaJity or independence·,
(ii) h on the challenge.
~ah~h does not J)OeSess qualifications as provided for in (c) If a challenge under any procedure agreed upon by the parties
apter or those agreed to by the parties;
or under the procedure of paragraph (b) of this Article is not successful,
(iii) he/she is disqualified IA:> act as arbitrator under these the challe nging party may request the appointing authority, within thirty
Rules; (30) days after having received notice of the decision rejecting the chal-
(iv) he refuses IA:> respond to questions by a party regarding lenge, to decido on the challenge, which decision shall be immediately
the nature and extent of his professional dealings with a executory and not subject to appeal or motion for reconsideration. While
party or its counsel. auch a reques t is pending, the arbitral tribunal, including the challenred
arbitrator, may continue the arbitral proceedings and make an award.
402 Al.TERNATr\IE DISPUTE R ESOLUTION APPENDIX "C" 403
DEPARTMENT CIRCl1LIJI NO. 98

(d) If a request for inhibition is made, it shall be deemed as a chal· challenged arbitrator, to the parties, to the remaining membeni of the
lenge. arbitral tribunal and to the institution administering the arbitration, if
(e) A party mll)' challenge an arbitrator appointed by him/her/it, or any.
in whose appointment he/she/it has participated, only for reasons of which (m ) A challenged arbitrator shall be replaced if:
he/she/it becomes aware ~r the appointment has been made.
(i) he/she withdraws as arbitrator, or
(0 The challenge shall be in writing and it shall state specific facts
that provide the buia for the ground relied upon for the challenge. A (ii) the parties agree in writing to declare the office of arbi-
challenge shall be made within fifteen ( 15) days from knowledge by a trator vacant, or
party of the emtence of a around for a challenge or within fifteen (15) (iii) the arbitral tribunal decides the challenge and declares
days from the rejection by an arbitrator of a party's request for his/her the office of the challenged arbitrator vacant , or
inhibition. (iv) the appointing authority decides the challenge and de-
(If) Within fifteen (16) daya of receipt of the challenge, the chal- clares the office of the challenged arbitrator vacant, or
lenged arbitrator shall decide whether be/she shall accept the challenge or (v) in default of the appointing authority, the court decides
rejec~ i~. Itbe/aho a°"pt.. u,~ ch..Uenge, he/she shall voluntarily withdraw
the challenge and declares the office of the challenged ar-
as arbitrator. If helebe rejects it, be/she shall communicate, within the
same period of time, hie/her rejection of the challenge and state the facts bitrator vacant.
and argumenta relied upon for such rejection. (n) The decision of the parties, the arbitral tribunal, the appointi~g
authority, or in proper cases, the court, to accept or reject a challenge is
(h) An arbitrator who does not accept the challenge shall be given
an opp0rtunity to be heard . not subject to appeal or motion for reconsideration.
(o) Until a decision is made to replace the arbitrator under this Ar·
(I) . Notwithatandlna the rejection of the challenge by the arbitrator,
the parties may, within the same fifteen (15) day period, agree to the ticle, the arbitration proceeding shall continue notwithstanding the chal·
challenge. lenge, and the challenged arbitrator shall continue to participate therein
aa an arbitrator. However, if the challenge incideot is raised before ~e
(j) ln default of an agreement of the parties to agree on the chal· court, because the parties, the arbitral tribunal or appointing ~uthonty
lenge thereby r~pl~clng. the arbitrator, the arbitral tribunal shall decide on failed or refused to act within the period provided in paragraphs (j) ~d (k)
the challenge within thirty (30) days from receipt of the challenge. of thla Article, the arbitration proceeding shall be suspended until ~r
(k) If the challenge Procedure as agreed upon by the parties or ae the court ahall have decided the incident. The arbitration shall be con~n­
provided i~ this Article is not au~ful, or a party or the arbitral tribunal ued immediately afloer the court has delivered an order on the challengin1
shall declme to act, the challenging party may request the appointing incident. If the court agrees that the challenged arbitrator shall be re-
au~ority i~ writin~ to decide on .~e challeniie within thirty (30) days after placed, the parties shall immediately replace the arbitrator concerned.
havtng received notice of the decision rejecting the challenge. The appoint;. (p ) The appointment of a substitute arbitrator shall be mad.e pur-
ing ~uthority shall decide on the challenge within fifteen (15) days from 1uant to tha procedure applicable to the appointment of the arbitrator
receipt of ~e ~u-;at. If the appointing authority shall fail to act on the being replaced.
challeng~ wttJu~ thirty (30) ~aya from the date of its receipt or within such
further time aa it may ~· with notice to the parties, the requesting party Article 5.13. Failure or IJnpossibility to Aci. (a) lfan arbitra·
mizy renew the reQUMt with the court. tor beoomea de j ure or de fa;;to unable to perform his/her function& or for
other reason.a fails to act without undue delay, his/her mandate terminates
The requea~ made under this Article shall include the challenge, the ifbelshe withdraws from his/her office or if the parties aiiree on the termi·
reply or explanation of the challelJied arbitrator and relevant communica· nation. OtherwiM1, if a controversy remains concerning any of these
tion, if any, from either party, or from the arbitral tribunal. iirounda, any party may request the appointing authority to decide on the
(I) Every communication required or agreement made under thia termination of the mandate which decision shall be immediately execu·
Article in respect of a challeniie sball be delivered, as appropriate, to the tory and not subject to appeal or motion for reconsideration.
404 ALTERNATIVE DISPUTE RESOLUTION APPENDIX ·c· 405
DEPARTMENT CIRCULAR NO. 98

(b) If, under this Article or Article 6.12 <Chalknge Procedu~), an having regard to the circumstances of the case, and the need for the early
arbitrator withdraws from bis/her office or a party agrees to the termina· and expeditious settlement or the dispute, in light of the facts and argu-
tion of the mandate of an arbitrator, this does not imply acceptance of the ments raised to question its jurisdiction, may decide either to suspend the
validity of any eround refened to in this Article or in Article 5.12. arbitration until the court has made a decision on the issue or continue
Article 5.14. Appolnt.aent of Substitute Arbitrator. Where with the arbitration.
the mandate of an ar~itrator terminates under Articles 5.12 !Chalknge (d) If a dispute is, under an arbitration agreement, to be submitted
Procedure) or 5.13 CFa1lu~ or lmpouibility) or because of his withdrawal to arbitration, but before arbitration is commenced or while it is pending,
from office for any other reason or because of the revocation of his man- a party files an action before the court which embodies or includes as a
date by agreement of the parties or in any other case of termination of cause of action the dispute that is to be submitted to arbitration, the filing
his/her mand~te, a substitute ~bitrator shall be appointed according to of such action shall not prevent the commencement of the arbitration or
the rules appbcable to the appomtment of the arbitrator being replaced. the continuation of the arbitration until the award is issued.

RULE 4 - JIU'i9diction of Arbitral Tribunal Article G.16. Power of Arbi&ral Tribunal to Order Interim
Measures. (a) Unless otherwise agreed by the parties, the arbitral tri·
. ~l~le 5.10.. Competence of ArbitraJ Tribunal to Rule on ite bunal may, at the request of a party, order any party to t:ake such inte~
Jun&dichon. (a) When a demand for arbitration made by a party to a measures of protection as the arbitral tribunal may consider necessary m
dispute i? objected to by the adverse party, the arbitral tribunal shall, in respect of the subject matter of the dispute following tbe rules in this
the first instance, reJ!Olve the objection when made on any of the following Article. Such interim measures may include, but shall not be limited to
grounds: preliminary injunction directed against a party, appointment of receivers
(i)
or detention, preservation, inspection of property that is the subject of the
the
bl arbitration -..--men
·- t ·IS menstent,
· . vo1.d, unenforce- dispute in arbitration.
~ e or not binding upon a person for any reason, includ-
mg the fact that the adverse party is not privy to said (bl After the constitution of the arbitral tribunal, and during arbi·
agreement; or tral proceedings, a request for interim measures of protection, or modifica·
tion thereof, ahall be made with the arbitral tribunal. The arbitral tribunal
(ii) the_disp.ute i1 not arbitrable or is outside the scope of the la deemed constituted when the sole arbitrator or the third arbitrator, who
arbitration agreement; or bas been nominated, has accepted the nomination and written communi·
(iii) ~e dispute is under the original and exclusive jurisdic- cation of said nomination and acceptance has been received by the party
tion of a court or quasi-judicial body. making the request.
(b) If a party rafses any of the grounds for objection, the same shall (c) The following rules on interim or provisional relief shall be ob-
not. preclu_de the appo~tment of the arbitrator/a 88 such issue Is for the served:
arb1tral tribunal to decide.
(i) Any party may request that provisional or interim relief
. The participati?n of a party in the selection and appointment of an be granted against the adverse party.
arbitrator ~d ~e ~b~ ~f ~ppropriate pleadings before the arbitral tribu· (ii) Such relief may be granted:
nal ~ ~u~stion its Jwisdict1on shall not be construed 88 a submission to
the Junsd1ction of the arbitral tribunal or of a waiver of hia/her/its right to (aa) To prevent irreparable loas or illJury;
assert ~u.ch grounds to challenge the jwisdiction of the arbitral tribunal or (bb) To provide security for the performance of an oblige·
the validity of the resulting award. tion;
(c) The ~spondent in the arbitration may invoke any of auch (cc) To produce or preserve evidence; or
~unds to q~esti~n before the court the existence, validity, or enforceabil· (dd) To compel any other appropriate act or omissions.
!ty _of ~h~ arbitration agreement, or the propriety of the arbitration, or the (iii) The order granting provisional relief may be conditioned
JUnsd1ction of the arbitrator and invoke the pendency of such action as upon the provision of security or any act or omission
ground for suspension of the arbitration prooeeding. The arbitral tribunal, specified in the order.
406 ALTERNATIVE DISPUTE RESOLUTIO:S APPENDIX "Cn 407
DEPARTMENT CIRCULo\R NO. 98

(iv) Interim or provisional relief is requested by written appli· Article 5.20. Commencement of Arbitral Proceedings. (a)
cation transmitted by reasonable means to the arbitral Where there is a prior arbitration agreement between the parties, arbitra·
tribunal and the party against whom relief is sought, de- tion is deemed con1111enced as follo,vs:
scribing in l\ppropriatc detail the precise relief, the party (i) In institutional arbitration, arbitration is commenced in
against whom the relief is requested, the ground for the accordance with the arbitration rules of the institution
relief and the evidence supporting the request. agreed upon by the parties.
(v) The order either granting or denying an application for (ii) In ad hoc arbitration, arbitration is commenced by the
interim relief shall be binding upon the parties. claimant upon delivering to the respondent a ~emand for
(vi) Either party may apply with the court for assistance in arbitration. A demand may be in any form stating:
i mplementing or enforcing an interim measure ordered by (aa) the name, address, and description of each of the
an arbitral tribunal.
parties;
(vii) A party who does not comply with the order shall be liable (bbl a description of the nature and circumstances of
for all damages, resulting from noncompliance, including the dispute giving rise to the claim;
.a ll expenses, and reasonable attorney's fees paid in ob-
·t aining the order's judicial enforcement. (cc) a statement of the relief sought, including the
amount of the claim;
RULE 5 - Conduct of Arbitral Proceedings (dd ) the relevant agreements, if any, including the ar-
bitrati<>n agreement, a copy of which shall be at-
Article 5.17. Equal Treatment of Parties. The parties shall be tached; and
treated with equality and each party shall be given a full opportunity of
prc~nting his/her/its case. (ee) appointment of arbitrators and /or demand to ap-
point.
Article 5:18. Determination of Rules of Procedure. (a) Sub-
ject to the provisions of these Rules, the parties are free to agree on the (b) If the arbitration agreement provides for the appoint~ent of a
procedure to be followed by the arbitral tribunal in conducting the pro- sole arbitrator, the demand shall include an invitation of the claiman~ to
ceedings. the respondent to meet and agree upon such arbitrator at the place, time
and date stated therein which shall not be less than thirty (30) days from
<b>. _Fail~nt~ such agreement, the arbitral tribunal may, subject to receipt of the demand.
the i:irovision O ?ADR Act, conduct the arbitration in such manner as it
(cl If the arbitration agreement provides for the establishment of
~ons1ders appr<>pnate. The ~ower conferred upon the arbitral tribunal an arbitral tribunal of three (8) arbitrators, the demand shaH name .the
mc!udes the. power to determine admissibility, relevance, materiality and
weight of evidence. arbitrator appointed by the claimant. It shall include the curriculum vitae
of the arbitrator appointed by the claimant and the latter's acceptance of
Article 5.:19. Place of Arbitration. (a) The parties are free to the appointment.
agr?C on the place ~f arbitration. Failing such agreement, the place of (d) Where there is no prior arbitration agreement, arbitration m":y
arb1trat1on shall be in Metro Manila unless the arbitral tribunal, having be initiated by one party through a demand upon the other to submit their
regard to the circumstances of the case, including the convenience of the dispute to arbitration. Arbitration shall be deemed co~en~d upon the
parties, shall dedde on a different place of arbitration. agreement by the other party to submit the dispute to arbitration.
(b) The arbitral tribunal may, unless otherwise agreed by the par· (e) The d emand shall require the respondent to name his/her/its
ties, meet at any place it considers appropriate for consultation among :i ts arbitrator within a period which shall not be less than fifteen (15) days
members, for hearing witnesses, experts or the parties, or for inspection of from r eceipt of the demand. Th is period may be extcnd.ed by agreement. of
gO<>ds, other property or documents. the parties. Within said perioo, the respondent shall give a wntten notice
to the claimant of the appointment of the respondent's arbitrator and
408 ALTERNATIVE DtSPtJTE RESOLUTION APPENDIX "C" 409
DEPARTMENT CIRCULAR NO. 98

attach to the notice the arbitrator's curriculum vitae and the latter's ac- (ii) The manner of recording the proceedings;
ceptance of the appointment.
(iii) The periods for the communication of the statement of
Articl e 5.21. Language. (a) The parties are free to agree on the claims, answer to the claims with or without counter-
language or languages to be used in the arbitral proceedings. Failing such claims, and answer to the counterclaimls and the form
agreement, the language to be used shall be English or Filipi no. The lan- and contents of such pleadings;
guage/a agreed, unless otherwise specified therein, shall be used in all (iv) The definition of the issues submitted to the arbitral tri-
bearings and all written statements, orders or other communication by the bunal for determination and the summary of the claims
parties and the arbitral tribunal. and counterclaims of the parties;
(b) The arbitral tribunal may order t hat any documentary evidence (v) The manner by which evidence may be offered if an oral
shall be accompanied by a translation into the language or languages hearing is required, the submission of sworn written
agreed upon by the parties in aocordance with paragraph <al of this Arti- statements in lieu of oral testimony, the cross-
cle. e xamination and further examination of witnesses;
Article 5.22. Sta temen ts of Cla im and D efe n se. (a) Within (vi) The delivery of certain types of communi".8tio~s s~ch as
the period of time agreed by the parties or determined by the arbitral pleadings, terms of reference, order granting mte~ re-
tribunal, the claimant shall state the facts supporting his/her claim, the lief: final award and the like that, if made by electronic or
points at issue and the relief or remedy sought, and the respondent shall s irn'ilar means, sh all require further confirmation in the
state his/her defe~se in respect of these particulars, unless the parties form of a hard copy or bard copies delivered personally or
may have otherw1se agreed as to the required elements of such state- by registered post;
ments. The parties may submit with their statements all documents they
(vii) The issuance of a subpoena or a subpoena duces tecum by
consider to be relevant or may add a reference to the documents or other
evidence they will submit. the arbitral tribunal to compel the production of evidence
if either party shall or is likely to request it;
(b) Unless otherwise agreed by the parties, either party may amend
or supplement ltis/herlita claim or defense during the course of the arbitral (viii) The manner by which expert testimony will be received if
proceedings, unless the arbitral tribunal considers it inappropriate to a party will or is likely to request the arbitral tnbunal. to
allow such amendments having regard to the delay in making it. appoint one or more experts, and in such case, the pe~od
for the submission to the arbitrator by the requesting
Article 5.28. Hearing and Written Proceedings. (al In ad hoc party of the proposed terms of reference for the eqiert,
arbitration, the p~cedure determined by the arbitrator, with the agree- the fees to be paid the manner of payment to the expert
ment of the parties, shall be followed. In in¥titutiona1 arbitration. the aud th., d.,posit by 'the plil't.ies or of the rcqueeting' P art
. Y of
applicable rules of procedure of the arbitration institution shall be fol- such amount necessary to cover all expenses associated
lowed. In default of agreement of the parties, the arbitration procedure with the referral of such issues to the expert before the
shall be as provided in this Chapter. expert is appointed; ·
(b) Within thirty (30) days from the appointment of the arbitrator (ix) The possibility of either party applyi~g for ~ order grruit-
or the constitution of an arbitral tribunal, the arbitral tribunal shall call ing interim relief either with the arbitral tribun91: or with
the parties and their respective counsels to a pre-hearing conference to the court, and, in such case, the nature of the rehef to be
discuss the following matters: applied for;
(i) The venue or place/a where the arbitration proceeding (x) The possibility of a site or ocular inspection, the purpose
may be conducted is an office space, a business center, a of such inspection, and in such case, the date, pla~ ~d
function room or any suitable place agreed upon by the time of the inspection and the manner of conducting it,
parties and the arbitral tribunal, which may vary per ses- and the sharing and deposit of any associated fees and
sionlhearing/conference; expenses;
410 ALTERNATIVll DLSl'\ITE RESOLUTION APPENDIX •c- 411
DEPAJITMENT CIRCULAR NO. 98

(xi) The amount to be paid to the arbiual tribunal aa fees and (k) The arbitral tribunal shall arrange for the transcription of the
the auociated co1ta, char11es and expenses of arbitration recorded testimony of each witness and require each party to ahare the
and the manner and timin11 of such payments; and cost of recording and transcription of the testimony of each witneu.
(Xii) Such other relevant matters u the parties and the arbt- (I) Each party shall provide the other party with a copy of each
tral tribunal may conaider necessary to provide for a statement or document submitted to the arbitral tribunal and ahall have
1peedy and efficient arbitration of the dispute. an opportunity to reply in writing to the other party'• statements and
(c) To the extent poe1ible, the arbitnll tribunal and the parties proofs.
shall agree upon any 1uch matters and in default of agreement, the arbi- (m) The arbitral tribunal may require the partiee to produce .uch
tral tribunal 1ball have the discretion and authority to make the decia.ion, other documents or pnwide auch information as in ita judpent would be
although in making a deci1ion, regard shall be given to the view1 ex- neceuary for it to render a complete. fair and Impartial award.
pressed by both parties. (n) The arbitral tribunal shall receive u evidence all u.hibita sub-
(dl The arbitral tribunal 1hall, In consultation with the parties, fix mitted by a party properly marked and identified at the time of submJ.I.
the datels and the time ofhearlni:, regard being given to the desirability of sion.
eondueting and concludinr an erbitr~tion without undue delay.
(o) At the close of the hearing, the arbitral tribunal ahall 1peci1i-
(el The hearing set •hall not be postponed except with the confor- cally inquire of all parties whether they have further proof or witneases to
mity of the arbitrator and the parties and only for a good and sufficient present; upon receiving a negative reply, the arbitral tribunal 1hall declare
eauae. The arbitral tribunal may deny a request to postpone or to cancel a the hearing closed.
scheduled bearing on the ground that a party hu requested or is Intend- (p) After a hearing is declared closed, no further motion or i;oarufes-
ing to request from the court or from the arbitrator an order granting
Interim relief. tation or aubmisaion may be allowed except for post-hearin& bnefs ll;"d
reply briefs that the pa.rtles have agreed to aubmit within a fixed penod
(f) A party may, during the proceedinga, represent himselDhenelfr.t- after the hearing ia declared closed, or when the arbitral tribun~. motu
self or be represented or auiated by a representative u defined by th- proprio or upon request of a party, allows the reopening of the he&nJli.
Rules.
(q ) Deciaion.a on interlocutory matten shall be made b! the •?le .,...
Cg) The hearing may proceed In the abaence of a party who fail1 to bitrator or by the majority of the arbitral tribunal. The arb1tral tribunal
obtain an adjournment thereof or who, despite d ue notice, fails to be pre- may a uthorize ita chairman to issue or releaae. on behalf of the arbitral
sent, by himaeWherselOit9elf or through a representative, at such hearing. tribunal. ita decision on interlocutory matters.
(b) Only parties, their respective representatives, the wimes- and (r) Except u provided in Section 17 (d) of the ADR Act•. no ai:hitra-
the administrative staJf of the arbitral tribunal shall have the ri!lht to be tor shall act ae a mediator in any proceeding in which bel~he 11 aeting 88
present during the hearing. Any other peraon may be allowed by tha arbitra- arbitTator even if ttiquested by the parties; and all negotiations towards
tor to be present if the parties, upon beinr Informed of the presence of such settlement of the dispute must take place without the preoence of the
penon and the reaaon for hie/her pretence, interpoae no objection thereto. arbitraton.
(i) Issues raised durinr the arbitration proceeding relating to (a) (s) Before assuming the duties of bis/her oftl~e•. an arbitrator must
the jurisdiction of the arbitral tribunal over one or more of the claims or be sworn by any officer authorized by Jaw to adm1ruster an oath or_ be
counter-claim.a, or (b) the arbitrabillty of a particular claim or counter- required to make an affirmation to faithfully and fairly hear and eX811llne
claim, shall be resolved by tbe arbitral tribunal ae threshold i.tsuea, If the the matters in controveroy "nd tn make a just award according to the best
parties so request, wtlffe they are intertwined with factual iaaues that of his/her ability and underetandine. A copy of the arbitrator's oath or
they cannot be resolved ahead of the bearing on the merita of the di.tpute. affirmation shall be furnished each party to the arbitration.
(j) Each witneu shall, before giving testimony, be required to tab (t) Either party may object to tbe commencement or continuation of
an oath/affirmation before the arbitral tribunal, to tell the whole truth end an arbitTation proceeding unless the arbitrator take. an oath or affirma-
nothing but the truth during the hearing. tion u required in thia Chapter . If the arbitrator shall ref\ue to tab an
412 ALTERNATfVB DISPUTE RESOLUTION APPENDIX •C" 413
DEPARTMENT CIRCVLAR NO. 98

oath or affirmation as required by Jaw and this Rule, he/she shall be re- (aa> To prevent irnparable loss or injury;
placed. The failure to object to the absence of an oath or affirmation shall
be deemed a waiver of such objection and the proceedings shall continue in
<bbl To provide security for the performance of an obli-
due course and may not later be used as a ground to invalidate the pro- gation;
ceedings. (cc> To produce or preserve evidence; or
(u) The arbitral tribunal shall have the power to administer oaths ldd> To compel any other appropriate act or omissions.
to, or require affirmation from, all witnesses directing them to tell the <Iii) The order granting provisional relief may be condi~o~ed
truth, the whole truth and nothing but the truth in any testimony, oral or upon the provision of security or any act or OllWl81on
written, which they may give or offer in any arbitration hearinir. The oath specified in the order.
or affirmation shall be required of every witness before his/her testimony,
oT8l or written, is heard or considered. livl Inter:im provisional relief is requested by written .applic~­
tion transmitted by reasonable means to tha arbitral tri-
(v) The arbitral tribunal shall have the power to require any penon bunal and the party against whom relief ~· so~ht, de-
to attend a hearing as a witnesa. It shall have the power to subpoena scr:ibing in appropriate detail of the prease relief, the
witnesses, to testify and/or produce documents when the relevancy and party against whom the relief is ~uested, the ground for
materiality thereof has been shown to the arbitral tribunal. The arbitral the relief, and the evidence supporting the request.
tribunal may also require the exclusion of any witness during the testi-
mony of any ot~er ~tnesa. Unless the parties otherwise agree, all the (v) The order either granting or denying an ~pplication for
arbitrators appointed m any controveTSy must attend all the hearings and interim relief shall be binding upon the parties.
hear the evidence of the parties. (vi) Either party may apply with the court for assistance in
Article 5.24. Power of Arbitral Tribunal to Order Interim implementing or enforcing an interim measure ordered by
Meuures. (a) Unleae otherwise agreed by the parties, the arbitral tri· an arbitral tribunal.
bunal may, at the request of a party and in accordance with this Article, Cvii) A party who does not comply with the order shall be liable
order any party to !-ke
such interim measures of protection as the arbitral for all damages, resulting from noncompliance, i~cl_udlng
tribunal may consider necessary in reapect of the subject matter of the all expenses, and reasonably attorney's fees, paid 10 ob-
dispute or the procedure. Such interim measures may include, but shall taining the order's judicial enforcement.
not be limited, ~ preliminary injunction directed against a party, ap- (d) The arbitral tribunal shall have the power at any time, befo~
J>?intm~t of ~ei:vers o: detention of property that is the subject of the rendering the award, without prejudice to the rights of any party to ~=­
dispute m arbitration or its pNServation or inspection. tion the court to take measures to safeguard and/or conserve any ma r
(b) AJ\er the constitution of the arbitral tribunal and during the which is the subject of the dispute in arbitration.
arbitration proceedings, a request for interim measures' of protection, or
Article 6.25. Default of a Party. Unless otherwise agreed by
modification thereof, may be made with the arbitral tribunal. The arbitral
the parties, if, without showing sufficient cause,
tribunal is deemed constituted when the sole arbitrator or the third arbi·
trator, who has been nominated, bas accepted the nomination and written o:
(a) the claimant fails to communicate hislherlits statement claim
in accordance with paragraph (a) of Article 6.22 (Staleme'!'- of Claim and
communication of said nomination and acceptance has been received by
the party making the request. Defense), the arhitral tribunal shall t.erminate the proceedings;
(c) The following rules on interim or provisional relief shall be ob- (b) the respondent fails to communicate bislherfits statement of de-
served: fense in accordance with paragraph (a) of Article 6.22 (Statemen~ of
Claim a.nd Defense) the arbitral tribunal shall continue the p~gs
(i) Any party may request that provisional or interim relief Without treating au~h failure in itself as an admission of the claimant's
be granted against the adverse party. allegations;
(ii) Such relief may be granted:
414 ALTERNATIVE DISPUTE RESOLUTIO:-< Al>f>ENDIX *C" 415
DEPAJITMENI' CIRCULAR NO. 98

(c) any party fails to appear at a bearing or to produce documen- law as is chosen by the parties. In the absence of such agreement, Philip-
tary evidence, the arbitral tribunal may continue the proceedings and pine law shall apply .
make the award based on tbe evidence before it. Cb) The orbitrol tribunal may grant any remedy or relief which it
Article 5.26. Expert Appointed b y the Arbitral Tribunal. (a) deems just and equitable and within the scope of the airrooment of the
Unless otherwise agreed by the parties, the arbitral tribunal, parties, which .ehall include, but not be limited to, the specific performance
(i) of a contract.
~ay appoint. one or more experts to report to it on apeciOc
issues to be determined by the arbikal tribunal; or Cc) In all cases, the arbitral tribunal shall decide in accordance with
the terms of the contract and shall take into account the usages of the
(ii) may require a party to give the expert any relevant in- trade applicable to the transactio~.
formation or to produce, or to provide access to, any rele-
vant docun:enta, goods or other property for his/her in- Article G.29. Dec ision Making by the Arbitral Tribu.nAL (a)
spection. In arbitration proceedings with more than one arbitrator, any decision of
. (b) . Uni~ otherwise agreed by the parties, if a party so requeats or the arbitral tribunal shall be made, unless otherwise agreed by the par-
if the ar~itral tri~unal considers it ncceasary, the expert shall, aft"r deliv- ties, by a majority of all its members. However, questions of procedure
ery ?f hi.a/her wntten or oral report, participate in a bearing where the may be decided by the chairman of the arbitral tribunal, if eo authorized
parti;: ~ve the .opportunity to put questions to him/her and to present
expe witnesses in order to testify on the points at issue.
by the parties or all members of the arbitral tribunal.
(bl Unless otherwise agreed upon by the parties, the arbitral tribu-
d(~ ~pon &greement of the parties, the finding of the expert en- nal shall render its written award within thirty (SO) days after the closing
ll~ge. Y e arbitral tribunal on the matter/a referred to him shall be of the bearings and/or aubmission of the parties' respective briefs or if the
binding upon the parties and the arbitral tribunal. oral bearings shall hove been waived, within thirty (30) days after the
arbitral tribunal shall have declared such proceedings in lieu of hearing
Article 5.27 Court Aa818 t ln T closed . This per iod may be further extended by mutual consent of the
Matter._ (a) The' arbi . ance aldng Evidence and Other
arbitral tribunal tral tribunal or a party, with the approval of the parties.
such as the i s s : 7uest from a court, assistance in taking evidence
Article 5.30 . Sett le m e nt. (a) If, during arbitral proceedings,
tecum depositi ~ a~poena ad teatificand.um and subpoena ducu
tion of properti: Th g, site or ocular inspection, and physical examlna- the parties .eettle the dispute, the arbitral tribunal shall terminate the
proceedings and, if requested by the parties and not objected to by the
and according t.o 1:ts rule court may cra~t the request within its competence
es on taldn11 evidence. arbitral tribunal, record the settlement in the form of an arbitral award on
(b) The arbitral tribunal . . agreed term.e, consent award or award based on compromise.
forcing an order of th arb' or ~ party to the dispute interested in en- (b) An award as rendered above shall be made in accordance with
court, aasistan . e . itral tribunal may request from a competent
not limited
'
to:"! ennfo~ng orders of the arbitral tribunal, including but
C 1.0 OWUJif
the provi.eions of Article 5.31 (Form and Conunts of Award) and shall
state that it ie an award. Such on award has the um" AlatWI and effect as
any other award on the merits of the case.
(i) Interim or provisional relief;
(ii) Protective orders with respect to confidentiality; Article 6.31. Form and Content• of Award. (a) The award
shall be made in writing and shall be signed by the arbitral tribunal. In
(iii) 0 rders of the arbitral tribunal pertaining to the subject arbitration proceedings with more than one arbitrator, the signatures of
matter of the dispute that may affect third persons and/or the majority of all members of the arbitral tribunal shall suffice, provided
their prope!'ties; and/or that the reason for any omitted signature is stated.
(iv) Examination of debtors. (b) The award shall state the reasons upon which it is based , unless
Artic~e 5.2~. Rulee Applicable 14 the Substanc e of Dlepute. the parties have agreed that no reasons are to be given or the award is an
(a) The arb1tral tribunal aha.II decide the dispute in accordance with auch award on agreed terms, consent award or award based on compromise
under Article 5 .30 <Settlement).
416 ALTERNATIVE DISPUTE R~LUTION Af'PEJ\"DIX "C" 417
DEPARTMENT CIRCULAR l'O. 98

(c) The award shall state its date and the place of arbitration as de- parties to t he arbitration. However, where it is shown that the arbitral
termined i:\ o.ceordon~A with J'Aragraph (a ) of Article 5.19 <Pla<e of Arbi- u ·ibu_n al foiled to resolve nn issut: tsul.uoiu.ed to him for detennin,o.tion. a
tration ). The award shall be deemed to have been made at that place. verified motion to complete a final award may be made within thirty (30)
(d ) After the award is mode, n copy signed by the arbitrators in ac- days from its receipt.
cordance with paragraph (o) of this Article shall be delivered to each (e) Notwithstan ding the foregoing, the arbitral tri~unal may, '.or
party. special reasons. reserve in the final award or order, a heanng to quantify
(e) The award of the nrbitral tribunal need not be acknowledged, costs and determine which party shall bear the costs or apportionment
sworn to under oath, or affirmed by the arbitral tribunal unless so re- thereof as may be determined to be equitable. Pending determination of
quired in writing by the parties. If despite such requirement, the arbitral t his issue, the award shall not be deemed final for purposes of appeal,
tribunal shall fail to do ns required, the parties may, within thirty days vocation, correction, or any post-award proceedings.
from receipt of said award, request the arbitral tribunal to supply the
omission . The failure of the parties to make on objection or make such Article 5.33. Correction and Interpretation of Award, Addi-
requeBt within the said period shall be deemed a waiver of such require- t ional Awar d _ Cal Within thirty (30) days from receipt of the award,
ment and :nay no longer be raised as a ground to invalidate the award. unlcsa another period of time has been agreed upon by the parties:
Ci) A party may, with notice to the other party, .the arbitral
Article 5.32. Te"?lnation of Proceedings. (a) The arbitrn-
tio~ proceedings ~re terminated by the final award or by an order of the tribunal to correct in the award any errors m computa-
arb1tral tribuna l in accordance with paragraph Cb) of t his Article. tion, any clerical or typographical errors or any errors of
(b) Tho arbitrnl .tribunal shall ·issue an order for the termmatlon
· . of similar nature.
the arbitration proceedings when: (ii) If so agreed by the parties, a party, with notice to the
(I) Tho claimant withd h" . other party, may request the arbitral tribunal to give an
objects th to fi raws is claim, unless the respondent interpretation of o specific point or part of the award.
claims 1 e;;: or the PUtpnge of pro•1><uting hi; counter- If Lhe arbitral tribunal considers the request t.o 1Je j""'tified, it eh oll
. n ~ sn~e Proceedings or the arbitral tribunal make the correction or give the interpretation within thirty (30) days from
~ecofmz~s a egitimate interest on his part in obtaining a
na sett ement of the dispute; or receipt of the request. Tho interpretation shall form part of the award.
(ii) Th · (b) The arbitral tribunal may correct any error of t?e y.ype _referred
e parties agree on the termination of the proceedings·
or • to in paragraph (al of this Article on its own initiative within thirty (30)
(iii) The orbitral tribunal fi d . . days of the date of the award.
d' b n s that the contmuat1on of the (c) Unless otherwise agreed by the parties, a party may, ~th notice
proceei m~s as for any other reason become unnecessary
or mposs1ble; or to the other party, may request, within thirty (30) dnys of receipt of .the
award, the arbitral tribunal to make an additional award as to claims
(iv) T~o required deposits are not paid in full in accordance presented in the arbitral proceedings but omitted from .the award. If the
with paragraph (d) of Art;c\e 5.46 <Fees and Costs). arbitral t ribunal considers the request to be j ustified, 1t shall make the
(c) '.he ~andate of ~be arbitral tnl>una] ends with the termination additional award within sixty ( 60) days.
of the arb1trat1on
· d proceedmgs' subiect
' to the provts1ons
. · • ~· Ie .33
of =nlC Cd) The arbitral tribunal may extend, if n~, the period ~f
(c orrect•o• 5
an lnrerpretation of Award Add'·· al A rd> an d Arti c1e time within which it shall make a correction. interpretation or an addi-
5 34 (A i· ·
·
• KIOn wa
PP •cation for Setting Asick cm &clusi11e Recourse Againit Arbitral
Award). tional award under paragraphs (a) and (c) of this Article.
(e) The provisions of Article 5.31 <Form and Contents of A1ua~
. (d) Except. as otherwise provided in the arbitration agreement, no shall apply to a correction or interpretation of the award or to an addi-
'?otion for reconsideration, correction and inte.r pretation of award or addi- tional award .
tional award shall be mode with the arbitral tribunal. The arbitral tribu-
nal, by releasing its final Award, loses juriadiction over the diopute nnd the
418 ALTERNATIVE DISPUTE RESOLUTJ0:-1 APPENDIX ·c· 419
DEPART.llE:-IT CIRCULAR NO. 98

Article 5.34. Application for Setting Aside an Exclusive Re- (c) Where a party files a petition with the court to vacate or set aside
course against Arbitral Award. The court, when asked to set aside an an award by reason of omission/s that do not affect the merits of the case
award, may, where appropriate and so requested by a party, suspend the and may be cured or remedied. the adverse party may oppose that petition
setting aside proceedings for a pe.riod of time determined by it in order to and instead request the court to suspend the vacation or setting aside pro-
give the arbitral tribunal an opportunity to resume the arbitral proceed- ceedings for a period of time to give th.e arbitral tribunal an opportunity to
ings or to take such other action as in the arbitral tribunal's opinion will cure or remedy the award or resume the arbitration proceedings or take
eliminate the irrounds for setting aside an award. such other action as will eliminate the grounds for vacation or setting aside.
Article 5.35. Grounds to Vacate an Arbitral Award. (a) The RULE 6 - Recognition and Enforcement of Awards
arbitr~l award may be ~ucationed, vacated or set aside by the appropriate
court in accordance wtth the Special ADR Rules only on the following Article 15.36. Confirmation of Award. The party moving for an
grounds: order confirming, modifying, correcting, or vacating an award, shall, at tho
(i) The arbitral award was procured by corruption, fraud or time that such motion is filed "';th the court for the entry of judgment
other undue means; or thereon, also filo the original or verified copy of the award, the arbitration
(ii) T~ere was evident partiality or corruption in the arbitral or settlement agreement, and such papers as may be required by tho
tnbunal or any of its members; or Special ADR Rules.
(iii) The arbitral tribunal was guilty of misconduct or any Article 5.37. Judgment. Upon the grant of an order confirmi~g,
f~rm of misbehavior that has materially prejudiced the modifying or correcting an award, judgment may be entered in conform1t~
~ights of any party such as refusing to postpone the henr· therewith in the court where said application was filed. Costs of the apph·
ing upon sufficient cause shown or to hear evidence perti· cation and the proceedings subsequent thereto may be awarded by tho
nont and material to the controversy; or court In i ts discretion. If awarded, the amount thereof must be included in
tho judgment. Judgment will be enforced like court judgments.
(iv) One or more ~f the arbitrators was disqualified to act ns
auch under tlus Chnptcr and willfully refrained from dis· Article G.38. Appeal. A decision of the court confirming, vacat·
closing such disqualification; or Ing, selling aside, modifying or correcting an erbitrol. awnrd mo,y be ap·
(v) The arbitral tribunal exceeded its powera, or 80 imper· pealod to tho Court of Appcnls in accordance with Special ADR Rule•.
f~cUy executed them, such that a complete, final and defi· The losing party who appeals from the judgment of the Court con·
n1te award upon the subject matter submitted to it was firming an arbitral award shall be required by the Court of Appeal• to post
not made. a counter-bond executed in favor of the prevailing party equal to tho
Any other ground raised to question, vacate or set aside the arbitral amount of the award in accordance with the Special ADR Rules.
award shall be disregarded by the court. Article 5.39. Venue and Jurisdiction. Proceedings for recogni·
. . (b) Whe~ a petition to vacate or set aside an award is filed, the pe- tion and enforcement of an arbitration agreement or for vocation or setting
t1t1oner may a1multoncously, or the oppositor may in the alternative osido of an arbitral award, and any application with a court for arbitrati~n
petition the co~rt to remit the ~ to the same arbitral tribunal for th~ assistance and supervision, except appeal, shall be deemed as spooal
purpose of making a new or revtsed final and definite award or to direct a proceedings and shall be filed with the court:
new hearing before the same or new arbitral tribunal the members of (a) where the arbitration proceedings are conducted;
which shall be cho~n i.n t he manner originally provided 'in t he arbitration (b) where t h e asset to be attached or levied upon, or the act to be
o.gree_ment .or aubm1~1on. In the latter case, any provision limiting the ertjoincd is located;
time in which the arb1tral tribunal may make a decision shall be deemed
applicable to the new arbitral tribunal and to commence from the date of (c) where any of the parties to the dispute resides or has its place of
the court's order. business; or
Cd) in the National Capital Judicial Region at the option of the ap-
plicant.
420 ALTERNATIVE D ISPUTE RESOLUTION APPENDIX "C" 421
DEPARTMENT CIRCULAR NO. 98

Article 5.40. Notice of Proceedings to Parties. In a special ble, shall be used subject to such modifications consistent with Articles
proceeding for recosnition and enforcement of an arbitral award , the court 5.17 <Equal Treatment of Parties) and 5.18 (J)eurmination of Rulu of
shall send notice to the parties at their address of record in the arbitra- Proc.duNt) as the arbitral tribunal shall deem appropriate to addreu
tion, or if any party cannot be aerved notice at such address, at such possible complexities of a multi-party arbitration.
party'• laat known addresa. The notice shall be sent at lea.st fifteen (15)
days before the date eet for the initial bearing of the application. (b) When a claimant includes persons who are not parties to or oth-
erwise bound by the arbitration agreement, directly or by reference, be-
Article 5.41. LecaI Representation in Domestic Arbitration. tween him/her and the respondent as edditional claimante or additional
(a) \n domeauc arbitration conducted in t he Pbilippine.s , a party may be reapondents, the respondent shall be deemed to have consented to the
repres~nted by any pe~aon of hWber/its choice: Provided, that such repre- inclusion of the additional claimants or the additional respondente unles1
sentative, un14;8" admitted to the practice of law in the Philippines., shall not later than the date of communicating bis/her answer to the request for
not be aut??n~ed to appear u counsel in any Philippine Court, or any arbitration, either by motion or by a special defense in his answer, be
other qua.e1-jud1clal body whether or not such appearance is in relation to objects, on jurisdictional grounds, to the inclusion of such additional
the arbitration in which he/she appears. claimante or additional respondents. The additional respondents shall be
(b.) N~ erbitrato~ ehall act as a mediator in any proceeding in which deemed to have consented to their inclusion in the arbitration unless, not
he/she is acting as arbitrator and all negotiations towards settlement of later than the date of communicating their answer to the request for ~bl·
the dispute must take place without the presence of the arbitrators. tration, either by motion or a speci:al defense in their answer, they object,
on jurisdictional grounds, to their inclusion.
&:'lei~ 5.42. C~nftd~ntiallty of Arbitration Proceeding.,
The a rb1trat1on proceedings, including the records, evidence and the arbi- Articl e 5.45. Consolidation of Proceedings and Concurrent
tral a ward and 0th.er confidential information, shall be considered privi- Hearings. The parties may agree that -
leged and confidential and shall not be published except- (a) the arbitration proceedings shall be consolidated with other ar-
(1) with the consent of the parties; or bitration proceedi ngs; or
(2) for the.limited purpose of disclosing to the court relevant docu- (b} that concurrent hearings shall be held, on such terms as may be
ments JD cases where resort to the court is allowed herein: agreed.
. ProuUk~. however, that the court in which the action or the appeal is Unless the parties agree to confer such power on the a~bitl"~I tribu-
pendmg may •~ue a P~tective order to prevent or prohibit disclosure of nal, the tribunal has no power to order consolidation of arbitration pro-
documente or 1nfo~at1on . conteining secret processes, developments, ceedings or concurrent bearings.
research .and otb~r ~formation where it is shown that the applicant ahall Article 5.48. Fees and Costs. (a) The fees of the arbi~tora
be maten ally prejudiced by an authorized disclosure thereof.
eball be aereed upon by the parties and the arbitrator/a in writing pnor to
. Article .5.43. Death ot a Party. Where a party d ies after mal<- the arbitration.
tng a aubm1~a1on or a contract to arbitrate as prescribed in these Rules, In default of agreement of the parties as to the amount and ~~r
the. P~tng may be beeun or continued upon the application o{, or of PllYment of arbitrator's fees the arbitrator's fees shall be detenruned ID
~?tice to, h1alher executor or administrator, or temporary administrator of accordance with the applicabie internal rules of the regular ~itratioo
Wb~r es~te: In 8?l' such case, the court may issue an order extending inetitution under whose rules the arbitration is conducted; or tn ad hcc
the time within which notice of a motion to recognize or vacate an award arbitration, the Schedule of Fees approved by the IBP, if any, or in default
~ust be served. l!pon recognizing an award, where a party bas died since thereof, the Schedule of Fees that may be a pproved by the OADR.
1t ~!18 filed or delivered, the court must enter judgment in the name of the (b) In addition to arbitrator's fees, the parties shall be responaible
onginal party; and the proceedings thereupon are the same as where a
party dies after a verdict. for the payment of the administrative fees of an arbitration institution
administering an arbitration and cost of arbitration. The latter shall in-
. :""~cle 5.44. Multi-Party Arbitration. (a) When a single ar- clude, as appropriate, the fees of an expert appointed by the arbitral tri-
b1trat1on mvolvea more than two parties, these Rules, to the extent possi- bunal, the expenses for conducting a site inspection, the ~ of a room
 APPENDIX "C" 423
422 ALTERNATIVE DISPUTE RESOLUTION
DEPARTMENT CIRCULAR NO. 98

where arbitration proceedinp shall be or have been conducted , and ex- appointing authority which may make any comment it deems appropriate
penses for the recording and transcription of the arbitration proceedings. to the arbitral tribunal concerning the fees.
(c) The arbitral tribunal shall fix the costs of arbitration in its (e) Except as provided in the next paragraph, the costs of arbitra-
award. The term "costs" include only: tion shall, in princ.i ple, be borne by the unsucceuful party. Howev~r, .lh:e
(i) The fees of the arbitral tribunal to be stated separately as arbitral tribunal may apportion each of such costs betwee_n the parties if it
determines that apportionment is reasonable, taking into account the
to each arbitrator and to be fixed by the arbitral tribunal
itself in accordance with this Article; circumstances of the case.
With respect to the coats of legal representation and .assistance .re-
(ii) The travel and other expenses incurred by the arbitrators;
ferred to in paragraph Cc) (iii) of this Article, the arbitral tribunal, ~ng
(iii) The costs of expert advice and of other assistance required into account the circumstances of the case, shall be free to detenllllle
by the arbitral tribunal, such a.s site inspection and ex- which party shall bear such costs or may apportion such costs between the
penses for the recording and transcription of the arbitra- parties if it determines that appointment is reasonable.
tion proceedinp; When the arbitral tribunal issues an order for the termination of the
(iv) The travel and other expenses of witnesses to the extent !t
arbitral proceedings or makes an award on agreed t~rms, s~all fix the
such expenses are approved by the arbitral tribunal; costs of arbitration referred to in paragraph (a) of this Article m the con-
(v) The costs for leeal representation and assistance of the suc- text of that order or award.
ceuful party if such costs were claimed durine the arbitra.l E.x cept as otherwise agreed by the parties, no addition~ fees may be
proceedings, and only to the extent that the arbitral tribu- charged by the arbitral tribunal for interpretation or correction or comple-
nal determines that the amount of such costs is reasonable; tion of its awa.r d under these Rules.
(vi) Any fees and expenses of the appointing authority. (f) The arbitral tribunal, on its establishment, may request ea~h
Cd) The fees of the arbltral tribunal shall be reasonable in amount, party to deposit an equal amount as an advance for the costs referred to 11\
taking into account the amount in dispute, the complexity of the subject paragraphs (i),(ii) and (iii) of paragraph (c) of this Article.
matter , the time spent by the arbitrators and any other relevant circum- During tho course of the arbitral proceedings, the arbitral tribunal
stances of the case. may request supplementary deposits from the parties.
If an appointing authority has been agreed upon by the parties and If an appointing authority has been agreed u~n bY th e parties• and
if such appointing authority has issued a schedule of fees for arbitrators in when a party so requests and the appointing authonty consents to pe':form
domestic cases which it administers, the arbitral tribunal, in fixing its fees the function, the arbitral tribunal shall fix the amounts of any ~8P?6 1ts or
shall take that schedule of fees into account to the extent that it considers supplementary deposits only after consultation with the appomtin~ a~­
appropriate in the circumstances of the case. thority which may make any comments to the arbitral ~bunal which it
If such appointing authority has not issued a schedule of fees for ar- deems appropriate concerning the amount of such deposits and supple-
bitrators in international cases, any party may, at any time request the mentary depos its .
appointing authority to furnish a statement setting forth the basis for If the required deposits arc not paid in full within ~rty (80) days af-
establishing fees which is customa.r ily followed in international cases in ter receipt of the request, the arbitral tribun~ shall so mfo~ t~e parties
which the authority appoints arbitrators. If the a ppointing authority in order that one of them may make the reqwred payment wtthm such~
consents to provide such a statement, the arbitral tribunal, in fixing its period or reasonable extension th.ereof as may be determined by the arb•-
fees shall take such information into account to the extent tbat it consid- tral tribunal. If such payment is not made, the arbitral tribunal may order
ers appropriate in the circumstances of the case. the termination of the arbitral proceedings.
In cases referred to in paragraph (d) of this Article, when a party so Aft.er the award has been made, the arbitral tribunal shall render an
requests and the appointing authority consents to perform the function, accounting to the parties of the deposits received and return any unex-
the arbitral tribunal shall fix its fees only aft.er consultation with the pended balance to the parties.
424 ALTERNATIVE DISPUTE RESOLUTION APPENDIX -(;'
DEPARTMENT CIRCULo\11NO. 98

CHAPTER 8 for lutpeMionldismiaaal of the action pursuant to Ar1id• 2030 of the Civil
ARBITRATION OF CONSTRUCTION DISPUTES Code of t he Philippines.
The Conatruction Industry Arbitration Commission (ClAC), which ArtJcle 7.5. Submission of Settlement ~emen&. Either
haa oripnal and excluaive jurisdiction over arbitration of construction party may submit to the court before wb.icb the case is peocling any eetr
dleputa pursuant ta Executive Order No. 1008, s. 1985, otherwise known tlement agreement following a neutral or an early neutral evaluation,
aa the "Construction Induat.y Arbitration Law•, shall promulgate the mini-trial or mediation-arbitration.
lmplement.inr Rule1 and Rerulatlons governing arbitration of construction
disputel, incorporetlor therein the pertinent p rovisions of the ADR Act. RULE 2 - Neutral or Early Neutral Evaluation

CHAPTER '1 Article 7.6. Neutral or Early Neuiral Evaluation. (a) The
OTHERADR FORMS neut ral or early neutral evaluation shall be eoverned by the rulee and
procedure agreed upon by the parties. In the absence of aaid qreement,
RULE 1 - General Provisions tlWo Rule 1hall apply.
Cb) If the parties cannot agree on, or fail ta provide for:
Article '1.1. Scope of Application and General Principle&
Except aa otherwiae arreed, this Chapter shall apply and supply the defi- (il The desired qualification of the neutral third pareon;
ciency in the agreement of the parties for matters involving the following (ii) The manner of his/her selection;
fol"Dlll of ADR: (iii) The appointing authority (not IBP) who 1hall have. the au-
(a) early neutral evaluation; thority to make the appointment of a neutral third per-
(b) neutral evaluation; aon; or
(c) mini-trial; (Iv) if despite agreement on the foregoinc and the lapee of the
(d) mediation-arbitration; period of time stipulated for the appointment, the ~81
(e) a combination thereof; or are unable to select a neutral third pereon or app0tntinr
(f) &Dy other ADR form. authority,
then, either party may request the default appointing authority, u de-
Article '1.ll. Applicability of the Rules on Mediation. Jf the fined under paragraph Cl of Article (Lkfinition qf Terma~, ta make the
other ADR formlprw.H if Ul<>l'\I !Wn to mediation (i.e., the neutral third· appointment taking into consideration the nature of tbe diaput. .,,.t the
person merely uaiets the partiee in reaching a voluntary agreement), experience and expertise of the neutral third person.
Chapter 3 governing Mediation ohall have euppletory application to the
extent tbat It i1 not In conflict with the agreement of the parties or thie (c ) The parties shall submit and exchange poeition pa~rl contain-
Chapter. ing the issues and statement of the relevant facta and appending 1upport.
ing documents a nd affidavits ofwitnesseS to assist the neutral third per-
Article '1.8. Applicability of the Rwea on Arbitration. If the IOD in evaluating or aasesaing the dispute.
other ADR fonn/pl"OC888 is more akin to arbitration (i.e., the neutral third- (d ) The neutral third person may requnt either party to addreu
peraoo baa the power ta make a binding resolution of the dispute), Chap- additional issues that he /she may consider neceaaary for a complete
ter 5 roveming Domestic Arbitration shall have auppletory application ta evaluationla.aseaament of the dispute.
the extent that it ii not in conflict with the agreement of the parties or thil
Cbapte.r. (el The neutral third person may structure the evaluation procesa
In any manner he/she deems appropriate. Io the co\lrle thereof, the neu-
Article 'I.A. Referral. If a dispute is already before a court, ei- tral third person may identify areas of agreement, clarify the ieauee, de-
t her party may, before and during pre-trial, fil e a motion for the court to fine those that are contentious, and encourage the parties to agree oo a
refer the partle1 to other ADR forms/processes. However, at any time definition of issues and stipulate on facts or admit the pnuin eneaa and
during court proceedin11, even after pre-trial, the parties may jointly move due execution of documents.
426 ALTERNATIVE DISPUTE RESOLUTION APPENDIX ·c· 427
DEPARTMENT CIRCULAR NO. 98

(f) The neutral third person shall issue a written evaluation or as- member and to the adverse party. The summary shall identify the specific
3coomcnt within thirty (30) days from the conclut-ion of the evalua.Liou fuctual or legal issue or issues. Each party may attach to the s~tiry "
process. The opinion shall be non-binding and shall set forth how the more exhaustive recital of the facts of the dispute and the applicable law
neutral third person would have ruled had the matter been subject to a and j urisprudence.
binding process. The evaluation or assessment shall indicate the relative
strengths and weaknesses of the positions of the parties, the basis for the CO At the date, time and place agreed upon, the parties shall ap-
evaluation or assessment, and an estimate, when feasible, of the amount pear before the mini-trial panel member/s. The lawyer of each P~
for which a party may be liable to the other if the dispute were made and/or authorized representative shall present his/her case starting witb
subject to a binding process. the claimant followed by the respondent. The lawyer and/or representa-
tive of each party may thereafter offer rebuttal or sur-rebuttal argu-
(g) There shall be no ex-parte communication between the neutral ments.
third person and any party to tbe dispute without the consent of all the
parties. Unless the parties agree on a shorter or longer period, the presenta-
tion-in-chief shall be made, without interruption, for one hour and tbe
Ch) All papers and written presentations communicated to the neu- rebuttal or Sur-rebuttal shall be thirty (30) minutes.
tral third person, including any paper prepared by a party to be communi-
cated to the neutral third person or to the other party as part of the dis- At the end of each presentation, rebuttal or sur-rebuttal, tbe mini-
pute resolution process, and the neutral third person's written non-binding trial panel member/s may ask clarificatory questions from any of the pre-
assessment or evaluation, shall be treated as confidential. sentors.
After the mini-trial, the mini-trial panel members shall negotiate a
RULE 3 - Mini-Trial settlement of the dispute by themselves.
Article 7.7. Mini-Trial. (a ) A mini-trial shall be governed by the In cases where a neutral third person is appointed, th~ neu~~ t~:
rules and procedure agreed UPOn by thP. parties. Jn t.he abseno" of said person shall assist the parties/mini-trial panel members m se~ mg hal~
agreement, this Rule shall apply. dispute and, unless otherwise agreed by the parties, the pruceeding<1"
be governed by Chapter 3 on Mediation.
(b) A mini-trial shall be conducted either as: (i) a separate dispute
resolution process; or (ii) a continuation of mediation, neutral or early RULE 4 - Mediation-Arbitration
neutral evaluation or any other ADR process.
(c) The parties may agree that a mini-trial be conducted with or Article 7.8. Mediation-Arbitration. (a) A Mediation n~bi~:~
without the presence and participation of a neutral third person. If a tion shall be governed by the rules and procedure agreed upoti Yhall
neutral third person is agreed upon and chosen, he/she shall preside over parties. In the absence of said agreement, Chapter 3 on .Media on s
the mini-trial. The parties may agree to appoint one or more (but equal in first apply and thereafter, Chapter 5 on Domestic Arbitration.
number per party) senior executive/s, on its behalf, to sit as mini-trial (b) No person shall, having been engaged and. having ~ct:"d as me-
panel members. diator of a dispute between the parties, following a failed mediation, act ats
. 1·n a written agreemen
arbitrator of the same dispute unless th e Part1es, b''
(d) The senior executive/s chosen to sit as mini-trial panel members
must be duly a uthorized to negotiate and settle the dispute with the other expressly authorize the medi~tor to hear and decide the case as an ar 1-
party. The appointment of a mini-trial panel member/s shall be communi· trat.or.
cated to the other party. This appointment shall constitute a representa- (c) The mediator who becomes an arbitrator pursuant to t~is R~e
tion t.o the other party that the mini-trial panel member/s has/have the shall make an appropriate disclosure to the parties as i~ the arbitrat~on
authority t.o enter into a settlement agreement binding upon the principal proceeding had commenced and will proceed as a ~ew dispute resolut•:
without any further action or ratification by the latter. process, a nd shall, before entering upon bis/her duties, execute t~e app
priate oath or affirmation of office as arbitrat.or in accordance with these
(e) Each party shall submit a brief executive summary of the dis-
put.e in sufficient copies as to provide one copy to each mini-trial panel Rules.
428 ALTERNATIVE DISPUTE RESOLUTION APPENDIX ·c· 429
DEPARTMENT CIRClILAR NO. 98

RULE 5 - Coats and Fees Article 8.4. Tranaitory Provisions. Contideriog the procedu·
raJ character of the ADR Act and these Rules, the provisions of these Rules
Article 7.9. Costs and Feee. (a) Before entering hialher duties shall be applicable to all pending arbitration, mediation or other ADR
as ADR Provider, he/she shall agree with the parties on the coat of the forms covered by the ADR Act if the parties agree.
ADR p.-dure, the fees to be paid and manner of payment :or his/her
services. Article 8.5. Effectivity Clause. These Rules shall take effect
fift.een Cl5) d ays after the completion of its publication iD at least two (2)
(b) In the absence of such agreement, the fees for the senices of the national newspapers of !l'eneral circulation.
ADR provider/practitioner shall be determined as follows:
(I) If the ADR procedure is conducted under the r ules and/or APPROVED :
administered by an institution regularly providing ADR
services to the general public, the fees of the ADR profes- October 26, 2009
sional shall be determined in accordance with gchedule of
fees approved by such institution, if any; (SgdJ AGNES VST DEVANADERA
(ii) ln ad hoc ADR, the fees shall be determined in •ClCOrdance Acting Secretary
with the schedule of fees approved by the OADR;
(iii) In the absence of a schedule of fees approved by the ADR Committee for the Formulation of the Implementing Rulet1
institution or by the OADR, the fees shall be determined and Regulations of the Alternative Dispute Resolution Act of 2004:
by the ADR institution or the OADR, as the caso may be,
on the basis of quantum meruil, taking into consideration, Undersecretary Jose Vicente B. Salazar
among others, the length end complexity of the process, Department of Justice
the amount in dispute and the professional standing of
the ADR professional. Underaecretary Zenaida N. Maglaya
Cc) A contingency fee 8JTangement shall not be allowed. The Dep&rUnentofTradeandlnduatry
amount that may be allowed to an ADR professional may not be made
d.e pendent upon the auocesa of his/her effort in helping the parties to settle Director Nelda D. Leda
their dUpute. Department of the Interior and Local Government

CHAPTER 8 Atty. Victor P . Lezatin

MISCELLANEOUS PROVISIONS Representative of the President of the Integrated
Bar of the Philippines
Article 8.1. Amendments. These Rules or any portion hereof
may be amended by the Secretary of Justice. Atty. Custodio O. Parlade
Arbitration Profession
Article 8.2. Separability Clause. lf any part, article or provi-
sion of these Rules are declared invalid or unconstitutional, the other Atty. Alfredo F. Tadlar
parts hereof not affected thereby shall remain valid. Professor
Artic le 8.S. Funding. The heads of departmenta end qentles Annabelle T. Abaya
concerned, especially the Department of Justice, insofar as the funding Mediation Profession
requirements of the OADR is concerned, shall immediately include In their
annual appropriation the funding nece88ary to implement programs and Atty. Mario E. Valderrama
ext.end services required by the ADR Act a nd these Rules. ADR Organization
430 ALTERNATIVE DISPUTE R ESOLUTION

OTHER PARTICIPANTS IN THE FORMULATION OF THE

IMPLEMENTING RULES AND REGULATIONS:
APPENDIX ''D"
DEPARTMENT OF JUSTICE
Chief State Cou.nsel Ricardo V. Paras Ill
UNCI TRAL MODEL LAW ON INTERNATIONAL
Assistant Chief State Counsel Ruben F. Fondevilla
COMMERCIAL ARBITRATION
Retired Assistant Chief State Prosecutor Nilo C. Mariano
Senior State Counsel Marlyn L. Angeles
(United Nations document A /40117, Annex n
(As adopted by the United Nations Commission on
State Counsel Bernadette C. Ongoco
International Trade Law on 21 June 1985)
State Counsel Leilani R. Fajardo
Ms. Suerte T. Gamiao
Mr. Jose Mario B. Uy CHAPTER I. GENERAL PROVISIONS

DEPARTMENT Ol<' TRADE AND INDUSTRY Article 1. Scope ofApplication·

Director Victorio Mario A. Dimagiba
Cl} This Law applies to international commercial- arbitration, sub·
PRESIDENT OF THE INTEGRATED BAR OF THE PHILIPPINES ject to any agreement in force between this State and any other State or
States.
Atty. Patricia Tysman-Clemente
(2) The provisions of this Law, except articles 8, 9, S5 and S6, apply
MEDIATION PROFESSION only if the place of arbitration is in the territory of this State.
(3) An arbitration is international if:
Former Prosecutor Dominador Bornasal, Jr.
(a) the parties to an arbitration agreement have, at the time
of the conclusion of that agreement, their places of busi-
ness in different States; or

• Article headings are for reference purposes only and are no~ to be used for
purposes of interpretation .
.. The term •commercial• should be given a wide interpretation so as t.o cover
matt.ere arising from all relationships of a commercial nature, whether contractual
or not-. Relationships of a commercial nature include, but are not limited to, the
following transactioM: any trade transaction for t.he supply or exchange of goods or
service.&; distribution agreement; commercial representation or agency; factoringi
leasing; construction of works; coosulUngj engineering; licensing; investmeo~
financing; banking; insurance; exploitation agreement or concession; joint venture
flnd ot.hAr forms of industrial or buainesA cooperation: carriage of goods or passen~
gen1 by air, sea, rail or road.

431
432 ALTZRNATIVE DISPUTE RESOLUTIO!I: APPENDIX "D• 433
UNCITRAL MODEL LAW ON INTERNA110NAL
COt.DIERCIAL ARBITRATION

(b)one of the following place• ie situated outside the State in (0 where a provition or this Law, other than in articlee 25(8) and
which the parties have their places of business: 82(2)(a), refers to a claim, it also applies to a coUJlter-daim, and where it
(I) the place of arbitration if determined in, or punuant
refers to a defence, it also applies to a defence to 1uch cowiter-claim.
to, the arbitrat.ion asreement; Article S. R.ft:elpl ofWriU- Conunu.nicolton1
(ii) any place where a aubatant.ial part of the obli1atlon1
of the commercial relationship is to be performed or ( 1) Unless otherwise agreed by the parties:
the place with which the subject-matter of the die- (al any written communication is deemed to have been ~
pute ia most cloaely connected; or ceived if It i1 delivered to the addressee penonally or if it
(c) the partiea have expreuly agreed that the subject-matter is delivered at his place of buainesa, habitual residence or
of the arbitration agreement relates to more than one mailing address; if none of theae can be found ~. m~·
country. ing a reuonable inquiry, a written communication 18
(4 ) For the purposes of paragraph (3) of this article: deemed to have bffn received if it la sent to the ad-
dresaee'• lut.-known place ol buaines1, habitual residence
Cal It a party has more than one place of businesa, the place or or mailing address by registered leu.r or 8"'! ~er means
buainese is that which haa the closest relationship to the which providas a record of the attempt to deliver it;
arbitration agreement;
(b) the communication i• deemed to have been received on the
(b) if a party does not have a place of business, reference ie to
day it ia ao delivered.
be made to his habitual reaidence.
(2) The provisions of this article do not apply to communications in
(5) Thia Law shall not affect any other law of this State by virtue of court proceedings.
which certain diaputee may not be aubmitted to arbitration or may be
submitted to arbitration only according to proviaiona other than those of Article 4. Waluer ofR'6ht to 0~«1
this Law.
A party who know• that any provision of th11 Law from which the
Article 2. DeflnUiorut and RaZ-1 of lnterpretalwn pemea ~Y derogate or any requirement under the arbi~tion. ~t
bu not been complied with and yet proceeds with the arlntration wi~ut
For the purposea of this Law: atating his objection to such non-compliance without undue delay or, if a
(a) "arbitration" meana any arbitration whether or not adminla· time-limit is provided therefor, within such period of time, abaD be deemed
tared by a permanent arbitral inatitution; to have waived his right to object.
(b) "arbitral tribunal" meana a sole arbitrator or a panel of arbitra·
tora; Article G. E:rt1ml ofCourt lnterwntion
(c) "court" means a body or organ of the judicial system of a State; In matters eovemed by thia Law, no court ehall intervene except
(d) where a provision of this Law, except article 28, leavee the par- where ao provided in this Law.
ties free to determine a certain i.aeue, euch freedom include& the rigbt ol
the parties to authorU.e a third party, including an institution, to make Article 6. Courl or Otlur Aatliority for Certain Funl:tion1
that determination; ofArbitration Aaailtance and Supert1iaion
(e) where a provision of this Law refen to the fact that the partlee The functions referred to in articles 11(8), 11(4), 18(3), 14, 16(3) and
have agreed or that they may agree or in any other way refere to an 84(2) ehall be performed by ... (Each State enactinr this model law speci·
agreement of the parties, such agreement includes any arbitration rules fies the court, courta or, where referred to therein, other authority compe-
referred to in that agreement; tent to perform these functions.)
434 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "D" 435
\TNCITRAL MODBL I.AW ON IHTBRNA110NAL
COMMERCIAL ARBITRATION

CHAPTER D. ARBITRATION AGREEMENT (2) Failing auch determination, the number ol arbitrators shall be
three.
Article 11. Appointnw11l o(Ar6Urob>ra
•Arbitration agreement" ia an agreement by the partie1 to sub-
( 1)
mit to arbitration all or certain ditpul:eJI which have arisen or which may (1) No person aha\I be precluded by reason or his nationality from
arise between them in respect of a defined legal relationship, whether acting as an arbitrator, unless otherwiae agreed by the parties.
contractual or not. All arbitration •lll'eement may be in the form of an (2) The parties are free to agree on a procedure of appointing the
arbitration clauee in a contract or in the form of a separate a~ement. arbitrator or arbitrators, aubject to the proviaionl of paragraphs (4) and (5)
(2) The arbitration agreement shall be in writing. An agTeement is of this article.
in writing if It ia contained in a document signed by the partie1 or in an (3) Failing auch agreement:
exchanp of letters, telex, teieer&IDll or other means of telecommunication
(a) in an arbitration with three arbitrators, each party •ball
which provide a record of the agreement, or in an exchanee of atatementl
of claim and deCence in which the exiatence of an agreement ia alleced by appoint one arbitrator, and the two arbitrator& th~ ap..
one party and not denied by another. The reference in a contract to a pointed shall appoint the third arbitrator; ifa ~ fails to
appoint the arbitrator within thirty day& of r.ce1pt of~ re-
document containing an arl>itration clause constitutes an arbitration queat to do ao from the other party, or if.th~~ arb1tra·
agreement provided that the contract ia in writing and the reference is
tore fail to agree on the third arbitrator within thirty dll)'ll
such as to make that clause part of the contract.
of their appointment, the appointment shall be .made, ~pon
Article B. Arbitration Agrumenl and Sub1tantl1Je request of a party, by the court or other authonty specified
Cudm befon Courl in article 6;
Cb) in an arbitration with a sole arbitrator, if the parties are
(l) A court before which an action ia brought in a matter which ia u nable to acree on the arbitrator, be shall be appoin~,
th• subject or &n arbitration agnoement shall, If a p•uty ao req""ts not upon request oC a party, by tbe court or other au.tbon~
later than whea •ubmitting his first statement on the substance of the specified in article 6.
dispute, refer the parties to arbitration unless it finds that the agreement (4 ) Where, under an appointment procedun agreed upon by the
is null and void, inoperative or incapable of being performed. parties:
(2) Wbeie an action referred to ln paragraph (1) of this article has been (a) a party fe.ile to act as required under auch procedure, or
brought, arbitral proceedings may n~rtheleas be commenced or continued,
and an award may be made, while the Issue iB pending before the court. (bl the parties, or two arbitratora, are unable to reach an
agreement expected of them under auch procedure, or
Article 9. Arbilrotwn A,reemient and lntierirn (c) a third party. Including an institution, falls to perform any
Mea..un• by Courl function entrwited to it under auch proced~, an~ ~
~ requfft the court or other authority specified 10 arti·
It ii not incompatible with an arbitration agreement for a party to cle 6 to take the neceasary meuure, unless the agreement
request, before or during arbitral proceedings, from a cou.rt an interim on the appointment procedure provides other mean.a for
measure of protection and for a court to srant such measure. securing the appointment.
(5) A decision on a matter entrusted by paragraph CS) or (4) of thia
CHAPTER m. COMPOSITION OF ARBITRAL TRIBUNAL article to the court or other authority specified in article 6 shall be subiect to
no appeal. The court or other authority, in appointing an arbitrator, shall
Article 10. Number ofArbitroloN have due regard to any qualification• required of the arbitrator by the agree-
ment of the parties and to aucb considerations as are likely to secure the
(1) The parties are free to determine the number of arbitratort.
436 ALnRNATIVB DISPUTE RESOLUTION APPENDIX "D• 437
UNCITRAL MODE!. LAW ON INTERNA'nONAI.
COMMERCIAL ARBITRATION

appointment of an independent and impartial arbitrator and, in the case of a mandate terminates if he withdraws from his office or if the parties agree
sole or third arbitrator, shall take into account as well the advisability of on the termination. Otherwise, if a controversy remains concerning any of
appointing an arbitrator of a nationality other than those of the parties. tlune grounds, any party may request the court or other authori~ ·~­
fied in article 6 to decide on the termination of the mandate, which dea-
Article 12. Grounth for Cholkngf! sion shall be subject to no appeal.
(1) When a person is approached in connection with his possible (2) If, under this article or article 13(2), an arbitrator withdraws
appointment as an arbitrator, be shall disclose any circumstances likely to from his office or a party agrees to the termination of the mandate of an
give rise to justifiable doubts as to his impartiality or independence. An arbitrator, this does not imply acceptance of tbe validity of any ground
arbitrator, from the time of his appointment and throughout the arbitral referred to in this article or article 12(2).
proceedings, shall without delay disclose any such circumstances to the
parties unless they have already been informed of them by him. Article 15. Appoint~nl ofSubatltuttt ArlJitnJl;or
(2) An arbitrator may be challenged only if circumstances exist that Where the mandate of an arbitrator terminates under article 13 or
give rise to justifiable doubts as to his impartiality or independence, or if 14 or because of his withdrawal from office for any other reason or because
be does not poeuu qualifications agr~ to by the parties. A party may of the revocation of his mandate by agreement of the parties or in any
cbal~e~ an arbitrator appointed by him, or in whose appointment he has other case of termination of his mandate, a substitute arbitrator shall be
participated, only for reasons of which he becomes aware after the ap- appointed according to the rules that were applicable to the appointment
pointment baa been made. of the arbitrator being replaced.
Article 13. Cholknge Procf!du.-. CHAPTER IV. JURISDICTION OF ARBITRAL TRIBUNAL
• (1) The _parties are free to agree on a procedure for challenging an
arbitrator, subJect to the provisions of paragraph (3) of this article. Article 16. Competenctt ofArbitral Tribunal
to Ruk on ite Jurudictlon
• (2) Failing auch agreement, a party who intends to challenge an
arbitrator shall, within fifteen days after becoming aware of the constitu- (1) The arbitral tribunal may rule on its own jurisdiction, in~luding
tion of the arbitral tribunal or after becoming aware of any circumstance any objections with respect to the existence or validity of the arbitration
referred to in article 12(2), send a written statement of the reasons for the agreement. For that purpose, an arbitration clause which forms part of a
challenge to the arbitral tribunal. Unless the challenged arbitrator with- contract shall be treated as an agreement independent of the other _terms
draws from his office or the other party agrees to the challenge, the arbi- of the contract. A decision by the arbitral tribunal that the co~tract 18 null
tral tribunal shall decide on the challenge. and void shall not entail ipsojure the invalidity of the arbitration clause.
(3) If a challenge under any procedure agreed upon by the parties (2) A plea that the arbitral tribunal does not have jurisdiction shall
or under_ the procedure of paragraph (2) of this article is not successful, the be raised not later than the submission of the statement of defence. A
challenging party may request, within thirty days after having received party is not precluded from raising such a plea by the fact that he bas
notice of the decision rejecting the challenge. the court or other authority appointed, or participated in the appointment of, an arbitrator. A plea ~at
specified in article 6 to decide on the challenge, which decision shall be the arbitral tribunal is exceeding the scope of its authority shall be raised
subject to no appeal; while such a request is pending, the arbitral tribunal, aa soon as the matter alleged to be beyond tbe sco~e of its aut?ori~ is
including the challenged arbitrator, may continue the arbitral proceedings raised during the arbitral proceedings. The arbitral tribunal may, m e1ther
and make an award. case, admit a later plea if it considers the delay justified.
(3) The arbitral tribunal may rule on a plea referred to in para-
Article 14. Failure or Impo..iblllty to Act graph (2) of this article either as a preliminary q1188tion or in an award on
(1) If an arbitrator becomes ck jun or ck facto unable to perform
the merits. If the arbitral tribunal rules as a preliminary question that it
has jurisdiction, any party may request, within thirty days after having
his functions or for otber reasons faila to act without undue delay, hia
438 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "D" 439
UNCITRAL MODEL LAW ON INTERNATIONAL
COMMERCIAL ARBITRATION

received notice of that ruling, the court specified in article 6 to decide the Article 21. Comm4ncenumt ofArbitral Proceedlnp
matter, which decision shall be subject to no appeal; while such a request
la pending, the arbitral tribunal may continue the arbitral proceedings Unless otherwise agreed by the parties, the arbitral P~!
and make an award. respect of a particular dispute commence on the date on which • req
for that dispute to be referred to arbitration is received by the respondent.
Article 17. PoU1flr ofArbitrol Tribunal to Order
Interim Measure• Article 22. Language
Unless otherwise agreed by the parties, the arbitral tribunal may, at (1) The parties are free to qtee on the language or langu~ to~
the request of a party, order any party to take such interim measure of used in the arbitral proceedings. Failing such agreement, ~e ~1 ro-
protection as the arbitral tribunal may consider necessary in respect of the tribunal shall determine the language or languages to be ~ m ~fued
subject-matter of the dispute. The arbitral tribunal may require any party ceedings This agreement or determination, unless otherwJhse 8 • d
to provide appropriate security in connection with such measure.
therein ·shall apply to any wntten
· -Atement
- by a pA-.
-·~·
any eanng
al an
any aw~nl. decision or other communication by the arbitral tribun ·
CHAPTER V. CONDUCT OF ARBITRAL PROCEEDINGS
(2) The orbitral tribunal may order that anY documen~ evidence
Article 18. Equal Treatment of Partlta shall be accompanied by a translation into the l~gu~ oralanguages
agreed upon by the parties or determined by the arb1b'al tribun ·
The parties ehaD be treated with equality and each party shall be Article 23. Statement• of Clain& and Defence
eiven a full opportunity of presenting his case.
. ed
(1) Within the period of tim• agreed by the parties or detenninhis
Article 19. Determination ofRules of Procedure
by the arbitral tribunal, the claiman.t shall eta~ th::~.:::.~n­
0
(1) Subject to the provisions of this Law, the parties are free to claim, the points at issue and the rebef or reme Y 8parti
. ulars unless the
agree on the procedure to be followed by the arbitral tribunal in conduct- dent shall state his defence in reapect of these c of
such state-
ing the proceedings. parties have otherwise agreed aa to the reqwred elements th
menta. The parties may submit with their statements all documents they
(2) Failing such agreement, the arbitral tribunal may, subject to consider to be relevant or may add a reference to the document& or 0 er
the provisions of this Law, conduct the arbitration in such manner as it evidence they will submit.
considers appropriate. The power conferred upon the arbitral tribunal
includes the power to determine the admissibility, relevance, materiality (2) Unless otherwise agreed by the parties, either party m~y amend
and weight of any evidence. or supplement his claim or defence during the course of the .arbitral pro·
ceedinge, unless the arbitral tribunal coneidere it ~na~propnate to allow
Article 20. Place ofArbUrollon such amendment having regard to the delay in making 1t.

(1) The parties are free to agree on the place of arbitration. Failing Article 24. Hearings and Wrltun Proceedlnp
such agreement, the place of arbitration shall be determined by the arbi-
tral tribunal having regard to the circumstances of the case, including the (1) S ubject to any contrary agreement by the parties, the ar~itral
convenience of the parties. tribunal shall decide whether to hold oral hearings for the presentation of
evidence or fnr oral argument, or whether the proceedings shall be con-
(2) Notwithstanding the provisions of paragraph ( 1l of this article, ducted on the basis of documents and other materials. Howev~r, unl~ss the
the arbitral tribunal may, unless otherwise agreed by the parties, meet at parties have agreed that no hearings shall be held, the arb1tral trib~
any place it considers appropriate for consultation among ita members, for shall hold such hearings at an appropriate etage of the proceedinp, if ao
hearing witnessea, experts or the parties, or for inspection of goods, other requested by a party.
property or documenta.
440 ALTERNA11VE DISPUTE RESOLUTIO!': APPENDIX "D• 441
UNCJTRAl. MODEL LAW ON INTERNATIONAL
COMMERCIAL ARBITRATION

(2) The perti• a hall be given sufficient advance notice of any hear- takinJ evidence. T he court may execute the request within itl competence
iD&: and of any meetlne of the arbitral tribunal for the purposes of inapec. and according to its rulet on taking evidence.
tloo of i:ooda, other property or documents.
(3) All ltatemeota, documents or other information supplied to tbe CHAPTER VI. MAKING OF AWARD AND
arbitral tribunal by one party ahall be communicated to the other party. TERMINATION OF PROCEEDINGS
Alao any expert report or eridentiary document on which the arbitral tribu-
nal ma_y rel.Y in making ill! deciaioo 1hall be communicated to the parties. ArtJcle 28. Ruk• AppUcabk to Subdance ofDlaJ*U

.Article 25. IN(oult of o. P~ (1) The arbitral tribunal shall decide the dispute in accordance
with 1uch rules of law es are chosen by the partiea u applieeble to the
Unleu otherwise •creed by the parties, if, without showine BUfti- 1ubetance of the dispute. Any designation of the law or legal system of a
cieot cause: Jiven State aha ll be construed, unless otherwise expresaed, u d irectly
(a) t.lw clajmant fails to communicate his statement of claim in ac- referrinir to the substantive law of that State and not to itl conflict of law1
cordance with article 23(1), the arbitral tribunal shall terminate the pro- rules.
ceedinp; (2) Failing any designation by the partiea, the arbitral ~bunal
(b) the reapondent fails to communicate his statement of defence in 1hall a pply the law determined by the conflict oflawa rule. which it con-
accordance with article 23( 1), the arbitral tribunal shall continue the eiden applicable.
proceedinp without treating such failure in itself as an admisaion of the (3) The arbitral tribunal shall decide u oequo et bono or u amiable
claimant'• allegatlona; compoaiteur only if the parties have expressly authorized it to do ao.
(c) any party faila to appear at a hearing or to produce documen- (4) In all cases, the arbitral tribunal shall decide in accordance
tary evidence, the &rbitral tribunal may continue the proceedings and with the terms of the oontract and shall take into accoWlt the uaagea of the
make the award on the evidence before it. trade applicable to the tranaaction.
Article lie. BZJHrl Appointed by Arbltral Tribunal At-tlcle 29. Deculon Makin¥ by POfUll ofArfJltralon
(1) Unl111 otherwise agreed by the parties, the arbitral tribunal: In arbitral proceedings with more than one arbitrator, any decition
(a) may appoint one or more experts to report to it on specific of the arbitral tribunal shall be made, W1less otherwise agreed by the
ilaue1 to be determined by the arbitral tribunal; parties, by a majority of all itl members. However, queation1 of procedure
may be decided by a presiding arbitrator, ifso authorized by the partiea or
(b) ma.Y require a party to give the expert any relevant infor- all members of the arbitral tribunal.
mation or to produce, or to provide access to, any relevant
documentl, eooda or other property for hia inspection. Article 80. Set1k,,..nt
. (2) . Uni~ otherwise agreed by the parties, if a party ao requesta or
if the ~bitra,J tribunal considers it necessary, the expert shall, after deliv- (1) If, d uring arbitral proceedings. the parties settle the ditpute,
ery of hl1 wntt.n o~ oral report, participate in a hearing where the parties the arbitral tribun.a l shall terminate the proceedings and, if requested by
have the opportunity to put questiom to him and to present expert wit- the parties and not objected to by t he arbitral tribuoal, record the eetde-
nH1es In order to testify oo the pointe at iaeue. ment In the form of an arbitral award on agreed tenns.
(2) An award on agreed terma mall be made in accordance with the
Article 2'7. Court A..i..tance in Taking Eouunc• provisions of article 3 1 and shall state that it la an award. Such an award
baa the aame status and effect a.a any other award on the meritl of the
The arbitral tribunal or a party with the approval of the arbitral trl· cue.
bunal ma_y request from a competent court of this State assistance in
442 Al.TERMATl\IE DISPUTE RESOLUTION
APPENDIX "D" 443
VNCITRAL MODEL LAW ON INTERNATIONAL
COMMERCIAL ARBl'l'RA'l10N

Article 31. Form and Content• ofAward (a) a party, with notice to the other party, ~ request the
arbitral tribunal to correct in the award any enora in com-
(l) The award ehall be made in writing and shall be signed by the
putation. any clerical or typogn>phical enora or any erron
arbitretor or arbitratora. ID arbitral proceedings with more than one arbi· of similar nature;
trator, the •i1DaturN or the ~ority or all members of the arbitral tnl>u·
nal ahall aufllce, provided that the reuon for any omitted signature ~ (b) if so agreed by the parties, a party, with notice to the other
elated. party, may req ueat the arbitral tribunal to give an Inter-
pretation ofa apecific point or part of the award.
(2 )_ The award ahall elate the reuons upon which it is based, unlesa
the partiee have sereed that no reasons are to be given or the award ~ an If the arbitral tribunal considers the request to be justified, It ahall
award on agreed terms under article 30. make the correction or give the intupretation within thirty days of receipt
of the request. The Interpretation shall form part of the award.
(3) The award ahall 1late its date and the place of arbitration 88
determined in accordance with article 20( 1). The award shall be deemed to (2) The arbitral tribunal may conect any error of the type referred
have been made at that place. to 111 par&iJ'&ph ClXa> of this article on ita own initiative within thiR)' day1
of the date of the award.
(4) After the award ia made, a copy signed by the arbitrators in ac·
cordance with paragraph (1) of this article shall be delivered to each party. (3) Unless otherwise agreed by the parriea, a party, with notice to
the other party, may request, within thirty days of receipt of the award,
Article 32. Termination ofProceeding• the arbltral tribunal to make an additional award as to claims presented
In the a.rbitral proceedings but omitted from the award. If the ~itral
(1) The arbitral proceedings are terminated by the final award or tribunal considers the request to be justified, it shall make the additional
by an order of the arbitral tribunal in accordance with paragraph (2) of award within sixty days.
thi• article. (4) The arbit..al tribunal may extend, if necesaary, the period of
(2) The arbitral tribunal shall issue an order for the termination of time within which it shall make a cOTT'eCtion, Interpretation or an addi·
the arbitral proceedings when: tlonal award under paragraph (1) or (3) of this article.
(a) the claimant withdraws his claim, unless the respondent (5> The proviaione of article 31 shall apply to a COJTeCtlon or inter·
object. thereto and the arbitral tribunal recognizes a le- pretation of the award or to an additional award.
eltlmate Interest on his part in obtaining a final settle-
mentor the d~pute; CHAPTER VII. RECOURSEAGAINSTAW.ARD
(b) the partiee 8iJ'89 on the termination of the proceedings;
Article 34.. Application for Sellinl Aaiu - Bsclaetoe
(c) the arbitral tribunal finds that the continuation of the pro- &couree A6aU..t ArbUral Arocvd
ceedinp has for any other reason become unnecusary or
impoaaible. ( 1) Recourse to a court against an arbitral award may be made only
(3) The mandate of the arbitral tribunal terminates with the ter- by an application for setting a.aide in accordance with paragra,pha (2) and
mJ114tion of the arbitro proceedinp, subject to the provisiollll of articles 33 (3) or thb article.
and 34(4). ( 2) An arbitral award may be set aside by the court apecified in ar-
ticle 6 only if:
Article 33. CoTTeetion and ln.lt1rpretation ofAtoord; (a) the party making the application furniahea proof that:
Additional Ar.card
(i) a party to the arbitration agreement referred to in
( 1) Withi n thirty daya of receipt of the award, unletSS another pe- article 7 was under some incapacity; or the eeid
riod oftime bu been 8ereed upon by the parties: agreement is not valid under the law to which the
444 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "D" 445
UNCITR,\L MODEL LAW ON INTERNATIONAL
CO~IMERCIAL ARBITRATION

parties have subjected it or, failing any indication CHAPTER VIII. RECOGNITION AND ENFORCEMENT
thereon, under the law of this State; or OF AWARDS
(ii) the party making the application was not given
proper notice of the appointment of an arbitrator or Article 35. Recognition and En(Qrr;ement
of the arbitrnl proceedin.gs or was otherwise unable
to present his case; or (1) An al'bitral award, irrespective of the cou~try. in ~hich. it was
made, shall be recognized as binding and, upon apphcation .m~ wntmg ~
(iii) the award deals with a dispute not contemplated by the competent court, shall be enforced subject to the proV1s1ons of this
or not falling within the terms of the submission to
arbitration, or contains decisions on matters beyond article and of article 36.
the scope of the submission to arbitration, provided (2) The party relying on an award or applying for its enforcement
that, if the decisions on matters submitted to arbi· shall supply the duly authenticated original award or a dul.y cerbfied copy
tration can be separated from those not so submit· . . . . ment referred to 1n article 7 or a
t h ereof, and the ongmal arbitration ngree d · an
ted, only that part of the award which contains deci· duly certified copy thereof. If the award or agreement is not ~a e m
sions on matters not submitted to arbitration may official I anguage of this State, the party shall supply a duly certified trans·
be set aside; or lation thereof into such language.-·
(iv)the composition of the arbitral tribunal or the arbi-
tral procedure was not in accordance with the Article 36. Grounds for Refusing Recognltwn
agreement of the parties, unless such agreement or Enforcement
was in conflict with a provision of this Law from
which the parties cannot derogate, or, failing such
.
(1) Recognition or enforcement of an arb1tral award', 1rrespective of
agreement, was not in accordance with this Law; or the country in which it was made, may be refused only:
(b) the court finds that: (a) at the request of the party against whom it is invoked, ~f
that party furnishes to the competent court where recogm·
(i) the subject-mat.ter of the dispute is not capable of ti on or enforcement is sought proof that:
settlement by arbitration under the law of this (i) a party to the arbitration agreeme~t r·eferred to ~n
State; or
article 7 was under some incapacity; or the srud
(ii) the award is in conflict with the public policy of this agreement is not valid under th~ law to ~hi'.'11 ~be
State. parties have subje1:ted it or, faibng any indication
(3) An application for setting aside may not be made after three thereon, under the Jaw of the country where the
mo~ths have el~psed from the date on which the party making that appli· a\vard was made; or
cation had received the award or, if a request had been made under article (ii) the party against whom the awar~ is invoked was
33, from the date on which that request had been disposed of by the arbi· not given proper notice of the apP?mtment of an ar·
tral tribunal. bitrntor or of the arbitral proceedlllgs or was other·
(4) The court, when asked to set aside an award, may, where ap· wise unable to present his case; or
propnate and ~o requested by a party, suspend the setting aside proceed· (iii) the award deals "~th a dispute not contemplated by
ings for a period of time determined by it in order to give the arbitral or not falling within the terms of the submission to
tribunal an Opportunity to resume the arbitral proceedings or to take such arbitration, or it contains decisions on matters be·
other action as in the arbitral tribunal's opinion will eliminate the grounds yond the scope of the submission to arbitration, pro·
for setting aside.
··· The conditions &et. forth in this paragraph are intended to set maximum
alandards. It would, thus, not be contrary to the harmonization to be achieved by
the model law if a State retained even les.s onerous conditions.
446 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "D" 447
UNCJTRAL MODEL LAW ON INTERNATIONAL
COMMERCIAL ARBITRATION

vided that, if the decisions on matters submitted to December 1985, recommended "that all States give due coDAideration to
arbitration can be separated from those not 50 sub- the Model Law on International Commercial Ari>itration. in view of the
mitted, that part of the award wruch contains deci- desirability of uniformity of the Jaw of arbitral procedures and the specific
aiona on matters submitted to arbitration may ba need& of inter national commercial arbitration practice.•
recognized and enforced ; or
2. The Mode.I Law constitutes a sound and promising basis for the
(iv) the composition of the arbitral tribunal or the arbi- desired harmonhation and improvement of national laws. It covera all
tral procedure was not in accordance with the agree- lta&'ea of the arbitral process from the arbitration agreement to the~&'­
ment of the parties or, failing such agreement, was nltion and enforcement of the arbitral award and reflects a worldwide
not in accordance with the law of the country where conaenaus on the principles and important iuues of international arbitra·
the arbitration took place; or tion practice. It is acceptable to States of all regions and the different legal
(v) the award has not yet become binding on the parties or economic systems of the world.
or has been set aside or suspended by a court of the 8 . The form of a model law was chosen as the vehicle for harmoni·
country in which, or under the law of wruch, that zation and imp rovement in view of the flexibility it gives to States in pre·
award was made; or parini new a r bitration laws. It is advisable to follow the model as cloaely
(b) if the court finds that: as possible since t h at would be the best contribution to the desired har-
(i) tha aubject-matter of t h e dispute is not capable of monization and in th e best interest of the users of international arbitra·
aettlement by arbitration under the law of this tion, who are primarily foreign parties and their lawyers.
State; or
.A. BACKGROUND TO THE MODEL LAW
(ii) the recognition or enforcement of the award would
be contrary to the public policy of this State. 4 . The Model Law is designed to meet concerns relating to the cur-
(2) If an application for setting aside or suspension of an award has rent state of national laws on arbitration. The need for improvement and
been made to a court referred to in paragraph (l )(a)(v) of this article, the harmonization is based on findings that domestic laws .are ~ften i?appro·
court where recognition or enforcement is sought may, if it considers it priate for international cases and that considerable disparity eX1sta be-
proper, adjourn ita decision and may also, on the application of the party tween them.
claiming recognition or enforcement of the award, order the other party to
provide appropriate security. 1. I nadequacy of Dome.tic Laws
5. A global survey of national laws on arbitration revealed consid·
E.x planatory Note by the UNCITRAL Secretariat on the erable disparities not only as regards individual provisions and solutions
Model Law on International Commercial Arbitration " but alao in terms of development and refinement. Some laws mll)' be re·
garded as out.dated, sometimes going back to the nineteenth century and
1. The UNCITRAL Model Law on International Commercial A.rbi· oft.en equating the arbitral proceas with court litigation. Other laws D1llY
tration was adopted by the United Nations Commission on International be said to be fragmentary in that they do not address all relevant iuu~a.
Trade Law <UNCITRAL) on 21 June 1985, at the close of the Commiasion's Even moat of those laws which appear to be up-to-date and comprebens1~e
18th annual -ion. The General Assembly, in its resolution 40/72 of 11 wore drafted with domestic arbitration primarily, if not excluaively, m
mind. While this approach is understandable in view of the fact that even
today the bulk of cases governed by a general arbitratio~ law would ~ of a
·Tb;. note hu been prepared by the secretariat or the Uni!Aod Natioos Com- purely domestic nature, the unfortunate consequence ta that traditional
miaalon on lnternallooal Trade Law (UNCITRAL) for informational purposes only; local ooncepte are imposed on international cases and the needs of modern
it ia not an official commentary on the Model Law. A commentary prepared by 111'1
Secretariat on ao earUer dral\ of the Model Law appea.r s in document AICN.91'.26', practice are oft.en not met.
(reproduced lo UNCITRAL Yearbook, vol. XVl: 1986) <United Nations Publication, 6. The expectations of the parties as expres5ed in a choeeo set of
Sales No. E.87.V.•J. arbitration rules or a "one-oft" arbitration agreement may be frustrated,
448 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "D" 449
llNCITRAL MODEL LAW ON INTERNATIONAL
COMMERCIAL Al!lllTllATIOK

eopecially by a mandatory pl'OY!aion or the applicable law. Unexpected and ari>itration, without aft"ecting any relevant treaty in force in the State
undesired retlrictiona found in national laws relate, for example., to the adopting the Model Law. While tbe need for uniformity exieta only In
parti..' ability effectively to aubm.it future diaputea to arbitration, to their re.tpect of international ca.sea, the desire o( updating and improving the
power to Mlec:t th• arbitrator hel y , or to their Interest in having u.. arbitratlon law may be Celt by a State alao In respect of non-international
arbitral proceedings conducted according to the agreed rules of procedwe cues and could be met by enacting modem legislation baeecl on the Model
and with no more court involvement than is appropriate. Frustration!I may Law for both categories of ca.sea.
alao ensue from non·mandatoiy provision• which may impose unde.irecl
requlrementa on unwary parties who did not provide otherwise. Even the a. Sub•tanti1Je and territorial ..:ope of applka.tton
abtence of non-mandatory provisions may cause difficulties by not provid· 10. The Model Law defines an arbitration as 'international if "the
Ing anawera to the many procedural issues relevant in an arbitration and
parties to an arbitration agreement have, at the time of the conclusion of
not alw~ 1ettled In the arbitration agreement.
that agreement, their places of business in dift'erent Statea" (article l(S)).
2. Disparity ~fu>Hn Na.ttonal La&0a The vaat majority of situations commonly regarded u international will
fall under this criterion. In addition, an arbitration is international IC the
7. Problem• and undesired consequences, whether emanating from place of arbitration, the place of contract performance, or the place of the
~andatory or non-mandatory provisions or from a lack of pertinent provi- subject-matter of the dispute is situated in a State other than where the
11.ona, ~ auravate.d by the fact that national laws on arbitral procedure parties have their place of business, or if the parties have expressly ai:reed
d.1ft'er Wld~ly. The d1ft'erencea are a frequent source of concern in interna- that the subject-matter of the arbitration agreement relatea to more than
tional arbitration, where at least one of the parties is, and often both one country.
parties are, confronted with foreign and unfamiliar provisions and proce- 11. Aa regards the term •commercial: no hard and faat definition
durea. For aucb a party it may be expensive, impractical or impossible to could be provided. Article l contains a note calling for "a wide interpreta·
obtain a full and preciae account of the law applicable to the arbitration. tion ao aa to cover matters arislni: from all relatioll8hipo of a commercial
. 8 . Uncertainty about the local law with the inherent risk of frustra- nature, whether contractual or not." The foot.note to article 1 then providea
tion may adveraely affect not only the functioning of the arbitral proce11 an Illustrative list of relationships that are to be considered commercial,
but already the •~lectlon of the place of arbitration. A party may well for thua emphasizing the width of the suggested interpretation and indicatinc
thOl8. reason• hesitate or refuse to agree to a place which otherwise, for that the determinative test ia not baaed on what the national law may
practical reasona, would be appropriate in the case at hand. The choice of rerard .. "commercial."
places o_f arbitration _would thus be widened and the smooth functioning of 12. Another aspect of applicability is what one may call the territo-
the arbitral ~1np. would be enhanced if States were to adopt the rial 1eope of application. According to article 1(2), the Model Law as en·
M~el Law which la easily .-iiinizable, meets the specific need& of inter- acted in a given State would apply only if the place ofarbitretion is in the
n~tional "?mmercial arl>itration and provides an international standard territory of that State. Howevar, there ii an important and reasonable
with aolut.iona acceptable to parties from different States and legal eya.- exception. Articles 8( l) and 9 which deal with recognition of arbitntion
tema. &gt'ffmenu, i ncl uding U..ir compatibility with interim meuurw of pro~
tion, and articles 85 and 86 on recognition and enforoement of arbitral
B. SALIENT FEATURES OF THE MODEL LAW awarda are given a global acope, i.e., they apply irrespective of whether the
place of arbitration ia in that State or in another State and, as reprda
1. SP"ci<JI Pl"Oeedwul rwgi,,.. for inhrnatlonal commercial arilt. articlea 8 and 9, even if the place of arl>itntioo is not yet determined.
tratlon
18. The atrict territorial criterion, governing the bulk of the provi·
9. The Principlee and individual solutions adopted in the Model aiona of the Model Law, waa adopted for the sake of certainty and in view
Law aim at reducing or eliminating the above concerns and difficulties. A. of the following facta. The place of arbitration is uaed as the exclusive
criterion by the great majority of national laws and, where national !awe
a response to the inadequacies and disparities of national laws, the Model
Law present.a a special legal regime geared to international commercial allow parties to choose the procedural law of a State other than that where
the arbitr ation takea place, experience shows that parties in practice
450 ALTERNATIVE DISPUTE R ESOLv'TION APPENDIX "D" 451
UNCITRAL MODEL LAW ON INTERNATIONAL
COMMERCIAL ARBITRATION

rarely make use of that facility. The Model Law, by its liberal contents, 2. Arbitration agreement
further reduces the need for such choice of a "foreign" law in lieu of the
(Model) Law of the place of arbitration, not the least because it grants 17. Chapter II of the Model Law deals with the arbitration agree·
parties wide freedom in sh aping the rules of the a rbitral proceedings. This ment, including its recognition by courts. The provisions follow clos.ely
includes the possibility of incorporating into the arbitration agreement article II of the Convention on the Recognition and Enforcement of Foreign
procedural provisions of a "foreign" law, provided there is no conflict with Arbitral Awards (New York, 1958) (hereafter refen-ed to as "1958 New
the few mandatory provisions of the Model Law. Fu rthermore, the strict York Convention"), with a number of useful clarifications added.
territorial criterion is of considerable practical benefit in respect of articles
11, 13, 14, 16, 27 and 34, which entrust t he courts of the respective State a. D efinition and form of arbitration agreement
with functions of arbitration assistance and supervision.
18. Article 7( 1) recogniz.es the validity an d effect of a commitment
b. DeUmitation of court assistance and supervision by the parties to submit to arbitration an existing dispute ("comprorms"l ?r
a future dispute ("clause compromissoire"). The latter type of agreement IS
14. A$ evidenced by recent amendments to arbitration laws, t here presently not given full effect under certain national laws.
exists a trend in favour of limiting court involvement in international
commercial arbitration. This seems justified in view of the fact that the 19. While oral arbitration agreements are found in practice and are
parties to an arbitration agreement make a conscious decision to exclude recogniz.ed by some national laws, article 7(2) follows t~e 1958 New '."?rk
court jurisdiction and, in particular in commercial cases, prefer expediency Convention in requiring written form. It widens and clanfies the definition
and finality to protracted battles in court. of written form of article II(2) of that Convention by adding "telex or o~er
means of telecommunication which provide a record of the agreement, by
15. In this spirit, the Model Law envisages court involvement in covering the submission-type situation of •a.n exchange ~f statements of
the following instances. A first group comprises appointment, challenge claim and defence in which the existence of an agreement 1s alleged by _one
and termination of the mandate of an arbitrator (articles 11, 13 and 14), party and not denied by another," and by providing that 711~ reference_m a
jurisdiction of the arbitral tribunal (article 16) and settin,g aside of the contract to a document" (e.g., general conditions) "con~1ng an arbitra-
arbitral award (article 34). These instances are listed in article 6 as func- tion clause constitutes an arbitration agreement proVlded that the con-
tions which should be entrusted, for the sake of centralization, specializa- tract is in writing and the reference is such as to make that clause part of
tion and acceleration, to a specially designated court or, as regards articles the con tract."
11, 13 and 14, possibly to another authority (e.g., arbitral institution,
chamber of commerce). A second group comprises court assistance in tak- b . Arbitration agreement and the court•
ing evidence (article 27), recognition of the arbitration agreement, includ-
ing its compatibility with court-ordered interim measures of protection 20. Articles a and 9 deal with two important aspects of the complex
(articles 8 and 9), and recognition and enforcement of arbitral awards issue of the relationship between the arbitration agreement an~ resoi: to
(articles 35 and 36). courts. Modelled on article Il(3) of the 1958 New York Conventi~n, artide
16. Beyond the instances in these two groups, "no court shall inter- 8(1) of the Model Law obliges any court to refer the partie~ to arbitration if
vene, in matters governed by this Law." This is stated in the innovative seized with a claim on the same subject-matter unless 1t fi.n ds that the
article 5, which by itself does not take a stand on what is the appropriate arbitration, agreement is null and void, inoperative or ~capable of bemg
role of the courts but guarantees the reader and user that he will find all performed. The referral is dependent on a request which a party may
instances of possible court intervention in this Law, except for matters not make not later than when submitting his first statement on the substan~e
regulated by it (e.g., consolidation of arbitral proceedings, contractual rela- of the dispute. While this provision, where adopted by a State when it
tionship between arbitrators and parties or arbitral institutions, or fixing of adopts the Model Law, by its nature binds merely th~ co~ ?fthat State,
costs and fees, including deposits). Especi.a lly foreign readers and users, who it is not restricted to agreements providing for arbitration ~ that ~tate
constitute the majority of potential users and may be viewed as the primary and, thus, helps to give universal recognition and effect to international
addressees of any special law on international commercial arbitration, will commercial arbitration agreements.
appreciate that they do not have to search outside this Law.
452 .ALTERNATIVE DISPUTE RESOLUTION APPENDIX "D" 453
UNCITRAL MODEL LAW ON INTERNATIONAL
COMMERCIAL ARBITRATION

21. Article 9 expresses the principle that any interim measures of ity of the arbitration agreement. For that purpose, an arbitration clause
protection that may be obtained from courts under their procedural law shall be treated as an agTeement independent of the other terms of the
(e.g., pre-award attachments) are compatible with an arbitration agre&- contract, and a decision by the arbitral tribunal that the contract is null
ment. Like article 8, this provision is addressed to the courts of a given and void shall not entail ipso jure the invalidity of the arbitration clause.
State, insofar as it determines their granting of interim measures as being Detailed provisions in paragraph (2) require that any objections relating to
compatible with an arbitration agreement, irrespective of the place of the arbitrators' jurisdiction be made at the earliest possible time.
arbitration. Insofar as it declares it to be compatible with an arbitration
agreement for a party to request such measure from a court, the provision 25. The arbitral tribunal's competence to rule on its own jurisdic·
would apply irrespective of whether the request is made to a court of the tion, i.e., on the very foundation of its mandate and power, is, of course,
given State or of any other country. Wherever such request may be made subject to court control. Where the arbitral tribunal rules as a preliminary
it may not be relied upon, under the Model Law, as an objection agairu1t question that it has jurisdiction, article 16(3) provides for instant court
the existence or effect of an arbitration agreement. control in order to avoid unnecessary waste of money and time. Hswever,
three pr0<:edural safeguards are added to reduce the risk and e.ffect of
8. Composition of arbitrol tribunal dilatory tactics: short time-period for resort to court (30 days), court ~eci­
sion is not appealable, and discretion of the arbitral tribunal to continue
22. Chapter III contains a number of detailed provisions on ap- the proceedings and make an award while the matter is pending with the
pointment, challenge, termination of mandate and replacement of an court. In those less common cases where the arbitral tribunal oombines its
arbitrator. The chapter illustrates the approach of the Model Law in decision on jurisdiction with an award on the merits, judicial review on the
eliminating difficulties arising from inappropriate or fragmentary laws or question of jurisdiction is available in setting aside proceedings, under
r~es. The ap~roach consists, first, of recognizing the freedom of the par- article 34 or in enforcement proceedings under article 36.
ties to determine, by reference to an existing set of arbitration rules or by
an a~ hoc agreement, the procedure to be followed, subject to fundamental b. Power t o order inurim measures
reqwre~ents of fairness and justice. Secondly, where the parties have not
used their freedom to lay down the rules of p.r ocedure or a particular issue 26. Unlike some national laws, the Model Law empowers the arbi·
~as not been covered, t~e M~el Law ensures, by providing a set of suppl&- tral tribunal, unless otherwise agreed by the parties, to orde'. any party to
tive rules, that the arb1trat1on may commence and proceed effectively to take an i nterim measure of protection in respect of the subJect-matter of
the resolution of the dispute. the dispute, if so requested by a party (article 17). It may be noted t!bat the
article does not deal with enforcement of such measures; any State, adopt-
23. Where under any procedure, agreed upon by the parties or ing the Model Law would be free to provide court assistance in this regard.
based upon the suppletive rules of the Model Law difficulties arise in the
process of appointment, challenge or tenninatio~ of the mandate of an 5. Conduct of arbitral proceedings
arbitrator, articles 11, 13 and 14 provide for assistance by courts or other
authorities. In view of the urgency of the matter and in order to reduce the 27. Chapter V provides the legal framework for a fair and effective
risk and effect of any dilatory tactics, instant resort may be had by a party conduct of the arbitral proceedings. It opens with two provisions express-
within a short period of time and the decision is not appealable. ing basic principles that permeate the arbitral procedure governed by the
Model Law. Article 18 lays down fundamental requirements of procedural
4 . Jurttldretion of arbitrol tribunal justice and article 19 the rights and powers to determine the rules of pro·
cedure.
a . Competence to rule on own jurisdiction
a. Fundamental procedural right• ofa party
24. Article 16(1) adopts the two important (not yet generally recog-
nized) principles of •Kompetenz-KompeU!nz" and of separability or auton- 28. Article 18 embodies the basic principle that the parties shall be
omy of the arbitration clause. The arbitral tribunal may rule on its own treated w ith equality and each party shall be given a full opportunity of
jurisdiction, including any objections with respect to the existence or valid- presenting his case. Other provisions implement and specify th.e basic
454 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "D" 455
UNCITRAL MODEL LAW ON INTERNATIONAL
COMMERCIAL ARBITRATION

principle in respect of certain fundamental rights of a party. Article 24(1) evidence. Moreover, it provides a means for solving any procedural ques-
provides that, unleaa the parties have validly agreed that no oral hearinp tions not regulated in the arbitration agreement or the Model Law.
for the presentation of evidence or for oral argument be held, the arbitral
tribunal shall bold auch bearings at an appropriate stage of the proceed- 32. In addition to the general provisions of article 19, there are
inp, if so requeated by a party. It should be noted that article 24(1) deals some special provisions using the same approach of granting the partiea
only with the general riebt of a party to oral hearings (as an alternative to autonomy and, failing agreement, empowering the arbitral t:"~unal to
conducting the proceedings on the basis of documents and other materials) decide the matter. Examples of particular practical importance in intema·
and not with the procedural aspects such as the length, number or timing tional cases are article 20 on the place of arbitration and article 22 on the
of hearings. language of the proceedin gs.
29. Another fundamental right of a party of being heard and being c. Default of a party
able to pruent his case relates to evidence by an expert appointed by the
arbitral tribunal. Article 26(2) obliges the expert, after having delivered 33. Only if due notice was given, may th? ~itral p~Dll be
his written or oral report, to participate in a hearing where the parties continued in the absence of a party. This apphes, m particular, to tb_e
may put questions to him and present expert witnesses in order to testify failure of a party to appear at a hearing or to p~duce d~umentary evi-
on the points at issue, if such a hearing is requested by a party or deemed dence without showing sufficient cause for the failure (article 25(c]). The
necessary by the arbitral tribunal. As another provision aimed at ensuring arbitral tribunal may also continue the proceedings where the respondent
fairness, objectivity and impartiality, article 24(3) provides that all state- fails to communicate his statement of defence, while there is no need for
ments, documents and other information supplied to the arbitral tribunal continuing the proceedings if the claimant fails to submit his statement of
by one party shall be communicated to the other party, and that any ex- claim (article 25[a), lb)l.
pert report or evidentiary document on which t he arbitral tribunal may
rely in making its decision shall be communicated to the parties. In order 34. Provisions which empower the arbitral tribunal to c~ out its
to enable the parties to be present at any hearing and at. any meeting of task even if one of the parties does not participate are of considerable
the arbitral tribunal for inspection purposes, they shall be given sufficient practical importance since, as experience shows, it is n?t unco~on that
notice in advance (article 2412)). one of the parties has little interest in cooperating and ID ?x~1ti~g mat-
ters. They would, thus, give international commercial arb1tra~1on its nee·
b. Determination ofruke ofprocedure easary effectiveness, within the limits of fundamental reqwrements of
procedural justice.
30. Article 19 guarant.ees the parties' freedom to agree on the pro-
cedure to be followed by the arbitral tribunal in conducting the proceed- 6. Making of autard and termination ofprtH!e«l-in/I•
ings, subject to a few mandatory provisions on procedure, and empowers
the arbitral tribunal, failing agreement by the parties, to conduct the a . Ru,l ea applicable to aubatance ofdUpute
arbitration in such a manner as it considers appropriate. The power con-
35. Article 28 deals with the substantive law aspects of ~itration.
ferred upon the arbitral tribunal includes the power to determine the
admiasibility, relevance, materiality and weight of any evidence. Under paragraph (1), the arbitral tribunal decides the ~pute •!1 acco;
dance with such rules of Jaw as may be agreed by the parties. This provt·
31. Autonomy of the parties to determine the rules of procedure is eion is significant in two respects. It grants th~ parties t~e ~om to
of special importance in international cases since it allows the part:iea to choose the applicable substantive law, which is unportant m vt~ of the
select or tailor the rules accordi ng to their specific wishes and needs, fact that a number of national laws do not clearly or fully recognize that
unimpedad by traditional domestic concepts and without the earlier men- right. In addition, by referring to the choice of "rules of law• instead of
tioned risk of frustration . The supplementary discretion of the arbitral "law,• the Model Law sives the parties a wider range of options ~ reg~s
tribunal la equally important in that it allows the tribunal to tailor the the des ignation of the Jaw applicable to the substance of the dispute ID
conduct of the Proceeding.a to the specific features of the case without that they may, for example, agree on rules of law that have been el~
restraints of the traditional local law, including any domestic rules on rated by an international forum but have not yet been incorporated 1Dto
any national legal system. The power of the arbitral tribunal, on the other
456 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "D" 4 57
UNCITRAL MODEL I.AW ON 1N'l1!RNATIONAL
COMMERCIAL ARBITRATION

hand, follows more traditional lines. When the parties have not designated with varying and oft.en Jong time-periods and with extensive lists of
the applicable law, the arbitral tribunal shall apply the law, i.e., the na- crounds that differ widely in the various legal systems. The Model Law
tional law, determ.ined by the conflict of laws rules which it considers attempts to ameliorate this situation, which is of considerable concern to
applicable.
those involved in international commercial arbitration.
:JG. According to arliclts 28(3), the parties may authorize the arbi-
tral tribunal to decide the diapute u ~quo et bona or as amiables cornpo- a . Application fo r setting tuide tu ezcbuiw recoune
siuurs. This type of arbitration is currently not known or used in all legal
8y$tems and there exists no uniform understanding as regards the precise 41. The first measure of improvement is t.o allow only one type ?f
sccpe o~ the. pow~r of the arbitral tribunal. When parties anticipate an r ecourse to the e.x clusion of any other means of recourH regulated in
uncertainty in tb11 respect, they may wish to provide a clarification in the another ~rocedural law of the State in question. An applicstion f~r setting
arbitration a1Teement by a more specific authorization to the arbitral aside under article 34 must be made within three months of receipt of the
trib.unal: Paregraph (4 ) makes clear that in all cases, i.e.. including an award . It should be noted that •recourse" means actively "attacking" the
arbitration rz oequo et bona, the arbitral tribunal must decide in accor- award; a party is, of course, not precluded from seeking court control by
dance with the terms of the contract and shall take into account the us- way of defence in enforcement proceedings (article 36). Furthermore,
ages of the trade applicable to the transaction. "recourse• means resort to a court, i.e., an organ of the judicial s~tem of~
St ate; a party is not precluded from resorting to an arbitral tnbunal. o
b. Malting of award and other decisions second instance if such a possibility has been agreed upon by the parties
(as is common in certain commodity trades).
37. In its rules on the making of the award (articles 29-31) the
Model La':" pays special attention to the rather common case that the b. Grounds for s etting tuide
arbitra~ tnbunal ~onsists of a plurality of arbitrators (in particular, three).
It provid~s .that, tn such ~ase, any award and other decision shall be made 4 2. As a further measure of improvement, the Model Law oon~ns
by a m11Jority of the arbitrators, except on questions of procedure which an exclusive list of limited grounds on which an award may be set aside.
may~ 1.eft to a preaiding arbitrator. The majority principle applies' also to This list is essentially the same ss the one in article SEU), taken .from
the s.iiJlmg of the awerd, provided that the reason for any omitted signa· article V of the 1958 New York Convention: lack of capacity of parties to
ture is stated. conclude arbitration agreement or lack of vah'd arb'itrat' . ion agreement·
. •
lack of notice of app0intment of an arbitrator or of the arb1~al proceecbn~
. 38; Article 31~3) provides that the award shall state the place of
arb1tra~on and tha! it shall be deemed t.o have been made at that place. or inability of a party t.o present his case; aw_~ deals "?th r::eraaln~r
AB to th11 presumption, it may be noted that the final making of the award covered by submission to arbitration; oompos1tion of arb1tral un .
constitutes a legal act, which in practice is not necessarily one factual act conduc~ or arbltral p"""""'in~ contrary to eff'ed:ive Agreement of ~es
or failing agreement to the- Model Law; non·arb'trabil'ty of subJect-
0

bu~ may be done in deliberations at various places, by telephone conver· i 1 • •

sau.on or correapondence; above all, the award need not be signed by the
m~tter of dispute and 'violation of public policy, which ~o~d include sen·
arb1tratora at the same place. ous departures from fundamental notions ofproceduralJus::ice.
43. Such a parallelism of the grounds for setting eside with ~
39. The arbitral award must be in writing and state its date. It must
provided in article Vofthe 1958 New York Convention for Rfusal ofre:cocni·
also s~te the reaaona o~ which it is based, unless the parties have agreed
tion and enforcement was already adopted in the European ~nven~on on
othet'Wlse or the award 18 an award on agreed terms, i.e., an award which International Commercial Arbitration (Geneva, 1961). Under its article IX.
records the tenna of an amicable settlement by the perties. It may be added
th.e decision of a foreign court setting aside an award for a Rason other ~
that the Model Law neither requires nor prohibits "dissenting opinions.•
the ones listed in article V of the 1958 New York Conventio~ does ?ot ~.,!:
7. RecourH a14i.n1t award tute a ground for refusing enforcement. The Model Law ~s ~ P
phy one sU!p further by directly limiting the reasons for setting amde.
40. National laws on arbitration, oft.en equating awards with court 44. Although the grounds for setting aside~ alm?5t identical to those
decisions, provide a variety of means of recourse against arbitral awards, for refusing recognition or enforcement. two practical differences should be
 458 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "D" 459
Ul':CITRAL MODEL LAW ON INTERNATIONAL
COMMERCIAL ARBITRATION

noted. Firstly, the grounds relatine to public policy, including non-arnitn- the grounds on which recognition or enforcement may be refused). B~
bility, may be different in substance, depending on the State in question (i..e ., on the above consideration of the limited importance of the place of arllt·
State or settinr &aide or State of enforcement). Secondly, and more impor- tration in international cases and the desire of overcoming tenitorial
tantly, the grounds for refusal of rec:q:nition or enforcement are valid and restrictions, reciprocity is not included as a condition for recognition and
effective only in the State (or States) where the winning party seeks rec:q:ni- enforcement.
tion and enforcement, while the grounds for setting aside have a different
impact: 'lbe settinc aside of an eward at the place of origin prevents enforce- 49. The Model Law does not lay down prooedural detaila of recocni·
ment of that award in all other countries by virtue of article VUXeloftbe 1958 tion and enforcement since there is no practical need for uni.fYing them,
New York Convention and article 36(1XaXv) of the Model Law. and since they form an int rinsic part of the natio~~ procedural. l~w and
practice. The Model Law merely sets certain conditions for obtaining en-
8. R ecopitlon and enforcement of aworch forcement: application in writing, accompanied by the award and the
arbitration agreement (article 35[2)).
45. The eighth and laat chapter of the Model Law deals with recog· c . Grounds for refusing recognition or enforcement
nition and enforcement of awards. Its provisions reflect the significant
policy decision that the same rules should apply to arbitral awards 50. As noted earlier, the grounds on which recognition or ~nfo~­
whether made in the country of enforcement or Abroad. and that those ment may be refused under the Model Law are identical to those listed in
rules should follow closely the 1958 New York Convention. article V of t he New York Convention. Only, under the Model ~w,~h~y
are relevant not merely to foreign awards but to all a:-v~e ';~ e; CoI D
a. Toward• uniform treatmen t of a ll awards irresp ective of international commercial arbitration. While some pr0V1sions 0 8 . D·
country of origin vention, in particular as regards their drafting, may hav~ called for •~·
provement only the first ground on the list (Le., "the parties to the ar •·
46. By treating awards rendered in international commercial arbi- tration agi'.eement were, under the law applicable to. ~em, ~der some
tration in a uniform manner irrespective of where they were made, the incapacity") was modified since it was viewed as conta1rung an 1ncompl~te
Model Law draws a new demarcation line between "international" and and potentially misleading conflicts rule. Generally, it was deemed _desir-
•non-international" awards instead of the traditional line between "for• able to adopt, for the sake of harmony, the same approach and wording as
oign" and "domestic• awards. Thia new line is based on substantive this important Convention.
grounds rather than tenitorial borders, which are inappropriate in view of
tho limited importance of the place of arbit ration in international cases.
The place of arbitration is often chosen for reasons of convenience of the Further information may be obtaiMd from:
parties and the dispute ~ have littl.e or no connection with the State
where the arbitration tak9 place. Consequentl.y, the reoognition and UNClTRAL Secn!tariat
enforcement of "international• awards, whether "foreign" or "domestic," Vienna International Centre
should be governed by the aame provisions. P.O. Box500
1400 Vienna, Austria
47. By modelling the recognition and enforcement rules on the rele-
vant pro·olisiona of the 1958 New York Convention, the Model Law supple- Telephone:(+ 43-ll 26060-4060
ments, without conflicting witb, the regime of recognition and enforcement
created by that aucceesful Convention. Internet: http://www.uncitral.org
E ..mail: uositraJ®uncitral om
b . P rocedural conclUlo,.. of recognition and enforcement

48. Under article 35(1) any arbitral award, irrespective of the coun-
try in which it was made, shall be recogni%ed as binding and enforceable,
subject to the provisions of article 35(2) and of article 36 (which sets forth
 APPENDIX "E" 461
SPECIAL RULES OF COURT ON
ALTERNATIVE DISPUTE RESOLUTION

APPENDIX "E" SPECIAL RULES OF COURT

ON ALTERNATIVE DISPUTE RESOLUTION
Republic of the Philippines PART I
SUPREME COURT GENERAL PROVISIONS AND POLICIES
Manila
RULE l - General Prout.ions
EN BANC

A.M. No. 07-11-08-SC Rule I.I. S ubject matter and gouerni".g rule•.-The. Special
September 1, 2009 Rules of Court on Alwrnative Dispute Resolution (the "Special ADR
Rules") shall apply to and govern the following cases:
SPECIAL RULES OF COURT ON
a. Relief on the issue of Existence, Validity, or Enforceability of the
ALTERNATIVE DISPUTE RESOLUTION Arbitration Agreement;
Acting on the recommendation of the Chairperson of the Sub-Com- b . Referral to Alternative Dispute Resolution ("ADR");
mittee on the Rules on Alternative Dispute Resolution submitting for this c. Interim Measures of Protection;
Court's consideration and approval the proposed Special Rules of Court on d. Appointment of Arbitrator;
Alternative Dispute Resolution, the Court Resolved to APPROVE the same. e. Challenge to Appointment of Arbitrator;
This Rule shall take effect on October 30, '2 009 following its pub- f. Termination of Mandate of Arbitrator;
lication in three (3) newspapers of general circulation.
g. Assistance in Taking Evidence;
September 1, 2009.
h. Confirmation, Correction or Vacation of Award in Domestic
Arbitratio n;
REYNATO S. PUNO i. Recognition and Enforcement or Setting Aside of an Award in
Chief Justice International Commercial Arbitration;
LEONARDO A. QUISUMBING CONSUELO YNARES-SANTIAGO j. Recognition and Enforcement of a Foreign Arbitral Award;
Associate Justice Associate Justice
ANTONIO T. CARPIO k. Confidentiality/Protective Orders; and
RENATO C. CORONA
Associate Justice Associate Justice I. Deposit and Enforcement of Mediated Settlement Agreements.
CONCHITA CARPIO MORALES MINITA V. CHICO-NAZARIO
Associate Justice Rule 1.2. Nature of the proceeding&-All proceedings under
Associate Justice the Special AD R Rules are special proceedings.
PRESBITERO J. VELASCO, JR. ANTONIO EDUARDO B. NACHURA
Associate Justice Associate Justice Rule 1.3. Summary proceedings in certain cau&-The pro-
TERFSITAJ. LEONARDO-OE CASrRo ARTURO D. BRION ceedings i n the following instances are summary in nature and shall be
Associate Justice Associate Justice governed by this provision:
DIOSDADO M. PERALTA LUCAS P. BERSAMIN a. Judicial Relief Involving the Issue of Existe.nce, Validity or En-
Associate Justice Aissociate Just.ice forceability of the Arbitration Agreement;
MARIANO C. DEL CASTILLO ROBERTO A. ABAD b. Referral to ADR;
Associate Justice Associate Justice
c. Interim Measures of Protection;
d . Appointment of Arbitrator;
460 e. Challenge to Appointment of Arbitrator;
462 ALTERNATIVE DISPUTE RESOWTIOS APn:Nt>IX "E"
SPECIAL RULES OP COUKTON
ALTERNATIVE DISPUTE RESOUJTJON

f. Termination of Mandate of Arbitrator;

the affiant has read the same and that the factual allegationa therein are
I· AHl1tance in Taki111 Evidence; true and correct of his own penional knowledge or baaed on authentic
h. Confidentiality/Protective Orders; and records and shall contain as annexes the supporting document..
i. Depoait and Enforcement of Mediated SetUement Agreements. The annexes to the pleading, motion, opposition, comment, def-
or claim filed by the proper party may include a legal brief, d'":J veriJ!ecl
W S."'ke and /fling ofpetition in 1ummary proettdinp.- by the lawyer submitting it, statinc the pertinent facts, the applicable law
The petitioner ehall aerva, either by personal service or courier, a copy cl and jurisprudence to justify the necessity for the court to rule upon the
the petition upon the rupondent before the filing thereof. Proof of eervict
ahall be attached to the petition filed in court. iNue raised.

Fer peraonal aervice, proof of aervice of the petition consists of the Rule 1.5. Cer1ifU:atlon Agalmt Forvm SlaoppU...-A Certili-
affidavit of the peraon who effected service, stating the time, place and cation Against Forum Shopplne ia ooe made under oeth made by the
manner of the aervice on the respondent. For aervice by courier, proof of petitioner or movant: (a) that be has not ~ere~fore ~=
aervice conalsta of the signed courier proof of delivery. If service is refused action or filed any claim Involving the 11B1De 1ssue11 m any court,
or has failed, the affidavit or delivery receipt must state the circumetancu or quasi-Judicial agency and, to the best of his knowledge, no a~ch otJ;ier
oCthc "tt.ompted eervl"" and ret\J.sal or failure thereof. action or clo.im ie p<inding tb.orein; (b) if there ia such oth.,,. J>Alldinc action
or claim, a complete atatement of the present statue thereot, ~d~::.he
(B) Notlce.-Except for cases involving Referral to ADR and ahould thereafter learn that the same or similar action or claun froen
Confidentiality/Protective Orders made through motions, the court shall, if filed or is pending he shall report that £act within five (5) days t.he';ied m
it finda the petition au.fficient in form and substance, send notice to the to the court wherein his aforementioned petition or motion bas been ·
partlea dlrect1n1 them to appear at a particular time and date for the
hearing thereof which shall be Ht no later than five (5) days ftoom the A Certification Against Forum Shopping shall be appended totiall
lapee of the period for filing the oppoeition or comment. The notice to the Initiatory pleadings except a Motion to Refer the Dillpute to Alterna ve
respondent ehall contain a statement allowing him to file a comment or Dispute Resolution.
oppoeition to the petition within fifteen (15) days from reeeipt of the Rule 1.6. Proh.ibUed aublllUliona.-Tbe following pleadinp,
notice.
motions, or petitions shall not be allowed in the caelines IOVbye:;:'.edc:1rthC:.
The motion filed pureuant to the rules on Referral to ADR or Special ADR Rules and shall not be accepted for 6 C
Confidentiality/Protective Orders shall be set for bearing by the movant Court:
and contain a notice of hearing that complies with the requirements under a. Motion to dismias;
Rule 15 of the Rulea of Court on motions.
b. Motion for bill of particulars;
(C) Summor,, Morlng.-ln all caaea, as far as practicable, the c. Motion for new trial or for reopening of trial;
aummary hearing •hall be conducted in one (1) day and only for purposea
of clarifyins Cacta. d. Petition for relief from judgment;
e . Motion for extension, except in ca"9 where an ex-parta ~po-
Except In cues involving Referral to ADR or Confidentiality/Pro- niry order of protection bas been issued;
tective Ordera tuade through motiona, it shall be the court that aete the
petition for hearing within five (5 ) days from the lapse of the period for r. Rejoinder to reply;
filins the opposition or comment. g. Motion to declare a party in default; 8Jld
h. July other pleading specifi<&lly di.ullowed under any provieion
(0) Retolutlon.-The court shall resolve the matter within •
period o( thirty (30) daya ftoom the day of the hearing. of the Special ADR Rulea.
The court ahall motu proprio order a pleading/motion that it hu
Rule 1.4. Veri/kotion and •ubmlnio,...-Any pleading, mo- determined to be dilatory in nature be apunged from the records.
tion, opposition, comment, defense or claim filed under the Special ADR
Rulea by the proper party 1hall be supported by verified statements that
464 ALTERNATIVE DISPUTE RESOl..l!T!ON APPENDIX "E• 465
SPECIAL RULES OF COURT ON
ALTERNATIVE DISPUTE RESOLUTION

Rule 1.7. ComputatWn of tim«.-ln computing any period of Rule 1.9. No aummon-.-ln cases covered by tbs Special ADR
time prescribed or allowed by the Special ADR Rules. or by order of the Rules, a court acquires authority to act OD tbe petition or motion upon
court, or by 6JV applicable atatute, the d.ay of the act or event from which proof of j urisdictional facts, Le~ that tbs respondent was furniahed a copy
the deelpated period of time begina to run ia to be excluded and the date of the petition and the notice of bearing.
of performance included. If the last day of the period, aa thus computed. CA) Proof of wruice.-A proof of service of the petition and notice of
Calb o~ a Saturday, a Sunday, or a legal holiday in the place where the bearing upon respondent shall be made in writing by tbs ee1"91' and shall
court e1te, the time ehall not l'\lJl until the next working day. Rt forth the manner, place and date of service.
. Should an act be done which effectively interrupts the running of the (8 ) Burden of proof.-The bW'den of showinc that a copy of the
penod, the allowable period after such interruption shall start to run on petition and the notice of hearing were served OD the respondent reate on
the day aft4or notice of the ceaaation of the cause thereof. the petitioner.
The day of the act. that caueed the interruption shall be excluded The technical rules on aervice of aummons do not apply to the pro-
from the computation of the period.
ceedinga under the Special ADR Rules. In instances where the respondent,
Rule 1.8. &rvice and filin8 of pt..adlngs, motion• and other whether a natural or a juridical penon, was not penonally served with a
PfSJHI'• ln notH"!""'41'y proceeding•.-The initiatory pleadings shall copy of the petition and notice of hearing in the proceedings contemplated
be fil~d directly w1\b the court. The court will then cause the initiatory In the first paragraph of Rule 1.3 CB), or the motion in proceedince CC>n·
pleading to be terved upon the respondent by personal service or courier. templated in the second paragraph of Rule 1.3 (B), the method of service
Where an action la already pending, pleadings, motions and other papere reeorted to must be such as to reaaonably ensure receipt thereof by the
shal~ be filed and/or eerv..i by the concerned party by personal service or respondent to satisfy the requirement of due process.
couner. Where courier eervices are not available, resort to registered mail Rule 1.10. Content• of petltwnlmotton.-The initiatory plea·
le allowed.
ding In the form of a verified petition or motion, In the appropriate caae
. (A) . Proof of /ili11g.-The filing of a pleading shall be proved by lta where court proceedlnp have already commenced, ehall include the namea
existence In the record of the case. If it is not in the record, but is claimed of the parties, their addresses, the necessary allegation• 1upporting the
to have been filed personally, the filing shall be proved by the written or petition and the reliefl:s) sought.
etam~~d acknowled~ent of ite filing by the clerk of court on a copy of the
same, iffiled by couner, by the proof of delivery from the courier company. Rule 1.11. Deflnition.-Tbe following terms shall have the follo-
wing meanings:
. CB> P'!"'f of •rviu.-Proof of personal service shall consiet of a
wntten adm1Nlon by the party aerved, or the official return of the aerver, a . •ADR Laws• refers to the whole body of ADR laws in the Philip-
or the affidavit of the party serving, containing a full statement of the pinee.
date, pl~ and manner of aervice. If the service is by courier, proof thereof b. "Appointing Authority" shall mean the person or inatitution
1hall conaiat of an affidavit of the proper person, stating facte •bowing that named in t he arbitration agreement u the appointing authority; or the
the docwne~t wae deposited with the courier company in a eealed regular arbitration institution under whose rule the arbitration is agreed
env~lope, .Plainly a~dresaed to the party a t hia office, if known, otberwiN to be conducted. Where the parties have agreed to submit their dispute to
at h~a rea1~ence, .Mtb J>09laee fully pre-paid, and with instructions to the institutional arbitration rules, and unlees they have agreed to a dilferent
couner to unmediately provide proof of delivery. procedure, they shall be deemed to have agreed to procedure under ouch
(CJ FiJill(J and •roice by eJ«tronil: mea.u and proof thereo(.-Filing arbitration rules for the selection and appointment of arbitrators. In ad
and service or pleadings by electronic transmission may be allowed by hoc arbitration, the default appointment of arbitrators ahal1 be made by
a&J1Mlment of the partlea approved by the court. If the filing or eerv!ce of a the National President of the Integrated Bar of the Philippine• or hie duly
pleadine or motion wu done by electronic transmission, proof of filing and authorized repreaentative.
aervice ahall be made in accordance with the Rules on Electronic Evidence. c. "Authenticate• meana to sign, execute or use a symbol, or eocrypt
a record in whole or in part, intended to identify the authentitating party
and to adopt, accept or establi1h the authenticity of a record or term.
466 ALTERNATIVE DISl'IJTE RESOLUTION .APPENDIX •E• 467
SPECIA.L RULES OF COURT ON
ALTERNATIVE OISPlTl"E RESOLtmON

d. "Foreien Azbitral Award" ia one made in a country other than efficient resolution of disputes, impartial juatice, curl> a litigioua culture
the Philippines.
and to d~log court dockets.
e. •Legal Brief' is a written legal argument submitted to a court, The court shall exercise the power of judicial review ae prorided by
outllnina the facta derived from the factual statements in the witneaa's tb- Special ADR Rules. Courts shall intervene only in the caMS allowed
statements of fact and citing the legal authoritiea relied upon by a party ia by law or these Special ADR Rules.
a cue submitted in connection with petitions, counter-petitions (i.e., pe-
titions to vacate or to set uide and/or to cornet/modify in opposition to Rule 2.2. Polley on arbitratWn..- {.A) Where the parties h~'le
petitions to confirm or to recognize and enforce, or petitions to confinn or qreed to aubmit their dispute to arbitration, courts ~ ref~ th~ partiee
to recognize and enfon:e in opposition to petitions to vacate or set aside to arbitration pursuant to Republic Act No. 9285 bearing m 1111Dd that
and/or correct/modify), motion.a, evidentiary iS!lues and other mattera that auch arbitration agreement ia the law between the parties and tllat they
an.. during the coune of a cese. The legal hrief shall state the applicable are expected to abide by it in good faith. Further, ~ courts ·~ .not
law and the relevant jurisprudence and the legal arguments in support ol refuse to refer parties to arbitration for reasons including, but not limited
a party'• poaition in the caae. to, the following:
f. "Veri.fication" ahall mean a certification under oath by a party or a. The referral tends to oust a court of ita jurladiction;
a peraon who bu authority to act for a party that he has read the plea- b. The court is in a better position to resolve the diaput.e subject of
ding/motion, and tlat he certifies to the truth ofthP. f11cts sttlted th•rein on arbitration;
tbe basla of hia own personal knowledge or authentic documents in hi•
J>09seaaion. When made by a lawyer, verification shall mean a statement c. The referral would result in multiplicity of suits;
under oath by a lawyer aigning a pleading/motion for delivery to the Cowt d. The arbitration proceeding bas not commenced;
or to ~e pa~lea that he peraonally prepared tile pleading/motion, that e. The place of arbitration is in a foreign country;
there ,. 1uffic1ent factual bula for the statements of fact stated therein f. One or more of the iasues are legal and one or more of the ar-
that ~ere ia auft\cient buia in the facts and the law to support the praye; bitrators are not lawyera;
for rebef therein, and that the pleading/motion is filed in iood faith and ill
not interposed for delay. I· One or more of the arbitrators are not Philippi.De nationala; or
h. One or more of the arbitrator& are alleged not to poaaeaa the
Rule 1.12. A,pplkabLlily of Part II on Specific Court Relhf.- required qualification under the arbitration agreement or law.
Part JI of t~e S~ial ADR Rules on Specific Court Relief, insofar u it
refen to arb1trat1on, shall also be applicable to other forms of ADR. (Bl Where court intervention ill allowed under ADR Laws or. tbe
Special ADR Rules, courts ahall not refuse to grant relief, ae provided
Rule 1.18. Spirit and Intent of the Special ADR Rul«.-Jn herein, for any of the following reuona:
1ituationa where no lpecific rule ia provided under the Special ADR Rules,
the court •hall reaolve •uch matter summarily and be guided by the spirit a . Prior to the constitution of the arbitral tribunal, the court finds
and intent of the Special ADR Rules and the ADR Laws. that the principal action is the subject of an arbitration agreement; or
b. The principal action is already pending before an arbitral tribu·
RULE ll - Stat.ttMnt of PolU:in nal.
The Special ADR Rulea recoenize the principle of competence-
Rule ll.l. Om.rul policiea.-It ia the policy of the State to ac- competenoe, which m.eans that the arbitral tribunal may initially ~e on
tively promote the use of Yarioua modes of ADR and to respect party itl own juriadiction, including any objections with re~~ to the enstence
autonomy or the freedom of the parties to make their own arraneementl or validity of the arbitration agreement or any condition precedent to the
in the reaolution of disputes with the 1?1'88test cooperation of and the leut fllina nf to request for arbitnation.
intervention li'om the courta. To thia end, the objectives of the Special ADR
Rule• are to encourap and promote the use of AD R, particularly ar- The Special ADR Rulee recognize the principle of separability of the
bitration and mediation, as an important me.&J\8 to achieve speedy and arbitration clause which means that said clause shall be treated as an
aereement lndepe~dent of the other terma of the contract of which it forme
 APPENooc "E" ~9
468 ALTERNAT!V!: D ISPUTE RESOLUTION
SPECIAL Rut.ES OF COURT ON
ALTERNATIVE DISPUTE RESOLUTION

part. A decision that the contract ia null and void shall not entall lpao jure Rule 2.7. Conuenion of a uttle-nl f16nte1Mnt lo an arlllt·
the invalidity of the arbitration clauee. rol cuoard.-Where the parties to mediation have agreed in the written
eettlement agreement that the mediator shall beoome the sole arbitr:ator
Rule i.3. Ruin goNrnlng arl>ltrol procttding..-The parties for the dispute or that the settlement agreement 1ball become an arb1tral
are free to agree on the procedure to be followed in the conduct of arbltral award, the sole arbitretor aball issue the settlement agreement as an
proceedings. Failing such agreement, the arbitral tribunal may conduct arbitral award, which shall be subject to enforcement under the law.
arbitration In the manner it consider• appropriate.
Rule i .4. Policy Implementing competence-competence pri,.. PART II
ciple.-The arbitral tribunal ahall be accorded the first opportunity or SPECIFIC COURT RELIEF
competence to rule on the issue of whether or not it has the competence or
jurisdiction to decide a dispute submitted to it for decision, including llD¥ RULE 3 - Judk!ial Relief lnuoluinl the r,.ue of
objection with respect to the existence or validity of the arbitration agree- &i1tenc., Validity and Enforc«abl/Jty
ment. When a court is asked to rule upon issue/a affecting the competence oftlM Arbitration Apft1Mnt
or jurisdiction of an arbitral tribunal in a d isp1.1te bl'91.1ght btfore it, either
before or att.r the arbitral tribunal is constituted, the court must exen:ile Rule 3.1. Wlunjudiclal nitufu cuiailable.-Tbe judicial relief
judicial restrain.t and defer to the competence or jurisdiction of the arl>itral provided in Rule 3, whether resorted to before or ~r ~mi;n~cement "!
tribunal by allowing the arbitral tribunal the first opportunity to rule arbitration, shall apply only when the place oC arbitration IS m the Phi·
upon auch lasuea. lippines.
Where the court is asked to make a determination of whether the
A. Judicial Relief before Commencement of Arbitration
arbitration agreement is null and void, Inoperative or incapable of being
performed, under this policy of judicial restraint, the court muat make no
Rule 3.2. Who may fihl petlllon.-Ally party to an arbitra~on
more than a prima facie determination of that ieaue.
agreement may petition the appropriate court to determine 8JlY q~~on
Unleea the court, pursuant to auch prima facie determination, con· concerning the existence, validity and enforceability of auch arb1tra~on
eludes that the arl>itration agreement ia null and void, inoperative rr agreement serving a copy thereof on the respondent in accordance with
incapable of beinc performed, the court must suspend the action before it Rule l."W.
and refer the partiea to arbitration pursuant to t he arbitration agreement.
Rule 3.3. When tu petition may be fflff.-The ~tion for
Rule 2.5. Polley on mediatlon.-The Special ADR Rulee do not judicial determination of the existence, validity and/or enforceability or an
apply to Court-Annexed Mediation, which shall be governed by iaauancea arbitration agreement may be filed at any time prior to the commence·
of the Supreme Court. roent of arbitration.
Where the parties have agreed to 1ubmit their dispute to mediation. Despite the pend ency of the petition provided herein, arbi~ procee·
a court before which that dispute was brought shall suspend the proceed· dings may neverthele11 be co=enced and oontinue to the rendition of an
inp and direct the parties to submit their dispute to private mediation. If award, while the issue ia pending before the court.
the parties subsequently agree, however, they may opt to have their die·
pute aettled through Court-Annexed Mediation. Rule 3.4.. Vemu. -A petition queetioning the emtence, validity
and enforoeability of an arbitration .,reement m_, ~. filed before the
Rule i .8. Polley on .Arf>ltrolion-Medlalion or Medlalion·Ar- Regional Trial Court of the place where any of the petitioners or reepon·
bitralion.- No arbitrator shall act u a mediator in any proceeding in dents has his principal place of business or ruiclence.
which be i• acting as arbitrator; and all negotiations towards eettlement <A
the dispute must take place without the presence of that arbitrator. Rule 3.5. Groun.U.-A petition may be granted only ~ it .is
Conversely, no mediator shall act as arbitrator In any proceeding In which ahown that the arbitration agreement is, under the applicable Jaw, 1nvahd,
he acted ae mediator. void, unenforceable or inexistent.
470 ALTERNATIVE DISPUTE RESOLUTION
APPENDIX "E" 471
SPECIAi. RULES OF COURT ON
At.TERNAT!VE DISPUTE RESOLUTION

Rule S.6. ContniQ of~t.ltion..-The verified petition shall stat. iuuea with due regard, however, to the standard for review for arbitral
the following: awarda prescribed in t hese Special ADR Rules.
a. The facts showing that the persons named aa petitioner or
respondent have lqal capacity to sue or be sued; B . Judicial ReUef after Arbitration Commen,...
b. The nature and substance of the dispute between the parties;
Rule S.12. Who may ffk petltion.-Any party to arbit:i:8tion mq
c. The rround.a and the circumstances relied upon by the petitioner
to establish hi,1 position; and petition the appropriate court for judi~al relief ~m the ~ o( l:'1'
arbitral tribunal on a preliminary question upholding or d.ec_l1nl~ i!" J.u·
d. The relieUa 90u1ht. risdktion. Should the rulin1 of the arbitral tribunal cleclinina lbs Jun•·
Apart trom other aubmiaaiona, the petitioner must attach to the diction be reversed by the court, the parties ahall be free to replace the
petition an authentic copy of the arbitration agreement. arbitrators or any one of them in accordance with the rulee that were
applicable for the appointment of arbitrator sought to be replaced.
Rule 8.7. ComJMnt/Oppo.ttion..-The comment/oppoaition of
the respondent must be liled within fifteen (15) days from service of the Rule 3.13. When ,,.tUlon moy IN fiW-The petition ~ay be
petition. filed within thirty (30) daya after having received notice of that rulina by
the arbitral tribunal.
Rule 8.8. Court actlon..-ln resolving the petition, the court
must exerciae judicial restraint In accordance with the policy set forth in Rule S.14. Venue.-The petition may be filed before the Region~
Rule 2.4, deferrin1 to the competence or jurisdiction of the arbitral tri· Trial Court of the place where arbitration is taking place, or ~here any 0
bunal to rule on !ta competence or jurisdiction. the petitioners or reapondents hes his principal place of bumne11 or re-
sidence.
Rule 8.9. No forum ehopplng.-A petition for judicial reJi.ef
under this Rule may not be commenced when the existence, validity or Rule S.15. Grounda.-The petition may be granted when the
enforceability of an arbitration &gl'eement has been raised aa one of the CO urtfinds that the arbitration •'"""'ment is invalid, inexistent or :unen·
iuues in a prior action before the same or another court. -e·--. .
forceable as a result of which the arbitral tribunal L --
....., • "adiction to
no Jun
reaolve the dispute.
Rule S.10, ApplU!atton for baterim relief.-lf the petitioner
also applies for an interim measure of protection, he must also comply Rule S.16. Cantenta of 1Htitton.-The petitioo shall etate the
with the requirements of the Special ADR Rules for the application for an following:
interim meaaure of protection. a. The facts showing that the penoa named aa petitioner or re•
pondent has legal capacity to sue or be sued; .
Rule 8.11. JUI~agalnat court actton..-Whue there u a prirno
~i.e ckkrmination upholdi1111 the arbitration agreermnt.-A prima facie b. The nature and substance of the di.Jput.e between the partiee;
det.erminatioo by the court upholding the existence, validity or enfon:e- c. The grounds and the circumstancea relied upon by the petitio-
ebi.lity al an arbitration agreement shall not be subject to • motion f« ner; and
reconsideration, appeal or certiorari. d. The relief1s aougbt.
Such primo fock determination will not, however , prejudice the In addition to the aubmissiont. th• petitioner •hall attach to. the
right of any party to raiae the iaaue of the existence, validity and enfon:e- petition a copy of the request for arbitration and the ruling of the arb1tral
ability of the arbitration agreement before the arbitral tribunal or the tribunal.
court in an action to vacate or eet aside the arbitral award. In the Jett.er
The arbitrators ahall be iulpleaded aa nominal parties to the cue
case, the court's review of the arbitral tribunal's rulina upholding the
existence, validity or enfo-ability of the arbitration agreement shall no and 1hall be notified of the prcgrees of the case.
longer be limited to a mere prime facie determination of such iaaue ~ Rule 8.17. Comment/OpposUion.-The comment/oppoeition must
issues as prescribed in thb Rule, but shall be a full review of such iaaue or be filed within fifteen (15) days froPl service of the petition.
472 ALTERNATIVE DISPUTE RESOLUTIOI> APPENDIX "E. 473
SPECIAL RULES OF COURT ON
ALTERNATIVE DISPUTE RESOLUTION

Rule 3.18. Court tu:lion.-(A) Period for nsolving tM petition. the same should the latter participate in the proceed.inp, but only as
-The court shall render judgment on the basis of the pleadings filed and nominal partiu thereto.
the evidence, if any, 1ubmitted by the parties, within thirty <30) days from
the time the petition is submitted for resolution. RULE 4-&ferraltoADR
(8) No injunction of arbitration proceedings.-The court shall not
eajoin the arbitration proceedings during the pendency of the petition. Rule 4.1. Who make• tM nrque.t.-A party to a pending ~ction
filed in violation of the arbitration agreement, whether contained tn an
Judicial recourse to the court shall not prevent the arbitral tribunal arbitration clause or in a submission agreement, may request the court to
from continuing the proceedings and rendering its award. refer the parties to arbitration in accordance with such agreement.
(C) WMn dismissal of petition is appropriate.-The court shall dia-
mies the petition if it fails to comply with Rule 3.16 above; or if upon Rule 4.2. When to make requeet.-(A) Wherv tlu arbitration
consideration of the grounds alleged and the legal briefs submitted by the agrttment exists before the action is filed.-Tbe request for refe~ shall
parties, the petition does not appear to be prima facie meritorious. be made not later than the pre-trial conference. After the P.~ti?81 con·
ference, the court will only act upon the request for referral if 1t 1a made
Rule 8.19. R.lief against court action.-The aggrieved party with the agreement of all parties to the case.
may file a motion for reconsideration of the order of the court. The decision (B) Submission agrttmen.t.-If there ia no ~xistlng arbitration ag·
of the court shall, however, not be subject to appeal. The ruliq of the reement at the time the cme is filed but the parties subsequently en~r
court allirming the arbitral tribunal's jurisdiction shall not be subject to a into an arbitration agreement, they may request the court to refer thell'
petition for certiorari. The ruling of the court that the arbitral tribunal baa dispute to arbitration at any time during the proceedings.
no jurisdiction may be the subject of a petition for certiorari.
Rule 4.S. Content• of nrqueet.-The request for referral shall be
Rule S.20. Whe,.. no pclltlon ie ollowed.-Where the arbitral In the tbrm of a motion, which shall state tbat the dispute is wvered by an
tribunal defers it1 ruling on preliminary question regarding its jurisdiction arbitration a!P""ment.
until its final award, the aggrieved party cannot seek judicial relief to
question the defe1Tal and must await the final arbitl'al award before Apart from other submissions, the movant shall attach to his motion
seeking appropriate judicial recourse. an authentic copy of the arbitration agreement.
The request shall contain a notice of bearing addressed to all parties
A ruling by the arbitral tribunal deferring resolution on the iaaue of
its jurisdiction until final award, shall not be subject to a motion for specifying the date and time when it would be b~ard..The party ~g
reconsideration, appeal or a petition for certiorari. the request shall serve it upon the respondent to ~ve hi~ the opportu~ty
to file a comment or opposition as provided in the unmedistely succeeding
Rule S.21. R.ndition of arbitral award before court decuh>n Rule before the hearing.
on petition from arbitral tribunal'• preliminary ruling on Juri.
dictton.-Jf the arbitral tribunal renders a final arbitral award and the
Rule 4.4. Comnwnt/OppoeUion.-The comment/opposition must
be filed within fifteen (15) days from service of the petition. The com·
Court has not rendered a decision on the petition from the arbitral tri·
ment/opposition should show that: (a) there is no agreement to refer the
bunal's preliminary ruling affirming its jurisdiction, that petition shall dispute to arbitration; and/or (b) the agreement is null and void; and/or.Cc)
become ipso facto moot and academic and shall be dismiaaed by the the subject-matter of the dispute is not capable of settlement or resolution
Regional Trial Court. The dismissal shall be without prejudice to the right
by arbitration in accordance with Section 6 of the ADR Act.
of the aggrieved party to raise the same issue in a timely petition to vacate
or set aside the award. Rule 4.CS. Courl actlon.-After hearing, the court shall stay the
action and, considering the statement of policy embodied in Rule 2.4,
Rule S.22. Arbttral tribunal a nominal part,y.-Tbe arbitral above, refer the parties to arbitration if it ~ds prima fac~: based on the
tribunal is only a nominal party. The court shall not require the arbitral pleadings and supporting documents sub1D1~ by the parties, t~at there
tribunal to submit any pleadinrs or written submissions but may consider is an arbitration asreement and that the subJect·matter of the dispute. is
capable of settlement or resolution by arbitration in accordance with
474 ALTERNATIVE DISPUTE RESOLt:T!ON APPENDIX ·E· 475
SPECIAL RULES OF COURT ON
ALTERNATIVE DISPUTE RESOLtmON

Section 6 of the ADR Act. Otherwise, the court shall continue with the arbitration is commenced, but before the constitution of the arbitral tri-
judicial proceedings. bunal, or (cl after the constitution of the arbitral tribunal and at any time
during arbitral proceedings but, at this atage, only t.o the exteDt that the
Rule 4.6. No reconai<kration, OpJHal or cerliorari.-An order arbitral tribunal has no power to act or is UD4ble to act effectively.
referring the dispute to arbitration shall be immediately executory and
shall not be subject to a motion for reconsideration, appeal or petition for Rule 6.S. Venue.-A petition for an interim measure of protection
certiorari. may be filed with the Regional Trial Court, which has jurisdiction over any
An order denying the request to refer the dispute to arbitration shall of the following places:
not be subject to an appeal, but may be the subject of a motion for a. Where the principal place of business of any of the partiea to
reconsideration and/or a petition for certiorari. arbitration is located;
Rule 4.7. Multipk action. ana parliee.-The court shall not h. Where any of the parties who are individuals resides;
decline to refer some or all of the parties to arbitration for any of the c. Where any of the acta sought to be eajoined are being performed,
following reasons:
threatened to be performed or not being performed; or
a. Not all of the disputes subject of the civil action may be referred d. Where the real property subject or arbit.Tation, or a portion there-
t.o arbitration;
of is situated.
. ~· Not all of the parties to the civil action are bound by the er·
b1tration agreement and referral to arbitration would result in multiplicity Rule 6.4. Grounda.-The following grounds, while not limiti~g
of suits; the reasons for the court to grant an interim measure of pro,:tect1on, .in·
dicate the nature of the reasons that the court shall corundar 10 grantmg
c. The issues raised in the civil action could be speedily and elfi· the relief:
ciently resolved in its entirety by the court rather than in arbitration;
a. The need to prevent Irreparable loss or injury;
. d. Referral to arbitration does not appear to be the most prudent
action; or b. The need to provide aec:urity for the performance of any obli·
gation;
. e; ~e stay of the action would prejudice the rights of the parties to
the ctvtl action who are not bound by the arbitration agreement. c. The need to produce or preaerve evidence; or
The court may, however, issue an order directing the inclusion in ar· d. The need to compel any other appropriate act or omission.
bitration of those parties who are not bound by the arbitration agreement Rule 6.6. Content. of the petition.-The verified petition must
but who agree to such inclusion provided those originally bound by it do state the following:
not object to their inclusion.
a. The fact that there is an arbitration agreement;
Rule 4.8. Arf>ilra.tion lo proceed.-Despite the pendency of the b. The fact that the arbitral tribunal has not been constituted, or if
action refened to in Rule 4.1, above, arbitral proceedings may never- constituted, le unable t.o act or would be unable to act effectively;
thele88 be co~menced 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:;
d. The grounds relied on for the allowance of the petition
RULE G-Interim Me(Uures of Protection Apart from other submissions, the petitioner must attach t.o bis pe-
Rule 15.1. Who may cuk for Interim me<Uurn of protection.- tition an authentic copy of the arbitration agreement.
A party t.o an arbitration agreement may petition the court for interim Rule 6.6. 7)pe of interim mecuure ofprotection that a court
measures of protection. may 8J"Clllt.-Tbe following, among others, are the interim measures of
Rule &.2. When to petilwn.-A petition for an interim measure protection that a court may grant:
or protection may be made (a) before arbitration is commenced, (b) after a. Preliminary injunction directed against a party to arbitration;
476 ALTERNATIVE DISPUTE RESOLUTION APPzm>IX "E• 477
SPECIAL RULES OF COURT ON
ALTERNATIVB DISPUTE RESOLUTION

~· Preliminary attachment against property or garnishment of a. Furnish the respondent a copy of the petition and a notice re-
funds in the custody of a bank or a third person; quiring him to comment thereon on or before the day the petition will be
c. Appointment of a receiver; heard; and
d. Detention, preservation, delivery or inspection of property; or, b. Notify the parties that the petition shall be heard on a day
e. Assistance in the enforcement of an interim measure of protec- specified In the notice, which must not be beyond the twenty (20) day
tion ~anted by the arbitral tribunal, which the latter cannot enforce period of the effectivity of the ex-parte order.
effectively. The respondent has the option of having the temporary order of
protection lifted by posting an appropriate counter-bond aa determined by
. R~e 5.7. Dt.pe1Um1 with prwr notice in certain caeea.- the court.
Prior n~tice to th~ ~her party may be dispensed with when the petitioner
alleges m the petition that there is an urgent need to either (a) preserve If the respondent requests the court for an extension of the period to
property, (b) prevent the respondent from disposing of, or concealing, tbe file his opposition or comment or to reset tbe hearing to a later date, and
property, O~ (c) pi:event the relief prayed for from becoming illusory be- such request is granted, the court shall extend tbe period ofvalidity of the
ca":8~ of pnor notice, and the court finds that the reason/s given by tbe u·parte temporary order of protection for no more than twenty days from
petitioner are meritorious. expiration of the original period.
After notice and hearing, the court may eitber grant or deny the
be ru!ul-~.8. Comrnent/Oppoaitwn.-The comment/opposition must petition for an interim measure of protection. The order granting or deny·
Wl fifteen (15) days from service of the petition. The opposition

=
ing any application for interim measure of protection In aid of arbitration
:_:immheoulntdahould state the reasons why the interim measure of pro- must indicate that it is issued without prejudice to subsequent grant,
~··On s not be granted.
modification, amendment, revision or revocation by an arbitral tribunal.
hall 5•9 • Cou~ ~twn.-After hearing the petition, the court
Rule 5.10. Relief tJIOin.t court action.-11 reapondent was
s be ce ~e relative interests of the parties and inconveniences that given an opportunity to be heard on a petition for an interim measure of
;:iay fr cawie • and on that basis resolve the matter within thirty (30) protection, any order by the court ahall be immediately executory, but may
;~ J,m (a) submiaaion of the opposition, or (b) upon lapse of the period be the subject of a motion for reconsideration and/or appeal or, if war-
t e ; :me,.or (c) from termination of the hearing that the court may
se on1Y ere ts a need for clarification or further argument. ranted, a petition for certiorari.
th h If ~e ot~r Parties fail to file their opposition on or before the day of Rule 5.11. Duty oftM court to refer baclc.-Tbe court shall not
b e is ~·~I 8 ~urt shall mctu proprio render judgment only on the deny an application for assistance in implementing or enforcing an Interim
tias d 0 e egationa In the petition that are substantiated by supporo measure of protection ordered by an arbitral bibWlal on any or all of the
ng ocuments and limited to what is prayed for therein. followina grounds:
th 't cases where, based solely on the petition, the court finds that
ere s an urgent_~ to either (a) preserve property, (b) prevent the
a. The arbltral tribunal granted the interim relief ex parte; or
. b. The party opposing the application found new material evidence,
respon~ent from d1spos1ng of, or concealing, the property, or (c) prevent which the arbitral tribunal had not considered in eranting in the app·
~he rehe~ pray~ for froni becomina illusory because of prior notice, it shall lication, and which, if considered, may produce a different result; or
issue ~ ~mmedu1.tel! executory temporary order of protection and require c. The measure of protection ordered by the arbitral tribunal
the petitioner, within five (5) days from receipt of that order, to post a amends, revokes, modifies or ia inconsistent with an earlier measure of
bond to answer for any damage that respondent may suffer as a result of
protection issued by the court.
its order. The ex·parte teniporary order of protection shall be valid only for
a period of twenty (20) days from the service on the party required to lf it finds that there is sufficient merit In the opposition to the
comply with the order. Within that period, the court shall: application based on Jetter (b) above, the court shall refer the matter back
to the arbitral tribunal for appropriate determination.
478 ALTERNATIVE DISPUTE RESOLUTI0:-1 APPENDIX "E" 479
SPECIAL RU1.ES OF COURT ON
ALTl!RNATIVE DISPUTS RESOLUTION

8;ule 5.12. Security.-The order IP'anting an interim measure of a . Where any of the parties in an institutional arbitration failed or
protection may .be.conditioned upon the provision of security. performance refused to appoint an arbitrator or when the partiea have failed to reach
of an act, or om1aa1on thereof, specified in the order. an agreement on the sole arbitrator (in an arbitration before a sole
The Court may not change or increase or decrease tho security arbitrator) or when the two designated arbitrators have failed to reach an
ordered by the arbitral tribunal. agreement on the third or presiding arbitrator (in an arbitration before a
panel of three arbitrators), and the institution under whose rules
Rule 5.13. Modi~ation, amendme nt, reuision or reuocatlon arbitration is to be conducted fails or is unable to perform its duty as
of courl'• preul~uoly uaued Interim measure of protectlon.- Any appointing auth ority within a reasonable time from receipt of the request
co.urt order .gr~tmg or denying interim measure/s of protection is iuued for appointment;
without P~Jud1ce to subsequent grant, modification, amendment, revision b . In all instances where arbitration is ad hoc and the parties failed
or revocation by the arbitral tribunal as may be warranted.
to provide a m ethod for appointing or replacing an arbitrator, or substitute
An interim measure of protection issued by the arbitral tribunal arbitrator. or the method agreed upon is ineffective, and the National
sh9:11. upon it. issuance be deemed to h ave ipso jure modified, amended, President of the Inteirrated Bar of the Philippines (IBP) or his duly
revised or revoked an interim measure of protection previously issued by authoriud representative fails or refuses to act within auch period as may
the court to the extent that it is inconsistent with the subsequent interim be allowed under the pertinent rules of the IBP or within such period aa
meuure of protection issued by the arbitral tribunal. may be agreed upon by the parties, or in the absence thereof, within thirty
(30) days from receipt of such request for appointment;
Rule 5.14. Conflict or inconel.tency between interim nuo.-
Bure of protection u •ued by the court and by the arbltro.l trlbu- c. Where the parties agreed that their dispute shall be resolved by
nal.-Any question involving a conflict or inconsistency between an three arbitrators but no method of appointing those arbitrators has been
interim measure of protection issued by the court and by the arbitral agTeed upon, each party shall appoint one arbitrator and the two
tribunal s hall be immediately referred by t he court to the a rbitral tribunal arbitrators th us appointed shall appoint a third arbitrator. If a party fails
which shall have the authority to decide such question. to appoint his arbitra tor within thirty (SO) days of receipt of a request to
do so from the other party, or if the two arbitrators fail to agree on the
Rule 5.15. Court to defer action on petUion for an mterlm third arbitrator within a reasonable time from their appointment, the
meOBure ofprotection wMn informed of constitution of the o.rbitrol appointment shall be made by the Appointing Authority. If the latter fails
~~nal.-The court shall defer action on any pending petition for an or refuses to act or appoint an arbitrator within a reaaonable time from
ltl~~m meaaure of protection filed by a party to an arbitration alP'eement receipt of the request to do so, any party or the appointed arbitrator/s may
ansmg from or In connection wit h a dispute thereunder upon being in· request the court to appoint an arbitrator or the third arbitrator as the
formed that an arbitral tribunal has been constituted pursuant to aucb case maybe.
agreement. The court may act upon such petition only if it is established
by the petitioner that the arbitral tribunal has no power to act on any such Rule 6.2. Who m ay request for app olntment. -Any party to an
interim measure of protection or is unable to act th ereon effectively. arbitration may request the court to act as an Appointing Authority in the
instances specified in Rule 6.1 above.
Rule 6.16. Court OBBi1tance 1hould arbitral tribunal ~ ""°" Rule 6.3. Venue. - Tbe petition for appointment of arbitrator may
abk to effecttuely enforce interim meaaure of protection.-Tbe court
shall assut in the enforcement of an interim measure of protection iasuel be filed, at the option of the petitioner, in the Regional Trial Court (a)
by the arbitral tribunal which it is unable to effectively enforce. where the principal pliu:e or business of any of the parties is located, (b) if
any of the parties are individuals, where those individuals reside, or (c) in
RULE 6 -Appointment of Arbitrators the National Capital Region.
Rule 6.4. Content• of the petition.-The petition shall state the
Rule 6.1. When tM court may act a• Appointing Authority.- following:
The court shall act as Appointing Authority only in the following
instances: a. The gen eral nature of the dispute;
480 ALTERNATIVE DISPUTE Rt;!<Ol.UTION APPENDIX "E" 481
SPECIAL RULES OF COURT ON
ALTERNATlVE DISPUTE RESOLUTION

b. lfthe pnrties agreed on an appointment procedure, o description Rul e 6.9. R elief against court action. - lfthe court appoints an
of thnt procedure with reference to the agreement where such may be arbitrator, the order appointing an arbitrator shall be immediately
found; executory and shall not be the subject of a motion for reconsideration,
c. The number of arbitrators agreed upon or the absence of any appea l or certiorari. An order of the court denying the petition for appoint,.
agreement na to the number of arbitrators; ment of an arbitrotor may, however, be the subject of a motion for re·
d. The special qualifications thnt the arbitrator/s must possess, if consideration, appeal or certiorari.
any, that were agreed upon by the parties; R ULE 7 - Cliallenge to Appointment ofArbitrator
e. The fact that the Appointing Authority, without justlflable
cause, has foiled or refused to net as s uch within the time prescribed or in Rule 7.1. Who may challenge.-Any of the parties to an arbit-
the absence thereof, within a reasonable time, from the date n request is ration may challenge an arbitrator.
made; and
Rule 7.2. When challenge may be rai•ed in court.-When an
f. The petitioner is not the cause of the delay in, or fniluro of, the arbitrator is challenged before the arbitral tribunal un~er the ~roced~
appointment of the arbitrator. agreed upon by t he parties or under the procedure provided for m ~cle
Apart from other submissions, tho petitioner must a t tach to the 13 (2) of the Model Law and the challenge is not auccessful, the aggneved
petition (a) an authentic copy of the arbitration agreement, and (b) proof party may request the Appointing Authority to rule on the challenge., and
that the Appointing Authority has been notified of the filing of the petition it is only when such Appointing Authority fails or refuses to ~ct on the
for appointment with the court. challenge within such period as may be allowed under the apph.cable rule
or in the absence thcrco(0 within thirty (30) days from receipt of the
Rule 6.15. Commenl/Oppo•illo n. -The comment/opposition must request, that the aggrieved party may renew the chnllcnge in court.
be filed within fifteen (15) days from service of the pet ition.
Rule 7.3. Venue.-The challenge shall be filed with the Regional
Rul e 6.6. Submission of list of arbitrators. -The court mny, at Trial Court (al where the principal place of business of any of th~ ~es is
its option, also require each party to submit a list of not less thnn three (3) located, (b ) if any of the parties are individuals, where those tnd1vtduals
proposed arbitrators together with their curriculum vitae. reside, or Cc) in the Notional Capital Region.
Rule 6.7. Court action.- AAer hearing, if the court finds merit Rul e 7 .4. Ground•.-An arbitrator may be challenged on any.or
in the petition, it shall appoint an arbitrator; otherwise, it shall dismiss the grounds for challenge provided for in Republic Act No. 9285 an~ its
the petition. implementing rules, Republic Act No. 876 or tho ~~odel Law. The nat1ona·
In making the appointment, the court s hall have record to such lity or profession al qualification of an arbitrator _'S n~t a ~und .to c~a­
considerations as nro likely to secu re tho appointment of an independent Uenge an a rb itrator unless the parties have specified in their arb.1trat1on
and impartial arbitrator. agreement a n ationality and/or professional qualificntion for appotntment
At any time after the petition i• lilod Hnd before tho court makes nn as arbitrator.
appointme nt, it sholl also dismiss the pe tition upon being informed that Rule 7 .5. Content• of the petition. - The petition shall state the
the Appointing Authority has already made the appointment. fullowing:
Rule 6.8. Forum shopping prohibited..-When there ia a pen· a. The name/a of t he arbitrator/s challengoo nnd his/their address;
ding petition in another court to declare the arbitration agreement b. The grounds for the challenge;
inexistent, invalid, unenforceable, on account of which the respondent
failed or refused to participate in the selection and appointment of o sole c. The facts s howing that the ground for the challenge has been
arbitrator or to appoint a party-nominated arbitra tor, the petition filed expressly or impliedly rojected by the challenged arbitrntorls; and
under this rule shall be dismissed. d . The facts showing that the Appointing Authority failed or
refused to act on the cho llonge.
482 ALTERMATIVE DISPUTE R ESOLUTJQ:-; APPENDIX "E" 483
SPECIAL RULES OF COURT ON
ALTERNATIVE DISPIJ'l'E RESOLUTION

The court 1hall di1miss the petition motu proprio unless it is clearly executory and shall not be the subject of a motion for reeonsideration,
alle&ed therein that the Appointing Authority charged with deciding the appeal, or certiorari.
cballe~ge, aft.er the resolution of the arbitral tribunal rejecting the cbal-
len&e 11 ralaed or contested before such Appointing Authority, failed or Rule 7.9. IUimbune~nt of erpenu• and rea;ionobr. com-
refuaed to act on the challenge within thirty (30J days from receipt of the pen•ation to ch4ll.eraged arbitrotor.-Unless the bad faith of the chal-
request or within such longer period as may apply or as may have been lenged arbitrator is established with reasonable certainty by concealing or
agreed upon by the parties. failing to disclose a ground for bis disqualification, the challenged arbitra-
tor shall be entitled to reimbursement of all reasonable expenaea be may
Rule 7.6. CommentlOppodtion.-The challenged arbitrator or have incurred in attending to the arbitration and to a reasonable compen-
other partiea may file a comment or opposition within fifteen (15) daya sation for his work on the arbitration. Such expenses include, but shall not
from service of the petition. be limited to, transportation and hotel expenses, if any. A reasonable
compensation shall be paid to the challenged arbit.ratA>r on the basie of the
Rule 7.7. Court action.-Aft.er hearing, the court shall remove length of time he has devoted tA> the arbitration and taking into considera-
t~e c?alleneed ~i:t>ltrator if it finds merit in the petition; otherwise, it shall tion bis stature and reputation as an arbitrator. The request for reimbur-
d1am1as the petition.
sement of expenses and for payment of a reasonable compensation shall be
The court shall allow the challenged arbitrator who subsequently filed in the same case and in the court where the petition to niplace the
a&ree8 to accept the challenge to withdraw as arbitrator. challenged arbitrntor was filed. The court, in determining the amount of
?'hecourt shall accept the challenge and remove the arbitrator in the
followmg cases:
the award to the challenged arbitrator, shall receive evidence of expenses
to be reimbursed, which may consist of air tickets, hotel bills and exi>?n·
see, and inland transportation. The court shall direct the challengmg
b' 8 • The party or parties who named and appointed the challenged party to pay the amount of the award to the court for the account of the
ar 1tratA>r agree tAl the chaUenge and withdraw the appointment. challenged arbitrator, in default of which the court may issue a writ of
b. The other arbitrators in the arbitral tribunal agree to the execution to enforce the award.
removal of the challeneed arbitrator; and
c. The challenged arbitrator fails or refuses to submit his comment RULE 8 - Termination of tM Mandate of Arbitrator
?n the petition or the brief of legal arguments as directed by the court, or Rule 8 .1. Who 1'1431 requeat termination and on what
10 such comment or legal brief, be fails to object to his removal following
the challenge. grountU.-Any of the parties to an arbitration may request for the
termination of the mandate of an arbitrator where an arbitrator becomes
. The court shall decide the challenge on the basis of evidemie sub- de jure or de facto unable to perform his function or for other reasons fails
mitted by the partiea. tAl act without undue delay and that arbitratA>r, upon requeat of any party,
!he court will decide the challenge on the basis of the evidence faila or refuses to withdraw from his office.
submitted by the parties in the following iruitances:
Rule 8.2. When to requut.- lf an arbitrator refu11e11 to withdnlw
a. The other arbitratoni in the arbitral tribunal agree to the from bis office, and subsequently, the Appointing Authority fails or refuaea
removal of the challenged arbitrator; and to decide on the termination of the mandate of that &Jbitrator within euch
b. If the challenged arbitrator fails or refuses to submit hie period as may be allowed under the applicable rule or, in the abaence
comment.on the petition or the brief of legal arguments as directed by the thereof, within thirty (30) days froal the time the request is brought before
~urt. or m such ~mmenL or brief of legal arguments, be fails to object to him, any party may file with the court a petition to terminate the mandate
his removal followtng the challenge. of that arbitrator.

Rule 7.8. No motion for reco,..Uknuion, appeal or certio- Rule 8.S. Venue.-A petition to terminate the mandate of an ar-
rarl.- Any order of the court resolving the petition shall be immediately bitrator may, at that petitioner's option, be filed with the Regional Trial
Court (a l where the principal place of business of any of the parties is
484 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "E" 485
SPECIAi. RULES OF COURT ON
ALTERNATIVE DISPUTE RSSOLtmON

located, (b) where any of the parties who are individuals resides, or (c) in Rule 9.2. Wlun 088'8tance may 611 1oug.ht.-Assistance may be
the National Capital Region. sought at any time during the course of the arbitral proceedings when the
need arises.
Rule 8.4. Content. oftrut petition.-The petition shall state the
following: Rule 9.S. Venue.-A petition for assistance in taking evideru:e
a. The name of the arbitrator whose mandate is sought to be may, at the option of the petitioner, be filed with Regional Trial Court
terminated; where (a) arbitration proceedings are taking place, (b) the witnesses reside
or may be found, or (c) where the evidence may be found.
b. The ground/a for termination;
c. The fact that one or all of the parties had requested the ar· Rule 9.4. Ground.- The court may grant or execute the request
bitrator to withdraw but he failed or refused to do so; for assistance in taking evidence within ita competence and according to
the rules of evidence.
d. The fact thst one or all of the parties requested the Appointing
Authority to act on the request for the termination of the mandate of the Rule 9.6. TyJn of oetiatonce.-A party requiring assistance in
ar~itrator and failure or inability of the Appointing Authority to act within the taking of evidence may petition the court to direct any person,
thii:tY (30) daya from the request of a party or parties or within such including a representative of a corporation, 1188ociation, partnership or
pen~ as may have b"n agreed upon by the parties or allowed under the other entity (other than a party to the ADR prooeedlnp or its officers)
applicable rule. found in the Philippines, for any of the following:
Th: ~tit!o~.,.. •hall further allege that one or all of the parties had a. To comply with a subpoena ad t.esli{icandum and/or subpoena
requeste t e ar itrator to withdraw but he failed or refused to do so. duces tecum;
Rule 8.6. Com~nt/O . • Th b. To appear as a witneu before an officer for the taking of his
be filed within flftee ( 'PPOH1io":- e comment/opposition must
n 15) daya from service of the petition. deposition upon oral examination or by written intenogatories;
Rule 8.6. Colll't action. Me h . .f c. To allow the physical examination of the condition of persona, or
in the petition it hall . - r eanng, 1 the court finds merit the inspection of things or premises and, when appropriate, to allow the
refuses to withdraw~ ~rnunate the mandate of the arbitrator who recording and/or documentlltion of condition of persona, thinp or premises
m 14 office; otherwise, it shall dismiss the petition. (i.e., photographs, video and other means of recording/documentation);
Rule 8.7. No motion fo
order of the court resol . r ~onauuratwn or appea.1.-Any d . To allow the examination and copying of documents; and
and shall not be 8 b'ect vi;g the. petition shall be immediately executory e. To perform any similar acts.
for certiorari. u ~ 0 a lllOtion for reconsideration, appeal or petition
Rule 9.6. Contents of tire petition.-Tbe petition must state the
Rule 8.8. Appointme t f . following:
mandate of an arbit n ~ •idletituee arl>Urator.-Where tbe
any other reason orrator la ternu_nat.ed, or h~ withdraws from office for a. The fact that there is an ongoing arbitration prooeedin& even if
the .ea . ' 1:'8cause of hia mandate 1s revoked by agreement of such proceeding could not continue due to some legal impedimenta;
sh~ a or i:te~rmmat~ for any other reason, a substitute arbitrator b. The arbitral tribunal ordered the taking oC evidence or the party
appointme:i0 f th ab~ording ~ the rules that were applicable to the desires to present evidence to the arbitral tribunal;
ear •trator being replaced.
c. Materiality or relevance of the evidence In be teken; and
RULE 9-Asaiitonce in Takin1 Evidence d. The names and addresses of the intended witness/es, place
where the evidence may be found, the place where the premises to be
. Rule 9.1. Who may request oeeietonu..-Any party to an ar· inspected are located or the place where the acts required are to be done.
b•ti:ation, ~he~r domestic or foreign, may request the court to provide
assistance 111 taking evidence. Rule 9.7. CommentlOppoaUion.-The comment/opposition must
be filed within fifteen (15) days from service of the petition.
486 ALTERNATIVE DISPUTE RESOLUTION
APPENDIX "E" 487
SPECIAL RULES OF COURT ON
ALTERNATIVE DISPUTE RESOLUTION

Rule 9.8. Court action.-lf the evidence sought is not privileged, unauthorized disclosure of the information obtained, or to be obtained,
and is material and relevant, the court shall grant the assistance in taking during an ADR proceeding.
evidence requested and shall order petitioner to pay costs attendant to
such assistance. Rule 10.3. Cont ent• of the motion or petltwn.-Tbe petition or
motion must state the following:
Rule 9.9. R elief agabut court act lon.-Tbe order granting tw1i5>
tance in taking evidence shall be immediately executory and not subject to a . That the information sought to be protected was obtained, or
reconsideration or appeal. If the court declines to grant assistance in taking would be obtained, during an ADR proceeding;
evidence, the petitioner may :file a motion for re<:onsideration or appeal. b. The applicant would be materially prejudiced by the disclosure of
that information;
Rule 9.10. Perpetuation of teetl.m ony before the a rbitral tri·
buna l u constituted.-At anyt.ime before arbitration is commenced or c. The person or persons who are being a.sk~ to divulge the con·
before the arbitral tribunal i5 constituted, any person who desires to per- 6dential information participated in an ADR proceedings; and
petuate his testimony or that of another person may do so in accordance d. The time, date Md place when th.e ADR proceedings took place.
with Rule 2'I of the Rules of Court.
Apart from the other submissions, the movant must ~t the motion
Rule 9.11. Conseqiunce of diwbedience.-The court may im· for hearing and contain a notice of bearing in accordance with Rule 15 of
pose the appropriate sanction on any person who disobeys its order to the Rules of Court.
testify when required or perform any act required of him.
Rule 10.6. Notice.-Notice of a reque!t for a pro~~e order
RULE 10 - Confidentiallty/Protect iue Orders · parties in accor·
mad e through a motion shall be made to t he opposmg
dance with Rule 13 of the Rules of Court.
Rule 10.1. Who may requelt confidentiality.-A party, counsel Rule 10.7. Comm enJ/Oppoaition.-The comment/opposition ~~st
or ~tnesa who di~loaed or who was compelled to disclose information
relative to the IUbJect of ADR under circumstances that would create a be filed within fifteen (15) days from service of the petition. 1:"1e op~ttio.n
or comment may be accompanied by written proof that (a) the ~tion ••
reasonable expectation, on behalf of the source that the information shall
be kept C?nfidenti~ has the right to prevent s~ch information from being not confidential, (b) the information was not. oi;>talned d)du;;: S:tio~~
further d11cloeed without the express written consent of the source or the proceeding, (c) there was a waiver of confidenuality, °"
< pe
party who made the disclosure. movant is precluded from aaserting confidentiality.
Rule 10.8. Court = tlon.-If the court 6.nda the petition or mo·
Rule 10.2. When requeet rnade.-A party may request a pro-
ti on meritorious, it a hall iaaue an order eajoining 8 person or persons from
tective order at anytime there is a need to enforce the confidentiality of the
information obtained, or t.o be obtained, in ADR proceedings. divulging confidential information.
In resolving the petition or motion, the courts shall be guid<:d b.y the
Rule 10.3. Venue.-A petition for a protective order may be filed following principles applicable to all ADR proceedings; Confi.denib':81· mfor-
with the Regional Trial Court where that order would be implemented. mation shall not be aubject to discovery and •hal!~ ?1~dl111SS e m
adversarial proceedinf whether judicial or quasi JUdicial. Howe~er, evt·
anr
. If t.J_iere it a pending court proceeding in which the information
obtained in an ADR Proceeding is required to be divulged or ia being dence or information that is otherwise admbsible or subject to dtSCOvery
divulged, the party seeking to enfon:e the confidentiality of the lnforma· does not become inadmlsaible or protected from discovery solely by reason
tion may file a motion with the court where the proceedings are pendine to ofits use therein.
eajoin the confidential information from being divulged or to suppress For mediation proceedings, the court shall be further guided by the
confidential information. following principles:
Rule 10.4. Groun.U.-A protective order may be granted only if a. Information obtained through mediation shall be privileged and
it is shown that the applicant would be materially prejudiced by an confidential.
488 Al.TERNATIVE DISPUTE RESOLUTION .APPENDIX "E• 489
SPECIAL RULES Of' COURT ON
ALTERNATIVE DISPUTE RESOLUTION

b. A party, a mediator, or a nonparty participant may refuse to (B) Correction I Modi{ication.-Not later than thirty (30) days from
disclose and may prevent any other person from disclosing a mediation receipt of the arbitral award, a party may petition the court to correct/
communication. modify that award.
c. In auch an adversarial proceeding, the following persons involved (C) Vacation.-Not later than thirty (30) days from receipt of the
or previously involved in a mediation may not be compelled to disclose arbitral award, a party may petition the court to vacate that award.
confidential information obtained during the mediation: ( 1) the parties to (0) A petition to vacate the arbitral award may be filed, in
the dispute; (2) the mediator or mediators; (3) the counsel for the parties: opposition to a petition to confirm the arbitral award, not later than thirty
(4) the nonparty participants; (5) any person hired or engaged in con·
(30) days from receipt of the award by the petitioner. A petitioo to vacate
nection with the mediation 88 secretary, stenographer; clerk or assistant; the arbitral award filed beyond the reglementary period shall be
and (6) any other person who obtains or possesses confidential information dismissed.
by reaaon of his/ her profession.
<E> A petition to confirm the arbitral award may be filed, in oppo-
d. The protection of the ADR Laws shall continue to apply even if a sition to a petition to vacate the arbitral award, at any time after the
mediator la found to have failed to act Impartially. petition to vacate such arbitral aw·a rd i9 filed. Tbe dismissal of the petition
e. A mediator may not be called to testify to provide information to vacate the arbitral award for having been filed beyond the reglementary
gathered in mediation. A mediator who is wrongfully subpoenaed shall be period shall not result in the dismiasal of the petition for the confirmation
reimbursed the full cost ofhia attorney fees and related expenses. of such arbitral award.
Rule 10.9. Reli.ef ogairut court actlon.-The order eajoinlng a (F) The filing of a petition to confirm an arbitral award shall not
person or persons from divulging confidential information shall be authorize the filing of a belated petition to vacate or set aside such award
immediately executory and may not be enjoined while the order is being in opposition thereto.
questioned with the appellate cowte. (G) A petition to correct an arbitral award may be included 88 part
If the court declines to enjoin a person or persons from divulging con- of a petition to confirm the arbitral award or 88 a petition to confirm that
fidential information, the petitioner may file a motion for reconsideration award.
or appeal.
Rule 11.8. Venue.-The petition for confirmation, correction/~o­
. Rule 10.10. Coruttquence of duobedience.-Any person who diftcation or vacation of a domestic arbitral award may be filed with
disobeys the order of the court to cease from divulgine confidential Regional Trial Court having jurisdiction over the plaoe in w~ch one of the
illf.wmation ahall be imposed the proper sanction by the court. parties is doing busineu, whe~ any of tbe partiea reside or where
arbitration proceedings were conducted.
RULE 11 - Confirmation, Correction or Vacation Rule 11.4. Grounda.-{A) To l/Ocale an orbitral award.-Tbe ar-
of.Award in DowwatU: Arbitration bitral award may be vacated on the following grounds:
a. The arbitral award was procured through corruption, fraud or
Rule 11.1. Who may request con/frmatton, correctton or
other undue means;
11acation.-Any part;y to a domestic arbitration may petition the court to
confirm, correct or vacate a domestic arbitral award. b. There waa evident partiality or corruption in the arbitral tri·
bunal or any of its members;
Rule 11.2. When to request confirmation, correction/modi-
fication or vacation.- c. The arbitral tribunal was guilty of misconduct or any form of
misbehavior that has materially prejudiced the rights of any party auch 88
(A) Confinnation.-At any time after the lapse of thirty (30) daya refusing to postpone a hearing upon auft!cient cause shown or to hear
from receipt by the petitioner of the arbitral award, he may petition the evidence pertinent and material to the controversy;
court to confirm that award.
d. One or more of the arbitrators was disqualified to act 88 such under
the law and willfully refrained trom disclosing auch disqualification; or
490 ALTERNATIVE DISPUTE R ESOLUTION APPENDIX "E" 491
SPECIAL RULES OF COURT ON
ALTERNATIVE OISPtrl'E RESOLUTION

e. The arbitral tribunal exceeded its powers, or so imperfectly exa- When a petition to confirm an arbitral award is pending before a
cuted them, such that a complete, final and definite award upon the sub- court, the party seeking to vacate or correctlmodify said award ma.v only
ject matter submitted to them was not made. apply for those reliefs through a petition to vacate or correctlmodify the
The award may also be vacated on any or all of the following award in opposition to the petition to confirm the award provided that
grounds: such petition to vacate or correctlmodify is filed within thirty (30) da.va
from his receipt of the award. A petition to vacate or correctlmodify an
a . The arbitration agreement did not exist, or is invalid for any arbitral award filed in another court or in a separate case before the same
irround for the revocation of a contract or is otherwise unenforceable; or court shall be dismissed, upon appropriate motion, as a violation of the
b. A party to arbitration is a minor or a person judicially declared rule against forum-shopping.
to be incompetent. When a petition to vacate or correct/modify an arbitral award ia
The petition to vacate en arbitral award on the ground that the pendina before a court, the party seeking to confirm said award may only
party to arbitration is a minor or a person judicially declared to be in· apply for that relief through a petition to confirm the same award in
competent shall be filed only on behalf of the minor or incompetent and opposition to the petition to vacate or correct/modify the award. A petition
~hall allege _that (a) tho other party to arbitration had knowingly entered to confirm or correctlmodify an arbitral award filed aa separate proceeding
into a. a~b1D1aalon ?r a~eement with such minor or incompetent, or (b) the in another court or in a different case before the same court shall be dis-
aubm1ss1on to arbitration was made by a guardian or guardian ad litem missed, upon nppropriate motion, as a violation of the rule against forum
who was not authorized to do so by a competent court. shopping.
. In decidin11 the petition to vacate the arbitral award, the court shall As an alternative to the dismissal of a second petition for con·
disregard any other around than those enumerated above. flrmation, vacation or correctionlmodification of an arbitral award tiled in
violation of the non-forum shopping rule, the court or courts concerned
• (8) To corrtctlmodify on orbilral oward.- The Court may correct! may allow the consolidation of the two proceedings in one court and In one
~odify or o~er the arbitral tribunal to correctlmodify the arbitral award case.
1n the following caaea:
Where the petition to confirm the award and petition to vacate or
.d at ~:e there was an evident miscalculation of figures or an correct/modify were simultaneously filed by the parties in the same court
evi en nus e in the description of any person, thing or property re- or in different courts in the Philippines, upon motion of either party, the
ferred to In the award;
court may order the consolidation of the two cases before either court.
. b. Where the arbitrators have awarded upon a matter not aub- In all instances, the petition must be verified by a person who baa
au~ to them, not affecting the merits of the decision upon the matt.er knowledge of the jurisdictional facts.
submitted;
c. Where the arbitrators have omitted to resolve an issue submitted Rule 11.6. Content. of petition.-Tbe petition must state the
to them for reeolution; or following:
d .. Where the award ia imperfect in a matter of form not affecting a . The addresses of the parties and any change thereof;
the menta of tho controversy, and If it had been a commissioner's report, b. The jurisdictional issues raised by a party during arbitration
the defect could have been amended or disregarded by the Court. proceedings;
. Rule 11.6. Form of petilion.-An application to vacate an ar- c. The grounds relied upon by the parties in seeking the vacation of
bitral ~ward •~8!1 be in the form of a petition to vacate or as a petition to the arbitral award whether the petition is a petition for the vacation or
vacate in opposition to a petition to confirm the same award. setting aside of the arbitral award or a petition in opposition to a petition
to confirm the award; and
. An. ~pplication to correcttmodify an arbitral award may be included
in a petition to confirm an arbitral award or in a petition to vacate in d. A statement of the date of receipt of the arbitral award and the
opposition to confirm the same award. circumstances under which it was reclrlved by the petitioner.
492 ALTERNATIVE DISPUTE RESOLUTION
APPENDIX "E• 493
SPECIAL RULES OP COURT ON
ALTERNATIVE DISPUTE RESOLUTION

Apart from other submissions, the petitioner must attach to the

petition the following: attached thereto. But if the ground was raised before the arbitral tribunal
in a motion to dismiss filed not later than the aubllUssion of ita 8116Wer,
a. An authentic copy of the arbitration agreement; and the arbitral tribunal ruled in favor of its own jurisdiction aa a
b. An authentic copy of the arbitral award; preliminary question which waa appealed by a party to the Regional Trial
Court. a copy of the order, ruline or prelimina:ry award or decision of the
c. A certification against forum shopping executed by the applicant arbitral tribunal, the appeal therefrom to the Court and the order or
in accordance with Section 5 of Rule 7 of the Rules of Court; and decision of the Court !hall all be attached to the petition.
d. An authentic copy or authentic copies of the appointment of an If the ground of the petition la that the petitioner is an infant or a
arbitral tribunal.
person judicially declared to be incompetent, there ahaJI be attached to the
Rule 11.7. Notice.-Upon finding that the petition filed under petition certified copies of documents ahowiD& auch fact. In addition, the
thi~ Rule ia sufficient both in form and in substance, the Court shall cauae petitioner shall show that even if the submission or arbitration agreement
n~tice and a copy of the petition to be delivered to the respondent allowing was entered into by a guardian or guardian ad !item, the latter was not
him.to file a comment or opposition thereto within fifteen (15) days from authorized by a competent court to sign such the aubmisaioo or arbitration
•""!•~t o_f the petition. Jn lieu of an opposition, the respondent may file a agreement.
petition m opposition to the petition. If on the basis of the petition, the opposition, the affidavita and reply
. . The petitioner may within fifteen (151 days from receipt of the affidavits of the parties, the court finds that there is a need to conduct an
petition in opposition thereto file a reply. oral hearing, the court shall set the case for hearine. Thls case shall have
preference over other cases before the court, e:leept criminal cases. Durio&
.. R~e llJI'. . Rearing.-lf the Court finds from the petition or the hearing, the affidavits of witnesses shall take the place of their direct
petition .•n opl?°s~tion thereto that there are issues of fact, it shall require testimonies and they shall immediately be subject to cross-examination
the parties, wtthm a period of not more than fifteen (HI) days from receipt thereon. The Court shall have full control over the proceedinga in order to
o~ the order, to simultaneously submit the affidavits of all of their ensure that the case is heard without undue delay.
witne~ and rep!~ affidavits within ten (10) days from receipt of the
affida"!ts to be rephed to. There shall be attached to the affidavits or reply Rule 11.9. Court action.-Uoleu a ground to vacate an arbitral
affidavits documents relied upon in support of the statements of fact in award under Rule 11.5 above is fully established, the court shall confirm
such affidavits or reply affidavits. the award.
lf~e petition or the petition in opposition thereto is one for vacation An arbitral award shall eajoy the presumption that it waa made and
of~~ arb1tral award, the intereate<t party in arbitration may oppose the released in due course of arbitration and is subject to confirmation by the
petition OT the petition in opposition thereto for the reason that tbs court
groun~s cited in the petition or the petition in opposition thereto, In resolving the petition or petition in opposition thereto in
assummg them.to be true, do not affect the merits of the case and may be accordance with these Special ADR Rules, the court shall either confirm or
cured or remedied. Moreover, the interested party may request the court vacate the arbitral award. The court shall not disturb the arbitral
to suspend the proceedings for vacation for a period of time and to direct tribunal's determination offacts and/or interpretation of law.
the arbitral tribunal to reopen and conduct a new hearing and take such In a petition to vacate an award or in petition to vacate an award in
other action aa will eliminate the grounds for vacation of the award. The oppoeition to a petition to confirm the award, the petitioner may
opposition shall be supported by a brief of legal arguments to show the simultaneously apply with the Court to refer the case back to the same
existence of a sufficient legal basis for the opposition. arbitral tribunal for the purpose of malclng a new or revised award or to
If the ground of the petition to vacate an arbitral award is that the direct a new hearing, or in the appropriate case, order the new hearing
arbitration agreement did not exist, is invalid or otherwise unenforceable, before a new arbitral tribunal, the members of which shall be cboeen in
and an earlier petition for judicial relief under Rule 3 had been filed, a the manner provided In the arbitration agreement or submission, or the
copy of such petition and of the decision or final order of the court ehall be law. Jn the latter case, any provision limiting the time in which the ar-
494 ALTERNATIVE DISPUTE RESOl.\;TION APPENDIX "E" 495
SPECIAL RULES OF COURT ON
ALTERNATIVE DISPUTE RESOLUTION

bitral tribunal may make a decision shall be deemed applicable to the new Rule 12.4. Ground. to u t aauu or re•ut en(orcement.-The
arbitral tribunal. court may set aside or refuse the enforcement of the arbitral award only if:
In referring the case back to the arbitral tribunal or to a new arbitral a. The party making the application furnishes proof that:
tribunal pursuant to Rule 24 of Republic Act No. 876, the court may not
(i) A party to the arbitration agreement w~ under some in-
direct it to revise its award in a particular way, or to revise ita findings of
fact or conclusions of law or otherwise encroach upon the independence of capacity, or the said agreeme~t Is n~t valtd ~der the. law
to which the parties have subJected at or, faihng any Uldi-
an arbitral tribunal in the making of a final award.
cation thereof, under Philippine law; or
RULE 12 - Recognition and Enforcement or Setting A•lth (ii) The party making the application to set aside or resist en-
0/41& Intemational Comm<trclal Arbitration Award forcement was not given proper notice of the appointment
of an arbitrator or of the arbitral proceedings or was oth-
Rule 12.1. Who may request recognition and enforcem<tnt or erwise unable to present bis case; or
u ttlnq aauu.-Any party to an international commercial arbitration in (iii) The award deals with a dispute not contemplated by or not
the Philippines may petition the proper court to recognize and enforce or fallins within the terms of the submission to arbitration,
set aside an arbitral award. or contains decisions on matters beyond the scope of the
submission to arbitration; provided that, if the decisiona
Rule 12.2. When to fik petlllon.-<A> Petition to recogniu and on matters submitted to arbitration can be separated fr?m
enforce.-The petition for enforcement and recognition of an arbitral those not so submitted, only that part of the ow~ wh~ch
award may be filed anytime from receipt of the award. If, however, a conte.i na decisions on matters not submitted to arb~tration
timely petition to set aside an arbitral award is filed, the opposina party may be set aside or only that part of the a'"'.ard :Which con-
must file therein and in opposition thereto the pet ition for recognition and tains de<:isions on matters submitted to arbitration may be
enforcement of the same award within the period for filing o.n opposition. enforced; or
CB) Petition to set aside. -The petition to set aside an arbitral (iv) The composition of the arbitral tribunal or the arbitral
award may only be filed within three (SJ months from the time the procedure was not in accordance with ~e agree~ent ~f the
petitioner receives a copy thereof. If a t imely request is made with the parties, unless such agreement w~ IJl confli~ with a
arbitral tribunal for correction, interpretation or additional award, the provision of Philippine law from which the parti"." cannot
three (8) month period shall be counted from the time the petitioner derogate, or, failing such agreement, was not m accor-
receives the resolution by the arbitral tribunal of that request. dance with Philippine Jaw;
A petition to set aside can no longer be filed after the lapse of the
b. The court finds that:
three (3) month period. The dismissal of a petition to set aside on arbitral
award for being time-barred shall not automatically result in the approval (i) The subject-matter of the diapute is not cap~bl? of
of the petition filed therein and in opposition thereto for recognition and settlement by arbitration under the Jaw of the PhilippUles;
enforcement of the same a ward. Failure to file a petition to set aaide shall or
preclude a party from raising grounds to resist enforcement orthe award. (ii) The recognition or enforcement of the award would be
Rul e 12.3. Venru.-A petition lo recognize and enforce or set contrary to public policy.
aside an arbitral award may, at the option of the petitioner, be filed with In deciding the petition, the Court aball disregard any other ground
the Regional Trial Court: (a) where arbitration proceedings were con- to set aside or enforce the arbitral award other than those enumerated
ducted; (b) where any of the assets to be attached or leviod upon is located; above.
(c) where the act to be enjoined will be or is being performed; (d) where The petition to set-aside or a pleading resisting the enforcement of
any of the parties to arbitration resides or has its place of business; or (e) an arbitral award on the ground that a party was a minor or an
in the National Capital Judicial Region. incompetent shall be filed only on behalf of the minor or incompetent and
496 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "E" 497
SPECIAL RULES OP COURT ON
ALTERNATIVE DISPUTE RESOLUTION

&ball allege that (a) the other party to arbitration had knowingly entettd c. A verification and certification apinst forum shopping executed
into a submission or agreement with such minor or incompetent, or (b) the by the applicant in accordance with Sections 4 and 5 of Rule 7 of the Rules
submission to arbitration was made by a iruardian or guardian ad litem of Court; and
who wa& not authorized to do so by a competent court. d. An authentic copy or authentic copies of the appointment of an
arbitral tribunal.
Rule 12.5. &cbuwe recourse again•I arbitral award.-
Recourse to a court against an arbitral award shall be made only through (BJ Petition to set aside.-The petition to eet uide or petition to set
a petition to set aside the arbitral award and on grounds prescribed by the aside in opposition to a petition to recognize and enforce an arbitral award
law that 1ov~ international commercial arbitration. Any other recourse in international commercial arbitration shaU have the 1ame contenta u a
from the arb1tral award, such as by appeal or petition for review or petition to recognize and enforce or petition to recognize and enforce in
petition for certiorari or otherwise, shall be dismissed by the court. opposition to a petition to Mt aside an arbitral award. In addition, the said
petitions should state the grounds relied upon to set it aside.
Rule 12.6. Fonn..-The application to recognize and enforce or set
aside an arbitral award, whether made through a petition to recognize and Further, if the ground of the petition to eet uide ia that the pe·
enforce or to set aside or as a petition to set aside the award in opposition titioner is a minor or found incompetent by a court, there shall be attached
thereto,. or thro~~h a petition to set aside or petition to recognize and to the petition certified copies of documents &bowing such fact. In addition,
enforce m opposition thereto, shall be verified by a person who has per- the petitioner shall show that even if the submission or arbitration agree-
sonal knowledge of the facts stated therein. ment was entered into by a guardian or guardian ad litem, the latter was
not authorized by a competent court to sign such the submission or ar-
When a petition to recognize and enforce an arbitral award is pen- bitration agreement.
ding, the application to set it aside, if not yet time-barred shall be made
through a petition to set aside the same award in the aame ~roceedings. In either case, if another court was previously requested to resolve
and/or has resolved, on appeal, the arbitral tribunal's preliminary deter-
~en a timely petition to set aside an arbitral award is filed, the mination in favor of its own jurisdiction, the petitioner shall apprise the
opposing perty may file a petition for recognition and enforcement of the court before which the petition to recognize and enforce or set aside is
same award in opposition thereto.
pending of the status of the appeal or its resolution.
Rule 12.7'. .content• o~ petitlon.~A) Petition to recognize and Rule 12.8. Notke.-Upon finding that the petition filed under
enfo~-,-The petition to ~ze and enforce or petition to set aside in this Rule is sufficient both in form and in substance, the court shall cause
oppos1t1on thereto, or petition to eet aside or petition to recognize and notice and a copy of the petition to be delivered to the respondent ~ting
enforce in opposition thereto, shall state the following: him to file an opposition thereto within fifteen (15) days from receipt of the
. a .. The addresses of record, or any change thereof, of the parties to petition. In lieu of an opposition, the respondent may file a petition to set
arbitration; aside in opposition to a petition to recognize and enforce, or a petition to
b. A statement that the arbitration agreement or submission exists; recognize and enforce in opposition to a petition to set aside.
c. The names of the arbitrators and proof of their appointment; The petitioner may within fifteen (15) deya from receipt of the
petition to set aside in opposition to a petition to recognize and enforce, or
d. A statement that an arbitrsl award was issued and when the
petitioner received it; and from receipt of the petition to recognize and enforce in opposition to a
petition to set aside, file a reply.
e. The relief sought.
Rule 12.9. Submiaalon of ctoeumente.-lf the court finds that
Apart from other submissions, the petitioner shall attach to the the issue between the parties ia inainly one of law, the parties may be
petition the following:
required to submit briefs of legal arguments, not more than fifteen (15)
a. An authentic copy of the arbitration agreement; days from receipt of the order, sufficiently discussing the legal issues and
the legal basis for the relief prayed for by each of them.
b. An authentic copy of the arbitral award;
500 ALTERNATIVE D ISPUTE RESOLUTI0:-1 APPENDIX "E" 501
SPECIAL RULES OF COURT ON
ALTERNATIVE DISPUTE RESOLUTION

country that is not a signatory to the New York Convention as if it were a Rule 13.5. Contents of petition.- The petition shall state the
Convention Award.
following:
A Philippine court shall not set aside a foreign arbitral award but a . The addresses of the parties to arbitration;
may refuse it recognition and enforcement on any or all of the following
grounds: b. In the aibsence of any indication in the award, the country where
the arbitral award was made and whether such country is a signatory to
a. The party malcing the application to refuse recognition and en-
forcement of the award furnishes proof that: the New York Convention; and
c. The relief sought.
(i) A party to the arbitration agreement was under some
incapacity; or t he said agreement is not valid under the Apart from other submissions, the petition shall have attached to it
law. to .which the parties have subjected it or, failing any the following:
mdfoat1on thereof, under the law of the country where the a. An authentic copy of the arbitration agreement; and
award WM made; or
b. An authentic copy of the arbitral award.
(ii) Th~ party making the application was not given proper
notice of the appointment of an arbitrator or of the arbitral If the foreign arbitral award or agreement to arbitrate or submission
proceedings or was otherwise unable to present his case; or is not made in En glish, the petitioner shall also attach to the petition a
( iii) Tb ~ awai:<' ~eals with a dispute not contemplated by or not
translation of these documents into English. The translation shall be
certified by an official or swom translator or by a diplomatic or consular
falling w1thm the terms of the submission to arbitration agent.
or co~ta!ns decisions on matters beyond the scope of th~
subauss1on to arbitration; provided that, if the decisions Rule 13.6. N ot ice and opposition.-Upon finding that the peti-
on matters submitted to arbitration can be separated from tion filed under t h is Rule is sufficient both in form and in substance, the
those not so submitted, only that part of the award which court shall cause notice and a copy of the petition to be delivered to the
contains decisions on matters not submitted to arbitration respondent allowing him to file an opposition thereto within thirty (30)
may be set aside; or days from receipt of the notice and petition.
(iv) The composition of the arbitral tribunal or the arbitral Rule 13.7 . Opposition.-The opposition shall be verified by a
pro"'?dure w~ .not in accordance with the agreement of the person who has personal knowledge of the facts stated therein.
~es or, failmg such agreement, was not in accordance
with the law of the country where arbitration took place; or Rule 13.8 . Submissiona.-If the court finds that the issue bet-
(v) The award has not yet become binding on the parties or ween the parties is mainly one of law, the parties may be required to
submit briefs of legal arguments, not more than thirty (30) days from
?as been set aside or suspended by a court of the country
m which that award was made; or receipt of the order, sufficiently discussing the legal issues and the legal
bases for the relief prayed for by each other .
b. The court finds that.:
If, from a review of the petition or opposition, there are issues of fact
(i) The subject-matter of the dispute is not capable of relating to the ground/a relied upan for the court to refuse enforcement,
settlement or resolution by arbitration under Philippine the court sh all, motu proprio or upon request of any party, require the
law; or parties to simultaneously submit the affidavits of all of their witnesses
within a period of not less than fift.een (15) days nor more than thirty (30)
(ii) The recognition or enforcement of the award would be days from receipt of the order. The court may, upon the request of any
contrary to public policy. party, allow the submission of reply affidavits within a period of not less
The court shall disregard any ground for opposing the recognition than fifteen ( 15) days nor more than thirty (30) days from receipt of the
and enforcement of a foreign arbitral award other than those en umerated order granting said request. There shall be attached to the affidavits or
above.
504 ALTERNATIVE DISPUTE RESOLUTION AJ>l'Em>IX "E" 505
SPECIAL RULES OF COURT ON
ALTERNATIVE DISPUTE RESOLUTION

(I) The addresses of the petitioner and respondents; and the court, rather than the CIAC, the body that would exclusively resolve
(ii) The ultimate facts that would show that the adverse party the dispute.
has defaulted to perform its obligation under Mid agree-
ment; and Rule 17.2. Form and contenia of motiotL-Tbe request for
dismissal of the civil action and referral to arbitration shall ba through a
c. Have attached to it the following: verified motion that shall (a) contain a statement showing that the dispute
ia a construction dispute; and (b) be accompanied by proof of the existence
(i) An authentic copy of the mediated settlement agreement;
and of the arbitration agreement.
(ii) Certificate of Deposit showing that the mediated settle- If the arbitration airreement or other document evidencing the exis-
ment agreement waa depoeited with the Clerk of Court. tence of that agreement is already part of the record, those d~enbl
need not be submitted to the court provided that the movant has cited in
Rule 15.7. OpposiliotL-The adverse party may file an opposi- the motion particular references to the records where those document.a
tion, within fifteen (15) days from receipt of notice or service of the may be found.
petition, by submitting written proof of compliance with the mediated
settlement agreement or such other affirmative or negative defenses it The motion shall also contain a notice of hearing addreesed to all
may have. parties and shall specify the date and time when the motion wil~ be heard,
which must not be tater than fifteen (15) days after the filing of the
Rule 15.8. Court actiotL-After a summary hearing, if the court motion. The movant shall ensure receipt by all parties of the motion at
ftnda that the agreement is a valid mediated settlement agreement, that least three days before the date of the hearing.
there is no merit in any of the affirmative or negative defenses raised, and
Rule 1 '7.3. OppoeitlotL-Vpon receipt of the motion to n:~r the
the respondent baa breached that agreement, in whole or in part, the court
dispute to arbitration by CIAC, the other party may file an oppos1ti~n. to
shall order the enforcement thereof; otherwise, i:t. shall dismiss the pe-
tition. the motion on or before the day such motion is to be heard. The opposition
shall clearly set forth the reasons why the court should not dismiss the
case.
PART IV
PROVISIONS SPECIFIC TO CONSTRUCTION ARBITRATION Rule 17.4. Hearlng.-The court shall bear the motion only once
and for the purpose of clarifying relevant factual and legal iuues.
RULE 18 - Chnerol Proviafons
Rule 17.6. Court Mtion.-If the other parties fall tD file the~
Rule 16.1. Application of the rule• on ar6itratio1L-Wbenever opposition on or before the day of the hearing, the court.shall mot~ propno
applicable and appropriate, the rules on arbitration shall be applied in resolve the motion only on the basis of the facts alleged m the motion.
proceedings before the court relative to a dispute subject to construction After hearing, the court shall dismiss the civil action and refer ~he
arbitration. parties to arbitration If it finds, based on the pleadings and supporting
documents submitted by the parties, that there is a valid and enf~rceable
RULE 1'7 - Referral to CIAC arbitration agreement involving a construction dispute. Otherwise, the
court shall proceed to hear the case.
Rule 17.t. Dumi#al of actlon.- A Regional Trial Court before All doubta shall be resolved In favor of the existence of a construction
which a construction dispute is filed shall, upon becoming aware that the
dispute Bild the arbitration agreement.
parties have entered into an arbitration agreement, motu proprio or upon
motion made not later than the pre-trial, dismiss the case and refer the Rule 17.6. Referral immediately aecutory.-An order dismis·
parties to arbitration to be conducted by the Construction Industry Ar• sing the case and referring the dispute to arbitration by CIAC shall be
bitration Commission (CIAC), unless all parties to arbitration, assisted by immediately executory.
their respective counsel, submit to the court a written agreement malting
506 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "E• 607
SPECIAL RULES OF COURT ON
ALTERNATIV! DISPUTE RESOLUTION

Rule 17.7. Multipl.e aeliona and partiea.-The court shall not Rule 18.2. Applicability of the rul.ee on medlalion.-lf ~e
decline to dismiss the civil action and make a referral to arbitration by other ADR form/process la more akin to mediation (i.e., the neutral third
CIAC for any of the following reaaons: party merely assists the parties in reaching a voluntary agreement), the
a. Not all of the dieputea subject of the civil action may be referred herein rules on mediation shall apply.
to arbitration;
Rule 18.S. ApplicabUily of rut.a on ~r6itralion.-If ~he other
b. Not all of the parties to the civil action are bound by the arbit- ADR form/process is more akin to arbitration (i.e. , the neutral third party
ration agreement and referral to arbitration would result in multiplicity of has the power to make a binding resolution of the dispute), the herein
suita;
rules on arbitration shall apply.
c. The issues raised in the civil action could be speedily and
efficiently resolved in its entirety by the Court rather than in arbitration; Rule 18.4. ReferroL-lf a dispute is already before a court,
either party may before and during pre-bial, file a motion for du; court to
d. Referral to arbitration does not appear to be the most prudent refer the parties to other ADR forma/proce88es. At any time dunng court
action; or
proceedings, even after pre-bial, the parties may joi~~y move for
e. Dismissal of the civil action would prejudice the rights of the suspension of the action pursuant to Article 2030 of tbe Civil Code of the
parties to the civil action who are not bound by the arbitration agreement. Philippines where the posaibility of compromise is shown.
The court may, however, issue an order directing the inclusion in Rule 18.6. Submtaawn of settlement a,f1'ffment.-Either party
arbitration of those parties who are bound by the arbitration ag!'ffment may submit to the court, before which the case is pending: any ~~e~e::
directly or by reference thereto pursuant to Section 34 of Republic Act No. agreement following a neutral or an early neutral evaluation, IDlDl·trial
9285.
mediation-arbitration.
Furthermore, the court shall issue an order directing the case to
proceed with respect to the parties not bound by the arbitration agree- PARTVl
ment. MOTION FOR RECONSIDERATION, APPEAL
AND CERTIORARI
Rule 17.8. R.ierraL-If the parties manifest that they have
agreed ~ submit all or part of their dispute pending with the court to RULE 19 - Motion for Reconeibratlon.
arb1trat1on by CIAC, the court shall refer them to CIAC for arbitration. Appeal and Certiorari
PARTV A. MOTION FOR RECONSIDERATION
PROVISIONS SPECIFIC TO OTHER FORMS OF ADR
Rule 19.1. Motwn for reconeldnution, when allo~-A
RULE 18 - Gerural Proviawna party may ask the Regional Trial to reconsider its ruling on the follOW111g:
a . That the arbitration agreement is inexistent, invalid or unen-
Rule 18.1. Applkabilily ofrul.a to other form• of ADR.-Tbis
forceable pursuant to Rule S.10 (B);
rule governs the procedure for matters brought before the court involving
the following forms of ADR: b. Upholding or reversing the arbitral tribunal's jurisdiction
pursuant to Rule 3.19;
a. Early neutral evaluation;
c. Denying a request to refer the parties to arbitration;
b. Neutral evaluation;
c. Mini-trial; d. Granting or denying a party an interim measure of protection;
d. Mediation-arbitration; e . Denying a petition for the appointment of an arbitrator;
e. A combination thereof; or f . Refusing to grant assistance io taking evidence;
f. Any other ADR form.
508 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "E. 609
SPECIAL RULES Of' COURT ON
ALTERNATIVE OISPUTB RESOLUTION

g. EQjoinlne or nifu.sing to ertjoin a person from divlllgine confi· Rule 19.4. Oppoeltion or eomment.-Upon receipt of the motion
dential Information; for reconsideration, the other party or parties shall have a non-extendible
h. Confirming, vacating or correctinr a domestic arbitral award; period offlfteen (15) days to file bis opposition or comment.
i. Suapending the proc:eedingw to set uide an international com- Rule 19.5. Re..lutlon of motion.-A motion for reconaideratloo
111ercial arbib'al award and referring the cue back to the arbitt al tribunal; ehall be resolved within thirty (30) days from receipt of the opposition or
j. Settin1 aside an international commercial arbitral award; comment or upon the expiration of the period to file euch opposition or
k. Diamiuin1 the petition to set a1ide an international commercial comment.
arbitral award, even if the court doea not recognize and/or enforce the Rule 19.8. No Hcond motion for reconauurallon.-No party
same; shall be allowed a second motion for reconsideration.
I. Recognizing and/or enforcine, or diamiasing a petition to recog•
nize and/or enforce an international commercial arbitral award; B. GENERAL PROVISIONS ON APPEAL AND CERTIORARI
m. Declining a request for Uliatance in taking evidence;
Rule 19.7. No ._ppeal or certiorari on tM maUa o f - ..,,.
. n. Acijouming or deferring a ruling on a petition to .et aside, re- bUral award.-An agreement to refer a disput.e to arbitration aba11 mean
COCJllze and/or enforce an international commercial arbitral award; that the arbltral award shall be final and bindinc. CoOllequently, a party
o. Recognizing and/or enforcing a foreign arbitral award, or refu· to an arbitration la precluded from filing an appeal or a petition for
siDg recognition and/or enforcement of the same; and certiorari questioning the merits of an arbitral award.
p. Grantin1 or dismissing a petition to enforce a depoaited media· Rule 19.8. Sub}..:t matur and goueming rulee.-The ~medy
ted Httlement agreement. of an appeal throui=-h a petition for review or. the ~edy of a 1pec1al civil
No motion for reconsiderat.ion shall be allowed from the following action of certiorari from a d eciaion of the Regional Trial Court made under
rulings of the Regional Trial Court: the Special AOR Rulea ehall be allowed in the inatancea, and instituted
only in the manner, provided under this Rule.
a . A prima facu determination upholding the existence, validity or
enforceability of an arbitration agreement purauant to Rule 3.1 (A); Rule 19.9. Prolalbiled allernatl- ,..JJMdln,-:Where the reme-
b. An order referring the dispute to arbitration; dies of appeal and certiorari are specifically made available to a party
under the Special ADR Rules, recourse to one remedy shall preclude
c. An order appointing an arbitrator;
recourae to the other.
d. Any ruling on the challenge to the appointment of an arbitrator;
e. Any order resolving the i1Sue of the termination of the mandate Rule 19.10. Rule on jrulU:lal niut.UI on orl>llratlon ~ tM
of an arbitrator; and PhUipplnea.-Aa 8 general rule, the court can only vacate or set aside the
decision of an arbitral tribunal upon a clear showing t;h8t the ·~
f. An order eranting 888istance in taking evidence. 1uffer1 from any of the inf!nnities or ground• for vacating an arb1tral
Rule 19.2. When to molt<! for nconaUkralion.-A motion foe award under Section 24 of Republic Act No. 87~ or ~der Rule 34 ~f the
rECOD!lideration m~ be filed with the Regional Trial Court within a non- Model Law in a domestic arbitration. or for setting ande an award m an
i.ntemational arbitration under Article 3' of the Model Law, or for auch
extendible period of fifteen (15) daya from receipt of the questioned ruling
or order. other grounds provided under these Special Ru]e9.
If the Regional Trial Court Is asked to set aside an arbitral award in
Rule 19.S. Contents Bnd nottc..-The motion shall be made in a domestic or international arbitration on 8DY ground o~er than those
writing stating the ground or grounds therefor and shall be filed with the provided in the Special ADR Rules, t:he court shall.entertain such ir:i:ound
court and served upon the other party or parties. for the setting a.aide or non-recognition of the arb1tral award only if the
eame amounts to a violation of public policy·
510 ALTERNATIVE DISPUTE RESOLUTIOI'< APPENDIX "E" 511
SPECIAL RULES OF COURT ON
ALTERNATIVE DISPUTE RESOLUTION

The court shall not set aside or vacate the award of the arbitral Rule 19.13. Where to appeal-An appeal under this Rule shall
tribunal merely on the ground that the arbitral tribunal committed errors be taken to the Court of Appeals within the period and in the manner
of fact, or of law, or of fact and law, as the court cannot substitute its herein provided.
judgment for that of the arbitral tribunal.
Rule 19.14. When to appeal-The petition for review shall be
Rule 19.11. Rule on judicial review of foreign arbitral filed within fifteen (15) days from notice of the decision of the Regional
awanL-The court can deny recognition and enforcement of a foreign Trial Court or the denial of the petitioner's motion for reconsideration.
arbitral award only upon the grounds provided in Article V of the New
York Convention, but shall have no power to vacate or set aside a foreign Rule 19.16. H ow appeal taken.-Appeal shall be taken by filing
arbitral award. a verified petition for review in seven (7) legible copies with the Court of
Appeals, with proof of service of a copy thereof on the adverse party and on
C. APPEALS TO THE COURT OF APPEALS the Regional Trial Court. The original copy of the petition intended for the
Court of Appeals shall be marked original by the petitioner.
Rule 19.12. Appeal to tM Court of Appeala.-An appeal to the
Court of Appeals through a petition for review under this Special Rule Upon the filing of the petition and unless otherwise prescribed by
shall only be allowed from the following final orders of the Regional Trial the Court of Appeals, the petitioner shall pay to the clerk of court of the
Court: Court of Appeals docketing fees and other lawful fees of P3,500.00 and
deposit the sum of PS00.00 for costs.
a. Granting or denying an interim measure of protection;
Exemption from payment of docket and other lawful fees and. the
b. Denying a petition for appointment of an arbitrator; deposit for costs may be granted by the Court of Appeals upon a ve~ed
c. Denying a petition for assistance in taking evidence; motion setting forth valid grounds therefor. If the Court of Appeals derues
d. Enjoining or refusing to enjoin a person from divulging confi- the motion, the petitioner shall pay the docketing and other la~ful fees
dential information; and deposit for costs within fifteen days from the notice of the derual.
e. Confirming, vacating or correcting/modifying a domestic arbitral Rule 19.16. Contents of the Petition.-The petition for review
award; shall (a) state the full names of the parties to the case, without implea?ing
f. Setting aside an international commercial arbitration award; the court or agencies e ither as petitioners or respondent, Cb) contai~ a
g. Dismissing the petition to set aside an international commercial concise statement of the facts and issues involved and the grounds rehed
arbitration award even if the court does not decide to recognize or enforce upon for the review, (c) be accompanied by a clearl>: legible duplicate
such award; original or a certified true copy of th e decision or resolution of t~e Regional
Trial Court appealed from, together with certified true copies of s~ch
h. Recognizing and/or enforcing an international commercial a rbit- material portions of the record referred to therein and other supporting
ration award;
papers, and (d) contain a sworn certification against forum shopping. as
i. Dismissi11g a petition to enforce an international commercial provided in the Rules of Court. The petition shall state the spec1.fic
arbitration award; material dates showing that it was tiled within the period fixed herein.
j. Recognizing and/or enforcing a foreign arbitral award; Rule 19.17. Effect of failure to comply with requirements.-
k. Refusing recognition and/or enforcement of a foreign arbitral The court shall dismiss the petition if it fails to comply with the foregoing
award; requirements regarding the payment of the docket and other lawful fees,
I. Granting or dismissing a petition to enforce a deposited the deposit for costs, proof of service of the petition, the contents and the
mediated settlement agreement; and documents, which should accompany the petition.
m. Reversing the ruling of the arbitral tribunal upholding its juris- Rule 19.18. Act ion on the petition.-The Court of Appeals may
diction. require the respondent to file a comment on the petition, not a motion to
dismiss, within ten ( 10) days from notice, or dismiss the petition if it finds,
512 ALTERNATIVE DISPUTE RESOl.UTION APPENDIX "E• 513
SPECIAL RULES OF COURT ON
ALTERNATIVE DISPUTE RESOl.tmON

upon conaideration of the grounds alle&e<f and the legal briefs submitted
by the partiea, that the petition does not appear to be prima fade Rule 19.24. Sufdttt ofappeol rw.trlcted in cerlain U..~
meritoriou.. -Ir the decision of the Regional Trial Court refusing to recognize and/or
enforce, vacating and/or aetting aside an ubitral award ia premiMd on a
Rule 19.19. Content• ofC01111tUnt.-The comment shall be filed ftndlng of fact, the Court of Appeals may inquire only into auch fact to
within tan (10) day• from not.ice In seven (7) legible copies and accom- determine the existence or non•xistence of the S'J>'CWC ground under the
panied by clearly legible certified true copies or such material portione at arbitration laws of the Philippines relied upon by the Refional Trial Cou.rt
the record referTed to therein together with other aupponing papers. The to refuu to recognize and/or enforce, vaaite and/or eet aside an award.
comment ehall (a) point out insufficiencies or inaccuracies in petitioner'e N!y 1uch inquiry into a question of fact shall not be resorted to for the
statement of facta and iuues, and (b) etate the reasons why the petition purpou of eubatituting the court's judgment for that of the arbitral
ehould be denied or diamiHed. A copy thereof shall be served on the tribunal u regards the latter's rulinc on the merita of the controveny.
petitioner, and proof of such service shall be filed with the Court of
Appeala. Rule 19.25. Party appea.llng decwWn of courl confln•li.1111
ar6ltra.l award required to pa.t bond.-Tbe Court of Appeals lhall
Rule 19.20. D ... courH.-lf upon the filing of a comment or auch within fifteen CUI) days from receipt of the petition require the party
other pleadlnc or documents as may be required or allowed by the Court of appealing from the decision or a final order of the Reiional Trial Court,
Appeal.I or upon the expiration of the period for the tiling thereof, and on either confirming or enforcing an arbitral award, or denyi.u& a petition to
th~ basil of the petition or the reconls, the Court of Appeals finds prima eet aside or vacate the arbitral award to poet a bo11d execu!A!d in favor of
facte that the Regional Trial Court has committed an error that would the prevailing party equal to the amou.ot of the awerd.
warrant l'll\lersal or modification of tbe judgment, final order, or resolution Failure of the petitioner to post auch bond ahall be a ground for the
sought to be reviewed, it may eive due course to the petition; otherwise it Court of Appeal• to dismiu the petition.
•hall diemie1 the aame. '
Rule 19.21. Tranemittal of recon:t..-Within fifteen (15) daya D. SPECIAL CIVIL ACTION FOR CERTIORARI
from notice that the petition has been given due course, the Court of
Rule 19.26. Cerlwra.rl. lo tAe Courl of Appeok-When the
Appeala may require the court or agency concerned to transmit the orifi·
Regional Trial Court, in making a ruling under the Special ADR Rulff,
nal or a legible certified true copy of the entire record of the proceeding
hu acted without or in excess of its jurisdiction, or with grave abuse of
under review. The record to be transmitted may be abridged by agreement
diacretion amounting to lack or exces1 of jurisdiction, and there ii no
of all partie1 to the proceeding. Tbe Court of Appeals may require or
appeal or any plain, speedy, and adequate remedy in the_ordinary course
permit eubaequent correction of or addition to the record.
of law, a party may file a special civil action for certiorari to 1U1Dul or aet
Rule 19.!B. B{fect of appeaL-The appeal shall not atay the uide a ruling of the Regional Trial Court.
award, judiment, final order or resolution aought to be reviewed unleu A special civil action for certiorari may be filed agalnat the followin&
the Court of Appeal• directs otherwiae upon such terms as it may deem orders of the court.
just.
a . Holding that the arbitration agreement is inexistent, invalid or
Rule 19..23. Submluion fo,.. .Ucuion.-If the petition is given unenforceable;
due course, the Court of Appeals may aet the case for oral argument or b . Reversing the arbitral tribunal's prelimilwy determination up-
require the partiee to submit memoranda within a period of fifteen (15) holding ita jurisdiction;
days from notice. The cu• shall be deemed submitted for decision upon c. Denyi~ the request to refer the dispute to arbitration;
the filin1 of the Jut pleading or 11111mol'8Jldum Mquirecl by the Court oC
Appeals.
d. Granting or refusing an interim reliee
The Court of Appeale shall render judgment within sixty (60) days e. Denying a petition for the appointmant of an arbitrator;
from the time th• cue la aubmitted for dedeion. f. Confirming, vacating or conecting a domestic arbitral award;
614 ALTERNATIVE DISPUTE RESOIXTIO:-: A.l>PBNDIX "E• 515
SPECIAL RULES OF OOUltT ON
ALTERNATIVE DISPUTE RESOt.1.mON

g. Suspending the proceedinp to set aside an international com- con•!deration of the ground alleged and the legal brie& aubmitted by the
mercial arbitral award and referring the case back to the arbitral tribunal; parties, the petition does not appear to be prima facie meritorious.
b . Allowing a party to enforce an international commercial arbitral
award pendi ng appeal;
Rule 19.81. °""""to co,,.,....,.,_-If the petition Is eufftclent in
form and substance to justifY auch proceu, the Court of Appeala 8hall
i. Adjourning or deferring a ruling on whether to set aside, recof· immediately issue an order requiriDg the respondent or respondent. to
nlze and or enforce an International com111ercial arbitral award; comment on the petition within a non-extendible period offitteen (11!) d11111
j . AJlowin1 a party to enforce a foreign arbitral award pendlns &om reooipt of a copy thereof. Such order ahall be aerved on the respon-
appeal; and dents in such manner a.a the court may direct, together with a copy of the
k. Denying a petition for assistance in taking evidence. petition and any annexes thereto.

Rule 19.27. Form..-The petition shall be accompanied by a cer- Rule 19.82. Arbitration moy continue dapite petltlon for
tified true copy of the questioned judgment, order or resolution of the cerliororl.-A petition for certiorari to the court from the action of the
Regional Trial Court, copies of all pleadings and documents relevant and appointing authority or the arbitral tribunal allowed under this Rule ahall
pertinent thereto, and a sworn certification of non-forum shopping as pro- not prevent the arbitral tribunal from continuing the proceedinp and ren-
dering ite award. Should the arbitral tribunal continua with the pro-
vided in the Ru lee of Court. cee~lnga, the arbitral proceedings and any award rendered therein will be
Upon the filing of the petition and unless otherwise prescribed by 1ubJect to the final outcome of the pending petition for certiorari.
the Court of Appeals, the petitioner shall pay to the clerk of court of the
Court of Appeals docketing fees and other lawful fees of P3,500.00 and Rule 19.SS. Prohibition agalnat itUUMtiona.-The Court of
depoeit the sum of P500.00 for costs. Eicemption from payment of docket Appeals shall not, during the pendency ol the proceedings before it,
and other lawful feel and the deposit for costs may be granted by the prohibit or enjoin the commencement of arbitration, the conetitution of the
Court of Appeals upon a verified motion setting forth valid grounds arbitral tribunal, or the continuation of arbitration.
therefor. If the Court of Appeals denies the motion, the petitioner shall
pay the docketing and other lawfUI fees and deposit for costs within fifteen Rule 19.34. Proceedlnq• o~e,. comm41nl ia ffkd.-A&r the
comment ia filed, or the time for the filing thereof has expired, the court
days from the notice of the denial. 1h~ll render judgment granting the relief prayed for or to wWcb the
Rule 19.28. WMn to flk pditlon.-The petition must be filed petitioner is entitled, or denying the same, within a non-extendible period
with the Court of Appeals within fifteen (15) days from notice of the offif\een (15) days.
judgment, order or resolution sought to be annulled or set aside. No exten- Rule 19.35. ~rvlce antl ua(orct111U!!nl ofonkr orJutlglMnt.-
sion of time to file the petition shall be allowed.
A ceJ't!fied copy of the judgment rendered ia accordance with the last
Rule 19.29. A.rbUral tribunal a nominal party in ,,,. petl- preceding section shall be aerved upon the Regional Trial Court concerned
llon.-Tbe arbitral tribunal shall only be a nominal party in the petition ln such manner a.a the Court of Appeals may direct, and dlaobedience
for certiorari. As nominal party, the arbi~al. tribunal shall not be required thereto •hall be punished as contempt.
to submit any pleadings or written subm1SS10~ to the court. The arbitral
tribunal or an arbitrator may, however, aubnut such pleadings or "1itten E. APPEAL BY CERTIORARI TO THE SUPREME COURT
submissions if the aame aerves the interest orjustice.
Rule 19.86. lhvu111 tlUcl'dionar>-A review by tbe Supreme
In petitions relating to the recognition and enforcement of a foreign Court is not a matter or right, but of sound judicial ruscretioo, which will
arbitral award the arbitral tribunal ehall not be included even as a be granted only for serious and compelling reuona resulting in grave
nominal party.' However, the tribunal may be notified of the proc:eedings p~udice to the aagrieved party. The followio.g, while neither controllin1
and fumiahed with court proceNM· nor fl.illy measuring the court's discretion. indicate the serioua and com-
Rwe 19.SO. Courl to dUmi•• petition..-The court shall diamiaa pelline, and neceasarily, restrictive nature of the grounds that will war-
the petition if it failll to comply with Rulea 19.27 and 19.28 above, or upon
1520 ALTERNATIVE D ISPUTE RESOLUTION APPENDIX "E• 1521
SPECIAL RULES OF COURT ON
AJ.:tERNATIVE DISPUTE RESOLIJTION

The prevailio.1 party ahall be entitled to an award of costs, which Rule 25.2. ScoM of Online Ditlput. R.aolution.-Oaline
ahall include reuonable attorney's fea of the prevailing party against the Dispute Resolution shall refer to all electroaic forms of ADR including the
unaucceafW party. The court ahall determine the reasonableness of the UH of the internet and other web or computed hued technologiee for
claim for attorney's r-. facilitati ng ADR.
Rule 21.8. Golt*rnm«nl'• ~mption from pa.yml!nt of fees.-
RULE 26 -Effectwity
The Republic of tlle Philipplnea, lts agencies and instrumentalities are
eirempt from paying legal fees provided in these Special ADR Rules. Local Rule 26.1. Effectiuity.-The Special ADR Rulea shall take effect
1ovem.menta and pemment controlled corporation with or with or with- fifteen (15) days after ita complete puhlicatioa in two (2) aewspepera of
out independent chart.en are not exempt from paying such fees.
general circulation.
RULE 22 -A.ppllcablllty of the Ruka ofCourt
RULE A: GUIDELINES FOR THE RESOLtlTION OF ISSUES
Rule 22.1. .Applicability of Rules of Court.-The provisions of RELATED TO ARBITRATION OF LOANS
the Rules of Court that are applicable to the proceedings enumerated in SECURED BY COLLATERAL
Rule 1. 1 of theae Special ADR Rules have either been included and
incorporated in these Special ADR Rules or specifically referred to herein.
In c:onnection with the above proceedings, the Rules of Evidence Rule A.l. Applicability of an ori>Urutlon Ol'ftme"! In a
shall be hberally construed to achieve the objectives of the Special ADR contract of loa,. applie• to the aece••ory contrallt ncun"6 th11
Rules. loan.-An arbitration agreement in a contract of loan extends to and
covers the accesaory contract securing the loan such as a pledie or 1
RULE 23 - Separability mortgage executed by the borrower in favor of the lender under that
contract of loan.
R~e 28.1. S.parubility Clauae.- lf, for any reason, any part of Rule A .2. Forecloaure of pledge or cetra-judkial fb,_io...,..
the Special ADR Rules shall be held unconstitutional or Invalid other
Rules or proviaiona hereof which are not affected thereby shall continue to of mortgage not precluded 1'y arbilration.-The ~~oemen.t of ~e
be in full force and effect. ' arbitral proceeding under the contract of loan coatairung an arbitra~on
qreement shall not preclude the lender from availing himself of~ ng:t
to obtain satisfaction of tbe loan under the acceasory con of thy
RULE 24 - Trruiaitory Proviaiona
foreclosure of the thing pledged or by extra-judicial f?:!:~ e
Rule 2'.l. 7'raMitory Proviaion.-Considering its procedural collater al under the real estate mortgage in accordance W1 °·3135 ·
character, the Special ADR Rules shall be appliceble to all pending The lender may Jikewiae institute foreclosure proceedlnga ~nat
arbitrat:i~n, mediation or other ADR forma covered by the ADR Act, unleaa the collateral securing the loan prior to the commencement of the arbit:ral
the. ~- ~. othe,...iae. The Special ADR Rules, however, may not proceeding.
preJud1oe or unpair veated rights in accordanoe with Jaw. By aareeing to refer any dispute under the contract of loan to
arbitration, the lender who ia secured by an 8cce8llOI?' C?"tract of real
RULE 211 - Online Dl•pute Rll•olution estate mortgage shall be deemed to have waived bia riJbt to obtain
eatisfaction of the loan by judicial foreclosure.
Rule 25.1. A.ppl~obUity of tM Special A.DR Ruin to Online
Dt.put11 Rll•olutlon.- Whenever applicable and appropriate, the Special Rule A.8. Remedy of the borrouier C11f4lntl an action ta.\en
ADR Rules ahall JOV•rn the procedure for matters broug ht before the court 6y ti•• ~nd•r 41Taltu1t the collateral before th~ comtltution of th11
involving Online Dispute Resolution. arbltrol trlbunaL-The hotTOwer provi~ aecunty for the ~ent of
hi1 loan who ia agerieved by the action taken by th~ lender ageinat ~e
collateral Heuring the loan may, if such action agamet the collateral ia
522 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "En 523
SPECIAL RULES OF COURT ON
ALTERNATIVE DISPUTE RESOLUTION

taken before the arbitral tribunal is constituted, apply with the approp.. Rul e A.6. Arbitration inuoluing a third-party prooUkr of
riate court for interim relief against any such action of the lender. Such aecurity.-An arbitration agreement contained in a contract of loan bet-
interim relief may be obtained only in a special proceeding for that pur- ween the lender and the borrower extends to and covers an accessory
pose, against the action taken by the lender against the collateral, pending contract securing the loan, such as a pledge, mortgage, guaranty or
the constitution of the arbitral tribunal. Any determination made by the suretyship, executed by a person other than the borrower only if ~uch
court in that special proceeding pertaining to the merits of the contro- third -party securing the loan has agreed in the accessory contract, either
versy, including the right of the lender to proceed against the collateral, directly or by reference, to be bound by such arbitration agreement.
shall be only provisional in nature.
Unless otherwise expressly agreed upon by the third-party securing
After the arbitral tribunal is constituted, the court shall stay its the loan, his agreement to be bound by the arbitration agreement in the
proceedings and defer to the jurisdiction of the arbitral tribunal over the contract of loan shall pertain to disputes arising from or in connection with
entire controversy including any question regarding the right of the lender the relationship between the lender and the borrower as well as the
to proceed against the collateral.
relationship between the lender and such third-party including the right of
Rule A.4. Re<Mdy of borrower against action taken by tM the lender to proceed against the collateral securing the loan, but shall
lender againat tM collateral a/fer the arbitral tribunal has been exclude disputes pertaining to the relationship exclusively between the
constituted.-Alter the arbitral tribunal is constituted, the borrower borrower and the provider of security such as that involving a claim by the
providing security for the payment of his loan who is aggrieved by the provider of security for indemnification against the borrower.
action taken by the lender against the collateral securing the loan may In this multi-party arbitration among the lender, the borrower_ and
apply to the arbitral tribunal for relief, including a claim for damages, the third party securing the loan, the parties may agree .to submit to
against such action of the lender. An application to the court may also be arbitration before a sole arbitrator or a panel of three arbitrators to be
made by the borrower against any action taken by the lender against the appointed either by an Appointing Authority designated by the parties in
collateral securing the loan but only if the arbitral tribunal cannot act the arbitration agreement or by a default Appointing Authority under the
effectively to prevent an irreparable injury to the rights of such borrower law.
during the pendency of the arbitral proceeding.
In default of an agreement on the manner of .appointin11, arb~trators
An arbitration agreement in a contract of loan precludes the borro- or of constituting the arbitral tribunal in such multi-party arb1tra~on, the
wer therein providing security for the loan from filing and/or proceeding dispute shall be resolved by a panel of three arbitrators to be designated
with any action in court to prevent the lender from foreclosing the pledge by the Appointing Authority under the law. But even m def~ult. of an
or extra-judicially foreclosing the mortgage. If any such action is filed in agreement on the manner of appointing an arbitrator or constituting .an
court, the lender shall have the right provided in the Special ADR Rules to arbitral tribunal in a multi-party arbitration, if the borrow~r and the ~d
have such action stayed on account of the arbitration agreement. party securing the loan agree to designate a common arbitrator, ';ll'b1tra-
tion shall be decided by a panel of three arbitrators: one to be deSJgnated
Rule A.5. Relief that may be granted by the arbitral tri.l>u- by the lender; the other to be designated jointly by the borro":'er and the
naL-The arbitral tribunal, in aid of the arbitral proceeding before it, may provider of security who have agreed to designate the same arbit:rator; and
upon submission of adequate security, suspend or enjoin the lender from a third arbitrator who shall serve as the chairperson of the arb1tral panel
proceeding against the collateral securing the loan pending final deter- to be designated by the two party-designated arbitrators.
mination by the arbitral tribunal of the dispute brought to it for decision
under such contract of Joan.
The arbitral tribunal shall have the authority to resolve the issue of
the validity of the foreclosure of the thing pledged or of the extrajudicial
foreclosure of the collateral under the real estate mortgage if the same has
not yet been foreclosed or confirm the validity of such foreclosure if made
before the rendition of the arbitral award and had not been enjoined.
 APPENDIX "F' 525
EXECUTIVE ORDER NO. 1008

SECTION 1. Title.-This Executive Order shall be known as the

"Construction Industry Arbitration Law."
APPENDIX "F" SEC. 2. Declaration of Policy.-Tbere is hereby declared to be
the policy of the State to encourage the early and expeditious settlement of
disputes in the Philippine construction industry.
EXECUTIVE ORDER NO. 1008 SEC. 3. Creation.- There is hereby established in the CIAP a
body to be known as the Construction Industry Arbitration Commission
{CIAC). The CIAC shall be under the administrative supervision of the
CREATING AN ARBITRATION MACHINERY FOR THE PHILIPPINE PDCB.
CONSTRUCTION INDUSTRY
SEC. 4. Jurisdiction.-The CIAC shall have original and exclu·
sive jurisdiction over disputes arising from, or connected with, contracts
WHEREAS, the construction industry provides employment to a entered into by parties involved in construction in the Philippines,
large segment of the national labor force and is a leading contributor to whether the disputes arises before or after the completion of the contract,
the gross national product;
or after the abandonment or breach thereof. These disputes may involve
. WHEREAS, it is of vital necessity that continued growth towards government or private contracts. For the Board to acquire jurisdiction, the
national .goals shall not be hindered by problems arising from, or con· parties to a dispute must agree to submit the sa.me to voluntary arbitra·
nected with, the construction industry; tion.
WHEREAS, there is a need to established an arbitral machinery to The jurisdiction of the CIAC may include but is not limited to viola·
settle such dISpu~ expeditiously in order to maintain and promote tion of specifications for materials and workmanship; violation of the
healthy partnership between the government and the private sector in the terms of agreement; interpretation and/or application of contractual provi·
furtherance of national development goal&; sions: amount of damages and penaJtiM; commencement time and dela.vs;
maintenance and defects; payment default of employer or contractor and
WHEREAS, Presidential Decree No. 1746 created the Construction changes in contract cost.
Industry Authority of the Philippines {C!AP) to exercise centralized au-
thority for the optimum development of the Construction Industry and to Excluded from the coverage of this law are disputes arising from
enhance the growth of the local construction industry; employer-employee relationships which shall continue to be covered by the
Labor Code of the Philippines.
. . Vl'.lfEREAS, ~mong the implementing agencies of the CIAP is the
Phtltppme Domesti~ Construction Board {PDCB) which is specifically SEC. 5. Composition of the Board.-The Commission shall con-
au~onzed b:>' Pres1?ential Decree No. 1746 to "adjudicate and settle sist of a Chairman and two (2) members, all to be appointed by the CIAP
claim~ and disputes m the implementation of the public and private con· Board upon recommendation by the members of the PDCB.
structton contracts and for this purpose, formulate and adopt the neces- SEC. 6. Functions of the Commiuion.- Tbe Commission shall
sary rules and regulations subject to the approval of the President"; perform, among others that may be conferred by law, the following func·
NOW, THEREFORE, I, FERDINAND E. MARCOS President of the tions:
~hilippines, .by virtue of the powers vested in me by law, do hereby author- ( 1) To formulate and adopt an arbitration program for the con-
ize the. c.rea.t1on of an arbitration machinery in the construction industry of struction industry;
the Ph1hppmes, and do hereby order and ordain: (2) To enunciate policies and prescribe rules and procedures for
construction arbitration;
(3) To supervise the arbitration program, and exercise such author·
ity related thereto as regards the appointment, replacement or challenging
524 of arbitrators; and
526 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "F" 527
EXECUTIVE ORDER NO. 1008

(4) To direct its officers and employees to perform such functions as ~rties fail to agree as to the arbitrator, the CIAC taking into considera·
may be assigned to them from time to time. tion .the complexities and intricacies of the dispute/e has the option to
appoint a single arbitrator or an Arbitral Trib1mal.
SEC. 7. Compen•ation of the Commiasion.-The members of
the Commission shall receive such per diems and allowances as may be . If the CIAC decides to appoint an Arbitral Tribunal, each party may
fixed by the CIAP from time to time: nominate one Ill arbitrator from the list of arbitrators accredited by the
CIAC for appointment and for confirmation. The third arbitrator who is
SEC. 8. Term.-The term of office of the members of the Commia· acceptable to both parties confirmed In writing shall be appointed by the
eion shall be six (6) years; provided, however. that of the Commission CIAC and shall preside over the Tribunal.
members first appointed, the chairman shall hold office for six (6) years;
Arbitrators shall be men of distinction in whom the business aector
the other member for four (4) years; and the third for two 12) years. The and the government can have confidence. They sball not be permanently
appointment to any vacancy in the Commission shall only be for the unex- employed with the CIAC. Instead, they shall render services only when
pired portion of the term of the predecessor. called to arbitrate. For each dispute they eettle, they sball be given feea.
SEC. 9. Quorum.-The presence of a majority of the members of SEC. US. Appointment of ~rl&-The aervicee of technical or
tbe Commission shall constitute a quorum for the transaction of business. legal experts may be utilized in the aettlement of disputes if requested by
SEC. 10. Deliberotions.-The decisions of the Commission shall any of the parties or by the Arbitral Tribunal If the request for an expert
be arrived at by a majority vote. is done by either or both of the partiee, it ia necessary that the appoint-
ment of the expert be confirmed by the Arbitral Tribunal.
SEC. 11. Secretariat.-The Commission shall have a Secretariat
to be headed by an Executive Director who shall be responsible for receiv· Whenever the parties request for the services of an expert, they ehall
ing requests for arbitration end other pleadings; for notifying the parties equally shoulder the expert's fees and expenaes, balf of which shall be
thereto; and for fixing and receiving filing fees. deposits, costs of arbitra- deposited with the Secretariat before the expert renders service. When
tion, administrative charges, and fees. It shall be the duty of the Executive only one party makes the request, it shall deposit the whole amount re-
Director to notify the parties of the awards made by the arbitrators. quired.
The Secretariat shall have among others a Publication and a Train- SEC. 16. Arbitration ~Mes.-Arbitration expen11e8 shall in-
clude the filing fee, administrative charges, arbitrator's feea; fee and ex-
ing Division.
penses of the expert, and others which may be imposed by the CIAC.
SEC. 12. Authority to Appoint.-The Commission is hereby au-
thorized to appoint the Executive Director. the consultants, the arbitra· The adminiatrative charges and the arbitrator's fees shall be com-
puted on the basis of percentage of the sum in clispute to be fixed in accor-
tore, as well as the personnel and staff. dance with the Table of Administrative Charges and Arbitrator's Fees.
SEC. 13. Authoril;y to Colkct Fees.-The Commission is em·
powered to determine and collect fees, deposits, costs of arbitration, as SEC. 17. DeposU to Co1J11r Arbitration Expenaea.-The CIAC
shall be authorized to fix the amount to be deposited which must be
well as administrative and other charges as may be necessary in the per-
equivalent to the expected arbitration expenSSI. The deposit shall be paid
formance of its functions and responsibilities. The CIAC ia authorized to
use its receipts and deposits of funds to finance its operation subject to the to the Secretariat before arbitration proceedings sball commence. Payment
shall either be shared equally by the parties or be paid by any of them. If
approval of the PDCB, the provisions of any law to the contrary notwith·
one party fails to contribute his share in the deposit, the other party must
standing. pay in full. If both parties fail to render the required deposit, the case shall
SEC. 14. Arbitroton.- A Sole Arbitrator or three arbitrators be considered dismissed but the parties shall still be liable to pay one balf
may settle a dispute. (112) of the agreed administrative charge.
Where the parties agree that the dispute shall be settled by a aole SEC. 18. Reporta.- The Commission shall, within three (3)
arbitrator, they may, by agreement, nominate him from the list of arbitra· months after the end of the fiscal year, submit its annual report to the
tors accredited by the CIAC for appointment and confirmation. If the
528 ALTl!lRHATIVE DISPUTE RESOLUTION

ClAP. It shall, likewise, submit such periodic report as may be required

from time to time.
APPENDIX "G"
SEC. 19. Finality of AU>Grda.-The arbitral award shall be bind·
ing upon the parties. It shaU be final and inappealable except on questiona
oflaw which shall be appealable to the Supreme Court.
SEC. 20. Encutwn and Enforcement of Atoards.-As soon as REVISED RULES OF PROCEDURE
a decision, order _or award has become final and executory, the Arbitral GOVERNING CONSTRUCTION ARBITRATION
Tribunal or the single arbitrator, with the concurrence of the CIAC shall
~tu prop~w or on mo~on of an1 interested party, issue a writ of ~ecu· (AB amended bJ1 CIAC Re11t1lution: Nos. IS-2006, 16-2006,
tion requinng any sheriff or other proper officer to execute said decision, 18-2006, 19-2006, 02·2001, 01.2001, 18·2007, 02·2008,
order or award.
03°2008, 11·2008, 01-2010, 04-2010, 07-2010,
SEC. 21. Rul,e.Making Power.-The CIAC shall formulate and 08·2014, and 01·2016, 06-2017, and 01·2019)
adopt necessary rules and procedures for construction arbitration.
SEC. 22. Separahitity Clauae.-Tbe provisions of this Executive
RVLE 1 -POLICY AND OBJECTIVES
Order ~ decl~ed ~ be separable and if any provision on the application
he~~ IB held mval1_d or unconstitutional, the validity of the remaining
provunon not otherwuJe affected shall remain in full force and effect. SECTION 1 .1 SWf&rry:at of pqljcy qpd obi«tfoM. It is the policy
and objective of these Rules to provide a fair and expeditious resolution of
SEC_. 23. Re~lng Clauae.-All provisiona of existing Jaws, construction disputes as an alternative to judicial proceedings, which may
proclamations, decrees, letters of instructions and executive orders con· restore the disrupted harmonious and frie-ndly relationahips between or
~ary to or inconsistent herewith are hereby repealed or modified aocord- among the parties.'
mgly.
SECTION 1.2 ApplU:gbility of ru/c•. Theee Rules are applicable
SEC. 24. Effectiolty o(Clause..-This Executive Order shall take to proceedings in arbitration before an Arbltral Tn"bunal af one or more
effect immediately. Arbitrator/a.
D~ne in the City of Manila, this 4"' day of February in the year of our SECTION 1.3 Ju4jciql rules apt contmlling.-ln any arbitration
Lord, Nmeteen Hundred and Eighty-Five. proceeding under these Rules, the judicial rules of evidence need not be
controlling, and it is the spirit and intention ottheae Rules to ascertain the
facts in each case by every and all reasonable me8D8 without regard to
technicalities oflaw or procedure.

1
As amended by CIAC Resolution No. 06-2017 (effectivity: 23 Aup.&t
2017) to conform with the language of Section 4, E.O. 1008.

529
530 ALTERNATIVE DISPUTE RESOIXTIOK APPENDIX "G" 531
C IAC REVISED RULES OF PROCEDURE GOVERNING
CONSTRUCTION ARBITRATION

RULE 2 -JURISDICTION 2.3.1 Such arbitration agreement or subsequent submission must be

alleged in the Complaint. Such submission may be an exchange of
SECTION 2.1 Jurisdictjon The CIAC shall have original and ex- communication between the parti.es or some other form showing that
clusive jurisdiction over construction disputes, which arose from, or is the parti.es have agreed to submit their dispute to arbitration. Copies
connected with contracts entered into by parties involved in construction of such communication or other form shall be attached to the Com-
in the Philippines whether the dispute arose before or after the completion plaint. "
of the contract, or after the abandonment or breach thereof. These dis-
putes may involve government or private contracts.' 2.3.2 If the Complaint is filed without the required arbitration
clause or subsequent submission, the CIAC Secretariat shall within
2.1.1 The jurisdiction of the CIAC may include but is not limited to three (3) days from such filing, notify the Respondent that, if he/it is
violation of specifications for materials a nd workmanship; violation willing to have the dispute be resolued by arbitration, such agreement
of the terms of agreement; interpretation and/or application of con· must be clearly expressed in the Answer.'
tractual provisions; amount of damages and penalties; commence-
ment time and delays; maintenance and defects; payment default of 2.3.3 Respondent's refusal to Answer the Complaint or the filing of a
employer or contractor and changes in contract cost.• Motion to Dismiss for lack of jurisdiction shall be <kemed a refusal. to
submit to arbitration. In either case, the Commission (CIAC) shall
SECTION 2.2 Couerage.-Construction dispute shall include those dismiss the Complaint without p~~ to Us refiling upon a subse·
between or among parties to, or who are otherwise bound by, an arbitration quent submission.'
agreement, directly or by reference, whether such parties are project owner,
contractor, subcontractor, fabricator, project manager, design professional, SECTION 2.4 Jurjsdjctioaq/ chgl[enae -A motion to dismiss based
consultant, quantity surveyor, bondsman or issuer of an insurance policy in a on lack ofjurisdiction shall be resolved by the appointed arbitral tribunal.
oonstruction project.'
2.4.1 The Arbitral Tribuaq/ shall haue full authority to resolve all is·
2.2.1 The CIAC shall continue to exercise original and exclusive ju· sues raised in the Motion to Dismiss for lack of jurisdiction on the
risdiction over oonstruction disputes although the arbitration is grounds that the dispute is not a construction dispute, or that the Re-
commercial pursuant to Section 21 of R.A. 9285 or the Alternative sponden.t was represented by one without capacity to enter into a bind·
Dispute Resolution Act of 2004. ing arbitration agreement, or that said agreement or submission is not
valid for some other reasons, or does not couer the particul.ar dispute
2.2.2 Excluded from the coverage of this Rules are disputes arising sought to be arbitrated, or other issues of interpretation or non·
from employer-employee relationships, which shall continue to be fulfillment ofpre-conditions to arbitration that are raised therein.'
covered by the Labor Code of the Philippines.
SECTION 2.11 Non-wgjvgr qf juri.dictiQMl chglknge.-A party
SECTION 2.8 Condjtjmt fqr ex&rcise qf iur4W.iction For the CIAC to does not waive its right to challenge the jurisdiction of CIAC by any of the
acquire jurisdiction, the parties to a dispute must be bound by an arbitra- following acts:
tion agreement in their oontract or subsequently agree to submit the same
to voluntary arbitration. a) participating in the nomination process including challenging
the qualifications of a nominee;
b) praying for extension of time to file appropriate plead-
ing/motion to dismiss;
' Section 4, E.O. No. 1008; CIAC Resolution No. 06-2017 deleted the
word "construction from the phrase •construction disputes• to conform with the ' As amended by CIAC Resolution No. 15-2006 (effectivity: 18 October
language of Section 4, E.O. 1008. 2006).
•Section 4, E.O. 1008. ' Ibid.
• Ssection 35, R.A. 9285; bold text amended by ClAC Resolution No. 06- 'Ibid.
2017. 'Ibid.
 532 ALTERNATIVE DISPUTE RESOLl:TION Al'PENDIX ~G• 633
CIAC REVISED RULES OF PROCEDUJU; GOVllRNING
CONSTRUCTION ARBITRATION

c) oppo.ing an application for interim relief; controversy to CIAC jurisdiction, notwithstanding the reference to a differ-
d) filing of a motion to dismi111/suspend. ent arbitration institution or arbitral body in such contract or submission.•
4.1.l Submi..io,. to CIAC Rulu - ..,,._ tM par1ia Aave
RULE 3 - REQUEST FOR ARBITRATION I ~ to •ubmlt tM tlupukh to ar6Urollon &,, CIAC, tJut, U.OU
COMPLAINT be deem«i there&,, to haw .,,,,~ Ipso /r#to to U.- Rulu
and any amendment. herelo.'°
SECTION 3.1 EiliJJg.-Any party to a construction contract desir-
ing to avail of arbitration shall file its Request for Arbitration In the pre- 4.1.2 When a contract contains a clause for the aubmisalon of a fu.
scribed fonn and number of copies to the Secretariat of the CIAC. ture controversy to arbitration, it ia not neceuary for the parties to en-
ter into a aubmiaalon a.ereemeot before the Claimant may invoke the
SECTION 8 .2 Pccqmdjtions. The claimant against the govern· jurisdiction of CIAC.
ment, in a government construction contract, shall state in the com-
plaint/requeat for arbitration that 1) all administrative remedies have 4 .1.S An arbitration agreement or a 1ubmiuion to arbitration aball
been exhausted, or 2) there is unreasonable delay in acting upon the claim be in writing, but it need not be signed by the parties, u long u tbe
by the government office or officer to whom appeal is made, or 3 l due to the intent is clear that the partie.e agree to submit a preeent or future
application for interim relief. exhaustion of administrative remediea U. not controversy arising from a construction contnc:t to arbitration. It
practicable. may be in the form of exchange of letters Mnt by poet or by telefax,
telexes, telegrams, electronic mail or any other mode of communica-
3.2.1. The Claimant in a private construction contract hae the same tion.
obligation u the above to show similar good faith compliance with all
preconditions Imposed therein or exemptions therefrom. SECTION 4.2 Failure or reflwU ro arbltmf.c -Where the jurisdic-
tion of CIAC is properly Invoked by the filing of a Request for Arbitration in
3.2.2. In case of non-compliance with the precondition contractual)y accordance with the" Rules, the failure de.epita due notice which amount.a
imposed, absent a showing of j ustifiable reasons, exemption, or a to • refusal of the Respondent to arbitrate, ahall not •ta.Y the proceedinp
waiver thereof, the tribunal thall auspend arbitration proceedinp notwithstanding the absence o.r lack of participation at the Respondent. In
pending compliance therewith within a reasonable period directed by euch case, CIAC shall appoint th.e arbitratoda in accordance with U -
the Tribunal. Rulea. Arbitration proceedinp 1hall continue, and the award shall be made
after receiving the evidence of the Claimant.
SECTION 8.3 &quest to qMwcr The CIAC Secretariat ahall
Mtbin three (8) days from tiling, transmit to the Respondent a request for 4.2.1 In the event that, before award, the Respondeot who had not
his Answer, attaching thereto a copy of the complaint and the Request for earlier questioned the jurisdiction of the Tribunal, appears and of·
Arbitration toaetber with the annexed documents. fers to present his evidence, the Arbltral Tribunal may, for reasons
that justifies the failure to appear, reopen the proceedinp, require
SECTION 3A Cqmwnccmcnt q( qrbitra/ prqcecdina• The date him to file hia answer with or without countercla.i1111, pay the fees.,
when the Request for Arbitration is filed with CIAC shall, for all intents where required under th- Rules, and allow him to prueot bis evi·
and purposea, be deemed to be the date of commencement of the proceed- dence, with limited right to Cl'088 examine witn- already pr8*lted
ines-
RULE 4 - EFFECT OF AGREEMENT • Chino Cha1111 Jian8 EMrgy Corpomtion /Philippines) v. Roaal lnfccu·
TO ARBITRATE tucctuce Builc/era, and th• Courl of Appea/1, September 30, 1996, G.R. No.
125706; NatU>nal lrci(/atkm Adminutmlicm {(NIA) v. Hon. Courl of Appeah
SECTION C.1 SubmiRsion to CIAC jucjadictinn. An arbitration /November 17, 1999, G.R. No.129169).
cla1188 In a con•truetion contract or a aubmlaalon to arbitration of a construe· •• Provision in Section 1, Art. W of the Original CIAC arbitration rules
tion dispute ahall be deemed an agreement to aubmit an existing or future datad CIAC Resolution No. 07-2016 (efl'ectivity: 4 Jan. 2017); SectiODS 4.1.l and
4.1.2 were also renumerated to 4.1.2 and 4.1.3, respectively.
536 ALTERNATIVE DISPUTE RESOLt:TIOS APPENDIX ·a· 537
CIAC REVISED RULES OF PROCEDURE GOVERNING
CONSTRUCTION ARBITRATION

RULE 8- QUALIFICATIONS OF ARBITRATORS e) Contribute to the fair, ezped.ltioua and timely resolution
ot the dispute.'•
SECTION 8.1 General quali{jrotion of arbitrators. The Arbitrators
shall be penona in whom the business sector, particularly the •lake hold- SECTION 8.4 ArbitmWQ! Ml nermgaent emp/.gytt« qfClAC The
ers of the conatruction induatry and the government can have confidence. Arbitnltors shall render service only when called upon to arbitrate a con·
They shall pone.. the compet11nce, integrity, and l«ulerehip qualitin to &truction dispute.
resolve any construction dispute expeditiously and equitably. The Arbitrators
shall come from different professions. They may include engineers, architecta, SECTION 8.5 EremptiOM from civil ligbililv for qffjcjal QCts
construction managers, engineering consultants, and businessmen familiar Arbitrators shall not be civilly liable for acts done in the performance of
with the construction industry and lawyers who are experienced in construc- their official duties except in a clear case of bad faith, malice or grosa negli·
gen1:e as provided in Section 38 (1), Chapter 9, Book 1 of the Administrative
tion disputes." Code of 1987.
SECTION 8.2 The Arbjtratga must be ClAC-gq:mijftd.-Only
CIAC-accredited arbitrators may be nominated by the parties and appointed RULE 9 - NOMINATION AND
by CIAC 88 arbitrators. A replacement arbitrator shall likewise be a CIAC- APPOINTMENT OF ARBITRATORS
accredited arbitrator. However, as an exception to this rule, CJAC may
appoint to an Arbitral Tribunal an arbi.trator who is not CIAC-aocredited SECTION 9.1 Number qf qrbilraJoa. A Tribunal of one or three
PROVIDED that the nominee: 11 is the parties' common nominee; 2) pos- Arbitrators may be appointed to settle a dispute in accordance with the
sesses the technicalllegal competence to handle the construction dispute provisions hereunder.
involved; and 3) h88 signified his availability/acceptance of his poasible
appointments.'' 9.1.1 In the obsence of on agreenuml on the number of arbitraJora,
CIAC taking into conaidllration the compkrilies Olld intricaciea of the
SECTION 8.3 Und,er1gkin11 ofarojtmtor upqn the qcceptgn« dispute Is or the sum involv~ has the option to oppoint o Sok Arbi·
qf anpojntment..-An arbitrator who accepts an appointment as trator or on Arbitral Tribunal"
arbitrator undertakes to:
9.1.2 In case of multiple port~s. whether 08 Claimant or as
a) Make himlJelf/herself available at all stages of the arbltra· Respondent, including three (3) or more parties in the arbitra·
tlon proceedings; tion, where all parties are unabk to ogre to a tMlhod for constitu-
tion of the Tribunal within ten(lO) days from notice, CIAC shall ap-
b) ReiuaiD independent of the parties and their counsel or point the arbitnztora."
representatives;
SECTION 9.2 &k ArbjtmW; Where the parties have agreed that
c) Maintain impartiality on all matters relating to the di.
the dispute(s) shall be settled by a Sole Arbitrator, each party shall name
pute11; not more than six (6) nominee• from IM CIAC.a«redtud arbttratore
d) Have a contlnuinc duty to dlaclose any fact of clrcumBtance m the order oftheir preference for appointtn#!nl as Sok ArbUrator. If
that may arouse justifiable doubts as to independence or im- any or both of the parties ahaU fail to aubmit the names of their nominees
partiality; and

" New provision under CIAC Resolution No. 07-2016 (effectivity: 4 Janu·
ary 2017); Sections 8.3 and 8.4 were numbered to 8.4 and 8.5 respectively.
" As amended by CIAC Resolutioo No. 07-2016 (effectivity: 4 Januaiy •• Previously Section 9.1.2 but renwnbered to Section 9.1.1 due to dele-
2017) tion of the section under CIAC Resolution No. 07-2016
,. As amended by CIAC Rea. No. 02-2007 (effectivity. 10 February 2007) " Previously Section 9.1.3 but renwnbered to Section 9.1.2 under CIAC
and CIAC Rea. No. 07-2018 (efl"ectivity. 4 January 2017) Resolution No. 07-2018
 538 Al.TERHAT!VE DISPl1TE RESOL\:TION APPENDIX •a• 639
CIAC REVJSllO RULES OF PROCBOURB O-OVERNING
CONSTRUCTION ARBITRATION

within the period/a prescribed by CIAC, a Sole Arbitrator shall be appointed SECTION 9.4 CtmditjQM Mr gpPOiatmcnt ql&ryimt qrbilmtqr.n-
byCIAC." A foreign arbitrator not accredited by CIAC m&,T be appointed as a co-
arbitrator or chairperson of an arbitral tribunal for a construction dispute
9.2.1 CIAC 6'iall appoirit a.s $0/c arbitrotor till common
under the followina conditio1111:
ncntinM of th. ptJrfU• who U auailable an.d not diaqua/ifi«L In
till abHn« of a common ncniintt or in COll'B where the common nomi· a) the disput41 ii a construction dispute In which one party ii an
ntt U diaq~ or ia nol auoilab/c, CIAC shall return the lista of international ~ i.e. one who.e place of business is outside
nominH• lo th. partiu and a.sit th.m to make an agrermcnt on o com- the Phillppines. For this purpose, the term International party
mon nomintt/1 within 48 hou,.._ If the parlies still fail lo ogrtt on o shall not Include a domestic aubsidlary of auch iDtemational
common ncntil!H, CIAC may appoint a Sole Arbitrator or an Arbitral party or a co-venturer in a joint venture with a party which
~unaL If CIAC decuus to appoint a Sole Arbitrator, it may •let an has ita place ofbuainess in the Philippines.
arb1tratorwhou not o nominee of any one oftlw partie11 and who u not
dillqutZJ.iMd and ia auailabk for appointment." b) the foreign arbitrator to be appointed ia not a national of the
Philippines and ia not of the ume oatioulity u the iiltema-
SECTION 9.3 Arbjtrql Tribunal -Where the parties hau. qreet1 tional pan;y in the dilpute;
that the dilput.e •hall be ttttled by an Arbitral Tribunal, each party ahell
IUllJMI not mon Uuua six (6) nomlnft• from the CIAC-accredited arbi- 9.4.1 Protttlurc roe appointment cl forri«n arbitmtqr. The beign
trators in the orrkr for their preference for appointnunt aa Arl>itro- arbitrator must be nominated by the international paity or ii the
ton. CIAC ahall choose and appoint u members of the Tribunal, one Arbi· common choice of the two CIAC-accredited arbitrators one of whom
trator from the claimant's nominees and another from respondent'• nomin-. was nominated by the International party. The nomination must be
CLtC •hall aleo cJwoae and appoint the Third Arbitrator and Mlify accompanied by a resume or bio-data of the nominee relevant to quali·
tM partk• thenof for their conffrmallon ln wrllin6 wUhin flu. (IS) fications as a conatruction arbitrator and a alaned undertaking ol the
workin/f do.ya from receipt of the rw&e. If no confirmation la rw:elved nominee to abide by CIAC arbitration rulee and policies.
wUhill auch puiod, U.. Third Arbitrator appointed by CIAC ah4Jl be SECTION 9.6 Diwuglifjcgtian qfgr ngn:q«gptqnq by M,,Uncg.
dttlMd accepf«l by the parlia. The Third Arl>itrmor chottn and If the nominee{a) of a party aball be disqualified or fail or refuse to accept
appoinkd by CIAC ahall be the Chainnan of the Tribunal. • the appointment, ClAC ahall choose and appoint any qualified arbitrator
who i.a willine to be eo appointed.
SECTION 9.6 Challengc."-An Arbitrator may be chalknged by o
" ~ amended by CIAC Resolulion No. 02·2016 S..fl'ectivity: 4 January party at any time after his appointmcnl but befort the lapse of the original
2017) lO·day period for aubmission of memoranda or draft decision under Sec·
,. ~ amended by CIAC Resolution No. 02-2007 <efl'ectivity: 10 February lion 13.16, Rule 13 hereof, Any eztenaions af Uma to fik memoranda or
:2007) Per CIAC Rea. No. 08-2010 (effect.ivity: l January 20lll, a cap/limit for draft .Ucisions will not EXTEND the l<J.day ,,.rlod to fi/4 o chalhf16tt or
the appointment of a Sole Arbitratnr ia prescribed based on a Sum in Diapute motion for inhibition. Tha chall4"8• shall be based upon the followi"8
(SID) of PtOO Million pnl\'ided, however, that if the Commission shall deter- Brounds:
mine that due to the number & complexity of ihe iu11e1 raiaed, Uie dispute
would be more judiciously resolved by a 3-penon panel of arbitrators, the Commig. a) relationship ,,,, blood or marriage within tM Wdh degrtt of a·
Qon lhall hKve the cli9cntion of appointine "" Arbitral 1nbunal even if the linllt aet
h8JI not been reached. Such discretion, nevertheleu, cannot be exerc!aed If tM " Se<:tion 37, R.A. 9286; On 23 June 2011, the CommiNion passed CIAC
SID does not exceed P30 Million, in which cases the principle of party auton· Rea. No. 09-2011 CPrelCribine New Guidelines for the Payment of Travel Ex·
omy shall be upheld in the parties' choice of a Sole Arbitrator penaes, Per Dieme, Arbltrator'a Feea, and Compensation of Foreip Arbitra·
'° ,_. amended by CIAC Reeolut.ion No. 07-2016 <effectivity: 4 January tors) which became effective on 4 August 2011
2017); Section 9.3.1 on the automatic appointment of common nomineM to the "' Section 3(p), R.A. 9286
Azbitra) TribwW wu deleted ID be mare in accord with the pal1;y autol\orJ\Y rule .. A. amended by CIAC Resolution No. 18-2006 (efl'ectivity: 2 December
by applyine Iha parties' order alpreference iD their llat of nominees 2006)
540 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "G• 541
C£AC REVISED RULES OF PROCEDURE GOVERNING
CONSTRUCTION ARBITRATION

ther party to the controversy, or to counsels within the fourth SECI'ION 10.2 Diglqttum by qrbitrqt,qr pfdLwuqU6mpQn "-Upon
degree, compukd ~rding to the rules ofcfoil law. acceptance of his appointment, the Arbitrator shall disclose in writing to
CIAC any circumstance likely to create in either party a presumption of bias
b) fi.nancial, fi.duciary or other ink.est in the controvusy
or which he believes might diaquallly him as an impartial Arbitrator. Such
c) partiality or biaa; written disclosure shall be communicated to the parties immediately by the
Secretariat. The purpose of such disclosure shall be to enable either party to
dJ incompeknu, or professional misconduct. investigate and ascertain whether there is a substantial legal basia to file a
A party may also req~8l the inhibition of an arbitrator upon other just motion for inhibition of the arbitrator concerned or seek his replacement.
and ualid reasona affecting independence, integrity, impartiality and interest. SECTION 10.3 Acceptqng: or refiml. "-The arbitrator must com·
9.6.1 A motion for inhibition or a request for the disqualification
municate to CIAC the acceptance or refusal of bis/her appointment within
and replacement of an arbitrator shall be treated as a challenge. five (5) days from receipt thereof. If no communication is received within
the prescribed period, ClAC shall appoint a replacement from the list of
9.6.2 The challenge, motion or request shall be in the form of a the party wha nominated him/her or, if none is available or qualified, from
complaint Wider oath, stating distinctly and concisely the facts com· the list of CIAC-accredited arbitrators.
plained of, supported by affidavits, it any, of persons having personal
knowledge of the facts therein alleged and shall be accompanied with SECTION 10.4 Yacgncig1.•-1t al any time during the proceed·
copies of such documents 88 may substantiate said. facts. ings but before an award ha.s been rendl!ml, any Arbitrator should resign,
be incapacitated, refuse or be unable, or be disqualified for any reason to
9:6.3 The arbitrator concerned shall be given by CIAC an opportu- perform the duties of his office, CIAC may, within five (5) days from the
mty to be beard. He may, without admitting the existence of the occurrence of a vacancy or refusalf1D8bility to accept appointment, appoint
eround of the challenge, motion or request, choose to inhibit himself a aubstitute(s) to be chosen from a list of alternatives previously agreed
but his decision shall be subject to approval by CIAC. upon by the parties. In the absence of auch a list, the ClAC shall fill the
vacancy from the list of accredited arbitrators.
9.6.4 In case the challenged arbitrator is allowed to Inhibit himself
or is removed, CIAC shall promptly appoint his replacement. If the lfthe vacancy OCCU/'8 after the award ha.r been renUred but before the ju·
arbitrator concerned is the third member of the Arbitral Tribunal, ri.sdiction of the arbitrator/s over the dispute is terminat.ld un.ckr &ctUm 16.6
the first two members thereof shall select his replacement. of Rule l 6 hereof, the CIAC may, on il8 own initiatiue, or upon writtien l'f!tl~Bt
of any of the parties, appoint a replaDtment from. the lillt of altemativu previ·
9.6.11 The decision of CIAC to retain or replace an arbitrator shall ously agreed upon by IM partiu or the list of at:erediud arbitrators. The re·
be final. quest shall state the justiMatUm Is for the Med for a replacement and shall be
filed together wilh. the required tkpom cf arbitTators (tea for the substitute I•.
SECTION 9.7 Dmuali&atiDn ofmgdjar.or as grbitrator.-An Arbi- The CIAC may, if it fi.nds it neceuary, appoint a aubstitute Is. Ifthe CIAC finds
trator who acted 88 conciliatorlmediator in a case previously brought before
him for conciliation/mediation cannot act as arbitrator for the same case
the reqW!st to be ""n«essaJJI (e.g. for Motions for correction of final. award
under Rule 17.1; Motiona for ezecuticn or atay of taClltioll un.du Rules 18.5
when brought to arbitration, unless both parties consent to his appointment and 18.6; Motions for relk( not co~ by the Ruka under Rule 19.1; ca&eB
in writing.
where the appel/at,e court merely directs a re-computation of the award or a
clarification thereof, or other ~,.. whith do net entail a re-hearing of t.M
RULE 10-APPOINTMENT AND ACCEPTANCE case, or a hearing on the merits of any i.ss~, or would not disturb I alter tM
OF ARBITRATORS

SECTION 10.1 Communication of qppojntmcnts The Secre- "' Made applicable under CIAC Res. No. 05-2006 (effectivity: 17 Febru&?Y
tariat shall communicate to the arbitrators their appointment. 2006) to all legal or technical experts hired in CIAC cases pursuant to Rule 15
(Appointment of Experts)
,. Aa amended by ClAC Res. No. 01-2019 (efl'ectivity: 28 February 2019)
,. As amended by CIAC Res. No. 07·2007 (efl'ectivity: 26July2007l
542 ALTERNATIVE DISPUTE RESOLUTION
APPENDIX •a• 543
CIAC REVISED RULES OF PROCEDURE GOVBRNING
CONSTRUCTION ARBITRATION

findi"8• in tM firuzl award; and otMr similar inslollCfls as determiMd by tM pant in .the proceedings. On the basis of such diaclosure, either party may
CIAC), ii shall deny IM same, re{undlM deposit made, and direct tM n!main·
ing I suniiuing arbitratcrIs to act 011 pending matters. ask clanficatory questions thereon that may lead to a decision to move for
inhibition or accept the appointment.
Tiu ckci1ion of tlu CIAC on uacancies shall be final.
SECTION 11.4 Term« qfRcferenq. This document functions like
RULEll-PRELIMINARYCONFERENCE/ a pr~·trial order in judicial pl"Oeffdini:s and controls the arbitration pro-
TERMS OF REFERENCE ceedings unless corrected for manifest errors by motion filed not later than
the hearing date.
SECTION 11.l Notl!:e of confereru;e.- The ArbitratorlArbitral Tri- 11.4.l Cqnienls The TOR ahaJI include the following particu·
bunal shall set the case for preliminary conference not later than 15 days Jars:
after appointment of arbitrator(&) and a notice to the parties thereof shall
forthwith be sent to finalize the Terms of Reference as provided in Rule 11.4 a) the full names of the parties, and their respective counaels, ifany;
below, a draA copy of which is attached thereto and to consider the following. b) the addresses and contact numbers of the parties/counsels, to
among others: which notifications or communications arising in the coune of the
a. possibility of amicable settlement; arbitration may validly be made;

b. nece$Sity or desirability ofamendments to pleadings; c) a summary of the parties' re1pective claims;

c. obtaining stipulations or admission of facts and/or documents d) full statement of admitted fact& and documents;
to avoid unnecessary proof; el the issues to be resolved in question form;
d. limitation of the number ofwitnesaes; 0 the Arbitrators' full names;
e. suggested formulation of issues by the parties; g) the place where arbitration proceedings shall be held;
f. application for interim relief, appointment of experts and h) the breakdown, schedule of payments, and sharing of arbitration
necessity of site inspection; and fees;
I· such other matters as may aid in the just and speedy disposi- i) such other particulars 88 may be required by the Arbitral Tribu·
tion of the case. naJ for the proper and speedy adjudication of the case.
SECTION 11.2 lntroductWn qfthe arbjtrator11.-At the start of the 11.4.2 Signing -The Terms of Reference (TOR) shall be signed on
preliminary conference, the arbitrator/a shall introduce themselves to the each and every page thereof, by the parties together with their respective
parties paying particular attention to matters related to professional train- counsel and the Arbitral Tribunal immediately after finalization thereof.
ing and experience. In any case, the TOR must be finalized and signed not later than five (5)
days from inception.
SECTION 11.3 Djglqsure. "-During the preliminary conference
the Arbitrator who had failed to make bis or her written disclosure required SECTION 11.G Arbitmtinn Tq Prpr.ttd. Even Wi'bput TOR In
in the previous section shall disclose any circumstance likely to aive rise to the exercise of the sound discretion of the Arbitral Tribunal, arbitration
justifiable doubts 88 to impartiality or independence, including financial or shall proceed even without the TOR on the baais of the issues formulated
personal interest in the outcome of the arbitration and any existing or p88t by the pleadings filed by the parties.
relationships with any individual or corporate party together with their
respective relatives or principal atockholderslofficere or foreseeable partici· SECTION 11.6 Subinjuinn for Dn;j.Bio!L No factual issue being
in dispute, the case may be deemed submitted for decision without an oral
hearing and on the basis of documentary evidence already submitted.
" Made applicable under CIAC Res. No. 05-2006 (effectivity: 17 February
2006) to aJI lecal or technical experts hired in CIAC cases pursuant to Rule 16
(Appointment ofE:rperta)
544 ALTERNATIVE DISPUTE RESOLUT101' APPENDIX "G" 545
CIAC REVISED RULES OF PROCEDURE GOVERNING
CONSTRUCTION ARBITRATION

RULE 12 - VENUE 13.6.1 Order to produce docur1w1tary eu;den«. Upon motion of either
or both of the parties, or on its own initiative, the Arbitral Tribunal
SECTION 12.1 Venue Date and Time of Hearjng.-The venue, may direct any person, board, body, tribunal, or government office,
date and time of the a.r bitral proceedings shall be mutually agreed upon by agency or instrumentality, or corporation to produce real or documen-
the parties and the Arbitral Tribunal. In the event of disagreement, the tary evidences necessary for the proper adjudication of the issues.
choice of venue made by the Arbitral Tribunal shall prevail.
13.6.2 Order tq gjue testimony. The Arbitral Tribunal may, like-
RULE 13 - ARBITRATION PROCEEDINGS wise, direct any person to give testimony at any proceeding for arbi-
tration.
SECTION 13.1 Ordt:r qf Proc•ed.in@.-A hearing shall be opened SECTION 18.6 Affidaujt jn lieu qf direct testimony - The Arbitral
by recording of the place, time and date of hearing, the presence of the Tribunal shall require the simultaneous submission of affidavits of wit-
Arbitral Tribunal, parties, and witnesses, if any. The names and addresses nesses in lieu of their direct testimonies attaching thereto pertinent docu-
of all witnesses and exhibits in the order received shall be made part of the ments supportive of their respective declarations. These documents shall be
record. properly marked for pw-poses of identification.
18.1.1 Quorum.- Two members of a tribunal shall comprise a S E CTION l S.7 ExamiMtjqn by the Arliitm1 Tribunql.-The Arbi-
quorum for the purpose of conducting a hearing. tral Tribunal may ask clarificatory questions of the witnesses at any stage of
SECTION 18.2 Brie/fog gn Rules gad prqcedures.-At the initial the proceedings.
hearing, the Arbitral Tribunal shall inform the parties of the general rules S ECTION 13.8 Documentary eujdence - As a general rule, no
and procedures on arbitration proceedings, stressing peculiarities from documentary evidence(s) presented and offered shall be rejected unless the
judicial proceedings, its strict adherence to time bars, its policies against same is found by the Arbitral Tribunal to be completely irrelevant.
postponements and other matters to insure a speedy and fair disposition of
the issues. S E C TION 13.9 Offer of dqcuments.-All documents not offered
with the Arbitral Tribunal at the hearing but which are arranged at the
SECTION 18.8 Ortier of presentation.-It shall be within the dis· hearing subsequently by agreement of the parties to be submitted, shall be
cretion of the Arbitral Tribunal to determine the order of presentation of filed within five (5) days from the termination of the hearing. All parties
evidence. Ge.nerally, the party who seeks to enforce a right or establish a
shall be afforded opportunity to examine such documents.
claim shall be required to present its evidence first, followed by the other
party. SECTION 13.10 Site jnsoo:tion.-The Arbitral Tribunal may, motu
prop'*> after notice to the parties, or upon motion of a party, conduct a site
SECTION 18.4 Expeditious pmced.ures The Arbitral Tribunal
inspection of any building, place or premises, including any work, material,
shall at all times adopt the most expeditious procedures for the introduction
and reception of evidences, and shall have complete control over the proceed- implement, machinery, appliance or any object there~. The Tribun8! in
ings, but in any case shall afford full and equal opportunity to all parties to deciding on the necessity of a site inspection, may consider whether a Vldeo
present relevant evidence. or pictorial presentation may suffice.

SECTION 18.5 Eui<feace.-The parties may offer such evidence as 18.10.1 Costs including transportation, accommodations. meals,
they desire and shall produce such additional documents and witnesses as rental fee for the video/still camera, services, video tape recording,
the Arbitral Tribunal may deem necessary to a clear understanding of facts copy of pictures and other expenses shall be equally shared by both
and issues for a judicious determination of the dispute(s). The Arbitral parties. In special cases upon the order of the Arbitral Tribunal, the
Tribunal shall act according to justice and equity and merits of the case, party who seeks this video and will benefit from it shall bear the ex-
without regard to technicalities or legal forms and need not be bound by any penses.
technical rule of evidence. Evidence shall be taken in the presence of the SECTION 18.11 Aqiqurmmmls.-The Arbitra! Tribunal for good
Arbitral Tribunal and all of the parties, except where any of the parties is cause shown, may adjourn the hearing upon his/its own initiative or upon
absent, or has waived his right to be present.
546 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "G" 647
CIAC REVISED RULES OF PROCEDURE GOVERNING
CONSTRUCTION ARBITRATION

the request of one of the parties. Acijournment shall not be more than five (5) SECTION 13.18 Pgcjpd to mqk q tjnql qwgrd. Tbe number of
working days. days within which an award shall be made wiU start from the date of the
13.11.1 Hearings may be adjourned for more than five (5) worklng termination of the hearing, or from the filing of additional documenta, or
days when such have been suspended due to payment defaults of any from the submission date of memoranda, pleadi.nga, documents or evi·
denf:e-s whichever is later.
or both of the parties. The Arbitral Tribunal shall order the suspen-
sion of hearings upon advice by CIAC of non-payment of arbitration
RULE 14 - INTERIM RELIEF
feea by one or both parties. Hearings ahall resume upon notice by
CIAC of compliance by the defaulting party/ies. SECTION 14.1 lntgrim !!WHuces. In the coune of the proceed·
SECTION 13.12 ArfijtratiM in the obsencc ofthc Mrty.-The Ar- logs, the Arbitral Tribunal may, upon the request of elther or both parties
bitration may proceed despite the absence of any party who after due or upon its own initiative, issue onlera as is necesaaiy to attsin the following
notice fails to be present or fails to obtain an adjournment. AA award, objectives:
however, shall not be made solely on the default of a party. It shall be a. to ensure the enforcement ofths award;
made on tbe basis of evidence submitted and proven.
b. to prevent irreparable loaa or ilijury or deterioration of prop.
SECTION 13.13 Closing of the hegrinu.-After the submission of erty;
the draft decision/final memorandum of arguments and/or the lapse of the c. to minimize or avoid undue delays in project or contract im·
period given for the submission thereof, the proceedings is considered
plementation;
closed and no further pleadinp/papers shall be filed nor accepted for
filing. d. to provide security for the performance of any obligation;
e. to produce or preserve any evidence;
SECTION 13.14 Rcqwning o( hfqrjng. The hearing may be re-
opened by the Arbitral Tribunal on their own motion or upon the request f. such other measures deemed by the Arbitral Tribunal to be
of any party, upon good cause shown, at any time before the award is neceSBary to prevent a miscarriage ofjustice or abuse of rights
rendered. When hearings are thus reopened, the effective date for the of any of the parties.
cloai.111 of the hearing shall be the date of closing of the reopened hearing.
14.1.1 The order granting provisional relief may be oonditioned
SECTION 13.15 Summqtjon The Arbitral Tribunal may direct upon provision of security for any act or omiaaion specified in the or-
the parties to make a brief oral summation at the end of the oral hearing. der.
SECTION 13.16 Submission qfmpnqrondq or drqlt d,ecjJMna " - If 14.1.2 Such interim measures may include but shall not be limited
any or both of thL parties so <Usire, written memoranda or droft decision• to preliminary irtjunction directed agalnat a part.y, appointment ?f
may be •ubmitted not later than ten (10) cakndar days from the termina· receivers or detention, preservation, inspection of property, that 18
tion of the hearing or from the date of the filing of additional documents as the subject of dispute in arbitration. Either party may apply to the
preukiualy agreed. upon, whichever is later. Court for assistance in implementing or enforcing an interim meas-
ure ordered by an Arbitral Tribunal
13.18.1 If both parties agree to aubmit memoranda or draft deci-
aions, the filing shall be simultaneous. RULE 15-APPOINTMENTOF EXPERTS
SECTION 13.1'1 Awgnt or d,ecjsion qn th& pkqdjngs - Instead of a
SECTION 15.l Aopgjntrru:nt of £rl1Cl1...-The service of techni-
formal bearing. the parties may agree to submit the iasues for resolution cal or legal experts may be utilized if requested by any of the parties or if
after the filing of pleadings, evidence, memoranda or draft decision& . deemed necessary by the Arbitral Tribunal. If the request for an expert is
made by either or by both of the parties, the necessity of such appointment

,. Aa amended by CIAC Rea. 16-2006 (elfectivity: 27 September 2007) ,. Section 15, E.O. No. 1008.
548 A1:reRNATIVE DISPUTE RESOLt:T1or-: APPENDIX "G• 549
CIAC REVISED RULES OF PROCEDURE GOVERNING
CONSTRUCTION ARBITRATION

anust be confirmed by the Arbitral Tribunal before issuing an appoint. 16.4.1 Setth:l!lltnt gs qwgal.11-A compromise agreement settled by
anent. mediation in the course of arbitration or by direct negotiation between
the parties shall be treated as an arbilnll award ifao moll«l by the pa1'
ltU.1 Whenever the parties request for the services of an expert, ties and subject to the approual of the Arbitral Tribunal, after a sum·
they shall equally shoulder the expert's fees and expenses, half of mary hearing, that the same ls not contrary lo law, morals, good cu.
which shall be deposited with the Secretariat before the expert ren· toms, public orckr, or public policy.
der11 service. When only one party makes the request, it shall deposit
the whole amount required. If the request for an expert is by the Ar· SECTION 16.6 Decision 01 to coata qfgrbjtrotiqn.. In the case of
hitral Tribunal, the cost of such service<s) shall be considered part of non-monetary claims or where the parties agreed that the sharing of fees
the arbitration expenses which may be ordered to be paid by the loa· shall be determined by the Arbitral Tribunal, the Final Award shall, in
ing party or by both parties u the Arbitral Tribunal in his/their addition to dealing with the merits of the case, fix the costs of the arbitra·
award anay adjudge, in the absence of a provision in the TOR signed tion, and/or decide which of the parties aball bear the cost(a) or in what
by the parties relative to the sharing of these expenses; provided, proportion the cost(s) shall be borne by each of them.
however, both parties consented to the hiring of an expert.
SECTION 16.6 TermjMliM qfiurjsdji;tion.•-E:i=ptforezecution
RULE 18-THEARBITRATION AWARD or post·awa.r d proceedings, the jurisdiction of the Arbitral Tribunal over
the dispute ia terminated upon the finality of the Final Award or Decision.
SECTION 18.1 Til!!lt of qwgrd.-The award shall be rendered Where an appeal is taken from a decision or Final Award, and the appel-
promptly by the Arbitral Tribunal within thirty (30) days from the time late court directs a re-bearing or a hearing on the merits on any iasue
the case Is submitted for resolution but not more than six (6) months from arising in the case, jurisdiction terminates only upon a final diaposition of
the date of eigning of the TOR, or in cues where a TOR is absent, not the case by the appellate court and/or a final dstennjnation of all inciden-
mnrP. than Rix (6) months from the date of the last preliminary conferenoo tal matters thereto.
called for the purpose of finalizing and/or signing of the TOR. There shall SECTION 16.7 NO(jfimtiPn of QWQrd re RArtjc1.-0nce a Final
be no extensions of time unless approved by the CIAC. Award baa been made, provided that the costs of the arbitration have been
SECTION 16Jl Form q( qword.,-The Final award shall be In fully paid to the Secretariat by the parties or by one of them, the Secre-
writing and signed by the Arbitral Tribunal or a nuijority of its members. A tariat shall provide the parties through their respective counsel a copy of
disaent from the decision of the majority or a portion thereof shall be in the Final Award signed by the Arbitral Tribunal.
writing specifyi711l the portion Is diS8ented from with a statement of the 16.7.1 Additional oopiea certified true by the Executive Director of
reason Ii thereof and signed by the diaaenting member. the Secretariat shall be made available, on request and at any time,
SECTION 18.3 Content! of the Mal qward.-Generally, the Final to the parties or their counsel but to no one else.
Award shall contain the iaaues involved, a brief statement and discuasion of SECTION 16.8 Filing ofqwaaf. The original of an arbitral award
the facts, and the authority relied upon for the resolution or disposition of the shall be filed with the Secretariat.
issues.
SECTION 18.4 Awq.rd UQAA settlement-If the parties settle their RULE 17-POST-AWARDPROCEEDINGS
dispute(s) during the course of the arbitration, the Arbitral Tribunal, upon
SECTION 17.1 MO(ion for Cf!CDlcljqn qffi.ngl qwaal. Any of the
their request, may set forth the agreed settlement 89 an Arbitral Award.
parties may file a motion for correction of the Final award within fifteen
(15) days from receipt thereof upon any of the followinj: grounds:

"As amended by CIAC Res. No. 07-2007 (efl'ectivity: 26 July 2007) and
with clarification under CIAC Res. No. 10-2007 (passed 26 July 2007) that " As amended by CIAC Res. Nos. 04-2010 (effectivity: 11 September
di1&enting opinions do not form part of the decisions/final awards and hence. 2010), and 07-2010 (effectivity: 1January2011)
are NOT for promulgation. " As amended by CIAC Res. No. 01-2010 (elJectivity: 5 March 2010)
 550 ALTERNATIVE DISPUTE RESOLUTIOS APPENDIX ·G· 651
CIAC REVISED RULES OF PROCEDURE GOVERNING
CONSTRUCTION ARBITRATION

a. an evident miscalculation of figures, a typographical or arith- issuance of the entey of judgment of the appellate court, or upon the
metical error; lapse/lifting of the TRO or liftini of the preliminary Utjunction.
b. an evident mistake in the description of any party, person, SECTION 18.4 Effect of petition for ccvjcw. The petition for re-
date, amount, thing or property referred to in the award. view shall not stay the execution of the final award sought to be reviewed
c. where the arbitrators have awarded upon a matter not submit- unless the Court of Appeals directs otherwise upon such terms as it deems
ted to them, not affecting the merits of the decision upon the just.
matter submitted; SECTION 18.5 E;m;utionlcnforcemcnt of qwqcd&. As soon as a
cl. where the arbitrators have failed or omitted to resolve certain decision, order or final award has become executory, the Arbitral Tribunal
issue/a fomwlated by tM partks in the Terms of Reference (or the surviving remaining memberI B), shall, motu proprio or on motion of
<TOR) and 11ubmitted to !Mm for re11olution"'; and the prevailing party issue a writ of execution requiring any sberi1r or proper
officer to execute said decision, order or final award. q tMN! an no remain-
e. where the award is imperfect in a matter of form not affecting ing I surviving appointed arbitrator/a. the Commission shall iaw the writ
the merits of the controversy. prayed for.""
The motion shall be acted upon by the Arbitral Tribunal or the surviv-
Notwithstanding the Commission'• disagrttment with the substan« or
inWi'emaining members."
merit of the award I decision, if em:ution is ripe or prop.r "1Ukr the CIAC
17.1.1 The filing of the motion for correct.ion shall interrupt the Rules, it shall release the writ of o:ecuJion wued by the arbitralorls. Hence,
running of the period for appeal. once an award I decision becomes a«utory, the rekaM of the writ of ezzcu·
tion by the Commission is purely minillterial, regardhst1 of whether or nol the
17.l.2 A motion for correction upon grounds other than those men- arbitrator Is considered the commenu of the Commission, or any of iu mem·
tioned in thia sect.ion shall not intemipt the running of the period for bers, on point.a of subslance in the award during scruti.ny.•
appeal.
18.5.l The writ of execution shall direct the sheriff or other officer
SECTION 17.2 Motjpn for rccqnsjdergtion or m:w tdql.-A motion to conduct the sale of property on execution in accordance with Section
for reconsideration or new trial shall be considered a prohibited pleading. 15 of Rule 39 of the Rules of Court. In the case of aale of real property
or personal property not capable of manual delivery, the auction aale
RULE IS-EXECUTION OF FINAL AWARD shall be held at the office of the sberi1r aetving the writ. Upon proper
application by the sherllf, with notice to the parties, CIAC may au-
SECTION 18.l EucuW>n ofAwqrd. A final arbitral award shall thorize the sale to be held in the place where the property is located.
become executory upon the lapse of fifteen (15) days from receipt thereof
by the parties. SECTION 18.8 Stay pfp:«utjpn nendi.ne reujew. Execution is-
sued under the preceedinir Section may be stayed upon app~al by the
SECTION 18.2 Petition for review.-A petition for review from Arbitral Tribunal (or tlu survi11inglccmaining member/a), with the con·
a final award may be taken by any or the parties within fifteen (15) currence of CIAC, of a surety bond posted by the petitioner in_ an amount
days from receipt thereof in accordance with the provisions of Rule 43 of equal to the award, conditioned upon the perfo"?ance of the_ Judgment of
the Rules of Court. the appellate court in case it upholds the award m whole or 10 part. Such
surety bond shall be posted within such period of tinM!, which shall in no
SECTION 18.3 Entrv of iudgrzumt.-If a petition for review is
caae be less than fifteen (15) days, as may be granted by the Arbitral.1:rl·
filed from a final award and a temporary restraining order (TRO) is issued bunal during the hearing on the motion for execution and the opposition
by the appellate court, such award shall become executory only upon the
thereto. The Surety Company posting the bond muat be included in the

"As amended by CIAC Res. No. 02-2008 (efl'ectivity: 30 April 2008) .. Ibid.
"As amended by CIAC Res. No. 07·2007. ,. As amended by CIAC Res. No. 13-2007 (eft'edivity: 27 February 2008)
552 ALTERNATIVE DISPUTE RESOLUTIOX APPENDIX ·G· 553
CIAC REVISED RULES OF PROCEDURE GOVERNING
CONSTRUCTION ARBITRATION

latest list of surety compan~s accredited by the Supreme Court and must lated to the execution of the Award, including but not limikd to the thUr.
comply with the requirements set by the CIAC for bond approval, concur. mi nation of sufficiency of the bond, approlJOl of the surety or bonding com·
rence, and/or acceptance, auchas, but not limited to, the prescribed 'Surety pany, satisfaction of the award, quashal of the execution, partial ex«ution.
Under1aki11{1' form. If there are no remaining I surviving appointed arbitra· issuance of alias writs, assessment of properties kvied, appointment of a
tors, the Com.miaaion may approve the required bond." quantity surveyor or assessor, aamination of. a.nd issuance of subpoena a.d
testificandum and subpoena duces tecum to banJis, tkbtare of the judgment
The concurrence of the Commission to the approval by the arbitra· debtor and any ~rson holding properties or assets ofthe judgment tkbtor.
tor ls of the mrety bond to stay eucution is only for the purpose of ensuring
compliance with the requirements set by the CIAC for bond approval." RULE 19-RELIEF NOT COVERED
SECTION 18.'7 Effect q( a:ucU!OI qf awgrd " -Where an award is BY THE RULES"
partially or totally reversed onappeal, the Arbitral Tribunal (or the suroiv·
inglremaining members, or the Commission if there are no remain· SECTION 19.1 Mqtjon for re/jefMI @umd by the Rulca."- Every
inglaurviving appointed arbitrators) may, on proper motion, issue such motion or other paper filed in connection with the execution of an award
not expressly authorized by the Rules shall be charged a filing fee of Php
order of restitution or reparation of damages as equity and justice may
3000.00 or as may be prescribed by CIAC.
warrant under the circumstances.
TM motion shall be acted upon by the Arbitral Tribunal (or the
SECTION 18.8 Ez«utory Powers •·- The Arbitral Tribunal (or tlut surviving I remaining members, or the Commission if there are no remain·
suruiuing I remaining members, or the Commission, if there are no remain-
ing I surviving appointed arbitrators).
ing/sur1Jiuing appointed arbitrators) shall have the authority and power to
decuu matters and isstu appropriate orders which are neces11ary and re· RULE 20 - SMALL CLAIMS"

., As amended by CIAC Res. Nos. 19-2006 Ceffectivity: 22 December SECTION 20.1 Small Clqim.-Case• where the claim does not ex-
2006); 0'1·2007 (effectivity: 26 July 2007); and 08-2014 (effectivity: 15 ceed Pl million shall be categorized as a small claim thereby entitled to
February 2015). Additional requirements for bond approval, concurrence special procedures of disposition and reduced fees.
and/or acceptance were also issued under CIAC Res. No. 12-2010 (effectiv·
20.1.1 A small claims case shall be handled by a sole arbitrator
ity: 1 Jan. 2011) as follows:
whose fees shall be at a fixed rate of 3% of the claim but not leas
1. The surety company must be in the latest list of surety comps· than Pl0,000.00 or as may be prescribed by CIAC. The expenses of
nies accredited by the Supreme Court for civil actionalspecial the sole arbitrator and CIAC staft" consisting of actual expenses for
proc~dings only; travel, accommodations, and administrative costs for at most two (2)
2. The effectivity of the bond shall be from its approval by the Ar- days incurred for hearing if held outside of Metro Manila shall be
bitral Tribunal and until the case in the appellate court is fi. borne by CIAC.
nally decided, resolved, or terminated, and this condition shall
be expressly stated in the terms and conditions of the bond; fail·
ing which, the same shall be deemed ipBO facto incorporated In "Ibid.
the bond and shall be binding on all the parties thereto; and "AB amended by CIAC Res. 0'1·2007.
3. The party securing the bond must pay the premi.ums due to keep " For small claims below Pl00,000.00, the Commission has pre-
the bond from being cancelled until the case in the appellate scribed guidelines under CIAC Res. No. 13-2010 (attached hereto as Ap-
court is decided, resolved or terminated, otherwise the Tribunal pendix 2; effedivity: 9 February 2011) providing, among others, for the
shall, upon motion of the prevailing party, order execution of the Sole Arbitrator's fee to be home by CIAC and for a one-day bearing only to
award. be conducted. Under CIAC Res. No. 01-2011 {effectivity: 16 March 2011),
•As amended by CIAC Res. No. 13-2007. parties in amall claims cases are required to attend an orientation meeting
•As amended by CIAC Res. No. 07-2007. on mediation to be conducted by the CIAC Officer-of-the-Month prior to
"As amended by CIAC Res. No. 01-2010. arbitration.
554 ALTERNATIVE DISPUTE RESO!.UTIO!< APPENDIX "G" 555
CIAC REVISED RULES OF PROCEDURE GOVERNING
CONSTRUCTION ARBITRATION

20.1.2 A small claims case shall be handled by a sole arbitrator SECTION 21.4 lntcrpmgcion gnd gpplU:gtinn gf Ruks The Arbi·
whose All prescribed periods under normal procedure shall whenever tt:al Tribunal shall interpret and apply these Rules in so far as they relate to
practicable, be abbreviated to fifty percent<50'K) of that required. hl~ta powers and duties. Where there is a dift'erence of opinion amoog tbe
Arbitrators in an arbitral tribunal concerning the meaning or application ti
RULE 21 - GENERAL MATTERS these Rules, the same shall be decided by a majority vote.
SECTION 21.1 Rew'lfi.ng qf qmrttdj11gs. Proceedings before an . SE~TION 21.5 Attgndqncc pf Marina Peraons having direct
Arbitral Tribunal may be recorded by means of any audio and /or audio- i~teres.tin the arbitration are entitled to attend the hearings. It shall be
visual recording equipment such as, but not limited to, tape recorders and dJ.SCretionary upon the Arbit:ral Tribunal to determine the propriety of the
video cameras, or if a stenographer is available, either through stenoeraphic attend~nce of any other person. The Arbitral Tribunal shall have the power
notes or minutes taken of the proceedings. All recordings on tapes films to require the exclusion of any witness.
cassettes, disks, or diskettes shall be done by CIAC and shall remai~ in i~
SE.CTl~N 21.6 Wqjf/Cr qf Bula Any party who proceeds with
custody for safekeeping and eventual disposal after the resolution of the the arbitration after knowledge that any provision or requirement ot
case. Copies of such recordings including transmpts and minutes of the these Rules has not been complied with and fails to state his objection
proceedings shall be made available to the parties upon request for a nomi- thereto in writing, shall be deemed to have waived his right to object.
nal fee.
SECDON 21.7 flrrdmn mRettJe."-The parties shall be free to settle
The arbitral Tribunal may opt to dispense with the use of recording the dispute(s) anytime even if the &ame is under arbitration. In such case,
devicea or stenographic services and take down notes of the proceedings the actual expenses incurred for arbitration shall be charged api.nst the
Such notes taken shall be filed with CIAC and shall be part of the reconb deposit. If the deposit is insufficient, the parties shall equally shoulder the
of tho case. Copiee of the n~teo filed ohall be made available to the parties, balance.
upon request, at reproduction cost.
21.7.1 The parties may either jointly withdraw or 1'IOll<I thaJ their
SECTION 21.2 Cqntml pugr pme«di nll§.M-The Arbitral Tribunal compromise aereement be the basis for nllihri"ll an award by the
shall exercise complete control over all proceedings to insure a speedy Arbitral Tribunal, if the latter have already been appointed. Where
adequate and j ustifiable disposition of the disputes and cases submitted U: the arbitrators have been appointed and proceedings have com·
them for resolution. menced, the arbitration fees to be charged the parties shall be in ac-
21.2.1 In aU arbitration proceedings before or after an award ha& cordance with the stage of proceedings."
been rendered but prior to the terminatioR of the jurilldiction of the 21.7.2 TM Arbitral Tribunal shall act upon th.e nu>tion ~r con·
arbitratorls over a cau pursuant to Section 16.6 hereof. the arbitra. ducting a summary hearing."
torts shall ha~ th.e power to issue subpoena and/or subpoena ducu
tecum requiring any peC80n to attend the hearing as a witneu or to RULE 22 - COSTS
produce rekvant documents.
SECTION 21.3 lkmnt of power of grbitrator The Arbitral Tri- SECnON 22.1 Expe111!fR gnd d(llQl!it Arbitration expenses shall
include the filing and administrative fees, arbitrator's fees. ADF Charges
bunal shall decide only such issues and related matters as are submitted
to them for acljudication. They have no power to add, to subtract from
modify, or amend any of the terms of the contract or any aupplemeniu; '' Clarification under CIAC Ree. No. 06-2007 (eft'ectivity: 27 June 2007):
agreement thereto, or any rule, regulation or policy promulgated by the &K:. 21. 7 only applies to cases where arbitration p~ are atill oo-going
and an a ward has not been rendered. & such, the parties are free to set-
CIAC. tle/come to t<!rms and/or consequently jointly move for the withdrawal of the
case anytime durine the proceediDgs but before the lapse of the period given
for submission of memoranda or draft decision.
.. As amended by CIAC Res. No. 07·2010 (eft'ectivity: 1January2011)
"As amended by CIAC Res. No. 03·2008 (effectivity: 30 April 2008) "Ibid.
556 A1:n:RNATIVI: D ISPUn REsoLUTION APPENDIX ·a· 557
Cl AC REVISED RULES OP PROCEDl.JRJ: GOVBllNINO
CONSTllUcnON ARBl'l'llATION

and fee and espenoea of the upert, and others which may be imposed by THE COMMISSION
CIAC.
MANUELM. COSICO
22.1.1 The filing and administrative fees, ADF charges. and arbi- Chairman
tra!Alr'a feea far monetary, non-monetary and small claims and the
schedules of J>llYIDent therefor ahall be in accordance with the ClAC- EMILIO WLITO J . TUMBOCON
ANTONIO ABOLA
approved Table ofAdministrative Charges and Arbitrator's Fees. Member
Member
22.1.2 Expert'• fees shall be determined and paid for in accordance
with Section 15.1.1 of the Rules.
Note: The ReuiMd Rui.., publlAMd In tlu Manlla S ttuwlanl on
SECTION 22.2 The CIAC may fix the fees of the Arbitral Tribunal Novem~r SO, 2005, became effectlDe on Decemlwr Its, J005.
a t a fil'U"8 bigher or lower than that which would result from the applica-
tion of the Table of Fees if in the exceptional circumstances of the case, the
aame appearll to be necessary.

RULE 23-REPEALING CLAUSE

SECTION 28.1 The old rules and all policies issued in connection
therewith, as well as policies inconsistent herewith are hereby repealed.

RULE 24- SEPARABILITY CLAUSE

SECTION 24.1 SeAAmbilitv. If far any reason or reuons, aiiy

portion or provision of the1e Rules shall be held unconstitutional or inva-
lid, all other part1 or proviaions not affected shall thereby continue to
remain in full force and effect.

RULE 25 - EFFEC'I1VITY

SECTION 25.1 These Rules shall take effect fifteen (15) da)'!I after
lta publication at least once In a newspaper of general circulation and the
filing of three (8) certified copies thereof with the Office of the National
Adminiatrative Regi1ter, U.P. Law Center.

APPROVED AS REVISED BY THE CIAC RESOLt.rrlON NO. 06-

ll017.

J uly 81, 2017, Makatl City, Philippines.

 APPENDIX "H" 669
llEPUBLICACTNO. 7180
- The Local Ooveroment Code or 1991-

(f) In Barangays where majority oftbe inhabitants are membera of

APPENDIX "H" indigenous cultural communltiel, local ayatema of aettling diaput.
through t h eir councils o( datua or elde.. ahall be recognized without
prej udice to the applicable provisiona ofthia Code.
REPUBLIC ACT NO. 7160
Sec. 400. Oath and Tenn of O/fi«.-Upon appointment, each Lu-
"The Local Government Code of 1991" pon member shall take an oath of office before the Punoll6 ~y. He
shall hold office until a new Lupon is constituted on the third year follow-
Book ill, Chapter 7 ing his appointment unless sooner terminated by reeignation, transfer of
residence or place of work, or withdrawal of appointment by the Punong
Barongay with the concurrence of the majority of all the members of the
CHAPTER 7. KATARUNGANG PAMBARANGAY Lupon.
Sec. 40 l . Vacandea.-Should • vacancy occur In the Lupon for llllY
Sec. 399. Lupong Togapamoyapa.~a) There is hereby created in cause, the Punong Bara"l/OY eball immediat.ly 1ppoint a qualified penoo
each Barangay a Lupong Tagapamoyapa, hereinafter referred to aa the who shall hold office only for the unexpired portion of the term.
Lupon, composed of the Punof16 Baro1111ay u chairman and ten ( 10) to
twenty (20) memben. The Lupon ehall be constituted every three (3) yean Sec. 402. Function.a oftlu Lupon.-The Lupon aball:
in the manner provided herein. (a) Exercise administrative supervision <1'1flr the conciliation panels
(b) Any penon actually reeidlng or working in the Baranpy, not provided herein;
otherwise expreeely disqualified by law, and posse&Sing integrity, imparti· (b) Meet reeuJarly once a month to provide a forum for exch~ of
ality, independence of mind, aenae of fairness, and reputation for probity, ideas among its memben and the public on matt.era relevant to the &m.1ca·
may be appointed a member of the Lupon. ble settlement of dispute., and to enable various conciliation panel mem-
(c) A notice to constitute the Lupon, which shall include the names ber• to share with one another their obaervatioal and aperiencea in ef•
of proposed members who have expreteed their willingness to aerve, shall fecting speedy resolution of disputes; and
be prepand by the Purwll6 Barongay within the first fifteen ( 15) daye (c) Exercise auch other powers and perform auch other duties and
from the etart of his term of office. Such notice shall be posted in three (3) functions as may be prescribed by law or ordinance.
conspicuous places in the Barangay continuously for a period of not leas
than three (3) weeks; Sec:. 403. Sf!cretary of the Lupon.-The Barangay eec:retary ahall
concurrently serve as the secretary of the Lupon. He ahall record the te-
(d) The Purwng Barangay, takin1 into consideration any opposition aults of mediation proceedin1s before the PunO"l/ BQra116ay and ahall
to the propoeed appointment or any recommendations for appointments as submit a report thereon to the proper city ~r municip_aJ courts.. He shall
may have been made within the period of posting, shall within ten (10) also receive and kffp the records of proceeding• aub1D1tted to him by the
daye thereafter, appoint u membe" those whom he determines to be various conciliation panels.
suitable therefor. Appointments 1hall be in writing, signed by the Punong
Barangay, and attested to by the Barangay secretary. Sec. 404. Pangluu "ii Tagapag*saundo.-<•> There ehall be consti-
tuted for each dispute brought before the Lupon a conciliation panel to be
(e) The list of appointed members ahall be posted in three (3) con- known u the PangW ng Tagapaglcaswido, hereinafter referred to u the
spicuous place• in the Barangay for the entire duration of their term of Pang/cat, consisting of three (3) members who shall be choaen by the par-
office; and tiea to the dispute from the list ofmembera oftbe Lupon.
Should the parties fail to agree on the PangMt membership, the
same ehall be determined by Jote drawn by the Lupon chairman.
(b) The three (S) membera conetituting the Pang/cat shall elect from
558 among tbemael vee the chairman and the aeC79tary. The aecretary ahall
 ALTERNATIVE DISPUTE RESOLl-"TION APPENDIX •H" 661
REPUBLIC AC't NO. 7180
- The Local Govemmoot Codo ol 1991 -

prepare the minutes of the Pangltat proceedings and submit a copy duly (c) Offenses punishable by impriaonment exc:eeding one ( 1) yeer or
atte1ted to by the chairman to the Lupon secretary and to the proper city a fine exceeding Five thousand pe909 CPS,000.00);
or municipal court. He lhall iaaue and cause to be served notices to the
partieo concerned. (dl Offenses where there is no private offended party;
The I.upon acretary shall issue certified true copies of any public re· Ce) Where the dispute involves real properties located ill dilfereJ1t
cord in hi• cuatody that ia not by law otherwise declared confidential. cities or municipalities unless the parties thereto agree to submit tbelr
differences to amicable settlement by an appropriate Lupon;
Sec. 405. Vacanc;.• in the Pangltal.-Any vacancy in the Pang/rat
(0 Disputes involving partiea who actually nl8ide in~~ ~f
ahall be cboeen by the parties to the dispute from among the other Lupon
members. Should the partiea fail to agree on a common choice, the vacancy d ifferent cities or municipalities, except where such Baranpy uruta acijom
1hall be filled by lot to be drawn by the Lupon chairman. each other and the parties thereto agree to 1ubmit their difference• to
amicable settlement by an appropriate £upon;
Sec. 406. Charuc/4r of Office and Servi« of Lupon Members. - (g) Such other classes oC disputes which the President may deter-
(•) The Lupon memben, while in the performance of their official mine in the Interest ofj11tti~ or upon the recom1nendation ot'the-=retaey
duties or on the occaaion thereof, shall be deemed as persons in authority, of Justice.
as defined In the Reviaed Penal Code. The court in which non-criminal cues not falling within the author-
(b) The Lupon or Panglrat members shall serve without compensa· ity of the Lupon under this Code are filed m_,, at any time. befure trial,
tlon, except u provided for in Section 393 and without prejudice to incen· motu proprio refer the case to the Lupon concerned for amtcable aettle-
tivea aa provided for In this Section and in Book IV of this Code. The De- ment.
partment of the Interior and Local Government shall provide for a system
of grantiD&" economic or other incentivea to the Lupon or Panglrat members Sec. 409. Venue.-
who adequately demonstrate the ability to judiciously and expeditiously (&)Disputes between persons actually residing in the •ame Baran-
resolve cues referred to them. While in the performance of their duties, gay shall be brought for amicable settlement before the Lupon of aaid
the Lupon or Panglral members, whether in public or private employment, Barangay.
shall be deemed to be on official time, and shall not suffer from any dimi· (b) Thoae involving actual residents of different Berangays within
nution in compensation or allowance from said employment by reason the same city or municipality shall be brought in the Baranray where the
thereof.
respondent or any of the re!!pondenta actually resides, at the election of
Sec. 407. Legal Aduit:e on Matters Involving Q~stions of Law.- the oomplainant.
The pnwindal, city legal officer or prosecutor or the municipal legal officer (c) All disputes involving real property or any interest therein 1hall
•hall render legal advice on matters involving questions of law to the be brought in the Barangay where the real property or the leriler portion
Punong Borungay or any £upon or Panglta.t member whenever· necessary thereof is situated.
i.n the exercise of hia functions in the administration of the Kata.runga71/1
Pambarangay. (d ) Those arising at the workplace where the cont.ending partiea
are employed or at the institution where such parties an enrol.led for
Sec. 408. Subject Ma~r for Amicabk &ttkment; Elc«ption study, shall be brought in the Barangay where auch workplace or inatitu·
Th.irdo.-The Lupon of each Barangay shall have authority to bring to- tion la located.
gether the parties actually residing in the aame city or municipality for Objections to venue shall be raised in the mediation proceed~ be-
amicable settlement of all disputes except: fore the Punong Barangay; otherwise, the aame shall be deea:ied wai~
(a) Where one party is the eovemment, or any subdivision or in- Any legal queation which may confront the Punong Baf"01181Jy ID nt0lvin1
•trwnent:ality thereof; objections to venue herein referred to may be submitted to the secretary of
(b) Where one party is a public officer or employee, and the diapute
Justice, or his duly designated representative, whose ruling thereon aball
relates to the performance of his official functions; be binding.
562 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "H" 563
REPUBLIC ACT NO. 7180
-The Local Goote.rnment Code of1991-

Sec. 410. Proudure for Amicable Settlement.- may be. When the parties to the dispute do not use the same language or
(&) Who may initiau pl'OCftding.-Upon payment of the appropri-
dialect, the settlement shall be written in the languap or dialect known to
them.
ate filing fee, any individual who haa a caW1e of action against another
individual involving any matter within the authority of the Lupon may Sec. 412. Conciliation.-
complain, orally or in writing, to the Lupon chairman of the Barangay. Ca> Pre-condition ta FiUng of Complaint in Court.-No complaint,
(b) Mediation by Lupon chairman.- Upon receipt of the complaint, petition, action, or proceeding involving any matter within t.he authority of
the Lupon chairman shall within the next working day summon the re- the Lupott shall be filed or instituted directly in court or any other gov·
spondent(s), with notice to the complainant(a) for them and their wit- emment office for adjudication, unless there bas been a confrontation
neaaea to appear before him for a mediation of their conflicting interests. If between the parties before the Lupon chairman or the Pangkat, and that
he fails in his mediation effort within fifteen (15) days from the first meet- no conciliation or settlement has been reached as certified by the Lupon
ing of the parties before him, he shall forthwith set a date for the constitu- secretary or Pangkat secretary as attested to by the Lupon or Pangkat
tion of the Pangkal in accordance with the provisions of this Chapter. chairman or unless the settlement has been repudiated by the parties
(c) Suspemion of preacriptiw period of offenses.-While the dispute thereto.
la under mediation, conciliation, or arbitration, the prescriptive periods for (bl Where Parties May Go Directly to Court.-The parties may go
offenses and cause of action under existing laws shall be interrupted upon directly to court in the following instances:
filing of the complaint with the Punong Barangay. The prescriptive peri- 1. Where the accused is under detention;
ods shall resume upon receipt by the complainant of the complaint or the
certificate of repudiation or of the certification to file action issued by the 2 . Where a person has otherwise been deprived of personal
Lupon or Pangkat secretary; Provided, however, That such interruption liberty calling for habeas corpus proceedings;
shall not exceed sixty (60) days from the filing of the complaint with the 3. Where actions are coupled with provisional remedies such
Punong Barangay. as preliminary il\iunction, attachment, delivery ·o f personal
(d) Issuaru:e of summons; hearing; grounds for disqualifu:ation.- property, and supportpendente lite; and
The Panglcat shall convene not later than three (3) days from its constitu- 4. Where the action may otherwise be barred by the statute
tion, on the day and hour set by the Lupon chairman, to hear both parties of limitations.
and their witnesses, simplify issues, and explore all possibilities for ami-
(c) Conciliation among msmhen1 of indi/fencus cultural communi·
cable settlement. For this purpose, the Pangkat may issue summons for
ties .- The customs and traditions of indigenous cultural commu:nitiea shall
the personal appearance of parties and witnesses before it. In the event
be applied in settling disputes between members of the cultural communi·
that~ party moves to disqualify any member of the Pangkat by reason of
relationship, bias, interest, or any other similar grounds discovered after ties.
the co~itutlon of the Pangkat, the matter shall be resolved by the af. Sec. 413. Arbitration.-
firmative vote of the maje>rity of the Pangkal whose decision shall be final. (&) The parties may, at any atage of the proceedinga, agree in writ-
Should disqualification be decided upon, the resulting vacancy shall he ing that they shall abide by the arbitration award of the Lupon chairman
filled as herein provided for.
or the Pangkat. Such agreement to arbitrate may be repudiated within
(e) Period to a:nw at a: settlement.-The Pangka:t shall arrive at a five (5) days from the date thereof for the same grounds and in accordance
settlement or ~lut1on of the dispute within fifteen (15) days from the with the procedure hereinafter prescribed. The arbitration award shall be
day it convenes lJl accordance with thia section. This period shall, at the made after the lapse of the period for repudiation and within ten (10) days
discretion of the Pangkat, be extendible for another period which shall not thereafter.
exceed fifteen (15) days, except in clearly meritorious cases.
(bl The arbitration award shall be in writing in a language or dia·
Sec. 411. Form of Settlement.-All amicable settlements shall be in lect known to the parties. When the parties to the dispute do not use the
writing, in a language or dial~ known to the parties, signed by them, and same language or dialect, the award shall be written in the language or
attested to by the Lupon ch&rman or the Pangka:t chairman, as the cue dialect known to them.
564 ALTERNATIVE DISPUTE RESOLUTION APPENDIX "H" 665
REPUBLIC ACT NO. 7160
-The Local Government Code of 1991-

Sec. 414. Proceeding• Open to the Public; Erception.-All proceed- relating to all proceedings in the implementation of the Katanmgang
ings for settlement shall be public and informal: Provided, however, That Pambarangay.
the Lupon chairman or the Pangkat chairman, as the case may be, may
motu proprio or upon request of a party, exclude the public from the pro- Sec. 421. Administration; Rules and Re.gulatiOM.-Tbe city or mu-
ceedinp in the interest ofprivaey, decency, or public morals. nicipal mayor, as the case ml\Y be, shall see to the efficient and effective
implementation and administration of the KatarunjJant Pamba/tJilgay.
Sec. 415. Appearanu of Parties in Person.-ln all Katarungang The secretary of Justice shall promulgate the rules and regulations neces-
Pambarangay proceedings, the parties must appear in person without the sary to implement this Chapter.
11S11iatance of counsel or representative, except for minors and incompe-
tents who may be assisted by their next-of-kin who are not lawyers. Sec. 422. Appropriation&-Such amount aa may be necessary for
the effective implementation of the Katarungang PamBaraneay shall be
Sec. 416. Effect of Amicable Settlement and Arbitration Award.- provided for in the annual budget of the city or municipality concerned.
The amicable settlement and arbitration award shall have the force and
efl'ect of a final judgment. of a court upon the expiration of ten (10) days
from the date thereof, unless repudiation of the settlement has been made
or a petition to nullify the award baa been filed before the proper city or
municipal court.
However, this provision shall not apply to court caaes settled by the
Lupon under the last paragraph of section 408 of this Code, in which case
the compromise settlement agreed upon by the parties before the Lupon.
chairman or the Pangkat chairman shall be submitted to the court and
upon approval thereof, have the force and effect of a judgment of said
court.
Sec. 417. Erecution..-The amicable settlement or arbitration
award may be enforced by execution by the Lupon within six (6) months
from the date of the settl-ement. After the lapse of such time, the settle-
ment may be enforced by action in the appropriate city or municipal court.
Sec. 418. RepudiaJion.- Any party to the dispute may, within ten
(10) days from the date of the settlement, repudiate the same by filing
with the Lupon chairman a statement to that effect sworn to before him,
where the consent is vitiated by fraud, violence, or intimidation. Such
repudiation shall be sufficient basis for the issuance of the certification for
filing a complaint as hereinabove provided.
Sec. 419. TransmiUal of Settlement and Arbitration Award to the
Court.-The secretary of the Lupon shall transmit the settlement or the
arbitration award to the appropriate city or municipal court within five (6)
days from the date of the award or from the lapse of the ten-day period
repudiating the settlement and shall furnish copies thereof to each of the
parties to the settlement and the Lupon chairman.
Sec. 420. Power to Admini.tler Oaths.-The Punong Barangay, aa
chairman of the Lupon.g Talfapamayapa, and the members of the Pangkat
are hereby authorized to administer oaths in connection with any matter

J.
 .APPENDIX "I" 667
RULES AND REGUU.TIONS IMPLEMENTING
THE LOCAL~COD!! OF Ultl

ARTICLE 200. Respon1ibi/ily o(IM Cily or Munkipal ~ayor.-The

APPENDIX "I" city or municipal mayor, ea the case may be, shall be respoDBible for the
efficient and effective implemeotation olthe Katanuy/a"8 Pambarangay.
ARTICLE 201. lmpk-n.ting Rulu and Rqulation&-'!b- Secre-
RULES AND REGULATIONS IMPLEMENTING THE tary of Justice shall promulgate the rules and regulations to 11Dplement
LOCAL GOVERNMENT CODE OF 1991' this Rule which shall fonn part of these Rulee.

RULE XXVI- KATARUNGANG PAMBARANGAY

ARTICLE 196. !,,,pong Tagapamayapa.-There shall be created in

each barangey a Lupong Tagapamayapa composed of the Punong Baran·
gay u chairman and ten (10) to twenty ( 20) members. The Lupon shall be
constituted every three (3) years.
ARTICLE 197. Pangkat ng Tagapogka1undo.-There shall be con·
stituted for each dispute brought before the wpon a conciliation panel to
be known as the PCJllll/tal ng TagaJ>08kasundo consisting of three (3) mem·
ber1 who 1hall be chosen by the parties to the dispute from the list of
members of the wpon.
ARTICLE 196. Eeonorrik or Ot!t.r lne<!ntiws.-The DILO ahall
pl"OYide a system of granting economic or other incentives to the Lupon or
Paf18ltal members who adequately demonstrate the ability to judiciously
and expeditiously resolve cues referred to them .
ARTICLE 199. Penally for !Wfiual. or Failu~ of Any Party or Wit-
nus to Ap~Ot' befo~ tM Lupon or Pangltat.-Refusal or willful failure of
any party or witness to appear before the Lupon or Pangltat in compliance
with summona issued pursuant to this Rule may be punished by the city or
municipal court as for Indirect contempt of court upon application filed
therewith by the Lupon chairman, the Pa"8kat chairman, or by any of the
contending parties. Such refusal or willful failure to appear shall be re--
fleeted in the recorda of the Lupon secretary or in the minutes of the
Pangkat secretary and shall bar the complainant who fails to appear, from
seeking judicial recoune for the same course of action, and the respondent
who refuses to appear, &om Illini any counterclaim arising out of, or
necessarily connected with the complaint.

· Promulgated by the Department of th• loterior aod Local GovernmeoL

666
 APPENDIX •J'" 669
KATARUNGANO PANBARANOAY INPLl!MBNJtNO
RULES AND llECULAT!ONS

RULE U - DEFINITION OF TERMS

APPENDIX "J"
The followinir terms shall have the following meaninp'
Ia I Lupon g TagapoJMYtSPG hereinaf\er referred to u Lupon, ii the
KATARUNGANG PAMBARANGAY IMPLEMENTING body organized ln every baraDgay compcsed of the 1'wwll6 ~Y u
RULES AND REGULATIONS" Chairman and not less than ten (10) nor more than twenty (20) memben
from which the membera of every PIJll8kal 1hall be chosen.
[bl Pang/rat ng Tagapagkasundo hereinafter refened to u l'on6·
Purauant to &ction 421 of Chapter 7, Title One, Book III of Republic /tat, is the conciliation p1111el constituted from the Lupon membership for
Act No. 7160, otherwise known u the Local Government Code of 1991 every dispute brought before the Lupon and consistiq of three (3) mem·
approved on October 10 1991, the following rules and regulations are bare chosen by agreement of the disputanta, or it no auch agreement is
hereby promulgated to implement the aforesaid Chapter, entitled "Kata· reached, drawn by lot by the Pun""lf Barungoy.
ru"l/aflll Pambarangay," which provides for the amicable settlement of
diepute1 at the baranpy level, as a compulsory alternative to the formal lei Habeas Corp1U Proceeding is a judicial proceeding for the pur-
pose of releasing a person who is illeplly deprived of libeny or reetorin1
adjudication of disputes.
rightful custody to the person who bas been deprived thereof.
RULE 1- GENERAL PROVISIONS ldl Preliminary irtjunction is a provisional remedy In the form of an
order Issued by a judge before whom the action is pendin~ at any ltap
SECTION 1. Title.-Sectlons 399 to 422, Chapter 7, Title One, thereof prior to final judgment requiring a person to refr81~ &om a ~
Book III and Section 515, Title One, Book IV of Republic Act No. 7160 ticular act. It may also require the performance of a partic:ular act, 10
•hall be known as the Kat4run.gan.g Pamborangay Law and these imple- which case it shall be known as preliminaey mandatory irtjunction.
mentinr rules and rel{Ulatlona shall be known as the Katarungan11 Pam. [el Attachment is a provisional remedy in the form of an order 111-
boron.gay Rules. aued by a judge before whom the proper action ia pendiq b! which the
property of the adverae party ill tskeo into legal cuatody, either at the
SECTION 2. Corutruction.-These Rules shall be liberally con-
strued in order to promote their object of assisting disputant• to obtain a commencement of the action or at any time thereafter before final judr·
juat, a~y and inezpensive amicable sett!ement of disputes at the ment, as security for the satisfaction of a judgment obtained by the pre-
barangay level. vailinir party.
(fl Support pendenJe liU is a provisional ~edy in th_• form of an
SECTION 3. Scopc.-These Rules shall govern the establishment,
administration 1111d operation of the Lupong Tagapamayapa and the
order issued by a judge before whom the P'°Jl8!° action la ~ndini, crant:ine
an allowance for sustenance, dwelling, clothinc, education and medical
Pllll(lkat "II TagapaskCU1uruio as well as the procedures in settlinr disputes attendance to the party/parties entitled thereto.
amoDI barangay memben through mediation, conciliation and arbilt'a·
tion. [g) Delivery of Peraonal Propeny C&pkuin) ill a prorisi~nal rem~
In the form of an order issued by a judge before whom an action ~
for the recovery of po811888ioD of peraooal property is pendinc, for the
delivery of auch property to the movant upon the filing by the latter of a
bond to guarantee its return or to answer for damagee.
· Promulgai.d by the l)epuiment of Justice; Official Gazette, Volume 88, No. [h) Arbitration is a process ror the adjudication of di9putee by
22. pp. 8800-33 15, Juoe 1, 1992. which the parties agree to be bound by the decision of a third peram or
body in place of a regularly organized tnaunal.
(I) Statute of Limitationa is the Jaw that bara the i08titution of an
668 action against another after the lapse of the period prescnDed therefor.
570 ALTERNATIVE DISPUTE RESOu.:TtO!ll APPENDIX "J" 571
KATARUNOANG PAMBAllANOAY IMPLl!MENTING
RULES AND llSGULATIONS

(j) Actual Residence is the place where a person actually !iv~. riod of posting. For this purp>ae, be shall determine their auitability
!kl Venue is the plat* provided by law for filing an action or pro- to the task of conciliation by considering their integrity, Impartiality,
ceeding. independence of mind, aenee of fairness, reputation for probity and
DI Mediation and Conciliation are interchangeable terms indicating other relevant considerations;
the process whereby disputants are persuaded by the Punong Baranga:y or 131 Post said notice to constitute the Lupon immediately upon
Pong/wt to amicably eettle their diaputes. ita completion in three (3) conspicuoua places within the beranpy
(ml A minor i. a person below eighteen (18) years of age. for a period of not less than three (3) weelu;
(4) Appoint not leas than ten (10) nor 111ore than twenty (20)
. !nl_ Th•. word "Incompetent" includes persons suffering the penalty
of civil interdiction or who are hospitalized lepers, prodigals, deaf and persona from the list of names contained in the notice, aa Lupon
dumb wbo are unable to communicate, those who are of unsound mind, members within ten (10) days from the laat 11-.y ofpoeting, after con·
ev.en though they have lucid intervals, and persons not being of unsound aidering endorsements of or opposition to the proposed appointees
mind, but _by rea.aoo of •ae, diseaee, weak mind, and other similar causes, and recommendations for the appointment of other persona not in-
cannot, Wlthout. outside aid, take care of themselvea and manage their cluded in the list. He shall likewiae appoint immedjately a qualified
property, becoming thereby an easy prey for deceit and exploitation. person to any vacancy that may thereafter occur in the Lupon for
any cause;
. lo( A next ofkln is a relative or a responsible friend with whom th 8
minor or Incompetent lives. (5) Swear the appointees into office, sign their appointment
papers and have them attested to by the Barangay Secretary;
RULE Ill - POWERS AND DUTIES (6) Post the list of appointed Lupon m.emben in three (3) con-
spicuous places in the barangay for the entire duration of their term
SECTION l. Punong Barangcy.-The Punong Barangay as Chair· of office; and
:-: of the Lupon, •hall have and perform the following powers and du· (71 Withdraw the appointment of any [,upon member for jus-
tifiable cause with the concurrence of a majority of all Lupon mem·
a. Conalilution of IM Lupon _ bera, as provided in Section 7 (c), Rule IV.
Ill Determine within fifteen 1151 days from the start of hi. b. Mediation and Arbitratwn FunctWn9 -
term of office the actual number, not less than ten [10) days nor Ill Receive all written complaints and put in writing all ver-
~ore than twenty [20), that will constitute the Lupon. In determin·
bal complaints made by individuals peraonally before bl111 against
1ng the ~ctual number he shall take into consideration the barangay
other individuals. He shall not receive complaints made by or
~~u!ati~n ~d the volume of diaputea previously brought for con· against corporations, partnerships or other juridical entities. Im.me-
cihation 1n hlll berangay;
d iately upon auch receipt he shall DOlify the complainant of the date
[~) Prepare, within t!1e period mentioned in the immediately of initial hearing a.nd shall, withi.n the next working dll)', iuue
~receding paragTaph, a notice to constitute the Lupon, which shall •ummona to the respondent/a to appear before him not later than
!nclude the names of pro~ members who are l't!lliding or working five (5) days from date thereof for e mediation of their conflicting in·
ID the barangay, not ot.herwiae 8Xpl'US)y disqualified by law and who teresta;
have expressed their willingnesa to serve. The list of names shall be 121 Administer oaths in connection with an.}' matter relating
at least five [Ii] more than the actual number previously determined to all proceedings in the implementation of the Kir.tarungong Pam·
in accordance with the immediately preceding paragraph and it shall barangay;
contain an invitation to the barangay members to endorse or oppoee
the proposed appointment of a.ny peraon included in the list or to 131 Resolve all objections tn venue raised during the media·
recommend other persona not included in the list, which endone- tion proceedings before him and oerti(y that he rellOlved the matter
ment, oppo11ition, or recommendation 1hall be made within the pe- or that no such objection.a wu made;
572 ALTERNATIVE DISPUTE RESOLl'TION APPENDIX "J" 573
KATARUNOANG PAMBAllANGAY IMPLEMENTING
RULES AND REGULATIONS

(41 Mediate all disputes within his jurisdiction. Upon success- (41 Where the mediation or arbitration was made by him, he
ful conclusion or hi• mediation efforts, he shall reduce to writing in a shall attest the certification signed or issued by the Lupon Secretary;
lancuace or dialect known to the parties the terms or the settlement and
agreed upon by them, have them sign the same, and attest to its due 151 Enforce by execution, on behalf of the Lupon, the amicable
execution;
settlement or arbitration award in accordance with Rule VII hereo£
(5) Arbitrate the dispute upon written agreement of the par-
ties to abide by the arbitration award of the Lupo11 Chairman. He SECTION 2. Secretary of t"6 Lupon.-Tbe Barangay Secretary
ahall within ten (10) days from date of the agreement to arbitrate, shall concurrently serve as the secretary of the Lupon and shall have the
conduct hearings and evaluate the evidence presented by the parties. following duties and functions:
He shall render the award in writing in a language or dialect known (al Keep and maintain a record book of all complaints filed with the
to the parties not earlier than the sixth day but not later than the Punong Barangoy numbered consecutively in the ~er in which ~ey were
fifteenth day following the date of the agreement to arbitrate. received and enter therein the names of the parties, date and time filed,
c. Co11J1titutiD11 of th. PangkaJ - nature of the case, and disposition;
(bl Note the results of the mediation p~ before the PullOTl/I
(1) There having been no agreement to arbitrate and media- Baran.g ay and submit a final report to ~ pro~r Munici~ Tri_al
tion efforts having been unauccessful, be shall on the last day or the Court/Municipal Circuit Trial Court/Mun1clpal Trial Court. m C1~
mediation proceedings before him immediately proceed to constitute ies/Metropolitan Trial Court hereinafter referred to as the local trial court;
the Po11gkot in accordance with the procedure herein provided;
M Record the willful failure or refusal of a witness to comply with
(2] Should the parties fail to qree on the composition or the a subpoena issued by the Puno11g Bora11gay;
three-member Pangkat, he shall determine the Pongkat membership
by drawing oflots from the list or Lupon members; [di Record the willful failure or refuaal of a party to comply with
the summons issued by the Punory/ Barangay and issue a ce~cation to
(3) Ifthe Pon_gkat decides to disqualify any of its members, he bar action/counterclaim. as the case may be, pursuant to Section 8, Rule
shall fill the resulting vacancy also by drawing of lots should the VI;
parties fail to agree on the common choice;
(eJ Receive and keep records of proceedinP aubmitted to him by
141 In case of vacancy in the Po1tgluit due to other causes he the various Pangkats;
shall in similar manner fill such vacancy should the parties rail
to
(fl Transmit the settlement agreed upon by the parties . to the
agree on a common choice; and
proper local trial court not earlier than the eleventh nor later than the
(51 Set the date and time for the initial hearing of the dispute fifteenth day from the date of the settlement;
by the Pongkat, which shall not be later than three (3) days from its
constitution. fgl Transmit the arbitration award to the proper local trial court
within five 151 days from the date thereof;
d. OtMr Powers and Duties -
(hJ Issue the certification required for filing an action or proceed-
Ill Set the date, time and place of, and preside over, the regu- ings in court or any government office for ~djudicatioo. Such certification
lar monthly meetings of the Lupon; shall show that a confrontation of the parties has taken place and that a
(2) Prepare the agenda for each meetings;
conciliation or settlement bu been readwd. but the aame hu been rep11·
diated;
(31 See to it that the Lupon exercises administrative supervi-
Iii Issue a certification for barring the complainant from filing a
sion over the various Pangkats and performs such powers, duties case or the respondent from filing a couoten:laim ~court in case of willful
and functions aa may be prescribed by law or ordinance; failure of the complainant or respondent, respectively, to appear as pro-
vided in Sec. 8, Rule VI hereof;
574 ALTERNATIVE DISPUTE RESOLUTION APPENDIX • J- 575
KATAJlUNGANG PAMBARANOAY IMPLEMENTING
· RlJLES AND llEGULATIONS

ijl Funn.h copies of the settlement or arbitration award to all the h~I Issue a certification for berrinc the complainant from filiDe a
parties and to the PUIUHIB &rotytay; and case. or the reapondent from filing a counterclaim In court in cue of willful
!kl Issue certified true copies of any public record in his custody failure of the complainant or respondent, reepectivel7, to appear u pro-
that ia not by law otherwise declared confidential. vided in Section 8, Rule Vl, hereof.
SECTION 3. Pangltal Cltairman.-The Chairman or the Pangkat RULE IV -LUPONG TAGAPAMAYAPA
ehall be chosen by the majority vote of its three (31 members and shall
have the following powers and duties: SECTION 1. Qual~ for membersllip.-Ta qualify Cor a~
[el Preside over all hearings conducted by the Pangkat and admin· pointment to the Lupan, a person must have hie actual l'Midence or place
ieter oatlu in connection with any matter relating to all proceedings in the of work in the baranp.y and must poueu pe.-al characteriatice that
implementation of the Kotarungang Pambarangay; Indicate his suitability for the Wk of conciliation of disputet. Such lllit-
!bl luue summons for the personal appearance of parties and wit- ability may be indicated by his integrity, impartiality, Independence of
neMe9 before the Pangltat; mind, sense of fairness, reputation for probity and other relevant con.eid-
erations such aa tact, patience, resourcefulnesa, fiexibility and open mind·
(cl Attest to the authenticity and due execution of the settlement edne88. Further, he must not be e·x preuly disqualified by law &om holding
reached by the parties before the Pangltat; public office.
[di When the parties agree in writing to have the Pangkat arbitrate SECTION 2 . Opposition to or recomllU!ndation for appointnwnt. -
their dispute, preside over the arbitration hearings; and Any person may register with the Punong Barangay hie opp061tlon to the
lei Attest the certification iasued by the Pangkat Secretary for fll· appointment of any one included in the liat of intended appointeea on the
Ing an action or proceedinp in court or any government office for adjudi· ground that he is not qualified or suitable for inembenhip in the Lupon.
cation. Endorsement of any proposed appointee or recommendation of other per-
eons not included in the list may likewise be made.
SECTION 4. Secretary of the Pangltat.-The Patytkat Secretary
shall be chosen by the majority vote of its three (3) members from amone SECTION 3. Appointnvnt of Lupon membere.-Aft.er cooeiderin,r
them.selvea and 1hall perform the following duties and functions: euch opposition, endoreement or recommendatioo 81 may have been made
[aJ Issue notices of hearing before the Patytkal and cause them to within the period of posting the Punong Barangay shall, within ten (10)
be eerved upon the partiea and their witnesses; days after completion of the twenty.one (21) day period oC po9ti.ng ot the
notice to constitute the Lupon, issue the written appointmente 81 members
[b) Keep minutes of the proceedings for conciliation and arbitration to those whom he determines to be suitable therelOr and have them attest.eel
by the Pang/tat and have them attested by the Pangkat Chairman; by the barangay secretary.
[cl Note in the minutes the willful failure or refusal of a party to
SECTION 4. Term of office.- Upon appointment. each Lupon
comply with the aummona ias11ed by the Pangkat Chairman;
member shall take his oath of office before the PuMfl8 Baraniay. I.upon
(di Immediately transmit to the Lupon Secretary all settlements membeni shall hold office until a new Lupon is constituted on the third
~ upon by the partiea and arbitration awards rendered by the Pang· year following their appointment, unlesa the tenn of llll.Y oC the Lupon
kat; members ia sooner terminated by resignation, transfer of reeideoce or
(el Submit copies of the aforesaid minutes to the I.upon Secretary place of work, or withdrawal of appointment by the Punong Barotl8QY with
and to the proper local trial court; the concurrence of the majority of all the members of the Lupon. A Lupon
member who ia appointed to fill a vacancy in the Lupon shall hold office
. IO Iuue the certification required for filing an action or proceeding only for the unexpired portion of the term.
in court or any eovemment office for adjudication. Such certification shall
show that a confrontation of the parties took place but no conciliation or Incumbent Lupon members shall hold office until a new Lupon ie
settlement baa been reached; or that no auch personal confrontation took constituted by the Punong Barangay first elected aft.er the promulption of
place through no fault that can be attributed to the complainant; these Rules.
576 ALTERNATM! DISPUTE RESOl.1."TION APPENDIX • J" 577
KATAAUNGANG PAMBARAHGAY IMPLBMBNTING
RUl.ES AND REGULATIONS

In barangaya where the Lupon hu not been constituted and in lei Other powers and dutiea.-The Lupon shall eiterciae such other
newly created barangaya, the Lupon ahall be constituted by the incumbent powers and perform 1ucb other duties and f'unctiolll u may be prescribed
!'unona Barangay not later than two 121 months from the date of effectiv- by law or ordinance.
1ty of th~ Rules or from th.e date of u1umplion to office of the Punong
Barunaay ID the cue of newly aeated barangaya. The term of office of the SECTION 8. Choractu of oflice.-Tbe Lupon members, while in
members of the aaid Lupon shall be co-terminus with the term of office of the performance of their official duties or on oc:caaion thereo( shall be
the Punona BaraJl8ay who appointed them. deemed as persona in authority as defined in the 1teviMd Penal Code.
SECTION 5. Vaconcy.-lmmediately upon learning of the death SECTION 9 . Natul"f! of •rvice.-Tbe Lupon inembers aball serve
tranafer of. reeldence or place of work of a Lupon member, or upon accep'. without compensation, except as provided for In Section 893 oC the Local
tance of h19 reaignation or withdrawal of his appointment, the Punong Government Code of 1991 and without prejudice to incentives as provided
B~tu"llOY •hall appoint a suitable replacement who shall serve the unex- for in Section 406 and in Book JV of the aforeeald Cade. While in the per·
pired portion of the term of office of the repI aced member. formance of their duties, the Lupon members, whether in public or private
employment, shall be deemed to be on official time, and 1ball not suffer
SECTION 6. Succeuie>n to or aub1titutio11 for Punong Barongay.- from any diminution in compensation or allowance from said employment
111 the ev~t !Ji~ Punong Barangay ceaaes to hold office or is unable to by reason thereof.
perform h11 dutiee enumerated in Section 1 of this Rule, t he aaid duties
shall be performed by the officer succeeding the Punong Barongay pursu- RULE V - PANGKAT NG TAGAPAGKASUNDO
ant to the rule on succession provided in Sections 44, 45 and 46, Chapter
2, Title II, Book of the Local Government Code of 1991. SECTION 1. Conatilution.-Tbe partiet to a dl1pute that bu not
SECTION 7. Functions.-lal Administratiue superuision.-The been successfully settled by the Puno1111 Barangay shall in hia pretence
Lupon ahall exercise administrative supervision over the variou1 Pan,gkal choose Crom among the Lupon membership three (3) penons who shall
by seeing to it that they have the necessary supplies and forms required constitute the Pang/tot that ehall conciliate their dUferencea.
6?r discharging their duties and that they perform their functions effi- Should the parties fail to agree on the Pang/tat membenhip, the
ciently, effectively and fairly. aame shall be detennined by Iota drawn by the Lupon Chairman.
!bl /lqulor mttting.-The Lupon shall meet regularly once a The three (3) regular members o( the PO"llltal, chosen by agreement
month on a date aet by the Lupon Chairman, to provide a forum for the or determined by lot, shall elect from ~ them1elvee their chairman
exchange of ideu on matters relevant to the amicable settlement of dis· and eecretary.
putes, and to enable the various conciliation panel membere to ehare with
one another their obeervatiorui and experiencee in effecting speedy resolu- SECTION 2. Vacancy.-A.ny vacancy in the Pang!MJt including the
tion of disputes, u well as to discuss problems relating to the amicable vacancy created by the disqualification of a member aball be filled by the
settlement of cliiputes and deviae solution• thereto by harneuing the partiea to the dispute from among the other Lupon members. Should the
resources provided by the Sangguniang Bc.rongay and other local ?&- parties fail to agree on a common choice, the vacancy eball be ftlled by lot
to be drawn by the Lupon Chairman.
sources of the baraneay.
(cl Withdrawal of appoinJtn1tn.t.-AiUr proper notice and hearing, SECTION 3. Function.-All disputes not a"Ucce11fully settled by the
the Pun.o1111 Barangay may, with the concurrence of a majority of all the Purwng Barangay shall u far u pouible be settled by the Pa.ry:lt:ot
Lupon members, 1rithdraw the appointment of a ~mber of the Lupon by through conc;iJiation or ariritntion..
reason of incapacity to discharge the duties of h1B office or unsuitability SECTION ' · DiM1uolifiootilm.-A party may move to disqualify
therefor. any member of the Pangkat by reason of relationship, bias interest or
(di &cuution of aettlnnent or award.-The Lupon shall, through other similar grounda discovered after the constitution of the Pang/tat. The
the Puno"ll Barangay, enforce by execution the settlement or arbitration Pangkat shall resolve the matter by majority vote. Ill decision on till.
award in accordance with the provision• of Rule VII hereof. matter shall be final.
678 ALTERNATIVE DISPUTE RESOLt:TION
APl'mmoc • J" 679
KATARl1NOANG PMIBARANGAY INPLBMBNTING
RULES AND REGULATIONS

S~CTION 5. N<Uun of the wrvi«.-The Pangkat member shall

oerve without compen,.tion, except ae provided for in Section 393 of the The foregoing exception.a, notwithttandintr. the court in which the
Local Gov~ent ~ode of 1991 and without prejudice to incentives as non-criminal cases not falling within the authority of the Lupon under
provided for ID Section 406 and in Book JV of the aforesaid Code. The these Kalarungang Pambaron/l(Jy Lew and Rules are filed may, at any
Department of _the Interior and Locel Government shall provide for a time before trial, motu proprio refer the cue to the Lupon concerned for
syetem of grantmc economic or other incentivu to the Pangkal members amicable settlement.
who adequately demonstrate the ability to judiciously and expeditiously SECTION 3. VMu..-Tbe place of eettlement shall be subject to
reeolve cues referred to them. While in the performance of their duties, the following rules:
the Pong/tat members, whether in public or private employment shall be
deemed to .be on official time, and shall not 1uffer from any dimi~ution in lal Where the partie1 reeide in the aame berangay, the di.lpute
compensation or allowance from said employment by reason thereof. ahall be brought for settlement in said baranpy;
lbl Where the parties reside in different barangays in the same city
RULE VI - AMICABLE SE'ITLEMENT or municipality, the dispute ehall be settled in the barangey where the
OF DISPUTES respondent or any one of the respondents actually resides, at the choice of
the complainant;
S~O~ 1.. Partiea.-Only individuals ahall be partiee to these le) Dispute involving real property 1ball be brought for eettlement
P~ either u complainants or respondents. No complaint by or in the barangay where the real property or IMger portion thereof 11 litu-
aga111.1t corporationa, partnerships or other juridical entities shall be filed ated;
received or acted upon. '
Id) Disputes arising at the workpiece where the contendintr parties
S~CTION 2. Subject matters for ulll•m•nl.-All disputes may be are employed or at the i.netitution where auch parties are enrolled for
the 1ubJe'7 of proceedings for amicable settlement under these rules except study, shall be brought in the barangay where auch workplace or lnatitu-
the followmg enumerated caaea: tion is located;
la) Where one party ii the government, or any subdivision or In- lei Any objection relating to venue 1hall be raised before the
strumentality thereof; Punona Barangay during the mediation proceedings before him. Failure to
!bl Where one party ii a public officer or employee, and the dispute do ao aha II be deemed a waiver ofeuch oqjectiona; and
relatA!s to the performance of his official functions; (fl Any legal question, which may confront the Purnmo Barar1ifa1 in
resolving objections to venue herein referred to may be submitted to the
. [c) Offenses for which the law prescribes a maximum penalty of
Secretary of Justice, or his duly designated repre1entative, whoM ruling
imprisonment exceeclintr one (1) year or a fine exceeding Five Thousand
peaoa (P5,000.00); thereon •hall be binding.
Id! Offensee where there is no private offended party; SECTION 4 . ComnwnamenL-Proceedinp fOr settlement lhall be
commenced by verbal or writtan complaint to the Punong BartJn8a:1 on any
[e) Where the dispute involves real properties located in different matter not excepted under Section 2 of this Rule, in accordance with the
ci.tiee or municipalities unless the parties thereto agree to submit their Rules on Venue provided in the preceding eection and upon payment of the
differences to amicable settlement by an appropriate Lupon; filing fee in the amount of not leae than Five (5) Pesos nor more than
. 10 ~~putea involving parties who actually reside in barangays of Twenty (20) Pesos. The Pun.ong Baranga;y &hall determine a ecliedule of
different cities or municipalities, except where auch barangay unite adjoin fees which shall not be chaniied during hil term, taking into consideration
each other and the parties thereto agree to eubmit their differences to the value of property or amount involved in the dispute, the financial
amicable settlement by an appropriate Lupon; and capabilitiee of the complainant and other relevant conaiderations.
[g) Such other c1888es of disputes which the President may deter- SECTION 5. Answ.r.-The respondent ahall answer the compla.int
mine in the interest of juatice or upon the recommendation of the Secre- orally or in writing, by denying specifically the material avermenl.I or the
tary of Justice. complaint and/or allegina- any )awful defense. He may also interpoee e
counterclaim against the complainant, a croes·clalm against a co-
580 ALTERNATIVE DISPUTE RESOL.l.l"TION APPENDIX •;r 581
KAT/\RUNG/\NG P/\Mll/\lt/\NG/\Y !MPLBMZNT!NG
RULES AND REGULATIONS

rupondent or a third-party complaint against one not yet a party to the reason before the Pangkat, as determined by the latter after notice and
proceeclinp. hearing, ahaU be a sufficient basis for the iaauance of a certification for
filing complainant's cauae of action in court or with the proper government
SECTION 6. Ptnonal appeorance.-ln all proceedings for amicable acency or office.
aettlement, the p&rti• muat appear in person without the auistanca of
counsel or the intervention of anyone. Minors and incompetents. however, In addition, such willful failure or refusal to appear llllU' aubject the
may be uaiated by their next of kin who is not a lawyer. recalcitrant party or witness to punishment as for con~pt ol court, upon
application filed by the U.pon Chairman, PGJwkat Chairman or any of the
SECTION 7. Htari114'•.-fal The Punong Baranga;y and the Pang· contend inc parties with the local trial court.
bt ahall procaed to hear the matter in dispute in an informal but orderly
manner, without retard to te<:hnical rules of evidence. and 88 is best calcu· fbl Pro«dure -
lated to effect a Cair eettlement of the dispute and bring about a harmoni- 1. Mediation Prouedill/l•·
ous relatlonahlp of the parties.
1.1 In case a party fails to appear fi>r mediation, the
!bl Proceedinp before the Punong Baranga;y ahail be recorded by Punong Barangay shall set a date for the abeent
the Lupon Secretary while those before the Pangkat shall be recorded by party/iea to appear before him to expl~ the rea.eon
the P01111ltat Secretary. The record shall note the date and time or hearing, for his/their failure to appear at the hearing;
appearance of partie1, namea of witnesses and substance of their testimo-
nies, objections and resolutions, and such other matters as will be helpful 1.2 If the Punong BaronBOY finds after hearing that the
to a full understanding or the case. failure or refusal of the complainant to appear ia
without justifiable reason, he shall 111 diamiaa the
(cl All proceedln11 for aettlement shall be open to the genera) pub· complaint; 121 dlrect the iaauance or an~ a~t to the
lie except that the Pun<>TllJ Barango;y or the Pangkat, as the caae may be, certification to bar the llling of the action ID court or
at the request of a party or upon hia or its own initiative, may exclude the any government oflice; and [3) apply with the local
public in the interest of privacy, decency or public morals.
trial court for punishment of the ~citrant party u
SECTION 8. Failure to appear.-fa) Sanctions - The complaint for indirect contempt of court; and
may be diamlaaed when the complainant, after due notice, refuses or will· 1.3 In case of similar willful failure or refuaal of the re·
fully fails to appear without juatifiable reason on the date set for media·
tion, conciliation or arbitration. Such diamiaaal ordered by the Pu7W1111
apondent to appear for mediation _be'?re the Puno1111
Barangay, the latter shall: Ill d1_amia the -pon·
Baranga;y I POlllJltat Chairman after giving the complainant an opportunity dent'• counterclaim; 121 direct the 1aau~ce of and at-
to axplain hie non-appearance ahall be certified to by the Lupon or Pang- test to the certification to bar the filing al reapon·
ltat Secretary u the cue may be, and shall bar the complainant from dent'• counterclaim in court/govenunent office; 131
seeking judlcial recourse for the same cause or action aa that dismissed. apply with the local trial court for puniahment al the
Upon a similar failure of the respondent to appear, any counterclaim recalcitrant puty 88 for indirect contempt of court;
he baa made that an- from or ia necessarily connected with complain· and [4[ set a date for the parties to appear before him
ant'e action, may be diamisaed. Such diarnisaal, ordered by the PUMng for the constitution of the PGJwltat.
Barangay/ Pangbt Chairman after giving the respondent an opportunity
2. Constitution of Pangltat.
to explain bis non-appearance shall be certified to by the Lupon or Pang.
Ital Secretary, u the case may be, and ahall bar the respondent from filing 2. 1 In caae the complainant refute9 or wil1fu1l7 fan. to
such counterclaim in court or any government offioe for acljudicatfon. appear for the constitution of the Pang/tat, he shall be
Further, in all ca1ea where the respondent faila to appear at the me· subject to the same sanctiom impoeable upon the re-
diation proceedings before the Punong Barangay, it i.s mandatory for the calcitrant complainant in paragraph 1.2 hereof;
latter to coo.stitute the Pangllat pursuant to Section l (c), Rule Ill hereof, 2.2 If the respondent aimilarly refuses or fails to appear
but the reapondent'a refusal or willful failure to appear without juatifiable for the constitution of the Pangbt, the PunOll/l
582 ALTERNATIVE DISJ>UTE RESOLUTION
APl'BNncc •.r-
KATARUNGANG PAMBAl\ANGAY IMi'LEMBHTINO
RULES AND REGULATIONS

&rangoy ahall act as provided in items Ill. 121 and The agnement for arbitration may be repudiated in acairdance with
131 of paragraph 1.3 hereof, and in addition, proceed the procedure provided in Section 12 of this Rule.
to constitute the Panglral by drawing of lots as pro-
vided in Section lie) 121, Rule UI hereof; and SECTION 10. Ti- limiU.-laJ The PUflOlllf ~ 1hall .,..
2.3 The PuMrrg Barongay shall apply, in similar man- ert all efforts to conciliate the parties within fifteen (111) d8,Y1 trom their
initial confrontation before him. Failing in this efl'ort, be ahall aet a date
ner, for the punishment of a recalcitrant witness who
for the constitution of the Pang/rat in accordance with Rule V hereof
willfuJJy fails or refuaes to appear, as for indirect con·
tempt of court. (bl The Pangl«U shall cnnvae to cnnciliate the pertiee on the date,
time and place set by the Punong Bal'Oll/lay but not later than three (8)
3. Concilialion ~forr tM Pang/rat. daya from its constitution. The Pang/rat ahall exert all efforts to conciliate
3.1 In case a party fails to appear for conciliation, the the parties within fifteen (15) days from their Initial coafrontatlons, which
Pangfr.at Chairman shall set a date for the absent may be extended in its discretion for an~er period not to uceed 6.ftaen
party/iee to appear before him to explain the reason 1151 more days, except in clearly meritorious c:uee.
for hiaftheir failure to appear at the hearing; Jc) Where the parties have agreed to arbitrate, the PuflOTl8 &rn.n-
3.2 If he tinda after hearing that the failure of the com- say or the E'anghat, aa the - may be, eball llftcr bet.ring make the
plainant to appear is without justifiable reason, he award not earlier than the sixth day but not later than the fifteenth day
ahall Ill dismiss the complaint; (2) direct the issuance followina- the date of such agreement.
of and attest to the certification to bar the filing of the SECTION 11. SuspeMion of prr!H!ripti~ period of offenMa and
action In court or any government office; and (3) ap- cause of action.-The prescriptive periods of offell8es and cause of action
ply with the local trial court for punishment of the re- under existing laws shall be interrupted upon filing of the cnmplaint with
calcitrant party as for indirect contempt of court; the Punong Barangay. The running of the prescriptive periocb shall re-
3.3 In ca.ae of aimilar willful failure or refusal of the re- sume upon receipt of the complainant of the certificate of repudiation or of
epondent to appear for conciliation before the Pang· the certification to file action issued by the Lupoa or Paflll/ra.t Secretary:
/rat, ita Chairman, shall: Ill dismiss the respondent's Provided, however, that such interruption shell not exceed sixty (60) days
counterclaim; 121 direct the issuance of and attest to from the filing of the complaint with the Puno1111 Baraflllay. After the
the certification: la] to bar the filing of respondent's expi ration of the aforesaid period of sixty dayB, lhe filing of the case in
counterclaim in court/government office; and [b] to court or government office for aqjudication shall be subject to the provision
file complainant's action in court/government office; of paragraph !bl (41 of Rule VIII of these Rules.
and (31 apply with the local trial court for punish-
SECTION 12. Repudiation of agreement for arbilratian.-Any 8(·
ment of the ret:alcitrant party as for indirect con- grieved party to an agreement for arbitration ma7, within five (51 d.,a
tempt of court; and from date thereof, repudiate the same by filing with the~ Barungoy
S.4 The Pang/tat Chairman shall apply, in similar man- or the Pang/rat Chairman, as the case may be, a •t:aUment nrom to before
ner, for the punishment of a witness who willfully either of them repudiating the agreement on the cround that bla consent
fait. or refuses tu appear as for indirect contempt of thereto was obtained and vitiated by fraud, violence or intimidation.
court. Failure to repudiate the arbitration agreement within the alOreeaid
SECTION 9. A6r-Hm11nt for arbitralion.-Tbe parties may, at any time limit &hall be deemed a waiver aC the rigkt to challenge on said
at.aae of the proceedinirs, agree in writing to have the matter in dispute grounds.
decided by arbitration by either the Punong Barangay or the Pang/rat. In SECTION lS . Form of ~nl and award.-All settlements,
such a case, arbitrational hearings shall follow the formal order of aqjudi· whether by mediation conciliation or arbitration, ahaJI be in writing, in a
cative trials. language or dialect known to the parties. Settlements by mediation or
conciliation shall be signed by the partiee and attested by the Puno~
 ALTERNATIVE DISPUTE RESOLt:TION APPENDrx • J" 585
KATARUNGAllG PAMBARAllGAY IMPL8:MJ!NTING
RULES AND REOULATIONS

Bara111ay or Pwi/:ltat Chairman, 118 the case may be, that such eettlement RULE VII- EXECUTION OF SETl'LEMENT
was agreed upon by the parties freely and voluntarily, after a full under- OR AWARD
standine of its terms and an intelliient awareness of the legal conae-
quenca thereof.
SECTION l. Ezttuticl& of &ttkment or Atuard.-Execution •hall
The arbitration award shall be signed by the Punons Baransay or all issue only upon the expiration of ten [10) deya from date ofeettlement or
the membera of the Pangkol, as the case may be. receipt of award unless repudiation of the aettleme.nt baa been made or a
petition to nullify the award bas been filed prior to the expiration of the
SECTION 14. &pudialion of sett/ement.-Any party to the dispute aaid period.
may, within ten [101 days ft-om the date of the settlement, repudiate the
same by filing with the Punong Baransay a statement to that effect awom SECTION 2. Modes of E.zeculion.-Tbe amicable eettlement or ar-
1? before him, where the consent is vitiated by fraud, violence, or intimida- bitration award may be enforced by execution by the I.upon within aix (6)
tion. Such repudiation shall be 1ufficient basis for the issuance of the months from date of the aettlement or date of receipt of the award or from
certification for filing a complaint in court or any government office for the date the obligation stipulated in the settlement or a.fjudged in the
aqjudication. arbitration award beco.mee due and demandable. After the lapee ot such
Failure to repudiate the settlement within the aforesaid time limit time, the settlement or award 11111)' be enforced by the appropriate loca:J
shall be deemed a waiver of the right to challenge on said grounds. trial court pursuant to the applicable provaion1 of the Rules oC Court. An
amicable settlement reached in a case referred by the Court having juri,.._
SECTION 15. Effect of setelt~nt by arbitration or conciliation.- diction over the cue to the Lupan shall be enforeed by execution by the
The amicable eettlement and arbitration award shall have the force and aaid court.
effect of a final judgment of a court upon the expiration of ten 1101 days
from date of the settlement or date of receipt of the award, unleu repudia- SECTION 3. Motion for Er«ution.-Tbe diaputant/a may file a mo-
tion of the eettlement has been made or a petition for nullification of the tion with the Punans Borangoy, copy fumiebed to the other disputant/1,
award baa been filed before the local trial court. for the execution of a final aettlement or awud which bu not been mm·
plied with.
However, this provision shall not apply to court cases referred to the
Lupoa under the Jut paragraph of Section 2 of this Rule, in which caae the SECTION 4 . Hearing.--On the dlQ' the motion for execution ie
compromiae aettlement agreed upon by the parties before the Lupon filed, the PullQng Barangay shall set the same for ~ on a date
Chairman or the Pangkat Chairman shall be submitted to the court and agreed to by the movant , which shall not be later than five (5) da19 from
upon approval thereof, have the force and effect of a judgment of said the date of the filine of the motion. The Pun0fl6 BaTOll6oy shall live im-
court. mediate notice of hearing to the other party.
During the hearing, the Pv.twng Borafll10Y •ball aecertain the fact of
SECTION 16. TransmUtal of settlement and award to court.-
non-compliance with the terms of the aettlement or award. Upon such
Immediately upon signing, the Punong Barangay or the Pangkat Chair-
man, as the case may be, shall furnish copies of the settlement or award to determination of non-compliance, the Pwwng Baraf16ay shall ltrongly
urge the party obliaed to voluntarily comply with the settlement or award.
the perties and send such settlement or award to the Lupon Secretary who
shall trarurmit the same to the local city or municipal court within five (5) SECTION 5. l ssuan«, form and COllW!tt of the notice o{tM execu·
days from date of the award or, in the case of settlement, not earlier than tion. -Tbe Punang Barangay shall within five (5) days from the~ of
the eleventh nor later than the fifteenth day from date of settlement. The h earin g, determine whether or not voluntary compliance can be eecured.
amicable Mttlement reached in a case refen-ed by the court to the Lupon Upon the lapse of eaid five-day period, there being no voluntary compli-
purauant to Section 2 of thia Rule shall be transmitted to the said court ance, he shall iBllue a notice of execution in the name of the Lupo"l/ TQla·
within the eame period provided in this Section for the transmittal of pamayapa. The aaid notice mu9t Intelligently refer to the settlement or
settlement to the local trial court. award and the amount actually due thereunder if it be for money, or the
terms thereof which be must be complied with.
586 ALTERNATIVE DISPUTE RESOLUTION APf'DmlX "J" 687
KATARIJNGANG PAMBARANGAY IMPLEXEN'l'INO
llUU:S AND REGUI.\TIONS

SECTION 6 . Proadu~ for -aaion. - (di His necessary clothing, and that of all his family;
(al Ir the execution be for the payment of money, the party obliged lei HouHhold furniture and uten.sn. necessary for ho'CIMkeepiq,
ia allowed a period of five 151 days to make a voluntary pay- and used for that pwpose by the debtor;
ment, failing which, the Pu•o11g Barongay shall take possession (fl Provisfons for individual or family use aut6cient IOr four (4)
of aufficient personal property located in the barangay, of the months;
party obliged to satisfy the settlement or award from the pro-
ceeds of the sale thereof with legal inte~t such sale to be con- lg) The profeaaional h1traries of attomeJB, judge., pllyaiciana,
ducted in accordance with the procedure herein provided. lfsuf· pharmac:iata, dentists, eogineera, aurveyora, clergymen, teach·
ftcient penonal property eliats, the party oblige<! is allowed to ers and other professionals;
point out which of them shall be taken possession of a head of lh I One fishing boat, net, and other fishinr paraphernalia of the
the othen. If penonal property ia not sufficient to satisfy the party obliged who ia a fiaherman, by the lawful uee of which he
settlement or award, the deficiency shall be satisfied in accor- earns a livelihocd;
dance with the applicable provisions of the Rules of Court. Iii So much of the earnings of the party obliged for his personal
lbl If it Ii. for the delivery or restitution of property located in the services within the month preceding the levy aa are necessary
barangay, the PunlHlfl Barongay shall oust therefrom the per- for the support of his family;
aon agalnat wbom the settlement or award is rendered and
UI Lettered gravestones;
place the party entitled thereto in possession of such property.
lkl All moneys, benefits, privilegea, or annuities accruing or in any
[cl If it be for the delivery or restitution of property located in an- manner growing out of any life insurance, provided the pro-
other b&J'alle~ of the ~me city or municipality, the Punong ceeds therefrom shall not exceed one hundred thousand peso.
Barat111ay issuing the nottct shall authorize the Punong Baron· (Pl00,000.00);
gay ~f the barangay where the property is situated ta take pos·
eesa1on of the property and to act in accordance with paragraph Ill The right to receive legal support, or money or property ob-
lbl hereof~ tained as such support, or any penaion or gratuity &om the gov-
ernment; and
[di If a settlement or award directs a party to execute a conveyance
of land, or to ~eliver deeds or other documents, or to perform Im) Copyrights and other properties especially exempted by law.
~Y other specific act, and the party fails to comply within the But no article or species of property ineotiooed in this secti?n ah~
time specified, the Pu110f18 Borangay may direct the Lupon Sec- be exempt from execution isaued upon a settlemei>t or award for 1ta pnce
retary to perform the act at the cost of the disobedient party or for a mortgage thereon.
and the act when ao done shall have like effects as if done by
the party. SECTION 8 . Paymenl before aale.-At any time Ii.fore the sale of
prope~ on execution, the party obliged may pre11ent the sale by paying
SECTION 7. Property eumpt from tt«utian.-Except as otherwiae the amount required by the order of ezecution.
expressly provided by law, the following property, and no other shall be
ezempt from execution: SECTION 9. Pl'Olldure for nk ofpc,._.,u property on e:«cution.-
[a) The debtor's family home constituted in accordance with the [al Notitt of sak.-Before the sale of property on execution under
Section 6 (a ) herein abcwe, notice thereof must be liven aa fol-
Family Code;
lows:
!bl Tool• and implements necessarily lll!ed by him in his trade or
(11 In C&lie of perishable property, by posting immediately
employment;
upon taking possession thereof of a written notice of the
(cl Two horsea, or two cows, or two carabaoe, or other beasts of time and place of the sale in three (3) public places in the
burden, auch as the debtor may select, and neoeesarily used by barangay where the sale ia to take place, for not les1 than
him in hill ordinary occupation; twenty-four (24) hours prior to the sale; and
588 ALTERNATIVE DISPUTE RESOLUTION APPENDIX •J" 589
KATARUNGANG PAMBARANOAY IMPLEMENTING
RULES AND RBOULA110NS

(21 In case of other personal property, by posting immedi- RULE vm -PRE-CONDITION FOR
ately upon taking possession thereof a similar notice in FORMAL ADJUDICATION
three (3) public places in the barangay where the sale ia
to take place, for not less than five (5) nor more than ten Conciliation, pre-condition for filing of complaint in court or govern-
(10) days. ment office.
!bl Monrur of sole.-AJI sales of personal property under execution (al No individual may go directly to court or to any government of-
muat be made at public auction, to the highest bidder, between fice for acljudication ofhia dispute with another individual upon
the hours of eight in the morning and five in the afternoon at any matter falling within the authority oftbe Punong Borangay
the place indicated in the notice. After sufficient property has or Pangkat ng Tagapagluuundo to settle under th- Rules,
been sold to satisfy the execution, no more shall be sold. The unless, after personal confrontation of the parties before tbem
personal property must be 1ald within view of those attending earnest efforts to conciliate have failed to result in a eettlement
the sale. The party obliged if present at the sale, may direct the or such settlement haa been efl'ectively repudiated.
order in which personal property shall be sold. Neither the
Punong Borangay nor the Lupon Secretary nor any of the [b) Notwithstending the foregoing rule, however, a complainant
members oftbe Lupon concerned can become a purchaser, or be may institute proceedings directly in court or with the proper
interested directly or indirectly in such sale. government office, in the following enum~~ ~ where ~
gent legal action is necessary to prevent 1111uatice from being
(cl Disposition ofproceed.a of the sole.-The Punong Barongay shall committed or further continued:
pay to the prevailing party so much of the proceeds of the sale
as will satisfy the settlement or award. Any excess in the pro- Ill In a criminal case where the accused was arrested with-
ceeds over the settlement or award must be delivered to the out warrant and is under police custody or detention, the
party obliged. criminal complaint or information may directly be tiled by
the offended party, police or fiscal with the proper court;
When the prevailing party is the purchaser, he shall pay to the party
obliged only such amount as exceeds the amount of the settlement/award. 121 A person illegally deprived of hia rightful custody over an-
other or a person illegally deprived of hi~ ~berty or one
SECTION 10. Conveyan« to purchaser of personal property - acting in his behalf may directly file a petition for habeas
When the purchaser of any personal property, capable of manual delivery, corpus with the proper court to regain custody or secure
pays the purchaser money, the Punong Borangoy making the sale must the releaae of such person;
deliver the property to the purchaser and, if desired, execute and deliver to
him a certificate of sale. The sale conveys to the purchaser all the right 131 Actions coupled with provisional rem~es such aa pre-
which the party obliged had in such property on the day the execution was liminary injunctian, attachment, delivery of per~nal
levied. property and support during the pendency of the action;
and
SECTION 11. Entry of satisfaction of settlement or award by Where the action may otherwiae no longer be filed in
barangoy secretary or Punong Borongoy.-The satisfaction of a settlement
141
court because it may be barred by the Statute of Limit&·
or award shall be entered by the Punong Barongay or Barangay Secretary, tions.
in his record upon the return by the Punong Barangay of an execution
satisfied, or upon the filing of an admission of satisfaction of the settle- RULE IX- INDIGENOUS CULTURAL
ment or award. COMMUNITIES
SECTION 12. Other cases of ex.ecution.-In all other cases not
herein provided for, the applicable provisions of the Rules of Court shall SECTION 1. Local system of di8p1'U seUlement.-In barangaya
apply. where majority of the inhabitant& are members of indigenous cultm:8'
communities as determined by the Provincial Office of the National Statia-
tics Office, such community or communities shall register with the office of
590 ALTERNATIV! DISPIJTl!I R£SOU.:"'TION APPENDIX • J" 1591
KATARUNCANC PAMBARANGAY IMPLmlBNTING
RULES AND REGl.lL\TIONS

the city/municipal mayor, the namelnamH of their recognized datus, tribal SECTION 6. &corda.-Tbe Baranpy Secretazy shall keep a file of
leaders, elders or •imilar leaden. The indigenoua system of settling dia- the attested settlement.. aJ>d the certificates ofnon...ettlement transmitted
putea u certified to by their respective councils of datua, hibal leaders, or to the Pwrong Barangay and transmit a copy of each of laid Mttlementa
elders or other elmJlar leeden •hall be recoaruzed without prejudice to the and certificates of non-settlement to the proper local trial court.
applicable pl"OViaiOM of the Katarungang Pamborongay.
Disputea between memben of the same indigenous cultural commu- RULE X- MISCELLANEOUS PROVISIONS
nity aball be settled In accordance with the cuatoma and traditions of that
panic:ular cultural community aa provided in the immediately preceding SECTION 1. IAgal advice on llUJtUn ia"°"1in/J quutioM of law.-
par~apb. Where ooe or mol'1! of the parties to the aforesaid dispute The provincial, city legal officer or proeecutor or the municipal legal officer
belong to the minority, submisaion to the indigenoua system of amicable shall render legal advice on matters involving questions of law to the
settlement ahall be mutually qreed upon by all the parties. In the ab- Punong Barongay or any Lt.pan or Pang/tat member whenever necesaary
eence of eucb agreement, the aettlement procedures provided in these in the exercise of his functions in the administration of the Katanuiga1111
Ru lea 1hall apply. Pambarangay .
. SE~~ON 2. Attestation of•uccen{ul settlement.-Where a dispute SECTION 2. Reuiew.-Tbe i'uno"8 Baro,..ay or any Ll<pon or
fallioir Wl~ the authority of the Lupon is successfully settled through Pangkat member may seek a review by the Secretary o( Juatice of any
the local lnd11renou1 aystem, the council of datus, tribal leaders or elders legal advice rendered by the provincial oc city prosecutor in accordance
shall attest to the settlement and transmit the attested copy to the Punong with Section 1 hereof. Any legal advice rendered by any of the ofllcera
Borongay of the place where the dispute should have been settled pursu· mentioned in said section concerning the implementation of any of the
ant to Seetlon 3, Rule VI hereof. provisions of these Rulea may be elevated to the Secretary of Justice for
review.
SECTION 8. Effect of attested settlement.-The said attested set·
tlement, ahall have the same force and effect as a settlement arrived at SECTION 3. Rules and Regulation•.-The Secretary of Justice
through the procedures herein provided upon the expiration of ten (10) ahall promulgate such additional or amendatory rules and reeulations
de,ys from the date the attested copy of the settlement is received by the lmplementini the Katarungang Pamborangay Law, aa need therefor
Punona Bartln8ay. arises.
A party may repudia~ the said settlement within the same period, SECTION 4. Administration oflM Kal'"""il"n/l Pamborongay llY•·
on the 88Jlle grounds and m accordance with the procedures provided in tem.-The city or municipal mayor, 88 the case may be, ahall - to I.be
Section 14, Rule VI hereof. efficient and effective implementation and administration of the Katarun·
gang Pa.mbarangay. He shall insure the non-political Bild non-partisan
SECTION 4. FGilu~ of aettlement.-Wbere the parties fail to ami-
character of such implementation and adminisiration.
ca.bly settle their dispute through the ~ocal indigenous system, the datu or
tribal leader or elder coocerned shall issue a certification that settlement SECTION 5. Appropriation&-Sucb amount 88 may be necesa11r1
hu failed and transmlt the same to the Punong 8ClTfUl8ay of the place of for the effective implementation of the Katarurigatlll Ptunharan(Jay includ·
settlement determined in accordance with Section 3, Rule VI hereof. ing the provision for honorarium for Pangkal members aball be provided
The parties may mutually agree to aubmit themselves to the media- for in the annual budget of the ci~ or municipali~ concerned. For thit
tfon and conciliation or arbitration procedures herein provided. purpoae, the city or municipal mayor aball include the aforesaid amount in
the executive budget which be shall submit to the SanggunUJJ\ Panlu.ng·
SECTION 15. ~rtificate to file aclion.-Wbere there has been no aod or Sa"llJluniang Boyan, as the case may be.
settlement in accordance with the immediately preceding section, and
upon reque1t by the proper party, the Punong Barongay to whom the SECTION 6. ln«nti~s.-Tbe Department of Interior and Local
certificate of non-settlement ia transmitted shall issue a certificate to file Government shall provide for a ayatem of granting economic or other
action in court/irovernment office on the ground of failure of settlement. incentives to the Lupon or Pang/cat members who adequately demonstrate
the ability to judiciously and expeditioualy resolve cases refemid to them.
594 ALTEJUo!ATIVE DISPITl't R CSOU.'T 10N
APPl!NDIX "K" 595
ADMINISTRATIVE CIRC1JLAR NO. 1'-Sa

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

instrumentality thereof, 9. Any c1aas of disputes which the President may determine in
2. Where one party ie a public officer or employee, and the dis- the interest of justice or upon the recommenda tion of the
pute relates to the performance of hie official functions ; Secretary of Juatioe;

3. Where the dispute in,,olves real properties located in differ- 10. Where the dispute ariaea from the Comprehensive Agrarian
ent cities and municipalities, unless the parties thereto Reform Law CCARL)(Sec. 461: 47, R.A. 6657);
ag-ree to submit their difference to amicable aettlement by 11. Labor disputes or controvera!ea arisinJ from employe,..
an appropriate Lupon; employee relations <Montoya u1. EllCO:yO, d al., 171 SCRA
4. Any complaint by or qainst corporations., partnerships or «2· Art. 226, Labor Code, u amended, wlticb rnmts origi-
j uridical entitiea, aince only individuals shall be parties to nal 'and uclusive jurisdiction over conciliation and media-
tion of disputea, grievances or problems to certain offices of
Barangay conciliation proceedinrs either as complainants or
respondents (Sec. 1, Rule VI, Katarungang Pambarangay the Department of Labor and Employment);
Rules); 12. Actions to annul judgment upon a comprontlae which may
be filed directly in court <See Sancliez va. '/Uptu, 158 SCRA
5. Disputes involvinr partiea who actually reside in barangaya
459).
of different cities or municipalities, except where such
barangay units adjoin each other and the partiea thereto II. Under the provisions of R.A. 7160 on Kalarunga"6 Pambaran-
agree to submit their differences to amicable settlement by gay conciliation, aa implemented by the Kalorungang ~mbara~y ~es
an appropriate Lupon;
and Regulations promulgated by the Secretary of Justice, the cei:tffication
6. Offenses for which the law prescribes a maximum penalty of for filing a complaint in court or any government office shall ~e 18sued. by
imprisonment exceeding one ( 1) year or a fin e over five Baran.gay authorities only upon compliance with the follOWlDC reqwre-
thousand peaos (PS,000.00}; menta:
7. Offenaes where there is no private offended party; 1. lasued by the Lupon Secretary and attested by ~e Lupo11
8. Disputes where urgent legal action is necessary to prevent Chairman (Punong Barongay), certifying that a confrontation of the
injustice from being committed or further continued, specifi- parties has taken place and that a conciliation aettl~ment has been
cally the following: reached, but the same has been subsequently repudiated (Sec. 412,
Revised Katarungang Pombarangay Law; Sec. 2[h), Rule Ill, Kata-
a. Criminal cases where accused ie under police custody or runga ng Pambarongay Rules);
detention (see Sec. 412 (b) ( 1), Revised Kau.rungana
Pambarangay Law); 2 . Iaaued by th e P41lgkat Secretary and attested by the Pong.
kat Chairman, certifying that:
b. Petitiona for habeas corpu8 by a person illegally de-
prived of hie rightful custody over another or a person a. a confrontation of the parties took place but no con-
illegally deprived or one actinJ in his behalf; ciliation/aettlement bu been reached (Sec. 4[!], Rule
lll, KatOl'IUl/l(lllC Pamborangoy Rules; or
c. Actions coupled with provisional remedies auch as pre·
that no penonal confrontation took p~ace beli(Secore th[t]e
liminary injunction, attachment, delivery of per~nal
property and support during the pendency of the action;
b.
1
Pangkat through no fault of the comp ainant •4 ,
and Rule Ill, Katarungang pambarangay Rulee).
d. Actiona which may be barred by the Statute of Limita- 3 . Jasued by the Pwwng Borongay, as requeet.ed b! th11
tions. proper party on the ground of failure of settlement where~ disp'.1te
involvea members of the same indi&enoua cultural c:ommnn1ty, which
shall be eetUed in accordance with the customs and traditions of that
particular cultural community, or where one or more of the parties to
596 APPENDIX "K" 597
AD!l!INISTRATIYI ClltCULAR NO. 144'

the aforesaid dispute belonc to the minority and the parties mutu· Strict ob.ervance of these guidelines is enjoined. Thi• Administra-
ally agreed to submit their di1pute to the indigenous system of ami· tive Circular shall be effective immediately.
cable settlement, and there hae been no settlement as certified by Manila, Philippines. July 15, 1993
the datu or tribal leader or elder to the Punong Barangay of the
place of settlement ($eca. 1,4 & 5, Rule DC, Katarungang Pambaran·
gay Rules); and (Sgd.l ANDRESR. NARVASA
4. If mediation or conciliation efforts before the Punong ChUf Jvnii:.
Barangay proved uneuccessful, there having been no agreement to
arbitrate <Sec. 410 (b), Revised Katarungan11 Pambarangay Law;
Sec. 1, c. (1). Rule Ill, Kalarun:ang Pambarangay Rules), or where
the respondent f&a to appear at the mediation proceeding before the
Pwwng Barafl60y (3rd par. Sec. 8, a, Rule VI, Katarungang Pam·
baraiigay Rules), the Punong Bara"(lay shall not cause the issuance
at this stage of a certificaticn to file action, because it is now manda·
tory for him to constitute the Pang/tat before whom mediation, con·
eiliation, or arbitration proceedings ahall be held.

Ill. All complainta and/or informations filed or raffled to your

salalbraneh of the Regional Trial Court shall be carefully read and serutl·
nized to determine if there baa been compliance with prior Barangay
conciliation procedure under the Revieed Katarungang Pambarangay Law
and ita Implementing Rulea and Replations, as a pre-condition to judicial
action, particularly whether the certification to file action attached to the
records of the case comply with the nquirement.s hereinabove enumerated
in par. ll;

IV. A case filed in court without compliance with prior Barangay

conciliation which le a pre-<0ndition fi>r formal adjudication (Sec. 412 [a) of
the Revised Kataru.ngang Pambara~gay Law> may be dismissed upon
motion of defendant/a, not for lack or jurisdiction of the court but for fail·
ure to state a cause of action or prematurity <Roya/es us. IAC, 127 SCRA
470; Gonzalea vs. CA, 151 SCRA 289), or the court may suspend proceed·
ings upon petition of any party under See. 1, Rule 21 of the Rules of Court;
and refer the case motu proprio to the appropriate Barangay authority,
applying by analogy Sec. 408 (g), 2nd par., of the Revised Katarungang
Pambarangay Law which reads aa follows:

"The court In which non-criminal cases not falling

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