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Arbitration - voluntary dispute resolution process in which one or more arbitrators, appointed in

accordance with the agreement of the parties or rules promulgated pursuant to the ADR Act, resolve a
dispute by rendering an award; merit/evidence based
Kinds:
-compulsory
>settlement by a government agency
>investigate
>make award binding to all parties
>compelled to accept resolution of dispute
-voluntary (covered by ADR Act and IRR)
>impartial body
>chosen by parties themselves
>abide by arbitral award issued after proceedings where both parties had the opportunity to
be heard
Presence of Foreign Element
-domestic
>all located in the Philippines
>irrespective of foreign elements
>not international in character
-foreign
>conducted outside the Philippines
-commercial
>whether or not contractual
-international
>places of business in different states at the conclusion of the arbitration agreement
>place of arbitration and place of business is outside the Philippines
>place where substantial part of obligation is to be performed or place where subject
matter is most closely connected and place of business is outside the Philippines
>expressly agreed that subject matter of agreement relates to more than one country
Objective
-speedy and inexpensive method of settling disputes
-avoid formalities, delay, expense, and aggravation which commonly accompany litigation
Arbitrator - person appointed to render an award; uses discretion
Arbiter - bound by rules of law and equity
Arbitration agreement - agreement by parties to submit to arbitration in all or certain disputes which
have arisen or which may arise between them in respect of a defined legal relationship agreement,
whether contractual or not
-elements
>consent give
>cause
>lawful object
-two modes
>agreement to submit to arbitration (agreement to submit future disputes usually stipulated
in a civil contract; arbitration clause or compromissoire; liberally construed)
>submission agreement (agreement to submit existing matter of difference)
-requirements
>in writing
>subscribed by parties or representatives
Doctrine of Separability
-independent of main contract
-remains valid and enforceable
Due process
-quasi-judicial capacity
-agencies or instrumentalities
-administrative due process
Judicial Review and Court Intervention
-judicially reviewable; remedies
>petition to vacate award
>petition for review under Rule 43
>petition for review under Rule 65
-decides to defer preliminary ruling, none of the parties can seek judicial relief from deferment;
await rendition and raise issue of jurisdiction
-complement with the courts
-apply with the courts
>protective measures and enforcement
>assistance in taking evidence
>arbitration assistance and supervision
>determination of jurisdiction of arbitral tribunal
>recognition, enforcement, and implementation of award
>setting aside arbitral award
>appointment of and challenge to arbitrators
>intervention in case of failure or impossibility
-award is immediately executory and not subject to appeal, but may be subject to judicial review
Interim measures
-provisional reliefs
-ancillary remedies intended for protection of subject matter of the dispute
>preliminary injunction
>appointment of receivers
>detention of property
>preservation of property
>inspection of property
-by arbitral tribunal; if not yet constituted, no power, or unable to act effectively, may be filed in
the court
-cannot exist without principal cause of action; but cannot refuse to grant, implement, or enforce
a petition on the sole ground that it is merely an ancillary remedy

International Commercial Arbitration


-UNCITRAL Model Law on International Commercial Arbitration; Article 19 of ADR Act
>legal representation in international arbitration
>referral of court action to arbitration
>definition and functions
>grant of interim measures
>governing law
>place and language of arbitration
-refer to Presence of Foreign Elements
Coverage
-applicable to international commercial arbitration in the Philippines not contrary to law or
already covered by other laws
-default rules; in the absence of
>agreement between Philippines and other states
>agreement between parties on the applicable rules
Rules of Interpretation
-ADR Act = favors arbitration
-Model Law = international usage
-IRR
>same policies
>party autonomy
>freedom to determine certain issues
>reference to an agreement
>applicable to counterclaims
Rules on Receipt of Written Communications
-in default of stipulations, deemed received
>delivered personally to business, habitual residence, or mailing address
>registered letter which provide a record of attempt to deliver
Waiver of Right to Object in ICA
-procedurally driven
-waiver to confidentiality, privilege, non-compliance; estoppel if not objected to; estoppel in pais
(by acts, admissions, representation, or silence, whether intentionally or culpable negligence,
induces another to believe certain facts)
Confidentiality
-shall not be disclosed unless
>with consent from parties
>limited purpose of disclosing to the court relevant document
-may issue protective orders
Due Process
-reasonable opportunity to be heard
>sufficient notice
>communicate all information that he will supply to the tribunal
Place
-determined by parties
-default in Metro Manila
-depends on circumstances of case
Commencement
-determined by parties
-default date is on which a request for that dispute to be referred to arbitration is received by
respondent
Language
-determined by parties; may order documents to be accompanied by a translation
-default is English
Applicable Law
-may be agreed upon by the parties
>substantial law (legal system applicable to complete resolution of the dispute)
>conflicts of law or private international law (set of laws that determines which between the
domestic law of the two or more states should apply to the resolution of a dispute involving
foreign elements
-in default, determined by arbitral tribunal
Appointing Authority
-person or institution named in the arbitration agreement authorized to make default
appointment of arbitrators or sole arbitrator
-necessary measure to appoint an arbitrator if any party, arbitrators, or third party fails to perform
any function necessary for the appointment
-decide challenge against arbitrator if tribunal rejects challenge
-consider qualifications of arbitrator
>impartiality and independence
>advisability of appointing arbitrator of a different nationality
-submit to dispute to institutional arbitration rules; deemed to have agreed to procedure unless
they have agreed to different procedure
-ad hoc arbitration
>default appointment shall be made by National President of IBP
>unless a different procedure had been agreed upon
Arbitrators and Arbitral Tribunals (default in absence of agreement)
-three arbitrators
-procedure
>each party will appoint one arbitrator
>both appointed arbitrators will appoint the third arbitrator
>for sole arbitrator, shall be appointed upon request of party by the appointing authority
-appointment procedure agreed upon by parties, a party, or arbitrators, third party fails to
perform function, arbitration agreement shall govern procedure; if there is none, any party may
request appointing authority to take measures to appoint an arbitrator; immediately executory
-factors
>qualifications required by agreement
>considerations as are likely to secure an appointment
>sole or third; advisability of appointing arbitrator of a different nationality to avoid bias
-not satisfied, may file petition in court
-deemed constituted when sole arbitrator or third member of panel has accepted nomination and
written communication of said nomination and acceptance has been received by party making
request

Grounds for Challenge of an Arbitrator


-disclose any circumstances likely to raise doubts about his impartiality or independence; from
appointment until proceedings
-circumstances
>impartiality or independence
>possession of qualifications agreed upon by the parties
-party who appointed arbitrator estopped from challenging the latter; does not apply where act of
appointing was performed without the knowledge of actual facts and for reasons which the party
became aware of after the appointment was made
Procedure for Challenge
-default
>written statement of reasons for challenge within 15 days after becoming aware of
constitution of tribunal or circumstance constituting ground for challenge; tribunal will
decide
>not successful, within 30 days from notice of rejection to decide the challenge,
immediately executory and not subject to MR or appeal
>successful: substitute arbitrator will be appointed; same rules in appointment
Procedure in case Arbitrator fails to act
-withdraw
-parties agree to terminate
-does not carry an implied acceptance of existence of the ground for termination
-controversy remains; any party may request appointing authority to decide on the termination,
immediately executory, not subject to MR or appeal
Jurisdiction
-subject matter
>conferred by law
>act without jurisdiction (lack and excess; proper grounds for Rule 65)
-lack of the jurisdiction
>jurisdiction includes authority to rule on its own jurisdiction
>arbitration agreement or clause should be treated as an independent and separate
agreement; if in itself is void, inexistent, inoperative that the jurisdiction may be questioned
>GENERAL RULE: jurisdiction over the subject matter cannot be waived and cannot be
subject of compromise or stipulation; may be raised on appeal; unless estopped by laches
>EXCEPTION: international commercial arbitration, should not be raised not later than the
submission of statement of defense in answer or motion to dismiss, not precluded from
raising issue even if he participated in the appointment
-excess of jurisdiction
>exceeds scope of authority; raised when excess of jurisdiction becomes apparent,
otherwise, deemed waived unless delay is justified
-judicial review
>decision without jurisdiction is null or void ab initio unless there is a waiver
>may either
=consider challenge as a preliminary question, rule before conducting the arbitration;
may elevate ruling to RTC within 30 days from receipt of ruling, decision of RTC
immediately executory and not subject to MR or appeal
=defer resolution until rendition of arbitration award; ruling may be challenged in
court in the same manner and procedure for challenging an award
>arbitral proceedings may proceed notwithstanding the pendency of a judicial action unless
court issues TRO or writ of preliminary injunction
-jurisdiction over parties
>conferred by consent of parties; contained in
=agreement to submit to arbitration (pre-causal)
=submission agreement (present causal)
Interim Measures
-after arbitral tribunal is constituted, any party may request for grant of interim measures against
adverse party; in writing transmitted by reasonable means to tribunal and adverse party (ground
and evidence)
-may be granted in order to
>prevent irreparable loss (similar to preliminary injunction)
>provide security for performance of obligation (similar to preliminary attachment)
>produce or preserve evidence (similar to modes of discovery)
>compel any other appropriate acts or omissions
-may be conditioned upon provision of security (similar to attachment or injunction bond)
-order denying or granting request shall be binding and either party may apply with courts for
assistance in implementing or enforcing it
-party refusing to comply shall be liable for damages for non-compliance; further refusal may be
cited for indirect contempt
Legal Representative
-may be represented by a person of his choice even if he is a non-lawyer; person shall not be
authorized to appear before any Philippine court or tribunal even if in relation to the arbitration
Rules of Procedure
-determination
>general rule: free to determine
>default: UNCITRAL Model Law
=statement of claims
=statement of defenses
=default of parties (failure to communicate, appear, or produce evidence)
+claimant: termination
+respondent: proceed, not considered admission
+failure to appear or produce evidence: waiver, render decision on basis of
evidence submitted
=amendment
=hearings (oral hearings/oral arguments/submission of documents; notice to parties)
+court assistance in taking evidence
+subpeona (ad testificandum or duces tecum); no contempt powers, must
invoke judicial intervention
+expert (assistance, not an expert witness)
=conclusion/closure (mandate ends)
+award or settlement (in writing, signed by sole or majority of arbitrators, date
and place of arbitration; send to both parties; mandate extends to interpret
award, set aside recourse, quantification of costs)
+termination (withdrawal of claim, termination, continuation unnecessary)
*+retains jurisdiction until:
.rendition of award
.hearing on costs
.expiration of period for interpretation and correction 30 days from receipt of
the award either by party or tribunal
Costs
-fees of tribunal
-travel and other expenses
-expert advise
-travel and other expenses of witnesses
-legal representation and assistance
-travel and other expenses of appointing authority
-take into consideration
>amount of dispute
>complexity of subject matter
>time spent
>other relevant circumstances
-borne by unsuccessful party; may be apportioned by tribunal
Correction and Interpretation
-may be amended for a period of time
>quantification of costs
>typographical and similar errors (within 30 days from receipt of award; clerical errors, no
prejudice, void judgments)
>interpretation (finds request justified, make correction or interpretation within 30 days
from receipt of request)
>correction of typographical error initiated by arbitral tribunal (motu propio within 30 days
from date of award)
>additional award
=within 30 days from receipt, party, with notice to other party may request additional
award
=tribunal shall make additional award within 60 days if justified
Setting aside
-may be set aside by courts provided
>petitioner furnishes proof of
=defect in arbitration agreement
=violation of due process
=lack or excess of jurisdiction on the art of tribunal
=violation of arbitration agreement
>or if the court finds that
=dispute not capable of settlement
=award in conflict with public policy of the Philippines
-venue is RTC
>where proceedings took place
>where asset is to be attached or levied upon
>where any of the parties resides or has his place of business
>in the NCR at option of applicant
-time for filing
>within 3 months / 90 days from the date when party making the application
=received award
=request for correction, interpretation or additional award has been disposed
Recognition and Enforcement
-recognition (acknowledgement; foreign)
-confirmation (judicial affirmation of domestic tribunal; domestic)
-enforcement (execution)
-foreign arbitral award (one made in a country other than the Philippines)
-ICA both domestic and international
>both require recognition
>award rendered in Philippines is susceptible to vacation
-jurisdiction, venue, and nature of proceedings
>vested in the RTC
>where proceedings took place
>where asset is to be attached or levied upon
>where any of the parties resides or has his place of business
>in the NCR at option of applicant
>special proceedings, summary in nature
>recognition: notice to parties at addresses in the record of arbitration or at last known
address, fifteen days before initial hearing
Grounds for Refusing and Procedure of Recognition of Convention and As-in Convention Awards
-kinds
>convention award (foreign arbitral award made in a state which is a party to the New York
Convention)
>non-convention award (foreign arbitral award made in a state which is NOT a party to the
New York Convention)
>as-in convention award (foreign arbitral award made in a state which is NOT a party to the
New York Convention but, by reason of comity and reciprocity, may be recognized and
enforced as if it is a convention award)
-grounds
>defect in agreement
>violation of due process
>lack or excess of jurisdiction on the part of the tribunal
>violation of arbitration agreement
>or if there is a finding in a court that
=dispute is not capable of settlement
=award is in conflict with public policy
-procedure
>filing of application
=file with RTC original or duly authenticated copy of award and original agreement
>confirmation
=final and executory
>consolidation / concurrent hearings
>rejection / suspension (appropriate security; may also remit award)
>appeals (counter-bond; may be waived by agreement or stipulation without prejudice to
judicial review by Rule 65)
Legal Effects
-conclusive upon title to the thing
-judgment or order is presumptive evidence of a right as between the parties and their successors
in interest by subsequent title
-PROVIDED there is no
>want of jurisdiction
>want of notice
>collusion
>fraud
>clear mistake of fact or law