1. Section 10. Qualifications of arbitrators.

- Any person appointed to serve as an arbitrator must be

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

No party shall select as an arbitrator any person to act as his champion or to advocate his cause.

If, after appointment but before or during hearing, a person appointed to serve as an arbitrator shall
discover any circumstances likely to create a presumption of bias, or which he believes might
disqualify him as an impartial arbitrator, the arbitrator shall immediately disclose such information to
the parties. Thereafter the parties may agree in writing:

(a) to waive the presumptive disqualifying circumstances; or

(b) to declare the office of such arbitrator vacant. Any such vacancy shall be filled in the
same manner as the original appointment was made.

Section 9. Appointment of additional arbitrators. - Where a submission or contract provides that two
or more arbitrators therein designated or to be thereafter appointed by the parties, may select or
appoint a person as an additional arbitrator, the selection or appointment must be in writing. Such
additional arbitrator must sit with the original arbitrators upon the hearing.

2.

3. International Arbitration

SEC. 37. Appointment of Foreign Arbitrator. - The Construction Industry Arbitration Commission
(CIAC) shall promulgate rules to allow for the appointment of a foreign arbitrator or coarbitrator or
chairman of a tribunal a person who has not been previously accredited by CIAC: Provided, That:

(a) the dispute is a construction dispute in which one party is an international party

(b) the person to be appointed agreed to abide by the arbitration rules and policies of CIAC;

(c) he/she is either coarbitrator upon the nomination of the international party; or he/she is
the common choice of the two CIAC-accredited arbitrators first appointed one of whom was
nominated by the international party; and

(d) the foreign arbitrator shall be of different nationality from the international party.

Domestic Arbitration

Section 8. Appointment of arbitrators. - If, in the contract for arbitration or in the submission
described in section two, provision is made for a method of naming or appointing an arbitrator or
arbitrators, such method shall be followed; but if no method be provided therein the Court of First
Instance shall designate an arbitrator or arbitrators.
The Court of First Instance shall appoint an arbitrator or arbitrators, as the case may be, in the
following instances:

(a) If the parties to the contract or submission are unable to agree upon a single arbitrator; or

(b) If an arbitrator appointed by the parties is unwilling or unable to serve, and his successor
has not been appointed in the manner in which he was appointed; or

(c) If either party to the contract fails or refuses to name his arbitrator within fifteen days after
receipt of the demand for arbitration; or

(d) If the arbitrators appointed by each party to the contract, or appointed by one party to the
contract and by the proper Court, shall fail to agree upon or to select the third arbitrator.

(e) The court shall, in its discretion appoint one or three arbitrators, according to the
importance of the controversy involved in any of the preceding cases in which the agreement
is silent as to the number of arbitrators.

(f) Arbitrators appointed under this section shall either accept or decline their appointments
within seven days of the receipt of their appointments. In case of declination or the failure of
an arbitrator or arbitrators to duly accept their appointments the parties or the court, as the
case may be, shall proceed to appoint a substitute or substitutes for the arbitrator or
arbitrators who decline or failed to accept his or their appointments.

Institutionalized arbitration is conducted through organized bodies such as courts of arbitration,

trade associations, and arbitration centers and institutes, each prescribing its own different
arbitration procedure. Foremost among these institutions in the Philippines is the Philippine
Dispute Resolution Center Inc. ("PDRCI").12 These institutions do not actually participate in
settling the dispute but help administer the arbitration and provide a set of rules to govern the
proceedings. For international arbitration, the popular institutional rules referred to are those of
the International Chamber of Commerce ("ICC"), the Hongkong International Arbitration Centre
("HKIAC") and the Singapore International Arbitration Centre ("SIAC").13

For ad hoc arbitration, Philippine law grants the parties the right to select an arbitrator or
arbitrators and to choose procedures to govern the proceedings, including rules of arbitration
institutions. So long as the main requirement for arbitration, namely consent, is present, the State
allows the parties to conduct the arbitration in any manner they 8 Republic Act No. 9285, Secs.
19-31. 9 Republic Act No. 9285, Sec. 42. 10 Republic Act No. 9285, Sec. 43. 5 stipulate,
provided that the arbitration process is not "contrary to law, morals, good customs, public order
or public policy."11 Institutionalized arbitration is conducted through organ

Article 10. Number of arbitrators (1) The parties are free to determine the number of arbitrators. (2)
Failing such determination, the number of arbitrators shall be three. Article 11. Appointment of
arbitrators (1) No person shall be precluded by reason of his nationality from acting as an arbitrator,
unless otherwise agreed by the parties. (2) The parties are free to agree on a procedure of appointing
the arbitrator or arbitrators, subject to the provisions of paragraphs (4) and (5) of this article. (3) Failing
such agreement, (a) in an arbitration with three arbitrators, each party shall appoint one arbitrator, and
the two arbitrators thus appointed shall appoint the third arbitrator; if a party fails to appoint the
arbitrator within thirty days of receipt of a request to do so from the other party, or if the two
arbitrators fail to agree on the third arbitrator within thirty days of their appointment, the appointment
shall be made, upon request of a party, by the court or other authority specifi ed in article 6; (b) in an
arbitration with a sole arbitrator, if the parties are unable to agree on the arbitrator, he shall be
appointed, upon request of a party, by the court or other authority specifi ed in article 6. (4) Where,
under an appointment procedure agreed upon by the parties, (a) a party fails to act as required under
such procedure, or (b) the parties, or two arbitrators, are unable to reach an agreement expected of
them under such procedure, or (c) a third party, including an institution, fails to perform any function
entrusted to it under such procedure, any party may request the court or other authority specifi ed in
article 6 to take the necessary measure, unless the agreement on the appointment procedure provides
other means for securing the appointment. (5) A decision on a matter entrusted by paragraph (3) or (4)
of this article to the court or other authority specifi ed in article 6 shall be subject to no Part One.
UNCITRAL Model Law on International Commercial Arbitration 7 appeal. The court or other authority, in
appointing an arbitrator, shall have due regard to any qualifi cations required of the arbitrator by the
agreement of the parties and to such considerations as are likely to secure the appointment of an
independent and impartial arbitrator and, in the case of a sole or third arbitrator, shall take into account
as well the advisability of appointing an arbitrator of a nationality other than those of the parties.

6. IV. Ad hoc arbitration:

Ad hoc arbitration is an arbitration which is not administered by an institution providing

arbitration facilities and it is left to the parties to determine all aspects of the arbitration like
appointment of arbitrators, manner in which appointment is made, procedure for conducting the
proceedings and for designation of rules, applicable law, procedures and administrative support.
Ad hoc arbitration is mainly governed by the provisions of Arbitration and conciliation Act 1996
('Act') and parties are free to determine the procedure.

V. Institutional arbitration:

In institutional arbitration, a specialized institution with a permanent character intervenes and

assumes the functions of aiding and administering the arbitral process, as provided by the rules
of that institution. The institution only facilitates and administers the process and the tribunal is
appointed either by the parties or the institution. Often, the contract between the parties will
contain an arbitration clause which will designate an institution as administrator by stating that
the arbitration would be conducted as per the party designated institutional rules. For
administering and facilitating the arbitration and providing secretarial services and facilities for
conducting the arbitration proceedings, the institution normally levies administrative charges on
the parties. The primary disadvantages of the institutional arbitration are:

(i) Administrative fees are imposed ad valorem and depend on the claim amount. Fees for
services and use of facilities are high in disputes over large amounts;

(ii) Pre-established rules and procedures without any flexibility for conducting the proceedings
may contribute to parties dis-satisfaction;

(iii) Parties to the arbitration may be required to comply with procedural requirements in
unrealistic time frames.
In institutional arbitration, the first issue arising for agreement of the parties is choice of the
institution appropriate for the resolution of disputes arising under the contract. Whilst making
such choice, there are various factors to be considered i.e. nature & commercial value of the
dispute, rules of the institution (as these rules differ), past record and reputation of the institution
and also that the institutional rules are in tune with the latest developments in international
commercial arbitration practice.

The advantages of institutional arbitration outweigh those of ad hoc arbitrations. Some of the
advantages are:

(i) Administrative fees for services and use of facilities are often borne by the losing parties.

(ii) Institutions provide administrative assistance in the form of a secretariat or court of

arbitration;

(iii) Maintains a panel of qualified arbitrators having expertise in different commercial sectors;

(iv) Institution can act as appointing authority of arbitrators on parties consent;

(v) Provides hearing room facilities and support services for arbitrations;

(vi) Extends assistance in encouraging reluctant parties to proceed with arbitration; and

(vii) Offers an established rules and procedure for conducting arbitration proceedings.