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ALTERNATIVE DISPUTE RESOLUTION

Professor: Atty. Catherine Guerzo

ALTERNATIVE DISPUTE RESOLUTION


ARBITRATION IN THE PHILIPPINES

CHAPTER I. INTRODUCTION

DEFINITION OF ALTERNATIVE DIPUTE RESOLUTION

Note: according to the Supreme Court:

Alternative Dispute resolution methods or ADRs provide solutions that are less time consuming, less
tedious, less confrontational and more productive of goodwill and lasting relationships (Case: LM Power
Engineering 339 SCRA 562)

"Alternative Dispute Resolution System" means any process or procedure used to resolve a dispute or
controversy, other than by adjudication of a presiding judge of a court or an officer of a government agency,
as defined in this Act, in which a neutral third party participates to assist in the resolution of issues, which
includes arbitration, mediation, conciliation, early neutral evaluation, mini-trial, or any combination thereof;
(RA 9285, Section 3(a))

FORMS OF ALTERNATIVE DISPUTE RESOLUTION

1. MEDIATION - (q) "Mediation" means a voluntary process in which a mediator, selected by the disputing
parties, facilitates communication and negotiation, and assist the parties in reaching a voluntary agreement
regarding a dispute.
2. "EARLY NEUTRAL EVALUATION OR EVALUATION OF A THIRD PERSON" means an ADR process
wherein parties and their lawyers are brought together early in a pre-trial phase to present summaries of
their cases and receive a nonbinding assessment by an experienced, neutral person, with expertise in the
subject in the substance of the dispute;
3. "MINI-TRIAL" means a structured dispute resolution method in which the merits of a case are argued
before a panel comprising senior decision makers with or without the presence of a neutral third person after
which the parties seek a negotiated settlement;
4. MEDIATION-ARBITRATION—This is a two-step dispute resolution process involving both mediation and
arbitration
5. JUDICIAL DISPUTE RESOLUTION --

ULTIMATE GOAL OF ADR (IRR OF ADR LAW OF 2004)

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


(a) To promote party autonomy in the resolution of disputes or the freedom of the parties to make
their own arrangements to resolve their disputes; (empower parties or the disputants in the
manner of resolving their disputes)
(b) To encourage and actively promote the use of Alternative Dispute Resolution (“ADR”) as an
important means to achieve speedy and impartial justice and to declog court dockets;
(c) To provide means for the use of ADR as an efficient tool and an alternative procedure for the
resolution of appropriate cases; and
(d) To enlist active private sector participation in the settlement of disputes through ADR.

Comment: ARBITRATION IS FAR BETTER THAN LITIGATION


Q: what are the drawbacks of court litigation?
A: the drawbacks are the following:
1. Cost of litigation
2. Delay
3. Animosity and lack of confidentiality
4. Question of acceptability of an adverse decision by the losing party.

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ALTERNATIVE DISPUTE RESOLUTION
Professor: Atty. Catherine Guerzo

ARBITRATION V. LITIGATION
PERCEIVED BENEFITS

ASPECTS LITIGATION ARBITRATION

Court decisions are, as a general Most arbitral awards are not subject
FINALITY rule, subject to various appeals to appeal. They may be challenged
before the court only on very limited
grounds. In any case, most court
espouse a “pro-arbitration bias”
Usually difficult. A court judgment will YES. Through various international
INTERNATIONAL be recognized in another country conventions and especially the New
RECOGNITION/ENFORCEABILITY generally by application of a bilateral York Convention, signed by some
IN FOREIGN JURISDICTIONS treaty or by virtue of rather strict 120 countries including the
rules. Philippines, a foreign arbitral award
is typically easier to enforce than a
foreign judgment.
Although national judges may be Parties can place themselves on an
NEUTRALITY impartial, they apply the language equal footing with regard to: the
and procedural rules of their country place of arbitration (in a neutral
and are often of the same nationality country); the language used; the
as one of the parties thereby giving procedural rules; the nationality of
rise to the perceived “home court” arbitrators and legal representation.
advantage.
Not all judges are specialized. For Parties may select highly specialized
SPECIALIZED COMPETENCE AND example, in patent, banking disputes, arbitrators of their choice, provided
PERSONAL FOLLOW-UP technical expertise is necessary. The they are independent. Usually, the
duration of the litigation may lead arbitrators will follow the case from
several judges hearing one case. the first day to the last.
National courts are strictly bound by Most arbitral rules allow for party
PARTY PARTICIPATION their national rules of Procedure. participation, and thus greater
Thus, procedures are dictated by the flexibility, in defining the arbitral
rules of litigation. procedures.
Procedures may be delayed and Arbitration is faster than litigation
SPEED lengthy. Party may get entangled in a especially where the right to appeal
prolonged and costly series of is not unrestricted.
appeals.
Court hearings as well as the Arbitration hearings are not public
judgments are public. Moreover, and only the parties receive copies of
under Philippine law, rules and the award, which is a great
regulation, all documents, pleadings advantage where trade secrets and
PRIVACY/CONFIDENTIALITY and pieces of evidence submitted in inventions are at stake. In addition,
courts are a matter of public record most arbitration laws provide for
and as a general rule, accessible to strict confidentiality of arbitration
the public. proceedings. Underlying provisions
in a contract containing secrecy
provisions should hold for the
arbitration procedure.
In the absence of an agreement of The dispute will be resolved in one
PREDICTABILITY the parties limiting the forum for place and not by a race to judgment
litigation party-litigants may obtain in the courts of 2 nations.
judgments in their respective national
courts, which may or may not be
consistent with one another.
Prolonged litigation and extensive Arbitration proceedings normally do
COSTS (to some extent) discovery processes drive up the not involve extensive discovery
costs of litigation. processes and trial settings. Thus,
costs are reduced somewhat.

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ALTERNATIVE DISPUTE RESOLUTION
Professor: Atty. Catherine Guerzo

DISADVANTAGES OF ARBITRATION

a. The absence of any precedents that would guide the arbitrator or the mediator since cases brought before
them are through the agreements of the parties and hence,
b. They are not bound by any previous rulings.

In other words, it is a case to case basis.

HISTORICAL ANTECEDENT OF ARBITRATION

1. SPANISH CIVIL CODE OF 1889


- it is provided that parties are empowered to submit their dispute for an arbitral decision
- case: CONDOBA V. CONDE 2 PR 445 –it speaks about arbitration and the enforceability of the
arbitration clause
2. CIVIL CODE OF 1950
- It is under article 2024 of Civil Code of 1950 which recognizes the validity of an arbitration clause which
provides that an arbitral award is final
3. ARBITRATION LAW (RA 876)
4. EXECUTIVE ORDER 1008 (Construction Industry Arbitration Law)
5. ADR ACT OF 2004 (RA 9285)

SALIENT FEATURES OF RA 9285

1. It prescribes rules on mediation;


2. It incorporates as part of the law, the model law on international Commercial Arbitration adopted by the
United National Commission on International Trade Law;
3. It makes the Model law applicable to international commercial arbitration and strengthening it thru specific
provisions of RA 9285;
4. It strengthens domestic arbitration by making specific provisions of the Model law and RA 9285 pertaining to
international commercial arbitration;
5. It designates an appointing authority with the power to designate an arbitrator for the parties in default
situations;
6. Provides a broad and uniform scope of interim or provisional relief in international commercial arbitration and
domestic arbitration;
7. Sets the basic principles in the enforcement of foreign arbitral award, whether or not they fall within the
coverage of the New York Convention.

DIFFERENT KINDS OF ARBITRATION UNDER RA 9285

1. Domestic arbitration
2. International commercial arbitration (governed by Chapter 4)
3. Individual Arbitration
4. Institutional arbitration
5. Arbitration of Construction Disputes
6. Court-referred Arbitration (provided under Section 24 of RA 9285)

DEFINITION OF ARBITRATION

"Arbitration" means a voluntary dispute resolution process (it is one of the ADRs) in which one or more
arbitrators, appointed in accordance with the agreement of the parties, or rules promulgated pursuant to this
Act, resolve a dispute by rendering an award; (RA 9285, Section 3 (d))

Arbitration is from the Latin term “arbitrario”.

Its essential concept is that a decision is rendered by a private judge who is a neutral 3rd party who utilizes
the same method of adjudication; it is also adversarial but it is only heard before an arbitrator. It is a shift
from a public judging to a private judging.

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Professor: Atty. Catherine Guerzo

DISTINCTIONS BETWEEN A JUDGE AND ARBITRATOR

ASPECTS JUDGE ARBITRATOR


APPOINTMENT He is appointed by the government; Appointed by the parties to the
he is a government official arbitration
TERM OF OFFICE Judge holds office up to 70 years old Holds office up to the termination of
the case
SALARY Government is the one who pays his (not all) salaries of the arbitrator
salary comes from the fees given by both
parties

EXCEPTIONS TO THE APPLICATION OF THE ADR LAW (Section 6, RA 9285)

SEC. 6. Exception to the Application of this Act. - The provisions of this Act shall not apply to resolution
or settlement of the following: (a) labor disputes covered by Presidential Decree No. 442, otherwise known
as the Labor Code of the Philippines, as amended and its Implementing Rules and Regulations; (b) the civil
status of persons; (c) the validity of a marriage; (d) any ground for legal separation; (e) the jurisdiction of
courts; (f) future legitime; (g) criminal liability; and (h) those which by law cannot be compromised.

COVERAGE OF ADR LAW (RA 9285)

DOMESTIC ARBITRAL AWARDS

RA 9285 covers 2 general types of arbitration taking place in the Philippines


1. Domestic Arbitration and
2. International commercial arbitration

Both refer to DOMESTIC ARBITRAL AWARDS. These are those rendered in domestic
arbitration or international commercial arbitration which are Philippine arbitral wards since they
are the result of arbitral proceedings that are held in the Philippines (the seat of arbitration is
in Philippines)

FOREIGN ARBITRAL AWARDS

In contrast to FOREIGN ARBITRAL AWARDS—these are awards rendered abroad in arbitration


proceedings that take place outside of the Philippines (the seat of arbitration is a foreign state).

These foreign arbitral awards may be:


1. Convention award or –if that foreign state is a signatory to the New York Convention for
the Enforcement of Foreign Arbitral Awards, the arbitral award is a Convention award.
The action for recognition and enforcement of the awards shall be filed with the RTC.
(RA 9285)
2. Non-convention award—if a non-convention award, on grounds of comity and reciprocity
with states not signatory to the Convention, may be enforced in the Philippines as a
convention award (section 43, RA 9285)

PERTINENT LAWS

1. RA 9285 (the ADR Law) and the Model Law, which governs international commercial arbitration and partially
to domestic arbitration;
2. RA 876 (The Arbitration law, approved on June 19, 1953) to the extent that it is not superseded by RA 9285
and the Model Law;
3. EO 1008, effective February 4, 1985;
4. Articles 2042-2046 (Arbitration), in relation to Articles 2028-2041 (Compromises) Civil Code;
5. Pertinent provisions of the Labor Code of the Philippines, rules and regulations relating to resolution of
grievances arising from interpretation and implementation of the CBA;
6. Provisions on arbitration in the Clearing House Rules and regulations of the PCHC and its Arbitration Rules
of Procedure;
7. Doctrines or law principles dealing with arbitration established by the Supreme Court;

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ALTERNATIVE DISPUTE RESOLUTION
Professor: Atty. Catherine Guerzo

8. Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention of 1958)
adhered to by the Philippines in 1965; and
9. World Bank Convention creating the International Center for the Settlement of Investment Disputes.

AREAS OF OPERATION

a. LABOR MAANGEMENT DISPUTES (check list) –


a. voluntary arbitration,
b. compulsory arbitration and
c. preventive arbitration
b. CONSTRUCTION CONTRACTS
c. CHECK CLEARING DISPUTES

AREA OF OPERATION #1:


LABOR MANAGEMENT DISPUTES
VOLUNTARY ARBITRATION

PROVISIONS

Art. 260. Grievance machinery and voluntary arbitration. The parties to a Collective Bargaining
Agreement shall include therein provisions that will ensure the mutual observance of its terms and
conditions. They shall establish a machinery for the adjustment and resolution of grievances arising from the
interpretation or implementation of their Collective Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel policies.

All grievances submitted to the grievance machinery which are not settled within seven (7) calendar days
from the date of its submission shall automatically be referred to voluntary arbitration prescribed in the
Collective Bargaining Agreement.

For this purpose, parties to a Collective Bargaining Agreement shall name and designate in advance a
Voluntary Arbitrator or panel of Voluntary Arbitrators, or include in the agreement a procedure for the
selection of such Voluntary Arbitrator or panel of Voluntary Arbitrators, preferably from the listing of qualified
Voluntary Arbitrators duly accredited by the Board. In case the parties fail to select a Voluntary Arbitrator or
panel of Voluntary Arbitrators, the Board shall designate the Voluntary Arbitrator or panel of Voluntary
Arbitrators, as may be necessary, pursuant to the selection procedure agreed upon in the Collective
Bargaining Agreement, which shall act with the same force and effect as if the Arbitrator or panel of
Arbitrators has been selected by the parties as described above.

Art. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. The Voluntary
Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all
unresolved grievances arising from the interpretation or implementation of the Collective Bargaining
Agreement and those arising from the interpretation or enforcement of company personnel policies referred
to in the immediately preceding article. Accordingly, violations of a Collective Bargaining Agreement, except
those which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved
as grievances under the Collective Bargaining Agreement. These violations used to be under the jurisdiction
of labor arbiter and tribunals but now, they are to be resolved under the CBA. For purposes of this article,
gross violations of Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply
with the economic provisions of such agreement.

The Commission, its Regional Offices and the Regional Directors of the Department of Labor and
Employment shall not entertain disputes, grievances or matters under the exclusive and original jurisdiction
of the Voluntary Arbitrator or panel of Voluntary Arbitrators and shall immediately dispose and refer the
same to the Grievance Machinery or Voluntary Arbitration provided in the Collective Bargaining Agreement

Aside from their specific jurisdiction, under…

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ALTERNATIVE DISPUTE RESOLUTION
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Art. 262. Jurisdiction over other labor disputes. The Voluntary Arbitrator or panel of Voluntary
Arbitrators, upon agreement of the parties, shall also hear and decide all other labor disputes including
unfair labor practices and bargaining deadlocks. Including disputes mentioned in 217 over which Labor
arbiter has original and exclusive jurisdiction.

Thus, both management and labor may by mutual agreement, as in their CBA, vest voluntary
arbitrators with jurisdiction over cases that without such agreement would fall within the original
and exclusive jurisdiction of the labor arbiters pursuant to Article 217 of the Labor Code, such
as UNFAIR LABOR PRACTICES AND TERMINATION DISPUTES. (see cases)

CASES
The SC held in these cases that even if the case is not under the exclusive jurisdiction of the VA under
Article 217, but if the parties agree to submit the issue to arbitration, the same will be valid and the
agreement will prevail.

SAN JOSE V. NLRC

SC laid down the following rules:


1. The jurisdiction of the Labor Arbiter and Voluntary Arbitrator or Panel of Voluntary Arbitrators
over the cases enumerated in Articles 217, 261 and 262, can possibly include money claims
in one form or another.
2. Parenthetically, the original and exclusive jurisdiction of the Labor Arbiter under Article 217 (c), for
money claims is limited only to those arising from statutes or contracts other than a Collective
Bargaining Agreement. The Voluntary Arbitrator or Panel of Voluntary Arbitrators will have original
and exclusive jurisdiction over money claims “arising from the interpretation or implementation of
the Collective Bargaining Agreement and, those arising from the interpretation or enforcement of
company personnel policies”, under Article 261.
3. Voluntary Arbitrators or Panel of Voluntary Arbitrators, however, can exercise jurisdiction over any
and all disputes between an employer and a union and/or individual worker as provided for in
Article 262 which include disputes mentioned in article 217 of the Labor code over which the Labor
Arbiter has original and exclusive jurisdiction as MAY BE AGREED UPON BY BOTH LABOR AND
MANAGEMENT

SAN MIGUEL V. NLRC

SC held that a proviso in a CBA stating that “wages, hours of work, conditions of employment and/or
employer-employee relations shall be settled by arbitration” is not sufficient to remove termination
disputes and ULP disputes from the jurisdiction of LA and transfer them to VA.

The CBA must state in unequivocal language that the parties conform to the submission of
termination disputes and unfair labor practices to voluntary arbitration.

VIVERO V. CA
G.R. No. 138938. October 24, 2000

RA 9285 does not apply to the resolution or settlement of labor disputes covered by the
Labor code

In San Miguel Corp. v. National Labor Relations Commission this Court held that the phrase "all other
labor disputes" may include termination disputes provided that the agreement between the Union and the
Company states "in unequivocal language that [the parties] conform to the submission of termination
disputes and unfair labor practices to voluntary arbitration." Ergo, it is not sufficient to merely say that parties
to the CBA agree on the principle that "all disputes" should first be submitted to a Voluntary Arbitrator. There
is a need for an express stipulation in the CBA that illegal termination disputes should be resolved by a
Voluntary Arbitrator or Panel of Voluntary Arbitrators, since the same fall within a special class of disputes
that are generally within the exclusive original jurisdiction of Labor Arbiters by express provision of
law. Absent such express stipulation, the phrase "all disputes" should be construed as limited to the areas of

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conflict traditionally within the jurisdiction of Voluntary Arbitrators, i.e., disputes relating to contract-
interpretation, contract-implementation, or interpretation or enforcement of company personnel
policies. Illegal termination disputes - not falling within any of these categories - should then be considered
as a special area of interest governed by a specific provision of law.

In this case, however, while the parties did agree to make termination disputes the proper subject of
voluntary arbitration, such submission remains discretionary upon the parties. A perusal of the CBA
provisions shows that Sec. 6, Art. XII (Grievance Procedure) of the CBA is the general agreement of the
parties to refer grievances, disputes or misunderstandings to a grievance committee, and henceforth, to a
voluntary arbitration committee.

APALISOK V. RADIO PHILIPPINE NETWORK


[G. R. No. 138094. May 29, 2003]

The parties, by mutual agreement, may refer a termination or ID dispute after it has arisen to the VA for
resolution. They can likewise, by mutual agreement, as in the CBA to refer termination or illegal dismissal
dispute before it has arisen to the VA and not to the Labor Arbiter.

QUESTION: what is the remedy of the employer if the labor Arbiter refuses to dismiss an illegal dismissal
case filed by employee against the employer under the explicit terms of their CBA should be referred to
voluntary arbitration?
ANSWER: Employer should file a motion to dismiss for lack of jurisdiction and in the event of an adverse decision by
the Labor Arbiter, raise the issue before the NLRC on appeal of the main case.

LUDO AND LUYM CORP V. SAORNIDO

Parties executed a submission agreement submitting as a sole issue to be decided by the VA the date of
regularization of the workers. The VA, not only decide the issue submitted to him for resolution but likewise
awarded the workers their monetary benefits.

HELD: The Voluntary arbitrator had the necessary power to make a final settlement since arbitration is the
final resort for the adjudication of disputes.

(be sure to make the difference of Ludo case and the case of Asset Privatization v. cA )

QUESTION: can the arbitrators in this case resolve issues not submitted to them for arbitration? This case
was decided earlier than the case of Ludo and Luym Corp.

ASSET PRIVATIZATION V. CA

In this case, the arbitrators CANNOT resolve issues beyond the scope of the submission of agreement.
However, in the later case of Ludo, it was said that the VA had the necessary power to make a final
settlement since arbitration is the final resort for the adjudication of disputes.

QUESTION: What is the effect of ADR law on the provisions of the Labor Code on Voluntary Arbitration?
ANSWER: the provisions of the ADR law of 2004 DID NOT AMEND the provisions of the labor code on grievance
machinery and procedure and on arbitration. In fact, the ADR law expressly excluded Labor relations dispute from its
application (section 6, RA 9285)

SUMMARY:
Where a labor dispute is clearly within the jurisdiction of the VA as when the parties have agreed to refer such matter
for VA and the case is filed before the LA who refuses to dismiss the case despite his lack of jurisdiction, the party
contesting the LA’s jurisdiction CANNOT file a petition for certiorari before the NLRC. The conservative remedy in this
regard is for the aggrieved party to:
1. Raise the issue of lack of jurisdiction in the preliminary conference and its position paper;
2. Await the decision of the LA on the merits of the case and
3. In the event of an adverse ruling on this issue, appeal the decision and raise the lack of jurisdiction in its
appeal to the NLRC.

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Professor: Atty. Catherine Guerzo

WHERE A LABOR DISPUTE IS CLEARLY WITHIN THE JURISDICTION OF:

A. COMPULSORY ARBITRATION

Basis: Article 263 (g) of the Labor Code:


When, in his opinion, there exists a labor dispute causing or likely to cause a strike or
lockout in an industry indispensable to the national interest, the Secretary of Labor and
Employment may assume jurisdiction over the dispute and decide it or certify the same to
the Commission for compulsory arbitration.

B. PREVENTIVE MEDIATION

Basis: Article 263 and Rule 22 of the Omnibus Rules implementing the Labor code.

The remedy of Preventive mediation can be availed through the NCMB (national
Conciliation and Mediation board)
Case: SAN MIGUEL V. NLRC 403 S 418 – among the procedural requirements for a valid
strike is the filing of a NOTICE OF STRIKE with the NCMB. This notice requirement, the
absence of which, makes the strike illegal; that is, for encouraging voluntary settlement of
disputes.

C. EMPLOYMENT DISPUTES IN PRIVATE SCHOOLS

Basis: BP 232 or “The Education Act of 1982”

AREA OF OPERATION #2:


CONSTRUCTION CONTRACTS
Pertinent Law: EO NO. 1008; section 35 RA 9285 Chapter 6, section 17 RA 92855, section 39 of RA 9285

SEC. 34. Arbitration of Construction Disputes: Governing Law. - The arbitration of construction disputes
shall be governed by Executive Order No. 1008, otherwise known as the Constitution Industry Arbitration
Law.

SEC. 35. Coverage of the Law. - Construction disputes which fall within the original and exclusive
jurisdiction of the Construction Industry Arbitration Commission (the "Commission") shall include those
between or among parties to, or who are otherwise bound by, an arbitration agreement, directly or by
reference whether such parties are project owner, contractor, subcontractor, quantity surveyor, bondsman or
issuer of an insurance policy in a construction project.

The Commission shall continue to exercise original and exclusive jurisdiction over construction disputes
although the arbitration is "commercial" pursuant to Section 21 of this Act.

EO 1008, Sec. 4. Jurisdiction. The CIAC shall have original and exclusive jurisdiction over disputes
arising from, or connected with, contracts entered into by parties involved in construction in the
Philippines, whether the dispute arises before or after the completion of the contract, or after the
abandonment or breach thereof. These disputes may involve government or private contracts. For the
Board to acquire jurisdiction, the parties to a dispute must agree to submit the same to voluntary arbitration.

The jurisdiction of the CIAC may include but is not limited to violation of specifications for materials and
workmanship; violation of the terms of agreement; interpretation and/or application of contractual time and
delays; maintenance and defects; payment, default of employer or contractor and changes in contract cost.

Excluded from the coverage of this law are disputes arising from employer-employee relationships which
shall continue to be covered by the Labor Code of the Philippines.

Question; can construction disputes be settled through other modes of settling disputes? Aside
from arbitration? Remember, it is a contract.

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Answer: YES. It can be settled through other modes of settling disputes. The same can be settled through
MEDIATION. (Basis: section 17 (d) RA 9285)

QUESTION: Is the jurisdiction of the CIAC involve only private contracts and private entities.
Answer: NO, it can also involve the government. (Basis: section 4, EO 1008)

TAKE NOTE: If the parties to a construction contract that is to be performed in the Philippines PI enter into
an arbitration agreement, all disputes arising from or connected to will be resolved through or before the
CIAC, that is expressly provided under section 39 of RA 9285. Basta ang seat of arbitration is in the
PHILIPPINES.

Q: what is the condition before the CIAC can take or can acquire jurisdiction over a construction
dispute? What is the condition sine qua on for the CIA to acquire jurisdiction over the same?
A: For the Board to acquire jurisdiction, the parties to a dispute must agree to submit the same to voluntary
arbitration. Such agreement may come in the form of submission agreement or an arbitration clause.

Q: what is the distinction between a submission agreement and an arbitration clause?


A: submission agreement or submission to arbitrate is an agreement referring a present dispute to
arbitration whereas an arbitration clause referring FUTURE disputes to arbitration.

Under RA 9285, SECTION 35 paragraph 1-this expands the original and exclusive jurisdiction of
the CIAC to include disputes arising under the construction contract not only between or among
parties to, or who are otherwise bound by, an arbitration agreement, directly or by reference
whether such parties are project owner, contractor, subcontractor, quantity surveyor, bondsman or
issuer of an insurance policy in a construction project.

Q: What are the CONSTRUCTION ISSUES/DISPUTES that may be submitted to the CIAC for
arbitration?
A: The jurisdiction of the CIAC may include but is not limited to:
1. Violation of specifications for materials and workmanship; (not included in maam’s summary)
2. violation of the terms of agreement;
3. interpretation and/or application of contractual provisions, amount of damages and penalties,
commencement time and delays;
4. maintenance and defects;
5. payment, default of employer or contractor and
6. Changes in contract cost. (section 4, EO 1008)

The accredited arbitrators before the CIAC are either lawyers or non-lawyers. These
arbitrators include lawyers, architects and engineers.

SECTION 17 (d) RA 9285 recognizes that: parties to a dispute arising from contracts for
construction in the Philippines, whether or not they have previously agreed to settle their dispute
through or by arbitration, may nevertheless settle their dispute thru MEDIATION.

HOW? (d) The parties may agree in the settlement agreement that the mediator shall
become a sole arbitrator for the dispute and shall treat the settlement agreement as an
arbitral award which shall be subject to enforcement under Republic Act No. 876,
otherwise known as the Arbitration Law, notwithstanding the provisions of Executive Order
No. 1008 for mediated dispute outside of the CIAC.

(insert comment on LA transcript page 8)

The general rule under section 39 of RA 9285 is for the court to dismiss the case involving ua construction
dispute, unless, the parties shall submit, assisted by their respective counsel the same to the RTC, a written
agreement for the RTC to hear and decide the dispute instead of the Commission.

This was the ruling of the SC in the case of…

CHINA JANG ENERGY CORP V. ROSAL INFRASTUCTURE BUILDERS and NIA V. CA.

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In this case of CHINA CHANG, a dispute arose between parties to ac construction contract under which
they agreed to refer their case to arbitration before the international chamber commerce. When a dispute
arose between Rosal and China, Rosal here filed complaint to the CIAC. China here questioned because
they have an agreement that the same must be heard first before the international chamber of commerce.

HELD: What the law merely requires for a particular construction contract to fall within the jurisdiction of
CIAC is for the parties to agree to submit the same to voluntary arbitration. Unlike in the original version of
Section 1, as applied in the Tesco case, the law does not mention that the parties should agree to submit
disputes arising from their agreement specifically to the CIAC for the latter to acquire jurisdiction over such
disputes. Rather, it is plain and clear that as long as the parties agree to submit to voluntary arbitration,
regardless of what forum they may choose, their agreement will fall within the jurisdiction of the CIAC, such
that, even if they specially choose another forum, the parties will not be precluded from electing to submit
their dispute before the CIAC because this right has been vested upon each party by law, i.e., E.O. No.
1008.

SUMMARY: THE SC SHOULD RECONSIDER ITS RULIGN IN CHINA CHIANG. There is no


justification for giving any party to a construction contract the right to compel the other party to
arbitrate before the CIAC when their agreement calls for arbitration before another forum such as
International Chamber of commerce. Any such right or compulsion, removes the element of
mutuality in arbitration agreements. Arbitration is a creation of contract between parties who wish to
have their differences settled in the specific manner they have agreed upon. Hence, if the parties
agree on forum other than the CIAC, this agreement should be uphold parties should be given the
fullest freedom to choose ht forum for settling their differences.

Case: NATIONAL IRRIGATION ADMINISTRATION V. CA –same ruling as china Chang

SAME ruling. (insert notes from old transcription)

Principle under China and National irrigation: as long as a construction contract contains an arbitration
clause, any party thereto has the right to compel the other to arbitration before the CIASC, even if the
other party objects to the CIAC’s jurisdiction because their arbitration agreement calls for arbitration
before another forum.
Rule: basta pag construction dispute, CIAC xa. If the complaint was filed in the RTC, the case must be
DISMISSED.

Notes from old transcript:


So under E.O. 1008 ang jurisdiction to arbitrate construction disputes is before CIAC. Now, under R.A.
9285, it is provided that even if the case is properly within the jurisdiction of the CIAC, the parties may
nevertheless by written agreement ask the RTC to decide the case rather than refer it to CIAC or
dismiss it.

So which will prevail? Because you can see under R.A. 9285 it recognizes the mutuality of contracts
(parties agree) pero under E.O. 1008 it is said that exclusive jurisdiction kapag construction contract.

So remember this principle: Jurisdiction is conferred by law. Dili pwede na ang parties ang magbana-
bana.

Q: How will we reconcile the two provisions?


A: The general rule is that CIAC has jurisdiction over all construction dispute and any agreement to
arbitrate a construction dispute before a forum other than the CIAC is rendered ineffective. This was the
ruling of the SC in the case of China Chang Jiang Energy Corp. vs Rosal Infrastructure Builders
Gr. No. 125706, September 30, 1996 and National Irrigation Administration vs. CA 318 SCRA 255 –
same ruling as China Chang

Case: China Jiang Energy Corp. vs. Rosal Infrastructure Builders

Summary: The SC should reconsider its ruling in China Jiang. There is no justification for giving any party to a
construction contract the right to compel the other party to arbitrate before the CIAC when their agreement calls for
arbitration before another forum such as International Chamber of Commerce. Any such right or compulsion,
removes the element of mutuality in arbitration agreements. Arbitration is a creation of contract between parties who
wish to have their differences settled in the specific manner they have agreed upon. Hence, if the parties agree on

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forum other than the CIAC, this agreement should be upheld. Parties should be given the fullest freedom to choose
the forum for setting their differences.

Unless the construction dispute is filed in RTC and before the pre-trial stage of parties to the arbitration
assisted by their counsels submit to the court a written agreement made in the court or the body that
would exclusively resolve the disputes. This exception is provided under R.A. 9285 and further
explained by the special rules on ADR (the copy Ma’am gave) or A.M. 07-...issued by the SC. So you
have to connect. That is the interpretation. Pwede siya sa RTC but the agreement must be made before
the pre-trial stage. Why? Because after the pre-trial stage, the judge will issue a pre-trial order and the
pre-trial order will govern the trial stage. So cut-off na yung rights ng mga parties.

TN: Case of China and National Irrigation, yan silang dalawa, general rule.
TN: Of the exception under R.A. 9285 and further stated in the A.M…. of the SC.

Principle under China and National Irrigation: As long as a construction contract contains an arbitration clause,
any party thereto has the right to compel the other to arbitration before the CIAC, even if the other party objects to the
CIAC’s jurisdiction because their arbitration agreement calls for arbitration before another forum.

It is also provided that R.A. 9285, it treats any arbitration involving dispute arising under a contract for
construction in the Philippines as a domestic arbitration subject to the jurisdiction of the CIAC even if
one of the parties is a foreign entity or in the language of the law, an “international party”. In large
construction projects, the contractor may be a foreign entity.

QUESTION: for example a construction contract was entered into in the Philippines but involved a party who
is a foreign entity. There is a construction dispute. Will the CIAC take over or acquire jurisdiction over the
dispute?
A: YES. CIAC will still have jurisdiction even if 1 of the parties to a construction contract is a foreign entity or an
international party.

RA 9285 treats any arbitration involving dispute arising under a contract for construction in the Philippines as
a domestic arbitration subject to the jurisdiction of the CIAC even if one of the parties is a foreign entity or in
the language of the law, an “international party”. in large construction projects, the contractor may be a
foreign entity.

Under the Model law, this is regarded as an international arbitration:


1. Where the parties have a place of business in different states (or contending parties have
different nationalities) or
2. Where the place or af arbitration is determined in or pursuant to the arbitration agreement is
not int eh State where th parties have their places of business. However, this is treated by RA
9285 as domestic arbitration subject to the jurisdiction of the CIAC.

An arbitral award need not be confirmed by the courts for it to be executory. (EO 1008)
What is your remedy then? As soon as a decision ordering to award has become F/E, the arbitral tribunal or
single arbitrator with concurrence of the CIAC shall motu proprio or on motion of any interest party issue a
writ of execution.
Arbitral awards are FINAL and also NOT APPEALABLE except on question of law facts of mixed question of
law and facts before the CA. (rule 43, section 1)
One of the peculiarities of the proceedings before the CIAC as distinguished from proceedings before the
regular courts is that it is the parties who are notified of the text of the CIAC decision and not the counsel of
record of the parties (PHILIPPINE COMMERCIAL INTERNATIONAL BANK V. CA 404 S 442)
Arbitration before the commission is held in private and pleadings there are strictly confidential. The arbitral
awards are not published except that the CIAC itself publishes a bulletin that includes abstracts of cases it
has decided.
o Case: Metro Construction v. Chatham Properties 365 S 697
o Case: Hi-Precision Steel v. Lim Kim Steel builders 228 S 397

What is the effect of the ADR law on EO 1008?


Ra 9285 did not repeal the construction arbitration law!
(METRO CONSTRUCTION V. CHATHAM and HI-PRECISION STEEL V. LIM KIM)

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AREA OPERATION #3:


CHECK CLEARING DISPUTES
This is an institutional arbitration and it is the ARBICOM who is the body that hears these kinds of disputes.

PCHC was organized ON May 19, 1977 principally to provide a means of clearing checks and other items
pursuant Section 102, the New Central Bank Act, RA7653
Membership in the PCHC is open to banking institutions authorized to operate by the BSP.
The Clearing House Rules and Regulations (CHRR) lays down the basic understanding and agreement by
and amount participants to the clearing operations of the PCHC.
PROCEDURE:
1. Any dispute or controversy between 2 or more clearing participants involving any check or item cleared
thru the PCHC shall be submitted to the Arbitration committee (ARBICOM) thru a written complaint of
any participant in the controversy.
2. Five copies of complaint shall be filed with the ARBICOM copy furnished respondent who shall have 30
non-extendible days to file answer.
3. Upon filing of complaint by a member, the PCHC shall create an ARBICOM consisting of 4 members, 3
of whom are incumbent or retired Senior Officers of participating banks not involved in the dispute and a
4th member who shall be an attorney-at-law with at least 5 years experience as a bank lawyer without
any previous of present relation with any of the participating banks involved and who shall only have
advisory function without any right to vote. (CHRR, Section 36.3, par. 1)
4. The presence of at least the Chairman of the ARBICOM or any other member shall be sufficient to
constitute a quorum for the purpose of conducting any conferences or hearings or trials before the
ARBICOM but the vote of any 2 members of the ARBICOM shall be necessary to render and
promulgate any order, resolution, award or decision of the case presented for arbitration except that in
cases involving a principal amount of 300K or less, the arbitration proceedings shall be heard by a sole
arbitrator and his vote shall be sufficient to render and promulgate any order, resolution, award or
decision in the case.
5. If a formal hearing is required, the sole arbitrator or ARBICOM shall ask clarificatory questions of the
witnesses.
6. The hearing shall not last more than 30 days after which the parties shall have a non-extendible period
of 30 days to file their respective memoranda.
7. The decision of the sole arbitrator or ARBICOM shall be made within 45 days from submission of the
parties respective memoranda.
8. If a formal hearing is not required, the sole arbitrator or ARBICOM may either decide the case on the
basis of the affidavits and documents submitted by the parties at the preliminary conference.
9. The case shall be decided within 45 days from preliminary conference or submission of parties’
memoranda.
10. Within a non-extendible period of 15 days after receipt of the decision, a party not satisfied with the
decision may file an MR and the other party may also file its opposition within 15 days.
11. After lapse of the 15 day period, the motion shall be resolved by majority vote of the PCHC board.
12. The decision made by the sole arbitrator or ARBICOM or resolution of the MR, slall be EXECUTORY
WITHOUT THE NECESSITY OF JUDICIAL CONFIRMATION OF THE AWARD.
13. Such executory decision shall be sufficient basis for the automatic debit of the amount awarded therein
from the clearing account of the losing party and the crediting thereof to the clearing account of the
prevailing party even if the losing party files a petition for review (appeal) on questions of law before the
RTC in the National Capital Judicial Region where the Head Office of any of the parties is located.

ISSUES RAISED IN CASES THAT HAVE REACHED THE ARBICOM OF THE PCHC
1. Forged indorsement of checks
2. Return of checks beyond 24 hour reglementary period
3. Unlawful negotiation of cashier’s checks
4. Materially altered checks
5. Return of cashier’s checks due to forged indorsements
6. Spurious demand drafts and cashier’s checks.

Case: Banco de Oro v. Equitable Banking Corporation 157 S 188


Case: associated Bank v. CA 233 S 137

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CHAPTER II
ARBITRATION AS A CONTRACT
QUESTIONS:
1. What are the essential elements of a contract? Consent, object and consideration. Without these elements,
there is no contract to speak of.
2. It is said that Arbitration is deemed as a contract because there is a meeting of the minds between the
parties to submit their any or all of their disputes to arbitration, thus the very agreement is the contract itself.
Why is arbitration agreement deemed a separate agreement from the main contract? Take note that the
arbitration agreement itself is deemed a contract. Why is that so? It is because of th principle of
SEPARABILITY OF THE ARBITRATION CLAUSE which means that the said clause shall be treated as an
agreement independent of the term s of the contract of which it forms part. Thus, a decision that a contract is
null and void shall not entail ipso jure the invalidity of the arbitration clause.
3. What is the importance of arbitration clause in contracts? It is for CONVENIENCE.

Basically, there are 2 types of arbitration we have here in the Philippines.

1. KINDS OF ARBITRATON

a. Domestic arbitration –Section 32, RA 9285; governed by sections 22 to 31 of Chapter 4 and


Section 32 and 33 of Chapter 5
b. International Commercial Arbitration—involves dispute arising fro a ‘commercial’ relationship
that possesses any of the characteristics that make it ‘international’ under articles 1 (3) of the
Model Law; governed by UNCITRAL Model Law (ADR Law, Section 190, ADR Law Chapter 4
Sections 19-31, ADR Law, Chapter 7 Sections 42-45 and 47-48)

Comparison of Domestic Arbitration and International Commercial Arbitration:


Both take place and give rise to awards rendered in the Philippines
Both arbitrations give rise to domestic or Philippine Arbitral awards

Contrast between Domestic Arbitration and International Commercial Arbitration


As to definition—an arbitration that is not international where the proceedings are held and
where the award is rendered or the seat of arbitration is in the Philippines; the latter is an
arbitration where the proceedings are held and the award is rendered in the Philippines
but involves a dispute arising from a commercial relationship that possesses any of the
characteristics that make it international.
Distinct rules for the enforcement of arbitral awards under RA 9285

WHEN IS ARBITRATION ‘INTERNATIONAL’? (Article 1 (3) of the Model Law)


a. If the parties to an arbitration agreement have, at the time of the conclusion of that agreement,
their place of business in different States; or
b. Where either the place of arbitration as determined under that agreement or the place where a
substantial part of the obligations of the commercial relationship is to be performed or with
which the subject matter of the dispute is most closely connected, is situated outside of the
State where the parties have their places of business; or
c. The parties have expressly agreed that the subject matter of the arbitration agreement relates
to more than one country.

WHEN IS ARBITRATION ‘COMMERCIAL’ UNDER SECTON 21 OF RA 9285? If it involves matters arising


from all relationships of a commercial nature, whether contractual or not. These ‘commercial’ relationships
include, but are not limited to the following:
a. Any trade transaction for the supply or exchange of goods or services;
b. Distribution agreements;
c. Construction of works;
d. Commercial representation or agency;
e. Factoring;
f. Leasing;
g. Consulting;
h. Engineering;
i. Investment;

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j. Financing;
k. Banking;
l. Insurance;
m. Joint venture and other forms of industrial or business cooperation;
n. Carriage of goods by air, sea, rail or road.

WHEN IS ARBITRATION AD HOC? Where the parties to the arbitration choose to adopt whatever rules of
procedure they may deem appropriate without having their arbitration conducted under the auspices of any
arbitration body.

In contrast to an Institutional Arbitration..

WHEN IS ARBITRATION INSTITUTIONAL? One which contemplates arbitration under the auspices of a
body, whether domestic or international, under which the arbitration proceedings are conducted.

So for example, if the arbitration is to be conducted before the CIAC (ung mga construction disputes) or mga
labor disputes before the NCMB, un sila ang mga institutional arbitration.

Question: So what is the rule if the international arbitration is to be conducted in the Philippines?
Remember: the SAME RULE APPLIES with regard to DOMESTIC ARBITRATION.

RULE IF INTERNATIONAL ARBITRATION IS CONDUCTED IN THE PHILIPPIINES Validity of the


arbitration agreement is to be determined under the law agreed upon by the parties to the agreement.

TAKE NOTE: the said law which governs the arbitration agreement NEED NOT BE THE SAME with the law
governing the main contract!

In the absence of the law agreed upon, the validity of arbitration agreement is to be determined under the
Philippine Law (Article 34 (2) (a) (i))

2. FORM AND CONTENT

Q: WHAT ARE THE CONDITIONS FOR THE ARBITRATION TO PROCEED?


A: the conditions for arbitration to proceed are as follows: there must be:
i. a valid and enforceable arbitration agreement in the contract for future disputes (in other
words, that is the arbitration clause)
ii. There must be a submission agreement for the arbitration of a present dispute or
iii. a submission to arbitration.

Submission Agreement where the parties to an arbitration agreement refer to arbitration an


existing controversy between them.
Arbitration Clause parties refer to arbitration any dispute that may later on arise between them;
Arbitration agreement= submission agreement or arbitration clause

Case: Heirs of Augusto Salas v. Laperal Realty 329 S 610


Mutuality of Contracts, Civil code article 1308

Q: What is that FREEDOM OF CONTRACT PRINCIPLE?


A: under the general principles of OBLICON, this is otherwise known as ‘autonomy of parties to a
contract” where the parties to a contract are free to establish such stipulations, clause, terms,
conditions as they may deem convenient provided that they are not contrary to law, morals, good
customs, public order or public policy.

Q: what is the ruling of the SC in the case of HEIRS OF AUGUSTO SALAS V. LAPERAL
REALTY (329 SCRA 610)
A: A submission to arbitration is a contract; as such, the Agreement containing the stipulation on
arbitration binds the parties thereto, their assigns and heirs. That is otherwise known as Mutuality
of contracts principle which means that the essential equality of the contracting parties that the
contract must bind contracting parties, its validity or compliance cannot be left to the will of one of
them. Thus, under the principle of mutuality of contracts, both contracting parties, not just one of

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them, have the right to compel the other to refer the dispute to arbitration. If the right to refer their
dispute to arbitration is given only to one of the contracting parties, the agreement to arbitrate is
VOID for lack of mutuality.

Relate the said principle of mutuality to Rule 2.2 of the Special ADR Rules:
Rule 2.2. Policy on arbitration.—(A) Where the parties have agreed to submit their
dispute to arbitration, courts shall refer the parties to arbitration pursuant to Republic Act
No. 9285 bearing in mind that such arbitration agreement is the law between the parties
and that they are expected to abide by it in good faith. Further, the courts shall not refuse
to refer parties to arbitration for reasons including, but not limited to, the following:
a. The referral tends to oust a court of its jurisdiction;
b. The court is in a better position to resolve the dispute subject of arbitration;
c. The referral would result in multiplicity of suits;
d. The arbitration proceeding has not commenced;
e. The place of arbitration is in a foreign country;
f. One or more of the issues are legal and one or more of the arbitrators are not
lawyers;
g. One or more of the arbitrators are not Philippine nationals; or
h. One or more of the arbitrators are alleged not to possess the required qualification
under the arbitration agreement or law.

Q: Does an arbitration agreement required to be in a particular form?


A: under the law, it must be in WRITING. Before, it should be in writing and must be subscribed by
parties thereto. (BF CONSTRUCTION V. CA) but now, the law only requires that said arbitration
agreement be in WRITING.

Form as required under Model law Article 7 (2)? must be in WRITING and SUBSCRIBED BY THE
PARTIES THERETO (BF Construction v. CA, 288 S 267)

Q: So does it mean that an Arbitration Agreement CANNOT be entered into verbally?


A: YES. It must be in writing and under the Rules on Evidence, it must abide by the rules on Parol
Evidence. IT SHOULD BE IN WRITING!

The Model Law only requires that the arbitration agreement be in “writing”. An agreement satisfies
this requirement:
o The arbitration agreement may be made thru an exchange of letter or thru fax or by
reference to general printed conditions which contain an arbitration clause that are
actually appended to the contract or by a mere statement of incorporation in a contract of
the terms of another document like charter party”
o Case: BF Construction v. CA 288 S 267
o Case: Dauden-Hernaez v. de los Angeles 27 S 1276

The AGREEMENT TO ARBITRATE may be:


1. Express when a party signs an agreement containing an arbitration clause or
enters into a submission agreement
2. Implied when a party enter into an agreement that incorporates by reference an
arbitration agreement.

Example of arbitration clause:


“Any dispute, controversy or claim arising out of or in connection with this contract, its
interpretation, or the existence, breach, termination or invalidity thereof, shall be finally settled
by arbitration in___, Philippines, in accordance with the (ICC or UNCITRAL rules) presently in
force at the time of this contract, which Rules are deemed to be incorporated herein by
reference”.

3. PARTIES TO AN ARBITRATION AGREEMENT

CAPACITY TO CONTRACT—determined by the law on contracts;


iv. Capacity to contract of the State and its Instrumentalities state may resort to
arbitration to settle its disputes with Private parties (case: Gascon v. Arroyo)

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Rule: subject to sections 57 to 65 of the Administrative code of 1987


v. PARTIES—only binds the parties thereto as well as their assigns and heirs (Case: Heirs
of Augusto Salas v. Laperal Realty)

1st principle: CAPACITY TO CONTRACT IS TO BE DETERMINED


BY THE LAW ON CONTRACTS

Q: what is JURIDICAL CAPACITY?


A: Juridical capacity is the fitness to be subject of legal relations.

Q: What is CAPACITY TO ACT?


A: capacity to act is the power to do act with legal effect or that which produces legal effect.

Q: what may be restricted? Juridical capacity or capacity to act?


A: CAPACITY TO ACT. What are the restrictions? i.e. Minority, insanity, imbecility or if the person
is under civil interdiction.

NOTE: in relation to an arbitration agreement, remember it is a contract, so the general principles


of OBLICON will still apply.

CAPACITY TO CONTRACT:
1. Of a Filipino national—the same is determined by the law on contracts
2. Of a foreigner national-- it is to be determined by the laws of the country or his
nationality (Article 50 of the Civil Code)

Q: What if one of the parties is an infant or a minor? Does this mean that a controversy
cannot be arbitrated?
A: The general rule is that it CANNOT BE ARBITRATED; (Exception) UNLESS the court having
jurisdiction approve a petition for permission to submit such controversy to arbitration which is
made by his guardian.

2nd principle: THE CAPACITY TO CONTRACT OF THE STATE AND


ITS INSTRUMENTALITIES

GASCON V. ARROYO—the state may resort to arbitration to settle its disputes with private parties
but it is subject to sections 57-65 of the Admin Code of 1987.

SALAS V. LAPERAL— Earlier, we said that there is that principle which is known as the
RELATIVITY OF CONTRACT which means that the contract only binds the parties, their assigns
and heirs (Salas v. Laperal)

RULING: In this case, SC said that rescission under 1380 of civil code is not a ground to annul the
Arbitration agreement but rather a matter that is to be resolved thru arbitration. under the facts of
the case, the issue of rescission cannot be settled through AA because 3rd parties are involved
who are not bound by the AA. Such parties must be impleaded in the suit of the Salas heirs to
cancel the LRC sales of lots to the lot buyers. Thus, the complaint of the Salas heirs can only be
fully and completely settled thru an ordinary civil action involving such lot buyers who are ultimately
the real parties in interest.

QUESTION: we have mentioned that a contract only binds the parties, their assigns and
heirs. For example, a civil case is filed in court which involves multiple parties. Some of the
parties to the case agreed to arbitrate while others did not agree to arbitrate. What will
happen?

Answer: SECTION 25, RA 9285 (cases involving multiple parties) under the said rule, if one or
more of whom are parties to an arbitration agreement, the court shall refer to arbitration those
parties who are bound by the arbitration agreement although the civil action may continue as to
those who are not bound by such arbitration agreement.

That is is relation to rule 4.7 of the Special ADR rules.

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Rule 4.7. Multiple actions and parties.—The court shall not decline to refer some or all of the
parties to arbitration for any of the following reasons:
a. Not all of the disputes subject of the civil action may be referred to arbitration;
b. 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. The issues raised in the civil action could be speedily and efficiently resolved in its
entirety by the court rather than in arbitration;
d. Referral to arbitration does not appear to be the most prudent action; or
e. The stay of the action would prejudice the rights of the parties to the civil action who
are not bound by the arbitration agreement.

The court may, however, issue an order directing the inclusion in arbitration of those
parties who are not bound by the arbitration agreement but who agree to such
inclusion provided those originally bound by it do not object to their inclusion.

SECTION 35, RA 9285 (construction contracts to be performed in the Philippines)


Case: Del Monte v. CA 351 S 373 VS. Toyota Motor Philippines v. CA 216 S 236

DEL MONTE V. CA—The agreement to arbitrate maybe affected by subsequent


events that ay prevent the non-application of the AA if other parties who are not privity
to or bound by the AA and who must be included in the suit so that a complete
resolution of the dispute is possible. The court further ruled that the case cannot be
speedily and efficiently resolved in its entirety if both arbitration and trial were to be
simultaneously conducted or if trial were to be suspended pending arbitration.

Q: So what will come first? Arbitration or court action?


A: ARBITRATION. Arbitration precludes court action

Q: If arbitration precludes court action, is there any judicial relief prior commencement of
arbitration? Wala ka na ba talagang remedy or arbitration talaga muna tayo before court
action?
A: There can be a judicial relief prior commencement of arbitration .under the law; you can file
a petition to question the existence, validity or enforceability of the arbitration agreement. Ang
action jan is to PETIITON FOR JUDICIAL DETERMINATION OF THE EXISTENCE, VALIDITY or
ENFORCEABILITY OF THE ABITRATION AGREEMENT. It can be filed by any party to an
agreement and notwithstanding the pendency of the petition, arbitration proceeding may
nevertheless commence and continue up to the rendition of an award. So there can be a judicial
relief prior commencement of arbitration proceedings. The finding by the court of the said action is
merely PRIMA FACIE and will not prejudice the right of any party to raise the issue of existence,
validity and enforceability of the AA before the arbitral tribunal.

Case: Agan v. Philippine International Ai Terminals 402 S 612

PART II
SPECIFIC COURT RELIEF
RULE 3: JUDICIAL RELIEF INVOLVING THE ISSUE OF EXISTENCE, VALIDITY
AND ENFORCEABILITY OF THE ARBITRATION AGREEMENT

Rule 3.1. When judicial relief is available.--The judicial relief provided in Rule 3, whether resorted to
before or after commencement of arbitration, shall apply only when the place of arbitration is in the
Philippines.

A. Judicial Relief before Commencement of Arbitration

Rule 3.2. Who may file petition.—Any party to an arbitration agreement may petition the
appropriate court to determine any question concerning the existence, validity and enforceability of
such arbitration agreement serving a copy thereof on the respondent in accordance with Rule 1.4
(A).

Rule 3.3. When the petition may be filed.—The petition for judicial determination of the existence,

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validity and/or enforceability of an arbitration agreement may be filed at any time prior to the
commencement of arbitration.

Despite the pendency of the petition provided herein, arbitral proceedings may nevertheless be
commenced and continue to the rendition of an award, while the issue is pending before the court.

Rule 3.4. Venue.—A petition questioning the existence, validity and enforceability of an arbitration
agreement may be filed before the Regional Trial Court of the place where any of the petitioners or
respondents has his principal place of business or residence.

Rule 3.5. Grounds.—A petition may be granted only if it is shown that the arbitration agreement is,
under the applicable law, invalid, void, unenforceable or inexistent.

Rule 3.6. Contents of petition.—The verified petition shall state the following:
a. The facts showing that the persons named as petitioner or respondent have legal capacity
to sue or be sued;
b. The nature and substance of the dispute between the parties;
c. The grounds and the circumstances relied upon by the petitioner to establish his position;
and
d. The relief/s sought.

Apart from other submissions, the petitioner must attach to the petition an authentic copy of the
arbitration agreement.

Rule 3.7. Comment/Opposition.—The comment/opposition of the respondent must be filed within


fifteen (15) days from service of the petition.

Rule 3.8. Court action.—In resolving the petition, the court must exercise judicial restraint in
accordance with the policy set forth in Rule 2.4, deferring to the competence or jurisdiction of the
arbitral tribunal to rule on its competence or jurisdiction.

Rule 3.9. No forum shopping.—A petition for judicial relief under this Rule may not be commenced
when the existence, validity or enforceability of an arbitration agreement has been raised as one of
the issues in a prior action before the same or another court.

Rule 3.10. Application for interim relief.—If the petitioner also applies for an interim measure of
protection, he must also comply with the requirements of the Special ADR Rules for the application
for an interim measure of protection.

Rule 3.11. Relief against court action.—Where there is a prima facie determination upholding the
arbitration agreement.—A prima facie determination by the court upholding the existence, validity
or enforceability of an arbitration agreement shall not be subject to a motion for reconsideration,
appeal or certiorari.

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

4. SUBJECT MATTER OF ARBITRAITON


What cannot be arbitrated:
i. Civil status of persons
ii. Validity of a marriage or a legal separation
iii. Any ground for legal separation
iv. Jurisdiction of courts
v. Criminal liability
vi. Those which by law cannot be compromised

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vii. Section 6, RA 9285

3rd principle: COURTS CANNOT CREATE CONTRACTS


COURTS CANNOT CREATE CONTRACTS—Case: ESCANO V. CA , 100 S 197
i. Article 1315 of the Civil Code , parties to a contract are bound not only to the fulfillment of
what has been expressly stipulated between them but also to all the consequences which
according to their nature may in keeping with good faith, usage and law

The area of agreement between the parties must extend to all points that the parties
consider essential otherwise, there is no contract to speak of. Thus, in relation to that,
such submission or contract to arbitrate may include questions arising out of the
valuations, appraisals or other controversies which may be collateral, incidental,
precedent or subsequent to the issues between the parties (remember the previous cases
on labor. If the cases are submitted to VA, the VA can rule on an issue even if not raised
before him so that it can put an end to a controversy. So it is the same principle.)

SCOPE OF AUTHROITY
i. International commercial arbitration –arbitral tribunal has the power to “rule on its own
jurisdiction, including any objections with respect to the existence or validity of the
arbitration agreement. ‘
ii. Domestic arbitration—an arbitrator has “plenary jurisdiction and authority” not only to
interpret the agreement to arbitrate but also the “scope of his own authority”
1. Case: Sime Darby v. Magsalin 180S177

PRINCIPLE OF SEPARABILITY
i. GENERAL PREMISE: Arbitral agreement is independent from the main contract
(Model Law, Article 16 (1); applies in international commercial arbitration; the same is also
found under the Special ADR rules Rule 2.2 (b):

(B) Where court intervention is allowed under ADR Laws or the Special ADR Rules, courts
shall not refuse to grant relief, as provided herein, for any of the following reasons:
a. Prior to the constitution of the arbitral tribunal, the court finds that the principal
action is the subject of an arbitration agreement; or
b. The principal action is already pending before an arbitral tribunal.

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

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

ii. Does the principle of separability apply to domestic arbitration? YES. The rule or
principle of separability also applies to domestic arbitration. What is the basis? See below!

Basis of separability:
1. Civil code prescribes a presumption of divisibility or separability in the provisions
in a contract
2. Principle of separability is found in section 2 and 6 of the arbitration law.

SECTION 2—an arbitration agreement shall be valid, enforceable and


irrevocable save upon such grounds at law as exist as a ground for the
revocation of contracts

SECTION 6—a party who is aggrieved by the failure, neglect or the refusal of the
other contracting party to comply with their arbitration agreement can invoke the
aid to compel arbitration.

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FRAUDULENT INDUCEMENT TO CONTRACT

i. Is this subject to arbitration? YES. It is subject to arbitration. But you can also resort to
judicial relief prior commencement of arbitration on the ground that you were fraudulently
induced to enter in to an AA.

What is your basis then if nag-court action ka kaagad?


Answer: SECTION 3 of the Special ADR rules? You can file a petition before the court to
question the existence, validity or the enforceability of the AA.

EFFECT: Take note that when you say you were “fraudulently induced’, there are VICES
OF CONSENT which makes the contract VOIDABLE subject to ratification.

REVIEW: In fraudulent inducement to contract it is said that, there is nothing that could
bar the arbitral tribunal from ruling upon the issue of fraudulent inducement in the creation
of the contract that embodies the arbitration clause. The fact that a party desires to annul
the contract for being voidable because the consent is vitiated due to fraud will not remove
the fraudulent inducement from the ambit of the arbitration clause or the authority of the
arbitral tribunal to rule upon it. In other word, fraudulent inducement to contract is subject
to arbitration.

Question: can you resort to court action prior commencement of arbitration


proceedings on the ground that you were fraudulently induced to enter into an
arbitration agreement?
Answer: YES. See rule 3 of the Special ADR Rules.

NOTE:
1. International commercial arbitration—Model Law, Article 16 (1) empowers the
arbitral tribunal to decide any objection with respect to the existence or validity of
the arbitration agreement.
2. Domestic arbitration—the issue of fraudulent inducement is subject to
arbitration if the language of the arbitration clause is broad enough such as when
it provides for arbitration of claims or disputes arising out of, from or relating to
this contract.

Q: How do you aver fraud in your petition?


A: under section 5, rule 8 of the Revised Rules of Court in all averments of fraud, the
circumstances constituting fraud must be stated with particularity.

Rule 8 Sec 5 Fraud, mistake, condition of the mind In all averments of fraud
or mistake, the circumstances constituting fraud or mistake must be stated with
particularity. Malice, intent, knowledge or other condition of the mind of a person
may be averred generally.

5. TIMELINESS AND WAIVER

The general premise is that the arbitration agreement must be invoked in a TIMELY MANNER to
preclude court action.

What are the rules? We have to distinguish whether it’s ICA or DA.

RULES
i. INTERNATIONAL COMMERCIAL ARBITRATION—arbitration agreement must be
invoked to preclude court action not later than when submitting the 1st statement on
the substance of the dispute [Model Law, article 8(1)]

Question: What do you mean by “first statement on the substance of the dispute”?
Answer: If it is international commercial arbitration, the latest time to raise arbitration in
order to preclude court action is when the defendant files his answer.

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Review the rules of court.

Question: What is an answer?


Answer: it is a pleading in which the defending party sets forth his defenses. (Rule 6,
section 4 of the Rules of court)

Just remember that in ICA, it should be released at the time when the defendat files his
answer.

What is the rule if it’s a domestic arbitration?

ii. DOMESTIC ARBITRATION; Under RA 9285, Section 24—must invoke arbitration not
later than the pre-trial conference;
iii. May be invoked even prior to filing answer—by filing a motion to dismiss the suit on the
ground that the court lacks jurisdiction over the dispute (if a dispute is subject to
arbitration, the court in which the case is filed has no jurisdiction to entertain the suit)

RULE IN DOMESTIC ARBITRAITON: In case of a contract to arbitrate future


controversies, by the service, by either party upon the other of a demand for arbitration in
accordance with the contract. In case of the submission of an existing controversy, by the
filing with the court having jurisdiction of the submission agreement. In both cases, it must
be invoked noT later than the pre-trial conference.

In one case, it may also be invoked EVEN PRIOR TO THE FILING OF AN ANSWER.
How? By filing a MOTION TO DISMISS THE suit on the ground that the court lacks
jurisdiction over the dispute.

Question: What is the effect of failure to raise arbitration or failure to plead in his
motion to dismiss the suit or in his affirmative defenses in his answer?
Answer: It is DEEMED WAIVED. As provided under, Rule 9 section 1: Defenses and
objections not pleaded. — Defenses and objections not pleaded either in a motion to
dismiss or in the answer are deemed waived. However, when it appears from the
pleadings or the evidence on record that the court has no jurisdiction over the subject
matter, that there is another action pending between the same parties for the same cause,
or that the action is barred by a prior judgment or by statute of limitations, the court shall
dismiss the claim.

Again the failure of the defendant to raise objection is crucial to dismiss whereas an
affirmative defense in his answer constitutes waiver in arbitration

FACTORS CONSIDERED when a party deemed to have waived his right to require
arbitration:
i. Whether the party’s action are inconsistent with the right to arbitrate;
ii. Whether the litigation machinery has been substantially invoked;
iii. Whether a party either requested arbitration enforcement close tot eh trial date or delayed
for a long period before asking for a stay of the suit;
iv. Whether defendant seeking arbitration filed a counterclaim asking for a stay of the
proceedings;
v. Whether important intervening steps, such as resort to discovery procedure not otherwise
available in arbitration have been taken;
vi. Whether delay affected, misled or prejudiced the opposing party;
vii. When parties In fact litigate in a court of law a dispute that is subject to arbitration;
Case: Far East International Import v. Nankai Kogyo 6 S 725—“ having
waived recourse through arbitration, the losing party cannot thereafter question
the jurisdiction of the court”

6. OPERATION AND EFFECT


GENERAL RULE: An arbitration agreement invoked in a timely manner precludes court action;

Question: what is the principle behind this rule or policy?

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Answer: this is based on the rule that the arbitration agreement is the law between the parties and
they are expected to abide by it in good faith. (Rule 2.2 of the Special ADR Rules)

Question: again, the general premise is that the AA is the law between the parties and they
are expected to abide by it in good faith. However, what if a case is filed in court in
contravention of the agreement to arbitrate, what are your remedies?
Answer:
i. File MOTION TO SUSPEND court Proceedings
ii. File MOTION TO DISMISS
iii. File MOTION FOR REFERRAL TO ADR (Rule 4 of the Special ADR rules)

Take note: ALL PROCEEDINGS UNDER THE SPECIAL ADR RULES ARE SUMMARY.

RULE 4: REFERRAL TO ADR

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

Rule 4.2. When to make request. –

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

(B) Submission agreement. - If there is no existing arbitration agreement at the time the case is
filed but the parties subsequently enter into an arbitration agreement, they may request the court to
refer their dispute to arbitration at any time during the proceedings.

Rule 4.3. Contents of request. - The request for referral shall be in the form of a motion, which
shall state that the dispute is covered by an arbitration agreement.

Apart from other submissions, the movant shall attach to his motion an authentic copy of the
arbitration agreement.

The request shall contain a notice of hearing addressed to all parties specifying the date and time
when it would be heard. The party making the request shall serve it upon the respondent to give
him the opportunity to file a comment or opposition as provided in the immediately succeeding Rule
before the hearing.

Rule 4.4. Comment/Opposition. - The comment/opposition must be filed within fifteen (15) days
from service of the petition. The comment/opposition should show that: (a) there is no agreement to
refer the dispute to arbitration; and/or (b) the agreement is null and void; and/or (c) the subject-
matter of the dispute is not capable of settlement or resolution by arbitration in accordance with
Section 6 of the ADR Act.

Rule 4.5. Court action. - After hearing, the court shall stay the action and, considering the
statement of policy embodied in Rule 2.4, above, refer the parties to arbitration if it finds prima
facie, based on the pleadings and supporting documents submitted by the parties, that there is an
arbitration agreement and that the subject-matter of the dispute is capable of settlement or
resolution by arbitration in accordance with Section 6 of the ADR Act. Otherwise, the court shall
continue with the judicial proceedings.

Rule 4.6. No reconsideration, appeal or certiorari. - An order referring the dispute to arbitration
shall be immediately executory and shall not be subject to a motion for reconsideration, appeal or
petition for certiorari.

An order denying the request to refer the dispute to arbitration shall not be subject to an appeal, but
may be the subject of a motion for reconsideration and/or a petition for certiorari.

Rule 4.7. Multiple actions and parties. - The court shall not decline to refer some or all of the

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parties to arbitration for any of the following reasons:


a. Not all of the disputes subject of the civil action may be referred to arbitration;
b. 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. The issues raised in the civil action could be speedily and efficiently resolved in its
entirety by the court rather than in arbitration;
d. Referral to arbitration does not appear to be the most prudent action; or
e. The stay of the action would prejudice the rights of the parties to the civil action who are
not bound by the arbitration agreement.

The court may, however, issue an order directing the inclusion in arbitration of those parties who
are not bound by the arbitration agreement but who agree to such inclusion provided those
originally bound by it do not object to their inclusion.

Rule 4.8. Arbitration to proceed.- Despite the pendency of the action referred to in Rule 4.1,
above, arbitral proceedings may nevertheless be commenced or continued, and an award may be
made, while the action is pending before the court.

RULES:
i. If a dispute or an action, subject of arbitration , is instituted in a court of law, the court is
not at liberty to disregard the arbitration agreement and allow the action to proceed; The
correct procedure is for the court to suspend the case, not to dismiss it and require the
parties to proceed to arbitration in accordance with their agreement (case: chung fu
industry v. CA)

ii. It is erroneous for the court to issue a final order dismissing the case; rather, the court
should merely ‘suspend the case’. among the reasons for merely suspending, and not
dismissing the case, is that the parties may later on ‘go back to the court where the case
was pending to have the award confirmed by the said court’ (Asset Privatization Turst v.
CA)

Question: What are your remedies if the court erroneously denied your motion to
dismiss or motion to suspend court proceedings contrary to the agreement to
arbitrate?
Answer: the party invoking the arbitration clause may file the necessary petition nfor
CERTIORARI or PROHIBITION.

GENERAL PREMISE: an arbitration agreement invoked in a timely manner precludes


court action.

Question: does this principle mean tha the cour isautomaticaly precluded from taking
cognizance of the case?
Answer: it is the duty fo the court to determine WON the controversy is subject to
arbitraton. It is only after determining tha the controversy issubecti to arbitration that the
corut should suspend court proceedings and direct the parties to refer the case to
arbitration.

The rule is that even if th court takes cognizance of th said case the court only makes a
PRIMA FACIE determination upholding the existence, validty and enforceability of the
arbitration agreement.

Question: what if the court determine that it is not subject to arbitration, wha twill happen?
Answer: if the court determines that is ti not subject to arbigtraiotn or that the AA is void,
inexistent or unenforceable, hten the court may proceed to hear and decide the case.

VIP: THE MERE EXISTENCE OF AN ARBITRATION AGREEMENT DOES NTO PER SE


PRECLEUDE A COURT FROM TAKING COGNIZANCE OF A CASE EVEN IF DEFENDANT
CLAIMS THAT RECOURSE MUST FIRST BE THROUGH ARBITRATION

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7. THE RULE OF LIBERALITY


In resolving the issue whether the controversy is indeed subject to arbitration, the scope of the
arbitration agreement must be interpreted liberally so that any doubt concerning the scope of
arbitrable issues is to be resolved in favor of arbitration
Reason for the rule: Courts should liberally construe arbitration clauses to encourage alternative
dispute resolution.
So long as a clause is susceptible of an interpretation that covers the asserted dispute, an order to
arbitrate should be granted since any doubt should be resolved in favor of arbitration (LM Power
Engineering Corp V. Capitol Industry)

The arbitration agreement in the Subcontract Agreement provided that:

“6. The parties hereto agree that any dispute or conflict as regards to interpretation and
implementation of this Agreement which cannot be settled between respondent and petitioner
amicably shall be settled by means of arbitration”.

RULING: The SC ruled in favor of Capitol holding that the dispute was subject to arbitration. The
dispute arose due to the parties ‘incongruent positions on whether certain provisions of their
Agreement could be applied to the facts, and that it involved, ‘technical discrepancies that are
better left to an arbitral body that has expertise in those areas. The agreement of the parties to
refer ‘any dispute or conflict as regards to interpretation and implementation’ under their contract to
arbitration, includes within its scope discrepancies as to the amount of advances and billable
accomplishments, the application of the provision on termination and the consequent set-off of
expenses”.

8. REFERRAL TO ARBITRATION
RULES: If an action is commenced before a court on a matter that is the subject matter of an
arbitration agreement, the court should NOT dismiss the action but simply SUSPEND it, to await
the final outcome in the arbitration for possible confirmation and enforcement of the award before
the court.
VIP: The trial court DOES NOT LOSE JURISDICTION OVER THE CASE even if it should later be
finally determined that the controversy is subject to arbitration.

9. PROVISIONAL REMEDIES

RULES: the court in the exercise of its general jurisdiction is not prohibited from issuing a
provisional remedy while at the same time ordering the parties to submit their dispute to arbitration;
Case: Home bankers Savings v. Ca “a party to a pending arbitration has the right, without violin
the rule on forum shopping to institute an action to obtain a writ of preliminary attachment from the
court to preserve the property which is the subject matter of the arbitration.

RATIONALE: If a party has a right to obtain a provisional remedy from the court while the
arbitration is on-going, that party, should also have the right to seek such appropriate provisional
remedy from a court hat is deciding the issue whether or not to refer the parties to arbitration, and
to obtain such provisional remedy from that court when it ordered that the proceedings before it be
held in abeyance to enable the parties to arbitrate their dispute.

Section 28 (b) (2), RA 9285, a party in both international commercial arbitration and domestic
arbitration is entitled to provisional relief in the following cases:
i. To prevent irreparable loss or injury;
ii. To provide security for the performance of an obligation;
iii. To produce or preserve any evidence;
iv. To compel any other appropriate act or omission;

Question: when can you file before the court a petition for the issuance of provisional remedies
in relation to an arbitration agreement?
Answer: Under Rule 5.2:

Rule 5.2. When to petition. - A petition for an interim measure of protection may be made
(a) before arbitration is commenced,
(b) after arbitration is commenced, but before the constitution of the arbitral tribunal, or

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(c) after the constitution of the arbitral tribunal and at any time during arbitral
proceedings but, at this stage, only to the extent that the arbitral tribunal has no
power to act or is unable to act effectively.

Note: INTERIM MEASURES OF PROTECTION are SUMMARY PROCEEDINGS.

RULE 5: INTERIM MEASURES OF PROTECTION

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

Question: where will it be filed?


Answer: Rule 5.3. Venue. - A petition for an interim measure of protection may be filed with the
Regional Trial Court, which has jurisdiction over any of the following places:

a. Where the principal place of business of any of the parties to arbitration is located;
b. Where any of the parties who are individuals resides;
c. Where any of the acts sought to be enjoined are being performed, threatened to be
performed or not being performed; or
d. Where the real property subject of arbitration, or a portion thereof is situated.

Rule 5.4. Grounds. - The following grounds, while not limiting the reasons for the court to grant an
interim measure of protection, indicate the nature of the reasons that the court shall consider in
granting the relief:
a. The need to prevent irreparable loss or injury;
b. The need to provide security for the performance of any obligation;
c. The need to produce or preserve evidence; or
d. The need to compel any other appropriate act or omission.

Rule 5.5. Contents of the petition. - The verified petition must state the following:
a. The fact that there is an arbitration agreement;
b. The fact that the arbitral tribunal has not been constituted, or if constituted, is unable to act
or would be unable to act effectively;
c. A detailed description of the appropriate relief sought;
d. The grounds relied on for the allowance of the petition

Apart from other submissions, the petitioner must attach to his petition an authentic copy of the
arbitration agreement.

Rule 5.6. Type of interim measure of protection that a court may grant.- The following, among
others, are the interim measures of protection that a court may grant:
a. Preliminary injunction directed against a party to arbitration;
b. Preliminary attachment against property or garnishment of funds in the custody of a bank
or a third person;
c. Appointment of a receiver;
d. Detention, preservation, delivery or inspection of property; or,
e. Assistance in the enforcement of an interim measure of protection granted by the arbitral
tribunal, which the latter cannot enforce effectively.
f. a temporary order of protection.

Question: what is a temporary order of protection?


Answer: rule 5.9:
Xxxxxx
In cases where, based solely on the petition, the court finds that there is an urgent need to
either (a) preserve property, (b) prevent the respondent from disposing of, or concealing,
the property, or (c) prevent the relief prayed for from becoming illusory because of prior
notice, it shall issue an immediately executory temporary order of protection and require
the petitioner, within five (5) days from receipt of that order, to post a bond to answer for
any damage that respondent may suffer as a result of its order. The ex-parte temporary

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order of protection shall be valid only for a period of twenty (20) days from the service on
the party required to comply with the order. Within that period, the court shall:
a. Furnish the respondent a copy of the petition and a notice requiring him to
comment thereon on or before the day the petition will be heard; and
b. Notify the parties that the petition shall be heard on a day specified in the
notice, which must not be beyond the twenty (20) day period of the effectivity of
the ex-parte order.

The respondent has the option of having the temporary order of protection lifted by posting
an appropriate counter-bond as determined by the court.

ATTY: This TOP is similar or akin to the 72-hour TRO.


Who issues that 72-hour TRO? Only by the executive judge and it is issued ex-parte.
Within 24 hours after its issuance, it will be raffled to a regular court and there is a
summary hearing to be conducted. Defendant is given opportunity to answer is the said
72-hour TRO may be extended to 20 days to include that 72 hours already.

Be sure to distinguish the ex-parte TOP, ex-parte 72-hour TRO and the Temporary
Protection Order.

Rule 5.7. Dispensing with prior notice in certain cases. - Prior notice to the other party
may be dispensed with when the petitioner alleges in the petition that there is an urgent
need to either (a) preserve property, (b) prevent the respondent from disposing of, or
concealing, the property, or (c) prevent the relief prayed for from becoming illusory
because of prior notice, and the court finds that the reason/s given by the petitioner are
meritorious.

Rule 5.8. Comment/Opposition. - The comment/opposition must be filed within fifteen (15)
days from service of the petition. The opposition or comment should state the reasons
why the interim measure of protection should not be granted.

Rule 5.9. Court action. - After hearing the petition, the court shall balance the relative
interests of the parties and inconveniences that may be caused, and on that basis resolve
the matter within thirty (30) days from (a) submission of the opposition, or (b) upon lapse
of the period to file the same, or (c) from termination of the hearing that the court may set
only if there is a need for clarification or further argument.

If the other parties fail to file their opposition on or before the day of the hearing, the court
shall motu propriorender judgment only on the basis of the allegations in the petition that
are substantiated by supporting documents and limited to what is prayed for therein.

In cases where, based solely on the petition, the court finds that there is an urgent need to
either (a) preserve property, (b) prevent the respondent from disposing of, or concealing,
the property, or (c) prevent the relief prayed for from becoming illusory because of prior
notice, it shall issue an immediately executory temporary order of protection and require
the petitioner, within five (5) days from receipt of that order, to post a bond to answer for
any damage that respondent may suffer as a result of its order. The ex-parte temporary
order of protection shall be valid only for a period of twenty (20) days from the service on
the party required to comply with the order. Within that period, the court shall:
a. Furnish the respondent a copy of the petition and a notice requiring him to
comment thereon on or before the day the petition will be heard; and
b. Notify the parties that the petition shall be heard on a day specified in the
notice, which must not be beyond the twenty (20) day period of the effectivity of
the ex-parte order.

The respondent has the option of having the temporary order of protection lifted by posting
an appropriate counter-bond as determined by the court.

If the respondent requests the court for an extension of the period to file his opposition or
comment or to reset the hearing to a later date, and such request is granted, the court
shall extend the period of validity of the ex-parte temporary order of protection for no more
than twenty days from expiration of the original period.

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After notice and hearing, the court may either grant or deny the petition for an interim
measure of protection. The order granting or denying any application for interim measure
of protection in aid of arbitration must indicate that it is issued without prejudice to
subsequent grant, modification, amendment, revision or revocation by an arbitral tribunal.

Rule 5.10. Relief against court action. - If respondent was given an opportunity to be
heard on a petition for an interim measure of protection, any order by the court shall be
immediately executory, but may be the subject of a motion for reconsideration and/or
appeal or, if warranted, a petition for certiorari.

Rule 5.11. Duty of the court to refer back. - The court shall not deny an application for
assistance in implementing or enforcing an interim measure of protection ordered by an
arbitral tribunal on any or all of the following grounds:
a. The arbitral tribunal granted the interim relief ex parte; or
b. The party opposing the application found new material evidence, which the
arbitral tribunal had not considered in granting in the application, and which, if
considered, may produce a different result; or
c. The measure of protection ordered by the arbitral tribunal amends, revokes,
modifies or is inconsistent with an earlier measure of protection issued by the
court.

If it finds that there is sufficient merit in the opposition to the application based on letter (b)
above, the court shall refer the matter back to the arbitral tribunal for appropriate
determination.

Rule 5.12. Security. - The order granting an interim measure of protection may be
conditioned upon the provision of security, performance of an act, or omission thereof,
specified in the order.

The Court may not change or increase or decrease the security ordered by the arbitral
tribunal.

Rule 5.13. Modification, amendment, revision or revocation of court’s previously issued


interim measure of protection. - Any court order granting or denying interim measure/s of
protection is issued without prejudice to subsequent grant, modification, amendment,
revision or revocation by the arbitral tribunal as may be warranted.

An interim measure of protection issued by the arbitral tribunal shall, upon its issuance be
deemed to have ipso jure modified, amended, revised or revoked an interim measure of
protection previously issued by the court to the extent that it is inconsistent with the
subsequent interim measure of protection issued by the arbitral tribunal.

Rule 5.14. Conflict or inconsistency between interim measure of protection issued by the
court and by the arbitral tribunal. - Any question involving a conflict or inconsistency
between an interim measure of protection issued by the court and by the arbitral tribunal
shall be immediately referred by the court to the arbitral tribunal which shall have the
authority to decide such question.

Rule 5.15. Court to defer action on petition for an interim measure of protection when
informed of constitution of the arbitral tribunal. - The court shall defer action on any
pending petition for an interim measure of protection filed by a party to an arbitration
agreement arising from or in connection with a dispute thereunder upon being informed
that an arbitral tribunal has been constituted pursuant to such agreement. The court may
act upon such petition only if it is established by the petitioner that the arbitral tribunal has
no power to act on any such interim measure of protection or is unable to act thereon
effectively.

Rule 5.16. Court assistance should arbitral tribunal be unable to effectively enforce interim
measure of protection. - The court shall assist in the enforcement of an interim measure of
protection issued by the arbitral tribunal which it is unable to effectively enforce.

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CHAPTER III
ARBITRATORS AND THE ARBITRAL TRIBUNAL

PRINCIPLE OF “KOMPETENZ-KOMPETENZ”

NOTE: If you are asked about the principle of Kompetenz-kompetenz, you define the principle, but if you are
asked about the policy of the law about Kompetenz-Kompetenz, you cite Rule 2.4 of the Special ADR Rules.

Under the special rules, these are classified as special proceedings, it means that there is an initiatory
pleading. It is required that there should be an initiatory pleading and that initiatory pleading is known as
petition. Again, all action under the Special ADR rules are classified as special proceeding, it means that an
initiatory pleading is a petition.

WHAT IS THE PRINCIPLE OF KOMPETENZ-KOMPETENZ?


Ans: The first opportunity to rule on the issue of whether a tribunal has jurisdiction over the dispute must be given to
the tribunal itself. Thus the law required a court to exercise judicial restraint and defer to the tribunal in this issue.
That is why when you file a judicial determination of the validity or enforceability of the arbitration agreement, the
court will only give a prima facie determination by the basis of this Kompetenz-Kompetenz Principle.

WHAT IS THEN THE POLICY or the RULE ON KOMPETENZ-KOMPETENZ?

Rule 2.4. Policy implementing competence-competence principle. - The arbitral tribunal shall be accorded
the first opportunity or competence to rule on the issue of whether or not it has the competence or
jurisdiction to decide a dispute submitted to it for decision, including any objection with respect to the
existence or validity of the arbitration agreement.xxxxx

Stated differently, the first opportunity to rule on the issue of jurisdiction whether the tribunal has jurisdiction over the
said dispute must be given to the tribunal itself. Accordingly, the rule requires the court, to exercise judicial restraint
and refer to the tribunal on this issue.

If a court exercises jurisdiction over the said issue, it can only make a PRIMA FACIE DETERMINATION!

The law says, “Where the court is asked to make a determination of whether the arbitration agreement is null and
void, inoperative or incapable of being performed, under this policy of judicial restraint, the court must make no more
than a prima facie determination of that issue.”

Under the last paragraph, unless the court, pursuant to such prima facie determination, concludes that the arbitration
agreement is null and void, inoperative or incapable of being performed, the court must suspend the action before it
and refer the parties to arbitration pursuant to the arbitration agreement.

Does the provision of the rules of court apply to arbitration proceeding?

Ans: The provisions of the Rules of Court that are applicable to the proceedings enumerated in Rule 1.1 of these
Special ADR Rules have either been included and incorporated in these Special ADR Rules or specifically referred to
herein. In connection with the above proceedings, the Rules of Evidence shall be liberally construed to achieve the
objectives of the Special ADR Rules in order to achieve the objective of the Special ADR Rules. In other words, the
rules of court is not neccesary to have a suppletory character but it is already incorporated under the Special ADR
Rule.

Question: Who appoints an arbitrator?


Answer: The parties may agree as stipulated in their agreement

When is the appointment made? Before the commencement of the arbitration proceedings

1. THE ARBITRATOR
a. Qualifications:
i. Of legal age;

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ii. In full enjoyment of his civil rights and


iii. Must know how to read and write

b. Disqualifications: (section 10, Arbitration Law, letters a-d) (Article 12, Model Law, letters e-f for
international commercial arbitration)
i. Is related by blood or marriage within the 6th degree to either parites to controversy
ii. Has or had any financial or fiduciary or other interest int eh controversy or cause to be
decided or in the result of the proceedings;
iii. Has any personal bias, which might prejudice the right of any parto to a fair and impartial
award;
iv. Is the appointing party’s champion or advocate;
v. ‘justifiable doubts’ as to an arbitrator’s impartiality;
vi. If he does not possess the qualifications agreed upon by the parties.

In both international and domestic arbitration, it is not necessary that the arbitrator has any special training
or experience or be admitted to the State Bar. It is not necessary that the arbitrator be a lawyer.

Are foreigners allowed to act as arbitrators? IT DEPENDS upon the agreement of the parties
- If it’s an international commercial arbitration,
- If domestic, there is no bias against foreigners.

What if the arbitration agreement, the parties failed to provide the method of replacing an arbitrator?
What is your remedy?
- Challenge the qualifications of an arbitrator before:
1. The arbitral tribunal or
2. If the challenge is not successful, you can raise the same before the APPOINTING AUTHROITY if
the aggrieved party requests or
3. Raise the same before he court only if the appointing authority fails or refuses to act on the said
challenge.

When may the court act as appointing authority? Only under the circumstances provided in rule 6:

Rule 6.1. When the court may act as Appointing Authority.—The court shall act as Appointing
Authority only in the following instances:
a. Where any of the parties in an institutional arbitration failed or refused to appoint an
arbitrator or when the parties have failed to reach an agreement on the sole arbitrator (in
an arbitration before a sole arbitrator) or when the two designated arbitrators have failed
to reach an agreement on the third or presiding arbitrator (in an arbitration before a panel
of three arbitrators), and the institution under whose rules arbitration is to be conducted
fails or is unable to perform its duty as appointing authority within a reasonable time from
receipt of the request for appointment;
b. In all instances where arbitration is ad hoc and the parties failed to provide a method for
appointing or replacing an arbitrator, or substitute arbitrator, or the method agreed upon is
ineffective, and the National President of the Integrated Bar of the Philippines (IBP) or his
duly authorized representative fails or refuses to act within such period as may be allowed
under the pertinent rules of the IBP or within such period as may be agreed upon by the
parties, or in the absence thereof, within thirty (30) days from receipt of such request for
appointment;
c. Where the parties agreed that their dispute shall be resolved by three arbitrators but no
method of appointing those arbitrators has been agreed upon, each party shall appoint
one arbitrator and the two arbitrators thus appointed shall appoint a third arbitrator. If a
party fails to appoint his arbitrator within thirty (30) days of receipt of a request to do so
from the other party, or if the two arbitrators fail to agree on the third arbitrator within a
reasonable time from their appointment, the appointment shall be made by the Appointing
Authority. If the latter fails or refuses to act or appoint an arbitrator within a reasonable
time from receipt of the request to do so, any party or the appointed arbitrator/s may
request the court to appoint an arbitrator or the third arbitrator as the case may be.

Question: WHO IS AN APPOINTING AUTHORITY?


Answer: SEE rule 1. 11

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“Appointing Authority” shall mean the person or institution named in the arbitration
agreement as the appointing authority; or the regular arbitration institution under whose
rule the arbitration is agreed to be conducted. Where the parties have agreed to submit
their dispute to institutional arbitration rules, and unless they have agreed to a different
procedure, they shall be deemed to have agreed to procedure under such arbitration rules
for the selection and appointment of arbitrators. In ad hoc arbitration, the default
appointment of arbitrators shall be made by the National President of the Integrated Bar of
the Philippines or his duly authorized representative.

Functions of the appointing authority


- He undertakes the procedure in the appointment and challenge of the arbitrator in
case the arbitrator named in the arbitration agreement failed to perform his functions
- If you cannot challenge the qualifications or disqualifications of the arbitrator, and
pursue the remedies allowed by law, the appointing authority is the one who
undertakes such procedure.

Rule 6.2. Who may request for appointment. - Any party to an arbitration may request the court to
act as an Appointing Authority in the instances specified in Rule 6.1 above.

Rule 6.3. Venue. - The petition for appointment of arbitrator may be filed, at the option of the
petitioner, in the Regional Trial Court (a) where the principal place of business of any of the parties
is located, (b) if any of the parties are individuals, where those individuals reside, or (c) in the
National Capital Region.

Rule 6.4. Contents of the petition. -The petition shall state the following:

a. The general nature of the dispute;

b. If the parties agreed on an appointment procedure, a description of that procedure with


reference to the agreement where such may be found;

c. The number of arbitrators agreed upon or the absence of any agreement as to the
number of arbitrators;

d. The special qualifications that the arbitrator/s must possess, if any, that were agreed
upon by the parties;

e. The fact that the Appointing Authority, without justifiable cause, has failed or refused to
act as such within the time prescribed or in the absence thereof, within a reasonable time,
from the date a request is made; and

f. The petitioner is not the cause of the delay in, or failure of, the appointment of the
arbitrator.

Apart from other submissions, the petitioner must attach to the petition (a) an authentic copy of the
arbitration agreement, and (b) proof that the Appointing Authority has been notified of the filing of
the petition for appointment with the court.

Rule 6.5. Comment/Opposition. - The comment/opposition must be filed within fifteen (15) days
from service of the petition.

Rule 6.6. Submission of list of arbitrators. - The court may, at its option, also require each party to
submit a list of not less than three (3) proposed arbitrators together with their curriculum vitae.

Rule 6.7. Court action. - After hearing, if the court finds merit in the petition, it shall appoint an
arbitrator; otherwise, it shall dismiss the petition.

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In making the appointment, the court shall have regard to such considerations as are likely to
secure the appointment of an independent and impartial arbitrator.

At any time after the petition is filed and before the court makes an appointment, it shall also
dismiss the petition upon being informed that the Appointing Authority has already made the
appointment.

Rule 6.8. Forum shopping prohibited. - When there is a pending petition in another court to declare
the arbitration agreement inexistent, invalid, unenforceable, on account of which the respondent
failed or refused to participate in the selection and appointment of a sole arbitrator or to appoint a
party-nominated arbitrator, the petition filed under this rule shall be dismissed.

Rule 6.9. Relief against court action. - If the court appoints an arbitrator, the order appointing an
arbitrator shall be immediately executory and shall not be the subject of a motion for
reconsideration, appeal or certiorari. An order of the court denying the petition for appointment of
an arbitrator may, however, be the subject of a motion for reconsideration, appeal or certiorari.

Can you challenge the appointment of arbitrator before the corut? YES. See rule 7.

4. CHALLENGE AND DISQUALIFICATION


a. Article 13, Model Law—in both domestic and international arbitration, gives the parties the
freedom to decide on the procedure for challenging an arbitrator;
b. Absent the agreement, a party who intends to challenge an arbitrator is required to send a
written statement of the reasons for the challenge to the arbitral tribunal;
c. If challenge not successful, request the appointing authority to decide on the challenge
(section 26, RA 9285)

RULE 7: CHALLENGE TO APPOINTMENT OF ARBITRATOR

Rule 7.1. Who may challenge. - Any of the parties to an arbitration may challenge an arbitrator.

Rule 7.2. When challenge may be raised in court. - When an arbitrator is challenged before the
arbitral tribunal under the procedure agreed upon by the parties or under the procedure provided
for in Article 13 (2) of the Model Law and the challenge is not successful, the aggrieved party may
request the Appointing Authority to rule on the challenge, and it is only when such Appointing
Authority fails or refuses to act on the challenge within such period as may be allowed under the
applicable rule or in the absence thereof, within thirty (30) days from receipt of the request, that the
aggrieved party may renew the challenge in court.

Rule 7.3. Venue. - The challenge shall be filed with the Regional Trial Court (a) where the principal
place of business of any of the parties is located, (b) if any of the parties are individuals, where
those individuals reside, or (c) in the National Capital Region.

Rule 7.4. Grounds. - An arbitrator may be challenged on any of the grounds for challenge provided
for in Republic Act No. 9285 and its implementing rules, Republic Act No. 876 or the Model Law.
The nationality or professional qualification of an arbitrator is not a ground to challenge an arbitrator
unless the parties have specified in their arbitration agreement a nationality and/or professional
qualification for appointment as arbitrator.

Rule 7.5. Contents of the petition. - The petition shall state the following:
a. The name/s of the arbitrator/s challenged and his/their address;
b. The grounds for the challenge;
c. The facts showing that the ground for the challenge has been expressly or impliedly
rejected by the challenged arbitrator/s; and
d. The facts showing that the Appointing Authority failed or refused to act on the
challenge.

The court shall dismiss the petition motu proprio unless it is clearly alleged therein that the

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Appointing Authority charged with deciding the challenge, after the resolution of the arbitral tribunal
rejecting the challenge is raised or contested before such Appointing Authority, failed or refused to
act on the challenge within thirty (30) days from receipt of the request or within such longer period
as may apply or as may have been agreed upon by the parties.

Rule 7.6. Comment/Opposition. - The challenged arbitrator or other parties may file a comment or
opposition within fifteen (15) days from service of the petition.

Rule 7.7. Court action. - After hearing, the court shall remove the challenged arbitrator if it finds
merit in the petition; otherwise, it shall dismiss the petition.

The court shall allow the challenged arbitrator who subsequently agrees to accept the challenge to
withdraw as arbitrator.

The court shall accept the challenge and remove the arbitrator in the following cases:
a. The party or parties who named and appointed the challenged arbitrator agree to the
challenge and withdraw the appointment.
b. The other arbitrators in the arbitral tribunal agree to the removal of the challenged
arbitrator; and
c. The challenged arbitrator fails or refuses to submit his comment on the petition or the
brief of legal arguments as directed by the court, or in such comment or legal brief, he fails
to object to his removal following the challenge.

The court shall decide the challenge on the basis of evidence submitted by the parties.
The court will decide the challenge on the basis of the evidence submitted by the parties in the
following instances:
a. The other arbitrators in the arbitral tribunal agree to the removal of the challenged
arbitrator; and
b. If the challenged arbitrator fails or refuses to submit his comment on the petition or the
brief of legal arguments as directed by the court, or in such comment or brief of legal
arguments, he fails to object to his removal following the challenge.

Rule 7.8. No motion for reconsideration, appeal or certiorari. - Any order of the court resolving the
petition shall be immediately executory and shall not be the subject of a motion for reconsideration,
appeal, or certiorari.

Rule 7.9. Reimbursement of expenses and reasonable compensation to challenged arbitrator. -


Unless the bad faith of the challenged arbitrator is established with reasonable certainty by
concealing or failing to disclose a ground for his disqualification, the challenged arbitrator shall be
entitled to reimbursement of all reasonable expenses he may have incurred in attending to the
arbitration and to a reasonable compensation for his work on the arbitration. Such expenses
include, but shall not be limited to, transportation and hotel expenses, if any. A reasonable
compensation shall be paid to the challenged arbitrator on the basis of the length of time he has
devoted to the arbitration and taking into consideration his stature and reputation as an arbitrator.
The request for reimbursement of expenses and for payment of a reasonable compensation shall
be filed in the same case and in the court where the petition to replace the challenged arbitrator
was filed. The court, in determining the amount of the award to the challenged arbitrator, shall
receive evidence of expenses to be reimbursed, which may consist of air tickets, hotel bills and
expenses, and inland transportation. The court shall direct the challenging party to pay the amount
of the award to the court for the account of the challenged arbitrator, in default of which the court
may issue a writ of execution to enforce the award.

5. EQUAL RIGHT TO DESIGNATE


a. Parties are entitled to choose an equal number of arbitrators
b. Limitation: article 2045, civil code: any stipulation giving one of the parties the power to
choose more arbitrators than the other is null and void.
c. Case: Magellan Capital Management v. Zosa

Question: How many arbitrators can the parties appoint?

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Answer: as a General rule, the parties are free to stipulate and determine the number of arbitrators.
However, In case they fail to stipulate, they can appoint 3 arbitrators so that in case of voting, they
can ultimately come up with a decision.

Additional arbitrators may also be appointed by the parties but the same must be made in
WRITING.

A substitute arbitrator can also be appointed by the parties.

6. THERE IS NO LIABILITY FOR WRONG DECISIONS OF THE ARBITRATORS

a. There is no law prescribing the liability of the arbitrators

Question: If there is said to be no liability for wrong decisions of the arbitrators, but if
any, is there any liability that may be committed by an arbitrator?
Answer: YES. That is if the arbitrator fails to perform the duties required of him, he will incur
CONTRACTUAL LIABILITY to the parties in the sense that this acceptance of the appointment
implicitly carries with it the undertaking to discharge his duties to them in good faith.

RULE: The rule that the judges should act with competence, impartiality, probity and
independence likewise applies to arbitrators.

b. The rule applicable to judges should, by analogy, be applicable to arbitrators since they
act in quasi-judicial capacity and in fact deemed instrumentality of the government (case:
Luzon Development tank v. Association of Luzon Development Bank Employees)

Question: CAN THE ARBITRATOR BE MADE LIABLE FOR JUDICIAL ERROR?


YES. Case of SANTOS V. ORLINO
The fundamental propositions governing responsibility for judicial error were more
recently summarized in "In Re: Joaquin T. Borromeo," 241 SCRA 405-467 (1995). There, this
Court stressed inter alia that given the nature of the judicial function and the power vested by
the Constitution in the Supreme Court and the lower courts established by law, administrative
or criminal complains are neither alternative not cumulative to judicial remedies where such
are available, and must wait on the result thereof. Existing doctrine is that judges are not liable
to respond in a civil action for damages, and are not otherwise administratively responsible for
what they may do in the exercise of their judicial functions when acting within their legal
powers and jurisdiction. Certain it is that a judge may not be held administratively accountable
for every erroneous order or decision he renders. To hold otherwise would be to render
judicial office untenable, for no one called upon to try the facts or interpret the law in the
process of administering justice can be infallible in this judgment. The error must be gross or
patent, deliberate and malicious, or incurred with evident bad faith

The imputed error in this case not being in the premises gross, and the record being
bereft of any persuasive showing of deliberate or malicious intent on the part of respondent
Judge to cause prejudice to any party, the instant administrative proceeding against the latter
must be given short shrift for what of basis.

7. WHEN THE ARBITRAL TRIBUNAL IS DEEMED ‘CONSTITUTED’?


a. Answer: the arbitral tribunal is deemed constituted when the sole arbitrator or the 3 rd
arbitrator, who has been nominated, has accepted the nomination and written
communication of said nomination and acceptance has been received by the party making
the request.

NOTE: ARBITRAL TRIBUNAL MEANS ‘SOLE ARBITRATOR’ OR PANEL OF


ARBITRATORS

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CHAPTER IV
THE ARBITRATION PROCEEDING
In the conduct of arbitration proceeding the parties are treated with equality and each party is given the full
opportunity of defending its case. This is the fundamental requirement of due process.

In relation in the case of arbitration, it is said that in default of the place to be chosen by the arbitral tribunal, the place
chosen by the said tribunal that will be the place for arbitration. (see below)

1. PLACE OF ARBITRATION
The general rule is that the place of arbitration is the place so designated by the parties to the
arbitration.
If the parties in an international arbitration have not designated a place where the arbitration may
take place, the arbitral tribunal may determine the place of the arbitration having regard to the
circumstance of the place including the convenience of the parties. This is in pursuant to the Modal
law, Art. 20 (1)

The arbitral tribunal may meet at any place if considered appropriate for consultation among its
members for hearing of witnesses, experts or the parties for the inspection of goods, other property
or document.
The place chosen by the arbitral tribunal must have some relevance to the contract and should not
impose any undue hardship upon one party or any party to the contract especially in the terms of
the attending of hearings of parties or the witnesses.

2. COMMENCEMENT OF THE ARBITRAL PROCEEDING


When does the arbitration proceeding commence?
Ans: The arbitration proceeding commences on the day on which a request for that dispute to be
referred to arbitration if received by the respondents.

How about language to be used during the arbitration proceeding?


Ans: GR is that the parties are free to agree on the language to be used in the arbitral proceeding.
In default of such agreement the arbitral tribunal shall determine the language to be used in the
proceeding.

3. LAW OF PROCEDURE
It is said that in both domestic and international commercial arbitration, the parties may agree on
the application of rules of procedure that will govern the arbitration other than those set forth under
the Philippine law. However, it should be noted that the choice of the Philippines as the choice or
the seat of arbitration means that the arbitration itself is subject to the Philippine law as the lex
arbitri or the lex loci arbitrii. So this recognizes the first principle that parties may agree on the rules
of procedure that will govern. This recognizes the principle of AUTONOMY OF CONTRACT
principle.
Although they are free to adopt the rule of procedure in the AP, the choice is subject to certain
limitations or qualifications. Such limitation or qualification ensures that the basic requirements of
due process is conserved.

What are the limitations or qualifications under the Model law?


Answer:
a. Procedure for appointing arbitrators is subject to the provisions concerning the appointing
authority and specifying the instances when the appointing authority may designate an
arbitrator;
b. The procedure for challenging an arbitrator is subject to the provisions authorizing the
appointing authority to decide an unsuccessful challenge to an arbitrator;
c. Those pertaining to the forma and content of the award;
d. Those pertaining to the correction or interpretation of an award or making an additional
award;

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e. Those pertaining to the procedure for setting aside an award and the grounds for setting
aside the award;
f. Those pertaining to the procedure for refusing enforcement of the award and the grounds
for not enforcing the award.

Question: What if the parties failed to agree on what procedure will govern the conduct of
the AA?
Answer: failing such agreement, the arbitral tribunal may conduct arbitration in the manner it
considered appropriate.

What does due process mean?


Due Process in relation to arbitration proceeding:
a) The parties are given a chance to be heard and submit the evidence;
b) the tribunal must consider the evidence presented;
c) the tribunal must have something to support its decision;
d) the evidence that support the decision must be substantial;
e) the decision should be rendered based in the evidence presented or must be contained
in the record of the proceeding;
f) the decision must be rendered in such a manner that the parties knows the issued
involved and the reason for the decision rendered.
Case inpoint (ANG TIBAY V. CA)

Take note of Rule 3 of the special ADR RULES.

RULE 3: JUDICIAL RELIEF INVOLVING THE ISSUE OF EXISTENCE, VALIDITY


AND ENFORCEABILITY OF THE ARBITRATION AGREEMENT

Rule 3.1. When judicial relief is available.--The judicial relief provided in Rule 3, whether resorted to
before or after commencement of arbitration, shall apply only when the place of arbitration is in the
Philippines. It applies to both domestic and international commercial arbitration.

A. Judicial Relief before Commencement of Arbitration


Rule 3.2. Who may file petition.—Any party to an arbitration agreement may petition the
appropriate court to determine any question concerning the existence, validity and enforceability of
such arbitration agreement serving a copy thereof on the respondent in accordance with Rule 1.4
(A).
Rule 3.3. When the petition may be filed.—The petition for judicial determination of the existence,
validity and/or enforceability of an arbitration agreement may be filed at any time prior to the
commencement of arbitration.

Despite the pendency of the petition provided herein, arbitral proceedings may nevertheless be
commenced and continue to the rendition of an award, while the issue is pending before the court.

Rule 3.4. Venue.—A petition questioning the existence, validity and enforceability of an arbitration
agreement may be filed before the Regional Trial Court of the place where any of the petitioners or
respondents has his principal place of business or residence.

Rule 3.5. Grounds.—A petition may be granted only if it is shown that the arbitration agreement is,
under the applicable law, invalid, void, unenforceable or inexistent. (the grounds are exclusive!)

Rule 3.6. Contents of petition.—The verified petition shall state the following:
a. The facts showing that the persons named as petitioner or respondent have legal capacity
to sue or be sued;
b. The nature and substance of the dispute between the parties;
c. The grounds and the circumstances relied upon by the petitioner to establish his position;
and
d. The relief/s sought.

Apart from other submissions, the petitioner must attach to the petition an authentic copy of the
arbitration agreement.

Rule 3.7. Comment/Opposition.—The comment/opposition of the respondent must be filed within

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fifteen (15) days from service of the petition.

Rule 3.8. Court action.—In resolving the petition, the court must exercise judicial restraint in
accordance with the policy set forth in Rule 2.4, deferring to the competence or jurisdiction of the
arbitral tribunal to rule on its competence or jurisdiction.

Rule 3.9. No forum shopping.—A petition for judicial relief under this Rule may not be commenced
when the existence, validity or enforceability of an arbitration agreement has been raised as one of
the issues in a prior action before the same or another court.

Rule 3.10. Application for interim relief.—If the petitioner also applies for an interim measure of
protection, he must also comply with the requirements of the Special ADR Rules for the application
for an interim measure of protection.

Rule 3.11. Relief against court action.—Where there is a prima facie determination upholding the
arbitration agreement.—A prima facie determination by the court upholding the existence,
validity or enforceability of an arbitration agreement shall not be subject to a motion for
reconsideration, appeal or certiorari.

question : Why is that so?


Answer: this is because of the POLICY OF JUDICIAL RESTRAINT which means that there should
be least intervention from the court; besides the policy of the law is to favor arbitration.

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

B. JUDICIAL RELIEF AFTER ARBITRATION COMMENCES

Question: WHAT IS THE SUBJECT OF THIS REMEDY?


Answer: the ruling of the arbitral tribunal upholding or declining its jurisdiction

Rule 3.12. Who may file petition. - Any party to arbitration may petition the appropriate court for
judicial relief from the ruling of the arbitral tribunal on a preliminary question upholding or declining
its jurisdiction. Should the ruling of the arbitral tribunal declining its jurisdiction be reversed by the
court, the parties shall be free to replace the arbitrators or any one of them in accordance with the
rules that were applicable for the appointment of arbitrator sought to be replaced.

Rule 3.13. When petition may be filed. - The petition may be filed within thirty (30) days after
having received notice of that ruling by the arbitral tribunal.

Rule 3.14. Venue. - The petition may be filed before the Regional Trial Court of the place where
arbitration is taking place, or where any of the petitioners or respondents has his principal place of
business or residence.

Rule 3.15. Grounds. - The petition may be granted when the court finds that the arbitration
agreement is invalid, inexistent or unenforceable as a result of which the arbitral tribunal has no
jurisdiction to resolve the dispute.

Rule 3.16. Contents of petition. - The petition shall state the following:
a. The facts showing that the person named as petitioner or respondent has legal capacity
to sue or be sued;
b. The nature and substance of the dispute between the parties;
c. The grounds and the circumstances relied upon by the petitioner; and
d. The relief/s sought.

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In addition to the submissions, the petitioner shall attach to the petition a copy of the request for
arbitration and the ruling of the arbitral tribunal.
The arbitrators shall be impleaded as nominal parties to the case and shall be notified of the
progress of the case.

Rule 3.17. Comment/Opposition. - The comment/opposition must be filed within fifteen (15) days
from service of the petition.

Rule 3.18. Court action. - (A) Period for resolving the petition.- The court shall render judgment on
the basis of the pleadings filed and the evidence, if any, submitted by the parties, within thirty (30)
days from the time the petition is submitted for resolution.

(take note!!)

(B) No injunction of arbitration proceedings. - The court shall not enjoin the arbitration
proceedings during the pendency of the petition.

Judicial recourse to the court shall not prevent the arbitral tribunal from continuing the
proceedings and rendering its award.

(C) When dismissal of petition is appropriate. - The court shall dismiss the petition if it fails to
comply with Rule 3.16 above; or if upon consideration of the grounds alleged and the legal briefs
submitted by the parties, the petition does not appear to be prima facie meritorious.

Rule 3.19. Relief against court action. - The aggrieved party may file a motion for reconsideration
of the order of the court. The decision of the court shall, however, not be subject to appeal. The
ruling of the court affirming the arbitral tribunal’s jurisdiction shall not be subject to a petition for
certiorari. The ruling of the court that the arbitral tribunal has no jurisdiction may be the subject of a
petition for certiorari.

Rule 3.20. Where no petition is allowed. - Where the arbitral tribunal defers its ruling on preliminary
question regarding its jurisdiction until its final award, the aggrieved party cannot seek judicial relief
to question the deferral and must await the final arbitral award before seeking appropriate judicial
recourse.

A ruling by the arbitral tribunal deferring resolution on the issue of its jurisdiction until final award,
shall not be subject to a motion for reconsideration, appeal or a petition for certiorari.

Rule 3.21. Rendition of arbitral award before court decision on petition from arbitral tribunal’s
preliminary ruling on jurisdiction. - If the arbitral tribunal renders a final arbitral award and the Court
has not rendered a decision on the petition from the arbitral tribunal’s preliminary ruling affirming its
jurisdiction, that petition shall become ipso facto moot and academic and shall be dismissed by the
Regional Trial Court. The dismissal shall be without prejudice to the right of the aggrieved party to
raise the same issue in a timely petition to vacate or set aside the award.

Rule 3.22. Arbitral tribunal a nominal party. - The arbitral tribunal is only a nominal party. The court
shall not require the arbitral tribunal to submit any pleadings or written submissions but may
consider the same should the latter participate in the proceedings, but only as nominal parties
thereto.

A. HEARINGS BEFORE THE ARBITRATORS

IF INTERNATIONAL COMMERCIAL ARBITRATION:


General Rule is that there should be a hearing. Hearing is conducted.
Exception: the arbitral tribunal may or may not hold a hearing for the presentation
of evidence or for oral arguments.
Exception to the exception unless the parties have agreed that no hearing shall
be held. They will just submit their testimonies on paper or through affidavits
only.

If DOMESTIC ARBITRAITON

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Ans: Under Art. 12 and 15 of Arbitration law:

At the commencement of the hearing, the arbitral tribunal may ask both parties for brief
statements of the issues in controversy and/or an agreed statement of facts. Thereafter
the parties may offer such evidence as they desire, and shall produce such additional
evidence as the arbitrators shall require or deem necessary to an understanding and
determination of the dispute. At the close of the hearings, the arbitrators shall specifically
inquire of all parties whether they have any further proof or witnesses to present; upon the
receipt of a negative reply from all parties, the arbitrators shall declare the hearing closed
unless the parties have signified an intention to file briefs. If the parties decide to file their
brief then the hearing shall be closed by the arbitrators after the receipt of briefs and/or
reply briefs of the parties. “

Principles to remember:
Before the proceeding, the arbitrators take their oath. They have the power to
administer oaths of all witnesses. This oath shall be required of any witness
before their testimony is heard (section 13 of the Arbitration law)

Arbitrators are required to be present and to attend all the hearings and hear all
the allegations of the parties.

Arbitrators have the power to issue subpoena in order to compel witnesses to


attend the hearings (section 14 of Arbitration law)

Case in point : HOMEBANKERS V. CA (GR 115412, November 15, 1999)

Section 14 of Republic Act 876, otherwise known as the Arbitration Law, allows
any party to the arbitration proceeding to petition the court to take measures to
safeguard and/or conserve any matter which is the subject of the dispute in
arbitration, thus:
Sec. 14. Subpoena and subpoena duces tecum. — Arbitrators shall
have the power to require any person to attend a hearing as a witness.
They shall have the power to subpoena witnesses and documents when
the relevancy of the testimony and the materiality thereof has been
demonstrated to the arbitrators. Arbitrators may also require the
retirement of any witness during the testimony of any other witness. All
of the arbitrators appointed in any controversy must attend all the
hearings in that matter and hear all the allegations and proofs of the
parties; but an award by the majority of them is valid unless the
concurrence of all of them is expressly required in the submission or
contract to arbitrate. The arbitrator or arbitrators shall have the power at
any time, before rendering the award, without prejudice to the rights of
any party to petition the court to take measures to safeguard and/or
conserve any matter which is the subject of the dispute in
arbitration. (emphasis supplied)

Petitioner's exposition of the foregoing provision deserves scant consideration.


Section 14 simply grants an arbitrator the power to issue subpoena and
subpoena duces tecum at any time before rendering the award. The exercise of
such power is without prejudice to the right of a party to file a petition in court to
safeguard any matter which is the subject of the dispute in arbitration. In the case
at bar, private respondent filed an action for a sum of money with prayer for a writ
of preliminary attachment. Undoubtedly, such action involved the same subject
matter as that in arbitration, i.e., the sum of P25,200,000.00 which was allegedly
deprived from private respondent in what is known in banking as a "kiting
scheme." However, the civil action was not a simple case of a money claim since
private respondent has included a prayer for a writ of preliminary attachment,
which is sanctioned by section 14 of the Arbitration Law.

Question: Why can they issue subpoena? Because they exercise quasi-judicial
functions.

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B. ROLE OF ARBITRATORS

o An arbitrator should be impartial because it functions as a judge because it is a quasi-judicial


officer, he must be competent, independent, he must be a person of probity and impartiality.
o When you say that an arbitrator should be impartial, it does not mean that an arbitrator is not
allowed to take an active role in the proceeding before them. Like a judge an arbitrator can
ask clarificatory questions.
o Arbitrators receive exhibit in evidence any document.

o The Arbitrator is the sole judge of the relevancy and materiality of the evidence offered. He
is not bound by the rules of court.

BARBERS V. LAGUIO (351 S 606)

Anent the charge that respondent judge displayed bias and partiality during the trial when
he asked numerous clarificatory questions, we note that the participation of respondent
judge in the conduct of the trial was not by itself condemnable. He could not be expected
to remain an impassive and remote presence during the proceedings, prohibited from
asking questions when proper and necessary, yet all these were done without necessarily
transgressing the boundaries of impartiality decreed by judicial ethics. The mere fact
that the presiding judge asked clarificatory questions during the trial does not make him a
biased judge.[26]“He must be accorded a reasonable leeway in asking questions to
witnesses as may be essential to elicit relevant facts and to bring out the
truth.”[27] Differently stated, “questions to clarify points and to elicit additional relevant
evidence are not improper. The judge being the arbiter may properly intervene in the
presentation of evidence to expedite and prevent unnecessary waste of time.”

COMMETN: so the arbitrator can ask clarificatory questions during the conduct of the AP.

C. PROCEEDINGS WITHOUT HEARINGS

International commercial Arbitration—parties may agree that proceedings shall be conducted


only n the basis of documents and other materials without need of hearing
Domestic arbitration—parties by mutual agreement submit their dispute to arbitration other than
by oral hearing.

how is this done?


a) Parties may submit an agreed statement of facts;
b) Parties may submit their respective contention to the duly appointed arbitrator;
c) Parties may also submit their written arguments.

3. RELEVANCY AND MATERIALITY OF EVIDENCE


Under the Arbitration Law, the arbitral tribunal shall be the sole judge of the relevancy and
materiality of evidence offered or produced before them (arbitration law, section 15)
The arbitral tribunal is not bound to conform to the rule of court. This found under Section 15 of
Arbitration Law.

4. EXPERTS AS WITNESSES
In international commercial arbitration—unless the parties have agreed otherwise, the arbitral
tribunal may appoint experts to resort to it on specific issues that the arbitral tribunal may deem
appropriate
In Domestic arbitration—experts may be appointed by the arbitral tribunal even if RA 9285 has not
made Article 26 of the Model Law apply to domestic arbitration.

see article 26
Article 26 - Expert appointed by arbitral tribunal:
1. Unless otherwise agreed by the parties, the arbitral tribuna:

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a. may appoint one or more experts to report to it on specific issues


to be determined by the arbitral tribunal;
b. may require a party to give the expert any relevant information or
to produce, or to provide access to, any relevant documents,
goods or other property for his inspection.

2. Unless otherwise agreed by the parties, if a party so requests or if the


arbitral tribunal considers it necessary, the expert shall, after delivery of
his written or oral report, participate in a hearing where the parties
have the opportunity to put questions to him and to present expert
witnesses in order to testify on the points at issue.

Comment: expert witnesses pwede mag-testify before the arbitral tribunal.

5. PROVISIONAL REMEDIES
The arbitral tribunal has the power, at any time before rendering an award, without prejudice to the
right of any party to petition the court to take measures necessary to safeguard or conserve any
matter subject matter of the dispute.(arbitration law, section 23)
Specifically, after constitution of the arbitral tribunal and during the AP, a party may make such
request before the arbitral tribunal except3 when the AT has no authority or is unable to act
effectively.
How about if it is international commercial arbitration? Under Article 17 of the Modal Law, it is
said that the arbitral tribunal at the request of any party, can order any party to take any interim
measure of protection in respect of the subject matter of the dispute.

How may a person apply for interim measures of protection?


Answer: Under Section 5.1 of Special ADR Rules, A party to an arbitration agreement may petition the court
for interim measures of protection.

So magkaiba, in other words, you can ask the arbitral tribunal for the issuance of a provisional remedy; and
likewise you can also file a petition before the court for the issuance of any provisional remedies. So, take
note the kinds of provisional remedies that can be issued by the court. Magkaiba yun doon sa pwedeng
iissue ng arbitral tribunal.

Principle: the Arbitral Tribunal can grant provisional remedies or you can file for provisional remedies before
the court for the issuance of the same. This is pursuant to rule 5 of the Special ADR rules.

What if the Arbitral Tribunal granted a provisional remedy and the party against whom said
provisional remedy is issued disregards or disobeys such provisional order of the court, what is
your remedy? The offended party must apply with the court for an assistance to implement the such
measure. This is found in Section 28 (b) and Section 29 of RA 9285. Take note of the relationship between
the arbitral tribunal and the court. Both bodies can issue a provisional order.

under RA 9285, Section 28 (b) (2), arbitral tribunal has a power to issue provisional reliefs against the
adverse party in order to:
(i) prevent irreparable loss or injury:
(ii) provide security for the performance of any obligation;
(iii) produce or preserve any evidence; or
(iv) compel any other appropriate act or omission.

Further the arbitral tribunal may, at the request of a party, order any party to take such interim measures of
protection as the arbitral tribunal may consider necessary in respect of the subject matter of the dispute.
Such interim measures may include but shall not be limited to:
(1) preliminary injunction directed against a party,
(2) appointment of receivers; or
(3) order the detention, preservation, inspection of property (section 29)

Note:
Under RA 9285, the arbitral tribunal does not possess coercive power unlike that of the
arbitration law and the Model Law. In other words, arbitral tribunal can grant provisional remedies

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Section 28 (b) (5) of the ADR law clearly states that the order granting interim relief shall be binding
upon the parties.

Is this provisional remedy available against third person or non-party?


Ans: No, because under Section 28 (b) of the ADR law, it specifically provides that the interim relief
may be granted only against the adverse party.

6. ARBITRATION AS PRACTICE OF LAW


An individual who is not a member of the Philippine Bar may represent any party in both
international and domestic arbitration.
Section 22, RA 9285 “in international commercial arbitration conducted in the Philippines, a party
may be represented by any person of his choice”
If the representative is not a member of the Bar, is not authorized to appear as counsel in any
Philippine court or any quasi-judicial body, whether or not such appearance is in relation to the
arbitration in which he appears (section 33, RA 9285)

7. NO DEFAULT AWARDS
Can the other party to an arbitration agreement be declared in default? YES.
How about rendering a Default Arbitral Award? NO. In both international commercial arbitration
and domestic arbitration, default awards are not allowed unless otherwise agreed by the parties.
There can be no default award in arbitration proceedings but a party thereto can be declared in
default!

Why is there no default award? Under the law, it is said that ‘an award shall not be made solely on
the default of a party’. it is specifically provided under the law that an award shall not be made
solely on the default of the party. The arbitrator shall require the party to submit such evidence as
may be required n

However, a party may be declared in default. How? Under article 25 of the Model law:

Unless otherwise agreed by the parties, if, without showing sufficient cause:
1. the claimant fails to communicate his statement of claim, the arbitral tribunal shall
terminate the proceedings;
2. the respondent fails to communicate his statement of defense or fails to file his
answer, the arbitral tribunal shall continue the proceedings without treating such
failure in itself as an admission of the claimant’s allegations;
3. any party fails to appear at a hearing or to produce documentary evidence, the
arbitral tribunal may continue the proceedings and make the award on the evidence
before it.

That is why there is no default award.

SUMMARY
1. Interlocutory orders granting interim relief and/or other measures of protection are not enforceable under the
New York Convention as these are not final awards of the tribunal. Thus, generally limited to place of
issuance of injunction.
2. Arbitral interim relief may be tailored to particular circumstances of the case provided its effect is limited to
the parties of the dispute and to the subject matter of the arbitration.
3. As in most procedural rules for provisional remedies in the Philippines, the burden of proving the factual
bases for the grant of the interim relief and other measures of protection is on the APPLICANT.
4. Under the UNCITRAL MODEL LAW, interim relief and or other measures of protection may be granted by
the Arbitral Tribunal ex-parte.
5. After the Tribunal has been constituted, both the courts and the tribunal have the authority to grant interim
relief. However, in such cases, the arbitral Tribunal should have the primary competence and the parties
should be allowed to go to court only in those cases where, for whatever reasons, the tribunal is not in a
position to grant the relief sought within the required time frame.

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CHAPTER V. THE ARBITRAL AWARD


1st principle: the arbitral tribunal can render separate or partial final awards

1. SEPARATE OR PARTIAL FINAL AWARDS


Why? Both the Model Law and the Arbitration law do not provide wither arbitral tribunals may
render separate awards. But there is no reason for not recognizing that arbitral tribunals have the
authority to render separate awards when such are appropriate.

What is the basis? Rule 36, section 5, rules of court applies BY ANALOGY:
SEC. 5. Separate judgments.—When more than one claim for relief is presented in an
action, the court, at any stage, upon a determination of the issues material to a particular
claim and all counterclaims arising out of the transaction or occurrence which is the
subject matter of the claim, may render a separate judgment disposing of such claim. The
judgment shall terminate the action with respect to the claim so disposed of and the action
shall proceed as to the remaining claims. In case a separate judgment is rendered, the
court by order may stay its enforcement until the rendition of a subsequent judgment or
judgments and may prescribe such conditions as may be necessary to secure the benefit
thereof to the party in whose favor the judgment is rendered

When you say ‘separate’ awards, these are analogous to judgments that are partial but final
in nature. Why? Because they put an end to a particular matter. (Tamboan V. CA)

However, there is a caveat. (see below)

CAVEAT: Although tribunals may render separate awards, this prerogative should be used
carefully and sparingly to achieve the objective of arbitration of promoting a speedy and expeditious
resolution of the entire controversy, not just an aspect of it.

2. SCOPE OF RELIEF/CONTENTS OF AN AWARD


The arbitral tribunal may grant any remedy or relief that they deem just and equitable and within the
scope of the agreement of the parties, which shall include, but not limited to, the specific
performance of a contract (section 20, Arbitration law)

The principle is that:


As long as the award derives its essence from the contract and is based on a passably plausible
interpretation of the contracts.
Any limitation upon the remedial power of an arbitrator must either be explicitly contained or clearly
incorporated by reference in the arbitration clause.
Arbitrators may award punitive damages.

Question: how about monetary damages? Can the arbitrators award the same?
Answer: YES. If there is no such limitation as to its award, then the arbitrator may do so.

Can attorney’s fees as damages be awarded by the tribunal?


Answer: NO. Attorney’s fees as damages should not be awarded because the arbitrator should not
require the losing party to reimburse the winning party legal expenses and other damages and
further, such an award demands a factual, legal, or equitable justification before the same may be
given.

3. ARBITRAL TRIBUNAL CAN ONLY AWARD WITHIN THE AGREED SCOPE


Thus, an arbitrator can only decide on those matter s that have been submitted to them (section 20,
Arbitration Law, applies by analogy to international commercial arbitration)
Case in point: Asset Privatization Trust v. CA) --“Arbitrators cannot resolve issues beyond the
scope of the e submission agreement. The parties to such an agreement are bound by the

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arbitrator’s award only to the extent and in the manner prescribed by the contract and only if the
award are rendered in conformity thereon.
The scope of the arbitrator’s authority should be interpreted broadly if arbitration is to serve its
purpose.
Parties may specify in their “terms of reference” what matters or issues to refer to the arbitrator for
determination.

4. FORM OF AN ARBITRAL AWARD


Under the arbitration law, Section 20 provides that the award must be IN WRITING, SIGNED AND
ACKNOWLEGED by a majority of the arbitrators.
Under the model law, article 31 provides that:
1. The award shall be made in writing and shall be signed by the arbitrator or arbitrators.
In arbitral proceedings with more than one arbitrator, the signatures of the majority of
all members of the arbitral tribunal shall suffice, provided that the reason for any
omitted signature is stated.
2. The award shall state the reasons upon which it is based, unless the parties have
agreed that no reasons are to be given or the award is an award on agreed terms
under article 30.
3. The award shall state its date and the place of arbitration as determined in
accordance with article 20(1). The award shall be deemed to have been made at that
place.
4. After the award is made, a copy signed by the arbitrators in accordance with
paragraph (1) of this article shall be delivered to each party.

10. TIME TO RENDER


In international commercial arbitration no time frame as arbitral tribunal is given considerable
leeway, unless the parties provide a period within which the tribunal must render its award.
Domestic arbitration—arbitral tribunal must render its award with the period of time prescribed by
the parties, absent any agreement, within 30 days after closing of hearings.

11. Form of AWARD AND STATEMETN FO FACTS AND LAW


Under article 31 of the Model Law, which also applies to domestic arbitraton, the parties may agree
that the arbitral tribunal need not state the reasons for its award.
Case: GROGUN V. NAPOCOR 411 S 357—“An award that is not verified by the sole arbitrator, or
by a majority of the arbitrators, as required under Section 20 of the Arbitration Law is invalid”.

QUESTION: ano bang kaibahan ng award rendered kapag international arbitration and
domestic arbitration? So, under the law, if it is international commercial arbitration sabi pwede
siya hindi na kailangan i-acknowledge ng mga arbitrators. Unlike in domestic arbitration, it is said
that it should be acknowledged by the majority of the arbitrators.

QUESTION: under RA 9285, should the arbitral award be subscribed or verified before the
notary public? The answer there is NO. It is not necessary. Hindi kailangan i-acknowledge yung
decision or award. Arbitrators need not acknowledge nor verify the award. Ok, what is the case?
Grogun inc. vs Napocor 411 scra 357 sabi ng Supreme court, an award that is not verified by the
two arbitrators or by majority of the arbitrators as required under Sec. 20 of the Arbitration Law is
invalid. Now, upon the passage of RA 9285 diba. Diba under 9285 it is already dispensed with
pwede na siyang hindi verified.

The ruling in Grogun case. It would not apply to arbitral awards rendered after the effectivity of RA
9285. Take note, in both domestic and commercial arbitration. Now, hindi na kailangan i-verify
yung award.

12. CONSTITUTIONALITY OF THE LAW


It is said that arbitrators may decide legal issues that have constitutional implications.
but take note deemed to have exceeded their authority if they address the constitutional validity of
a statute.

13. LAW ON THE MERITS


We discussed about the procedural aspect of the law, the procedural aspect ng arbitration. Under
the procedural law it is said that the parties are free tO choose the laws on procedure which shall

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govern the arbitration. Again in domestic arbitration or international commercial arbitration the
parties may decide the rule of procedure governing the arbitration. The only limitation is imposed is
that the arbitration proceeding in both domestic and international commercial to follow the due
process requirement. So yun lang ang limitation.

Question: How about the substantive law that will govern the arbitration? Siyempre in every
dispute meron talagang applicable law on the matter. For example, interpretation of contracts,
what is the rule on the matter?

INTERNATIONAL COMMERCIAL ARBITRATION--Section 28 of the Model provides:


1. the arbitrators may make a decision on the substance of the issue based on the agreed
law of the parties.

Provision: the substance of the dispute in international commercial arbitration shall be


decided in accordance with such “rules of law” as are chosen by the parties as applicable
to the substance of th dispute

2. the agreed law of the parties refers to the substantive law of a state. Take note, this
refers to substantive law of the state and not to its conflict rules.

Provision: the designation by the parties of the applicable law or legal system of a given
State shall, unless otherwise specified by them, directly refer to the substantive law of that
State and not to its conflict of laws rules.

3. in the absence of designation, the arbitral tribunal will decide and shall apply the national
law determined by the conflict of laws rules.

Provision: under the Model Law, the arbitral tribunal shall decide ex aequo et bono as
amiable compositeur only if the parties expressly authorize them to do so

4. under numbers 1,2,3 the arbitral tribunal shall decide based on the terms of the contract
and shall take into account the usages of trade applicable in the action.

Again,
1)it is based on the agreed law of the parties.
2) it refers to substantive law of the state and not to its conflict rule.
3) in the absence of designation the arbitral tribunal shall apply the national law
determined by the conflict of laws rule 4
) under 1,2, and 3 the arbitral the arbitral tribunal shall decide based on the terms of the
contract taking into account the usages of trade applicable in the court action.

So in other words, if it is international commercial arbitration the rule there or principle is, it grants
the parties the freedom to choose the applicable law. In international commercial arbitration, it does
not matter if the parties are both foreigners as long as the place of arbitration is in the Philippines. If
both parties of international arbitration sabihin natin o sige the dispute basehan nito example the
imperial law example lang yan, ok lang yan diba because it allows the parties to choose the
applicable substantive law. So those are the rules. Depende yan if it is domestic arbitration or
international commercial arbitration.

The foregoing rules in international commercial arbitration is provided under Article 28 of the Model
Law. The principle there is that it recognizes that the agreement of the parties as agreed by the
parties is crucial in resolving any dispute arising in the contract.

So, the parties are given now leeway to choose what law will apply to the dispute. It will be
respected unless:
a. It is contrary to the public policy of the Philippines
b. It is contrary to the universally accepted principles of morality;
c. It is penal in character
d. It is purely fiscal or administrative in character
e. It would work undeniable injustice to the citizens or residents of the Philippines or
f. It would work against the vital interest or national security of the Philippines.

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DOMESTIC ARBITRATION--Under domestic arbitration,


arbitrators may grant any remedy or relief they deem just and equitable. (section 20 of the
arbitration law)
Can an arbitrator decide an issue or issues on the basis
of equity? YES. In the absence of any agreement or statutory limitation: “he may do justice as he
sees it, applying his own sense of law and equity to the facts as he finds them to be making an
award reflecting the spirit rather than the letter of the agreement, even though the award exceeds
the remedy requested by the parites”

14. COMPROMISE
Question: what if for example while undergoing arbitration proceedings nag settle yung
parties. Diba pwede yun mangyari. What will happen? What kind of award will the arbitral
tribunal render? Answer: it is an ARBITRAL AWARD ON AGREED TERMS; the arbitral tribunal
shall award a SETTLEMENT in the form of an arbitral award on agreed terms. It contemplates a
situation when parties amicably settle during the proceedings.
What happens? Under article 30 of the Model Law, the arbitral tribunal shall terminate the
proceedings and record the settlement in the form of arbitral award on agreed terms. Such an
award has the same status and effect as any other award on the merits of the case. (article 30 (2),
Model Law)

15. CORRECTION, MODIFICATION AND INTERPRETATION


Question: Is a correction before the arbitral tribunal allowed before the said body? It
depends.
i. If it is on the international commercial arbitration, under article 33 of the model law , it
provides that, “errors in computation, any clerical or typographical errors or any errors of
similar nature can be made but ‘with prior notice to the other party”.
ii. If is a correction in domestic arbitration, Under RA 9285, correction is not allowed in
domestic arbitration. The case there is Imperial Textile Mills vs Sampang 219 scra 615
The SC said that the reason for not allowing the arbitral tribunal is, it loses authority or
jurisdiction the moment it renders a decision.

So, corrections and modification in arbitral award is only award in international commercial
arbitration kapag domestic arbitration bawal. correction of an award is allowed if it is
rendered in international commercial arbitration but the correction daw is only limited to
clerical or typographical error. But if it is an award in domestic arbitration, correction of that
award before the tribunal is not allowed.
Question: if so, then what is your remedy if you want a part of the award to be corrected?
Your remedy is JUDICIAL through filing a petition to vacate the award.

How about additional awards? Additional award allowed in international commercial arbitration
(article 33, Model Law), “with notice to the other party, a party may request the Arbitral Tribunal to
give an interpretation of a specific point or part of the award”

16. FINALITY OF AWARD


If it is domestic arbitration—by deduction, section 26of the arbitration law, upon lapse of 30 days
after the award is delivered to the parties or their lawyers if they are represented by counsel.
If it is international commercial arbitration--after 3 months from receipt of the award.

Question: So when does an arbitration proceeding terminate?


1. An arbitration proceeding is terminated by a final order
2. The arbitration proceeding is terminated upon issuance of an award by the arbitral tribunal
terminating the proceeding on the following grounds:
a. When the claimant withdraws his claims
b. The parties agree on the termination of the proceeding
c. The arbitral tribunal finds that the continuation of the proceeding has for any
reason become unnecessary or impossible

17. CONFIDENTIALITY OF AWARD

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we learned that everything that is disclosed during mediation proceeding cannot be used for any
purpose. Diba, in any proceeding. How about yung mga papers and documents used during the
arbitration proceeding can that be presented in court? The answer is that arbitral proceedings are
held in private and all pleadings are treated confidential.
Arbitral awards are not published unless of course if the parties agreed.

Under 9285, when we say confidentiality, it includes the records of th case, evidence and the
arbitral award; it shall be considered of confidential and are not published EXCEPT:
a. when the parties agree or
b. only for the limited purpose of disclosing to the court of relevant documents and
c. Such disclosure is needed to be made in connection with an action or pending appeal
before ht said court.

Provision:
In case an arbitral award is appealed or contested in corut,a party to the arbitral
proceedings is authorized under RA 9285 to disclose to the court relevant
documents pertaining to the arbitration.
But the court where the appeal or other proceeding is pending may issue
protective orders “to prevent or prohibit disclosure of document sor information
containing secret processes, developments, research and other information
where it is shown that the applicant shall be materially prejudiced by an
authorized disclosure thereof” (section 23, RA 9285)

In other words, everything related to the proceedings are strictly confidential. But when it is shown
that the applicant will be adversely affected by said disclosure, the court in which the action is
pending or pending appeal, may issue PROTECTIVE ORDRES. That is sanctioned under rule 10
of the special ADR rules.

RULE 10: CONFIDENTIALITY/PROTECTIVE ORDERS

Rule 10.1. Who may request confidentiality. - A party, counsel or witness who disclosed or who
was compelled to disclose information relative to the subject of ADR under circumstances that
would create a reasonable expectation, on behalf of the source, that the information shall be kept
confidential has the right to prevent such information from being further disclosed without the
express written consent of the source or the party who made the disclosure.

Rule 10.2. When request made. - A party may request a protective order at anytime there is a need
to enforce the confidentiality of the information obtained, or to be obtained, in ADR proceedings
.
Rule 10.3. Venue. - A petition for a protective order may be filed with the Regional Trial Court
where that order would be implemented.

If there is a pending court proceeding in which the information obtained in an ADR proceeding is
required to be divulged or is being divulged, the party seeking to enforce the confidentiality of the
information may file a motion with the court where the proceedings are pending to enjoin the
confidential information from being divulged or to suppress confidential information.

Rule 10.4. Grounds. - A protective order may be granted only if it is shown that the applicant would
be materially prejudiced by an unauthorized disclosure of the information obtained, or to be
obtained, during an ADR proceeding.

Rule 10.5. Contents of the motion or petition. - The petition or motion must state the following:
a. That the information sought to be protected was obtained, or would be obtained, during
an ADR proceeding;
b. The applicant would be materially prejudiced by the disclosure of that information;
c. The person or persons who are being asked to divulge the confidential information
participated in an ADR proceedings; and
d. The time, date and place when the ADR proceedings took place.

Apart from the other submissions, the movant must set the motion for hearing and contain a notice
of hearing in accordance with Rule 15 of the Rules of Court.

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Rule 10.6. Notice. - Notice of a request for a protective order made through a motion shall be made
to the opposing parties in accordance with Rule 15 of the Rules of Court.

Rule 10.7. Comment/Opposition. - The comment/opposition must be filed within fifteen (15) days
from service of the petition. The opposition or comment may be accompanied by written proof that
(a) the information is not confidential, (b) the information was not obtained during an ADR
proceeding, (c) there was a waiver of confidentiality, or (d) the petitioner/movant is precluded from
asserting confidentiality.

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

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

For mediation proceedings, the court shall be further guided by the following principles:
a. Information obtained through mediation shall be privileged and confidential.
b. A party, a mediator, or a nonparty participant may refuse to disclose and may prevent
any other person from disclosing a mediation communication.
c. In such an adversarial proceeding, the following persons involved or previously involved
in a mediation may not be compelled to disclose confidential information obtained during
the mediation: (1) the parties to the dispute; (2) the mediator or mediators; (3) the counsel
for the parties: (4) the nonparty participants; (5) any persons hired or engaged in
connection with the mediation as secretary, stenographer; clerk or assistant; and (6) any
other person who obtains or possesses confidential information by reason of his/ her
profession.
d. The protection of the ADR Laws shall continue to apply even if a mediator is found to
have failed to act impartially.
e. A mediator may not be called to testify to provide information gathered in mediation. A
mediator who is wrongfully subpoenaed shall be reimbursed the full cost of his attorney
fees and related expenses.

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

If the court declines to enjoin a person or persons from divulging confidential information, the
petitioner may file a motion for reconsideration or appeal.

Rule 10.10. Consequence of disobedience. - Any person who disobeys the order of the court to
cease from divulging confidential information shall be imposed the proper sanction by the court.

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CHAPTER VI
RECOURSE AGAINST FINAL AWARDS
1. AWARDS IN DOMESTIC ARBITRATON
General rule: the arbitration agreement may provide that the arbitrator’s award shall be final, non-
appealable and executory.
Basis: Article 2044 of the Civil code—any stipulation that the arbitrator’s award or decision shall be
final is valid, without prejudice to Articles 2038, 2039 and 2040.
What is the only limitation? Decisions of arbitrators are subject to judicial review and may be
annulled or rescinded if the conditions prescribed in articles 2038, 2039, 2040 and sections 24 and
25 of the Arbitration Law apply”
If it is a domestic arbitration, an award that is rendered by the Arbitral Tribunal becomes final after
lapse of 30 days after the award is delivered to a party. If the party to a domestic arbitration wishes
to have the award set aside or modified he cannot do that before the Arbitral tribunal because
remember, the arbitral tribunal loses its jurisdiction the moment it issues the decision.

So what is your remedy? File a petition before the RTC for correcting or vacating of the award
(rule 11)
Review:
a. Remedy: file a motion to vacate award before the RTC having jurisdiction over the
arbitration within 30 days from receipt of the arbitral award
b. Section 25: Grounds for CORRECTING an awrd (remedy: file petition/motion for
correction/modification of arbitral award)
c. Section 24: Grounds for VACATING an award (remedy: file a petition/motion to vacate
domestic arbitral award filed with the RTC)

NOTE: When to request for correction, modification or vacation


o If it is DA, under section 25 of the Arbitration law, it provides for grounds for correcting an
award. Unlike in section 24, it provides grounds for VACATING an awarD
o Correcting an award refers to trivial matters compared to those in section 24 which provides for
grounds for vacating an award. It involves or goes into the very merits or substance of the
arbitral award.

GROUDNS FOR CORRECTING AN AWARD (Rule 11.4)


B) To correct/modify an arbitral award. - The Court may correct/modify or order the arbitral
tribunal to correct/modify the arbitral award in the following cases:
a. Where there was an evident miscalculation of figures or an evident mistake in the
description of any person, thing or property referred to in the award;
b. Where the arbitrators have awarded upon a matter not submitted to them, not affecting the
merits of the decision upon the matter submitted;
c. Where the arbitrators have omitted to resolve an issue submitted to them for resolution; or
d. Where the award is imperfect in a matter of form not affecting the merits of the
controversy, and if it had been a commissioner’s report, the defect could have been
amended or disregarded by the Court.

GROUNDS TO VACATE
Rule 11.4. Grounds.
(A) To vacate an arbitral award. - The arbitral award may be vacated on the following grounds:
a. The arbitral award was procured through corruption, fraud or other undue means;
b. There was evident partiality or corruption in the arbitral tribunal or any of its members;
c. The arbitral tribunal was guilty of misconduct or any form of misbehavior that has
materially prejudiced the rights of any party such as refusing to postpone a hearing upon
sufficient cause shown or to hear evidence pertinent and material to the controversy;
d. One or more of the arbitrators was disqualified to act as such under the law and willfully
refrained from disclosing such disqualification; or

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e. The arbitral tribunal exceeded its powers, or so imperfectly executed them, such that a
complete, final and definite award upon the subject matter submitted to them was not
made.

The award may also be vacated on any or all of the following grounds:
i. The arbitration agreement did not exist, or is invalid for any ground for the revocation of a
contract or is otherwise unenforceable; or
ii. A party to arbitration is a minor or a person judicially declared to be incompetent.

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

Rule 11.3. Venue. - The petition for confirmation, correction/modification or vacation of a domestic
arbitral award may be filed with Regional Trial Court having jurisdiction over the place in which one
of the parties is doing business, where any of the parties reside or where arbitration proceedings
were conducted.

Rule 11.5. Form of petition. - An application to vacate an arbitral award shall be in the form of a
petition to vacate or as a petition to vacate in opposition to a petition to confirm the same award.

An application to correct/modify an arbitral award may be included in a petition to confirm an


arbitral award or in a petition to vacate in opposition to confirm the same award.

When a petition to confirm an arbitral award is pending before a court, the party seeking to vacate
or correct/modify said award may only apply for those reliefs through a petition to vacate or
correct/modify the award in opposition to the petition to confirm the award provided that such
petition to vacate or correct/modify is filed within thirty (30) days from his receipt of the award. A
petition to vacate or correct/modify an arbitral award filed in another court or in a separate case
before the same court shall be dismissed, upon appropriate motion, as a violation of the rule
against forum-shopping.

When a petition to vacate or correct/modify an arbitral award is pending before a court, the party
seeking to confirm said award may only apply for that relief through a petition to confirm the same
award in opposition to the petition to vacate or correct/modify the award. A petition to confirm or
correct/modify an arbitral award filed as separate proceeding in another court or in a different case
before the same court shall be dismissed, upon appropriate motion, as a violation of the rule
against forum shopping.

As an alternative to the dismissal of a second petition for confirmation, vacation or


correction/modification of an arbitral award filed in violation of the non-forum shopping rule, the
court or courts concerned may allow the consolidation of the two proceedings in one court and in
one case.

Where the petition to confirm the award and petition to vacate or correct/modify were
simultaneously filed by the parties in the same court or in different courts in the Philippines, upon
motion of either party, the court may order the consolidation of the two cases before either court.
In all instances, the petition must be verified by a person who has knowledge of the jurisdictional
facts.

Rule 11.6. Contents of petition. - The petition must state the following:
a. The addresses of the parties and any change thereof;
b. The jurisdictional issues raised by a party during arbitration proceedings;
c. The grounds relied upon by the parties in seeking the vacation of the arbitral award
whether the petition is a petition for the vacation or setting aside of the arbitral award or a
petition in opposition to a petition to confirm the award; and
d. A statement of the date of receipt of the arbitral award and the circumstances under which
it was received by the petitioner.

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Apart from other submissions, the petitioner must attach to the petition the following:
a. An authentic copy of the arbitration agreement;
b. An authentic copy of the arbitral award;
c. A certification against forum shopping executed by the applicant in accordance with
Section 5 of Rule 7 of the Rules of Court; and
d. An authentic copy or authentic copies of the appointment of an arbitral tribunal.

Rule 11.7. Notice. - Upon finding that the petition filed under this Rule is sufficient both in form and
in substance, the Court shall cause notice and a copy of the petition to be delivered to the
respondent allowing him to file a comment or opposition thereto within fifteen (15) days from receipt
of the petition. In lieu of an opposition, the respondent may file a petition in opposition to the
petition.

The petitioner may within fifteen (15) days from receipt of the petition in opposition thereto file a
reply.

Rule 11.8. Hearing. - If the Court finds from the petition or petition in opposition thereto that there
are issues of fact, it shall require the parties, within a period of not more than fifteen (15) days from
receipt of the order, to simultaneously submit the affidavits of all of their witnesses and reply
affidavits within ten (10) days from receipt of the affidavits to be replied to. There shall be attached
to the affidavits or reply affidavits documents relied upon in support of the statements of fact in
such affidavits or reply affidavits.
If the petition or the petition in opposition thereto is one for vacation of an arbitral award, the
interested party in arbitration may oppose the petition or the petition in opposition thereto for the
reason that the grounds cited in the petition or the petition in opposition thereto, assuming them to
be true, do not affect the merits of the case and may be cured or remedied. Moreover, the
interested party may request the court to suspend the proceedings for vacation for a period of time
and to direct the arbitral tribunal to reopen and conduct a new hearing and take such other action
as will eliminate the grounds for vacation of the award. The opposition shall be supported by a brief
of legal arguments to show the existence of a sufficient legal basis for the opposition.

If the ground of the petition to vacate an arbitral award is that the arbitration agreement did not
exist, is invalid or otherwise unenforceable, and an earlier petition for judicial relief under Rule 3
had been filed, a copy of such petition and of the decision or final order of the court shall be
attached thereto. But if the ground was raised before the arbitral tribunal in a motion to dismiss filed
not later than the submission of its answer, and the arbitral tribunal ruled in favor of its own
jurisdiction as a preliminary question which was appealed by a party to the Regional Trial Court, a
copy of the order, ruling or preliminary award or decision of the arbitral tribunal, the appeal
therefrom to the Court and the order or decision of the Court shall all be attached to the petition.

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

If on the basis of the petition, the opposition, the affidavits and reply affidavits of the parties, the
court finds that there is a need to conduct an oral hearing, the court shall set the case for hearing.
This case shall have preference over other cases before the court, except criminal cases. During
the hearing, the affidavits of witnesses shall take the place of their direct testimonies and they shall
immediately be subject to cross-examination thereon. The Court shall have full control over the
proceedings in order to ensure that the case is heard without undue delay.

IMPORTANT THINGS TO REMEMBER:


Petition must be VERIFIED
Authentic copy o the arbitral ward must be attached
Certification against forum shopping
Authentic copy of the appointment of the arbitral tribunal.

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The grounds enumerated under section 24 are more serious and more substantial. The grounds involve
the integrity of the award itself.
So, again the grounds for vacating an award refer to the integrity of the award itself. In contrast, under
section 25 of the Arbitration Law. Section 25 of the Arbitration Law provides for the grounds for
correcting an award. Iba yung grounds for vacating an award, iba yung grounds for correcting an award.
So, under Section 25, correcting lang daw an award. So when you say you want the award to be
corrected, these do not involve the merits of the arbitral award. So, magkaiba ha. Section 24, the
vacating refers to substantial issues, the integrity of the award itself in contrast to section 25 which do
not involve the merits of the arbitral award.

when do you file the said petition either to vacate an award or to correct an award? under the law,
you file that not later than 30 days. Take note, not later than 30 days from receipt of the arbitral award.

So ang jurisdiction is to be filed before the RTC. Ok? So RTC of the place having jurisdiction over the
place in which one of the parties is doing business, where any of the parties reside or where arbitration
proceedings are conducted. That is under Rule 11.3.

Rule 11.3. Venue. - The petition for confirmation, correction/modification or vacation of a domestic
arbitral award may be filed with Regional Trial Court having jurisdiction over the place in which one of
the parties is doing business, where any of the parties reside or where arbitration proceedings were
conducted.

Rule 11.9. Court action. - Unless a ground to vacate an arbitral award under Rule 11.5 above is fully
established, the court shall confirm the award.

An arbitral award shall enjoy the presumption that it was made and released in due course of arbitration
and is subject to confirmation by the court

In resolving the petition or petition in opposition thereto in accordance with these Special ADR Rules,
the court shall either confirm or vacate the arbitral award. The court shall not disturb the arbitral
tribunal’s determination of facts and/or interpretation of law.

(Comment: if its a domestic arbitration and you file a petition to vacate the award, the court will either
VACAT E or CONFIRM)

In a petition to vacate an award or in petition to vacate an award in opposition to a petition to


confirm the award, the petitioner may simultaneously apply with the Court to refer the case back to the
same arbitral tribunal for the purpose of making a new or revised award or to direct a new hearing, or in
the appropriate case, order the new hearing before a new arbitral tribunal, the members of which shall
be chosen in the manner provided in the arbitration agreement or submission, or the law. In the latter
case, any provision limiting the time in which the arbitral tribunal may make a decision shall be deemed
applicable to the new arbitral tribunal.

(THIS REFERS TO DOMESTIC ARBITRAITON)

QUSETION: what if your ground to vacate an award is that because the arbitral tribunal
committed errors of or errors of law, will the court entertain your petition? NO. the court sill not
substitute its judgment for that of the arbitral tribunal. (rule 11.9) In referring the case back to the arbitral
tribunal or to a new arbitral tribunal pursuant to Rule 24 of Republic Act No. 876, the court may not
direct it to revise its award in a particular way, or to revise its findings of fact or conclusions of law or
otherwise

EFFECTS OF RAISING GROUNDS OTHER THAN THOSE ENUMERATED BY LAW

K, next. My next question is that, we’ve said that if we want an award to be vacated or if we want an
award to be corrected, there are specific grounds under the law. Now, my question is, what if, for
example, you filed a petition to vacate or to set aside an award already final before the RTC and then,

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you raise, a ground other than those enumerated under section 24. Hindi siya mentioned. At the point of
view of the RTC, will the RTC entertain your petition or should it be dismissed?

Differently stated: in a suit to vacate an arbitral award in a domestic arbitration, should the
court disregard the more serious grounds enumerated under section 24 of the Arbitration Law in
light of section 41 of RA 9285 which states that any ground other than those specified in section
25 of the Arbitration Law be “disregarded” by the court?

Answer: notwithstanding section 41 of RA 9285, the court should take cognizance of the grounds
enumerated in section 24 of the Arbitration Law in any proceeding to vacate or set aside an award in a
domestic arbitration since it violates the aggrieved party’s right to due process.

Any arbitration conducted in the Philippines, whether international or domestic arbitration, is subject to
the orverridign public policy that the rights of any party to due process, which means, at the very least,
the right to have a fair trial before an impartial tribunal, must be respected.

EFFECTS OF JUDGMENTS OF THE RTCT VACATING/MODIFYING/CORRECT AN AWARD:

Next, di ba we file a petition to vacate an award or to correct an award with the RTC. So my question is,
what is the effect of an order issued by the court in the said petition? What is the effect of the judgment
of the RTC either vacating or correcting the award? K, the effect there is… K. Three effects. So the
effect of the judgment of the RTC vacating or modifying or correcting the award, it is deemed as
an order made in a proceeding under Section 29 of the Arbitration Law.

So what are those effects?

1. IT SHALL BE DOCKETED AS IF IT WERE RENDERED IN AN ACTION;


2. IT SHALL HAVE THE SAME FORCE AND EFFECT OF A JUDGMENT IN AN ACTION;
3. IT MAY BE ENFORCED AS IF IT HAD BEEN RENDERED IN A COURT IN WHICH IT IS
ENTERED. –you can file for a motion for execution.

Ok now, as regards the first effect. Sabi natin, ang first effect is it shall be docketed as if it were
rendered in an action. Anong ibig sabihin ng docketed by the said RTC? Kasi, like in practice, for
example, pag may nag-file ng kaso, may tinatawag kaming case number. For example, Civil Case No.
123. And then sa court, we have that docket book, kung baga lahat ng proceedings na nangyari doon,
isusulat kamay yan siya sa docker book. So kung baga ang effect ng judgment ng RTC vacating or
confirming or modifying an award is that it shall be docketed as if it were rendered in an action. Para
siyang original action na gi-file sa court. So that is the first effect.

The third effect, it is said that it may be enforced as if it had been rendered in a court in which it is
entered. So, anong ibig sabihin no’n? Ang ibig sabihin no’n is it is subject to execution. So if you want to
execute that, you file a Motion for Execution before the said RTC. So take note ha of the effects of the
judgment of an RTC confirming or vacating or modifying or correcting the award.

The judgment of the RTC in a domestic arbitration either confirming the award or vacating or modifying
or correcting the award is an order or decision “entered upon an award” which is also deemed an “order
made in a proceeding under section 29 of this act”.

2 types of orders contemplated under section 29, Arbitration Law:


a. A judgment entered upon an award—judgment confirming, vacating, correcting or
modifying the arbitral award;
b. “order made in a proceeding under the Act”—includes any order other than the first type of
order which finally determines a specific aspect of part of the controversy.

Example: order compelling a respondent to proceed with arbitration. If the party fails or
refuses to proceed with arbitration, the other party can file a suit before the RTC to compel
the respondent to proceed with arbitration. If respondent fails to appeal, the order
becomes final and executory.

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QUESTION: WHAT IS NOW THE REMEDY AGAINST THE ORDER OF THE COURT EITHER
VACATING, CORRECTING OR MODIFYING A DOMESTIC ARBITRAL AWARD?
ANSWER: the remedy there is for you to first file a Motion for Reconsideration before the RTC within 15
days from receipt of the order. After that, you can file your appeal before the CA or file a petition for
Certiorari. Remember that the motion for reconsideration is filed within 15 days from the notice of the
decision of the RTC. This is found under Rule 19.2 of the Special ADR Rules.

Rule 19.2. When to move for reconsideration. - A motion for reconsideration may be filed with the
Regional Trial Court within a non-extendible period of fifteen (15) days from receipt of the questioned
ruling or order.

Can you file an appeal and certiorari at the same time? NO.
If after resolving your MR, party may file either an appeal or certiorari. Note that, “Where the remedies
of appeal or certiorari are specially made available for the parties under the special ADR rules, recourse
to one precludes the other. The remedies of certiorari and appeal are only ALTERNATIVE.

Appeal by petition for review under Rule 45 to the SC on pure questions of law.
If interlocutory, the remedy is certiorari under Rule 65 before the CA, if th order has been rendered thru
grave abuse of discretion.

WHAT IS THE EFFECT OF AN APPEAL? If you file an appeal, what will happen to the decision
rendered by the RTC? the effect of the appeal is that it shall not stay the award or the resolution sought
to be reviewed unless the Court of Appeals directs otherwise. So, take note of that ha. It shall not stay
the award or the resolution sought to be reviewed unless the Court of Appeals directs otherwise.

2. AWARDS IN INTERNATIONAL COMMERCIAL ARBITRATION


REMEDY: within 3 months after receipt of award, a party may apply to the court for setting aside
the award (model law, article 34 (3))

RULE 12: RECOGNITION AND ENFORCEMENT OR SETTING ASIDE OF AN


INTERNATIONALCOMMERCIAL ARBITRATION AWARD

Rule 12.1. Who may request recognition and enforcement or setting aside. - Any party to an
international commercial arbitration in the Philippines may petition the proper court to recognize
and enforce or set aside an arbitral award.

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

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

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

Comment: Now, when you file this petition, if it is an award in international commercial arbitration,
you file that within 3 months. Take note. File that within 3 months from the time the petitioner
receives a copy of the said award. Again, file that within 3 months from the time the petitioner
receives a copy of the award.

If a timely request is made before the arbitral tribunal, the 3 months is to be counted from the time

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the petitioner receives a resolution of the arbitral tribunal. Bakit sabi niya, if a timely request is
made before the arbitral tribunal? Because nga you can file a petition to correct your award before
the arbitral tribunal before it becomes final. Take note ha. So it is to be counted within 3 months
from the time the petitioner receives the resolution of the arbitral tribunal. Take note.

A petition to set aside can no longer be filed after lapse of 3 months. Magiging time-barred na ‘yan
siya. So you are given 3 months to file your petition before the RTC. So take note of that.

Remember: Unlike in domestic arbitration, ang gagawin lang ng RTC is either to VACATE or
confirm. Here, if the petition to vacate or correct is issued, it shall NOT automatically result in the
recognition or enforcement of the award.

Rule 12.3. Venue. - A petition to recognize and enforce or set aside an arbitral award may, at the
option of the petitioner, be filed with the Regional Trial Court: (a) where arbitration proceedings
were conducted; (b) where any of the assets to be attached or levied upon is located; (c) where
the act to be enjoined will be or is being performed; (d) where any of the parties to arbitration
resides or has its place of business; or (e) in the National Capital Judicial Region.

Take note of the grounds to set aside or resist the enforcement under rule 12.4

(important!) Rule 12.4. Grounds to set aside or resist enforcement. - The court may set aside
or refuse the enforcement of the arbitral award only if:
a. The party making the application furnishes proof that:
i. A party to the arbitration agreement was under some incapacity, or the
said agreement is not valid under the law to which the parties have
subjected it or, failing any indication thereof, under Philippine law; or
ii. The party making the application to set aside or resist enforcement was
not given proper notice of the appointment of an arbitrator or of the
arbitral proceedings or was otherwise unable to present his case; or
iii. The award deals with a dispute not contemplated by or not falling within
the terms of the submission to arbitration, or contains decisions on
matters beyond the scope of the submission to arbitration; provided that,
if the decisions on matters submitted to arbitration can be separated from
those not so submitted, only that part of the award which contains
decisions on matters not submitted to arbitration may be set aside or
only that part of the award which contains decisions on matters
submitted to arbitration may be enforced; or
iv. The composition of the arbitral tribunal or the arbitral procedure was not
in accordance with the agreement of the parties, unless such agreement
was in conflict with a provision of Philippine law from which the parties
cannot derogate, or, failing such agreement, was not in accordance with
Philippine law;

(VIP!) b. The court finds that:


(i). The subject-matter of the dispute is not capable of settlement by arbitration
under the law of the Philippines; or
(ii). The recognition or enforcement of the award would be contrary to public
policy.

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

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

Rule 12.5. Exclusive recourse against arbitral award. - Recourse to a court against an arbitral
award shall be made only through a petition to set aside the arbitral award and on grounds
prescribed by the law that governs international commercial arbitration. Any other recourse from
the arbitral award, such as by appeal or petition for review or petition for certiorari or otherwise,

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shall be dismissed by the court.

So bawal ang petition for review, certiorari or appeal, unlike sa domestic arbitral award.

Rule 12.6. Form. - The application to recognize and enforce or set aside an arbitral award,
whether made through a petition to recognize and enforce or to set aside or as a petition to set
aside the award in opposition thereto, or through a petition to set aside or petition to recognize
and enforce in opposition thereto, shall be verified by a person who has personal knowledge of
the facts stated therein.

When a petition to recognize and enforce an arbitral award is pending, 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
same proceedings.

When a timely petition to set aside an arbitral award is filed, the opposing party may file a petition
for recognition and enforcement of the same award in opposition thereto.

Rule 12.7. Contents of petition. - (A) Petition to recognize and enforce. - The petition to recognize
and enforce or petition to set aside in opposition thereto, or petition to set aside or petition to
recognize and enforce in opposition thereto, shall state the following:
a. The addresses of record, or any change thereof, of the parties to arbitration;
b. A statement that the arbitration agreement or submission exists;
c. The names of the arbitrators and proof of their appointment;
d. A statement that an arbitral award was issued and when the petitioner received it; and
e. The relief sought.
Apart from other submissions, the petitioner shall attach to the petition the following:
a. An authentic copy of the arbitration agreement;
b. An authentic copy of the arbitral award;
c. A verification and certification against forum shopping executed by the applicant in
accordance with Sections 4 and 5 of Rule 7 of the Rules of Court; and
d. An authentic copy or authentic copies of the appointment of an arbitral tribunal.

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

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

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

Rule 12.8. Notice. - Upon finding that the petition filed under this Rule is sufficient both in form
and in substance, the court shall cause notice and a copy of the petition to be delivered to the
respondent directing him to file an opposition thereto within fifteen (15) days from receipt of the
petition. In lieu of an opposition, the respondent may file a petition to set aside in opposition to a
petition to recognize and enforce, or a petition to recognize and enforce in opposition to a petition
to set aside.

The petitioner may within fifteen (15) days from receipt of the petition to set aside in opposition to
a petition to recognize and enforce, or from receipt of the petition to recognize and enforce in
opposition to a petition to set aside, file a reply.

Rule 12.9. Submission of documents. - If the court finds that the issue between the parties is
mainly one of law, the parties may be required to submit briefs of legal arguments, not more than

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fifteen (15) days from receipt of the order, sufficiently discussing the legal issues and the legal
basis for the relief prayed for by each of them.

If the court finds from the petition or petition in opposition thereto that there are issues of fact
relating to the ground(s) relied upon for the court to set aside, it shall require the parties within a
period of not more than fifteen (15) days from receipt of the order simultaneously to submit the
affidavits of all of their witnesses and reply affidavits within ten (10) days from receipt of the
affidavits to be replied to. There shall be attached to the affidavits or reply affidavits, all
documents relied upon in support of the statements of fact in such affidavits or reply affidavits.

Rule 12.10. Hearing. - If on the basis of the petition, the opposition, the affidavits and reply
affidavits of the parties, the court finds that there is a need to conduct an oral hearing, the court
shall set the case for hearing. This case shall have preference over other cases before the court,
except criminal cases. During the hearing, the affidavits of witnesses shall take the place of their
direct testimonies and they shall immediately be subject to cross-examination thereon. The court
shall have full control over the proceedings in order to ensure that the case is heard without
undue delay.

Rule 12.11. Suspension of proceedings to set aside. - The court when asked to set aside an
arbitral award may, where appropriate and upon request by a party, suspend the proceedings for
a period of time determined by it to give the arbitral tribunal an opportunity to resume the arbitral
proceedings or to take such other action as in the arbitral tribunal’s opinion will eliminate the
grounds for setting aside. The court, in referring the case back to the arbitral tribunal may not
direct it to revise its award in a particular way, or to revise its findings of fact or conclusions of law
or otherwise encroach upon the independence of an arbitral tribunal in the making of a final
award.

The court when asked to set aside an arbitral award may also, when the preliminary ruling of an
arbitral tribunal affirming its jurisdiction to act on the matter before it had been appealed by the
party aggrieved by such preliminary ruling to the court, suspend the proceedings to set aside to
await the ruling of the court on such pending appeal or, in the alternative, consolidate the
proceedings to set aside with the earlier appeal.

(read) Rule 12.12. Presumption in favor of confirmation. - It is presumed that an arbitral


award was made and released in due course and is subject to enforcement by the court,
unless the adverse party is able to establish a ground for setting aside or not enforcing an
arbitral award.

Rule 12.13. Judgment of the court. - Unless a ground to set aside an arbitral award under Rule
12.4 above is fully established, the court shall dismiss the petition. If, in the same proceedings,
there is a petition to recognize and enforce the arbitral award filed in opposition to the petition to
set aside, the court shall recognize and enforce the award.

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

Rule 12.14. Costs. - Unless otherwise agreed upon by the parties in writing, at the time the case
is submitted to the court for decision, the party praying for recognition and enforcement or setting
aside of an arbitral award shall submit a statement under oath confirming the costs he has
incurred only in the proceedings for such recognition and enforcement or setting aside. The costs
shall include the attorney’s fees the party has paid or is committed to pay to his counsel of record.
The prevailing party shall be entitled to an award of costs, which shall include reasonable
attorney’s fees of the prevailing party against the unsuccessful party. The court shall determine
the reasonableness of the claim for attorney’s fees.

NOTES FROM OLD TRANSCRIPT:


Next, what is the remedy against the decision of the RTC in an action to set aside an award in
international commercial arbitration? The remedy in domestic arbitration as well as in international
commercial arbitration, so MR within 15 days and then another 15 days para sa appeal before the

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Court of Appeals. Ano ang mode of appeal before the CA? What is the mode of appeal? That is by
a petition for review. Mode of appeal is by a petition for review.

Ang standards of review sa decision ng arbitral tribunal by the court limited lang. Limited lang
talaga. Because? Why? The grounds there are exclusive, as to the nature of the action to review,
there are specific grounds to vacate an award and the grounds to correct an award. Why? The
reason there is that arbitration is merely an alternative to the court system of resolving disputes.
That’s why ang standards of review by the court is purely limited. K? The limited or restricted mode
of review is likewise enunciated in the case of Carpio vs Sulu Resources Development
Corporation (387 SCRA 138). Likewise, this has been enunciated in the case of National Steel
Corporation vs. RTC (304 SCRA 595).

K. My next question is, are the remedies of appeal as well as certiorari under the special ADR law,
are these cumulative? Pwede ba pagsabayin ang appeal and certiorari or alternative lang ito sila?
Take note, sabi, under Arbitration Law as well as the Model Law, if you avail of appeal, this will
preclude certiorari. So, hindi pwede ha. So either mag-appeal ka lang, hindi na yang certiorari.
Later na ‘yung certiorari. Why? This is based on the premise that the main remedy of appeal
proscribes the special civil action of certiorari. K. So take note of that.

February 1, 2013

We’ll have two exams, 40% each. Plano ko to waive the 20% sa recit but I will require you to attend the court visit
baka first week of March. Ating final exam is about mediation and JDR.

So my lecture tonight will be very short. It will be regarding Enforcement of Philippine Arbitral Awards. So type of
exam for our first exam on Feb 6 3-5pm, more on application. Actually nasa lecture lahat. If you listen to my lecture
and you read the law, you won’t have a problem anymore.

First, regarding enforcement of arbitral awards.

CHAPTER VII
ENFORCEMENT OF ARBITRAL AWARDS
First Principle: All awards rendered by an arbitrator or arbitral tribunal require confirmation by the court to be
enforceable. Anong basis non? That is based on law.
OR
Second Principle: The parties may voluntarily implement the award after it is rendered. What is the basis? The basis
is the arbitration agreement of the parties.

Q: Next, what kind of award is subject to judicial confirmation?


A: Only final awards.

Q: Next, when is an arbitral award final?


A: for purposes of addressing finality of an award, it can be grouped into two categories:
First Group: The first category refers to cases suggesting that an award to be final must be confirmed by the court.
In other words, these are the awards na confirmed final awards.
Second Group: it is based on the arbitration agreement of the parties and their intention that the award will be final
and binding. This second group is called unconfirmed final award.
So two groups, the confirmed final award and unconfirmed final award.

So when we speak of confirmed final award, what is this confirmed final award?
So under the law and pursuant to your special ADR Rules, it shall be made by the court. You have to file a verified
petition before the RTC.

So what kind of award requires judicial confirmation? Awards rendered in domestic arbitration and International
commercial arbitration.

So if it is domestic arbitration, when do we file the petition for confirmation? We should file that after lapse of
30 days from receipt by the petitioner of the arbitral award by filing a verified petition. So after lapse of thirty days
from receipt of the award.

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Take note, under the law, there is a presumption that the arbitral award shall enjoy the presumption that it was made
and released in due course of arbitration, subject to confirmation by the court. Take note that the court shall not
disturb the arbitral tribunal’s determination of facts and/or interpretation of law unless there is a ground to vacate or
the grounds to vacate are established, the court shall confirm the award. In other words, it is the automatic duty of the
court to confirm the award.

How about if it’s international commercial arbitration, when do you file petition for confirmation? Within the 3
month period from receipt of the award because after the lapse of the 3month period, the award is already final. The
same parin, it is a VERIFIED petition. Under t law, unless the ground to set aside is fully established, the court shall
dismiss the petition. Only if in the same proceedings, which is the proceeding to vacate, there is a petition to
recognize any course, shall the court recognize and enforce the award. So diba magkaiba. If its domestic arbitration,
you file a petition nto vacate and then sabi ng court, walang ground to vacate, the court will confirm. But if its
international commercial arbitration, if you file a petition to vacate, and then the court finds that there is no ground,
hindi xa automatic. In other words, if its international commercial arbitration, the court is not duty bound to
automatically confirm the award. Yung ang difference.

Take note: once the award is judicially confirmed by the court, what happens? The award shall be enforced in the
same manner as a final and executory decision of the RTC. Meaning, it has the same effect as a court judgment.
After that, what will happen? After it is confirmed by the court, what will happen? The court may now issue a writ of
execution to enforce the confirmed award.

How about the losing party? what is his remedy? The losing party may counter petition to vacate the award
subject of the confirmation proceedings.

So the 1st group refers to the confirmed final award.

What is the 2nd group?


The 2nd group refers to the UNCONFIRMED final award. When you say unconfirmed final award, when is it deemed
final? Bakit xa unconfirmed? Because hindi xa nagdaan ng judicial confirmation. As a review, if its domestic
arbitration, after lapse of 30 days from receipt, the award is deemed final. If its international commercial arbitration,
upon lapse of 3 months, final na yung award. So after lapse of those period, if the parties agree na its already
deemed final, then that is considered as a unconfirmed final award or if the parties agree to a different period, pwede
shorter period that after the tribunal renders decision, they agree na it will be immediately final, pwede din yun. So it
depends upon the agreement of the parties. Kaya it is considered as an unconfirmed final award.

What is the reason behind? Bakit allowed ang unconfirmed final award? Diba the general premise is that all awards
rendered by an arbitrator or arbitral tribunal requires confirmation by the court to be enforceable, anu reason dun sa
confirmed final award? The reason behind is that the right to submit disputes to arbitration is CONTRACTUAL and
when both parties consent to an enforceable contract, each party is bound by its terms.

JUDICIAL REVIEW IN ARBITRATION


Based on your readings, I’m sure you’ve encountered that here’s only LIMITED JUDICIAL REVIEW.

What’s the reason behind? Why is it limited? Why limited ang court intervention? The policy of the law is to
FAVOR ARBITRATION. With just a limited judicial review needed to maintain the arbitration’s essential virtue of
resolving disputes in a straight way.

So that is essentially our last topic for tonight.

Regarding Special ADR Rules of Court. I will include special ADR specially the rules we discussed.

SPECIAL ADR RULES OF COURT

What’s the purpose of the Special ADR Rules (SARC)?


The SC said that the SARC is intended to govern the procedure to be followed by the courts whenever judicial
intervention is sought in ADR proceedings in the specific cases where it is allowed.

What are the EXCLUSIONS of the SARC?

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1. The SARC do not apply to COURT ANNEXED MEDIATION.


2. The SARC do not apply to the resolution or settlement of LABOR DISPUTES under the Labor Code.

What are the conditions for arbitration to proceed?


1. There should be a valid and enforceable arbitration agreement in the contract for future disputes.
2. A submission agreement for arbitration of present dispute.

What are the special FEATURES o f the SARC?


1. It has intrinsic value the intrinsic value is PEOPLE EMPOWERMENT. That is promoted by both the ADR
law and SARC by declaring as a policy of the state to respect party autonomy or the freedom of the parties
to make their own arrangements in the resolution of their disputes.
2. It’s INSTRUMENTAL VALUE this recognizes that ADR, particularly arbitration and mediation are
important means to achieve speedy and efficient resolution of disputes, impartial justice, curve a litigious
culture and to de-clog court dockets.
3. Under the special ADR rule, it recognizes that CONSTRUCTION DISPUTES shall be governed by E0
No. 1008 and its arbitration rules. –construction disputes filed in court shall be automatically dismissed
and referred to CIAC arbitration.
4. All actions under the SARC are classified as special proceedings. So if it’s spec pro, the initiatory
pleading is a PETITION.
5. Under the special ADR rule, a large number of judicial interventions are by summary proceedings.
What does that mean? Summary proceedings mean that there should be a PERSONAL SERVICE and filing
of petition by a courier service. If it is summary procedure, there is a HEARING but hearing is conducted in 1
day only for the purpose of clarifying facts and the court is required to resolve the matter within a period of
30 days from the day of the hearing. So summary hearing, 1 day hearing and then after that, the case is
deemed submitted for decision and the court has 30 days to resolve the case.
6. Arbitration rule on COMPETENCE-COMPETENCE—under the special ADR rule, what is that? Under the
principle the 1st opportunity to rule on the issue as to whether the tribunal has jurisdiction over a dispute
must be given to the tribunal itself. Thus, the rule requires a court to exercise judicial restraint and defer to
the tribunal on this issue.
7. Under the SARC, appeal to the SC is only discretionary. Why discretionary xa? The reason for this
restriction is to shorten the period of judicial review of arbitration awards. That discretionary review of the SC
is under RULE 19.36. A review by the SC is not a matter of right but of sound judicial discretion which will
only be granted for serious and compelling reasons resulting in grave prejudice to the aggrieved party.

So that’s the coverage of your exam.

Prepare for an objective and essay exam. More on the application.

GOOD LUCK!

Study of law is part of a larger culture. You can get a law degree and make a good living, but it is best that you
do that having studied the discipline for its own inherent merit, because you love studying

Material prepared by: RESCI ANGELLI RIZADA

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