You are on page 1of 9

Republic of the Philippines promulgated pursuant to this Act, resolve a dispute by

Congress of the Philippines rendering an award;

Metro Manila
(e) "Arbitrator" means the person appointed to render an
Twelfth Congress award, alone or with others, in a dispute that is the subject
Third Regular Session of an arbitration agreement;

(f) "Award" means any partial or final decision by an

arbitrator in resolving the issue in a controversy;

Begun and held in Metro Manila, on Monday, the twenty- (g) "Commercial Arbitration" An arbitration is "commercial if
eight day of July, two thousand three. it covers matter arising from all relationships of a
commercial nature, whether contractual or not;
Republic Act No. 9285 April 2, 2004
(h) "Confidential information" means any information,
AN ACT TO INSTITUTIONALIZE THE USE OF AN relative to the subject of mediation or arbitration, expressly
ALTERNATIVE DISPUTE RESOLUTION SYSTEM IN intended by the source not to be disclosed, or obtained
THE PHILIPPINES AND TO ESTABLISH THE OFFICE under circumstances that would create a reasonable
FOR ALTERNATIVE DISPUTE RESOLUTION, AND FOR expectation on behalf of the source that the information
OTHER PURPOSES shall not be disclosed. It shall include (1) communication,
oral or written, made in a dispute resolution proceedings,
Be it enacted by the Senate and House of Representatives
including any memoranda, notes or work product of the
of the Philippines in Congress assembled:
neutral party or non-party participant, as defined in this Act;
CHAPTER 1 - GENERAL PROVISIONS (2) an oral or written statement made or which occurs during
mediation or for purposes of considering, conducting,
SECTION 1. Title. - This act shall be known as the participating, initiating, continuing of reconvening mediation
"Alternative Dispute Resolution Act of 2004." or retaining a mediator; and (3) pleadings, motions
manifestations, witness statements, reports filed or
SEC. 2. Declaration of Policy. - it is hereby declared the
submitted in an arbitration or for expert evaluation;
policy of the State to actively promote party autonomy in the
resolution of disputes or the freedom of the party to make (i) "Convention Award" means a foreign arbitral award
their own arrangements to resolve their disputes. Towards made in a Convention State;
this end, the State shall encourage and actively promote the
use of Alternative Dispute Resolution (ADR) as an (j) "Convention State" means a State that is a member of
important means to achieve speedy and impartial justice the New York Convention;
and declog court dockets. As such, the State shall provide
(k) "Court" as referred to in Article 6 of the Model Law shall
means for the use of ADR as an efficient tool and an
mean a Regional Trial Court;
alternative procedure for the resolution of appropriate
cases. Likewise, the State shall enlist active private sector (l) "Court-Annexed Mediation" means any mediation
participation in the settlement of disputes through ADR. process conducted under the auspices of the court, after
This Act shall be without prejudice to the adoption by the such court has acquired jurisdiction of the dispute;
Supreme Court of any ADR system, such as mediation,
conciliation, arbitration, or any combination thereof as a (m) "Court-Referred Mediation" means mediation ordered
means of achieving speedy and efficient means of resolving by a court to be conducted in accordance with the
cases pending before all courts in the Philippines which Agreement of the Parties when as action is prematurely
shall be governed by such rules as the Supreme Court may commenced in violation of such agreement;
approve from time to time.
(n) "Early Neutral Evaluation" means an ADR process
SEC. 3. Definition of Terms. - For purposes of this Act, the wherein parties and their lawyers are brought together early
term: in a pre-trial phase to present summaries of their cases and
receive a nonbinding assessment by an experienced,
(a) "Alternative Dispute Resolution System" means any neutral person, with expertise in the subject in the
process or procedure used to resolve a dispute or substance of the dispute;
controversy, other than by adjudication of a presiding judge
of a court or an officer of a government agency, as defined (o) "Government Agency" means any government entity,
in this Act, in which a neutral third party participates to assist office or officer, other than a court, that is vested by law with
in the resolution of issues, which includes arbitration, quasi-judicial power to resolve or adjudicate dispute
mediation, conciliation, early neutral evaluation, mini-trial, involving the government, its agencies and
or any combination thereof; instrumentalities, or private persons;

(b) "ADR Provider" means institutions or persons (p) "International Party" shall mean an entity whose place
accredited as mediator, conciliator, arbitrator, neutral of business is outside the Philippines. It shall not include a
evaluator, or any person exercising similar functions in any domestic subsidiary of such international party or a
Alternative Dispute Resolution system. This is without coventurer in a joint venture with a party which has its place
prejudice to the rights of the parties to choose of business in the Philippines.
nonaccredited individuals to act as mediator, conciliator,
arbitrator, or neutral evaluator of their dispute. The term foreigner arbitrator shall mean a person who is not
a national of the Philippines.
Whenever reffered to in this Act, the term "ADR
practitioners" shall refer to individuals acting as mediator, (q) "Mediation" means a voluntary process in which a
conciliator, arbitrator or neutral evaluator; mediator, selected by the disputing parties, facilitates
communication and negotiation, and assist the parties in
(c) "Authenticate" means to sign, execute or adopt a reaching a voluntary agreement regarding a dispute.
symbol, or encrypt a record in whole or in part, intended to
identity the authenticating party and to adopt, accept or (r) "Mediator" means a person who conducts mediation;
establish the authenticity of a record or term;
(s) "Mediation Party" means a person who participates in a
(d) "Arbitration" means a voluntary dispute resolution mediation and whose consent is necessary to resolve the
process in which one or more arbitrators, appointed in dispute;
accordance with the agreement of the parties, or rules
(t) "Mediation-Arbitration" or Med-Arb is a step dispute SEC. 9. Confidentiality of Information. - Information
resolution process involving both mediation and arbitration; obtained through mediation proceedings shall be subject to
the following principles and guidelines:
(u) "Mini-Trial" means a structured dispute resolution
method in which the merits of a case are argued before a (a) Information obtained through mediation shall be
panel comprising senior decision makers with or without the privileged and confidential.
presence of a neutral third person after which the parties
seek a negotiated settlement; (b) A party, a mediator, or a nonparty participant may refuse
to disclose and may prevent any other person from
(v) "Model Law" means the Model Law on International disclosing a mediation communication.
Commercial Arbitration adopted by the United Nations
Commission on International Trade Law on 21 June 1985; (c) Confidential Information shall not be subject to discovery
and shall be inadmissible if any adversarial proceeding,
(w) "New York Convention" means the United Nations whether judicial or quasi-judicial, However, evidence or
Convention on the Recognition and Enforcement of Foreign information that is otherwise admissible or subject to
Arbitral Awards approved in 1958 and ratified by the discovery does not become inadmissible or protected from
Philippine Senate under Senate Resolution No. 71; discovery solely by reason of its use in a mediation.

(x) "Non-Convention Award" means a foreign arbitral award (d) In such an adversarial proceeding, the following persons
made in a State which is not a Convention State; involved or previously involved in a mediation may not be
compelled to disclose confidential information obtained
(y) "Non-Convention State" means a State that is not a during mediation: (1) the parties to the dispute; (2) the
member of the New York Convention. mediator or mediators; (3) the counsel for the parties; (4)
the nonparty participants; (5) any persons hired or engaged
(z) "Non-Party Participant" means a person, other than a
in connection with the mediation as secretary,
party or mediator, who participates in a mediation
stenographer, clerk or assistant; and (6) any other person
proceeding as a witness, resource person or expert;
who obtains or possesses confidential information by
(aa) "Proceeding" means a judicial, administrative, or other reason of his/her profession.
adjudicative process, including related pre-hearing
(e) The protections of this Act shall continue to apply even
motions, conferences and discovery;
of a mediator is found to have failed to act impartially.
(bb) "Record" means an information written on a tangible
(f) a mediator may not be called to testify to provide
medium or stored in an electronic or other similar medium,
information gathered in mediation. A mediator who is
retrievable form; and
wrongfully subpoenaed shall be reimbursed the full cost of
(cc) "Roster" means a list of persons qualified to provide his attorney's fees and related expenses.
ADR services as neutrals or to serve as arbitrators.
SEC. 10. Waiver of Confidentiality. - A privilege arising
SEC. 4. Electronic Signatures in Global and E- from the confidentiality of information may be waived in a
Commerce Act. - The provisions of the Electronic record, or orally during a proceeding by the mediator and
Signatures in Global and E-Commerce Act, and its the mediation parties.
implementing Rules and Regulations shall apply to
A privilege arising from the confidentiality of information
proceeding contemplated in this Act.
may likewise be waived by a nonparty participant if the
SEC. 5. Liability of ADR Provider and Practitioner. - The information is provided by such nonparty participant.
ADR providers and practitioners shall have the same civil
A person who discloses confidential information shall be
liability for the Acts done in the performance of then duties
precluded from asserting the privilege under Section 9 of
as that of public officers as provided in Section 38 (1),
this Chapter to bar disclosure of the rest of the information
Chapter 9, Book of the Administrative Code of 1987.
necessary to a complete understanding of the previously
SEC. 6. Exception to the Application of this Act. - The disclosed information. If a person suffers loss or damages
provisions of this Act shall not apply to resolution or in a judicial proceeding against the person who made the
settlement of the following: (a) labor disputes covered by disclosure.
Presidential Decree No. 442, otherwise known as the Labor
A person who discloses or makes a representation about a
Code of the Philippines, as amended and its Implementing
mediation is preclude from asserting the privilege under
Rules and Regulations; (b) the civil status of persons; (c)
Section 9, to the extent that the communication prejudices
the validity of a marriage; (d) any ground for legal
another person in the proceeding and it is necessary for the
separation; (e) the jurisdiction of courts; (f) future legitime;
person prejudiced to respond to the representation of
(g) criminal liability; and (h) those which by law cannot be
SEC. 11. Exceptions to Privilege. -
(a) There is no privilege against disclosure under Section 9
SEC. 7. Scope. - The provisions of this Chapter shall cover
if mediation communication is:
voluntary mediation, whether ad hoc or institutional, other
than court-annexed. The term "mediation' shall include (1) in an agreement evidenced by a record authenticated by
conciliation. all parties to the agreement;
SEC. 8. Application and Interpretation. - In applying (2) available to the public or that is made during a session
construing the provisions of this Chapter, consideration of a mediation which is open, or is required by law to be
must be given to the need to promote candor or parties and open, to the public;
mediators through confidentiality of the mediation process,
the policy of fostering prompt, economical, and amicable (3) a threat or statement of a plan to inflict bodily injury or
resolution of disputes in accordance with the principles of commit a crime of violence;
integrity of determination by the parties, and the policy that
the decision-making authority in the mediation process (4) internationally used to plan a crime, attempt to commit,
rests with the parties. or commit a crime, or conceal an ongoing crime or criminal

(5) sought or offered to prove or disprove abuse, neglect,

abandonment, or exploitation in a proceeding in which a
public agency is protecting the interest of an individual This Act does not require that a mediator shall have special
protected by law; but this exception does not apply where a qualifications by background or profession unless the
child protection matter is referred to mediation by a court or special qualifications of a mediator are required in the
a public agency participates in the child protection mediation agreement or by the mediation parties.
SEC. 14. Participation in Mediation. - Except as
(6) sought or offered to prove or disprove a claim or otherwise provided in this Act, a party may designate a
complaint of professional misconduct or malpractice filed lawyer or any other person to provide assistance in the
against mediator in a proceeding; or mediation. A lawyer of this right shall be made in writing by
the party waiving it. A waiver of participation or legal
(7) sought or offered to prove or disprove a claim of representation may be rescinded at any time.
complaint of professional misconduct of malpractice filed
against a party, nonparty participant, or representative of a SEC. 15. Place of Mediation. - The parties are free to
party based on conduct occurring during a mediation. agree on the place of mediation. Failing such agreement,
the place of mediation shall be any place convenient and
(b) There is no privilege under Section 9 if a court or appropriate to all parties.
administrative agency, finds, after a hearing in camera, that
the party seeking discovery of the proponent of the SEC. 16. Effect of Agreement to Submit Dispute to
evidence has shown that the evidence is not otherwise Mediation Under Institutional Rules. - An agreement to
available, that there is a need for the evidence that submit a dispute to mediation by any institution shall include
substantially outweighs the interest in protecting an agreement to be bound by the internal mediation and
confidentiality, and the mediation communication is sought administrative policies of such institution. Further, an
or offered in: agreement to submit a dispute to mediation under
international mediation rule shall be deemed to include an
(1) a court proceeding involving a crime or felony; or agreement to have such rules govern the mediation of the
dispute and for the mediator, the parties, their respective
(2) a proceeding to prove a claim or defense that under the
counsel, and nonparty participants to abide by such rules.
law is sufficient to reform or avoid a liability on a contract
arising out of the mediation. In case of conflict between the institutional mediation rules
and the provisions of this Act, the latter shall prevail.
(c) A mediator may not be compelled to provide evidence
of a mediation communication or testify in such proceeding. SEC. 17. Enforcement of Mediated Settlement
Agreement. - The mediation shall be guided by the
(d) If a mediation communication is not privileged under an
following operative principles:
exception in subsection (a) or (b), only the portion of the
communication necessary for the application of the (a) A settlement agreement following successful mediation
exception for nondisclosure may be admitted. The shall be prepared by the parties with the assistance of their
admission of particular evidence for the limited purpose of respective counsel, if any, and by the mediator.
an exception does not render that evidence, or any other
mediation communication, admissible for any other The parties and their respective counsels shall endeavor to
purpose. make the terms and condition thereof complete and make
adequate provisions for the contingency of breach to avoid
SEC. 12. Prohibited Mediator Reports. - A mediator may conflicting interpretations of the agreement.
not make a report, assessment, evaluation,
recommendation, finding, or other communication (b) The parties and their respective counsels, if any, shall
regarding a mediation to a court or agency or other authority sign the settlement agreement. The mediator shall certify
that make a ruling on a dispute that is the subject of a that he/she explained the contents of the settlement
mediation, except: agreement to the parties in a language known to them.

(a) Where the mediation occurred or has terminated, or (c) If the parties so desire, they may deposit such settlement
where a settlement was reached. agreement with the appropriate Clerk of a Regional Trial
Court of the place where one of the parties resides. Where
(b) As permitted to be disclosed under Section 13 of this there is a need to enforce the settlement agreement, a
Chapter. petition may be filed by any of the parties with the same
court, in which case, the court shall proceed summarily to
SEC. 13. Mediator's Disclosure and Conflict of
hear the petition, in accordance with such rules of
Interest. - The mediation shall be guided by the following
procedure as may be promulgated by the Supreme Court.
operative principles:
(d) The parties may agree in the settlement agreement that
(a) Before accepting a mediation, an individual who is
the mediator shall become a sole arbitrator for the dispute
requested to serve as a mediator shall:
and shall treat the settlement agreement as an arbitral
(1) make an inquiry that is reasonable under the award which shall be subject to enforcement under
circumstances to determinate whether there are any known Republic Act No. 876, otherwise known as the Arbitration
facts that a reasonable individual would consider likely to Law, notwithstanding the provisions of Executive Order No.
affect the impartiality of the mediator, including a financial 1008 for mediated dispute outside of the CIAC.
or personal interest in the outcome of the mediation and any
existing or past relationship with a party or foreseeable
participant in the mediation; and SEC. 18. Referral of Dispute to other ADR Forms. - The
parties may agree to refer one or more or all issues arising
(2) disclosure to the mediation parties any such fact known
in a dispute or during its pendency to other forms of ADR
or learned as soon as is practical before accepting a
such as but not limited to (a) the evaluation of a third person
or (b) a mini-trial, (c) mediation-arbitration, or a combination
(b) If a mediation learns any fact described in paragraph (a) thereof.
(1) of this section after accepting a mediation, the mediator
For purposes of this Act, the use of other ADR forms shall
shall disclose it as soon as practicable.
be governed by Chapter 2 of this Act except where it is
At the request of a mediation party, an individual who is combined with arbitration in which case it shall likewise be
requested to serve as mediator shall disclose his/her governed by Chapter 5 of this Act.
qualifications to mediate a dispute.
CHAPTER 4 - INTERNATIONAL COMMERCIAL agreed to be conducted. Where the parties have agreed to
ARBITRATION submit their dispute to institutional arbitration rules, and
unless they have agreed to a different procedure, they shall
SEC. 19. Adoption of the Model Law on International be deemed to have agreed to procedure under such
Commercial Arbitration. - International commercial arbitration rules for the selection and appointment of
arbitration shall be governed by the Model Law on arbitrators. In ad hoc arbitration, the default appointment of
International Commercial Arbitration (the "Model Law") an arbitrator shall be made by the National President of the
adopted by the United Nations Commission on International Integrated Bar of the Philippines (IBP) or his duly authorized
Trade Law on June 21, 1985 (United Nations Document representative.
A/40/17) and recommended approved on December 11,
1985, copy of which is hereto attached as Appendix "A". SEC. 27. What Functions May be Performed by
Appointing Authority. - The functions referred to in
SEC. 20. Interpretation of Model Law. - In interpreting the Articles 11(3), 11(4), 13(3) and 14(1) of the Model Law shall
Model Law, regard shall be had to its international origin be performed by the Appointing Authority, unless the latter
and to the need for uniformity in its interpretation and resort shall fail or refuse to act within thirty (30) days from receipt
may be made to the travaux preparatories and the report of of the request in which case the applicant may renew the
the Secretary General of the United Nations Commission application with the Court.
on International Trade Law dated March 25, 1985 entitled,
"International Commercial Arbitration: Analytical SEC. 28. Grant of Interim Measure of Protection. -
Commentary on Draft Trade identified by reference number
A/CN. 9/264." (a) It is not incompatible with an arbitration agreement for a
party to request, before constitution of the tribunal, from a
SEC. 21. Commercial Arbitration. - An arbitration is Court an interim measure of protection and for the Court to
"commercial" if it covers matters arising from all grant such measure. After constitution of the arbitral tribunal
relationships of a commercial nature, whether contractual and during arbitral proceedings, a request for an interim
or not. Relationships of a transactions: any trade measure of protection or modification thereof, may be made
transaction for the supply or exchange of goods or services; with the arbitral tribunal or to the extent that the arbitral
distribution agreements; construction of works; commercial tribunal has no power to act or is unable to act effectively,
representation or agency; factoring; leasing, consulting; the request may be made with the Court. The arbitral
engineering; licensing; investment; financing; banking; tribunal is deemed constituted when the sole arbitrator or
insurance; joint venture and other forms of industrial or the third arbitrator who has been nominated, has accepted
business cooperation; carriage of goods or passengers by the nomination and written communication of said
air, sea, rail or road. nomination and acceptance has been received by the party
making request.
SEC. 22. Legal Representation in International
Arbitration. - In international arbitration conducted in the (b) The following rules on interim or provisional relief shall
Philippines, a party may be presented by any person of his be observed:
choice. Provided, that such representative, unless admitted
to the practice of law in the Philippines, shall not be (1) Any party may request that provision relief be granted
authorized to appear as counsel in any Philippine court, or against the adverse party:
any other quasi-judicial body whether or not such
(2) Such relief may be granted:
appearance is in relation to the arbitration in which he
appears. (i) to prevent irreparable loss or injury:
SEC. 23. Confidential of Arbitration Proceedings. - The (ii) to provide security for the performance of any obligation;
arbitration proceedings, including the records, evidence
and the arbitral award, shall be considered confidential and (iii) to produce or preserve any evidence; or
shall not be published except (1) with the consent of the
(iv) to compel any other appropriate act or omission.
parties, or (2) for the limited purpose of disclosing to the
court of relevant documents in cases where resort to the (3) The order granting provisional relief may be conditioned
court is allowed herein. Provided, however, that the court in upon the provision of security or any act or omission
which the action or the appeal is pending may issue a specified in the order.
protective order to prevent or prohibit disclosure of
documents or information containing secret processes, (4) Interim or provisional relief is requested by written
developments, research and other information where it is application transmitted by reasonable means to the Court
shown that the applicant shall be materially prejudiced by or arbitral tribunal as the case may be and the party against
an authorized disclosure thereof. whom the relief is sought, describing in appropriate detail
the precise relief, the party against whom the relief is
SEC. 24. Referral to Arbitration. - A court before which an requested, the grounds for the relief, and evidence
action is brought in a matter which is the subject matter of supporting the request.
an arbitration agreement shall, if at least one party so
requests not later that the pre-trial conference, or upon the (5) The order shall be binding upon the parties.
request of both parties thereafter, refer the parties to
arbitration unless it finds that the arbitration agreement is (6) Either party may apply with the Court for assistance in
null and void, inoperative or incapable of being performed. Implementing or enforcing an interim measure ordered by
an arbitral tribunal.
SEC. 25. Interpretation of the Act. - In interpreting the
Act, the court shall have due regard to the policy of the law (7) A party who does not comply with the order shall be
in favor of arbitration. Where action is commenced by or liable for all damages resulting from noncompliance,
against multiple parties, one or more of whom are parties including all expenses, and reasonable attorney's fees, paid
who are bound by the arbitration agreement although the in obtaining the order's judicial enforcement.
civil action may continue as to those who are not bound by
SEC. 29. Further Authority for Arbitrator to Grant
such arbitration agreement.
Interim Measure of Protection. - Unless otherwise agreed
SEC. 26. Meaning of "Appointing Authority.". - by the parties, the arbitral tribunal may, at the request of a
"Appointing Authority" as used in the Model Law shall mean party, order any party to take such interim measures of
the person or institution named in the arbitration agreement protection as the arbitral tribunal may consider necessary
as the appointing authority; or the regular arbitration in respect of the subject matter of the dispute following the
arbitration institution under whose rules the arbitration is rules in Section 28, paragraph 2. Such interim measures
may include but shall not be limited to preliminary injuction SEC. 37. Appointment of Foreign Arbitrator. - The
directed against a party, appointment of receivers or Construction Industry Arbitration Commission (CIAC) shall
detention, preservation, inspection of property that is the promulgate rules to allow for the appointment of a foreign
subject of the dispute in arbitration. Either party may apply arbitrator or coarbitrator or chairman of a tribunal a person
with the Court for assistance in implementing or enforcing who has not been previously accredited by CIAC: Provided,
an interim measures ordered by an arbitral tribunal. That:

SEC. 30. Place of Arbitration. - The parties are free to (a) the dispute is a construction dispute in which one party
agree on the place of arbitration. Failing such agreement, is an international party
the place of arbitration shall be in Metro Manila, unless the
arbitral tribunal, having regard to the circumstances of the (b) the person to be appointed agreed to abide by the
case, including the convenience of the parties shall decide arbitration rules and policies of CIAC;
on a different place of arbitration.
(c) he/she is either coarbitrator upon the nomination of the
The arbitral tribunal may, unless otherwise agreed by the international party; or he/she is the common choice of the
parties, meet at any place it considers appropriate for two CIAC-accredited arbitrators first appointed one of
consultation among its members, for hearing witnesses, whom was nominated by the international party; and
experts, or the parties, or for inspection of goods, other
(d) the foreign arbitrator shall be of different nationality from
property or documents.
the international party.
SEC. 31. Language of the Arbitration. - The parties are
SEC. 38. Applicability to Construction Arbitration. - The
free to agree on the language or languages to be used in
provisions of Sections 17 (d) of Chapter 2, and Section 28
the arbitral proceedings. Failing such agreement, the
and 29 of this Act shall apply to arbitration of construction
language to be used shall be English in international
disputes covered by this Chapter.
arbitration, and English or Filipino for domestic arbitration,
unless the arbitral tribunal shall determine a different or SEC. 39. Court to Dismiss Case Involving a
another language or languages to be used in the Construction Dispute. - A regional trial court which a
proceedings. This agreement or determination, unless construction dispute is filed shall, upon becoming aware,
otherwise specified therein, shall apply to any written not later than the pretrial conference, that the parties had
statement by a party, any hearing and any award, decision entered into an arbitration to be conducted by the CIAC,
or other communication by the arbitral tribunal. unless both parties, assisted by their respective counsel,
shall submit to the regional trial court a written agreement
The arbitral tribunal may order that any documentary
exclusive for the Court, rather than the CIAC, to resolve the
evidence shall be accompanied by a translation into the
language or languages agreed upon by the parties or
determined in accordance with paragraph 1 of this section. CHAPTER 7 - JUDICIAL REVIEW OF ARBITRAL
SEC. 32. Law Governing Domestic Arbitration. -
Domestic arbitration shall continue to be governed by SEC. 40. Confirmation of Award. - The confirmation of a
Republic Act No. 876, otherwise known as "The Arbitration domestic arbitral award shall be governed by Section 23 of
Law" as amended by this Chapter. The term "domestic R.A. 876.
arbitration" as used herein shall mean an arbitration that is
not international as defined in Article (3) of the Model Law. A domestic arbitral award when confirmed shall be enforced
in the same manner as final and executory decisions of the
SEC. 33. Applicability to Domestic Arbitration. - Article Regional Trial Court.
8, 10, 11, 12, 13, 14, 18 and 19 and 29 to 32 of the Model
Law and Section 22 to 31 of the preceding Chapter 4 shall The confirmation of a domestic award shall be made by the
apply to domestic arbitration. regional trial court in accordance with the Rules of
Procedure to be promulgated by the Supreme Court.
DISPUTES A CIAC arbitral award need not be confirmed by the
regional trial court to be executory as provided under E.O.
SEC. 34. Arbitration of Construction Disputes: No. 1008.
Governing Law. - The arbitration of construction disputes
shall be governed by Executive Order No. 1008, otherwise SEC. 41. Vacation Award. - A party to a domestic
known as the Constitution Industry Arbitration Law. arbitration may question the arbitral award with the
appropriate regional trial court in accordance with the rules
SEC. 35. Coverage of the Law. - Construction disputes of procedure to be promulgated by the Supreme Court only
which fall within the original and exclusive jurisdiction of the on those grounds enumerated in Section 25 of Republic Act
Construction Industry Arbitration Commission (the No. 876. Any other ground raised against a domestic
"Commission") shall include those between or among arbitral award shall be disregarded by the regional trial
parties to, or who are otherwise bound by, an arbitration court.
agreement, directly or by reference whether such parties
are project owner, contractor, subcontractor, quantity B. FOREIGN ARBITRAL AWARDS
surveyor, bondsman or issuer of an insurance policy in a
SEC. 42. Application of the New York Convention. - The
construction project.
New York Convention shall govern the recognition and
The Commission shall continue to exercise original and enforcement of arbitral awards covered by the said
exclusive jurisdiction over construction disputes although Convention.
the arbitration is "commercial" pursuant to Section 21 of this
The recognition and enforcement of such arbitral awards
shall be filled with regional trial court in accordance with the
SEC. 36. Authority to Act as Mediator or Arbitrator. - By rules of procedure to be promulgated by the Supreme
written agreement of the parties to a dispute, an arbitrator Court. Said procedural rules shall provide that the party
may act as mediator and a mediator may act as arbitrator. relying on the award or applying for its enforcement shall
The parties may also agree in writing that, following a file with the court the original or authenticated copy of the
successful mediation, the mediator shall issue the award and the arbitration agreement. If the award or
settlement agreement in the form of an arbitral award. agreement is not made in any of the official languages, the
party shall supply a duly certified translation thereof into any CHAPTER 8 - MISCELLANEOUS PROVISIONS
of such languages.
SEC. 49. Office for Alternative Dispute Resolution. -
The applicant shall establish that the country in which There is hereby established the Office for Alternative
foreign arbitration award was made is a party to the New Dispute Resolution as an attached agency to the
York Convention. Department of Justice (DOJ) which shall have a Secretariat
to be headed by an executive director. The executive
If the application for rejection or suspension of enforcement director shall be appointed by the President of the
of an award has been made, the regional trial court may, if Philippines.
it considers it proper, vacate its decision and may also, on
the application of the party claiming recognition or The objective of the office are:
enforcement of the award, order the party to provide
appropriate security. (a) to promote, develop and expand the use of ADR in the
private and public sectors; and
SEC. 43. Recognition and Enforcement of Foreign
Arbitral Awards Not Covered by the New York To assist the government to monitor, study and evaluate the
Convention. - The recognition and enforcement of foreign use by the public and the private sector of ADR, and
arbitral awards not covered by the New York Convention recommend to Congress needful statutory changes to
shall be done in accordance with procedural rules to be develop. Strengthen and improve ADR practices in
promulgated by the Supreme Court. The Court may, accordance with world standards.
grounds of comity and reciprocity, recognize and enforce a
SEC. 50. Powers and Functions of the Office for
nonconvention award as a convention award.
Alternative Dispute Resolution. - The Office for
SEC. 44. Foreign Arbitral Award Not Foreign Alternative Dispute Resolution shall have the following
Judgment. - A foreign arbitral award when confirmed by a powers and functions:
court of a foreign country, shall be recognized and enforced
(a) To formulate standards for the training of the ADR
as a foreign arbitral award and not a judgment of a foreign
practitioners and service providers;
(b) To certify that such ADR practitioners and ADR service
A foreign arbitral award, when confirmed by the regional
providers have undergone the professional training
trial court, shall be enforced as a foreign arbitral award and
provided by the office;
not as a judgment of a foreign court.
(c) To coordinate the development, implementation,
A foreign arbitral award, when confirmed by the regional
monitoring, and evaluation of government ADR programs;
trial court, shall be enforced in the same manner as final
and executory decisions of courts of law of the Philippines. (d) To charge fees for their services; and
SEC. 45. Rejection of a Foreign Arbitral Award. - A party (e) To perform such acts as may be necessary to carry into
to a foreign arbitration proceeding may oppose an effect the provisions of this Act.
application for recognition and enforcement of the arbitral
award in accordance with the procedural rules to be SEC. 51. Appropriations. - The amount necessary to carry
promulgated by the Supreme Court only on those grounds out the provisions of this Act shall be included in the
enumerated under Article V of the New York Convention. General Appropriations Act of the year following its
Any other ground raised shall be disregarded by the enactment into law and thereafter.
regional trial court.
SEC. 52. Implementing Rules and Regulations (IRR). -
SEC. 46. Appeal from Court Decisions on Arbitral Within one (1) month after the approval of this Act, the
Awards. - A decision of the regional trial court confirming, secretary of justice shall convene a committee that shall
vacating, setting aside, modifying or correcting an arbitral formulate the appropriate rules and regulations necessary
award may be appealed to the Court of Appeals in for the implementation of this Act. The committee,
accordance with the rules of procedure to be promulgated composed of representatives from:
by the Supreme Court.
(a) the Department of Justice;
The losing party who appeals from the judgment of the court
(b) the Department of Trade and Industry;
confirming an arbitral award shall required by the appealant
court to post counterbond executed in favor of the prevailing (c) the Department of the Interior and Local Government;
party equal to the amount of the award in accordance with
the rules to be promulgated by the Supreme Court. (d) the president of the Integrated Bar of the Philippines;

SEC. 47. Venue and Jurisdiction. - Proceedings for (e) A representative from the arbitration profession; and
recognition and enforcement of an arbitration agreement or
for vacation, setting aside, correction or modification of an (f) A representative from the mediation profession; and
arbitral award, and any application with a court for
(g) A representative from the ADR organizations
arbitration assistance and supervision shall be deemed as
special proceedings and shall be filled with the regional trial shall within three (3) months after convening, submit the
court (i) where arbitration proceedings are conducted; (ii) IRR to the Joint Congressional Oversight Committee for
where the asset to be attached or levied upon, or the act to review and approval. The Oversight Committee shall be
be enjoined is located; (iii) where any of the parties to the composed of the chairman of the Senate Committee on
dispute resides or has his place of business; or (iv) in the Justice and Human Rights, chairman of the House
National Judicial Capital Region, at the option of the Committee on Justice, and one (1) member each from the
applicant. majority and minority of both Houses.
SEC. 48. Notice of Proceeding to Parties. - In a special The Joint Oversight Committee shall become functus officio
proceeding for recognition and enforcement of an arbitral upon approval of the IRR.
award, the Court shall send notice to the parties at their
address of record in the arbitration, or if any party cannot SEC. 53. Applicability of the Katarungan
be served notice at such address, at such party's last known Pambarangay. - This Act shall not be interpreted to repeal,
address. The notice shall be sent at least fifteen (15) days amend or modify the jurisdiction of the Katarungan
before the date set for the initial hearing of the application. Pambarangay under Republic Act No. 7160, otherwise
known as the Local Government Code of 1991.
SEC. 54. Repealing Clause. - All laws, decrees, executive of property subject of the arbitration.
orders, rules and regulations which are inconsistent with the
provisions of this Act are hereby repealed, amended or 5. Although RA 876, the old Arbitration Law, continues to
modified accordingly. govern domestic arbitration, the ADR law of 2004 adopted
several provisions of the UNCITRAL Model Law as well as
SEC. 55. Separability Clause. - If for any reason or RA 9285 for domestic arbitration. Thus, to a large extent,
reasons, any portion or provision of this Act shall be held even the rules on domestic arbitration were updated by RA
unconstitutional or invalid, all other parts or provisions not 9285 – specifically on the appointment and number of
affected shall thereby continue to remain in full force and arbitrators, grounds/procedure to challenge arbitrators,
effect. termination of the mandate of arbitrators, equality and full
opportunity of each party to present their case, decision-
SEC. 56. Effectivity. - This act shall take effect fifteen days
making by a panel of arbitrators, form and contents of the
(15) after its publication in at least two (2) national
award, confidentiality of arbitration proceedings, and interim
newspapers of general circulation.
measures of protection.

6. With respect to the Construction Industry Arbitration

A new Act in town – the Alternative Dispute Resolution Commission (CIAC) under E.O. 1008, the ADR law of 2004
Act of 2004 now allows (i) for the appointment of a foreign arbitrator as
co-arbitrator or chairman of a tribunal who has not been
On Feb. 4, 2004, Congress enacted into law Republic Act
previously accredited by the CIAC, and (ii) upon written
No. 9285 entitled "An Act to Institutionalize the Use of an
agreement of the parties, for an arbitrator to act as mediator
Alternative Dispute Resolution System in the Philippines
and vice versa.
and to Establish the Office for Alternative Dispute
Resolution and for other Purposes". RA 9285 is known as
The ADR Law of 2004 also codified into law the CIAC Rule
the "Alternative Dispute Resolution Act of 2004" (or the
that a Regional Trial Court before which a construction
ADR law of 2004).
dispute is filed and is aware that the parties involved have
entered into an arbitration agreement must dismiss the
The declared policy of the ADR Law of 2004 is "to actively
case and refer the parties to arbitration to be conducted by
promote party autonomy in the resolution of disputes or the
the CIAC.
freedom of the parties to make their own arrangements to
resolve their disputes. Towards this end, the State shall
7. The ADR Law of 2004 likewise clarified the judicial review
encourage and actively promote the use of Alternative
and enforcement of arbitral awards. For Foreign Arbitral
Dispute Resolution (ADR) as an important means to
Awards, RA 9285 refers to the provisions of the New York
achieve speedy and impartial justice and declog court
Convention of 1958.
8. The Office for Alternative Dispute Resolution (OADR)
The salient features of the ADR Law of 2004 are, among
created by the law will be established an attached agency
others, the following:
of the Department of Justice (DOJ). The objectives of the
OADR are to promote, develop and expand the use of ADR
1. Mediation, as a significant ADR mode, was given a
in the private and public sectors; to assist the government
concrete legal framework, and more importantly, solid legal
to monitor, study and evaluate the use by the public and the
support and encouragement. In addition, the ADR law of
private sector of ADR; and to recommend to Congress
2004 established the principle of "Confidentiality of
needful statutory changes to develop, strengthen and
Information" in mediation such that information obtained or
improve ADR practice in accordance with world standards.
generated through mediation proceedings is deemed
"privileged and confidential".
The Secretary of Justice is obliged to convene a
Committeecomposed of representatives from: (a) the
2. The UNCITRAL Model Law on International Commercial
Department of Justice, (b) the Department of Trade and
Arbitration was adopted to govern international commercial
Industry; (c) the Department of Interior and Local
arbitration in the Philippines. With this, the ADR law of 2004
Government; (d) the President of the Integrated Bar of the
has brought Philippine law on international commercial
Philippines; (e) a representative from the arbitration
arbitration up to par with the world’s best and it superceded
professions; (f) a representative from the mediation
the outmoded 1952 RA 876, the Philippine Arbitration Law.
profession; and (g) a representative from the ADR
organizations, to formulate the Implementing Rules and
3. The National President of the Integrated Bar of the
Regulations (IRR) which shall be submitted to a Joint
Philippines (IBP) or his duly authorized representative was
Congressional Oversight Committee for review and
designated the default "Appointing Authority." Under the old
law, in the absence of an agreement among the parties, it
was the Regional Trial Court (RTC) which will appoint the
The New ADR Law of 2004, which shall take effect 15 days
sole arbitrator or the third arbitrator of a panel if and when
after its publication in at least two national papers of general
the parties do not or can not agree. As the "Appointing
circulation, has yet to be published. The legal and allied
Authority", the National President of the IBP or his duly
professions in ADR are eagerly awaiting the effectivity of
authorized representative will decide challenges to the
this new act.
arbitrator as well as the termination of his mandate.
Res judicata and issue estoppel in arbitration
4. The grant of interim or provisional relief by the courts and
the arbitrator/s has been expanded and clarified. Any party Procedural or substantive law?
may request either the court or arbitral tribunal that an
interim or provisional relief be granted against the adverse
Publication | May 2016
party on the following grounds: (i) to prevent irreparable loss
or injury; (ii) to provide security for the performance of any
obligations; (iii) to produce or preserve any evidence; or (iv) Download PDF
to compel any other appropriate act or omission. Res judicata and issue estoppel exist at the
intersection of procedural and substantive law.
Deciding what law should apply remains at the
Such interim measures may include but are not limited to a
discretion of arbitration tribunals. This makes res
preliminary injunction directed against a party, appointment
judicata a potential area of uncertainty in the arbitration
of a receiver or the detention, preservation, and inspection process.
Whether and to what extent an arbitration tribunal The requirement under the third limb of the test that there
determines itself bound by earlier judgments and findings of be an absolute identity of parties can be contrasted with the
a court or tribunal may fundamentally affect the outcome of common law position, which extends res judicata to apply
an arbitration. This includes which factual and legal issues to ‘privies’ of parties.
are to be explored, tried and determined in the arbitration.
When assessing the probable legal costs and overall In some civil law jurisdictions, the concept of issue estoppel
strategy of an arbitration, a party will have to take this into is not recognized (one reason being that the operative order
account, particularly in international arbitrations likely to of court rather than the underlying reasons or factual
touch upon a number of legal systems and laws. findings is seen to be binding); the rule in Henderson v
Henderson (or its equivalent) is also not followed.
Sample scenario
For example, a supply contract governed by French law Procedural or substantive law?
may contain an arbitration clause providing for disputes to
be arbitrated in Hong Kong. In an arbitration, how should a
tribunal seated in Hong Kong approach questions of res The question of which law should be applied by an
judicata and issue estoppel concerning an earlier arbitration tribunal (as in the sample scenario outlined
determination of a court on a central issue in related above) in its consideration of res judicata turns on
proceedings not subject to the arbitration clause? What law whether res judicata (and its related concepts) should be
should it apply? (If, for example, a US judgment had seen as a question of procedural or substantive law.
confirmed that goods supplied under the contract in the US
were in breach of FDA regulations and therefore unfit for The case for lex arbitri
In common law jurisdictions, res judicata can be said to be
There are major differences between the common law and a rule of evidence and admissibility concerning the earlier
civil law approaches to the application of the doctrine of res decision, and whether it must be regarded as conclusive
judicata and its ambit. and binding.

Res judicata under common law In civil law jurisdictions, res judicata is usually codified in
procedural codes. There would appear to be good reason
Res judicata as applied in common law jurisdictions covers why res judicata should therefore be regarded as
a number of distinct concepts. Key amongst these are essentially a question of procedural law rather than
‘cause of action estoppel’ and ‘issue estoppel’. Broadly substantive law. As we know, the location of the seat of an
speaking under common law, a plea or defence based on arbitration is significant in that it determines the procedural
cause of action estoppel, if accepted, prevents a party rules which govern an arbitration (incorporating any
pursuing a claim which has already been determined by a mandatory local laws applicable to arbitration). The law of
court of competent jurisdiction in previous litigation between the seat of the arbitration (the lex arbitri) appears, therefore,
the same parties (or their privies). to be the appropriate law to be applied by the arbitration
tribunal when it considers the application of res judicata in
an arbitration – if res judicata is a question of procedural
On the other hand a plea or defence of issue estoppel, if law.
successful, prevents a party in proceedings from
contradicting a finding of fact or law that has already been
determined in earlier proceedings between the same The case for lex causae
parties (or their privies) – provided that the determination
was central to the decision in those proceedings. There is also a school of thought that res judicata is actually
a substantive rule of law. In that case, the tribunal should
A ‘privy’ under common law is one who claims title or right apply the governing law of the contract (lex causae) when
under, through or on behalf of a party bound by a decision. it considers the application of res judicata and issue
A privy has been held to include persons or entities with an estoppel.
interest, legal or beneficial, in the previous litigation or its
subject matter. In this regard, res judicata and issue estoppel can operate
to prevent a party from advancing a claim or arguments in
A further type of issue type estoppel related to res an arbitration which can be said to fundamentally affect the
judicata is the rule in Henderson v Henderson which substantive rights of a party.
operates to prevent a party raising claims and defences that
could have been raised in the earlier proceedings but were The wording of the arbitration agreement
Proper regard must be had to the actual agreement
Res judicata under civil law between the parties and their intention to be bound thereby.
The wording of the arbitration and proper law clause in a
In civil law jurisdictions the concept of res judicata is also contract might be viewed as sufficiently wide in ambit as to
followed, often in a codified form. Parties are barred under encompass and apply to issues of res judicata which might
the principles of res judicata from litigating the same arise.
dispute again, once a final judgment has been rendered by
a competent court. For example,

It is generally acknowledged, however, that in civil law The parties irrevocably agree that all disputes and
jurisdictions the concept of res judicata has a much questions arising under or in connection with the
narrower application. This is reflected, for example, in the negotiation, existence, legal validity or enforceability or
French Civil Code (article 1351), which applies a strict triple termination of the Agreement shall exclusively be governed
identity test for the application of the doctrine of res by and determined only in accordance with French Law.
No right or wrong answer
The authority of res judicata applies only to what was the
object of a judgment. It is necessary that the thing claimed The concept of res judicata straddles the intersection
be the same; that the claim be based on the same cause; between substantive and procedural law. There is no right
that the claim be between the same parties and brought by or wrong answer, nor any established approach as to
them acting in the same capacity. whether the lex causae or lex arbitri should be adopted by
an international arbitration tribunal in its consideration of res
judicata issues. It will probably remain within the discretion
of the particular tribunal, to be decided after due
consideration of all relevant factors to the particular dispute,
including the arbitration agreement and earlier decision.

This makes res judicata a potential area of uncertainty for

parties and their legal representatives going into arbitration.