ALTERNATIVE DISPUTE RESOLUTION

By. Atty. Gabriel Robeniol

CHAPTER 1: INTRODUCTION
I. Historical Note

Judicial and Legislative trends – Dispute resolution towards these trends consistently lean towards
the utilization of alternative means and methods implemented in or outside the court trial system

Civil Code of the Philippines:

 Took effect on 30 August 1950
 Contains provisions on compromises and arbitration which encourage litigants to agree upon
fair compromise and authorize arbitration as a means of concluding controversies.

19 June 1953
 Enactment of Arbitration Law
 Republic Act. 876 – supplemented the provisions of the NCC on arbitration

10 May 1965
 Philippine ADR was achieved when the Philippines Senate passed Resolution No. 71 adhering
to the UN “Convention on the recognition and enforcement of foreign arbitral awards” of 10
June 1958
 Philippine law has acknowledged the international arbitration as system of setting commercial
dispute.

UNCITRAL
 The Philippine was a signatory of the United Nation Commission on International Trade Law
New York Convention of 21 June 1985
 A “Model law on International Commercial Arbitration” which the Philippines committed its
adherence.

II. Judiciary Action

Response of Judiciary to the Problems of Delay:

 Requirements of conducting pre-trial conference

 Utilization on different modes of discovery
 Strict proscription against forum shopping
 More importantly, the supreme court encourages the use of arbitration through Philippine
Mediation Commission or through Judicial Dispute Resolution (JDR)

III. Legislative Action

 Special domestic legislations have been passed the prescribing arbitration, mediation and
conciliation in specific types of cases to help decongest court dockets.

For instance:
1. The Labor Code of the Philippines mandate the creation and constitution of the National Labor
Relations Commissions (NLRC) which, together with its Arbitration Branch, has been
dispensing arbitration service in cases involving:
 a) Unfair Labor Practice
b) Termination of Employment
c) Conditions of Employment
d) Damages arising from ER – EE
e) Level Arbitration

2. The Local Government Code of 1991 which requires conciliation, mediation or arbitration in
the barangay level before the pangkat ng tagapagsundo of would-be adverse parties in specified
civil and criminal cases before resort to courts can be had.

IV. Executive Branch Contribution

 Construction Industry Arbitration Commission (CIAC)– Enacted under E.O. No. 1008 dated 4
Feb 1985
 23 August 1998 – Approval and promulgation of the “Rules of Procedure Governing
Construction Arbitration”
 19 November 2005 – CIAC revised rules of procedure governing construction arbitration
 22 March 2010 – The Executive Branch of Government, through the Office of Solgen,
promulgated the “Rules on ADR for dispute between national government agencies” which
reiterated its adherence to the policy of the law to encourage the amicable settlement of disputes
through alternative dispute resolution methods.

V. The ADR Act of 2004

 The first alternative dispute resolution law in the Philippines under R.A. No. 9285 “An act to
institutionalize use of an alternative dispute resolution system in the Philippines and to establish
the office for alternative dispute resolution and for other purposes.”
 Promulgated on 2 April 2004 and became effective on 28 April 2004 after its publication on 13
April 2004.
 It is a general law applicable to all forms of alternative dispute resolution such as arbitration,
mediation, conciliation, early neutral evaluation, mini0trial, or any combination thereof.

The Supreme Court, in Korea Technologies Co., Ltd., v. Lerma, enumerated and explained the
salient features of R.A. No. 9285 applying and incorporating the UNCITRAL Model, namely:

1. RTC must refer to arbitration in proper case

2. Foreign Arbitral awards must be confirmed by RTC
3. The RTC has jurisdiction to review foreign arbitral awards
4. Grounds for judicial review different in Domestic and Foreign arbitral awards.
5. RTC Decisions of assailed foreign arbitral awards appealable: CA, certiorari

VI. The Lawyer’s Role

1. Must contribute to the promotion of ADR

2. Duties to the Courts – Assist courts in encouraging the parties to avail of alternative means
of dispute resolution
3. Duties to their clients – to explain the benefits of the alternative dispute resolution system to
them.
4. Can be appointed as an arbitrator, mediator, conciliator or neutral evaluator.
 5. They have to perform their functions in good faith, with no other motive except that of
securing for the parties a speedy, inexpensive and amicable settlement of their disputes and
controversies.

CHAPTER 2: FUNDAMENTALS OF ALTERNATIVE DISPUTE RESOLUTION

I. Alternative Dispute Resolution, defined.

In a broad sense, alternative dispute resolution is a system, using means and methods allowed by
law and approved by the parties, for the purpose of resolving or facilitating the resolution of
disputes and controversies between them, in an expeditious and speedy manner, without resorting
to court adjudication. This covers all forms and methods of resolving disputes outside the court trail
system.

ADR as defined in ADR Act of 2004, 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 xxx in which a neutral third party participates to assists in the resolution of issues xxx.”
Administrative agencies exercising quasi-judicial power are not covered by the ADR Act of 2004.

II. State Policy in ADR

 ADR act of 2004 declared the state policy

 Promote party autonomy resolution of dispute
 Freedom of the party to choose or make their own arrangement to resolve dispute
 Provides solutions that is less time consuming, less confrontational procedure of goodwill and
lasting friendship
 Wave of the future in international relationship

III. Principles of ADR

1. Promotion of party autonomy and self–determination in dispute resolution

2. Recognition of ADR as an efficient tool and an alternative procedure for the resolution of cases
3. Enlisting a private sector participation

IV. Objectives and Benefits of ADR

1. Speedy and impartial justice

2. Declogging of court dockets

V. Features of ADR

1. ADR means used to resolve a dispute or controversy

Exception: intention is to cause delay or suspend the proceeding
2. ADR utilize means and methods allowed by law
3. ADR is contractual in nature
4. ADR avoids court trial
5. ADR usually involves the participation of neutral third party

VI. Sources of ADR

1. Domestic Laws and Rules
 Constitution
 Civil Code
 Arbitration Law
2. Acts of the Executive Branch
3. Decisions of the Supreme Court
4. International Law : UNCITRAL
5. General principle of Law and Equity

VII. Forms of ADR

1. Arbitration – arrangement of the and abiding by the judgment or selected person in dispute;
binding between the parties
2. Mediation – voluntary agreement between the parties with the help of third person to convince
them to come into an agreement; non-binding between eh parties.
3. Conciliation – conciliation of dispute in an unantagonistic manner
4. Neutral – lawyers are brought to present the summary of the case
5. Early Neutral – availed of in pre–trial case
6. Mini–trial – merits of the case argued in front of a panel
7. Any combination of the foregoing
8. Any other ADR forms

VIII. Classification of Forms of ADR

1. As to the number of parties:

Bi–party – one or two parties
Multi–Party – two or more

2. As to the number of issues involve:

Simple – one issues involve
Complex – two or more issues

3. As to the extent of conclusion

Complete – all issues involve is resolve
Partial – only two or three issues involve are resolved but not all

4. As to the role of evidence in the proceedings

Evidentiary
Non–merit based

5. As to the pendency of the court case

Case–related – when there is a case involved
Independent

6. As to the applicable law

Domestic – when the place of business and arbitration is in the Philippines
International – when the place of business involved two states and arbitration is outside the
Philippines
Foreign – when the place of business is outside the Philippines and the arbitration is outside the
Philippines.
7. As to the permanency of the ADR provider
AD – HOC – temporary
Institutional – permanent

IX. Components of ADR

1. Contending parties
2. Dispute or controversy
3. Form of ADR
4. ADR provider or practitioner

X. Subject matter of ADR

All adversarial disputes and controversies except those which by law or reasons of public policy are
declared not capable of being subject to ADR, namely:

1. Civil Status of persons

2. Validity of marriage and any other forms of legal separation
3. Jurisdiction of courts
4. Future legitime
5. Criminal Liability
6. In general, those which, by law, cannot be compromise

XI. Seat and Venue of ADR

Seat – The jurisdiction under whose law the proceeding is being conducted.
Venue or place – The actual site where the arbitration is being conducted.

Hence it is possible for the venue or place of arbitration to be in a country different from the country
where the arbitration has its seat.

XII. Basic Concepts of ADR

 Concluding Acts or Arguments

 Arbitral Award – final decision of arbitration on awarding issue or controversy
 Mediated Settlement agreement – contract executed by the parties
 Compromise or compromise agreement – avoidance of litigation or to put an end to the one
already existing
 Waiver or quitclaim – a statement renouncing any right or claim
 ADR providers or practitioners
 Preferences of ADR

XIII. Office for ADR

 Pursuant to ADR Act of 2004, an Office for Alternative Dispute Resolution (OADR) was created
which is attached to DOJ
 Headed by an Executive Director appointed by the president upon recommendation of secretary
of justice

Principal objectives, powers and functions of the OADR are the following:
 1. To promote, develop and expand the use of ADR in the private and public sectors through
information, education and communication;
2. To assist the government to monitor, study and evaluate the use by the public and private
sectors of ADR, and recommend to Congress needful statutory changes to develop,
strengthen and improve ADR practice in accordance with the world standards;
3. To act as appointing authority of mediators when the parties agree in writing that it shall be
empowered to do so; and
4. To compile and publish a list or roster of ADR providers/practitioners, and to compile a list
or roster of foreign or international ADR providers/practitioners.

CHAPTER 3: MEDIATION UNDER ADR ACT OF 2004

I. Mediation in General

Mediation, as defined under the ADR Act of 2004 is “a voluntary process in which a mediator,
selected by the disputing parties, facilitates communication and negotiation, and assists the parties
in reaching a voluntary agreement regarding a dispute.”

Excluded from the coverage of the ADR Act are the following:

1. Court Annexed Mediated (CAM) – Mediation process conducted under the auspices of the
court. Specifically, CAM is conducted prior to the pre-trial “where the judge refers the parties
to the Philippine Mediation Center (PMC) for the mediation of their dispute by trained and
accredited mediators.

2. Court Referred Mediation – Mediation ordered by a court to be conducted in accordance

with the agreement of the parties when an action is prematurely commenced in violation of
such agreement.
3. Conciliation conducted by the Lupong Tagapamayapa and Pangkat ng Tagapagsundo
4. Judicial Dispute Resolution – the mediation, conciliation and early neutral evaluation
process conducted by the judge of a pending case after a failed court-annexed mediation and
before the pre-trial stage.

A. Parties in Mediation

1. Mediator – Person conducting mediation

2. Non – Party participants – Witness, resource person, or experts

B. Classification of Mediation

 As a form of ADR, mediation is non–evidentiary or non–merit based which focuses on

facilitation or communication and negotiation between the parties in encouraging to voluntarily
settle their dispute.

 On the basis of the structure of the ADR provider, mediation is either institutional when
administered and conducted by or under the rules of mediation institution or ad–hoc if it is other
than institutional

An agreement to submit a dispute to mediation by an institution shall include an agreement:

1. To be bound by the internal mediation and the administrative policies of such institution; and
2. To have such rules govern the mediation of the dispute and for the mediator, the parties and
their respective counsels and non-party participants to abide by such rules.

C. Place of Mediation

 Two disputing parties are free to agree the place.

 In the absence – default is convenient to and appropriate to all the parties

D. Stages of Mediation

1. Opening statement of mediator

2. Individual narration by the parties
3. Exchange by the parties
4. Summary issues
5. Generalization and evaluation of options
6. Closure

 The foregoing process, however, is not obligatory and the parties, under the principles of self-
determination and party autonomy, may choose the procedure that will govern their mediation.

 Mediation shall be held in private except when parties consented that there be other persons.

 Mediation shall be closed and concluded:

a) By the execution of settlement agreement by the parties;
b) By the withdrawal of any party from mediation; or
c) By the written declaration of the mediator that any further effort at mediation would not
be helpful.

E. Advantages of Mediation

1. Confidentiality in mediation process

2. Prompt, economical amicable dispute resolution
3. The decision-making authority rest upon the parties

F. Confidential and Privileged nature of Mediation Communication

The ADR Act of 2004 maintains the confidentiality of the mediation process by declaring that all
information of evidence is privileged and confidential in character.

Ways of guaranteeing the privilege:

 By declaring certain information as confidential and, therefore, not capable of being disclosed.
 By declaring the privileged information inadmissible in evidence.

Confidential Information

“Any information relative to the subject of mediation or arbitration, relative to the subject of
mediation or arbitration, expressly intended not to be disclosed, or obtained under circumstances
that would create a reasonable expectation on behalf pf the source that the information shall not be
disclosed.”

It can either be:

Expressly Confidential – if the intention not to be disclosed is expressed by its source; and
Impliedly confidential – if obtained under circumstances that would create a reasonable expectation
on behalf of the source that the information shall not be disclosed.

Confidential Information Includes:

1. Communication, oral or written, made in a dispute resolution proceeding, including any

memorandum, note or work product of the neutral party or non-party participant;
2. An oral or written statements made or which occurs during the mediation or for purposes of
considering, conducting, participating, initiating, continuing or reconvening mediation or
retaining a mediator; and
3. Pleadings, motions, manifestations, written statement and reports filed or submitted in
arbitration or for expert evaluation.

Legal effects of Confidential and privileged nature

1. A party may refuse to disclose confidential information

2. Confidential information shall not be subject to discovery and inadmissible in adversarial
proceedings whether judicial or quasi-judicial
3. In an adversarial proceeding, persons involved or previously involved in mediation may not be
compelled to disclose confidential information obtained during mediation:
 Parties to the dispute;
 Mediator or mediators;
 Counsel for the parties;
 Non–party participants;
 Any person hired or engaged in connection with mediation as secretary, stenographer,
clerk or assistant; and
 Any persons who obtains or possesses confidential information by reason of his
profession. In other words, practically all of the parties, mediator, and non-party
participants are bound by the prohibition to disclose confidential information.

4. The protection under the ADR Act shall continue to apply even if the mediator is found to have
failed to act impartially.
5. Mediator may not be called to testify to provide information gathered in mediation.

Exceptions based on agreement, Nature of Proceedings, Crime or Social Justice

1. Contained in an agreement evidence by a record authenticated by all parties to agreement.

2. Those available to the public or made during a session of mediation which is open, or is required
by law to be open, to the public.
3. A threat or statement of plan to inflict bodily injury or commit a crime of violence.
4. Communication intentionally used to plan, attempt to commit, or commit, a crime, or conceal
an on-going crime or criminal activity.
5. Communication 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
protected by law.
6. Communication sought or offered to prove or disprove a claim or complaint of professional
misconduct or malpractice filed against a mediator in a proceeding.
7. Communication sought to offered to prove or disprove a claim or complaint of professional
misconduct or malpractice against a party non-party participant, or representative of a party
based on conduct occurring during mediation.
Exceptions based on Public Policy

1. Court proceeding involving a crime or felony

2. A proceeding to prove a claim or defense that under the law is sufficient to reform or avoid
liability on contracts arising from mediation

Limited use of External Evidence

Only such portion of the communication necessary for the application of the exception can be
admitted in evidence.

Privilege of the Mediator

 Bound by the confidential and privileged nature of mediation communication.
 He may not be compelled to provide evidence of a mediation communication or testify in such
proceeding.
 He may not a report, assessment, evaluation, recommendation, finding or other authority that
will make a ruling on a dispute that is the subject of a mediation.

Exceptions:
1. Termination of mediation, or where settlement was reached;
2. Permitted to be disclosed under Section 13 of ADR Act

Waiver of Confidentiality
 Expressed – when it is contained in a record, or made orally during s proceeding by the mediator
and the mediation parties; or
 Implied – (a) by failing to timely object to an objectionable question propounded during a trial,
or to a document being offered in evidence, or (b) by testifying or presenting a witness to testify
on confidential and privileged information.
 It can also come by way of estoppel such as when a non-party participant himself discloses the
erstwhile confidential information.

II. The Mediator

 Mediation parties are given the freedom to select mediators and they may request the OADR
to provide them with a list or roster of its certified mediators, and their resumes.

Withdrawal Requirements

1. The party requested

2. Lacks qualifications, training and experience
3. Mediator’s impartiality is in question
4. Violation of ethical standards
5. Safety will be jeopardized
6. Unable to provide effective services
7. Conflict of interest
8. Other instances

Duties and Functions of Mediators

 Prior to Mediation –
On competence:
 Upgrade professional competencies in mediation skills and ensure that his qualifications,
trainings, and experiences are known to and accepted by the parties.

On partiality:
Reasonable inquiry whether there are known facts that a reasonable individual would consider
likely to affect hiss impartiality

 During the Mediation –

Confidentiality

On consent and self-determination:

A mediator shall exert reasonable effort to ensure that each party understands the nature and
character of the mediation proceedings

On promotion of respect and control of abuse and process:

The mediator shall encourage mutual respect between the parties, and shall take reasonable
steps, subject to the principle of self-determination, to limit abuses of the mediation process.

Mediator’s Cost and Fees

 A mediator is allowed to charge costs, reasonable fees and charges against the parties but is
under obligation to fully disclose and explain the basis thereof.
 In an Ad Hoc mediation, parties are free to make their own arrangement as to the mediation of
cost and fees.
 In an Institutional mediation, mediation costs shall include the administrative charges of the
mediation institution, mediator’s fees and associated expenses.

Mediated Settlement Agreement

 Compromise Agreement
 Successful Mediation

Roles of counsel in Mediation

Section 14 of ADR Act

 Collaborate with the other lawyer in working together towards the common goal of helping their
clients resolve their differences to their mutual advantage.
 Encourage and assist the client to actively participate in positive discussion and cooperate in
crafting an agreement to resolve their dispute.
 Assist the client to comprehend and appreciate the mediation process and its benefits, as well as
the client’s greater and personal responsibility for the success of mediation in resolving the
dispute.
 Confer and discuss with the client the mediation process and substance.

Supreme Court Resolution, albeit concerning CAM and JDR

1. Help their clients comprehend the mediation process and its benefits and allow them to assume
greater personal responsibility in making decisions for the success of mediation in resolving the
dispute.
2. Discuss with their clients the following:
a) The substantive issues involved in the dispute;
b) Prioritization of resolution in terms of importance to client;
c) Understanding the position of the other side and the underlying fears, concern, and needs
underneath that position;
d) Need for more information or facts to be gathered with the other side for informed
decision-making;
e) Possible bargaining options but stressing the need to be open-minded about other
possibilities;
f) The best, worst, and most likely alternatives to a negotiated agreement.