1.

What is the competence-competence principle and how is it defined in the Alternative Dispute
Resolution Act of 2004

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. When a court is asked to rule upon issue/s
affecting the competence or jurisdiction of an arbitral tribunal in a dispute brought before it, either
before or after the arbitral tribunal is constituted, the court must exercise judicial restraint and defer
to the competence or jurisdiction of the arbitral tribunal by allowing the arbitral tribunal the first
opportunity to rule upon such issues.
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.
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.

2.What is the principle of separability

The independent character of the arbitration clause, also known as the doctrine of separability or
severability, – an arbitration agreement is independent of the main contract. The arbitration agreement
is to be treated as separate from the main contract and it does not automatically terminate when the
contract of which it is a part of comes to an end.26 The separability doctrine was dwelt upon in the
recent case of Gonzales and Panel of Arbitrators v. Climax Mining Ltd.27 where the Supreme Court held
that petitioner’s argument that the Addendum contract was null and void and, therefore, the arbitration
clause therein was void as well, was not tenable. The validity of the contract containing the agreement
to submit to arbitration does not affect the applicability of the arbitration clause itself.

The Special Rules of Court on Alternative Dispute Resolution (Special ADR Rules)
recognise the principle of separability of the arbitration clause. An arbitration clause must be
treated as an agreement independent of the other terms of the contract of which it forms
part. Therefore, a decision that the contract is null and void will not necessarily lead to the
invalidity of the arbitration clause (rule 2.2, Special ADR Rules).

3. While courts may view arbitration as a legitimate substitute for legal action and welcome the
reduction in their dockets, they still do not have a uniform approach to libel and slander litigation arising
from the arbitral process. Even though defamation actions of this type are not permitted in the judicial
arena, courts are frequently divided on whether an absolute privilege should be applied to foreclose or
limit subsequent litigation. It is the position of the authors that if arbitration and related dispute
resolution procedures are to be truly effective, they must be accorded the same dignity and protection
provided analogous court proceedings

4. There is no express prohibition on unilateral or optional clauses. Therefore, an arbitration

agreement giving one party the right to choose arbitration is likely to be enforceable under
the principle of party autonomy (section 2, Republic Act 9285 otherwise known as the
Alternative Dispute Resolution Act of 2004 ).

5.
MODEL ARBITRATION CLAUSE
"Any dispute, controversy or claim arising out of or relating to this contract, or the breach,
termination or invalidity thereof shall be settled by arbitration in accordance with the PDRCI
Arbitration Rules as at present in force.

Note - Parties may wish to consider adding:

(a) The appointing authority shall be ... (name of institution or person);

(b) The number of arbitrators shall be ... (one or three);
(c) The place of arbitration shall be ... (town or country);
(d) The language(s) to be used in the arbitral proceedings shall be...(language)"

a. Separate arbitration agreement

Under the law, an arbitration agreement is valid so long as it is in writing and signed by the
parties to the agreement, or by their lawful agents. Therefore, a clause in the main contract
is sufficient and a separate arbitration agreement is not needed, so long as the
requirements for a contract are met (section 2, Arbitration Law).
Furthermore, the Republic Act 9285 otherwise known as the Alternative Dispute Resolution
Act of 2004 (Alternative Dispute Resolution Act of 2004), (which adopted the UNCITRAL
Model Law in its entirety (Model Law)) provides that an arbitration agreement can be in the
form of an arbitration clause in a contract or in a separate agreement.
The Model Law states that the reference in a contract to a document containing an
arbitration clause constitutes an arbitration agreement, provided that the contract is in
writing and the reference is such as to make that clause part of the contract (Article 7(6),
Model Law, Alternative Dispute Resolution Act of 2004).

b. As a general rule, an arbitration agreement is consensual and therefore only binding on

the contracting parties. Therefore, parties that did not sign the contract cannot be compelled
to arbitrate disputes relating to the contract, except when the contract contains a reference
to a document containing an arbitration clause to which the third party is a signatory.