I.

Arbitration

Arbitration is a process where the parties agree to submit their disputes to a neutral arbitrator
or tribunal, who renders an award after hearing the parties. Legally, it is defined as a voluntary
dispute resolution process whereby one or more arbitrators, appointed in accordance with the
agreement of the parties, or under rules promulgated pursuant to Republic Act No. 9285 (2004)
and its Implementing Rules and Regulations (IRR), resolve a dispute by rendering an award.
[Republic Act No. 9285 (2004) or “ADR Act of 2004”, Sec. 3(d); DOJ DC No. 98, s. 2009; IRR of
ADR Act of 2004), Rule 2, Art. 1.6, Sec. A (3)].
Arbitration may be institutional or ad hoc.

Institutional arbitration is administered by an entity registered as a domestic corporation with

the Securities and Exchange Commission (SEC) and engaged in, among others, arbitration of
disputes in the Philippines on a regular and permanent basis, e.g., the PDRCI [IRR of ADR Act of
2004, Sec. D (10)].

Ad hoc arbitration is arbitration administered by an arbitrator or by the parties themselves. An

arbitration administered by an institution shall be regarded as ad hoc arbitration if such
institution is not a permanent or regular arbitration institution in the Philippines [IRR of ADR Act
of 2004, Sec. D (1)].

Generally, institutional arbitration has the advantage of predictability and certainty. The
arbitration undergoes a process that both parties accept in advance of the dispute, from the
appointment of the tribunal, to the venue and conduct of the proceeding, to the time limit, up
to the rendition and enforcement of the final award. The parties are also familiar with the cost
of institutional arbitration, which apply uniformly to all disputes.

While there are advantages to an ad hoc arbitration, e.g., the parties will have more control
over the cost of the arbitration (as they are not subject to the fee schedule of an arbitration
center) or over the proceeding itself (as they can agree to their own rules), there are
disadvantages, including; (a) the parties in an ad hoc arbitration may have to negotiate the rules
of procedure instead of availing of tried and tested arbitration rules (e.g., PDRCI Rules); (b) the
absence of a permanent secretariat with an experienced staff who can provide administrative
assistance; (c) lack of access to skilled and experienced arbitrators who can resolve the dispute;
(d) delay and difficulty in the appointment of arbitrators in case of a challenge or if the parties
fail to timely appoint the arbitrators; (e) lack of readily available and convenient physical
facilities and equipment as well as support services for arbitration; and (f) difficulty in
encouraging reluctant parties to proceed with arbitration. An ad hoc arbitration may take
longer than institutional arbitration and, in some cases, even longer than court litigation.

II. Philippine Dispute Resolution Center, Inc. (PDRCI) Arbitration

(http://www.pdrci.org/our-rules/arbitration-rules-pdrci-arbitration-rules-2/)
 A. Arbitration Agreement

In the absence of a contractual stipulation that the dispute shall be resolved by

arbitration under the rules of the PDRCI, the parties may agree to submit the dispute to
a binding arbitration to be administered by the PDRCI under its rules of procedure by
executing an arbitration agreement or a submission agreement.

(Note: In this case, if we decide to submit to arbitration, the first step is to execute an
arbitration agreement because parties do not have contract, much more, arbitration
clause)

B. Initiating an Arbitration Proceedings with PDRCI

The party or parties initiating recourse to arbitration ("Claimant") shall communicate to PDRCI a
notice of arbitration ("Notice of Arbitration"). The Notice of Arbitration shall include the
following:
1. A demand that the dispute be referred to arbitration;
2. The names, addresses and other contact details of the parties;
3. A reference to the arbitration agreement;
4. A reference to the contract or legal relationship involved in the dispute;
5. A brief description of the claim and an estimate of the amount involved, including any
claim in the alternative;
6. The relief sought;
7. A proposal as to the number of arbitrators (one or three), if the parties have not
previously agreed on such number; and
8. Proposals regarding the appointment of a sole arbitrator or an arbitrator referred to in
Articles 7 (Joinder of Additional Parties) and 8 (Claims between Multiple Parties).

The Notice of Arbitration may also include the Statement of Claim. The Statement of Claim
shall include the following particulars:
1. The names, addresses and other contact details of the parties;
2. A statement of the facts supporting the claim;
3. The points at issue;
4. The legal grounds or arguments supporting the claim;
5. The value of the claims and the amounts involved, or if the relief sought is non-
monetary, an estimate thereof; and
6. The relief sought.

A copy of any contract or other legal instrument out of or in relation to which the dispute
arises and of the arbitration agreement shall be annexed to the Statement of Claim. The
Statement of Claim shall, as far as possible, be accompanied by all documents and other
evidence relied upon by the claimant, or contain references to them.
 The submission of a Notice of Arbitration shall be accompanied by payment of a non-
refundable Filing Fee in accordance with the Guidelines on Fees. The claimant shall also pay a
provisional advance on cost ("Provisional Advance") in accordance with the Guidelines on Fees.
(See: http://www.pdrci.org/web/wp-content/uploads/2015/03/2015-PDRCI-Guidelines-on-
Fees.pdf)

III. Philippine International Center for Conflict Resolution (PICCR) Arbitration

(https://piccr.com.ph/rules.php; https://piccr.com.ph/media/PICCR-Handbook.pdf)

A. Arbitration Agreement

Where the parties have agreed to submit to arbitration under the Rules, they shall be deemed
to have submitted ipso facto to the Rules in effect on the date of commencement of the
arbitration, unless they have agreed to submit to the Rules in effect on the date of their
arbitration agreement.

(Similar to the above discussion, the first step in this case if we will refer the matter to PICCR
Arbitration is to execute an Arbitration Agreement where both parties agree to submit the
dispute to arbitration by PICCR)

B. Initiating PICCR Arbitration

A party wishing to commence arbitration under the Rules shall submit its Request for
Arbitration ("Request") to the Secretariat. The Secretariat shall notify the claimant and
respondent of the receipt of the Request and the date of such receipt. The Request shall
contain the following information:

a. the name in full, description, address and other contact details of each of the
parties;
b. the name in full, address and other contact details of any person(s) representing
the claimant in the arbitration;
c. a description of the nature and circumstances of the dispute giving rise to the
claims and of the basis upon which the claims are made;
d. a statement of the relief sought, together with the amounts of any quantified
claims and, to the extent possible, an estimate of the monetary value of any
other claims;
e. any relevant agreements and, in particular, the arbitration agreement(s);
f. where claims are made under more than one arbitration agreement, an
indication of the arbitration agreement under which each claim is made;
g. all relevant particulars and any observations or proposals concerning the number
of arbitrators and their choice in accordance with the provisions of Articles 12
 (Constitution of the Arbitral Tribunal) and 13 (Appointment and Confirmation of
the Arbitrators), and any nomination of an arbitrator required thereby; and
h. all relevant particulars and any observations or proposals as to the place of the
arbitration, the applicable rules of law and the language of the arbitration.

The claimant may submit such other documents or information with the Request
as it considers appropriate or as may contribute to the efficient resolution of the
dispute.

Together with the Request, the claimant shall:

a. submit the number of copies thereof required by Article 3 (Written

Notifications or Communications and Time Limits), Paragraph 1; and
b. make payment of the filing fee required by Appendix 3 (“Costs”) in force on
the date the Request is submitted.
(See: https://piccr.com.ph/media/PICCR-Fees.pdf)