SUMMARY ON PROCEDURE FOR THE CONDUCT OF ARBITRATION

OUTLINE

A. Commencement of arbitration proceeding ----------------------------------------------- 2

B. Filing of state of claim and defenses -------------------------------------------------------- 3
C. Confidentiality of arbitration proceeding -------------------------------------------------- 3
D. Power to summon witnesses ------------------------------------------------------------------ 4
E. Hearing by arbitrators --------------------------------------------------------------------------- 5
F. Legal representation ----------------------------------------------------------------------------- 5
G. Submission of briefs and closure of hearing ----------------------------------------------- 6
H. Proceeding in lieu of hearing ------------------------------------------------------------------ 6
I. Awards ----------------------------------------------------------------------------------------------- 7
J. Confirmation of the award ---------------------------------------------------------------------- 8
Asset privatization v CA ------------------------------------------------------------------------- 8
K. Judgment ------------------------------------------------------------------------------------------- 8
L. Remedies ------------------------------------------------------------------------------------------- 8
M. Motion for reconsideration, Appeal, Certiorari ------------------------------------------- 10
N. Jurisprudence ------------------------------------------------------------------------------------- 12
RCBC Capital corp v BDO Unibank Inc
Fruehauf electronics phil crop vs TEAMPC
Chung Fu Industries v CA

A. Commencement of arbitration proceeding

When is an arbitration proceeding deemed commenced? (article 5. 20)

Institutional arbitration ad hoc arbitration

Commenced in accordance with the 1. With arbitration agreement - by
arbitration rules of the institution agreed delivery of the claimant to the

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 upon by the parties respondent a demand for
arbitration
2. No prior arbitration agreement –
initiated by one party through a
demand upon the other to submit
their dispute to arbitration. It
shall be deemed commenced
upon the agreement by the other
party to submit to arbitration.

What are the contents of a “demand for arbitration”?

1. The name, address and description of each of the parties;
2. Description of the nature and circumstances of the dispute giving rise to the claim;
3. A statement of the relief sought, including the amount of the claim;
4. The relevant agreements, if any, including the arbitration agreement, a copy of which
shall be attached; and
5. Appointment of arbitrators and/or demand to appoint

How are arbitrators appointed?

Arbitration agreement Arbitration agreement no prior arbitration

provides a sole arbitrator provides an arbitral agreement
tribunal (3 arbitrators)
the demand shall include The claimant shall name the demand shall require
an invitation to meet and the arbitrator including the the respondent to name
agree upon such CV and arbitrator’s his/her/its arbitrators within
arbitration. The place, acceptance. 15 days from receipt of
time, and date shall be demand. Respondent shall
stated give a rtitten notice to the
claimant of the
appointment of the
arbitrator including his CV
and acceptance
Shall not be less than 30 Within 30 days Within 30 days
days

B. Filing of state of claim and defense (article 5.22)

 Claimant -> shall state the facts supporting his claim/her claim, point at issue, and relief of
remedy sought.
- Include all documents or other evidence they deemed relevant.
 Respondent -> shall state his or her defense in respect of these particulars, unless the parties
may have otherwise agreed as to the required elements of such statement.
- Include all documents or other evidence they deemed relevant.

period to file: within the period of time agreed by the parties or determined by tribunal.

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 May the parties amend or supplement their claim and defenses?
- YES, either party may amend or supplement his/her/its claim or defense
during the course of the arbitral proceedings.

Exception:
1. Unless otherwise agreed by the parties
2. The arbitral considers it inappropriate to allow such
amendments having regard to the delay in making it.

C. Confidentiality of the proceeding

What is “confidential information”? (RA 9285)

- It means any information, relative to the subject of mediation or arbitration:
1. Intended by the source not to be disclosed, or
2. Obtained under circumstances that would create a reasonable expectation
on behalf of the source that the information shall not be disclosed

Confidential information includes the ff:

1. Communication, oral or written, made in a dispute resolution proceedings, including
any memoranda, notes, or work product of the neutral party or non-party participant
2. An oral or written statement made or which occurs during mediation or for purposes
of considering, conducting, participating, initiating, continuing of reconvening
mediation or retaining a mediator
3. Pleadings, motions manifestation, witness statements, reports filed or submitted in an
arbitration or for expert evaluation

What is the effect of confidentiality of arbitration proceedings? (IRR art 5.42)

- The arbitration proceedings, including the records, evidence and the arbitral
award and other confidential information shall be considered privileged and
confidential and shall not be published.

Arbitration proceedings are not considered confidential in the ff:

1. With consent of the parties
2. For the limited purpose of disclosing to the court relevant documents in cases where resort to
the court is allowed herein,
Provided that the court, in which action or the appeal is pending may issue a protective
order to prevent or prohibit disclosure of documents or 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.

D. Arbitrator’s power to summon witnesses (sec 14)

Arbitrators have the power to require person to attend a hearing as witness. They have the power
to issue:
1. Subpoena ad testificandum
2. Subpoena duces tecum

Provided that the relevancy of the testimony and documents and the materiality thereof has been
demonstrated to the arbitrators.

May one of the arbitrators in an arbitral tribunal solely hear the testimony of a witness?

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 -No. all of the arbitrators appointed in any controversy must attend all the hearings in that matter
and hear all allegations and proofs of the parties. But an award by majority of them is valid unless
the concurrence of all of them is expressly required in the submission or contract to arbitrate.

E. Hearing by arbitrators (sec 25)

During the commencement, the arbitrators may:
1. Ask both parties for brief statements of the issues in controversy and/or an agreed statement
of facts
2. In addition to the evidence offered by the parties, ask additional evidence necessary to an
understanding and determination of the dispute.

Are arbitrators bound by the rules on evidence under rules of court?

- No. The arbitrators shall be the sole judge of the relevancy and materiality of
the evidence offered or produced, and shall not be bound to conform to the
rules of court pertaining to evidence.

Arbitrators shall receive the exhibits in evidence any document which the parties may wish to
submit and the exhibits shall be properly identified.

But all the exhibits shall remain the custody of the clerk of court during the course of the
arbitration and shall be returned to the parties at the time the awards is made.

Requirements for ocular inspection by arbitrators:

1. Prior notice to the parties
2. Must be made in the presence of all parties to the arbitration, except the party fails to appear
after notice.

May the arbitral tribunal appoint an expert witness?

YES. It may appoint an expert witness
1. To report to it on specific issues to be determined by the arbitral tribunal
2. And require a party to give the expert witness any relevant information for
his/her inspection.
3. Upon agreement of the parties, the finding of expert engaged by the tribunal
on the matters referred to him shall be binding upon the parties and the
arbitral tribunal.

Exception to the appointment of expert witness:

1. Unless agreed to by the parties.

F. Legal representation in domestic arbitration (IRR art 5.41)

In domestic arbitration, who may represent a party?
- A party may be represented by any person of his/her choice provided, that
such representative shall not be authorized to appear as counsel in PH court,

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 or other quasi-judicial body whether such appearance is in relation to the
arbitration in which he/ she appear EXCEPT if he/she is admitted to the
practice of law in the PH.

- A party may, during the proceeding represent himself.

- No arbitrator shall act as mediator in any proceeding in which he/she is

acting as arbitrator and all negotiations towards settlement of the dispute
must take without the presence of the arbitrators.

G. Submission of briefs and closure of hearings

The arbitrators shall declare the hearing closed:

1. Upon received of a negative reply from all the parties after inquiring all the parties whether
they have any further proof or witness to present, the arbitrators shall declare the hearing;
2. After receipt of briefs/reply briefs if the parties signified an intention to file briefs.

Period to file briefs/reply briefs:

1. Briefs – within 15 days after the close of the oral hearings
2. Reply briefs – within 5 days following the 15-day period.

May a hearing be reopened?

- Yes by the ff:
a. By the arbitrators on their own motion or
b. Upon request of any party, upon good cause, shown at any time before
the award is rendered.

H. Proceeding in lieu of hearing (ADR LAW, sec 18)

May oral proceeding be dispensed with?
-Yes, the parties may submit their dispute to arbitration other than oral hearing through a written
agreement.

Process of a proceeding in lieu of hearing:

1. Written agreement of the parties to submit their dispute by arbitration other than oral hearing
2. The parties submit an agreed statement of facts including their respective contentions,
documentary proof, and written argument.
3. Each party shall provide the other party with a copy of all statements and documents
submitted to the arbitrators.
4. Each party has an opportunity to reply.
5. Failure to reply within 7 days after receipt of the statements and proof shall be deemed
waiver of his right to reply.
6. The arbitrators shall declare the proceedings in lieu of hearing closed upon delivery to the
them all statement, documents and proof.

I. Awards in Domestic arbitration

Period to render award:

Within 30 days after the closing of the hearings or proceedings in lieu of hearing
Exceptions:

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 1. Unless the parties have stipulated by a written agreement the time within the
arbitrators must render the award, or
2. The period to render the award is extended by mutual consent of the parties.

Form and contents of award (sec 20)

1. In writing
2. Signed and acknowledged by a majority of the arbitrators or the sole arbitrator
3. Each party shall be furnished with a copy of award.

Limitation of the award:

1. The arbitrators shall have to power to decide only those matters which have been submitted to
them.
2. the arbitrators, in their award, may grant any remedy or relief which 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.
3. the arbitrators shall have the power to assess in their award the expenses of any party against
another party, when such assessment shall be deemed necessary.

Nature of arbitration proceeding:

- arbitration under a contract or submission shall be deemed a special
proceedings.

Court which has jurisdiction:

1. court specified in the contract
2. court specified in the submission
3. CFI (RTC) if none is specified
a. Of the province or city in which one of the parties resides or
b. Doing business
c. In which the arbitration was held

J. DUTY OF RTC TO CONFIRM THE AWARD

Petition for confirmation- any party to the controversy may apply to the court having
jurisdiction for an order confirming the award any time within 1 month after the award is made.

Reason: Arbitral award by itself is valid and needs no court approval. However, in the event that
the losing party refuses to voluntarily comply with the award, it may become necessary for the
winning party to obtain a judicial confirmation of the award

Asia Privatization vs CA (important points):

- The order of the RTC in very clear terms stated that “complaint was dismissed.” The term
“dismiss” means to dispose of an action or suit or motion without trial on the issues involved.
Although the correct procedure was for the parties to go back to the court where the case was

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 pending to have the award confirmed. However, the RTC made a fatal mistake of issuing a final
order dismissing the case. While it should have merely suspended and not dismissed it, neither of
the parties questioned said dismissal. Thus, both parties are bound by such error.
- By its own motion, the trial court had lost jurisdiction over the case and could not have validly
reacquired jurisdiction on a mere motion of one of the parties. As there was no pending action to
speak of, a petition for confirmation should have been filed as a new case.

K. Judgment
The judgment may be entered in the court wherein said application was filed upon the granting of
an order confirming, modifying, or correcting an award.

Effect of judicial confirmation of arbitration award:

1. Same force and effect in all aspect as a final judgment ang may be enforced in the same
manner as a final executory decision of the RTC
2. The court has power to use compulsory and coercive processes, such as a writ of execution
3. Docketed as if it were rendered in an action.

L. Remedies after an award is rendered

The ff are the remedies available after an award is rendered:

1. Application to modify or correct the award
2. Petition to vacate the award

A. Modifying or correcting award

Grounds for correction or modifying of the award (sec 25)

1. Where there was an evident miscalculation of figures, or an evident mistake in the
description of any person, things or property referred to in the award
2. Where the arbitrators have awarded upon a matter not submitted to them, not affecting
the merits of the decision upon the matter submitted; or
3. 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

B. Vacating the award

Grounds for vacating award:

Any party to the controversy may petition to vacate the award before the court on the ff:
1. Award was procured by corruption, fraud, or other undue means;
2. That there was evident partiality or corruption in the arbitrators or any of them
3. The arbitrators were guilty of misconduct in ff:
a. Refusing to postpone the hearing upon sufficient cause shown
b. Refusing to hear evidence pertinent and material to the
c. One or more of the arbitrators was disqualified to act as such
d. Willfully refrained from disclosing his/her disqualification or any other
misbehavior by which the rights of any party to have been materially
prejudiced.

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 4. Arbitrators exceeded their powers, or imperfectly executed them, that a mutual, final and
definite award upon the subject matter submitted to them was not made.

Period to give notice of a motion to vacate, modify or correct the award:

- Must be served upon the adverse party to his counsel within 30 days after award is filed
or delivered.

Papers to accompany motion to confirm, modify correct, or vacate award:

The party moving for an order shall also file with the court the ff:
1. The submission, or contract to arbitrate; the appointment of the arbitrator or
arbitrators; and each written extension of the time, if any, within which to make
the award
2. A verified of the award
3. Each notice, affidavit, or other paper used upon the application to confirm,
modify, correct or vacate such award, and a copy of each of the court upon such
application.

What happens when an award is vacated?

- The court, in its discretion, may direct a new hearing either before the same arbitrators or
new arbitrators chose according to the submission or contract.

M. Motion for reconsideration, appeal, and certiorari

I. Motion for reconsideration (Rule 19, Special ADR)

Period to file:
- A motion for reconsideration may be filed with the RTC within a non-extendible
period of 15 days from receipt of the questioner ruling order

Some Subject of MR:

1. Arbitration agreement is inexistent, invalid, enforceable
2. Upholding or reversing the arbitral tribunal jurisdiction
3. Denying a request to refer the parties to arbitration
4. Granting or denying an interim measure protection
5. Refusing to grant assistance in taking evidence
6. Enjoining or refusing to enjoin a person from divulging confidential information
7. Confirming, vacating or correcting a domestic arbitral award

Rulings of RTC which cannot be subject to MR:

1. Prima facie determination upholding the existence, validity, or enforceability of an
arbitration agreement pursuant to Rule 3.1 (A)
2. An order referring the dispute to arbitration
3. An order appointing an arbitrator
4. Any ruling on the challenge to the appointment of an arbitrator
5. Any order resolving the issue of the termination of the mandate of an arbitrator

Period to resolve:
- Within 30 days from receipt of the opposition or comment or upon the expiration
of the period to file opposition

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 No second motion for reconsideration.
-
II. Appeal

- An appeal may be taken from an order or from judgment entered upon an award through
certiorari proceedings, but such appeals shall be limited to question of law. (Sec 29,
ADR)

- An agreement to refer a dispute to arbitration shall mean that the arbitral award shall be
final and binding. Consequently, a party to an arbitration is precluded from filing an
appeal or a petition for certiorari questioning the merits of an arbitral award (Rule 19.7,
Special rules of court on ADR)

Ground on Judicial review of arbitration in the PH:

The only instance where the court may vacate or set aside the decision of an arbitral
tribunal
1. Grounds to vacate under sec 24 of RA No. 876
2. Grounds under special rules of court ADR (19.10)
3. If RTC is asked to set aside the arbitral award other than the grounds mentioned
above, the court shall entertain such other grounds only if the same is in
violation of public policy. (Rule 19.10)

N. JURISPRUDENCE

A. RCBC Capital crop v BDO Unibank Inc, Gr no. 196171, Dec 10, 2012

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 “It must be stated that a review brought to the SC under the Special ADR rules is not a
matter of right. Rule 19.36 of said Rules specified the conditions for the exercise of this
court’s discretionary review….

A mere general allegation that the CA committed serious and substantial error or that it has
acted with grave abuse of discretion… without indicating with specificity the nature of such
error or abuse of discretion and the serious prejudice suffered by the petitioner, shall
constitute a sufficient ground for the SC to dismiss outright the petition.”

B. Fruehauf electronics phil crop vs Technology electronics assembly and management

pacific crop, GR no. 204197, Nov 23, 2016
Reiterated the ruling in Asset privatization case where the SC ruled:
“The right to an appeal is neither a natural right nor an indispensable component of due
process; it is a mere statutory privilege that cannot be involved in the absence of an enabling
statue. Neither the Arbitration law nor the ADR law allows a losing party to appeal from the
arbitral award. The statutory absence of an appeal mechanism reflects the state’s policy of
upholding the autonomy or arbitration proceedings and their corresponding arbitral awards.
“

C. Chung Fu Industries v CA, Gr no. 96283 Feb 25, 1992

“Under art 2044 of the Civil code, the finality of the arbitrator’s award is not absolute and
without exceptions… Under Sec 24, and 25 of the arbitration law, there are grounds for
vacating, modifying, or rescinding an arbitrator’s award. Thus, if and when the factual
circumstances referred to in the above cited provisions are present, judicial review of the
award is properly warranted.

This is where the proper remedy is certiorari under Rule 65 of the Revised Rules of court. It
is to be borne in mind, however, that this action will lie only where a grave abuse of
discretion or an act without or in excess of jurisdiction on the part of the voluntary
arbitrator is clearly shown.

Voluntary arbitrators, by the nature of their functions, act in quasi- judicial capacity.
Therefore, their decisions should not be beyond the scope of the power of judicial review of
this court. “

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