As of May 22 - Adr Not Complete Part 2

PART I - ARBITRATION
I. General Principles in Arbitration
Fruehauf Electronics Philippines Corporation v. Technology Electronics Assembly and Management Pacific Corporation, 810 SCRA
280 (2016)
A. Definition
- Elements; When Bound [see Section 3 (d), Republic Act No. 9285 or the “Alternative Dispute Resolution
Act of 2004” (“ADR”)];
(d) "Arbitration" means a voluntary dispute resolution process in which one or more arbitrators, appointed in accordance with the
agreement of the parties, or rules promulgated pursuant to this Act, resolve a dispute by rendering an award;
- Persons and Matters Subject to Arbitration [see Section 2, Republic Act No. 876 or “The Arbitration Law”
(“DAL”)];
Section 2. Persons and matters subject to arbitration. - Two or more persons or parties may submit to the arbitration of one or more
arbitrators any controversy existing between them at the time of the submission and which may be the subject of an action, or the
parties to any contract may in such contract agree to settle by arbitration a controversy thereafter arising between them. Such
submission or contract shall be valid, enforceable and irrevocable, save upon such grounds as exist at law for the revocation of any
contract.
Such submission or contract may include question arising out of valuations, appraisals or other controversies which may be
collateral, incidental, precedent or subsequent to any issue between the parties.
A controversy cannot be arbitrated where one of the parties to the controversy is an infant, or a person judicially declared to be
incompetent, unless the appropriate court having jurisdiction approve a petition for permission to submit such controversy to
arbitration made by the general guardian or guardian ad litem of the infant or of the incompetent.
But where a person capable of entering into a submission or contract has knowingly entered into the same with a person incapable
of so doing, the objection on the ground of incapacity can be taken only in behalf of the person so incapacitated.
- Distinguish Arbitration from Court Litigation [see Fruehauf Electronics Philippines Corporation v.
Technology Electronics Assembly and Management Pacific Corporation, supra]
Arbitration is an alternative mode of dispute resolution outside of the regular court system. Although adversarial in character,
arbitration is technically not litigation. It is a voluntary process in which one or more arbitrators - appointed according to the parties'
agreement or according to the applicable rules of the Alternative Dispute Resolution (ADR) Law - resolve a dispute by rendering an
award. 73 While arbitration carries many advantages over court litigation, in :many ways these advantages also translate into its
disadvantages.
Resort to arbitration is voluntary. It requires consent from both parties in the form of an arbitration clause that pre-existed the
dispute or a subsequent submission agreement. This written arbitration agreement is an independent and legally enforceable
contract that must be complied with in good faith. By entering into an arbitration agreement, the parties agree to submit their
dispute to an arbitrator (ortribunal) of their own choosing and be bound by the latter's resolution.
However, this contractual and consensual character means that the parties cannot implead a third-party in the proceedings even if
the latter's participation is necessary for a complete settlement of the dispute. The
tribunal does not have the power to compel a person to participate in the arbitration proceedings without that person's consent. It
also has no authority to decide on issues that the parties did not submit (or agree to submit) for its resolution.
As a purely private mode of dispute resolution, arbitration proceedings, including the records, the evidence, and the arbitral award,
are confidential 74 unlike court proceedings which are generally public. This allows the parties to avoid negative publicity and protect
their privacy. Our law highly regards the confidentiality of arbitration proceedings that it devised a judicial remedy to prevent or
prohibit the unauthorized disclosure of confidential information obtained therefrom. 75
The contractual nature of arbitral proceedings affords the parties substantial autonomy over the proceedings. The parties are free
to agree on the procedure to be observed during the proceedings. 76 This lends considerable flexibility to arbitration ; proceedings as
compared to court I litigation governed by the Rules of Court.
The parties likewise appoint the arbitrators based on agreement. There are no other legal requirements as to the competence or
technical qualifications of an arbitrator. Their only legal qualifications are: (1) being of legal age; (2) full-enjoyment of their civil
rights; and (3) the ability to read and write. The parties can tailor-fit the tribunal's composition to the nature of their dispute. Thus, a
specialized dispute can be resolved by experts on the subject.
However, because arbitrators do not necessarily have a background in law, they cannot be expected to have the legal mastery of a
magistrate. There is a greater risk that an arbitrator might misapply the law or misappreciate the facts en route to an erroneous
decision.
What are remedies from a final domestic

arbitral award?
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 invoked in the absence of an enabling statute. 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 of
arbitration proceedings and their corresponding arbitral awards.
As established earlier, an arbitral: award is not appealable via Rule 43 because: (1) there is no statutory basis for an appeal from the
final award of arbitrators; (2) arbitrators are not quasi-judicial bodies; and (3) the Special ADR Rules specifically prohibit the filing of
an appeal to question the merits of an arbitral award.
The Special ADR Rules allow, the RTC to correct or modify an arbitral award pursuant to Section 25 of the Arbitration Law. However,
this authority cannot be interpreted as jurisdiction to review the merits of the award.
- Distinguish Ad Hoc from Institutional Arbitration

Ad Hoc Arbitration Institutional Arbitration
Definition An arbitration administered by an institution An arbitration of disputes in the Philippines on a
shall be regarded as ad hoc arbitration if such regular and permanent basis.
institution is not a permanent or regular
arbitration institution in the Philippines.
Administration Administered by an arbitrator or by the parties Administered by an entity registered as a domestic
themselves. corporation with the Securities and Exchange
Commission (SEC)
Procedure Determined by the arbitrator, with the The applicable rules of procedure of the arbitration
agreement of the parties, shall be followed institution shall be followed.
Commencement Arbitration is commenced by the claimant upon Arbitration is commenced in accordance with the
of Arbitral delivering to the respondent a demand for arbitration rules of the institution agreed upon by the
Proceedings arbitration. parties.
Advantages and While there are advantages to an ad Institutional arbitration has the advantage of
Disadvantages hoc arbitration, e.g., the parties will have more predictability and certainty.
control over the cost of the arbitration (as they The arbitration undergoes a process that both parties
are not subject to the fee schedule of an accept in advance of the dispute, from the
arbitration center) or over the proceeding itself appointment of the tribunal, to the venue and conduct
(as they can agree to their own rules), there are of the proceeding, to the time limit, up to the
disadvantages, including; rendition and enforcement of the final award. The
(a) the parties in an ad hoc arbitration may parties are also familiar with the cost of institutional
have to negotiate the rules of procedure arbitration, which apply uniformly to all disputes.
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.
- Distinguish Domestic, International, and Commercial Arbitration [see Section 32, ADR; Rule 1.11 of A.M.
No. 07-11-08-SC or the “Special Rules of Court on Alternative Dispute Resolution” (“Special ADR Rules”);
Article 1 (3), UNITRAL Model Law, as amended (“Model Law”)]
Domestic Arbitration International Arbitration Commercial Arbitration

Definition Means arbitration that is not Means an arbitration where: Means an arbitration that
international as defined in Article (a) the parties to an arbitration covers matters arising from
1(3) of the Mode Law. agreement have, at the time of the all relationships of a
conclusion of that agreement, their commercial nature, whether
places of business in different states; contractual or not.
or COVERAGE:
(b) one of the following places is Relationships of a
situated outside the Philippines in commercial nature include,
which the parties have their places of but are not limited to, the
business following commercial
the place of arbitration if determined transactions: any trade
in, or pursuant to , the arbitration transaction for the supply or
agreement; exchange of goods or
any place where a substantial part of services; distribution
the obligations of the commercial agreements; construction of
relationship is to be performed or works; commercial
the place with the subject matter of representation or agency;
the dispute is most closely factoring; leasing;
connected; or consulting; engineering;
(c) the parties have expressly agreed licensing; investment;
that the subject matter of the financing; banking;
arbitration agreement relates to insurance; joint venture and
more than one country. other forms of industrial or
business cooperation;
four essential features of carriage of goods or
international commercial arbitration passengers by air, sea rail or
as follows: ( road.
i) it is an alternative to
national courts, (
ii) it is a private
mechanism for dispute
resolution, (
iii) it is controlled by the
parties and (
iv) it constitutes a final
and binding
determination of
parties’ rights and
obligations.
Governing Laws Republic Act No. 876, otherwise Model Law on International
known as "The Arbitration Law", as Commercial Arbitration (the "Model
amended by the ADR Act. Law")
Conduct of Hearing The parties may agree to submit Subject to any contrary agreement
their dispute to arbitration other by the parties, the tribunal shall
than through oral hearing. decide whether to hold oral hearings
The parties may submit an agreed for the presentation of evidence or
statement of facts. They may also for oral argument, or whether the
submit their respective proceedings shall be conducted on
contentions to the duly appointed the basis of documents and other
arbitrators in writing; this shall materials.
include a statement of facts, However, unless the parties have
together with all documentary agreed that no hearings shall be
proof held, the tribunal shall hold such
hearings at an appropriate stage of
the proceedings, if so requested by a
party.
Appointed An arbitrator must be of legal age, Any impartial and independent
Arbitrator in full enjoyment of his or her civil individual may be appointed as
rights, and knows how to read and arbitrator
write. The arbitrator shall not be
related by blood or marriage
within the sixth degree to either
party. He or she shall also have no
financial, fiduciary, or other
interest in the dispute or in the
result of the arbitration, and must
have no personal bias that may
prejudice the right of any party to
a fair and impartial award. The
arbitrator may not act as a
champion of any party or to
advocate its cause.
Bases on which an A party may file a petition with the A party may file a petition with the
Award may be appropriate court to vacate an appropriate court to set aside an
Challenged award on the following grounds: award on the grounds enumerated
a) corruption, fraud or other under article V of the New York
undue means; Convention, which include:
b) evident partiality or a) a party’s incapacity
corruption of the tribunal b) improper notification
or its members; regarding the appointment
c) misconduct or of arbitrators or the arbitral
misbehavior of the proceedings;
tribunal that materially c) the award deals with a
prejudiced the rights of a dispute outside the arbitral
party; terms, or contains matters
d) willful non-disclosure by beyond the scope of
an arbitrator of their arbitration;
disqualification; d) the tribunal’s composition
e) the tribunal exceeded its was not in accordance with
powers, or so imperfectly the parties’ agreements or
executed them, such that the law;
a complete, final and e) the award has not yet
definite award upon the become binding;
subject matter submitted f) the subject-matter of the
to them was not made; dispute is incapable of
f) non-existence, invalidity settlement by arbitration
or unenforceability of the under Philippine law; and
arbitration agreement; g) the recognition or
and enforcement of the award is
g) minority or incompetence against public policy
of a party
B. The Arbitration Agreement

- Definition [see Article 7(1), Model Law];
(1) “Arbitration agreement” is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which
may arise between them in respect of a defined legal relationship, whether contractual or not. An arbitration agreement may be in
the form of an arbitration clause in a contract or in the form of a separate agreement.
- Distinguish Arbitration Agreement and Submission Agreement [see Ormoc Sugarcane Planters’
Association, Inc. vs. Court of Appeals, 596 SCRA 630 (2009)]
The foregoing provision speaks of two modes of arbitration:
 an agreement to submit to arbitration some future dispute, usually stipulated upon in a civil contract between the
parties, and known as an agreement to submit to arbitration, and
 an agreement submitting an existing matter of difference to arbitrators, termed the submission agreement.
Article XX of the milling contract is an agreement to submit to arbitration because it was made in anticipation of a dispute that might
arise between the parties after the contract’s execution.
Except where a compulsory arbitration is provided by statute, the first step toward the settlement of a difference by arbitration is
the entry by the parties into a valid agreement to arbitrate. An agreement to arbitrate is a contract, the relation of the parties is
contractual, and the rights and liabilities of the parties are controlled by the law of contracts. 11 In an agreement for arbitration, the
ordinary elements of a valid contract must appear, including an agreement to arbitrate some specific thing, and an agreement to
abide by the award, either in express language or by implication.
- Principle of Party Autonomy; Private Contract and Consent [see Maria Luisa Park Association, Inc. vs.
Almendras, et al, 606 Phil. 670 (2009)]
Party autonomy is a key principle in international commercial arbitration. The doctrine of party autonomy – initially
formulated by academics before application by domestic law – has acquired large-scale acceptability. Parties to an international
commercial agreement decide legal rules applicable to that agreement, and in the application of these rules an arbitration
tribunal simply carries out their agreement. The scope of autonomy and limits to party autonomy will be discussed later in detail.
“Despite their differences, common law, civil law and socialist countries have all equally been effected by the movement towards the
rule allowing the parties to choose the law to govern their contractual relations. This development has come about independently in
every country and without any concerted effort by the nations of the world; it is the result of separate, contemporaneous and
pragmatic evolutions within the various national systems of conflict of laws.”
The principle of party autonomy is rooted in international conventions and model rules. Article 35(1) of UNCITRAL Rules, Article
21(1) of ICC Rules and Article 42 of ICSID are a few examples of the relevant sections that provide for party autonomy.
Article 35 (1) UNCITRAL Rules:
“1. The arbitral tribunal shall apply the rules of law designated by the parties as applicable to the substance of the dispute. Failing
such designation by the parties, the arbitral tribunal shall apply the law which it determines to be appropriate.”
Article 21 (1) ICC Rules:
“The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the
absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate.”
However, once the dispute has already arisen, allowing parties to choose a different set of law from what they had previously
chosen has less science of reasoning, although, it is still expressly provided for in Rome I Regulation, Art. 3(2), REGULATION (EC) No
593/2008 of the European Parliament and of the Council, which states that at any point in time the parties may accept to subject
the contract to a different law than that which previously regulated it.
Fundamentally, arbitration is based on party autonomy, however, autonomy is not outright in character and hence is subject to
certain curbs. Amongst these exceptions are public policy and mandatory rules. This means if the autonomy of parties is restricted
by rules, the authority generated by party autonomy will also be restricted. Pragmatically, this means that arbitrators are also
inescapable to limitations. As a result, arbitrators must adhere to party equality and a party’s right to be heard. These principals also
consist of an arbitrator’s duty to retain independence and fairness. Owing to this, arbitrators become indirect implementers of
public policy and mandatory rules.
- Formal Requisites [see Section 4, DAL; see also National Union Fire Insurance Co. of Pittsburgh v. Stolt-
Nielsen Philippines, Inc., 184 SCRA 682 (1990); BF Corporation v. C.A., 288 SCRA 267 (1998); Associated
Bank v. C.A., 233 SCRA 137 (1994); Ormoc Sugarcane Planters’ Association, Inc. v. C.A., 596 SCRA 630
(2009); Lanuza, Jr. v. BF Corporation, 744 Phil. 612 (2014); Freuhauf Electronics Philippines Corporation
v. Technology Electronics Assembly and Management Pacific Corporation, 810 SCRA 280 (2016).]
Section 4. Form of arbitration agreement. - A contract to arbitrate a controversy thereafter arising between the parties, as well as a
submission to arbitrate an existing controversy shall be in writing and subscribed by the party sought to be charged, or by his
lawful agent.
The making of a contract or submission for arbitration described in section two hereof, providing for arbitration of any controversy,
shall be deemed a consent of the parties to the jurisdiction of the Court of First Instance of the province or city where any of the
parties resides, to enforce such contract or submission.
- Effect of Rescission/Resolution under Article 1191 of the Civil Code on an Arbitration Agreement [see
Korea Technologies Co. Ltd. v. Lerma, 542 SCRA 1 (2008)]
Does it affect? -
With regard the Termination of contract with arbitration clause, A party may not unilaterally rescind or terminate the contract (that
contains an arbitration clause) for whatever cause without first resorting to arbitration. The rule allowing extrajudicial rescission of a
contract in case of breach does not apply when the contract contains a valid arbitration clause as the issues arising from such alleged
breaches of the contract by a party must be brought first and resolved by arbitration. Thus, the issues arising from the contract
between Korea Tech and Pacific General on whether the equipment and machineries delivered and installed were properly installed
and operational in Carmona and other issues related thereto are proper for arbitration. Pacific General’s counterclaim for damages
Where the issue of validity of the arbitration clause or of its proper scope is submitted to a trial court in a petition to compel
arbitration, the Arbitration Law confines the court’s authority to pass upon issue such in a summary proceeding. The trial court must
refrain from taking up the claim of the contending parties for damages which may be ventilated in a separate proceeding at the
appropriate time and venue.
The Enforcement of award in a domestic or international arbitration manifests that an arbitral award in a domestic or international
arbitration is subject to enforcement by a court upon application of the prevailing party for the confirmation or recognition and
enforcement of an award. Under Section 42 of the ADR Act, “The recognition and enforcement of such (foreign) arbitral awards shall
be filed with the Regional Trial Court in accordance with the rules of procedure to be promulgated by the Supreme Court.” An
arbitral award is immediately executory upon the lapse of the period provided by law. For an award rendered in domestic or non-
international arbitration, unless a petition to vacate the award is filed within thirty (30) days from the date of serve upon the latter,
the award is subject to confirmation by the court. For an award rendered in a domestic, international arbitration, the period for filing
an application to set it aside is not later than three (3) months from the date the applicant received the award, otherwise the court
shall recognize and enforce it.
- Principle of Separability [See Rule 2.2(B), Special ADR Rules; Article 16, Model Law; Gonzales, et al. vs.
Climax Mining Ltd., et al., 541 Phil. 143 (2007)].
The doctrine of separability or severability enunciates that an arbitration agreement is independent of the main contract. The
arbitration agreement is to be treated as a separate agreement and the arbitration agreement does not automatically terminate
when the contract of which it is part comes to an end. The separability of the arbitration agreement is especially significant to the
determination of whether the invalidity of the main contract also nullifies the arbitration clause. Indeed, the doctrine denotes that
the invalidity of the main contract, also referred to as the “container” contract, does not affect the validity of the arbitration
agreement. Irrespective of the fact that the main contract is invalid, the arbitration clause/agreement still remains valid and
enforceable.
The validity of the contract containing the agreement to submit to arbitration does not affect the applicability of the arbitration
clause itself. A contrary ruling would suggest that a party’s mere repudiation of the main contract is sufficient to avoid arbitration.
That is exactly the situation that the separability doctrine, as well as jurisprudence applying it, seeks to avoid.
ADDITIONAL - Effect on Third Party [Heirs of Agusto L. Salas, Jr. v. Laperal Realty Corp., 302 SCRA 620 (1999); Del Monte Corp. USA
v. CA, 351 SCRA 373 (2001); Section 25, ADR; Rules 2.2 and 4.7, Special ADR Rules; Article 1311, Civil Code
C. Pathological Arbitration Clause
- Definition [see Lucky Goldstar v Ng Mook Kee Ltd, [1993] 2 HKLR 73];
A pathological clause is a defective clause. It is defective because it may be incomplete or ambiguous. It presents problems
of interpretation and implementation which may require prior resolution before the arbitration moves forward. in the worst case, it
makes arbitration clause dysfunctional or inoperative unless a court intervenes.
According to Frédéric Eisemann, there are four essential elements of an arbitration clause:
(1) The first, which is common to all agreements, is to produce mandatory consequences for the parties,
(2) The second, is to exclude the intervention of state courts in the settlement of the disputes, at least before the issuance
of the award,
(3) The third, is to give powers to the arbitrators to resolve the disputes likely to arise between the parties,
(4) The fourth, is to permit the putting in place of a procedure leading under the best conditions of efficiency and rapidity
to the rendering of an award that is susceptible of judicial enforcement
An arbitration clause is pathological when it deviates from any one of the above four elements. How defective the clause is
depends on the extent of the deviation from those elements.
An example of a defective clause can be seen in the case of Lucky-Goldstar v. Ng Moo Kee Engineering, wherein the parties
to the contract had included the following arbitration agreement in their contract: “Any dispute or difference arising out of this
contract shall be arbitrated in a 3rd Country, under the rule of a 3rd Country and in accordance with the rules of procedure of the
International Commercial Arbitration Association.” The institution named in the clause did not exist and there was an ambiguous
reference to the seat of arbitration. This arbitration clause was nevertheless interpreted so as to render the clause effective.
- Duty of courts [Cf. Mindanao Portland Cement Corp. vs. Mcdonough Construction Company of Florida,
126 Phil. 78 (1967)];
Since there obtains herein a written provision for arbitration as well as failure on respondent's part to comply therewith,
the court a quo rightly ordered the parties to proceed to arbitration in accordance with the terms of their agreement (Sec. 6,
Republic Act 876). Respondent's arguments touching upon the merits of the dispute are improperly raised herein. They should be
addressed to the arbitrators. This proceeding is merely a summary remedy to enforce the agreement to arbitrate. The duty of the
court in this case is not to resolve the merits of the parties' claims but only to determine if they should proceed to arbitration or
not. And although it has been ruled that a frivolous or patently baseless claim should not be ordered to arbitration, it is also
recognized that the mere fact that a defense exists against a claim does not make it frivolous or baseless.
MINDANAO PORTLAND CEMENT CORPORATION, vs. McDONOUGH CONSTRUCTION COMPANY OF FLORIDA

G.R. No. L-23390 April 24, 1967
FACTS:
Petitioner MPCC and respondent McDonough executed a contract for the construction by the respondent for the petitioner
of a dry portland, cement plant at Iligan City. In a separate contract, Turnbull, Inc. — the "engineer" referred to in the construction
contract — was engaged to design and manage the construction of the plant.
Alteration in the plans and specifications were subsequently made during the progress of the construction, thus, extension
of time for the termination of the project were granted.
Respondent finally completed the project, except as to delivery of certain spare parts for replacements and installations of
floodlamps; however, it was complied with in the later time. As to the alteration made, some provisions of the Addenda were not
signed by petitioner, even if he is still in possession.
Petitioner claimed from respondent damages in the amount of more than P2,000,000 allegedly occasioned by the delay in
the project's completion. Respondent in turn asked for more than P450,000 from petitioner for alleged losses due to cost of extra
work and overhead as of April 1962. A conference was held to settle the differences, but no satisfactory results were reached.
Petitioner sent respondent, written invitations to arbitrate, invoking a provision in their contract regarding arbitration of
disputes. Instead of answering said invitations, respondent submitted to petitioner for payment its final statement of work
accomplished, asking for P403,700 as unpaid balance of the consideration of the contract.
Petitioner, filed the present action in the CFI of Manila to compel respondent to arbitrate with it concerning alleged
disputes arising from their contract. It averred these matters fall under the general arbitration clause of their contract; and that
respondent has failed to proceed to arbitration despite several requests therefor.
Respondent denied the alleged existence of disagreement between the parties. And as special defense, it alleged that that
the respective claims for damages should be resolved by Turnbull, Inc., pursuant to the exception in the arbitration clause of the
construction contract.
The court ruled that the dispute or disagreement obtained between the parties with respect to their rights and obligations
under their contract and that the same should be submitted to arbitration pursuant to par. 39 of said contract — the arbitration
clause — and to Republic Act 876 — the Arbitration Law. And thus it ordered petitioner and respondent to proceed to arbitration in
accordance with the terms of their contract.
ISSUE:
Whether or not under these facts McDonough is duty-bound to submit to arbitration.
RULING:
Yes.
Since there obtains herein a written provision for arbitration as well as failure on respondent's part to comply therewith,
the court a quo rightly ordered the parties to proceed to arbitration in accordance with the terms of their agreement (Sec. 6,
Republic Act 876). Respondent's arguments touching upon the merits of the dispute are improperly raised herein. They should be
addressed to the arbitrators. This proceeding is merely a summary remedy to enforce the agreement to arbitrate. The duty of the
court in this case is not to resolve the merits of the parties' claims but only to determine if they should proceed to arbitration or
not. And although it has been ruled that a frivolous or patently baseless claim should not be ordered to arbitration, it is also
recognized that the mere fact that a defense exists against a claim does not make it frivolous or baseless.
Wherefore, the judgment appealed from, ordering the parties to proceed to arbitration according to the terms of their
agreement, is hereby affirmed.
II. Commencement of Arbitration
A. “When” Commenced
See Section 10 of the Arbitration Law; see also
Section 10. Qualifications of arbitrators. - Any person appointed to serve as an arbitrator must be of legal age, in full-enjoyment of
his civil rights and know how to read and write. No person appointed to served as an arbitrator shall be related by blood or marriage
within the sixth degree to either party to the controversy. No person shall serve as an arbitrator in any proceeding if he has or has
had financial, fiduciary or other interest in the controversy or cause to be decided or in the result of the proceeding, or has any
personal bias, which might prejudice the right of any party to a fair and impartial award.
No party shall select as an arbitrator any person to act as his champion or to advocate his cause.
If, after appointment but before or during hearing, a person appointed to serve as an arbitrator shall discover any circumstances
likely to create a presumption of bias, or which he believes might disqualify him as an impartial arbitrator, the arbitrator shall
immediately disclose such information to the parties. Thereafter the parties may agree in writing:
(a) to waive the presumptive disqualifying circumstances; or
(b) to declare the office of such arbitrator vacant. Any such vacancy shall be filled in the same manner as the original
appointment was made.
- Difference between Commencement in Ad Hoc and Institutional Arbitration;
Article 5.20. Commencement of Arbitral Proceedings.

(a) Where there is a prior arbitration agreement between the parties, arbitration is deemed commenced as follows:
(i) In institutional arbitration, arbitration is commenced in accordance with the arbitration rules of the institution agreed
upon by the parties.
(ii) In ad hoc arbitration, arbitration is commenced by the claimant upon delivering to the respondent a demand for
arbitration. A demand may be in any form stating:
a. (aa) the name, address, and description of each of the parties
b. (bb) a description of the nature and circumstances of the dispute giving rise to the claim;
c. (cc) a statement of the relief sought, including the amount of the claim;
d. (dd) the relevant agreements, if any, including the arbitration agreement, a copy of which shall be attached; and
e. (ee) appointment of arbitrators and /or demand to appoint.
(b) If the arbitration agreement provides for the appointment of a sole arbitrator, the demand shall include an invitation of the
claimant to the respondent to meet and agree upon such arbitrator at the place, time and date stated therein which shall not be less
than thirty (30) days from receipt of the demand.
(c) If the arbitration agreement provides for the establishment of an arbitral tribunal of three (3) arbitrators, the demand shall name
the arbitrator appointed by the claimant. It shall include the curriculum vitae of the arbitrator appointed by the claimant and the
latter’s acceptance of the appointment.
(d) Where there is no prior arbitration agreement, arbitration may be initiated by one party through a demand upon the other to
submit their dispute to arbitration. Arbitration shall be deemed commenced upon the agreement by the other party to submit the
dispute to arbitration.
(e) The demand shall require the respondent to name his/her/its arbitrator within a period which shall not be less than fifteen (15)
days from receipt of the demand. This period may be extended by agreement of the parties. Within said period, the respondent shall
give a written notice to the claimant of the appointment of the respondent’s arbitrator and attach to the notice the arbitrator’s
curriculum vitae and the latter’s acceptance of the appointment.
- Demand to Arbitrate; Requirements [see Section 5 of the Arbitration Law, and Article 5.20 of the ADR
Act-IRR];
Section 5. Preliminary procedure. - An arbitration shall be instituted by:
(a) In the case of a contract to arbitrate future controversies by the service by either party upon the other of a
demand for arbitration in accordance with the contract. Such demand shall be set forth the nature of the controversy, the
amount involved, if any, and the relief sought, together with a true copy of the contract providing for arbitration. The
demand shall be served upon any party either in person or by registered mail. In the event that the contract between the
parties provides for the appointment of a single arbitrator, the demand shall be set forth a specific time within which the
parties shall agree upon such arbitrator. If the contract between the parties provides for the appointment of three
arbitrators, one to be selected by each party, the demand shall name the arbitrator appointed by the party making the
demand; and shall require that the party upon whom the demand is made shall within fifteen days after receipt thereof
advise in writing the party making such demand of the name of the person appointed by the second party; such notice shall
require that the two arbitrators so appointed must agree upon the third arbitrator within ten days from the date of such
notice.
(b) In the event that one party defaults in answering the demand, the aggrieved party may file with the Clerk of the
Court of First Instance having jurisdiction over the parties, a copy of the demand for arbitration under the contract to
arbitrate, with a notice that the original demand was sent by registered mail or delivered in person to the party against
whom the claim is asserted. Such demand shall set forth the nature of the controversy, the amount involved, if any, and the
relief sought, and shall be accompanied by a true copy of the contract providing for arbitration.
(c) In the case of the submission of an existing controversy by the filing with the Clerk of the Court of First Instance
having jurisdiction, of the submission agreement, setting forth the nature of the controversy, and the amount involved, if
any. Such submission may be filed by any party and shall be duly executed by both parties.
(d) In the event that one party neglects, fails or refuses to arbitrate under a submission agreement, the aggrieved
party shall follow the procedure prescribed in subparagraphs (a) and (b) of this section.
Article 5.20. Commencement of Arbitral Proceedings.

(iii) In institutional arbitration, arbitration is commenced in accordance with the arbitration rules of the institution agreed
upon by the parties.
(iv) In ad hoc arbitration, arbitration is commenced by the claimant upon delivering to the respondent a demand for
arbitration. A demand may be in any form stating:
a. (aa) the name, address, and description of each of the parties
b. (bb) a description of the nature and circumstances of the dispute giving rise to the claim;
c. (cc) a statement of the relief sought, including the amount of the claim;
d. (dd) the relevant agreements, if any, including the arbitration agreement, a copy of which shall be attached; and
e. (ee) appointment of arbitrators and /or demand to appoint.
claimant to the respondent to meet and agree upon such arbitrator at the place, time and date stated therein which shall not be less
(e) The demand shall require the respondent to name his/her/its arbitrator within a period which shall not be less than fifteen (15)
- Effect of failure to comply with minimum requirements for Demand to Arbitrate on the Arbitral
Tribunal’s jurisdiction [see Article 5.15 of the ADR Act-IRR]; and
Article 5.15. Competence of Arbitral Tribunal to Rule on its Jurisdiction.

(a) When a demand for arbitration made by a party to a dispute is objected to by the adverse party, the arbitral tribunal shall, in the
first instance, resolve the objection when made on any of the following grounds:
(i) the arbitration agreement is inexistent, void, unenforceable or not binding upon a person for any reason,
including the fact that the adverse party is not privy to said agreement; or
(ii) the dispute is not arbitrable or is outside the scope of the arbitration agreement; or
(iii) the dispute is under the original and exclusive jurisdiction of a court or quasi-judicial body,
(b) If a party raises any of the grounds for objection, the same shall not preclude the appointment of the arbitrator/s as such issue is
for the arbitral tribunal to decide.
The participation of a party in the selection and appointment of an arbitrator and the filing of appropriate pleadings before
the arbitral tribunal to question its jurisdiction shall not be construed as a submission to the jurisdiction of the arbitral tribunal or of
a waiver of his/her/its right to assert such grounds to challenge the jurisdiction of the arbitral tribunal or the validity of the resulting
award.
(c) The respondent in the arbitration may invoke any of such grounds to question before the court the existence, validity, or
enforceability of the arbitration agreement, or the propriety of the arbitration, or the jurisdiction of the arbitrator and invoke the
pendency of such action as ground for suspension of the arbitration proceeding. The arbitral tribunal, having regard to the
circumstances of the case, and the need for the early and expeditious settlement of the dispute, in light of the facts and arguments
raised to question its jurisdiction, may decide either to suspend the arbitration until the court has made a decision on the issue or
continue with the arbitration.
(d) If a dispute is, under an arbitration agreement, to be submitted to arbitration, but before arbitration is commenced or while it is
pending, a party files an action before the court which embodies or includes as a cause of action the dispute that is to be submitted
to arbitration, the filing of such action shall not prevent the
- Waiver objections in relation to non-compliance with formal requirements of the Demand to Arbitrate
[see Articles 5.3 and 4.16(b) of the ADR-Act IRR].
Article 5.3. Waiver of Right to Object.

(a) A party shall be deemed to have waived his right to object to non-compliance with any non-mandatory provision of these Rules
(from which the parties may derogate) or any requirement under the arbitration agreement when:
(i) he/she/it knows of such non-compliance; and
(ii) proceeds with the arbitration without stating his/her/its objections to such non-compliance without undue
delay or if a time-limit is provided therefor, within such period of time.
(b) If an act is required or allowed to be done under this Chapter, unless the applicable rule or the agreement of the parties provides
a different period for the act to be done, it shall be done within a period of thirty (30) days from the date when such act could have
been done with legal effect.
Article 4.16. Competence of Arbitral Tribunal to Rule on its Jurisdiction.

(a) The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of
the arbitration agreement or any condition precedent to the filing of a request for arbitration. For that purpose, an arbitration
clause, which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision
by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.
(b) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement
of defense (i.e., in an Answer or Motion to Dismiss). A party is not precluded from raising such plea by the fact that he/she has
appointed, or participated in the appointment of, an arbitrator. A plea that the arbitral tribunal is exceeding the scope of its
authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral
proceedings. The arbitral tribunal may, in either case, admit a later plea if it considers the delay justified.
(c) The arbitral tribunal may rule on a plea referred to in paragraph (b) of this Article either as a preliminary question or in
an award on the merits. If the arbitral tribunal rules as a preliminary question that it has jurisdiction, any party may request, within
thirty (30) days after having received notice of that ruling, the Regional Trial Court to decide the matter, which decision shall be
immediately executory and not subject to motion for reconsideration or appeal. While such a request is pending, the arbitral
tribunal may continue the arbitral proceedings and make an award.
B. Judicial Relief Pre and Post Commencement
See Rule 3.1, Special ADR Rules.

Rule 3.1. When judicial relief is available. - The judicial relief provided in Rule 3, whether resorted to before or after commencement
of arbitration, shall apply only when the place of arbitration is in the Philippines.
- The concept of lex arbitri

o Distinguish between venue [see Section 30, ADR and Section 20, Model Law], procedural rules, and
substantive rules.
ADR –
SEC. 30. Place of Arbitration. - The parties are free to agree on the place of arbitration. Failing such agreement, the place of
arbitration shall be in Metro Manila, unless the arbitral tribunal, having regard to the circumstances of the case, including the
convenience of the parties shall decide on a different place of arbitration.
The arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among
its members, for hearing witnesses, experts, or the parties, or for inspection of goods, other property or documents.
MODEL LAW –
Article 20. Place of arbitration
(1) The parties are free to agree on the place of arbitration. Failing such agreement, the place of arbitration shall be determined by
the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties.
(2) Notwithstanding the provisions of paragraph (1) of this article, the arbitral tribunal may, unless otherwise agreed by the parties,
meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for
inspection of goods, other property or documents.
Most significant contacts.
o Definition and importance.

In Singapore, lex arbitri used to be called as the fundamental framework for arbitration. It is a phrase translated from Latin
as the law of arbitration. The understanding of the concept of lex arbitri might be different for national boundaries. However,
despite of looking at the variation of the precise content of lex arbitri, the modern arbitral jurisdictions actually include provisions
which regulate the following three matters: matters internal to the arbitration, the external relationship between the arbitration and
the courts and also, the broader external relationship between arbitrations and the public policies of that place.
Lex Arbitri has also been described:
… It is a body of rules which sets a standard external to the arbitration agreement, and the wishes of the parties, for the
conduct of the arbitration The law governing the arbitration comprises the rules governing interim measures, the rules
empowering the exercise by the court of supportive measures to assist an arbitration which has run into difficulties and the
rules providing for the exercise by the court of its supervisory jurisdiction over arbitrations
As seen from above, the precise definition of lex arbitri may vary among different countries, but it may find a mutual
ground when regulating:
1. The formal matters internal to the arbitration, such as the appointment of arbitrators or the requirements to the rendering
of an award;
2. The relationship between the arbitration and local courts, the assistance of national jurisdictions; and
3. Some aspects of public policy of a specific country, as mandatory rules.
There are crucial consequences in terms of the applicable procedural law. Procedural law is applied to govern issues such as
the constitution of the tribunal and the requirements of due process. However, in certain exceptional circumstances, the courts will
deal with these matters according to the governing law of the place of the arbitration.
The lex arbitri which governs the arbitral proceedings, is almost always the law of the place of arbitration. According to
Alastair Henderson9 , “place” and “seat” of arbitration can be used interchangeably, but “seat” is preferable as it reflects more
accurately the juridical nature of the concept, the nexus between territorial attachment and applicable law.10 Similarly, the term
“seat” is not equivalent to “venue”. “Seat of the arbitration” flows from the juridical seat of arbitration, whereas “venue of
arbitration” ordinarily refers to the geographical or physical seat of arbitration which can be moved to other locations as may suit
the convenience of the parties and the arbitral tribunal.
296 scra … 1998

B1. Judicial Relief Pre-Commencement
- Challenge on “existence, validity, and enforceability of [the] arbitration agreement” [Rule 3.1, Special
ADR Rules].
Rule 3.1. When judicial relief is available. - The judicial relief provided in Rule 3, whether resorted to before or after commencement
of arbitration, shall apply only when the place of arbitration is in the Philippines.
- Grounds and contents of petition [Rules 3.5-3.6, Special ADR Rules].
Rule 3.5. Grounds. - A petition may be granted only if it is shown that the arbitration agreement is, under the applicable law, invalid,
void, unenforceable or inexistent.
Rule 3.6. Contents of petition. - The verified petition shall state the following:
a. The facts showing that the persons named as petitioner or respondent have legal capacity to sue or be sued;
b. The nature and substance of the dispute between the parties;
c. The grounds and the circumstances relied upon by the petitioner to establish his position; and
d. The relief/s sought.
Apart from other submissions, the petitioner must attach to the petition an authentic copy of the arbitration agreement.
Substantive and procedural law application and what law should govern.
- Binding nature of determination of the Court vis-à-vis the principle of Competence-Competence; The
“after-after” principle [Rule 3.11, Special ADR Rules].
Rule 3.11. Relief against court action. - Where there is a prima facie determination upholding the arbitration agreement.-A prima
facie determination by the court upholding the existence, validity or enforceability of an arbitration agreement shall not be subject
to a motion for reconsideration, appeal or certiorari.
Such prima facie determination will not, however, prejudice the right of any party to raise the issue of the existence, validity and
enforceability of the arbitration agreement before the arbitral tribunal or the court in an action to vacate or set aside the arbitral
award. In the latter case, the court’s review of the arbitral tribunal’s ruling upholding the existence, validity or enforceability of the
arbitration agreement shall no longer be limited to a mere prima facie determination of such issue or issues as prescribed in this
Rule, but shall be a full review of such issue or issues with due regard, however, to the standard for review for arbitral awards
prescribed in these Special ADR Rules.
What is the principle of competence-competence?
The principle of competence-competence means that the arbitral tribunal may initially rule on its own jurisdiction, including any
objections with respect to the existence or validity of the arbitration agreement or any condition precedent to the filing of a request
for arbitration. (Special ADR Rules, Rule 2.2)
What is the policy in implementing the 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. (Special ADR Rules, Rule 2.4)
Does the “prima facie finding” of the court mean that the arbitral tribunal can still be formed?
Yes. If the court finds that the arbitration agreement is null and void, inoperative or incapable of being performed, a party
may nevertheless commence arbitration and constitute the arbitral tribunal.
So where does “prima facie finding” of the court come in? How is it prima facie?

This means that the same issue may be passed upon by the arbitral tribunal, which has the effect of superseding the
previous of the court. (This is the “AFTER” ruling.)

What about the “after -after” ruling?

The same issue may be passed upon in an action to vacate or set aside the arbitral award (Rule 3.11) In this case, it is no
longer a prima facie determination of such issue or issues, but shall be a FULLREVIEW of such issue or issues with due regard,
however, to the standard of review for arbitral award
Arbitral tribunal first after
Then second after, court decides the second after ruling, it is final and executory.
- Relief against court action [Rule 3.11, Special ADR Rules].
- Effect on Arbitral Proceedings pending determination [Rule 3.3, Special ADR Rules].
Rule 3.3. When the petition may be filed. - The petition for judicial determination of the existence, validity and/or enforceability of
an arbitration agreement may be filed at any time prior to the commencement of arbitration.
Despite the pendency of the petition provided herein, arbitral proceedings may nevertheless be commenced and continue to the
rendition of an award, while the issue is pending before the court.
B2. Judicial Relief Post-Commencement
- Judicial Relief on finding of Arbitral Tribunal that it has jurisdiction over the controversy [Rule 3.12,
Special ADR Rules]
Rule 3.12. Who may file petition. - Any party to arbitration may petition the appropriate court for judicial relief from the ruling of the
arbitral tribunal on a preliminary question upholding or declining its jurisdiction. Should the ruling of the arbitral tribunal declining its
jurisdiction be reversed by the court, the parties shall be free to replace the arbitrators or any one of them in accordance with the
rules that were applicable for the appointment of arbitrator sought to be replaced.
- Who may file, when it may be filed, and venue [Rules 3.12-3.14, Special ADR Rules].
Rule 3.12. Who may file petition. - Any party to arbitration may petition the appropriate court for judicial relief from the ruling of the
arbitral tribunal on a preliminary question upholding or declining its jurisdiction. Should the ruling of the arbitral tribunal declining its
jurisdiction be reversed by the court, the parties shall be free to replace the arbitrators or any one of them in accordance with the
rules that were applicable for the appointment of arbitrator sought to be replaced.
Rule 3.13. When petition may be filed. - The petition may be filed within thirty (30) days after having received notice of that ruling
by the arbitral tribunal.
Rule 3.14. Venue. - The petition may be filed before the Regional Trial Court of the place where arbitration is taking place, or where
any of the petitioners or respondents has his principal place of business or residence.
- Grounds and contents of petition [Rules 3.15-3.16, Special ADR Rules].
Rule 3.15. Grounds. - The petition may be granted when the court finds that the arbitration agreement is invalid, inexistent or
unenforceable as a result of which the arbitral tribunal has no jurisdiction to resolve the dispute.
Rule 3.16. Contents of petition. - The petition shall state the following:
a. The facts showing that the person named as petitioner or respondent has legal capacity to sue or be sued;
b. The nature and substance of the dispute between the parties;

c. The grounds and the circumstances relied upon by the petitioner; and
d. The relief/s sought.
In addition to the submissions, the petitioner shall attach to the petition a copy of the request for arbitration and the ruling of the
arbitral tribunal.
The arbitrators shall be impleaded as nominal parties to the case and shall be notified of the progress of the case.
- Judicial restraint vis-à-vis refusal of Arbitral Tribunal to act “on the first instance” [Rule 3.20, Special
ADR Rules; Cf. Article 5.15, ADR Act-IRR; see also Rule 3.21, Special ADR Rules].
Rule 3.20. Where no petition is allowed. - Where the arbitral tribunal defers its ruling on preliminary question regarding its
jurisdiction until its final award, the aggrieved party cannot seek judicial relief to question the deferral and must await the final
arbitral award before seeking appropriate judicial recourse.
A ruling by the arbitral tribunal deferring resolution on the issue of its jurisdiction until final award, shall not be subject to a motion
for reconsideration, appeal or a petition for certiorari.
Article 5.15 Competence of Arbitral Tribunal to Rule on its Jurisdiction. (a) When a demand for arbitration made by a party to a
dispute is objected to by the adverse party, the arbitral tribunal shall, in the first instance, resolve the objection when made on any
of the following grounds:
(i) the arbitration agreement is in existent, void, unenforceable or not binding upon a person for any reason,
including the fact that the adverse party is not privy to said agreement; or
(ii) the dispute is not arbitrable or is outside the scope of the arbitration agreement; or
(iii) the dispute is under the original and exclusive jurisdiction of a court or quasi-judicial body,
(b) If a party raises any of the grounds for objection, the same shall not preclude the appointment of the arbitrator/s as
such issue is for the arbitral tribunal to decide.
The participation of a party in the selection and appointment of an arbitrator and the filling of appropriate pleadings before
the arbitral tribunal to question its jurisdiction shall not be construed as a submission to the jurisdiction of the arbitral
tribunal or of a waiver of his/her/its right to assert such grounds to challenge the jurisdiction of the arbitral tribunal or the
validity of the resulting award.
(c) The respondent in the arbitration may invoke any such grounds to question before the court the existence, validity, or
enforceability of the arbitration agreement, or the propriety of the arbitration, or the jurisdiction of the arbitrator and
invoke the pendency of such action as ground for suspension of the arbitration proceeding. The arbitral tribunal, having
regard to the circumstances of the case, and the need for the early and expeditious settlement of the dispute, in light of the
facts and arguments raised to question its jurisdiction, may decide either to suspend the arbitration until the court has
made a decision on the issue or continue with arbitration.
(d) If a dispute is, under an arbitration agreement, to be submitted to arbitration, but before arbitration is commenced or
while it is pending, a party files an action before the court which embodies or includes as a cause of action the dispute that
is to be submitted to arbitration the filling of such action shall not prevent the commencement of the arbitration or the
continuation of the arbitration until the award is issued.
Rule 3.21. Rendition of arbitral award before court decision on petition from arbitral tribunal’s preliminary ruling on jurisdiction. - If
the arbitral tribunal renders a final arbitral award and the Court has not rendered a decision on the petition from the arbitral
tribunal’s preliminary ruling affirming its jurisdiction, that petition shall become ipso facto moot and academic and shall be dismissed
by the Regional Trial Court. The dismissal shall be without prejudice to the right of the aggrieved party to raise the same issue in a
timely petition to vacate or set aside the award.
- Relief against court action [Rule 3.19, Special ADR Rules].
Rule 3.19. Relief against court action. - The aggrieved party may file a motion for reconsideration of the order of the court. The
decision of the court shall, however, not be subject to appeal. The ruling of the court affirming the arbitral tribunal’s jurisdiction
shall not be subject to a petition for certiorari. The ruling of the court that the arbitral tribunal has no jurisdiction may be the
subject of a petition for certiorari.
Reckoning - dependent on ruling of arbitral tribunal.
- Effect on Arbitral Proceedings pending termination [Rule 3.18(B), Special ADR Rules]
Rule 3.18. Court action. - (A) Period for resolving the petition.- The court shall render judgment on the basis of the pleadings filed and
the evidence, if any, submitted by the parties, within thirty (30) days from the time the petition is submitted for resolution.
(B) No injunction of arbitration proceedings . - The court shall not enjoin the arbitration proceedings during the pendency of the
petition.
Judicial recourse to the court shall not prevent the arbitral tribunal from continuing the proceedings and rendering its award.
(C) When dismissal of petition is appropriate. - The court shall dismiss the petition if it fails to comply with Rule 3.16 above; or if
upon consideration of the grounds alleged and the legal briefs submitted by the parties, the petition does not appear to be prima
facie meritorious.
- Binding nature of determination of the Court after review of the Arbitral Tribunal’s Decision [See 3.11,
Special ADR Rules].
B3. Referral to Alternative Dispute Resolution
- Who may file and when it may be made [Rules 4.1-4.2, Special ADR Rules].
RULE 4: REFERRAL TO ADR

Rule 4.1. Who makes the request. - A party to a pending action filed in violation of the arbitration agreement, whether contained in
an arbitration clause or in a submission agreement, may request the court to refer the parties to arbitration in accordance with such
agreement.
Rule 4.2. When to make request. - (A) Where the arbitration agreement exists before the action is filed. - The request for referral
shall be made not later than the pre-trial conference. After the pre-trial conference, the court will only act upon the request for
referral if it is made with the agreement of all parties to the case.
(B) Submission agreement. - If there is no existing arbitration agreement at the time the case is filed but the parties subsequently
enter into an arbitration agreement, they may request the court to refer their dispute to arbitration at any time during the
proceedings.
Rule 4.8. Arbitration to proceed.- Despite the pendency of the action referred to in Rule 4.1, above, arbitral proceedings may
nevertheless be commenced or continued, and an award may be made, while the action is pending before the court.
SUBJECT TO REFER DURING OR AFTER PRE TRIAL.
- Forms and contents of petition [Rule 4.3, Special ADR Rules; see also Rule 15 of A.M. No. 19-10-20-SC
(2019 Rules)].
Rule 4.3. Contents of request. - The request for referral shall be in the form of a motion, which shall state that the dispute is covered
by an arbitration agreement.
Apart from other submissions, the movant shall attach to his motion an authentic copy of the arbitration agreement.
The request shall contain a notice of hearing addressed to all parties specifying the date and time when it would be heard. The party
making the request shall serve it upon the respondent to give him the opportunity to file a comment or opposition as provided in the
immediately succeeding Rule before the hearing.
RULE 15
Motions
Section 1. Motion defined. — A motion is an application for relief other than by a pleading. (1a)
Section 2. Motions must be in writings. — All motions shall be in writing except those made in open court or in the course of a
hearing or trial. (2a)
Section 3. Contents. — A motion shall state the relief sought to be obtained and the grounds upon which it is based, and if required
by these Rules or necessary to prove facts alleged therein, shall be accompanied by supporting affidavits and other papers. (3a)
Section 4. Hearing of motion. — Except for motions which the court may act upon without prejudicing the rights of the adverse
party, every written motion shall be set for hearing by the applicant.
Every written motion required to be heard and the notice of the hearing thereof shall be served in such a manner as to ensure its
receipt by the other party at least three (3) days before the date of hearing, unless the court for good cause sets the hearing on
shorter notice. (4a)
Section 5. Notice of hearing. — The notice of hearing shall be addressed to all parties concerned, and shall specify the time and date
of the hearing which must not be later than ten (10) days after the filing of the motion. (5a)
Section 6. Proof of service necessary. — No written motion set for hearing shall be acted upon by the court without proof of service
thereof. (6a)
Section 7. Motion day. — Except for motions requiring immediate action, all motions shall be scheduled for hearing on Friday
afternoons, or if Friday is a non-working day, in the afternoon of the next working day. (7a)
Section 8. Omnibus motion. — Subject to the provisions of section 1 of Rule 9, a motion attacking a pleading, order, judgment, or
proceeding shall include all objections then available, and all objections not so included shall be deemed waived. (8a)
Section 9. Motion for leave. — A motion for leave to file a pleading or motion shall be accompanied by the pleading or motion
sought to be admitted. (n)
Section 10. Form. — The Rules applicable to pleadings shall apply to written motions so far as concerns caption, designation,
signature, and other matters of form. (9a)
- Court action and relief [Rules 2.4 and 4.5-4.6, Special ADR Rules].
Rule 2.4. 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.
Rule 4.5. Court action. - After hearing, the court shall stay the action and, considering the statement of policy embodied in Rule 2.4,
above, refer the parties to arbitration if it finds prima facie, based on the pleadings and supporting documents submitted by the
parties, that there is an arbitration agreement and that the subject-matter of the dispute is capable of settlement or resolution by
arbitration in accordance with Section 6 of the ADR Act. Otherwise, the court shall continue with the judicial proceedings.
Rule 4.6. No reconsideration, appeal or certiorari. - An order referring the dispute to arbitration shall be immediately executory and
shall not be subject to a motion for reconsideration, appeal or petition for certiorari.
An order denying the request to refer the dispute to arbitration shall not be subject to an appeal, but may be the subject of a motion
for reconsideration and/or a petition for certiorari.
- Apparent exception to forum shopping [Rule 4.7, Special ADR Rules].
Rule 4.7. Multiple actions and parties. - The court shall not decline to refer some or all of the parties to arbitration for any of the
following reasons:
a. Not all of the disputes subject of the civil action may be referred to arbitration;
b. Not all of the parties to the civil action are bound by the arbitration agreement and referral to arbitration would result in
multiplicity of suits;
c. The issues raised in the civil action could be speedily and efficiently resolved in its entirety by the court rather than in
arbitration;
d. Referral to arbitration does not appear to be the most prudent action; or
e. The stay of the action would prejudice the rights of the parties to the civil action who are not bound by the arbitration
agreement.
The court may, however, issue an order directing the inclusion in arbitration of those parties who are not bound by the arbitration
agreement but who agree to such inclusion provided those originally bound by it do not object to their inclusion.
- Effect on Arbitral Proceedings [Rule 4.8, Special ADR Rules; Vega vs. San Carlos Milling Co., Ltd., G.R.
No. 21549, (22 October 1924)].
TEODORO VEGA, vs. THE SAN CARLOS MILLING CO., LTD.
G.R. No. L-21549 October 22, 1924
FACTS:
This action is for the recovery of 32,959 kilos of centrifugal sugar, or its value, P6,252, plus the payment of P500 damages and the
costs.
The defendants filed an answer, and set up two special defenses, the first of which is at the same time a counterclaim.
The CFI of Occidental Negros that tried the case, rendered judgment, the dispositive part of which is as follows:
By virtue of these considerations, the court is of opinion that with respect to the complaint, the plaintiff must be held to
have a better right to the possession of the 32,959 kilos of centrifugal sugar manufactured in the defendants' central and
the latter is sentenced to deliver them to the plaintiff, and in default, the selling price thereof, amounting to P5,981.06
deposited in the office of the clerk of the court. Plaintiff's claim for damages is denied, because it has not been shown that
the defendant caused the plaintiff any damages. Plaintiff is absolved from defendant's counterclaim and declared not
bound to pay the such claimed therein. Plaintiff is also absolved from the counterclaim of P1,000, for damages, it not having
been proved that any damages were caused and suffered by defendant, since the writ of attachment issued in this case was
legal and proper. Without pronouncement as to costs. So ordered.
On appeal, defendant alleges that the lower court erred in having held itself with jurisdiction to take cognizance of and render
judgment in the cause. The error is based on clause 23 of the Mill's covenants and clause 14 of the Planter's Covenant. Said clauses
provides that all differences may arise between the parties will be submitted to arbitration.
It is an admitted fact that the differences which arose between the parties, and which are the subject of the present litigation have
not been submitted to the arbitration provided for in the above quoted clauses.
Defendant contends that as such stipulations on arbitration are valid, they constitute a condition precedent, to which the plaintiff
should have resorted before applying to the courts, as he prematurely did.
ISSUE:
WON arbitration is a condition precedent to a suit upon the contract

RULING:
No. The defendant is right in contending that such covenants on arbitration are valid, but they are not for the reason a bar to judicial
action, in view of the way they are expressed:
An agreement to submit to arbitration, not consummated by an award, is no bar to suit at law or in equity concerning the
subject matter submitted. And the rule applies both in respect of agreements to submit existing differences and agreements
to submit differences which may arise in the future. (5 C. J., 42.)
And in view of the terms in which the said covenants on arbitration are expressed, it cannot be held that in agreeing on this point,
the parties proposed to establish the arbitration as a condition precedent to judicial action, because these clauses quoted do not
create such a condition either expressly or by necessary inference.
Submission as Condition Precedent to Suit. — Clauses in insurance and other contracts providing for arbitration in case of
disagreement are very similar, and the question whether submission to arbitration is a condition precedent to a suit upon
the contract depends upon the language employed in each particular stipulation. Where by the same agreement which
creates the liability, the ascertainment of certain facts by arbitrators is expressly made a condition precedent to a right of
action thereon, suit cannot be brought until the award is made. But the courts generally will not construe an arbitration
clause as ousting them of their jurisdiction unless such construction is inevitable, and consequently when the arbitration
clause is not made a condition precedent by express words or necessary implication, it will be construed as merely
collateral to the liability clause, and so no bar to an action in the courts without an award. (2 R. C. L., 362, 363.)
Neither does not reciprocal covenant No. 7 of said contract Exhibit A expressly or impliedly establish the arbitration as a condition
precedent. Said reciprocal covenant No. 7 reads:
7. Subject to the provisions as to arbitration, hereinbefore appearing, it is mutually agreed that the courts of the City of
Iloilo shall have jurisdiction of any and all judicial proceedings that may arise out of the contractual relations herein
between the party of the first and the part is of the second part.
The expression "subject to the provisions as to arbitration, hereinbefore appearing" does not declare such to be a condition
precedent. This phrase does not read "subject to the arbitration," but "subject to the provisions as to arbitration hereinbefore
appearing." And, which are these "provisions as to arbitration hereinbefore appearing?" Undoubtedly clauses 23 and 14 quoted
above, which do not make arbitration a condition precedent.
We find no merit in the first assignment of error.
NOT GOOD LAW ANYMORE!!!!
Current policy, arbitration is preferred if possible since it is a faster and speedy disposition of cases.
- Distinguish with Petition to Compel Arbitration.
DOMESTIC
To compel arbitration, which is domestic in character, there is no need for a party to petition a court to compel arbitration. This is
because a party to a domestic arbitration need only apply to the Appointing Authority, or in its default, the court, to appoint an
arbitrator or arbitrators. After, when the arbitral tribunal has been constituted, a party to any arbitration agreement may lodge its
plea to compel arbitration with the arbitral tribunal.
A party who knows that any provision of the [Model Law] from which the parties may derogate or any requirement under the
arbitration agreement has not been complied with and yet proceeds with the arbitration without stating his objection to such non-
compliance without under delay or, if a time-limit provided therefore, within such period of time, shall be deemed to have waived
his right to object.
INTERNATIONAL
For international arbitration, there is also no need for a party to petition a court to compel arbitration. As in domestic arbitration, a
party to an international arbitration need only apply to the Appointing Authority, or in its default, the court, to appoint an arbitrator
or arbitrators. After, when the arbitral tribunal has been constituted, a party to any arbitration agreement may lodge its plea to
compel arbitration with the arbitral tribunal.
A party who knows that any provision of the [Model Law] from which the parties may derogate or any requirement under the
arbitration agreement has not been complied with and yet proceeds with the arbitration without stating his objection to such non-
compliance without under delay or, if a time-limit provided therefore, within such period of time, shall be deemed to have waived
his right to object.
In what circumstances can a third party that did not sign the contract incorporating the arbitral clause in question be compelled
to arbitrate disputes relating to the contract in question?
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.
In what circumstance is a third party that did not sign the contract incorporating the arbitral clause in question entitled to compel
a party that did sign the contract to arbitrate disputes relating to the contract?
A third party that did not sign a contract incorporating an arbitral clause may compel a party that did sign the contract to arbitrate,
if the contract contains a reference to a document containing an arbitral clause and the reference is such as to make that arbitration
clause part of the contract (section 7(2), UNCITRAL Model Law).
MOTION TO REFER VS PETITION TO COMPEL

REFUSES TO PARTICIPATE IN COMPEL
3 REMEDIES
1. QUESTION ON VALIDITY ETC
a. PRE COMMENCEMEN
b. POST COMMENCEMENT
2. MOTION TO REFER
3. PETITION TO COMPEL
C. Appointment of Arbitrators
Qualifications of Arbitrators [see Section 10, DAL]
MAGELLAN CAPITAL MANAGEMENT CORP. v. ZOSA

355 SCRA 157 (2001)
FACTS:
Under a management agreement entered into, MCHC appointed MCMC as manager for the operation of its business and affairs.
Pursuant thereto, petitioners and private respondent Rolando Zosa entered into “Employment Agreement” designating the latter as
President and CEO of MCHC. Respondent Zosa then was elected to a new position as MCHC’s Vice-Chairman/Chairman New
Ventures Development to which he communicated his resignation on the ground that it had less responsibility and scope and
demanded that he be given termination benefits as provided in the Employment Agreement. MCHC communicated its non-
acceptance to the resignation and advised respondent that the agreement is terminated on account of the latter’s breach thereof.
Respondent invoked the Arbitration Clause of the agreement and both parties designated their arbitrators in the panel. However,
instead of submitting the dispute to arbitration, respondent filed an action for damages against petitioners before the RTC.
Petitioners’ motion to dismiss was denied. Petitioners filed a petition for certiorari and prohibition in the CA to which it was given
due course. The RTC in compliance with the decision, declared the arbitration clause in the agreement partially void and of no effect
insofar as it concerns the composition of arbitrators. Petitioners then filed this petition for review on certiorari.
ISSUE:
Whether or not the arbitration clause in the Employment Agreement is partially void and of no effect
RULING:
We rule against the petitioners. Even if procedural rules are disregarded, and a scrutiny of the merits of the case is undertaken, this
Court finds the trial court’s observations on why the composition of the panel of arbitrators should be voided, incisively correct so as
to merit our approval. Thus, “From the memoranda of both sides, the Court is of the view that the defendants [petitioner] MCMC
and MCHC represent the same interest. There is no quarrel that both defendants are entirely two different corporations with
personalities distinct and separate from each other and that a corporation has a personality distinct and separate from those
persons composing the corporation as well as from that of any other legal entity to which it may be related. But as the defendants
[herein petitioner] represent the same interest, it could never be expected, in the arbitration proceedings, that they would not
protect and preserve their own interest, much less, would both or either favor the interest of the plaintiff. The arbitration law, as all
other laws, is intended for the good and welfare of everybody. In fact, what is being challenged by the plaintiff herein is not the law
itself but the provision of the Employment Agreement based on the said law, which is the arbitration clause but only as regards the
composition of the panel of arbitrators.
From the foregoing arbitration clause, it appears that the two (2) defendants [petitioners] (MCMC and MCHC) have one (1)
arbitrator each to compose the panel of three (3) arbitrators. As the defendant MCMC is the Manager of defendant MCHC, its
decision or vote in the arbitration proceeding would naturally and certainly be in favor of its employer and the defendant MCHC
would have to protect and preserve its own interest; hence, the two (2) votes of both defendants (MCMC and MCHC) would
certainly be against the lone arbitrator for the plaintiff [herein defendant]. Hence, apparently, plaintiff [defendant] would never get
or receive justice and fairness in the arbitration proceedings from the panel of arbitrators as provided in the aforequoted arbitration
clause. In fairness and justice to the plaintiff [defendant], the two defendants (MCMC and MCHC) [herein petitioners] which
represent the same interest should be considered as one and should be entitled to only one arbitrator to represent them in the
arbitration proceedings. Accordingly, the arbitration clause, insofar as the composition of the panel of arbitrators is concerned
should be declared void and of no effect, because the law says, “Any clause giving one of the parties power to choose more
arbitrators than the other is void and of no effect” (Article 2045, Civil Code).
“The dispute or controversy between the defendants (MCMC and MCHC) [herein petitioners] and the plaintiff [herein defendant]
should be settled in the arbitration proceeding in accordance with the Employment Agreement, but under the panel of three (3)
arbitrators, one (1) arbitrator to represent the plaintiff, one (1) arbitrator to represent both defendants (MCMC and MCHC) [herein
petitioners] and the third arbitrator to be chosen by the plaintiff [defendant Zosa] and defendants [petitioners].
We need only to emphasize in closing that arbitration proceedings are designed to level the playing field among the parties in
pursuit of a mutually acceptable solution to their conflicting claims. Any arrangement or scheme that would give undue advantage to
a party in the negotiating table is anathema to the very purpose of arbitration and should, therefore, be resisted. Wherefore,
premises considered, the petition is hereby dismissed and the decision of the trial court is affirmed.
PROCEDURE FOR APPOINTMENT [see Section 5, DAL; Article 5.20, ADR Act-IRR; and Article 2045 of the Civil Code. see also
Sections 8-9, DAL; Section 26, ADR; Article 1.6(D)(2), ADR Act-IRR. See also Article 5.5, ADR Act-IRR, and Rule 6.1, Special ADR
Rules. see further Rules 6.7 and 6.9 of the Special ADR Rules].
Section 5. Preliminary procedure. - An arbitration shall be instituted by:
(a) In the case of a contract to arbitrate future controversies by the service by either party upon the other of a demand for
arbitration in accordance with the contract. Such demand shall be set forth the nature of the controversy, the amount
involved, if any, and the relief sought, together with a true copy of the contract providing for arbitration. The demand
shall be served upon any party either in person or by registered mail. In the event that the contract between the
parties provides for the appointment of a single arbitrator, the demand shall be set forth a specific time within which
the parties shall agree upon such arbitrator. If the contract between the parties provides for the appointment of three
arbitrators, one to be selected by each party, the demand shall name the arbitrator appointed by the party making the
demand; and shall require that the party upon whom the demand is made shall within fifteen days after receipt thereof
advise in writing the party making such demand of the name of the person appointed by the second party; such notice
shall require that the two arbitrators so appointed must agree upon the third arbitrator within ten days from the date
of such notice.
(b) In the event that one party defaults in answering the demand, the aggrieved party may file with the Clerk of the Court
of First Instance having jurisdiction over the parties, a copy of the demand for arbitration under the contract to
arbitrate, with a notice that the original demand was sent by registered mail or delivered in person to the party against
whom the claim is asserted. Such demand shall set forth the nature of the controversy, the amount involved, if any,
and the relief sought, and shall be accompanied by a true copy of the contract providing for arbitration.
(c) In the case of the submission of an existing controversy by the filing with the Clerk of the Court of First Instance having
jurisdiction, of the submission agreement, setting forth the nature of the controversy, and the amount involved, if any.
Such submission may be filed by any party and shall be duly executed by both parties.
(d) In the event that one party neglects, fails or refuses to arbitrate under a submission agreement, the aggrieved party
shall follow the procedure prescribed in subparagraphs (a) and (b) of this section.
Article 5.20 Commencement of Arbitral Proceedings

(i) In institutional arbitration is commenced in accordance with the arbitration rules of the institution agreed upon
by the parties.
(ii) In ad hoc arbitration, arbitration is commenced by the claimant upon delivering to the respondent a demand
for arbitration. A demand may be in any form stating:
(aa) the name, address and description of each of the parties;
(bb) a description of the nature and circumstances of the dispute giving rise to the claim;
(cc) a statement of the relief sought, including the amount of the claim;
(dd) the relevant agreements, if any, including the arbitration agreement, a copy of which shall be
attached; and
(ee) appointment of arbitrators and / or demand to appoint.
claimant to the respondent to meet and agree upon such arbitrator, the place, time and date stated therein which shall not be less
(e) The demand shall required the respondent to name his/her/its/ arbitrator within a period which shall not be less than fifteen (15)
Article 2045. Any clause giving one of the parties power to choose more arbitrators than the other is void and of no effect.
Section 8. Appointment of arbitrators. - If, in the contract for arbitration or in the submission described in section two, provision is
made for a method of naming or appointing an arbitrator or arbitrators, such method shall be followed; but if no method be
provided therein the Court of First Instance shall designate an arbitrator or arbitrators.
The Court of First Instance shall appoint an arbitrator or arbitrators, as the case may be, in the following instances:
(a) If the parties to the contract or submission are unable to agree upon a single arbitrator; or
(b) If an arbitrator appointed by the parties is unwilling or unable to serve, and his successor has not been appointed in the
manner in which he was appointed; or
(c) If either party to the contract fails or refuses to name his arbitrator within fifteen days after receipt of the demand for
arbitration; or
(d) If the arbitrators appointed by each party to the contract, or appointed by one party to the contract and by the proper
Court, shall fail to agree upon or to select the third arbitrator.
(e) The court shall, in its discretion appoint one or three arbitrators, according to the importance of the controversy
involved in any of the preceding cases in which the agreement is silent as to the number of arbitrators.
(f) Arbitrators appointed under this section shall either accept or decline their appointments within seven days of the
receipt of their appointments. In case of declination or the failure of an arbitrator or arbitrators to duly accept their
appointments the parties or the court, as the case may be, shall proceed to appoint a substitute or substitutes for the
arbitrator or arbitrators who decline or failed to accept his or their appointments.
Section 9. Appointment of additional arbitrators. - Where a submission or contract provides that two or more arbitrators therein
designated or to be thereafter appointed by the parties, may select or appoint a person as an additional arbitrator, the selection or
appointment must be in writing. Such additional arbitrator must sit with the original arbitrators upon the hearing.
SEC. 26. Meaning of "Appointing Authority.". - "Appointing Authority" as used in the Model Law shall mean the person or
institution named in the arbitration agreement as the appointing authority; or the regular arbitration arbitration institution under
whose rules the arbitration is agreed to be conducted. Where the parties have agreed to submit their dispute to institutional
arbitration rules, and unless they have agreed to a different procedure, they shall be deemed to have agreed to procedure under
such arbitration rules for the selection and appointment of arbitrators. In ad hoc arbitration, the default appointment of an
arbitrator shall be made by the National President of the Integrated Bar of the Philippines (IBP) or his duly authorized representative.
Appointing Authority in Ad Hoc Arbitration means, in the absence of an agreement, the National President of the IBP or his/her
duly authorized representative.
Article 5.5. Court or Other Authority for Certain Functions of Arbitration Assistance and Supervision. The functions referred to in
paragraphs (c) and (d) of Article 5.10 (Appointment of Arbitrators), paragraph (a) of Article 5.11 (Grounds for Challenge), and
paragraph (a) of Article 5.13 (Failure or Impossibility to Act), shall be performed by the appointing authority, unless the latter shall
fail or refuse to act within thirty (30) days from receipt of the request in which case, the applicant may renew the application with
the court.
Rule 6.1. When the court may act as Appointing Authority. - The court shall act as Appointing Authority only in the following
instances:
a. Where any of the parties in an institutional arbitration failed or refused to appoint an arbitrator or when the parties have
failed to reach an agreement on the sole arbitrator (in an arbitration before a sole arbitrator) or when the two designated
arbitrators have failed to reach an agreement on the third or presiding arbitrator (in an arbitration before a panel of three
arbitrators), and the institution under whose rules arbitration is to be conducted fails or is unable to perform its duty as
appointing authority within a reasonable time from receipt of the request for appointment;
b. In all instances where arbitration is ad hoc and the parties failed to provide a method for appointing or replacing an
arbitrator, or substitute arbitrator, or the method agreed upon is ineffective, and the National President of the Integrated
Bar of the Philippines (IBP) or his duly authorized representative fails or refuses to act within such period as may be allowed
under the pertinent rules of the IBP or within such period as may be agreed upon by the parties, or in the absence thereof,
within thirty (30) days from receipt of such request for appointment;
c. Where the parties agreed that their dispute shall be resolved by three arbitrators but no method of appointing those
arbitrators has been agreed upon, each party shall appoint one arbitrator and the two arbitrators thus appointed shall
appoint a third arbitrator. If a party fails to appoint his arbitrator within thirty (30) days of receipt of a request to do so from
the other party, or if the two arbitrators fail to agree on the third arbitrator within a reasonable time from their
appointment, the appointment shall be made by the Appointing Authority. If the latter fails or refuses to act or appoint an
arbitrator within a reasonable time from receipt of the request to do so, any party or the appointed arbitrator/s may
request the court to appoint an arbitrator or the third arbitrator as the case may be.
Rule 6.7. Court action. - After hearing, if the court finds merit in the petition, it shall appoint an arbitrator; otherwise, it shall dismiss
the petition.
In making the appointment, the court shall have regard to such considerations as are likely to secure the appointment of an
independent and impartial arbitrator.
At any time after the petition is filed and before the court makes an appointment, it shall also dismiss the petition upon being
informed that the Appointing Authority has already made the appointment.
Rule 6.9. Relief against court action. - If the court appoints an arbitrator, the order appointing an arbitrator shall be immediately
executory and shall not be the subject of a motion for reconsideration, appeal or certiorari. An order of the court denying the
petition for appointment of an arbitrator may, however, be the subject of a motion for reconsideration, appeal or certiorari.
Appointment of Substitute Arbitrator [see Article 5.14, ADR Act-IRR]
Article 5.14. Appointment of Substitute Arbitrator. Where the mandate of an arbitrator terminates under Articles 5.12 (Challenge
Procedure) or 5.13 (Failure or Impossibility) or because of his withdrawal from office for any other reason or because of the
revocation of his mandate by agreement of the parties or in any other case of termination of his/her mandate, a substitute
arbitrator shall be appointed according to the rules applicable to the arbitrator being replaced.
Disclosure of potential conflict of interest [see Article 5.11, ADR Act-IRR, Sections 10-11, DAL]
Article 5.11. Grounds for Challenge.

(a) When a person is approached in connection with his/her possible appointment as an arbitrator, he/she shall disclose any
circumstance likely to give rise to justifiable doubts as to his/her impartiality, independence, qualifications and disqualifications. An
arbitrator, from the time of his/her appointment and throughout the arbitral proceedings, shall without delay, disclose any such
circumstances to the parties unless they have already been informed of them by him/her.
A person, who is appointed as an arbitrator notwithstanding the disclosure made in accordance with this Article, shall reduce the
disclosure to writing and provide a copy of such written disclosure to all parties in the arbitration.
(b) An arbitrator may be challenged only if:

(i) circumstances exist that give rise to justifiable doubts as to his/her impartiality or independence;
(ii) he/she does not possess qualifications as provided for in this Chapter or those agreed to by the parties;
(iii) he/she is disqualified to act as arbitration under these Rules;
(iv) he refuses to respond to questions by a party regarding the nature and extent of his professional dealings with a party
or its counsel.
(c) If, after appointment but before or during hearing, a person appointed to serve as an arbitrator shall discover any circumstances
likely to create a presumption of bias, or which he/she believes might disqualify him/her as an impartial arbitrator, the arbitrator
shall immediately disclose such information to the parties. Thereafter, the parties may agree in writing:
(i) to waive the presumptive disqualifying circumstances; or
(ii) to declare the office of such arbitrator vacant. Any such vacancy shall be filed in the same manner the original
(d) After initial disclosure is made and in the course of the arbitration proceedings, when the arbitrator discovers circumstances that
are likely to create a presumption of bias, he/she shall immediately disclose those circumstances to the parties. A written disclosure
is not required where it is made during the arbitration and it appears in a written record of the arbitration proceedings.
(e) An arbitrator who has or has had financial or professional dealings with a party to the arbitration or to the counsel of either party
shall disclose in writing such fact to the parties, and shall, in good faith, promptly respond to questions from a party regarding the
nature, extent and age of such financial or professional dealings.
Section 11. Challenge of arbitrators. - The arbitrators may be challenged only for the reasons mentioned in the preceding section
which may have arisen after the arbitration agreement or were unknown at the time of arbitration.
The challenge shall be made before them.
If they do not yield to the challenge, the challenging party may renew the challenge before the Court of First Instance of the province
or city in which the challenged arbitrator, or, any of them, if there be more than one, resides. While the challenging incident is
discussed before the court, the hearing or arbitration shall be suspended, and it shall be continued immediately after the court has
delivered an order on the challenging incident.
Acceptance of appointment [see Article 5.10, ADR Act-IRR]

Article 5.10. Appointment of Arbitrators.
(a) Any person appointed to serve as an arbitrator must be of legal age, in full enjoyment of his/her civil rights and knows how to
read and write. No person appointed to serve as an arbitrator shall be related by blood or marriage within the sixth degree to either
party to the controversy. No person shall serve as an arbitrator in any proceeding if he/she has or has had financial, fiduciary or
other interest in the controversy or cause to be decided or in the result of the proceeding, or has any personal bias, which might
prejudice the right of any party to a fair and impartial award.
No party shall select as an arbitrator any person to act as his/her champion or to advocate his/her cause.
(b) The parties are free to agree on a procedure of appointing the arbitrator or arbitrators. If, in the contract for arbitration or in the
submission, a provision is made for a method of appointing an arbitrator or arbitrators, such method shall be followed.
(c) Failing such agreement,

(i) in an arbitration with three (3) arbitrators, each party shall appoint one (1) arbitrator, and the two (2) arbitrators thus
appointed shall appoint the third arbitrator; if a party fails to appoint the arbitrator within thirty (30) days of receipt of a
request to do so from the other party, or if the two arbitrators fail to agree on the third arbitrator within thirty (30) days of
their appointment, the appointment shall be made, upon request of a party, by the appointing authority;
(ii) in an arbitration with a sole arbitrator, if the parties are unable to agree on the arbitrator, he/she shall be appointed,
upon request of a party, by the appointing authority.
(d) Where, under an appointment procedure agreed upon by the parties,

(i) a party fails to act or appoint an arbitrator as required under such procedure, or
(ii) the parties, or two (2) arbitrators, are unable to appoint an arbitrator or reach an agreement expected of them under
such procedure, or
(iii) a third party, including an institution, fails to appoint an arbitrator or to perform any function entrusted to it under such
procedure, or
(iv) The multiple claimants or the multiple respondents is/are unable to appoint its/their respective arbitrator, any party
may request the appointing authority to appoint an arbitrator.
In making the appointment, the appointing authority shall summon the parties and their respective counsel to appear
before said authority on the date, time and place set by it, for the purpose of selecting and appointing a sole arbitrator. If a
sole arbitrator is not appointed in such meeting, or the meeting does not take place because of the absence of either or
both parties despite due notice, the appointing authority shall appoint the sole arbitrator.
(e) If the default appointment of an arbitrator is objected to by a party on whose behalf the default appointment is to be made, and
the defaulting party requests the appointing authority for additional time to appoint his/her arbitrator, the appointing authority,
having regard to the circumstances, may give the requesting party not more than thirty (30) days to make the appointment.
If the objection of a party is based on the ground that the party did not fail to choose and appoint an arbitrator for the arbitral
tribunal, there shall be attached to the objection the appointment of an arbitrator together with the latter’s acceptance thereof and
curriculum vitae. Otherwise, the appointing authority shall appoint the arbitrator for that party.
(f) In making a default appointment, the appointing authority shall have regard to such considerations as are likely to secure the
appointment of an independent and impartial arbitrator. In order to achieve speedy and impartial justice and to moderate the cost
of arbitration, in choosing an arbitrator, the appointing authority shall give preference to a qualified person who has a place of
residence or business in the same general locality as the agreed venue of the arbitration and who is likely to accept the arbitrator’s
fees agreed upon by the parties, or as fixed in accordance either with the internal guidelines or the Schedule of Fees approved by
the administering institution or by the appointing authority.
(g) The appointing authority shall give notice in writing to the parties of the appointment made or its inability to comply with the
Request for Appointment and the reasons why it is unable to do so, in which later case, the procedure described under Article 5.5
(Court or Other Authority for Certain Functions of arbitration Assistance and Supervision) shall apply.
(h) A decision on a matter entrusted by this Article to the appointing authority shall be immediately executory and not subject to
appeal or motion for reconsideration. The appointing authority shall be deemed to have been given by the parties discretionary
authority in making the appointment but in doing so, the appointing authority shall have due regard to any qualification or
disqualification of an arbitrator/s under paragraph (a) of Article 5.10 (Appointment of Arbitrators) as well as any qualifications
required of the arbitrator/s by the agreement of the parties and to such considerations as are likely to secure the appointment of an
(i) The chairman of the arbitral tribunal shall be selected in accordance with the agreement of the parties and/or the rules agreed
upon or, in default thereof, by the arbitrators appointed.
(j) Any clause giving one of the agreement, if otherwise valid, shall be construed as permitting the appointment of one (1) arbitrator
by all claimants and one (1) arbitrator by all respondents. The third arbitrator shall be appointed as provided above.
If all the claimants or all the respondents cannot decide among themselves on an arbitrator, the appointment shall be made for
them by the appointing authority.
(k) The appointing authority may adopt Guidelines for the making of a Request for Appointment.
(l) Except as otherwise provided in the Guidelines of the appointing authority, if any, a Request for Appointment shall include, as
applicable, the following:
(i) the demand for arbitration;
(ii) the name/s and curricula vitae of the appointed arbitrator/s;
(iii) the acceptance of his/her/its appointment of the appointed arbitrator/s;
(iv) any qualification or disqualification of the arbitrator as provided in the arbitration agreement;
(v) an executive summary of the dispute which should indicate the nature of the dispute and the parties thereto;
(vi) principal office and officers of a corporate party;
(vii) the person/s appearing as counsel for the party/ies; and
(viii) information about arbitrator’s fees where there is an agreement between the parties with respect thereto.
In institutional arbitration, the request shall include such further information or particulars as the administering institution
shall require.
(m) A copy of the Request for Appointment shall be delivered to the adverse party. Proof of such delivery shall be included in, and
shall form part of, the Request for Appointment filed with the appointing authority.
(n) A party upon whom a copy of the Request for Appointment is communicated may, within seven (7) days of its receipt, file with
the appointing authority his/her/its objection/s to the Request or ask for an extension of time, not exceeding thirty (30) days from
receipt of the request, to appoint an arbitrator or act in accordance with the procedure agreed upon or provided by these Rules.
Within the aforementioned periods, the party seeking the extension shall provide the appointing authority and the adverse party
with a copy of the appointment of his/her arbitrator, the latter’s curriculum vitae, and the latter’s acceptance of the appointment. In
the event that the said party fails to appoint an arbitrator within said period, the appointing authority shall make the default
appointment.
(o) An arbitrator, in accepting an appointment, shall include, in his/her acceptance letter, a statement that:
(i) he/she agrees to comply with the applicable law, the arbitration rules agreed upon by the parties, or in default thereof,
these Rules, and the Code of Ethics for Arbitrators in Domestic Arbitration, if any;
(ii) he/she accepts as compensation the arbitrator’s fees agreed upon by the parties or as determined in accordance with
the rules agreed upon by the parties, or in default thereof, these Rules; and
(iii) he agrees to devote as much time and attention to the arbitration as the circumstances may require in order to achieve
the objective of a speedy, effective and fair resolution of the dispute.
Constitution of the Arbitral Tribunal [Section 28, ADR]
SEC. 28. Grant of Interim Measure of Protection. -

(a) It is not incompatible with an arbitration agreement for a party to request, before constitution of the tribunal, from a Court an
interim measure of protection and for the Court to grant such measure. After constitution of the arbitral tribunal and during arbitral
proceedings, a request for an interim measure of protection or modification thereof, may be made with the arbitral tribunal or to
the extent that the arbitral tribunal has no power to act or is unable to act effectively, the request may be made with the Court. The
arbitral tribunal is deemed constituted when the sole arbitrator or the third arbitrator who has been nominated, has accepted the
nomination and written communication of said nomination and acceptance has been received by the party making request.
(b) The following rules on interim or provisional relief shall be observed:

(1) Any party may request that provision relief be granted against the adverse party:
(2) Such relief may be granted:
(i) to prevent irreparable loss or injury:
(ii) to provide security for the performance of any obligation;
(iii) to produce or preserve any evidence; or
(iv) to compel any other appropriate act or omission.
(3) The order granting provisional relief may be conditioned upon the provision of security or any act or omission specified
in the order.
(4) Interim or provisional relief is requested by written application transmitted by reasonable means to the Court or arbitral
tribunal as the case may be and the party against whom the relief is sought, describing in appropriate detail the precise
relief, the party against whom the relief is requested, the grounds for the relief, and evidence supporting the request.
(5) The order shall be binding upon the parties.
(6) Either party may apply with the Court for assistance in Implementing or enforcing an interim measure ordered by an
arbitral tribunal.
(7) A party who does not comply with the order shall be liable for all damages resulting from noncompliance, including all
expenses, and reasonable attorney's fees, paid in obtaining the order's judicial enforcement.
Court intervention in issues concerning appointment of arbitrators [Article 5.12, ADR Act-IRR; compare with Section 8, DAL on
Appointing Authority]
Article 5.12. Challenge Procedure.

(a) The parties are free to agree on a procedure for challenging an arbitrator, subject to the provisions of paragraph (c) of this Article.
(b) Failing such agreement, a party who intends to challenge an arbitrator shall, within fifteen (15) days after becoming aware of the
constitution of the arbitral tribunal or after becoming aware of any circumstance referred to in paragraph (b) of Article 5.11
(Grounds for Challenge), send a written statement of the reasons for the challenge to the arbitral tribunal. Unless the challenged
arbitrator withdraws from his/her office or the other party agrees to the challenge, the arbitral tribunal shall decide on the
challenge.
(c) If a challenge under any procedure agreed upon by the parties or under the procedure of paragraph (b) of this Article in not
successful, the challenging party may request the appointing authority, within thirty (30) days after having received notice of the
decision rejecting the challenge, to decide on the challenge, which decision shall be immediately executory and not subject to appeal
or motion for reconsideration. While such a request is pending, the arbitral tribunal, including the challenged arbitrator, may
continue the arbitral proceedings and make an award.
(d) If a request for inhibition is made, it shall be deemed as a challenge.
(e) A party may challenge an arbitrator appointed by him/her/it, or in whose appointment he/she/it has participated, only for
reasons of which he/she/it becomes aware after the appointment has been made.
(f) The challenge shall be in writing and it shall state specific facts that provide the basis for the ground relied upon for the challenge.
A challenge shall be made within fifteen (15) days from knowledge by a party of the existence of a ground for a challenge or within
fifteen (15) days from the rejection by an arbitrator of a party’s request for his/her inhibition.
(g) Within fifteen (15) days of receipt of the challenge, the challenged arbitrator shall decide whether he/she shall accept the
challenge or reject it. If he/she accepts the challenge, he/she shall voluntarily withdraw as arbitrator. If he/she rejects it, he/she shall
communicate, within the same period of time, his/her rejection of the challenge and state the facts and arguments relied upon for
such rejection.
(h) An arbitrator who does not accept the challenge shall be given an opportunity to be heard.
(i) Notwithstanding the rejection of the challenge by the arbitrator, the parties may, within the same fifteen (15) day period, agree to
the challenge.
(j) In default of an agreement of the parties to agree on the challenge thereby replacing the arbitrator, the arbitral tribunal shall
decide on the challenge within thirty (30) days from receipt of the challenge.
(k) If the challenge procedure as agreed upon by the parties or as provided in this Article is not successful, or a party or the arbitral
tribunal shall decline to act, the challenging party may request the appointing authority in writing to decide on the challenge within
thirty (30) days after having received notice of the decision rejecting the challenge. The appointing authority shall decide on the
challenge within fifteen (15) days from receipt of the request. If the appointing authority shall fail to act on the challenge within
thirty (30) days from the date of its receipt or within such further time as it may fix, with notice to the parties, the requesting party
may renew the request with the court.
The request made under this Article shall include the challenge, the reply or explanation of the challenged arbitrator and relevant
communication, if any, from either party, or from the arbitral tribunal.
(l) Every communication required or agreement made under this Article in respect of a challenge shall be delivered, as appropriate,
to the challenged arbitrator, to the parties, to the remaining members of the arbitral tribunal and to the institution administering
the arbitration, if any.
(m) A challenged arbitrator shall be replaced if:

(i) he/she withdraws as arbitrator, or
(ii) the parties agree in writing to declare the office of arbitrator vacant, or
(iii) the arbitral tribunal decides the challenge and declares the office of the challenged arbitrator vacant, or
(iv) the appointing authority decides the challenge and declares the office of the challenged arbitrator vacant, or
(v) in default of the appointing authority, the court decides the challenge and declares the office of the challenged
arbitrator vacant.
(n) The decision of the parties, the arbitral tribunal, the appointing authority, or in proper cases, the court, to accept or reject a
challenge is not subject to appeal or motion for reconsideration.
(o) Until a decision is made to replace the arbitrator under this Article, the arbitration proceeding shall continue notwithstanding the
challenge, and the challenged arbitrator shall continue to participate therein as an arbitrator. However, if the challenge incident is
raised before the court, because the parties, the arbitral tribunal or appointing authority failed or refused to act within the period
provided in paragraphs (j) and (k) of this Article, the arbitration proceeding shall be suspended until after the court shall have
decided the incident. The arbitration shall be continued immediately after the court has delivered an order on the challenging
incident. If the court agrees that the challenged arbitrator shall be replaced, the parties shall immediately replace the arbitrator
concerned.
(p) The appointment of a substitute arbitrator shall be made pursuant to the procedure applicable to the appointment of the
arbitrator being replaced.
arbitration; or
Venue [Rule 6.3, Special ADR Rules]
Rule 6.3. Venue. - The petition for appointment of arbitrator may be filed, at the option of the petitioner, in the Regional Trial Court
(a) where the principal place of business of any of the parties is located, (b) if any of the parties are individuals, where those
individuals reside, or (c) in the National Capital Region.
Court Action [Rule 6.7, Special ADR Rules]
Rule 6.7. Court action. - After hearing, if the court finds merit in the petition, it shall appoint an arbitrator; otherwise, it shall dismiss
the petition.
In making the appointment, the court shall have regard to such considerations as are likely to secure the appointment of an
At any time after the petition is filed and before the court makes an appointment, it shall also dismiss the petition upon being
informed that the Appointing Authority has already made the appointment.
Forum Shopping [Rule 6.8, Special ADR Rules]
Rule 6.8. Forum shopping prohibited. - When there is a pending petition in another court to declare the arbitration agreement
inexistent, invalid, unenforceable, on account of which the respondent failed or refused to participate in the selection and
appointment of a sole arbitrator or to appoint a party-nominated arbitrator, the petition filed under this rule shall be dismissed.
Relief [Rule 6.9, Special ADR Rules]
Rule 6.9. Relief against court action. - If the court appoints an arbitrator, the order appointing an arbitrator shall be immediately
executory and shall not be the subject of a motion for reconsideration, appeal or certiorari. An order of the court denying the
petition for appointment of an arbitrator may, however, be the subject of a motion for reconsideration, appeal or certiorari.
D. CHALLENGE PROCEDURE. (SEE SEC.20, DAL)
Section 20. Form and contents of award. - The award must be made in writing and signed and acknowledged by a majority of the
arbitrators, if more than one; and by the sole arbitrator, if there is only one. Each party shall be furnished with a copy of the award.
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 be limited to, the specific performance of a contract.
In the event that the parties to an arbitration have, during the course of such arbitration, settled their dispute, they may request of
the arbitrators that such settlement be embodied in an award which shall be signed by the arbitrators. No arbitrator shall act as a
mediator in any proceeding in which he is acting as arbitrator; and all negotiations towards settlement of the dispute must take
place without the presence of the arbitrators.
The arbitrators shall have the power to decide only those matters which have been submitted to them. The terms of the award shall
be confined to such disputes.
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.
Grounds for Challenge [Article 5.11, ADR Act-IRR; see Article 12, Model Law].
Article 5.11. Grounds for Challenge.

(a) When a person is approached in connection with his/her possible appointment as an arbitrator, he/she shall disclose any
circumstance likely to give rise to justifiable doubts as to his/her impartiality, independence, qualifications and disqualifications. An
arbitrator, from the time of his/her appointment and throughout the arbitral proceedings, shall without delay, disclose any such
circumstances to the parties unless they have already been informed of them by him/her.
A person, who is appointed as an arbitrator notwithstanding the disclosure made in accordance with this Article, shall reduce the
disclosure to writing and provide a copy of such written disclosure to all parties in the arbitration.
(b) An arbitrator may be challenged only if:
(i) circumstances exist that give rise to justifiable doubts as to his/her impartiality or independence;
(ii) he/she does not possess qualifications as provided for in this Chapter or those agreed to by the parties;
(iii) he/she is disqualified to act as arbitration under these Rules;
(iv) he refuses to respond to questions by a party regarding the nature and extent of his professional dealings with a party
or its counsel.
(c) If, after appointment but before or during hearing, a person appointed to serve as an arbitrator shall discover any circumstances
likely to create a presumption of bias, or which he/she believes might disqualify him/her as an impartial arbitrator, the arbitrator
shall immediately disclose such information to the parties. Thereafter, the parties may agree in writing:
(i) to waive the presumptive disqualifying circumstances; or
(ii) to declare the office of such arbitrator vacant. Any such vacancy shall be filed in the same manner the original
(d) After initial disclosure is made and in the course of the arbitration proceedings, when the arbitrator discovers circumstances that
are likely to create a presumption of bias, he/she shall immediately disclose those circumstances to the parties. A written disclosure
is not required where it is made during the arbitration and it appears in a written record of the arbitration proceedings.
(e) An arbitrator who has or has had financial or professional dealings with a party to the arbitration or to the counsel of either party
shall disclose in writing such fact to the parties, and shall, in good faith, promptly respond to questions from a party regarding the
nature, extent and age of such financial or professional dealings.
Procedure and Resolution [Article 5.12, ADR Act-IRR; compare with Section 8, DAL on Appointing Authority; see also Article 13,
Model Law]

challenge.
such rejection.
the challenge.

arbitrator vacant.
concerned.
arbitration; or
Article 13 - Challenge procedure
1. The parties are free to agree on a procedure for challenging an arbitrator, subject to the provisions of paragraph (3) of this article.
2. Failing such agreement, a party which intends to challenge an arbitrator shall, within fifteen days after becoming aware of the
constitution of the arbitral tribunal or after becoming aware of any circumstance referred to in article 12(2), send a written
statement of the reasons for the challenge to the arbitral tribunal. Unless the challenged arbitrator withdraws from his office or the
other party agrees to the challenge, the arbitral tribunal shall decide on the challenge.
3. If a challenge under any procedure agreed upon by the parties or under the procedure of paragraph (2) of this article is not
successful, the challenging party may request, within thirty days after having received notice of the decision rejecting the challenge,
the court or other authority specified in article 6 to decide on the challenge, which decision shall be subject to no appeal; while such
a request is pending, the arbitral tribunal, including the challenged arbitrator, may continue the arbitral proceedings and make an
award.
Oil and Natural Gas Commission vs. C.A.

G.R. No. 114323 (1998)
NOTES:
Big commercial contracts, particularly international commercial contracts now usually have a provision to submit all disputes to
arbitration. In arbitration, the parties are free to choose who the arbitrators who will render the award. An award in an arbitration
proceeding is equivalent to a ruling or decision of a court. After parties present their arguments and evidence, the arbitrators render
the award. The winning party goes to court to have the award ―confirmed‖ by a judge or magistrate. Once confirmed by the court,
the party can have it enforced. In this case, the parties agreed on an arbitrator and the arbitration proceedings were held in India.
The award of the arbitrator was then confirmed or adopted by a court in India. It was the Indian court’s ruling which was being
sought to be enforced here in the Philippines. They did this by filing a complaint for the enforcement of a foreign judgment in the
RTC of Pasig.
FACTS:
Oil and Natural Gas Commission is a foreign corporation, owned and controlled by the Government of India.
Pacific Cement Co is a Philippine corporation. Pacific was supposed to deliver more than 4,000 metric tons of oil well cement to
Bombay and Calcutta but because of a dispute with the carrier, the shipment never reached the destination. Despite payment by Oil
and Natural, as well as repeated demands, Pacific does not deliver the oil well cement.
During negotiations, the parties agreed that the Pacific will replace the oil well cement with Class ―G‖ cement. Pacific did deliver the
Class ―G‖ cement but they were not according to specifications. Oil and Natural informed Pacific that they will submit the dispute to
arbitration as provided for in their contract.
The dispute was therefore submitted to arbitration, the arbitrator was Shri Malhotra, an employee of Oil and Natural Gas.
The decision of the arbitrator was in favour of Oil and Natural Gas. The arbitral decision was confirmed by an Indian court. Oil and
Natural Gas filed a complaint in Pasig RTC for the enforcement of the foreign judgment. This was opposed by Pacific for being
―bereft of any statement of facts and law upon which the award in favor of the petitioner was based.‖ The judgment of the Indian
court apparently simply adopted the award of the arbitrator without stating anything by way of support for its judgment.
The Pasig RTC dismissed the complaint. The RTC said that the contract provided for some disputes to be settled by the regular court
and some to be submitted to arbitration. This type, the RTC said, was for the courts. “Consequently, the proceedings had before the
arbitrator were null and void and the foreign court had therefore, adopted no legal award which could be the source of an
enforceable right.”
The CA affirmed the dismissal by the RTC. Aside from agreeing with the RTC that the arbitral award was void, the CA also said ―that
the full text of the judgment of the foreign court contains the dispositive portion only and indicates no findings of fact and law as
basis for the award. Hence, the said judgment cannot be enforced by any Philippine court as it would violate the constitutional
provision that no decision shall be rendered by any court without expressing therein clearly and distinctly the facts and the law on
which it is based.”
ISSUE:
Whether the judgment of the foreign court is enforceable in this jurisdiction in view of the private respondent's allegation that it is
bereft of any statement of facts and law upon which the award in favor of the petitioner was based.
RULING:
Yes, it is enforceable in this jurisdiction. The SC said that ―even in this jurisdiction, incorporation by reference is allowed if only to
avoid the cumbersome reproduction of the decision of the lower courts, or portions thereof, in the decision of the higher court. This
is particularly true when the decision sought to be incorporated is a lengthy and thorough discussion of the facts and conclusions
arrived at, as in this case, where Award Paper No. 3/B-1 consists of eighteen (18) single spaced pages..‖ In effect, the SC was saying
that we also do in this country what the Indian court did and it was okay for as long as the award or decision adopted was complete
in terms of the discussion of the facts and conclusions. The 18 pages of single spaced award by the arbitrator was, according to the
SC, complete enough. The short decision of the Indian court which merely adopted the award was acceptable in our jurisdiction.
Furthermore, the recognition to be accorded a foreign judgment is not necessarily affected by the fact that the procedure in the
courts of the country in which such judgment was rendered differs from that of the courts of the country in which the judgment is
relied on. This Court has held that matters of remedy and procedure are governed by the lex fori or the internal law of the forum.
Thus, if under the procedural rules of the Civil Court of Dehra Dun, India, a valid judgment may be rendered by adopting the
arbitrators findings, then the same must be accorded respect. In the same vein, if the procedure in the foreign court mandates that
an Order of the Court becomes final and executory upon failure to pay the necessary docket fees, then the courts in this jurisdiction
cannot invalidate the order of the foreign court simply because our rules provide otherwise.
Finally, we reiterate hereunder our pronouncement in the case of Northwest Orient Airlines, Inc. v. Court of Appeals that: "A foreign
judgment is presumed to be valid and binding in the country from which it comes, until the contrary is shown. It is also proper to
presume the regularity of the proceedings and the giving of due notice therein.”
"Under Section 50, Rule 39 of the Rules of Court, a judgment in an action in personam of a tribunal of a foreign country having
jurisdiction to pronounce the same is presumptive evidence of a right as between the parties and their successors-in-interest by a
subsequent title. The judgment may, however, be assailed by evidence of want of jurisdiction, want of notice to the party, collusion,
fraud, or clear mistake of law or fact. Also, under Section 3 of Rule 131, a court, whether of the Philippines or elsewhere, enjoys the
presumption that it was acting in the lawful exercise of jurisdiction and has regularly performed its official duty."
Consequently, the party attacking a foreign judgment (Pacific Cement) had the burden of overcoming the presumption of its validity
which it failed to do in the instant case.
The foreign judgment being valid, there is nothing else left to be done than to order its enforcement, despite the fact that Oil and
Natural Gas merely prays for, the remand of the case to the RTC for further proceedings. As this Court has ruled on the validity and
enforceability of the said foreign judgment in this jurisdiction, further proceedings in the RTC for the reception of evidence to prove
otherwise are no longer necessary.
Court intervention [Rule 7.2, Special ADR Rules]
Rule 7.2. When challenge may be raised in court. - When an arbitrator is challenged before the arbitral tribunal under the procedure
agreed upon by the parties or under the procedure provided for in Article 13 (2) of the Model Law and the challenge is not
successful, the aggrieved party may request the Appointing Authority to rule on the challenge, and it is only when such Appointing
Authority fails or refuses to act on the challenge within such period as may be allowed under the applicable rule or in the absence
thereof, within thirty (30) days from receipt of the request, that the aggrieved party may renew the challenge in court.
Grounds [Rule 7.4, Special ADR Rules]
Rule 7.4. Grounds. - An arbitrator may be challenged on any of the grounds for challenge provided for in Republic Act No. 9285 and
its implementing rules, Republic Act No. 876 or the Model Law. The nationality or professional qualification of an arbitrator is not a
ground to challenge an arbitrator unless the parties have specified in their arbitration agreement a nationality and/or professional
qualification for appointment as arbitrator.

Rule 7.5. Contents of the petition. - The petition shall state the following:
a. The name/s of the arbitrator/s challenged and his/their address;
b. The grounds for the challenge;
c. The facts showing that the ground for the challenge has been expressly or impliedly rejected by the challenged
arbitrator/s; and
d. The facts showing that the Appointing Authority failed or refused to act on the challenge.
The court shall dismiss the petition motu proprio unless it is clearly alleged therein that the Appointing Authority charged with
deciding the challenge, after the resolution of the arbitral tribunal rejecting the challenge is raised or contested before such
Appointing Authority, failed or refused to act on the challenge within thirty (30) days from receipt of the request or within such
longer period as may apply or as may have been agreed upon by the parties.
Rule 7.7. Court action. - After hearing, the court shall remove the challenged arbitrator if it finds merit in the petition; otherwise, it
shall dismiss the petition.
The court shall allow the challenged arbitrator who subsequently agrees to accept the challenge to withdraw as arbitrator.
The court shall accept the challenge and remove the arbitrator in the following cases:
a. The party or parties who named and appointed the challenged arbitrator agree to the challenge and withdraw the
appointment.
b. The other arbitrators in the arbitral tribunal agree to the removal of the challenged arbitrator; and
c. The challenged arbitrator fails or refuses to submit his comment on the petition or the brief of legal arguments as
directed by the court, or in such comment or legal brief, he fails to object to his removal following the challenge.
The court shall decide the challenge on the basis of evidence submitted by the parties.
The court will decide the challenge on the basis of the evidence submitted by the parties in the following instances:
a. The other arbitrators in the arbitral tribunal agree to the removal of the challenged arbitrator; and
b. If the challenged arbitrator fails or refuses to submit his comment on the petition or the brief of legal arguments as
directed by the court, or in such comment or brief of legal arguments, he fails to object to his removal following the
challenge.
Relief [Rules 7.8-7.9, Special ADR Rules]
Rule 7.8. No motion for reconsideration, appeal or certiorari. - Any order of the court resolving the petition shall be immediately
executory and shall not be the subject of a motion for reconsideration, appeal, or certiorari.
Rule 7.9. Reimbursement of expenses and reasonable compensation to challenged arbitrator. - Unless the bad faith of the challenged
arbitrator is established with reasonable certainty by concealing or failing to disclose a ground for his disqualification, the challenged
arbitrator shall be entitled to reimbursement of all reasonable expenses he may have incurred in attending to the arbitration and to
a reasonable compensation for his work on the arbitration. Such expenses include, but shall not be limited to, transportation and
hotel expenses, if any. A reasonable compensation shall be paid to the challenged arbitrator on the basis of the length of time he has
devoted to the arbitration and taking into consideration his stature and reputation as an arbitrator. The request for reimbursement
of expenses and for payment of a reasonable compensation shall be filed in the same case and in the court where the petition to
replace the challenged arbitrator was filed. The court, in determining the amount of the award to the challenged arbitrator, shall
receive evidence of expenses to be reimbursed, which may consist of air tickets, hotel bills and expenses, and inland transportation.
The court shall direct the challenging party to pay the amount of the award to the court for the account of the challenged arbitrator,
in default of which the court may issue a writ of execution to enforce the award.
Effect on pendency of challenge outside court system and within [Article 5.12, ADR Act-IRR]

challenge.
such rejection.
the challenge.

arbitrator vacant.
concerned.
E. TERMINATION OF MANDATE
Distinguish with Challenge [Rule 8.1, Special ADR Rules; see also Article 14, Model Law]
Rule 8.1. Who may request termination and on what grounds.- Any of the parties to an arbitration may request for the termination
of the mandate of an arbitrator where an arbitrator becomes de jure or de facto unable to perform his function or for other reasons
fails to act without undue delay and that arbitrator, upon request of any party, fails or refuses to withdraw from his office.
Article 14 - Failure or impossibility to act

1. If an arbitrator becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue
delay, his mandate terminates if he withdraws from his office or if the parties agree on the termination. Otherwise, if a
controversy remains concerning any of these grounds, any party may request the court or other authority specified in
article 6 to decide on the termination of the mandate, which decision shall be subject to no appeal.
2. If, under this article or article 13 (2), an arbitrator withdraws from his office or a party agrees to the termination of the
mandate of an arbitrator, this does not imply acceptance of the validity of any ground referred to in this article or article 12
(2).
Court intervention [Rule 8.2, Special ADR Rules]
Rule 8.2. When to request. - If an arbitrator refuses to withdraw from his office, and subsequently, the Appointing Authority fails or
refuses to decide on the termination of the mandate of that arbitrator within such period as may be allowed under the applicable
rule or, in the absence thereof, within thirty (30) days from the time the request is brought before him, any party may file with the
court a petition to terminate the mandate of that arbitrator.
Rule 8.3. Venue. - A petition to terminate the mandate of an arbitrator may, at that petitioner’s option, be filed with the Regional
Trial Court (a) where the principal place of business of any of the parties is located, (b) where any of the parties who are individuals
resides, or (c) in the National Capital Region.
Rule 8.6. Court action. - After hearing, if the court finds merit in the petition, it shall terminate the mandate of the arbitrator who
refuses to withdraw from his office; otherwise, it shall dismiss the petition.
Relief [Rule 8.7, Special ADR Rules]
Rule 8.7. No motion for reconsideration or appeal. - Any order of the court resolving the petition shall be immediately executory and
shall not be subject of a motion for reconsideration, appeal or petition for certiorari.
Appointment of substitute in case of termination of mandate [Rule 8.8, Special ADR Rules]
Rule 8.8. Appointment of substitute arbitrator. - Where the mandate of an arbitrator is terminated, or he withdraws from office for
any other reason, or because of his mandate is revoked by agreement of the parties or is terminated for any other reason, a
substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being
replaced.
F. Interim Measures of Protection
F1 . Interim Relief by The Arbitral Tribunal
Power of the Arbitral Tribunal to Issue Interim Measures of Protection [Sections 28-29, ADR; Article 5.24 (a), ADR Act-IRR; see also
Rule 5.13, Special ADR Rules]
SEC. 28ßßßß. Grant of Interim Article 5.24 Power of Arbitral Rule 5.13. Modification,
Measure of Protection. - (a) It is not incompatible with an Tribunal to Order Interim amendment, revision or
arbitration agreement for a party to request, before Muslim. ( a ) unless otherwise revocation of court’s
constitution of the tribunal, from a Court an interim measure of agreed by the parties, the previously issued interim
protection and for the Court to grant such measure. After arbitral tribunal may, at the measure of protection. -
constitution of the arbitral tribunal and during arbitral request of a party and in Any court order granting or
proceedings, a request for an interim measure of protection or accordance with the this denying interim measure/s
modification thereof, may be made with the arbitral tribunal or Article, order any party to of protection is issued
to the extent that the arbitral tribunal has no power to act or is take such interim measures of without prejudice to
unable to act effectively, the request may be made with the protection as the arbitral subsequent grant,
Court. The arbitral tribunal is deemed constituted when the sole tribunal may consider modification, amendment,
arbitrator or the third arbitrator who has been nominated, has necessary in respect of the revision or revocation by
accepted the nomination and written communication of said subject matter of the dispute the arbitral tribunal as may
nomination and acceptance has been received by the party of the procedure, Such be warranted.
making request. interim measures may
include, but shall not be An interim measure of
(b) The following rules on interim or provisional relief shall be limited, to preliminary protection issued by the
observed: injunction directed against a arbitral tribunal shall, upon
party, appointment of its issuance be deemed to
Any party may request that provision relief be granted against receivers or detention of have ipso jure modified,
the adverse party: property that is the subject of amended, revised or
the dispute in arbitration or revoked an interim measure
Such relief may be granted: its preservation or inspection. of protection previously
issued by the court to the
extent that it is inconsistent
(i) to prevent irreparable loss or injury:
with the subsequent interim
(ii) to provide security for the performance of any
measure of protection
obligation;
issued by the arbitral
tribunal.
(3) The order granting provisional relief may be

conditioned upon the provision of security or any act or
omission specified in the order.
(4) Interim or provisional relief is requested by written

application transmitted by reasonable means to the Court or
arbitral tribunal as the case may be and the party against whom
the relief is sought, describing in appropriate detail the precise
relief, the party against whom the relief is requested, the
grounds for the relief, and evidence supporting the request.
(6) Either party may apply with the Court for assistance in
Implementing or enforcing an interim measure ordered by an
arbitral tribunal.
(7) A party who does not comply with the order shall be
liable for all damages resulting from noncompliance, including
all expenses, and reasonable attorney's fees, paid in obtaining
the order's judicial enforcement.
SEC. 29. Further Authority for Arbitrator to Grant Interim

Measure of Protection. - Unless otherwise agreed by the parties,
the arbitral tribunal may, at the request of a party, order any
party to take such interim measures of protection as the arbitral
tribunal may consider necessary in respect of the subject matter
of the dispute following the rules in Section 28, paragraph 2.
Such interim measures may include but shall not be limited to
preliminary injuction directed against a party, appointment of
receivers or detention, preservation, inspection of property that
is the subject of the dispute in arbitration. Either party may
apply with the Court for assistance in implementing or enforcing
an interim measures ordered by an arbitral tribunal
When may issue [Article 5.24 (B), ADR Act-IRR]
(b) After the constitution of the arbitral tribunal, and during the arbitration proceedings, a request for interim measures of protection,
or modification thereof, may be made with the arbitral tribunal. The arbitral tribunal is deemed constituted when the sole arbitrator
or the third arbitrator, who has been nominated, has accepted the nomination and written communication of said nomination and
acceptance has been received by the party making the request.
Grounds [Article 5.24 (c) of the ADR Act-IRR]

(c) The following rules on interim or provisional relief shall be observed:
(i) Any party may request that provisional or interim relief be granted against the adverse party. (ii) Such relief may
be granted:
(aa) To prevent irreparable loss or injury;
(bb) To provide security for the performance of an obligation;
(cc) To produce or preserve evidence; or
(dd) To compel any other appropriate act or omissions.
(iii) The order granting provisional relief may be conditioned upon the provision of security or any act or omission
specified in the order.
(iv) Interim provisional relief is requested by written application transmitted by reasonable means to the arbitral
tribunal and the party against whom relief is sought, describing in appropriate detail of the precise relief, the party against
whom relief is requested the ground for the relief, and the evidence supporting the request.
(v) The order either granting or denying an application for interim relief shall be binding upon the parties.
(vi) Either party may apply with the court for assistance in implementing or enforcing an interim measure ordered by
an arbitral tribunal.
(vii) A party who does not comply with the order shall be liable for all damages, resulting from noncompliance,
including all expenses, and reasonably attorney’s fees, paid in obtaining the order’s judicial enforcement.
Necessity of security [Article 5.24 (C), ADR Act-IRR]

(c) The following rules on interim or provisional relief shall be observed:
(i) Any party may request that provisional or interim relief be granted against the adverse party. (ii) Such relief may
be granted:
(aa) To prevent irreparable loss or injury;
(bb) To provide security for the performance of an obligation;
(cc) To produce or preserve evidence; or
(dd) To compel any other appropriate act or omissions.
Binding nature [Article 5.24 (c) (v) and Article 5.24 (vii), ADR Act-IRR] (c) The following
rules on interim or provisional relief shall be observed:
(v) The order either granting or denying an application for interim relief shall be binding upon the parties.
(vii) A party who does not comply with the order shall be liable for all damages, resulting from noncompliance, including all
expenses, and reasonably attorney’s fees, paid in obtaining the order’s judicial enforcement.
F2.. Interim Relief by the Courts Of Law
Who, when, and where may an application be filed [Section 28, ADR; Rules 5.1-5.3 and of the Special ADR Rules; see also Section
14 of The Arbitration Law; Korea Technologies Co. Ltd. v. Lerma, 542 SCRA 1 (2008);
Toyota Motors Phils. Corp. vs. Court of Appeals, 216 SCRA 336 (1992)]
SEC. 28. Grant of Interim Measure of Protection. - (a) It is Rule 5.1. Who may ask for interim Section 14. Subpoena and
not incompatible with an arbitration agreement for a party measures of protection. - A party subpoena duces tecum. -
to request, before constitution of the tribunal, from a to an arbitration agreement may Arbitrators shall have the
Court an interim measure of protection and for the Court petition the court for interim power to require any person
to grant such measure. After constitution of the arbitral measures of protection. to attend a hearing as a
tribunal and during arbitral proceedings, a request for an witness. They shall have the
interim measure of protection or modification thereof, Rule 5.2. When to petition. - A power to subpoena
may be made with the arbitral tribunal or to the extent petition for an interim measure of witnesses and documents
that the arbitral tribunal has no power to act or is unable protection may be made (a) when the relevancy of the
to act effectively, the request may be made with the Court. before arbitration is commenced, testimony and the
The arbitral tribunal is deemed constituted when the sole (b) after arbitration is materiality thereof has been
arbitrator or the third arbitrator who has been nominated, commenced, but before the demonstrated to the
has accepted the nomination and written communication constitution of the arbitral arbitrators. Arbitrators may
of said nomination and acceptance has been received by tribunal, or (c) after the also require the retirement
the party making request. constitution of the arbitral tribunal of any witness during the
and at any time during arbitral testimony of any other
(b) The following rules on interim or provisional relief shall proceedings but, at this stage, only witness. All of the
be observed: to the extent that the arbitral arbitrators appointed in any
tribunal has no power to act or is controversy must attend all
(1) Any party may request that provision relief be unable to act effectively. the hearings in that matter
granted against the adverse party: and hear all the allegations
Rule 5.3. Venue. - A petition for an and proofs of the parties;
(2) Such relief may be granted: interim measure of protection but an award by the
may be filed with the Regional majority of them is valid
(i) to prevent irreparable loss or injury: Trial Court, which has jurisdiction unless the concurrence of all
over any of the following places: of them is expressly required
in the submission or
(ii) to provide security for the performance of any
a. Where the principal place contract to arbitrate. The
obligation;
of business of any of the parties to arbitrator or arbitrators shall
arbitration is located; have the power at any time,
(iii) to produce or preserve any evidence; or before rendering the award,
b. Where any of the parties without prejudice to the
(iv) to compel any other appropriate act or omission. rights of any party to
who are individuals resides;
petition the court to take
(3) The order granting provisional relief may be measures to safeguard
c. Where any of the acts
conditioned upon the provision of security or any act or and/or conserve any matter
sought to be enjoined are being
omission specified in the order. which is the subject of the
performed, threatened to be
dispute in arbitration.
(4) Interim or provisional relief is requested by performed or not being
written application transmitted by reasonable means to performed; or
the Court or arbitral tribunal as the case may be and the
party against whom the relief is sought, describing in d. Where the real property
appropriate detail the precise relief, the party against subject of arbitration, or a portion
whom the relief is requested, the grounds for the relief, thereof is situated.
and evidence supporting the request.
(6) Either party may apply with the Court for

assistance in Implementing or enforcing an interim
measure ordered by an arbitral tribunal.
A party who does not comply with the order shall be liable
for all damages resulting from noncompliance, including all
expenses, and reasonable attorney's fees, paid in obtaining
the order's judicial enforcement.
Grounds for issuance [Rule 5.4, Special ADR Rules]

Rule 5.4. Grounds. - The following grounds, while not limiting the reasons for the court to grant an interim measure of protection,
indicate the nature of the reasons that the court shall consider in granting the relief: a. The need to prevent irreparable loss or
injury;
b. The need to provide security for the performance of any obligation;
c. The need to produce or preserve evidence; or
d. The need to compel any other appropriate act or omission.
Types of Interim Measures of Protection that may issue [5.6, Special ADR Rules]
Rule 5.6. Type of interim measure of protection that a court may grant. - The following, among others, are the interim measures of
protection that a court may grant:
a. Preliminary injunction directed against a party to arbitration;
b. Preliminary attachment against property or garnishment of funds in the custody of a bank or a third person;
c. Appointment of a receiver;
d. Detention, preservation, delivery or inspection of property; or,
e. Assistance in the enforcement of an interim measure of protection granted by the arbitral tribunal, which the latter cannot
enforce effectively.
Dispensing with prior notice – when applicable; limitations if ex parte [Rules 5.7 and 5.9, Special ADR
Rules]
Rule 5.7. Dispensing with prior notice in certain cases. - Prior notice to the other party may be dispensed with when the petitioner
alleges in the petition that there is an urgent need to either (a) preserve property, (b) prevent the respondent from disposing of, or
concealing, the property, or (c) prevent the relief prayed for from becoming illusory because of prior notice, and the court finds that
the reason/s given by the petitioner are meritorious.
Rule 5.9. Court action. - After hearing the petition, the court shall balance the relative interests of the parties and inconveniences
that may be caused, and on that basis resolve the matter within thirty (30) days from (a) submission of the opposition, or (b) upon
lapse of the period to file the same, or (c) from termination of the hearing that the court may set only if there is a need for
clarification or further argument.
Period for court action [Rule 5.9, Special ADR Rules; see Rule 5.15, Special ADR Rules]
Rule 5.9. Court action. - After hearing the petition, the court shall balance the relative interests of the parties and inconveniences
that may be caused, and on that basis resolve the matter within thirty (30) days from (a) submission of the opposition, or (b) upon
lapse of the period to file the same, or (c) from termination of the hearing that the court may set only if there is a need for
clarification or further argument.
Rule 5.15. Court to defer action on petition for an interim measure of protection when informed of constitution of the arbitral
tribunal. - The court shall defer action on any pending petition for an interim measure of protection filed by a party to an arbitration
agreement arising from or in connection with a dispute thereunder upon being informed that an arbitral tribunal has been
constituted pursuant to such agreement. The court may act upon such petition only if it is established by the petitioner that the
arbitral tribunal has no power to act on any such interim measure of protection or is unable to act thereon effectively.
Relief against court action [Rule 5.10, Special ADR Rules]
Rule 5.10. Relief against court action. - If respondent was given an opportunity to be heard on a petition for an interim measure of
protection, any order by the court shall be immediately executory, but may be the subject of a motion for reconsideration and/or
appeal or, if warranted, a petition for certiorari.
Duty of court to assist [Rules 5.11 and 5.16, Special ADR Rules]
Rule 5.11. Duty of the court to refer back. - The court shall not deny an application for assistance in implementing or enforcing an
interim measure of protection ordered by an arbitral tribunal on any or all of the following grounds:
a. The arbitral tribunal granted the interim relief ex parte; or
b. The party opposing the application found new material evidence, which the arbitral tribunal had not considered in granting
in the application, and which, if considered, may produce a different result; or
c. The measure of protection ordered by the arbitral tribunal amends, revokes, modifies or is inconsistent with an earlier
measure of protection issued by the court.
If it finds that there is sufficient merit in the opposition to the application based on letter (b) above, the court shall refer the matter
back to the arbitral tribunal for appropriate determination.
Rule 5.16. Court assistance should arbitral tribunal be unable to effectively enforce interim measure of protection. - The court
shall assist in the enforcement of an interim measure of protection issued by the arbitral tribunal which it is unable to effectively
enforce.
Cases:
G.R. No. 143581 January 7, 2008
KOREA TECHNOLOGIES CO., LTD., petitioner, vs. HON. ALBERTO A. LERMA, in his capacity as Presiding Judge of Branch 256 of
Regional Trial Court of Muntinlupa City, and PACIFIC GENERAL STEEL MANUFACTURING CORPORATION, respondents.
Facts:
Petitioner Korea Technologies Co., Ltd. (KOGIES) is a Korean corporation which is engaged in the supply and installation of Liquefied
Petroleum Gas (LPG) Cylinder manufacturing plants, while private respondent Pacific General Steel Manufacturing Corp. (PGSMC) is
a domestic corporation. On March 5, 1997, PGSMC and KOGIES executed a Contract whereby KOGIES would set up an LPG Cylinder
Manufacturing Plant in Carmona, Cavite.
The contract was executed in the Philippines. On April 7, 1997, the parties executed, in Korea, an Amendment for Contract No. KLP-
970301 dated March 5, 1997 amending the terms of payment. The contract and its amendment stipulated that KOGIES will ship the
machinery and facilities necessary for manufacturing LPG cylinders for which PGSMC would pay USD 1,224,000. KOGIES would install
and initiate the operation of the plant for which PGSMC bound itself to pay USD 306,000 upon the plants production of the 11-kg.
LPG cylinder samples. Thus, the total contract price amounted to USD 1,530,000.
On October 14, 1997, PGSMC entered into a Contract of Lease with Worth Properties, Inc. (Worth) for use of Worths 5,079-square
meter property with a 4,032-square meter warehouse building to house the LPG manufacturing plant. The monthly rental was PhP
322,560 commencing on January 1, 1998 with a 10% annual increment clause. Subsequently, the machineries, equipment, and
facilities for the manufacture of LPG cylinders were shipped, delivered, and installed in the Carmona plant. PGSMC paid KOGIES USD
1,224,000.
However, gleaned from the Certificate executed by the parties on January 22, 1998, after the installation of the plant, the initial
operation could not be conducted as PGSMC encountered financial difficulties affecting the supply of materials, thus forcing the
parties to agree that KOGIES would be deemed to have completely complied with the terms and conditions of the March 5, 1997
contract. For the remaining balance of USD306,000 for the installation and initial operation of the plant, PGSMC issued two
postdated checks: (1) BPI Check No. 0316412 dated January 30, 1998 for PhP 4,500,000; and (2) BPI Check No. 0316413 dated March
30, 1998 for PhP 4,500,000. When KOGIES deposited the checks, these were dishonored for the reason PAYMENT STOPPED.
Thus, on May 8, 1998, KOGIES sent a demand letter to PGSMC threatening criminal action for violation of Batas Pambansa Blg. 22 in
case of nonpayment. On the same date, the wife of PGSMCs President faxed a letter dated May 7, 1998 to KOGIES President who
was then staying at a Makati City hotel. She complained that not only did KOGIES deliver a different brand of hydraulic press from
that agreed upon but it had not delivered several equipment parts already paid for.
PGSMC informed KOGIES that PGSMC was canceling their Contract on the ground that KOGIES had altered the quantity and
lowered the quality of the machineries and equipment it delivered to PGSMC, and that PGSMC would dismantle and transfer the
machineries, equipment, and facilities installed in the Carmona plant.
KOGIES wrote PGSMC informing the latter that PGSMC could not unilaterally rescind their contract nor dismantle and
transfer the machineries and equipment on mere imagined violations by KOGIES. It also insisted that their disputes should be settled
by arbitration as agreed upon in Article 15, the arbitration clause of their contract.
The Court of Appeals affirmed the trial court and declared the arbitration clause against public policy
Issue: Whether or not the arbitration clause in the contract of the parties should govern.
Held:
The Core Issue: Article 15 of the Contract
We now go to the core issue of the validity of Art. 15 of the Contract, the arbitration clause. It provides:
Article 15. Arbitration.—All disputes, controversies, or differences which may arise between the parties, out of or in relation
to or in connection with this Contract or for the breach thereof, shall finally be settled by arbitration in Seoul, Korea in
accordance with the Commercial Arbitration Rules of the Korean Commercial Arbitration Board. The award rendered by the
arbitration(s) shall be final and binding upon both parties concerned. (Emphasis supplied.)
Petitioner claims the RTC and the CA erred in ruling that the arbitration clause is null and void.
Petitioner is correct.
Established in this jurisdiction is the rule that the law of the place where the contract is made governs. Lex loci contractus. The
contract in this case was perfected here in the Philippines. Therefore, our laws ought to govern. Nonetheless, Art. 2044 of the Civil
Code sanctions the validity of mutually agreed arbitral clause or the finality and binding effect of an arbitral award. Art. 2044
provides, "Any stipulation that the arbitrators’ award or decision shall be final, is valid, without prejudice to Articles 2038, 2039
and 2040." (Emphasis supplied.)
Arts. 2038,31 2039,32 and 204033 abovecited refer to instances where a compromise or an arbitral award, as applied to Art. 2044
pursuant to Art. 2043,34 may be voided, rescinded, or annulled, but these would not denigrate the finality of the arbitral award.
The arbitration clause was mutually and voluntarily agreed upon by the parties. It has not been shown to be contrary to any law, or
against morals, good customs, public order, or public policy. There has been no showing that the parties have not dealt with each
other on equal footing. We find no reason why the arbitration clause should not be respected and complied with by both parties.
In Gonzales v. Climax Mining Ltd.,35 we held that submission to arbitration is a contract and that a clause in a contract providing that
all matters in dispute between the parties shall be referred to arbitration is a contract. 36 Again in Del Monte Corporation-USA v.
Court of Appeals, we likewise ruled that "[t]he provision to submit to arbitration any dispute arising therefrom and the relationship
of the parties is part of that contract and is itself a contract." 37
Arbitration clause not contrary to public policy
The arbitration clause which stipulates that the arbitration must be done in Seoul, Korea in accordance with the Commercial
Arbitration Rules of the KCAB, and that the arbitral award is final and binding, is not contrary to public policy. This Court has
sanctioned the validity of arbitration clauses in a catena of cases. In the 1957 case of Eastboard Navigation Ltd. v. Juan Ysmael and
Co., Inc.,38 this Court had occasion to rule that an arbitration clause to resolve differences and breaches of mutually agreed
contractual terms is valid. In BF Corporation v. Court of Appeals, we held that "[i]n this jurisdiction, arbitration has been held valid
and constitutional. Even before the approval on June 19, 1953 of Republic Act No. 876, this Court has countenanced the settlement
of disputes through arbitration. Republic Act No. 876 was adopted to supplement the New Civil Code’s provisions on arbitration."
Having said that the instant arbitration clause is not against public policy, we come to the question on what governs an arbitration
clause specifying that in case of any dispute arising from the contract, an arbitral panel will be constituted in a foreign country and
the arbitration rules of the foreign country would govern and its award shall be final and binding.
RA 9285 incorporated the UNCITRAL Model law

to which we are a signatory
For domestic arbitration proceedings, we have particular agencies to arbitrate disputes arising from contractual relations. In case a
foreign arbitral body is chosen by the parties, the arbitration rules of our domestic arbitration bodies would not be applied .
While RA 9285 was passed only in 2004, it nonetheless applies in the instant case since it is a procedural law which has a retroactive
effect. Likewise, KOGIES filed its application for arbitration before the KCAB on July 1, 1998 and it is still pending because no arbitral
award has yet been rendered. Thus, RA 9285 is applicable to the instant case. Well-settled is the rule that procedural laws are
construed to be applicable to actions pending and undetermined at the time of their passage, and are deemed retroactive in that
sense and to that extent. As a general rule, the retroactive application of procedural laws does not violate any personal rights
because no vested right has yet attached nor arisen from them.42
Among the pertinent features of RA 9285 applying and incorporating the UNCITRAL Model Law are the following:
(1) The RTC must refer to arbitration in proper cases
Under Sec. 24, the RTC does not have jurisdiction over disputes that are properly the subject of arbitration pursuant to an arbitration
clause, and mandates the referral to arbitration in such cases, thus:
SEC. 24. Referral to Arbitration.––A court before which an action is brought in a matter which is the subject matter of an
arbitration agreement shall, if at least one party so requests not later than the pre-trial conference, or upon the request of
both parties thereafter, refer the parties to arbitration unless it finds that the arbitration agreement is null and void,
inoperative or incapable of being performed.
(2) Foreign arbitral awards must be confirmed by the RTC
Foreign arbitral awards while mutually stipulated by the parties in the arbitration clause to be final and binding are not immediately
enforceable or cannot be implemented immediately. Sec. 35 43 of the UNCITRAL Model Law stipulates the requirement for the
arbitral award to be recognized by a competent court for enforcement, which court under Sec. 36 of the UNCITRAL Model Law may
refuse recognition or enforcement on the grounds provided for. RA 9285 incorporated these provisos to Secs. 42, 43, and 44 relative
to Secs. 47 and 48, thus:
SEC. 42. Application of the New York Convention.––The New York Convention shall govern the recognition and enforcement
of arbitral awards covered by said Convention.
The recognition and enforcement of such arbitral awards shall be filed with the Regional Trial Court in accordance with the
rules of procedure to be promulgated by the Supreme Court. Said procedural rules shall provide that the party relying on
the award or applying for its enforcement shall file with the court the original or authenticated copy of the award and the
arbitration agreement. If the award or agreement is not made in any of the official languages, the party shall supply a duly
certified translation thereof into any of such languages.
The applicant shall establish that the country in which foreign arbitration award was made in party to the New York
Convention.
xxxx
SEC. 43. Recognition and Enforcement of Foreign Arbitral Awards Not Covered by the New York Convention .––The
recognition and enforcement of foreign arbitral awards not covered by the New York Convention shall be done in
accordance with procedural rules to be promulgated by the Supreme Court. The Court may, on grounds of comity and
reciprocity, recognize and enforce a non-convention award as a convention award.
SEC. 44. Foreign Arbitral Award Not Foreign Judgment.––A foreign arbitral award when confirmed by a court of a foreign
country, shall be recognized and enforced as a foreign arbitral award and not as a judgment of a foreign court.
A foreign arbitral award, when confirmed by the Regional Trial Court, shall be enforced in the same manner as final and
executory decisions of courts of law of the Philippines
xxxx
SEC. 47. Venue and Jurisdiction.––Proceedings for recognition and enforcement of an arbitration agreement or for
vacations, setting aside, correction or modification of an arbitral award, and any application with a court for arbitration
assistance and supervision shall be deemed as special proceedings and shall be filed with the Regional Trial Court (i) where
arbitration proceedings are conducted; (ii) where the asset to be attached or levied upon, or the act to be enjoined is
located; (iii) where any of the parties to the dispute resides or has his place of business; or (iv) in the National Judicial
Capital Region, at the option of the applicant.
SEC. 48. Notice of Proceeding to Parties.––In a special proceeding for recognition and enforcement of an arbitral award, the
Court shall send notice to the parties at their address of record in the arbitration, or if any part cannot be served notice at
such address, at such party’s last known address. The notice shall be sent al least fifteen (15) days before the date set for
the initial hearing of the application.
It is now clear that foreign arbitral awards when confirmed by the RTC are deemed not as a judgment of a foreign court but as a
foreign arbitral award, and when confirmed, are enforced as final and executory decisions of our courts of law.
Thus, it can be gleaned that the concept of a final and binding arbitral award is similar to judgments or awards given by some of our
quasi-judicial bodies, like the National Labor Relations Commission and Mines Adjudication Board, whose final judgments are
stipulated to be final and binding, but not immediately executory in the sense that they may still be judicially reviewed, upon the
instance of any party. Therefore, the final foreign arbitral awards are similarly situated in that they need first to be confirmed by the
RTC.
(3) The RTC has jurisdiction to review foreign arbitral awards
Sec. 42 in relation to Sec. 45 of RA 9285 designated and vested the RTC with specific authority and jurisdiction to set aside, reject, or
vacate a foreign arbitral award on grounds provided under Art. 34(2) of the UNCITRAL Model Law. Secs. 42 and 45 provide:
SEC. 42. Application of the New York Convention.––The New York Convention shall govern the recognition and enforcement
of arbitral awards covered by said Convention.
The recognition and enforcement of such arbitral awards shall be filed with the Regional Trial Court in accordance with the
rules of procedure to be promulgated by the Supreme Court. Said procedural rules shall provide that the party relying on
the award or applying for its enforcement shall file with the court the original or authenticated copy of the award and the
arbitration agreement. If the award or agreement is not made in any of the official languages, the party shall supply a duly
certified translation thereof into any of such languages.
The applicant shall establish that the country in which foreign arbitration award was made is party to the New York
Convention.
If the application for rejection or suspension of enforcement of an award has been made, the Regional Trial Court may, if it
considers it proper, vacate its decision and may also, on the application of the party claiming recognition or enforcement of
the award, order the party to provide appropriate security.
xxxx
SEC. 45. Rejection of a Foreign Arbitral Award.––A party to a foreign arbitration proceeding may oppose an application for
recognition and enforcement of the arbitral award in accordance with the procedures and rules to be promulgated by the
Supreme Court only on those grounds enumerated under Article V of the New York Convention. Any other ground raised
shall be disregarded by the Regional Trial Court.
Thus, while the RTC does not have jurisdiction over disputes governed by arbitration mutually agreed upon by the parties, still the
foreign arbitral award is subject to judicial review by the RTC which can set aside, reject, or vacate it. In this sense, what this Court
held in Chung Fu Industries (Phils.), Inc. relied upon by KOGIES is applicable insofar as the foreign arbitral awards, while final and
binding, do not oust courts of jurisdiction since these arbitral awards are not absolute and without exceptions as they are still
judicially reviewable. Chapter 7 of RA 9285 has made it clear that all arbitral awards, whether domestic or foreign, are subject to
judicial review on specific grounds provided for.
(4) Grounds for judicial review different in domestic and foreign arbitral awards
The differences between a final arbitral award from an international or foreign arbitral tribunal and an award given by a local arbitral
tribunal are the specific grounds or conditions that vest jurisdiction over our courts to review the awards.
For foreign or international arbitral awards which must first be confirmed by the RTC, the grounds for setting aside, rejecting or
vacating the award by the RTC are provided under Art. 34(2) of the UNCITRAL Model Law.
For final domestic arbitral awards, which also need confirmation by the RTC pursuant to Sec. 23 of RA 876 44 and shall be recognized
as final and executory decisions of the RTC, 45 they may only be assailed before the RTC and vacated on the grounds provided under
Sec. 25 of RA 876.46
Section 25. Grounds for modifying or correcting award. - In any one of the following cases, the court must make an order
modifying or correcting the award, upon the application of any party to the controversy which was arbitrated:
(a) Where there was an evident miscalculation of figures, or an evident mistake in the description of any person,
thing or property referred to in the award; or
(b) Where the arbitrators have awarded upon a matter not submitted to them, not affecting the merits of the
decision upon the matter submitted; or
(c) 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.
The order may modify and correct the award so as to effect the intent thereof and promote justice between the parties.
(5) RTC decision of assailed foreign arbitral award appealable
Sec. 46 of RA 9285 provides for an appeal before the CA as the remedy of an aggrieved party in cases where the RTC sets aside,
rejects, vacates, modifies, or corrects an arbitral award, thus:
SEC. 46. Appeal from Court Decision or Arbitral Awards.—A decision of the Regional Trial Court confirming, vacating, setting
aside, modifying or correcting an arbitral award may be appealed to the Court of Appeals in accordance with the rules and
procedure to be promulgated by the Supreme Court.
The losing party who appeals from the judgment of the court confirming an arbitral award shall be required by the
appellate court to post a counterbond executed in favor of the prevailing party equal to the amount of the award in
accordance with the rules to be promulgated by the Supreme Court.
Thereafter, the CA decision may further be appealed or reviewed before this Court through a petition for review under Rule 45 of
the Rules of Court.
RTC has interim jurisdiction to protect the rights of the parties
Anent the July 23, 1998 Order denying the issuance of the injunctive writ paving the way for PGSMC to dismantle and transfer the
equipment and machineries, we find it to be in order considering the factual milieu of the instant case.
Firstly, while the issue of the proper installation of the equipment and machineries might well be under the primary jurisdiction of
the arbitral body to decide, yet the RTC under Sec. 28 of RA 9285 has jurisdiction to hear and grant interim measures to protect
vested rights of the parties. Sec. 28 pertinently provides:
SEC. 28. Grant of interim Measure of Protection.—(a) It is not incompatible with an arbitration agreement for a party to
request, before constitution of the tribunal, from a Court to grant such measure. After constitution of the arbitral tribunal
and during arbitral proceedings, a request for an interim measure of protection, or modification thereof, may be made with
the arbitral or to the extent that the arbitral tribunal has no power to act or is unable to act effectivity, the request may
be made with the Court. The arbitral tribunal is deemed constituted when the sole arbitrator or the third arbitrator, who
has been nominated, has accepted the nomination and written communication of said nomination and acceptance has
been received by the party making the request.
(b) The following rules on interim or provisional relief shall be observed:
Any party may request that provisional relief be granted against the adverse party.
Such relief may be granted:
(i) to prevent irreparable loss or injury;
(ii) to provide security for the performance of any obligation;
(c) The order granting provisional relief may be conditioned upon the provision of security or any act or omission specified
in the order.
(d) Interim or provisional relief is requested by written application transmitted by reasonable means to the Court or arbitral
tribunal as the case may be and the party against whom the relief is sought, describing in appropriate detail the precise
relief, the party against whom the relief is requested, the grounds for the relief, and the evidence supporting the request.
(e) The order shall be binding upon the parties.
(f) Either party may apply with the Court for assistance in implementing or enforcing an interim measure ordered by an
arbitral tribunal.
(g) A party who does not comply with the order shall be liable for all damages resulting from noncompliance, including all
expenses, and reasonable attorney's fees, paid in obtaining the order’s judicial enforcement. (Emphasis ours.)
Art. 17(2) of the UNCITRAL Model Law on ICA defines an "interim measure" of protection as:
Article 17. Power of arbitral tribunal to order interim measures
xxx xxx xxx
(2) An interim measure is any temporary measure, whether in the form of an award or in another form, by which, at any
time prior to the issuance of the award by which the dispute is finally decided, the arbitral tribunal orders a party to:
(a) Maintain or restore the status quo pending determination of the dispute;
(b) Take action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or
prejudice to the arbitral process itself;
(c) Provide a means of preserving assets out of which a subsequent award may be satisfied; or
(d) Preserve evidence that may be relevant and material to the resolution of the dispute.
Art. 17 J of UNCITRAL Model Law on ICA also grants courts power and jurisdiction to issue interim measures:
Article 17 J. Court-ordered interim measures
A court shall have the same power of issuing an interim measure in relation to arbitration proceedings, irrespective of
whether their place is in the territory of this State, as it has in relation to proceedings in courts. The court shall exercise such
power in accordance with its own procedures in consideration of the specific features of international arbitration.
In the recent 2006 case of Transfield Philippines, Inc. v. Luzon Hydro Corporation, we were explicit that even "the pendency of an
arbitral proceeding does not foreclose resort to the courts for provisional reliefs." We explicated this way:
As a fundamental point, the pendency of arbitral proceedings does not foreclose resort to the courts for provisional reliefs.
The Rules of the ICC, which governs the parties’ arbitral dispute, allows the application of a party to a judicial authority for
interim or conservatory measures. Likewise, Section 14 of Republic Act (R.A.) No. 876 (The Arbitration Law) recognizes the
rights of any party to petition the court to take measures to safeguard and/or conserve any matter which is the subject of
the dispute in arbitration. In addition, R.A. 9285, otherwise known as the "Alternative Dispute Resolution Act of 2004,"
allows the filing of provisional or interim measures with the regular courts whenever the arbitral tribunal has no power to
act or to act effectively.50
It is thus beyond cavil that the RTC has authority and jurisdiction to grant interim measures of protection.
Secondly, considering that the equipment and machineries are in the possession of PGSMC, it has the right to protect and preserve
the equipment and machineries in the best way it can. Considering that the LPG plant was non-operational, PGSMC has the right to
dismantle and transfer the equipment and machineries either for their protection and preservation or for the better way to make
good use of them which is ineluctably within the management discretion of PGSMC.
Thirdly, and of greater import is the reason that maintaining the equipment and machineries in Worth’s property is not to the best
interest of PGSMC due to the prohibitive rent while the LPG plant as set-up is not operational. PGSMC was losing PhP322,560 as
monthly rentals or PhP3.87M for 1998 alone without considering the 10% annual rent increment in maintaining the plant.
Fourthly, and corollarily, while the KCAB can rule on motions or petitions relating to the preservation or transfer of the equipment
and machineries as an interim measure, yet on hindsight, the July 23, 1998 Order of the RTC allowing the transfer of the equipment
and machineries given the non-recognition by the lower courts of the arbitral clause, has accorded an interim measure of protection
to PGSMC which would otherwise been irreparably damaged.
Fifth, KOGIES is not unjustly prejudiced as it has already been paid a substantial amount based on the contract. Moreover, KOGIES is
amply protected by the arbitral action it has instituted before the KCAB, the award of which can be enforced in our jurisdiction
through the RTC. Besides, by our decision, PGSMC is compelled to submit to arbitration pursuant to the valid arbitration clause of its
contract with KOGIES.
PGSMC to preserve the subject equipment and machineries
Finally, while PGSMC may have been granted the right to dismantle and transfer the subject equipment and machineries, it does not
have the right to convey or dispose of the same considering the pending arbitral proceedings to settle the differences of the parties.
PGSMC therefore must preserve and maintain the subject equipment and machineries with the diligence of a good father of a
family51 until final resolution of the arbitral proceedings and enforcement of the award, if any.
WHEREFORE, this petition is PARTLY GRANTED, in that:

(1) The May 30, 2000 CA Decision in CA-G.R. SP No. 49249 is REVERSED and SET ASIDE;
(2) The September 21, 1998 and October 19, 1998 RTC Orders in Civil Case No. 98-117 are REVERSED and SET ASIDE;
(3) The parties are hereby ORDERED to submit themselves to the arbitration of their dispute and differences arising from the subject
Contract before the KCAB; and
(4) PGSMC is hereby ALLOWED to dismantle and transfer the equipment and machineries, if it had not done so, and ORDERED to
preserve and maintain them until the finality of whatever arbitral award is given in the arbitration proceedings.
No pronouncement as to costs.
SO ORDERED.
G.R. No. 102881 December 7, 1992
TOYOTA MOTOR PHILIPPINES CORPORATION, petitioner,

vs.
THE COURT OF APPEALS, HON. FERNANDO V. GOROSPE, JR. and SUN VALLEY MANUFACTURING & DEVELOPMENT CORPORATION,
respondents.
Facts:
This case involves a boundary dispute between petitioner Toyota Motor Phil. Corporation (Toyota) and private respondent Sun
Valley Manufacturing and Development Corporation (Sun Valley). Both Toyota and Sun Valley are the registered owners of two (2)
adjoining parcels of land which they purchased from the Asset Privatization Trust (APT). The properties in question formerly
belonged to Delta Motors Corporation (DMC) which were foreclosed by the Philippine National Bank (PNB) and later transferred to
the national government through the APT for disposition. APT then proceeded to classify the DMC properties, called the GC III-Delta
Motors Corporation, and divided into Delta I, Delta II, and Delta III. Further subdivisions for the separate catalogues were made for
each division e.g. Delta I into Lots 1, 2 and 3. After this classification, APT parcelled out and catalogued the properties for bidding and
sale.
Part of the duly parcelled Delta I property (Lot 2) was sold to Toyota through public bidding. After its purchase, Toyota constructed a
concrete hollow block (CHB) perimeter fence around its alleged property. Another part of the parcelled Delta I (Lot 1) was purchased
by Sun Valley from APT. Petitioner then filed a case against APT for the reformation of the Deed of Sale executed between them
alleging that the instrument failed to reflect the true intention of the parties as the title failed to include 723 square meters strip of
land. On the other hand, Sun Valley, filed a case for recovery of possession of the disputed 723 square meters relying upon the title
description of its property and the surveys it has commissioned. Through legal maneuverings, the parties have succeeded in
muddling up the vital issues of the case and getting the lower courts embroiled in numerous appeals over technicalities. Hence, the
three appellate decisions/resolutions before the Court for review and conflicting orders issued by lower courts as a result of the
separate cases filed by the parties.
Issue: Whether or not Judge Tensuan had jurisdiction to take cognizance of the case for reformation of instrument.
Ruling:
Attention must first be brought to the fact that the contract of sale executed between APT and Toyota provides an arbitration clause
which states that:
5. In case of disagreement or conflict arising out of this Contract, the parties hereby undertake to submit the matter for
determination by a committee of experts, acting as arbitrators, the composition of which shall be as follows: a) One
member to be appointed by the VENDOR; b) One member to be appointed by the VENDEE; c) One member, who shall be a
lawyer, to be appointed by both of the aforesaid parties;
The contention that the arbitration clause has become dysfunctional because of the presence of third parties is untenable.
Toyota filed an action for reformation of its contract with APT, the purpose of which is to look into the real intentions/agreement of
the parties to the contract and to determine if there was really a mistake in the designation of the boundaries of the property as
alleged by Toyota. Such questions can only be answered by the parties to the contract themselves. This is a controversy which clearly
arose from the contract entered into by APT and Toyota. Inasmuch as this concerns more importantly the parties APT and Toyota
themselves, the arbitration committee is therefore the proper and convenient forum to settle the matter as clearly provided in the
deed of sale. Having been apprised of the presence of the arbitration clause in the motion to dismiss filed by APT, Judge Tensuan
should have at least suspended the proceedings and directed the parties to settle their dispute by arbitration. Judge Tensuan should
have not taken cognizance of the case.
In view of all the foregoing, the petition is hereby dismissed for failure to show reversible error, much less grave abuse of discretion,
on the part of the respondent court.
G. Conduct of Arbitration Proceedings
G1. Case Management Conference
- Section 12, Arbitration Law; Article 5.23 (b), ADR Act-IRR; see Article 5.23 (b) (iii), ADR Act-IRR]
- Jurisdictional Challenge during Case Management Conference [Article 5.15 (d), ADR Act-IRR; Oil
and Natural Gas vs. Court of Appeals, G.R. No. 114323 (1998)]
a. Case Management Conference
Section 12, Arbitration Law; Article 5.23 (b), ADR Act-IRR; see Article 5.23 (b) (iii), ADR Act-IRR]
Section 12. Procedure by arbitrators. - Article 5.23 Hearing and Written Proceedings (a) In ad hoc (b) Within thirty (30)
Subject to the terms of the arbitration, the procedure determined by the arbitrator, days from the
submission or contract, if any are with the agreement of the parties, shall be followed. In appointment of the
specified therein, are arbitrators institutional arbitration, the applicable rules of procedure of arbitrator or the
selected as prescribed herein must, the arbitration institution shall be followed. In default of constitution of an
within five days after appointment if agreement of the parties, the arbitration procedure shall be arbitral tribunal, the
the parties to the controversy reside as provided in this Chapter. arbitral tribunal shall
within the same city or province, or call the parties and
within fifteen days after appointment (b) Within thirty (30) days from the appointment of the their respective
if the parties reside in different arbitrator or the constitution of an arbitral tribunal, the counsels to a pre-
provinces, set a time and place for arbitral tribunal shall call the parties and their respective hearing conference to
the hearing of the matters submitted counsels to a pre-hearing conference to discuss the following discuss the following
to them, and must cause notice matters: matters:
thereof to be given to each of the
parties. (i) The venue or place/s where the arbitration (iii) The periods for the
The hearing can be postponed or proceeding may be conducted in an office space, a business communication of the
adjourned by the arbitrators only by center, a function room or any suitable place agreed upon by statement of claims
agreement of the parties; otherwise, the parties and the arbitral tribunal, which may vary per with or without
adjournment may be ordered by the session/hearing/conference; counterclaims, and
arbitrators upon their own motion answer to the
only at the hearing and for good and counterclaim/s and the
(ii) The manner of recording the proceedings;
sufficient cause. No adjournment shall form and contents of
extend the hearing beyond the day such pleadings.
fixed in the submission or contract for The periods for the communication of the statement of
rendering the award, unless the time claims with or without counterclaims, and answer to the
so fixed is extended by the written counterclaim/s and the form and contents of such pleadings.
agreement of the parties to the
submission or contract or their (iv) The definition of the issues submitted to the arbitral
attorneys, or unless the parties have tribunal for determination and the summary of the claims
continued with the arbitration without and counterclaims of the
objection to such parties;
adjournment.
(v) The manner by which evidence may be offered if an
The hearing may proceed in the oral hearing is required, the submission of sworn written
absence of any party who, after due statements in lieu of oral testimony, the crossexamination
notice, fails to be present at such and further
hearing or fails to obtain an examination of witnesses;
adjournment thereof. An award shall
not be made solely on the default of a (vi) The delivery of certain types of communications
party. The arbitrators shall require such as pleadings, terms of reference, order granting interim
the other party to submit such relief, final award and the like that, if made by electronic or
evidence as they may require for similar means, shall require further confirmation in the form
making an award. of a hard copy or hard copies delivered personally or by
registered post.
No one other than a party to said
arbitration, or a person in the regular (vii) The issuance of subpoena or subpoena duces tecum
employ of such party duly authorized by the arbitral tribunal to compel the production of evidence
in writing by said party, or a practicing if either party shall or is likely to request it;
attorney-at-law, shall be permitted by
the arbitrators to represent before The manner by which expert testimony will be received if a
him or them any party to the party will or is likely to request the arbitral tribunal to
arbitration. Any party desiring to be appoint one or more experts, and in such case, the period
represented by counsel shall notify for the submission to the arbitrator by the requesting party
the other party or parties of such of the proposed terms of reference for the expert, the fees
intention at least five days prior to to be paid, the manner of payment to the expert and the
the hearing. deposit by the parties or the requesting party of such
amount necessary to cover all expenses associated with the
The arbitrators shall arrange for the referral of such issues to the expert before the expert is
taking of a stenographic record of the appointed;
testimony when such a record is
requested by one or more parties, (ix) The possibility of either party applying for an order
and when payment of the cost granting interim relief either with arbitral tribunal or with
thereof is assumed by such party or the court, and, in such case, the nature of the relief to be
parties. applied for;
Persons having a direct interest in the (x) The possibility of a site or ocular inspection, the
controversy which is the subject of purpose of such inspection, and in such case, the date, place
arbitration shall have the right to and time of the inspection and the manner of conducting it,
attend any hearing; but the and the sharing and deposit of any associated fees and
attendance of any other person shall expenses;
be at the discretion of the arbitrators.
(xi) The amount to be paid to the arbitral tribunal as
fees and the associated costs, charges and expenses of
arbitration and the manner and timing of such payments;
and
(xii) Such other relevant matters as the parties and the

arbitral tribunal may consider necessary to provide for a
speedy and efficient arbitration of the dispute.
Jurisdictional Challenge during Case Management Conference [Article 5.15 (d), ADR Act-IRR; Oil and Natural Gas vs. Court of
Appeals, G.R. No. 114323 (1998)]
Article 5.15 Competence of Arbitral Tribunal to Rule on its Jurisdiction. (d) If a dispute is, under an arbitration agreement, to be
submitted to arbitration, but before arbitration is commenced or while it is pending, a party files an action before the court which
embodies or includes as a cause of action the dispute that is to be submitted to arbitration the filling of such action shall not prevent
the commencement of the arbitration or the continuation of the arbitration until the award is issued.
G.R. No. 114323 July 23, 1998

OIL AND NATURAL GAS COMMISSION, petitioner,
vs. COURT OF APPEALS and PACIFIC CEMENT COMPANY, INC., respondents.
This proceeding involves the enforcement of a foreign judgment rendered by the Civil Judge of Dehra Dun, India in favor of the
petitioner, OIL AND NATURAL GAS COMMISSION and against the private respondent, PACIFIC CEMENT COMPANY, INCORPORATED.
The petitioner is a foreign corporation owned and controlled by the Government of India while the private respondent is a private
corporation duly organized and existing under the laws of the Philippines.
Facts
The conflict rooted from the failure of the respondent to deliver the 4,300 metric tons of oil well cement to the petitioner even it
had already received payment.
Arbitrator ruled in favor of petitioner awarding him USD 899,603.77. The award was confirmed by the foreign court. Despite the
award and demands by petitioner, respondent refused to pay. Petitioner then filed a complaint with the RTC of Surigao City for the
enforcement of the foreign judgment.
The RTC dismissed the complaint, ruling that the Arbitrator did not have jurisdiction over the dispute on the ground that the referral
to the arbitrator under Clause 16 of their contract is erroneous. The breach consisting of the non-delivery of the purchased
materials, should have been properly litigated before a court of law, pursuant to Clause No. 15
On appeal, the CA affirmed RTC ruling. The CA likewise noted that judgment of the foreign court did not contain any statement of
facts and law upon which the award was based; hence, the judgment cannot be enforced by any Philippine court. Motion for
reconsideration was denied,
The petitioner then asseverates that granting, for the sake of argument, that the non-delivery of the oil well cement is not a proper
subject for arbitration, The petitioner now contends on the negotiations both party agreed upon that the private respondent will
replace the entire 4,300 metric tons of oil well cement with Class "G" cement. However, on inspection, the Class "G" cement did not
conform to the petitioner's specifications.
The petitioner then informed the private respondent that it was referring its claim to an arbitrator that the non -conformity of the
specifications of the contract is a matter clearly falling within the ambit of Clause 16 thus petition for review on certiorari.
Issues
1. Whether the Arbitrator had jurisdiction over the dispute under Clause 16 of the contract
Yes. The real issue that was bought to the Arbitrator was the non-conformity of the Class "G" cement with the specifications
agreed upon, and no longer the non-delivery of the oil well cement which was supposedly within the exclusive jurisdiction of
the courts as set forth in Clause 15.
Clause 16 pertain only to matters involving the technical aspects of the contract
Clause 15: All questions, disputes and differences, arising under out of or in connection with this supply order, shall be
subject to the exclusive jurisdiction of the court.
2. Whether the foreign judgment is enforceable in this jurisdiction
Yes. The foreign court adopted the findings of facts and law of the arbitrator as contained in the latter's Award Paper
Ruling
The court find merit on the petitioner’s contention; wherein, when the 4,300 metric tons of oil well cement were not delivered to
the petitioner, an agreement was forged between the latter and the private respondent that Class "G" cement would be delivered to
the petitioner as replacement. Upon inspection, however, the replacement cement was rejected as it did not conform to the
specifications of the contract. Undoubtedly, what was referred to arbitration was no longer the mere non-delivery of the cargo at
the first instance but also the failure of the replacement cargo to conform to the specifications of the contract, a matter clearly
within the coverage of Clause 16.
A foreign judgment is presumed to be valid and binding in the country from which it comes, until the contrary is shown. It
is also proper to presume the regularity of the proceedings and the giving of due notice therein. Consequently, the party
attacking a foreign judgment (Pacific Cement) had the burden of overcoming the presumption of its validity which it failed
to do in the instant case.
WHEREFORE, the instant petition is GRANTED, and the assailed decision of the Court of Appeals sustaining the trial court’s dismissal
of the Oil and Natural Gas Commission’s complaint before Branch 30 of the RTC of Surigao City is REVERSED.
Clause 16 provides as follows:
Except where otherwise provided in the supply order/contract all questions and disputes, relating to the meaning of the
specification designs, drawings and instructions herein before mentioned and as to quality of workmanship of the items
ordered or as to any other question, claim, right or thing whatsoever, in any way arising out of or relating to the supply
order/contract design, drawing, specification, instruction or these conditions or otherwise concerning the materials or the
execution or failure to execute the same during stipulated/extended period or after the completion/abandonment thereof
shall be referred to the sole arbitration of the persons appointed by Member of the Commission at the time of dispute. It will
be no objection to any such appointment that the arbitrator so appointed is a Commission employer (sic) that he had to deal
with the matter to which the supply or contract relates and that in the course of his duties as Commission's employee he had
expressed views on all or any of the matter in dispute or difference. 117
The first and second categories unmistakably refer to questions and disputes relating to the design, drawing, instructions,
specifications or quality of the materials of the supply/order contract. In the third category, the clause, "execution or failure to
execute the same", may be read as "execution or failure to execute the supply order/contract". But in accordance with the
doctrine of noscitur a sociis, this reference to the supply order/contract must be construed in the light of the preceding words
with which it is associated, meaning to say, as being limited only to the design, drawing, instructions, specifications or quality of
the materials of the supply order/contract.
Applying statutory construction:

According to the maxim noscitur a sociis, where a particular word or phrase is ambiguous in itself or is equally
susceptible of various meanings, its correct construction may be made clear and specific by considering the company of the
words in which it is found or with which it is associated, or stated differently, its obscurity or doubt may be reviewed by
reference to associated words.
G.2. Statement of Claims and Defenses
- Article 5.22, ADR Act-IRR
Statement of Claims and Defenses Article 5.22, ADR Act-IRR
Article 5.22 Statement of Claim and Defense

(a) Within the period of time agreed by the parties or determined by the arbitral tribunal, the claimant shall state the facts supporting
his/her/its claim, the points at issue and the relief or remedy sought, and the respondent shall state his/her defense in respect of
these particulars, unless the parties may have otherwise agreed as to the required elements of such statements. The parties may
submit with their statements all documents they consider to be relevant or may add a reference to the documents or other
evidence they will submit.
(b) Unless otherwise agreed by the parties, either party may amend or supplement his/her/its claim or defense during the course of the
arbitral proceedings, unless the arbitral tribunal considers it inappropriate to allow such amendments having regard to the delay
in making it.
g.3. Hearing Proper and Reception of Evidence
- Review view [see Part II (B) supra; Article 20, Model Law]
Hearing Proper and Reception of Evidence
[see Part II (B) supra; Article 20, Model Law]
Article 20 - Place of arbitration
1. The parties are free to agree on the place of arbitration. Failing such agreement, the place of arbitration shall be determined by
the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties.
2. Notwithstanding the provisions of paragraph (1) of this article, the arbitral tribunal may, unless otherwise agreed by the parties,
meet at any place it considers appropriate for consultation among its members , for hearing witnesses, experts or the parties, or
for inspection of goods, other property or documents.
The Arbitral Tribunal or the Arbitrator as Sole Judge of the Proceedings

[Section 16 of the Arbitration Law; Article 5.18, ADR Act-IRR, and Section 19, Model Law]
Section 16. Briefs. - At the close of the hearings, the arbitrators shall specifically inquire of all parties whether they have any
further proof or witnesses to present; upon the receipt of a negative reply from all parties, the arbitrators shall declare the
hearing closed unless the parties have signified an intention to file briefs. Then the hearing shall be closed by the arbitrations
after the receipt of briefs and/or reply briefs. Definite time limit for the filing of such briefs must be fixed by the arbitrators at
the close of the hearing. Briefs may file by the parties within fifteen days after the close of the oral hearings; the reply briefs, if
any, shall be filed within five days following such fifteen-day period.
Article 5.18 Determination of Rules of Procedure. (a) Subjected to the provisions of these Rules, the parties are free to agree on
the procedure to be followed by the arbitral tribunal in conducting the proceedings.
(b) Failing such agreement, the arbitral tribunal may subject to the provision of the ADR Act, conduct the arbitration in such
manner as it considers appropriate. The power conferred upon the arbitral tribunal includes the power to determine
admissibility, relevance, materially and weight of evidence.
Article 19 - Determination of rules of procedure
1. Subject to the provisions of this Law, the parties are free to agree on the procedure to be followed by the arbitral tribunal
in conducting the proceedings.
2. Failing such agreement, the arbitral tribunal may, subject to the provisions of this Law, conduct the arbitration in such
manner as it considers appropriate. The power conferred upon the arbitral tribunal includes the power to determine the
admissibility, relevance, materiality and weight of any evidence.
Presentation of Witnesses
[Articles 5.23 (l) and 5.23 (o), ADR Act-IRR]
Article 5.23 Hearing and Written Proceedings (a) In ad hoc arbitration, the procedure determined by the arbitrator, with the
agreement of the parties, shall be followed. In institutional arbitration, the applicable rules of procedure of the arbitration
institution shall be followed. In default of agreement of the parties, the arbitration procedure shall be as provided in this
Chapter.
(l) Each party shall provide the other party with a copy of each statement or document submitted to the arbitral tribunal and
shall have an opportunity to reply in writing to the other party's statements and proofs.
(o) At the close of the hearing, the arbitral tribunal shall specifically inquire of all parties whether they have further proof or
witnesses to present; upon receiving a negative reply, the arbitral tribunal shall declare the hearing closed.
Formality that can be dispensed with

Hot tubbing – all witnesses sat in table, and question by the arbitrators?
Appointment of Experts
[Article 5.26, ADR Act-IRR; compare with Section 49, Rule 130, Rules of Court]
Article 5.26. Expert Appointed by the Arbitral Tribunal.

(a) Unless otherwise agreed by the parties, the arbitral tribunal,
a. may appoint one or more experts to report to it on specific issues to be determined by the arbitral tribunal; or
b. may require a party to give the expert any relevant information or to produce, or to provide access to, any relevant
documents, goods or other property for his/her inspection.
(b) Unless otherwise agreed by the parties, if a party so request or if the arbitral tribunal considers it necessary, the expert
shall, after delivery of his/her written or oral report, participate in a hearing where the parties have the opportunity to put
questions to him/her and to present expert witnesses in order to testify on the points at issue.
(c) upon agreement of the parties, the finding of the expert engaged by the arbitral tribunal on the matter/s referred to him
shall be binding upon the parties and the arbitral tribunal.
Section 49. Opinion of expert witness. — The opinion of a witness on a matter requiring special knowledge, skill, experience or
training which he shown to possess, may be received in evidence.
Court proceeding – parties present expert witness upon approval of the court.
Arbitral proceedings – arbitrators are the one who appoint experts and not the parties.
Court Assistance on Specific Matters

[Article 5.27, ADR Act-IRR and Rule 9, Special ADR Rules]
Article 5.27. Court Assistance in Taking Evidence and Other Matters.

(a) The arbitral tribunal or a party, with the approval of the arbitral tribunal may request from a court, assistance in taking
evidence such as the issuance of subpoena ad testificandum and subpoena duces tecum, deposition taking, site or ocular
inspection, and physical examination of properties. The court may grant the request within its competence and according
to its rules on taking evidence.
(b) The arbitral tribunal or a party to the dispute interested in enforcing an order of the arbitral tribunal may request from a
competent court, assistance in enforcing orders of the arbitral tribunal, including but not limited, to the following:
(i) Interim or provision relief;
(ii) Protective orders with respect to confidentiality;
(iii) Orders of the arbitral tribunal pertaining to the subject matter of the dispute that may affect third persons
and/or their properties; and/or
(iv) Examination of debtors
Issues regarding the appointment of arbitrators.
Assistance in Taking Evidence
Rule 9.1. Who may request assistance. - Any party to an arbitration, whether domestic or foreign, may request the court to
provide assistance in taking evidence.
When and Where to File

[Rules 9.2-9.3, Special ADR Rules]
Rule 9.2. When assistance may be sought. - Assistance may be sought at any time during the course of the arbitral proceedings
when the need arises.
Rule 9.3. Venue. - A petition for assistance in taking evidence may, at the option of the petitioner, be filed with Regional Trial
Court where (a) arbitration proceedings are taking place, (b) the witnesses reside or may be found, or (c) where the evidence
may be found.
Grounds and Type of Assistance that may be Rendered

[Rules 9.4-9.5, Special ADR Rules]
Rule 9.4. Ground. - The court may grant or execute the request for assistance in taking evidence within its competence and
according to the rules of evidence.
Rule 9.5. Type of assistance. - A party requiring assistance in the taking of evidence may petition the court to direct any person,
including a representative of a corporation, association, partnership or other entity (other than a party to the ADR proceedings
or its officers) found in the Philippines, for any of the following:
a. To comply with a subpoena ad testificandum and/or subpoena duces tecum;
b. To appear as a witness before an officer for the taking of his deposition upon oral examination or by written
interrogatories;
c. To allow the physical examination of the condition of persons, or the inspection of things or premises and, when
appropriate, to allow the recording and/or documentation of condition of persons, things or premises (i.e.,
photographs, video and other means of recording/documentation);
d. To allow the examination and copying of documents; and
e. To perform any similar acts.
When Court may Act

[Rule 9.8, Special ADR Rules]
Rule 9.8. Court action. - If the evidence sought is not privileged, and is material and relevant, the court shall grant the assistance
in taking evidence requested and shall order petitioner to pay costs attendant to such assistance.
Sanction for disobedience

[Rule 9.11, Special ADR Rules; Cf. Rule 10.10, Special ADR Rules]
Rule 9.11. Consequence of disobedience. - The court may impose the appropriate sanction on any person who disobeys its order
to testify when required or perform any act required of him.
Rule 10.10. Consequence of disobedience. - Any person who disobeys the order of the court to U shall be imposed the proper
sanction by the court.
Principles of Confidentiality and Protective Orders

[Section2 3 (h) and 23, ADR Act; Rules 10.1-10.2, 10.4, 10.8, Special ADR Rules;
SEC. 3. Definition of Terms. - For purposes of this Act, the term:

(h) "Confidential information" means any information, relative to the subject of mediation or arbitration, expressly intended by
the source not to be disclosed, or obtained under circumstances that would create a reasonable expectation on behalf of the
source that the information shall not be disclosed. It shall include (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, as
defined in this Act;
(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; and (3) pleadings, motions manifestations,
witness statements, reports filed or submitted in an arbitration or for expert evaluation;
SEC. 23. Confidential of Arbitration Proceedings. - The arbitration proceedings, including the records, evidence and the arbitral
award, shall be considered confidential and shall not be published except (1) with the consent of the parties, or (2) for the
limited purpose of disclosing to the court of relevant documents in cases where resort to the court is allowed herein. Provided,
however, that the court in which the 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.
Rule 10.1. Who may request confidentiality. - A party, counsel or witness who disclosed or who was compelled to disclose
information relative to the subject of ADR under circumstances that would create a reasonable expectation, on behalf of the
source, that the information shall be kept confidential has the right to prevent such information from being further disclosed
without the express written consent of the source or the party who made the disclosure.
Rule 10.2. When request made. - A party may request a protective order at any time there is a need to enforce the
confidentiality of the information obtained, or to be obtained, in ADR proceedings.
If there is a pending court proceeding in which the information obtained in an ADR proceeding is required to be divulged or is
being divulged, the party seeking to enforce the confidentiality of the information may file a motion with the court where the
proceedings are pending to enjoin the confidential information from being divulged or to suppress confidential information.
Rule 10.4. Grounds. - A protective order may be granted only if it is shown that the applicant would be materially prejudiced by
an unauthorized disclosure of the information obtained, or to be obtained, during an ADR proceeding.
Rule 10.8. Court action. - If the court finds the petition or motion meritorious, it shall issue an order enjoining a person or
persons from divulging confidential information.
In resolving the petition or motion, the courts shall be guided by the following principles applicable to all ADR proceedings :
Confidential information shall not be subject to discovery and shall be inadmissible in any adversarial proceeding, whether
judicial or quasi-judicial. However, evidence or information that is otherwise admissible or subject to discovery does not
become inadmissible or protected from discovery solely by reason of its use therein.
For mediation proceedings, the court shall be further guided by the following principles:
a. Information obtained through mediation shall be privileged and confidential.

b. A party, a mediator, or a nonparty participant may refuse to disclose and may prevent any other person from disclosing a
mediation communication.
c. In such an adversarial proceeding, the following persons involved or previously involved in a mediation may not be
compelled to disclose confidential information obtained during the mediation: (1) the parties to the dispute; (2) the
mediator or mediators; (3) the counsel for the parties: (4) the nonparty participants; (5) any persons hired or engaged in
connection with the mediation as secretary, stenographer; clerk or assistant; and (6) any other person who obtains or
possesses confidential information by reason of his/ her profession.
d. The protection of the ADR Laws shall continue to apply even if a mediator is found to have failed to act impartially.
e. A mediator may not be called to testify to provide information gathered in mediation. A mediator who is wrongfully
subpoenaed shall be reimbursed the full cost of his attorney fees and related expenses.
Federal Express Corp. v. Airfreight 2100, Inc.,
809 SCRA 382 (2016)
Test, standards of implied confidentiality
FACTS:
FedEx, having lost its International Freight Forwarder's (IFF) license to engage in international freight forwarding in the
Philippines, executed various Global Service Program (GSP) contracts with Air2l, an independent contractor, to primarily
undertake its delivery and pick-up services within the country. 4
Under the GSP arrangement, the packages sent by FedEx customers from abroad would be picked up at a Philippine airport and
delivered by Air21 to its respective consignees. Conversely, packages from Philippine clients would be delivered by Air21 to the
airport and turned over to FedEx for shipment to consignees abroad. As stipulated in the GSP contracts, Air21 guaranteed that all
shipments would be cleared through customs in accordance with Philippine law. In the implementation of these contracts,
however, several issues relating to money remittance, value-added taxes, dynamic fuel charge, trucking costs, interests, and
penalties ensued between the parties.
On May 11, 2011, in an effort to settle their commercial dispute, FedEx and Air21 agreed to submit themselves to arbitration
before the Philippine Dispute Resolution Center (PDRC). Thus, on June 24, 2011, FedEx filed its Notice of Arbitration. On October
3, 2011, the Arbitral Tribunal was constituted.
As part of the arbitration proceedings, Jennings, John Lumley Holmes (Holmes), the Managing Director of SPAC Legal of FedEx;
and David John Ross (Ross), Senior Vice President of Operations, Middle East, India and Africa, executed their respective
statements5 as witnesses for FedEx. Ross and Holmes deposed that Federal Express Pacific, Inc., a subsidiary of FedEx, used to
have an IFF license to engage in the business of freight forwarding in the Philippines. This license, however, was suspended
pending a case in court filed by Merit International, Inc. (Merit) and Ace Logistics, Inc. (Ace), both freight forwarding companies,
which questioned the issuance of the IFF to FedEx. Absent the said license, FedEx executed the GSP contracts with Air21 to be
able to conduct its business in the Philippines. Ross and Holmes, in their individual statements, averred that Merit and Ace were
either owned or controlled by Air21 employees or persons connected with the Lina Group of Companies, which included Air21.
Jennings, in his cross-examination, was identified as the source of the information that Merit and Ace were Air21's proxies and
was asked if he had any written proof of such proxy relationship. 6 He answered in the negative. In his re-direct examination, he
was made to expound on the supposed proxy relationship between Merit, Ace and Air21. 7He responded that Merit and Ace were
just very small companies with meager resources, yet they were able to finance and file a case to oppose the grant of IFF license
to FedEx. Jennings also disclosed that one of the directors of Ace was a friend of Lina and that Loma Orbe, the President of Merit,
was the former "boss" of Lito Alvarez, who was also associated with Air21.
Feeling aggrieved by those statements, Lina for himself and on behalf of Air21, filed a complaint for grave slander against Jennings
before the Office of the City Prosecutor in Taguig City. 8 Lina claimed that the defamatory imputation of Jennings that Merit and
Ace were Air21 's proxies brought dishonor, discredit and contempt to his name and that of Air21. Lina quoted certain portions of
the written statements of Holmes and Ross and the Transcript of Stenographic Notes (TSN) of the April 25, 2013 arbitration
hearing reflecting Jennings' testimony to support his complaint.
Consequently, FedEx and Jennings (petitioners) filed their Petition for Issuance of a Confidentiality/Protective Order with
Application for Temporary Order of Protection and/or Preliminary Injunction before the RTC alleging that all information and
documents obtained in, or related to, the arbitration proceedings were confidential. 9 FedEx asserted that the testimony of
Jennings, a witness in the arbitration proceedings, should not be divulged and used to bolster the complaint-affidavit for grave
slander as this was inadmissible in evidence.
On January 16, 2014, the RTC granted petitioners' application for the Temporary Order of Protection. Meanwhile, on February 3,
2014, the arbitral tribunal rendered an award in favor of FedEx.
Subsequently, in the assailed Order, dated May 7, 2014, the RTC denied FedEx's petition for lack of merit, stating that the
statements and arbitration documents were not confidential information. It went on to state that "[t]he statement and
'Arbitration Documents' which purportedly consists the crime of Grave Slander under Articles 353 and 358 of the Revised Penal
Code are not in any way related to the subject under Arbitration." The RTC further wrote that "a crime cannot be protected by the
confidentiality rules under ADR. The said rules should not be used as a shield in the commission of any crime.
Dissatisfied, petitioners challenged the RTC order before the CA via a petition for review. On January 20, 2015, the CA denied the
petition. In its assailed decision, the CA explained that the declarations by Jennings were not confidential as they were not at all
related to the subject of mediation as the arbitration proceedings revolved around the parties' claims for sum of money. 11 Thus,
the CA ruled that "statements made without any bearing on the subject proceedings are not confidential in nature." It must be
emphasized that other declarations given therein, if relative to the subject of mediation or arbitration, are certainly
confidential."12 Hence, this present petition before the Court.
ISSUE:
Whether the testimony of Jennings given during the arbitration proceedings falls within the ambit of confidential information and,
therefore, covered by the mantle of a confidentiality/protection order.
RULING:
The Court finds the petition meritorious. Section 3(h) of Republic Act (R.A.) No. 9285 or the Alternative Dispute Resolution of 2004
(ADR Act) defines confidential information as follows:
"Confidential information" means any information, relative to the subject of mediation or arbitration, expressly intended by the
source not to be disclosed, or obtained under circumstances that would create a reasonable expectation on behalf of the source
that the information shall not be disclosed. It shall include (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, as defined in this
Act; (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; and (3) pleadings, motions manifestations,
witness statements, reports filed or submitted in an arbitration or for expert evaluation.
The said list is not exclusive and may include other information as long as they satisfy the requirements of express confidentiality
or implied confidentiality.18
Plainly, Rule 10.1 of A.M. No. 07-11-08-SC or the Special Rules of Court on Alternative Dispute Resolution (Special ADR Rules)
allows "[a] party, counsel or witness who disclosed or who was compelled to disclose information relative to the subject of ADR
under circumstances that would create a reasonable expectation, on behalf of the source, that the information shall be kept
confidential xxx the right to prevent such information from being further disclosed without the express written consent of the
source or the party who made the disclosure." Thus, the rules on confidentiality and protective orders apply when:
1. An ADR proceeding is pending;
2. A party, counsel or witness disclosed information or was otherwise compelled to disclose information;
3. The disclosure was made under circumstances that would create a reasonable expectation, on behalf of the source,
that the information shall be kept confidential;
4. The source of the information or the party who made the disclosure has the right to prevent such information from
being disclosed;
5. The source of the information or the party who made the disclosure has not given his express consent to any
disclosure; and
6. The applicant would be materially prejudiced by an unauthorized disclosure of the information obtained, or to be
obtained, during the ADR proceeding.
Gauged by the said parameters, the written statements of witnesses Ross, Holmes and Jennings, as well as the latter's oral
testimony in the April 25, 2013 arbitration hearing, both fall under Section 3 (h) [1] and [3] of the ADR Act which states that
"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, as defined in this Act; and (3) pleadings, motions, manifestations, witness statements,
reports filed or submitted in an arbitration or for expert valuation," constitutes confidential information.
Notably, both the parties and the Arbitral Tribunal had agreed to the Terms of Reference (TOR) that "the arbitration proceedings
should be kept strictly confidential as provided in Section 23 of the ADR Act and Article 25-A 19 of the PDRCI Arbitration Rules
(Arbitration Rules) and that they should all be bound by such confidentiality requirements."
The provisions of the ADR Act and the Arbitration Rules repeatedly employ the word "shall" which, in statutory construction, is
one of mandatory character in common parlance and in ordinary signification. 20 Thus, the general rule is that information
disclosed by a party or witness in an ADR proceeding is considered privileged and confidential.
In evaluating the merits of the petition, Rule 10.8 of the Special ADR Rules mandates that courts should be guided by the principle
that confidential information shall not be subject to discovery and shall be inadmissible in any adversarial proceeding, to wit:
In resolving the petition or motion, the courts shall be guided by the following principles applicable to all ADR proceedings:
Confidential information shall not be subject to discovery and shall be inadmissible in any adversarial proceeding, whether judicial
or quasi judicial. However, evidence or information that is otherwise admissible or subject to discovery does not become
inadmissible or protected from discovery solely by reason of its use therein.
Article 5.42 of the Implementing Rules and Regulations (JRR)21 of the ADR Act likewise echoes that arbitration proceedings,
records, evidence and the arbitral award and other confidential information are privileged and confidential and shall not be
published except [i] with the consent of the parties; or [ii] for the limited purpose of disclosing to the court relevant documents
where resort to the court is allowed. Given that the witness statements of Ross, Holmes and Jennings, and the latter's arbitration
testimony, fall within the ambit of confidential information, they must, as a general rule, remain confidential. Although there is no
unbridled shroud of confidentiality on information obtained or disclosed in an arbitration proceeding, the presence of the above
criteria must be apparent; otherwise, the general rule should be applied. Here in this case, only a perceived imputation of a
wrongdoing was alleged by the respondents.
In denying the said application for confidentiality/protection order, the RTC and the CA did not consider the declarations
contained in the said witness statements and arbitration testimony to be related to the subject of arbitration and, accordingly,
ruled that they could not be covered by a confidentiality order.
The Court does not agree. Suffice it to say that the phrase "relative to the subject of mediation or arbitration" need not be strictly
confined to the discussion of the core issues in the arbitral dispute. By definition, "relative" simply means "connected to," which
means that parties in arbitration proceedings are encouraged to discuss openly their grievances and explore the circumstances
which might have any connection in identifying the source of the conflict in the hope of finding a better alternative to resolve the
parties' dispute. An ADR proceeding is aimed at resolving the parties' conflict without court intervention. It was not designed to
be strictly technical or legally confined at all times. By mutual agreement or consent of the parties to a controversy or dispute,
they acquiesce to submit their differences to arbitrators for an informal hearing and extra-judicial determination and resolution.
Usually, an ADR hearing is held in private and the decision of the persons selected to comprise the tribunal will take the place of a
court judgment. This avoids the formalities, delays and expenses of an ordinary litigation. Arbitration, as envisioned by the ADR
Act, must be taken in this perspective.
Verily, it is imperative that legislative intent or spirit be the controlling factor, the leading star and guiding light in the application
and interpretation of a statute.22 If a statute needs construction, the influence most dominant in that process is the intent or spirit
of the act.23 A thing which is within the intent of the lawmaker is as much within the statute as if within the letter; and a thing
which is within the letter of the statute is not within the statute unless within the intent of the lawmakers. 24 In other words, a
statute must be read according to its spirit or intent and legislative intent is part and parcel of the statute. It is the controlling
factor in interpreting a statute. Any interpretation that contradicts the legislative intent is unacceptable.
In the case at bench, the supposed questionable statements surfaced when FedEx's suspended IFF license was discussed during
the arbitration hearing. In fact, when Jennings was asked by Arbitrator Panga to expound on how the opposition of Ace and Merit
could be related to the ongoing arbitration, Jennings replied that, to his mind, it was indicative of the leverage that Air21 had over
FedEx as it was able to withhold large sums of money and siphon their joint plans from being properly established. Whether the
information disclosed in the arbitration proceeding would be given weight by the tribunal in the resolution of their dispute is a
separate matter. Likewise, the relevance or materiality of the said statements should be best left to the arbitrators' sound
appreciation and judgment. Even granting that the weight of the said statements was not fundamental to the issues in the
arbitration process, nevertheless, they were still connected to, and propounded by, a witness who relied upon the confidentiality
of the proceedings and expect that his responses be reflected.
Arbitration, being an ADR proceeding, was primarily designed to be a prompt, economical and amicable forum for the resolution
of disputes.1âwphi1 It guarantees confidentiality in its processes to encourage parties to ventilate their claims or disputes in a less
formal, but spontaneous manner. It should be emphasized that the law favors settlement of controversies out of court. Thus, a
person who participates in an arbitration proceeding is entitled to speak his or her piece without fear of being prejudiced should
the process become unsuccessful. Hence, any communication made towards that end should be regarded as confidential and
privileged.
To restate, the confidential nature of the arbitration proceeding is well-entrenched in Section 23 of the ADR Act:
SEC. 23. Confidentiality of Arbitration Proceedings. - The arbitration proceedings, including the records, evidence and
the arbitral award, shall be considered confidential and shall not be published except (1) with the consent of the parties,
or (2) for the limited purpose of disclosing to the court of relevant documents in cases where resort to the court is
allowed herein. Provided, however, that the court in which the 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.
If Lina had legal grounds to suspect that Jennings committed slanderous remarks even before the arbitration proceeding
commenced, then he must present evidence independent and apart from some quoted portions of the arbitration documents.
It must be stressed that the very soul of an arbitration proceeding would be rendered useless if it would be simply used as an
avenue for evidence gathering or an entrapment mechanism to lure the other unsuspecting party into conveying information that
could be potentially used against him in another forum or in court.
Ultimately, the RTC and the CA failed to consider the fact that an arbitration proceeding is essentially a unique proceeding that is
non-litigious in character where the parties are bound by a different set of rules as clearly encapsulated under the Special ADR
Rules. Inevitably, when Lina cited portions of the said arbitration documents, he violated their covenant in the TOR to resolve
their dispute through the arbitration process and to honor the confidentiality of the said proceeding. To disregard this
commitment would impair the very essence of the ADR proceeding. By itself, this would have served as a valid justification for the
grant of the confidentiality/protection order in favor of FedEx and Jennings.
Thus, the claimed slanderous statements by Jennings during the arbitration hearing are deemed confidential information and the
veil of confidentiality over them must remain.
WHEREFORE, the petition is GRANTED. The January 20, 2015 Decision of the Court of Appeals (CA), in CA-G.R. SP No. 135835, is
REVERSED and SET ASIDE. The Petition for the Issuance of a Confidentiality/Protective Order filed by Federal Express Corporation
and Rhicke S. Jennings is hereby GRANTED.
g.4. Rendition of Award
- Section 19, Arbitration Law
Rendition of Award
Section 19, Arbitration Law
Section 19. Time for rendering award. - Unless the parties shall have stipulated by written agreement the time within which the
arbitrators must render their award, the written award of the arbitrators shall be rendered within thirty days after the closing of
the hearings or if the oral hearings shall have been waived, within thirty days after the arbitrators shall have declared such
proceedings in lieu of hearing closed. This period may be extended by mutual consent of the parties.
H. Correction, Confirmation, or Vacation of Award
h.1. Domestic Arbitration
Correction, Confirmation, or Vacation of Award
Domestic Arbitration
Who and when petition may be filed

[Rules 11.1-11.2, Special ADR Rules; Sections 23 and 28, The Arbitration Law;
Rule 11.1. Who may request confirmation, correction or vacation. - Any party to a domestic arbitration may petition the court to
confirm, correct or vacate a domestic arbitral award.
Rule 11.2. When to request confirmation, correction/modification or vacation. -
(A) Confirmation. - At any time after the lapse of thirty (30) days from receipt by the petitioner of the arbitral award, he may
petition the court to confirm that award.
(B) Correction/Modification. - Not later than thirty (30) days from receipt of the arbitral award, a party may petition the court to
correct/modify that award.
(C) Vacation. - Not later than thirty (30) days from receipt of the arbitral award, a party may petition the court to vacate that
award.
(D) A petition to vacate the arbitral award may be filed, in opposition to a petition to confirm the arbitral award, not later than
thirty (30) days from receipt of the award by the petitioner. A petition to vacate the arbitral award filed beyond the
reglementary period shall be dismissed.
(E) A petition to confirm the arbitral award may be filed, in opposition to a petition to vacate the arbitral award, at any time
after the petition to vacate such arbitral award is filed. The dismissal of the petition to vacate the arbitral award for having
been filed beyond the reglementary period shall not result in the dismissal of the petition for the confirmation of such
arbitral award.
(F) The filing of a petition to confirm an arbitral award shall not authorize the filing of a belated petition to vacate or set aside
such award in opposition thereto
(G) A petition to correct an arbitral award may be included as part of a petition to confirm the arbitral award or as a petition to
confirm that award.
Section 23. Confirmation of award. - At any time within one month after the award is made, any party to the controversy which
was arbitrated may apply to the court having jurisdiction, as provided in section twenty-eight, for an order confirming the award;
and thereupon the court must grant such order unless the award is vacated, modified or corrected, as prescribed herein. Notice
of such motion must be served upon the adverse party or his attorney as prescribed by law for the service of such notice upon
an attorney in action in the same court.
Section 28. Papers to accompany motion to confirm, modify, correct, or vacate award. - The party moving for an order
confirming, modifying, correcting, or vacating an award, shall at the time that such motion is filed with the court for the entry of
judgment thereon also file the following papers with the Clerk of Court;
(a) 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.
(b) A verified of the award.
(c) 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.
The judgment shall be docketed as if it were rendered in an action.
The judgment so entered shall have the same force and effect in all respects, as, and be subject to all the provisions relating to, a
judgment in an action; and it may be enforced as if it had been rendered in the court in which it is entered.
ABS-CBN Broadcasting Corp. v. World Interactive Network Systems Japan Co., Ltd.
568 PHIL 282 (2008)
FACTS:
Petitioner ABS-CBN Broadcasting Corporation entered into a licensing agreement with respondent World Interactive Network
Systems (WINS) Japan Co., Ltd., a foreign corporation licensed under the laws of Japan, in that the former granted respondent the
exclusive license to distribute and sublicense the distribution of the television service known as “The Filipino Channel” (TFC) in
Japan. By virtue thereof, petitioner undertook to transmit the TFC programming signals to respondent which the latter received
through its decoders and distributed to its subscribers. A dispute arose between the parties when petitioner accused respondent
of inserting nine episodes of WINS WEEKLY, a weekly 35-minute community news program for Filipinos in Japan, into the TFC
programming. Petitioner claimed that these were “unauthorized insertions” constituting a material breach of their agreement.
Consequently, petitioner notified respondent of its intention to terminate the agreement. Thereafter, respondent filed an
arbitration suit pursuant to the arbitration clause of its agreement with petitioner. The parties appointed Professor Alfredo F.
Tadiar to act as sole arbitrator who then rendered a decision in favor of respondent holding that petitioner gave its approval for
the airing of WINS WEEKLY as shown by a series of written exchanges between the parties and that petitioner threatened to
terminate the agreement due to its desire to compel respondent to renegotiate the terms thereof for higher fees. He then
allowed respondent to recover temperate damages, attorney’s fees and one-half of the amount it paid as arbitrator’s fee.
Petitioner filed in the CA a petition for review under Rule 43 of the Rules of Court or, in the alternative, a petition for certiorari
under Rule 65 of the same Rules, with application for temporary restraining order and writ of preliminary injunction. Respondent,
on the other hand, filed a petition for confirmation of arbitral award. The CA rendered the assailed decision dismissing ABS-CBN’s
petition for lack of jurisdiction. Petitioner moved for reconsideration but the same was denied.
ISSUE:
Whether or not an aggrieved party in a voluntary arbitration dispute may avail of, directly in the CA, a petition for review under
Rule 43 or a petition for certiorari under Rule 65 of the Rules of Court, instead of filing a petition to vacate the award in the RTC
when the grounds invoked to overturn the arbitrator’s decision are other than those for a petition to vacate an arbitral award
enumerated under RA 876.
RULING:
RA 876 itself mandates that it is the Court of First Instance, now the RTC, which has jurisdiction over questions relating to
arbitration, such as a petition to vacate an arbitral award. As RA 876 did not expressly provide for errors of fact and/or law and
grave abuse of discretion (proper grounds for a petition for review under Rule 43 and a petition for certiorari under Rule 65,
respectively) as grounds for maintaining a petition to vacate an arbitral award in the RTC, it necessarily follows that a party may
not avail of the latter remedy on the grounds of errors of fact and/or law or grave abuse of discretion to overturn an arbitral
award. Adamson v. Court of Appeals gave ample warning that a petition to vacate filed in the RTC which is not based on the
grounds enumerated in Section 24 of RA 876 should be dismissed.
In cases not falling under any of the aforementioned grounds to vacate an award, the Court has already made several
pronouncements that a petition for review under Rule 43 or a petition for certiorari under Rule 65 may be availed of in the CA.
Which one would depend on the grounds relied upon by petitioner.
Nevertheless, although petitioner’s position on the judicial remedies available to it was correct, we sustain the dismissal of its
petition by the CA. The remedy petitioner availed of, entitled “alternative petition for review under Rule 43 or petition for
certiorari under Rule 65,” was wrong. Time and again, we have ruled that the remedies of appeal and certiorari are mutually
exclusive and not alternative or successive.
A careful reading of the assigned errors reveals that the real issues calling for the CA’s resolution were less the alleged grave
abuse of discretion exercised by the arbitrator and more about the arbitrator’s appreciation of the issues and evidence presented
by the parties. Therefore, the issues clearly fall under the classification of errors of fact and law — questions which may be passed
upon by the CA via a petition for review under Rule 43. Petitioner cleverly crafted its assignment of errors in such a way as to
straddle both judicial remedies, that is, by alleging serious errors of fact and law (in which case a petition for review under Rule 43
would be proper) and grave abuse of discretion (because of which a petition for certiorari under Rule 65 would be permissible).
Wherefore, the petition is hereby denied. The decision and resolution of the CA directing the RTC to proceed with the trial of the
petition for confirmation of arbitral award is affirmed.
ABS-CBN NOT ANYMORE A GOOD LAW
Rule 19.7. No appeal or certiorari on the merits of an arbitral award. - 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.
Hi-Precision Steel Center, Inc. v. Lim Kim Steel Builders, Inc.,
G.R. No. 110434 (13 December 1993)
FACTS:
Hi- Precision entered a construction contract with Steel Builders, wherein Steel Builders would complete aP21M construction
project until Oct. 8, 1990. However, the project's completion date was moved to Nov.1990. Come Nov. 1990, the construction
was only almost 76% complete. Each party attributed delay to the other. Hi-Precision undertook the project and completed it
February 1991.Steel builders then filed a request for arbitration with the CIAC, as well as a complaint for collection of unpaid
progress buildings. The CIAC ordered Hi-Precision to pay Steel Builders. High Precision now goes to the SC to set aside the CIAC
Arbitrator's award alleging errors of law and grave abuse of discretion on the part of the CIAC.
ISSUE:
Whether or not there was serious error of law amounting to grave abuse of discretion resulting in lack of jurisdiction on the part
of the CIAC.
RULING:
Petition was dismissed. The matters raised by High Precision are really matters of fact that are not subject to review of the SC.
Based on the objective of voluntary arbitration in the construction industry, the Court will not assist one or the other or even both
parties in any effort to subvert or defeat that objective for their private purposes. The Court will not review the factual findings of
an arbitral tribunal upon the artful allegation that such body had "misapprehended the facts" and will not pass upon issues which
are, at bottom, issues of fact, no matter how cleverly disguised they might be as "legal questions." The parties here had recourse
to arbitration and chose the arbitrators themselves; they must have had confidence in such arbitrators.
ISSUE:
Whether the CIAC should be impleaded
RULING:
No. We note that the Arbitral Tribunal has not been impleaded as a respondent in the Petition at bar. The CIAC has indeed been
impleaded; however, the Arbitral Award was not rendered by the CIAC, but rather by the Arbitral Tribunal. Moreover, under
Section 20 of EO 1008, it is the Arbitral Tribunal, or the single Arbitrator, with the concurrence of the CIAC, which issues the writ
of execution requiring any sheriff or other proper officer to execute the award. The Arbitral Tribunal which rendered the Award
sought to be reviewed and set aside, should be impleaded even though the defense of its Award would presumably have to be
carried by the prevailing party. Petitioner Hi-Precision apparently seeks review of both under Rule 45 and Rule 65 of the Rules of
Court. We do not find it necessary to rule which of the two: a petition for review under Rule 45 or a petition for certiorari under
Rule 65 — is necessary under Executive Order No. 1008, as amended; this issue was, in any case, not squarely raised by either
party and has not been properly and adequately litigated.
ISSUE:
Whether petitioner is entitled to relief
RULING:
No. From the foregoing, petitioner Hi-Precision may be seen to be making two (2) basic arguments:
(a) Petitioner asks this Court to correct legal errors committed by the Arbitral Tribunal, which at the same time
constitute grave abuse of discretion amounting to lack of jurisdiction on the part of the Arbitral Tribunal; and
(b) Should the supposed errors petitioner asks us to correct be characterized as errors of fact, such factual errors
should nonetheless be reviewed because there was "grave abuse of discretion" in the misapprehension of facts
on the part of the Arbitral Tribunal.
Executive Order No. 1008, as amended, provides, in its Section 19, as follows:
Sec. 19. Finality of Awards. — The arbitral award shall be binding upon the parties. It shall be final and
inappealable except on questions of law which shall be appealable to the Supreme Court.
Section 19 makes it crystal clear that questions of fact cannot be raised in proceedings before the Supreme Court —
which is not a trier of facts — in respect of an arbitral award rendered under the aegis of the CIAC. Consideration of the
animating purpose of voluntary arbitration in general, and arbitration under the aegis of the CIAC in particular, requires
us to apply rigorously the above principle embodied in Section 19 that the Arbitral Tribunal's findings of fact shall be final
and inappealable.
Voluntary arbitration involves the reference of a dispute to an impartial body, the members of which are chosen by the parties
themselves, which parties freely consent in advance to abide by the arbitral award issued after proceedings where both parties
had the opportunity to be heard. The basic objective is to provide a speedy and inexpensive method of settling disputes by
allowing the parties to avoid the formalities, delay, expense and aggravation which commonly accompany ordinary litigation,
especially litigation which goes through the entire hierarchy of courts. Executive Order No. 1008 created an arbitration facility to
which the construction industry in the Philippines can have recourse. The Executive Order was enacted to encourage the early and
expeditious settlement of disputes in the construction industry, a public policy the implementation of which is necessary and
important for the realization of national development goals. 21
Aware of the objective of voluntary arbitration in the labor field, in the construction industry, and in any other area for that
matter, the Court will not assist one or the other or even both parties in any effort to subvert or defeat that objective for their
private purposes. The Court will not review the factual findings of an arbitral tribunal upon the artful allegation that such body
had "misapprehended the facts" and will not pass upon issues which are, at bottom, issues of fact, no matter how cleverly
disguised they might be as "legal questions." The parties here had recourse to arbitration and chose the arbitrators themselves;
they must have had confidence in such arbitrators. The Court will not, therefore, permit the parties to relitigate before it the
issues of facts previously presented and argued before the Arbitral Tribunal, save only where a very clear showing is made that, in
reaching its factual conclusions, the Arbitral Tribunal committed an error so egregious and hurtful to one party as to constitute a
grave abuse of discretion resulting in lack or loss of jurisdiction. 22 Prototypical examples would be factual conclusions of the
Tribunal which resulted in deprivation of one or the other party of a fair opportunity to present its position before the Arbitral
Tribunal, and an award obtained through fraud or the corruption of arbitrators. 23 Any other, more relaxed, rule would result in
setting at naught the basic objective of a voluntary arbitration and would reduce arbitration to a largely inutile institution.
Examination of the Petition at bar reveals that it is essentially an attempt to re-assert and re-litigate before this Court the detailed
or itemized factual claims made before the Arbitral Tribunal under a general averment that the Arbitral Tribunal had
"misapprehended the facts" submitted to it. In the present Petition, too, HiPrecision claims that the Arbitral Tribunal had
committed grave abuse of discretion amounting to lack of jurisdiction in reaching its factual and legal conclusions.
The first "legal issue" submitted by the Petition is the claimed misapplication by the Arbitral Tribunal of the first and second
paragraphs of Article 1911 of the Civil Code. 24 Article 1191 reads:
Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not
comply with what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of
damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should
become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons who have acquired the thing, in
accordance with articles 1385 and 1388 and the Mortgage Law.
Hi-Precision contends energetically that it is the injured party and that Steel Builders was the obligor who did not comply with
what was incumbent upon it, such that Steel Builders was the party in default and the entity guilty of negligence and delay. As the
injured party, Hi-Precision maintains that it may choose between the fulfillment or rescission of the obligation in accordance with
Article 1191, and is entitled to damages in either case. Thus, Hi-Precision continues, when the contractor Steel Builders defaulted
on the 153rd day of the original contract period, Hi-Precision opted for specific performance and gave Steel Builders a 30-day
extension period with which to complete the project.
What petitioner Hi-Precision, in its above argument, disregards is that the determination of whether HiPrecision or Steel Builders
was the "injured party" is not to be resolved by an application of Article 1191. That determination is eminently a question of fact,
for it requires ascertainment and identification of which the two (2) contending parties had first failed to comply with what is
incumbent upon it. In other words, the supposed misapplication of Article 1191, while ostensibly a "legal issue," is ultimately a
question of fact, i.e., the determination of the existence or non-existence of a fact or set of facts in respect of which Article 1191
may be properly applied. Thus, to ask this Court to correct a claimed misapplication or non-application of Article 1191 is to compel
this Court to determine which of the two (2) contending parties was the "injured party" or the "first infractor." As noted earlier,
the Arbitral Tribunal after the prolonged arbitration proceeding, was unable to make that factual determination and instead
concluded that both parties had committed breaches of their respective obligations. We will not review, and much less reverse,
that basic factual finding of the Arbitral Tribunal.
A second "legal issue" sought to be raised by petitioner Hi-Precision relates to the supposed failure of the Arbitral Tribunal to
apply the doctrines of estoppel and waiver as against Steel Builders. 25 The Arbitral Tribunal, after declaring that the parties were
mutually at fault, proceeded to enumerate the faults of each of the parties. One of the faults attributed to petitioner Hi-Precision
is that it had failed to give the contractor Steel Builders the required 15-day notice for termination of the contract. 26 This was
clearly a finding of fact on the part of the Tribunal, supported by the circumstance that per the record, petitioner had offered no
proof that it had complied with such 15-day notice required under Article 28.01 of the General Conditions of Contract forming
part of the Contract Documents. Petitioner Hi-Precision's argument is that a written Agreement dated 16 November 1990 with
Steel Builders concerning the take over of the project by HiPrecision, constituted waiver on the part of the latter of its right to a
15-day notice of contract termination. Whether or not that Agreement dated 16 November 1990 (a document not submitted to
this Court) is properly characterized as constituting waiver on the part of Steel Builders, may be conceded to be prima facie a
question of law; but, if it is, and assuming arguendo that the Arbitral Tribunal had erred in resolving it, that error clearly did not
constitute a grave abuse of discretion resulting in lack or loss of jurisdiction on the part of the Tribunal.
A third "legal issue" posed by Hi-Precision relates to the supposed failure on the part of the Arbitral Tribunal
"to uphold the supremacy of 'the law between the parties' and enforce it against private respondent [Steel Builders]." 27 The "law
between that parties" here involved is the "Technical Specifications" forming part of the Contract Documents. HiPrecision asserts
that the Arbitral Tribunal did not uphold the "law between the parties," but instead substituted the same with "its [own] absurd
inference and 'opinion' on mud." Here again, petitioner is merely disguising a factual question as a "legal issue," since petitioner is
in reality asking this Court to review the physical operations relating, e.g., to site preparation carried out by the contractor Steel
Builders and to determine whether such operations were in accordance with the Technical Specifications of the project. The
Arbitral Tribunal resolved Hi-Precision's claim by finding that Steel Builders had complied substantially with the Technical
Specifications. This Court will not pretend that it has the technical and engineering capability to review the resolution of that
factual issue by the Arbitral Tribunal.
Finally, the Petition asks this Court to "review serious errors in the findings of fact of the [Arbitral Tribunal]."
We consider that in asking this Court to go over each individual claim submitted by it and each individual countering claim
submitted by Steel Builders to the Arbitral Tribunal, petitioner Hi-Precision is asking this Court to pass upon claims which are
either clearly and directly factual in nature or require previous determination of factual issues. This upon the one hand. Upon the
other hand, the Court considers that petitioner Hi-Precision has failed to show any serious errors of law amounting to grave abuse
of discretion resulting in lack of jurisdiction on the part of the Arbitral Tribunal, in either the methods employed or the results
reached by the Arbitral Tribunal, in disposing of the detailed claims of the respective parties.
WHEREFORE, for all the foregoing, the Petition is hereby DISMISSED for lack of merit. Costs against petitioner.
Venue
[Section 40, ADR Act; Rule 11.3, Special ADR Rules]
SEC. 40. Confirmation of Award. - The confirmation of a domestic arbitral award shall be governed by Section 23 of R.A. 876.
A domestic arbitral award when confirmed shall be enforced in the same manner as final and executory decisions of the Regional
Trial Court.
The confirmation of a domestic award shall be made by the regional trial court in accordance with the Rules of Procedure to be
promulgated by the Supreme Court.
A CIAC arbitral award need not be confirmed by the regional trial court to be executory as provided under E.O. No. 1008.
Rule 11.3. Venue. - The petition for confirmation, correction/modification or vacation of a domestic arbitral award may be filed
with Regional Trial Court having jurisdiction over the place in which one of the parties is doing business, where any of the parties
reside or where arbitration proceedings were conducted
Grounds
[Rule 11.4 and 11.9 Special ADR Rules; Section 24, The Arbitration Law; Section 41, ADR Act; Section 2,
DAL]
Rule 11.4. Grounds. - (A) To vacate an arbitral award. - The arbitral award may be vacated on the following grounds:
a. The arbitral award was procured through corruption, fraud or other undue means;
b. There was evident partiality or corruption in the arbitral tribunal or any of its members;
c. The arbitral tribunal was guilty of misconduct or any form of misbehavior that has materially prejudiced the rights of
any party such as refusing to postpone a hearing upon sufficient cause shown or to hear evidence pertinent and
material to the controversy;
d. One or more of the arbitrators was disqualified to act as such under the law and willfully refrained from disclosing
such disqualification; or
e. The arbitral tribunal exceeded its powers, or so imperfectly executed them, such that a complete, final and definite
award upon the subject matter submitted to them was not made.
The award may also be vacated on any or all of the following grounds:
a. The arbitration agreement did not exist, or is invalid for any ground for the revocation of a contract or is otherwise
unenforceable; or
b. A party to arbitration is a minor or a person judicially declared to be incompetent.
The petition to vacate an arbitral award on the ground that the party to arbitration is a minor or a person judicially declared to
be incompetent shall be filed only on behalf of the minor or incompetent and shall allege that (a) the other party to arbitration
had knowingly entered into a submission or agreement with such minor or incompetent, or (b) the submission to arbitration was
made by a guardian or guardian ad litem who was not authorized to do so by a competent court.
In deciding the petition to vacate the arbitral award, the court shall disregard any other ground than those enumerated above.
(B) To correct/modify an arbitral award. - The Court may correct/modify or order the arbitral tribunal to correct/modify the
arbitral award in the following cases:
a. Where there was an evident miscalculation of figures or an evident mistake in the description of any person, thing or
property referred to in the award;
b. Where the arbitrators have awarded upon a matter not submitted to them, not affecting the merits of the decision
upon the matter submitted;
c. Where the arbitrators have omitted to resolve an issue submitted to them for resolution; or
d. 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.
A state may refuse to refuse award on the basis of public policy.
Asset Privatization Trust, et al. vs. Court of Appeals, et al.,

360 Phil. 768 (1998);
Courts not allowed to review the factual findings of the arbitrators.
There is rule 65 and 43, based on the basis of confirmation of award not on question of fact and law.
Pag nagrender award, next pet to vacate, exception 11.4.
Rule 65, only after rtc, after pet for vacate confirm etc.. to review the decision of rtc not the question of fact and law.
Adamson vs. Court of Appeals, 302 Phil. 638 (1994);
FACTS:
Adamson Management Corporation and Lucas Adamson on the one hand, and APAC Holdings Limited on the other, entered into a
contract whereby the former sold 99.97% of outstanding common shares of stocks of Adamson and Adamson, Inc. to the latter
for P24,384,600 plus the Net Asset Value of Adamson and Adamson, Inc. as of June 19, 1990. But the parties failed to agree on a
reasonable Net Asset Value. This prompted them to submit the case for arbitration in accordance with RA 876. The Arbitration
Committee rendered a decision finding the Net Asset Value of the Company to be P167,118. The Arbitration Committee
disregarded petitioners' argument. According to the Committee, however, the amount of P5,146,000 which was claimed as initial
NAV by petitioners, was merely an estimate of the Company's NAV as of February 28, 1990 which was still subject to financial
developments until June 19, 1990, the cut-off date. Aside from deciding the amount of NAV, the Committee also held that any
ambiguity in the contract should not necessarily be interpreted against private respondents because the parties had stipulated
that the draft of the agreement was submitted to petitioners for approval and that the latter even proposed changes which were
eventually incorporated in the final form of the Agreement. APAC Holdings Ltd. filed a petition for confirmation of the arbitration
award before the Makati RTC. Petitioners opposed the petition and prayed for the nullification, modification and/or correction of
the same, alleging that the arbitrators committed evident partiality and grave abuse of discretion. The RTC vacated the arbitration
award. The CA reversed.
ISSUE:
Whether the CA erred in affirming the arbitration award
RULING:
No. The CA, in reversing the trial court's decision held that the nullification of the decision of the Arbitration Committee was not
based on the grounds provided by the Arbitration Law and that ". . . petitioners herein have failed to substantiate with any
evidence their claim of partiality. Significantly, even as respondent judge ruled against the arbitrators' award, he could not find
fault with their impartiality and integrity. Evidently, the nullification of the award rendered at the case at bar was made not on the
basis of any of the grounds provided by law." Assailing the above conclusion, petitioners
argue that ". . . evident partiality is a state of mind that need not be proved by direct evidence but may be inferred from the
circumstances of the case. It is related to intention which is a mental process, an internal state of mind that must be judged by the
person's conduct and acts which are the best index of his intention." They pointed out that from the following circumstances may
be inferred the arbitrators' evident partiality:
1. the material difference between the results of the arbitrators' computation of the NAV and that of petitioners;
2. the alleged piecemeal interpretation by the arbitrators of the Agreement which went beyond the clear provisions of the contract
and negated the obvious intention of the parties;
3. reliance by the arbitrators on the financial statements and reports submitted by SGV which, according to petitioners, acted solely
for the interests of private respondents; and
4. the finding of the trial court that "the arbitration committee has advanced no valid justification to warrant a departure from the
well-settled rule in contract interpretation that if the terms of the contract are clear and leave no doubt upon the intention of the
contracting parties the literal meaning of its interpretation shall control."
We find no reason to depart from the Court of Appeal's conclusion.

Petitioners herein failed to prove their allegation of partiality on the part of the arbitrators. Proofs other than mere inferences are
needed to establish evident partiality. That they were disadvantaged by the decision of the Arbitration Committee does not prove
evident partiality.
Too much reliance has been accorded by petitioners on the decision of the trial court. However, we find that the same is but an
adaptation of the arguments of petitioners to defeat the petition for confirmation of the arbitral award in the trial court by herein
private respondent.
It is clear therefore, that the award was vacated not because of evident partiality of the arbitrators but because the latter
interpreted the contract in a way which was not favorable to herein petitioners and because it considered that herein private
respondents, by submitting the controversy to arbitration, was seeking to renege on its obligations under the contract.
That the award was unfavorable to petitioners herein did not prove evident partiality. That the arbitrators resorted to contract
interpretation neither constituted a ground for vacating the award because under the circumstances, the same was necessary to
settle the controversy between the parties regarding the amount of the NAV. In any case, this Court finds that the interpretation
made by the arbitrators did not create a new contract, as alleged by herein petitioners but was a faithful application of the
provisions of the Agreement. Neither was the award arbitrary for it was based on the statements prepared by the SGV which was
chosen by both parties to be the "auditors."
The trial court held that herein private respondent could not shirk from performing its obligations on account of the difficulty of
complying with the terms of the contract. It said further that the contract may be harsh but private respondent could not excuse
itself from performing its obligations on account of the ambiguity of the contract because as its drafter, private respondent was
well aware of the implications of the Agreement. We note herein that during the arbitration proceedings, the parties agreed that
the contract as prepared by private respondent, was submitted to petitioners for approval. Petitioners, therefore, are presumed
to have studied the provisions of the Agreement and agreed to its import when they approved and signed the same. When it was
submitted to arbitration to settle the issue regarding the computation of the NAV, petitioners agreed to be bound by the
judgment of the arbitration committee, except in cases where the grounds for vacating the award existed. Petitioners cannot now
refuse to perform its obligation after realizing that it had erred in its understanding of the Agreement.
Thus, petitioner cannot claim that the consideration for private respondent's acquisition of the outstanding common shares of
stock was grossly inadequate. If the NAV as computed was small, the result was not due to error in the computations made by the
arbitrators but due to the extent of the liabilities being borne by petitioners. During the arbitration proceedings, the committee
found that petitioner has been suffering losses since 1983, a fact which was not denied by petitioner. We cannot sustain the
argument of petitioners that the amount of P5,146,000.00 was an initial NAV as of February 28, 1990 to which should still be
added the value of tangible assets (excluding the land) and of intangible assets. If indeed the P5,146,000.00 was the initial NAV as
of February 28, 1990, then as of said date, the total assets and liabilities of the company have already been set off against each
other. NET ASSET VALUE is arrived at only after deducting TOTAL LIABILITIES from TOTAL ASSETS. "TOTAL ASSETS" includes those
that are tangible and intangible. If the amount of the tangible and intangible assets would still be added to the "initial NAV," this
would constitute double counting. Unless the company acquired new assets from February 28, 1990 up to June 19, 1990, no value
corresponding to tangible and intangible assets may be added to the NAV.
We also note that the computation by petitioners of the NAV did not reflect the liabilities of the company. The term "net asset
value" indicates the amount of assets exceeding the liabilities as differentiated from total assets which include the liabilities. If
petitioners were not satisfied, they could have presented their own financial statements to rebut SGV's report but this, they did
not do.
Lastly, in assailing the decision of the Court of Appeals, petitioners would have this Court believe that the respondent court held
that the decision of the arbitrators was not subject to review by the courts. This was not the position taken by the respondent
court.
It is clear then that the Court of Appeals reversed the trial court not because the latter reviewed the arbitration award involved
herein, but because the respondent appellate court found that the trial court had no legal basis for vacating the award.
Chug Fu Industries vs. Court of Appeals,

283 Phil. 474 (1992)
Facts: Petitioner Chung Fu Industries and Roblecor Philippines, Inc. forged a construction agreement whereby respondent
committed to construct and finish on December 31, 1989, petitioner 's industrial/factory complex in Cavite for P42,000,000. In the
event of disputes arising from the performance of subject contract, it was stipulated therein that the issue(s) shall be submitted
for resolution before a single arbitrator chosen by both parties. Apart from the construction agreement, Chung Fu and Roblecor
entered into two (2) other ancillary contracts, for the construction of a dormitory and support facilities and for the installation of
electrical, water and hydrant systems at the plant site. However, Roblecor failed to complete the work despite the extension of
time allowed it by Chung Fu. Subsequently, the latter had to take over the construction. Claiming an unsatisfied account of
P10,500,000.00 and unpaid progress billings of P2,370,179.23, Roblecor filed a petition for Compulsory Arbitration with prayer for
TRO before the RTC, pursuant to the arbitration clause in the construction agreement. Chung Fu moved to dismiss the petition
and further prayed for the quashing of the restraining order. Subsequent negotiations between the parties eventually led to the
formulation of an arbitration agreement. The RTC approved the agreement. Engr. Willardo Asuncion was appointed as the sole
arbitrator. Arbitrator Asuncion ordered petitioners to immediately pay respondent P16,108,801.00. He declared the award as
final and unappealable, pursuant to the Arbitration Agreement precluding judicial review of the award. Roblecor moved for the
confirmation of said award. On the other hand, Chung Fu moved to remand the case for further hearing and asked for a
reconsideration of the judgment award claiming that Arbitrator Asuncion committed twelve (12) instances of grave error by
disregarding the provisions of the parties' contract. The lower court denied petitioner’s motion to remand and granted Roblecor’s
Motion for Confirmation of Award. The CA affirmed.
ISSUE:
Whether the arbitration award is beyond the ambit of the court's power of judicial review.
RULING:
No. Sparse though the law and jurisprudence may be on the subject of arbitration in the Philippines, it was nonetheless
recognized in the Spanish Civil Code; specifically, the provisions on compromises made applicable to arbitrations under Articles
1820 and 1821. Although said provisions were repealed by implication with the repeal of the Spanish Law of Civil Procedure, these
and additional ones were reinstated in the present Civil Code. Arbitration found a fertile field in the resolution of labor-
management disputes in the Philippines. Although early on, CA 103 (1936) provided for compulsory arbitration as the state policy
to be administered by the CIR, in time such a modality gave way to voluntary arbitration. The Industrial Peace Act which was
passed in 1953 as RA875, favored the policy of free collective bargaining and resort to grievance procedure, in particular, as the
preferred mode of settling disputes in industry. It was accepted and enunciated more explicitly in the Labor Code, which was
passed on November 1, 1974 as PD 442, with the amendments later introduced by RA6715 (1989). That there was a growing need
for a law regulating arbitration in general was acknowledged when RA876 (1953), otherwise known as the Arbitration Law, was
passed. "Said Act was obviously adopted to supplement — not to supplant — the New Civil Code on arbitration. It expressly
declares that "the provisions of chapters one and two, Title XIV, Book IV of the Civil Code shall remain in force." In recognition of
the pressing need for an arbitral machinery for the early and expeditious settlement of disputes in the construction industry, a
CIAC was created by EO 1008, enacted on February 4, 1985. In practice nowadays, absent an agreement of the parties to resolve
their disputes via a particular mode, it is the regular courts that remain the fora to resolve such matters. However, the parties may
opt for recourse to third parties, exercising their basic freedom to "establish such stipulation, clauses, terms and conditions as
they may deem convenient, provided they are not contrary to law, morals, good customs, public order or public policy." In such a
case, resort to the arbitration process may be spelled out by them in a contract in anticipation of disputes that may arise between
them. Or this may be stipulated in a submission agreement when they are actually confronted by a dispute. Whatever be the
case, such recourse to an extrajudicial means of settlement is not intended to completely deprive the courts of jurisdiction. But
certainly, the stipulation to refer all future
disputes to an arbitrator or to submit an ongoing dispute to one is valid. Being part of a contract between the parties, it is binding
and enforceable in court in case one of them neglects, fails or refuses to arbitrate. Going a step further, in the event that they
declare their intention to refer their differences to arbitration first before taking court action, this constitutes a condition
precedent, such that where a suit has been instituted prematurely, the court shall suspend the same and the parties shall be
directed forthwith to proceed to arbitration. A court action may likewise be proven where the arbitrator has not been selected by
the parties. Under present law, may the parties who agree to submit their disputes to arbitration further provide that the
arbitrators' award shall be final, unappealable and executory? Article 2044 of the Civil Code recognizes the validity of such
stipulation, thus: Any stipulation that the arbitrators' award or decision shall be final is valid, without prejudice to Articles 2038,
2039 and 2040. Similarly, the Construction Industry Arbitration Law provides that the arbitral award "shall be final and
inappealable except on questions of law which shall be appealable to the Supreme Court." Under the original Labor Code,
voluntary arbitration awards or decisions were final, unappealable and executory. "However, voluntary arbitration awards or
decisions on money claims, involving an amount exceeding P100,000 or 40% of the paid-up capital of the respondent employer,
whichever is lower, maybe appealed to the NLRC on any of the following grounds: (a) abuse of discretion; and (b) gross
incompetence." It is to be noted that the appeal in the instances cited were to be made to the NLRC and not to the courts. With
the subsequent deletion of the provision from the LC, the voluntary arbitrator is now mandated to render an award or decision
within 20 calendar days from the date of submission of the dispute and such decision shall be final and executory after 10
calendar days from receipt of the copy of the award or decision by the parties. Where the parties agree that the decision of the
arbitrator shall be final and unappealable as in the instant case, the pivotal inquiry is whether subject arbitration award is indeed
beyond the ambit of the court's power of judicial review. We rule in the negative. It is stated explicitly under Art. 2044 CC that the
finality of the arbitrators' award is not absolute and without exceptions. Where the conditions described in Articles 203814, 2039
and 2040 applicable to both compromises and arbitrations are obtaining, the arbitrators' award may be annulled or rescinded. 19
Additionally, under Sections 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. What if courts refuse or neglect to inquire into the factual milieu of an arbitrator's
award to determine whether it is in accordance with law or within the scope of his authority? How may the power of judicial
review be invoked? 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. For "the writ of certiorari is an extraordinary remedy and that certiorari
jurisdiction is not to be equated with appellate jurisdiction. In a special civil action of certiorari, the Court will not engage in a
review of the facts found nor even of the law as interpreted or applied by the arbitrator unless the supposed errors of fact or of
law are so patent and gross and prejudicial as to amount to a grave abuse of discretion or an exces de pouvoir on the part of the
arbitrator." Even decisions of administrative agencies which are declared "final" by law are not exempt from judicial review when
so warranted. It should be stressed, too, that voluntary arbitrators, by the nature of their functions, act in a quasi-judicial
capacity. It stands to reason, therefore, that their decisions should not be beyond the scope of the power of judicial review of this
Court. After closely studying the list of errors, as well as petitioners' discussion of the same in their Motion to Remand Case For
Further Hearing and Reconsideration and Opposition to Motion for Confirmation of Award, we find that petitioners have amply
made out a case where the voluntary arbitrator failed to apply the terms and provisions of the Construction Agreement which
forms part of the law applicable as between the parties, thus committing a grave abuse of discretion. Furthermore, in granting
unjustified extra compensation to respondent for several items, he exceeded his powers — all of which would have constituted
ground for vacating the award under Section 24 (d) of the Arbitration Law. But the respondent trial court's refusal to look into the
merits of the case, despite prima facie showing of the existence of grounds warranting judicial review, effectively deprived
petitioners of their opportunity to prove or substantiate their allegations. In so doing, the trial court itself committed grave abuse
of discretion. Likewise, the appellate court, in not giving due course to the petition, committed grave abuse of discretion.
Respondent courts should not shirk from exercising their power to review, where under the applicable laws and jurisprudence,
such power may be rightfully exercised; more so where the objections raised against an arbitration award may properly constitute
grounds for annulling, vacating or modifying said award under the laws on arbitration.
Court Action
[Rule 11.9, Special ADR Rules;
Rule 11.9. Court action. - Unless a ground to vacate an arbitral award under Rule 11.5 above is fully established, the court shall
confirm the award.
An arbitral award shall enjoy the presumption that it was made and released in due course of arbitration and is subject to
confirmation by the court
In resolving the petition or petition in opposition thereto in accordance with these Special ADR Rules, the court shall either
confirm or vacate the arbitral award. The court shall not disturb the arbitral tribunal’s determination of facts and/or
interpretation of law.
In a petition to vacate an award or in petition to vacate an award in opposition to a petition to confirm the award, the
petitioner may simultaneously apply with the Court to refer the case back to the same arbitral tribunal for the purpose of
making a new or revised award or to direct a new hearing, or in the appropriate case, order the new hearing before a new
arbitral tribunal, the members of which shall be chosen in the manner provided in the arbitration agreement or submission, or
the law. In the latter case, any provision limiting the time in which the arbitral tribunal may make a decision shall be deemed
applicable to the new arbitral tribunal.
In referring the case back to the arbitral tribunal or to a new arbitral tribunal pursuant to Rule 24 of Republic Act No. 876, the
court may not direct it to revise its award in a particular way, or to revise its findings of fact or conclusions of law or otherwise
encroach upon the independence of an arbitral tribunal in the making of a final award.
Section 24. Grounds for vacating award. - In any one of the following cases, the court must make an order vacating the award
upon the petition of any party to the controversy when such party proves affirmatively that in the arbitration proceedings:
(a) The award was procured by corruption, fraud, or other undue means; or
(b) That there was evident partiality or corruption in the arbitrators or any of them; or
(c) That the arbitrators were guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown, or
in refusing to hear evidence pertinent and material to the controversy; that one or more of the arbitrators was
disqualified to act as such under section nine hereof, and wilfully refrained from disclosing such disqualifications or
of any other misbehavior by which the rights of any party have been materially prejudiced; or
(d) That the arbitrators exceeded their powers, or so imperfectly executed them, that a mutual, final and definite
award upon the subject matter submitted to them was not made.
Where an award is vacated, the court, in its discretion, may direct a new hearing either before the same arbitrators or before a
new arbitrator or arbitrators to be chosen in the manner provided in the submission or contract for the selection of the original
arbitrator or arbitrators, and any provision limiting the time in which the arbitrators may make a decision shall be deemed
applicable to the new arbitration and to commence from the date of the court's order.
Where the court vacates an award, costs, not exceeding fifty pesos and disbursements may be awarded to the prevailing party
and the payment thereof may be enforced in like manner as the payment of costs upon the motion in an action.
SEC. 41. Vacation Award. - A party to a domestic arbitration may question the arbitral award with the appropriate regional trial
court in accordance with the rules of procedure to be promulgated by the Supreme Court only on those grounds enumerated in
Section 25 of Republic Act No. 876. Any other ground raised against a domestic arbitral award shall be disregarded by the
regional trial court.
Section 2. Persons and matters subject to arbitration. - Two or more persons or parties may submit to the arbitration of one or
more arbitrators any controversy existing between them at the time of the submission and which may be the subject of an
action, or the parties to any contract may in such contract agree to settle by arbitration a controversy thereafter arising between
them. Such submission or contract shall be valid, enforceable and irrevocable, save upon such grounds as exist at law for the
revocation of any contract.
Such submission or contract may include question arising out of valuations, appraisals or other controversies which may be
collateral, incidental, precedent or subsequent to any issue between the parties.
A controversy cannot be arbitrated where one of the parties to the controversy is an infant, or a person judicially declared to be
incompetent, unless the appropriate court having jurisdiction approve a petition for permission to submit such controversy to
arbitration made by the general guardian or guardian ad litem of the infant or of the incompetent.
But where a person capable of entering into a submission or contract has knowingly entered into the same with a person
incapable of so doing, the objection on the ground of incapacity can be taken only in behalf of the person so incapacitated
National Steel Corp. v. RTC of Lanao del Norte,

364 PHIL 240 (1999)
FACTS:
Edward Willkom Enterprises Inc. together with Ramiro Construction and National Steel Corporation executed a contract whereby
the former jointly undertook the Contract for Site Development for the latter's Integrated Iron and Steel Mills Complex to be
established at Iligan City. Sometime in 1983, the services of Ramiro Construction was terminated and EWEI took over Ramiro's
contractual obligation. Due to this, extensions of time for the termination of the project, initially agreed to be finished on July 17,
1983, were granted by NSC. Differences later arose, EWEI filed a civil casebefore the RTC of Lanao del Norte, Branch 06 praying for
the payments of P458,381.001 with interest from the time of delay; the price adjustment as provided by PD 1594; and exemplary
damages in the amount of P50,000.00 and attorney's fees. The court upon joint motion of both parties had issued an order
dismissing the complaint and counterclaim . . . in view of the desire of both parties to implement Sec. 19 of the contract, providing
for a resolution of any conflict by arbitration. After series of hearings, the Arbitrators rendered the decision which is the subject
matter of these present causes of action, both initiated separately by the herein contending parties, substantial portion of which
directs NSC to pay EWEI. The RTC affirmed.
ISSUE:
Whether the court acted with grave abuse of discretion in not vacating the arbitrator's award.
RULING:
Thus, in a Petition to Vacate Arbitrator’s Decision before the trial court, regularity in the performance of official functions is
presumed and the complaining party has the burden of proving the existence of any of the grounds for vacating the award, as
provided for by Sections 24 of the Arbitration Law, to wit: (a) The award was procured by corruption, fraud or other undue means;
(b) That there was evident partiality or corruption in the arbitrators of any of them; or (c) That the arbitrators were guilty of
misconduct in refusing to postpone the hearing upon sufficient cause shown, or in refusing to hear evidence pertinent and
material to the controversy; that one or more of the arbitrators was disqualified to act as such under section nine hereof, and
wilfully refrained from disclosing such disqualification or of any other misbehavior by which the rights of any party have been
materially prejudiced; or (d) That the arbitrators exceeded their powers, or so imperfectly executed them, that a mutual, final and
definite award upon the subject matter submitted to them was not made. . . .
The grounds relied upon by the petitioner were the following (a) That there was evident partiality in the assailed decision of the
Arbitrators in favor of the respondent; and (b) That there was mistaken appreciation of the facts and application of the law by the
Arbitrators.
Petitioner’s allegation that there was evident partiality is untenable. It is anemic of evidentiary support. In the case of Adamson
vs. Court of Appeals, in upholding the decision of the Board of Arbitrators, this Court ruled that the fact that a party was
disadvantaged by the decision of the Arbitration Committee does not prove evident partiality. Proofs other than mere inference
are needed to establish evident partiality. Here, petitioner merely averred evident partiality without any proof to back it up.
Petitioner was never deprived of the right to present evidence nor was there any showing that the Board showed signs of any bias
in favor of EWEI.
Parentethically, and in the light of the record above-mentioned, this Court hereby holds that the Board of Arbitrators did not
commit any “evident partiality” imputed by petitioner NSC. Above all, this Court must sustain the said decision for it is a well-
settled rule that the actual findings of an administrative body should be affirmed if there is substantial evidence to support them
and the conclusions stated in the decision are not clearly against the law and jurisprudence, similar to the instant case,
Henceforth, every reasonable intendment will be indulged to give effect such proceedings and in favor of the regulatory and
integrity of the arbitrators act. Indeed, the allegation of evident partiality is not well-taken because the petitioner failed to
substantiate the same.
WHEREFORE, the awards made by the Board of Arbitrators which the trial court adopted in its decision are modified.
Practical value of confirmation of Award

[Article 2044, Civil Code]
ARTICLE 2044. Any stipulation that the arbitrators’ award or decision shall be final, is valid, without prejudice to articles 2038,
2039, and 2040. (n)
Not Summary in Nature

[Rule 1.3, Special ADR Rules]
Rule 1.3. Summary proceedings in certain cases.-The proceedings in the following instances are summary in nature and shall be
governed by this provision:
a. Judicial Relief Involving the Issue of Existence, Validity or Enforceability of the Arbitration Agreement;
b. Referral to ADR;
c. Interim Measures of Protection;
d. Appointment of Arbitrator;
e. Challenge to Appointment of Arbitrator;
f. Termination of Mandate of Arbitrator;
g. Assistance in Taking Evidence;
h. Confidentiality/Protective Orders; and
i. Deposit and Enforcement of Mediated Settlement Agreements.
(A) Service and filing of petition in summary proceedings.-The petitioner shall serve, either by personal service or courier, a
copy of the petition upon the respondent before the filing thereof. Proof of service shall be attached to the petition filed in
court.
For personal service, proof of service of the petition consists of the affidavit of the person who effected service, stating the
time, place and manner of the service on the respondent. For service by courier, proof of service consists of the signed courier
proof of delivery. If service is refused or has failed, the affidavit or delivery receipt must state the circumstances of the
attempted service and refusal or failure thereof.
(B) Notice.-Except for cases involving Referral to ADR and Confidentiality/Protective Orders made through motions, the court
shall, if it finds the petition sufficient in form and substance, send notice to the parties directing them to appear at a particular
time and date for the hearing thereof which shall be set no later than five (5) days from the lapse of the period for filing the
opposition or comment. The notice to the respondent shall contain a statement allowing him to file a comment or opposition to
the petition within fifteen (15) days from receipt of the notice.
The motion filed pursuant to the rules on Referral to ADR or Confidentiality/Protective Orders shall be set for hearing by the
movant and contain a notice of hearing that complies with the requirements under Rule 15 of the Rules of Court on motions
(C) Summary hearing. - In all cases, as far as practicable, the summary hearing shall be conducted in one (1) day and only for
purposes of clarifying facts.
Except in cases involving Referral to ADR or Confidentiality/Protective Orders made through motions, it shall be the court that
sets the petition for hearing within five (5) days from the lapse of the period for filing the opposition or comment.
(D) Resolution. - The court shall resolve the matter within a period of thirty (30) days from the day of the hearing.
When motion to vacate and when petition to vacate
REFERRAL TO ALTERNATIVE DISPUTE RESOLUTION

Who may file and when it may be made [Rules 4.1-4.2, Special
ADR Rules].
Rule 4.1. Who makes the request. - A party to a pending action filed in violation of the arbitration agreement, whether contained
in an arbitration clause or in a submission agreement, may request the court to refer the parties to arbitration in accordance with
such agreement.---- timely filed motion to refer Rule 4.2. When to make request.
(A) Where the arbitration agreement exists before the action is filed. - The request for referral shall be made not later than the
pre-trial conference. After the pre-trial conference, the court will only act upon the request for referral if it is made with the
agreement of all parties to the case.----if not timely filed- waived
(B) Submission agreement. - If there is no existing arbitration agreement at the time the case is filed but the parties
subsequently enter into an arbitration agreement, they may request the court to refer their dispute to arbitration at any time
during the proceedings.
nevertheless be commenced or continued, and an award may be made, while the action is pending before the court.---applies
during motion to refer
Forms and contents of petition

[Rule 4.3, Special ADR Rules; see also Rule 15 of A.M. No. 19-10-20-SC (2019 Rules)].
Rule 4.3. Contents of request. - The request for referral shall be in the form of a motion, which shall state that the dispute is
covered by an arbitration agreement.
Apart from other submissions, the movant shall attach to his motion an authentic copy of the arbitration agreement.
The request shall contain a notice of hearing addressed to all parties specifying the date and time when it would be heard. The
party making the request shall serve it upon the respondent to give him the opportunity to file a comment or opposition as
provided in the immediately succeeding Rule before the hearing.
RULE 15
Motions
Section 1. Motion defined. — A motion is an application for relief other than by a pleading. (1a)
Section 2. Motions must be in writings. — All motions shall be in writing except those made in open court or in the course of a
hearing or trial. (2a)
Section 3. Contents. — A motion shall state the relief sought to be obtained and the grounds upon which it is based, and if
required by these Rules or necessary to prove facts alleged therein, shall be accompanied by supporting affidavits and other
papers. (3a)
Section 4. Hearing of motion. — Except for motions which the court may act upon without prejudicing the rights of the adverse
party, every written motion shall be set for hearing by the applicant.
Every written motion required to be heard and the notice of the hearing thereof shall be served in such a manner as to ensure its
receipt by the other party at least three (3) days before the date of hearing, unless the court for good cause sets the hearing on
shorter notice. (4a)
Section 5. Notice of hearing. — The notice of hearing shall be addressed to all parties concerned, and shall specify the time and
date of the hearing which must not be later than ten (10) days after the filing of the motion. (5a)
Section 6. Proof of service necessary. — No written motion set for hearing shall be acted upon by the court without proof of
service thereof. (6a)
Section 7. Motion day. — Except for motions requiring immediate action, all motions shall be scheduled for hearing on Friday
afternoons, or if Friday is a non-working day, in the afternoon of the next working day. (7a)
Section 8. Omnibus motion. — Subject to the provisions of section 1 of Rule 9, a motion attacking a pleading, order, judgment, or
proceeding shall include all objections then available, and all objections not so included shall be deemed waived. (8a)
Section 9. Motion for leave. — A motion for leave to file a pleading or motion shall be accompanied by the pleading or motion
sought to be admitted. (n)
Section 10. Form. — The Rules applicable to pleadings shall apply to written motions so far as concerns caption, designation,
signature, and other matters of form. (9a)
Court action and relief [Rules 2.4 and 4.5-4.6, Special ADR
Rules].
Rule 2.4. 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.
Rule 4.5. Court action. - After hearing, the court shall stay the action and, considering the statement of policy embodied in Rule
2.4, above, refer the parties to arbitration if it finds prima facie, based on the pleadings and supporting documents submitted by
the parties, that there is an arbitration agreement and that the subject-matter of the dispute is capable of settlement or
resolution by arbitration in accordance with Section 6 of the ADR Act. Otherwise, the court shall continue with the judicial
proceedings.
Rule 4.6. No reconsideration, appeal or certiorari. - An order referring the dispute to arbitration shall be immediately executory
and shall not be subject to a motion for reconsideration, appeal or petition for certiorari.
An order denying the request to refer the dispute to arbitration shall not be subject to an appeal, but may be the subject of a
motion for reconsideration and/or a petition for certiorari.
Apparent exception to forum shopping [Rule 4.7, Special ADR

Rules].
Rule 4.7. Multiple actions and parties. - The court shall not decline to refer some or all of the parties to arbitration for any of the
following reasons:
a. Not all of the disputes subject of the civil action may be referred to arbitration;
b. Not all of the parties to the civil action are bound by the arbitration agreement and referral to arbitration would result
in multiplicity of suits;
c. The issues raised in the civil action could be speedily and efficiently resolved in its entirety by the court rather than in
arbitration;
d. Referral to arbitration does not appear to be the most prudent action; or
e. The stay of the action would prejudice the rights of the parties to the civil action who are not bound by the arbitration
agreement.
The court may, however, issue an order directing the inclusion in arbitration of those parties who are not bound by the arbitration
agreement but who agree to such inclusion provided those originally bound by it do not object to their inclusion.
Effect on Arbitral Proceedings [Rule 4.8, Special ADR

Rules].
H2. Compared with Recognition of Foreign Awards
International Commercial Foreign Arbitral Award

Arbitration Award
How to Enforce Award Petition to Recognize and Enforce
Period of Filing for Enforcement At any time from receipt of the award.
If a timely petition to set aside an arbitral award is filed, the opposing party must file therein
and in opposition thereto the petition for recognition and enforcement of the same award
within the period for filing an opposition.
How to Prevent Enforcement Petition to Set Aside Petition to Refuse Recognition
Period of Filing to Prevent Within 3 months from the time the petitioner receives a copy thereof.
Enforcement
Grounds to Prevent Enforcement 1. A party to the arbitration 1. A party to the arbitration agreement was under
agreement was under some some incapacity; or the said agreement is not valid
incapacity; or the said agreement is under the law to which the parties have subjected it
not valid under the law to which or, failing any indication thereof, under the law of the
the parties have subjected it or, country where the award was made; or
failing any indication thereof,
under the law of the country where 2. The party making the application was not given
the award was made; or proper notice of the appointment of an arbitrator or
of the arbitral proceedings or was otherwise unable to
2. The party making the application present his case; or
was not given proper notice of the
appointment of an arbitrator or of 3. The award deals with a dispute not contemplated
the arbitral proceedings or was by or not falling within the terms of the submission to
otherwise unable to present his arbitration, or contains decisions on matters beyond
case; or the scope of the submission to arbitration; provided
that, if the decisions on matters submitted to
3. The award deals with a dispute arbitration can be separated from those not so
not contemplated by or not falling submitted, only that part of the award which contains
within the terms of the submission decisions on matters not submitted to arbitration may
to arbitration, or contains decisions be set aside; or
on matters beyond the scope of
the submission to arbitration; 4. The composition of the arbitral tribunal or the
provided that, if the decisions on arbitral procedure was not in accordance with the
matters submitted to arbitration agreement of the parties or, failing such agreement,
can be separated from those not so was not in accordance with the law of the country
submitted, only that part of the where arbitration took place; or
award which contains decisions on
matters not submitted to 5. The award has not yet become binding on the
arbitration may be set aside; or parties or has been set aside or suspended by a court
of the country in which that award was made; or
4. The composition of the arbitral
tribunal or the arbitral procedure 6. The subject-matter of the dispute is not capable of
was not in accordance with the settlement or resolution by arbitration under
agreement of the parties or, failing Philippine law; or
such agreement, was not in
accordance with the law of the 7. The recognition or enforcement of the award would
country where arbitration took be contrary to public policy.
place; or
5. The subject-matter of the

dispute is not capable of
settlement or resolution by
arbitration under Philippine law; or
6. The recognition or enforcement

of the award would be contrary to
public policy.
Part II – Other Modes of Alternative Dispute Resolution
I. Mediation
A. General
- Definition [Section 3 (q), ADR see Section 7, ADR].
Sec. 3 (q) - "Mediation" means a voluntary process in which a mediator, selected by the disputing parties, facilitates communication
and negotiation, and assist the parties in reaching a voluntary agreement regarding a dispute.
SEC. 7. Scope. - The provisions of this Chapter shall cover voluntary mediation, whether ad hoc or institutional, other than court-
annexed. The term "mediation' shall include conciliation.
- Distinguished from Mediation-Arbitration [Section 3 (t), ADR].
Sec. 3 (t) - "Mediation-Arbitration" or Med-Arb is a step dispute resolution process involving both mediation and arbitration;
B. Confidentiality
- Definition [Sections 3(h), 9-10, and 12, ADR].
Sec 3. (h) - "Confidential information" means any information, relative to the subject of mediation or arbitration, expressly intended
by the source not to be disclosed, or obtained under circumstances that would create a reasonable expectation on behalf of the
source that the information shall not be disclosed. It shall include (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, as defined in this Act;
(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; and (3) pleadings, motions manifestations, witness
statements, reports filed or submitted in an arbitration or for expert evaluation;
SEC. 9. Confidentiality of Information. - Information obtained through mediation proceedings shall be subject to the following
principles and guidelines:
(a) Information obtained through mediation shall be privileged and confidential.
(b) A party, a mediator, or a nonparty participant may refuse to disclose and may prevent any other person from disclosing
a mediation communication.
(c) Confidential Information shall not be subject to discovery and shall be inadmissible if any adversarial proceeding,
whether judicial or quasi-judicial, However, evidence or information that is otherwise admissible or subject to discovery
does not become inadmissible or protected from discovery solely by reason of its use in a mediation.
(d) In such an adversarial proceeding, the following persons involved or previously involved in a mediation may not be
compelled to disclose confidential information obtained during mediation: (1) the parties to the dispute; (2) the mediator or
mediators; (3) the counsel for the parties; (4) the nonparty participants; (5) any persons hired or engaged in connection
with the mediation as secretary, stenographer, clerk or assistant; and (6) any other person who obtains or possesses
confidential information by reason of his/her profession.
(e) The protections of this Act shall continue to apply even of a mediator is found to have failed to act impartially.
(f) a mediator may not be called to testify to provide information gathered in mediation. A mediator who is wrongfully
subpoenaed shall be reimbursed the full cost of his attorney's fees and related expenses.
SEC. 10. Waiver of Confidentiality. - A privilege arising from the confidentiality of information may be waived in a record, or orally
during a proceeding by the mediator and the mediation parties.
A privilege arising from the confidentiality of information may likewise be waived by a nonparty participant if the information is
provided by such nonparty participant.
A person who discloses confidential information shall be precluded from asserting the privilege under Section 9 of this Chapter to
bar disclosure of the rest of the information necessary to a complete understanding of the previously disclosed information. If a
person suffers loss or damages in a judicial proceeding against the person who made the disclosure.
A person who discloses or makes a representation about a mediation is preclude from asserting the privilege under Section 9, to the
extent that the communication prejudices another person in the proceeding and it is necessary for the person prejudiced to respond
to the representation of disclosure.
SEC. 12. Prohibited Mediator Reports. - A mediator may not make a report, assessment, evaluation, recommendation, finding, or
other communication regarding a mediation to a court or agency or other authority that make a ruling on a dispute that is the
subject of a mediation, except:
(a) Where the mediation occurred or has terminated, or where a settlement was reached.
(b) As permitted to be disclosed under Section 13 of this Chapter.
- Exception to rule of privilege [Section 11, ADR].
SEC. 11. Exceptions to Privilege. -
(a) There is no privilege against disclosure under Section 9 if mediation communication is:
(1) in an agreement evidenced by a record authenticated by all parties to the agreement;
(2) available to the public or that is made during a session of a mediation which is open, or is required by law to be
open, to the public;
(3) a threat or statement of a plan to inflict bodily injury or commit a crime of violence;
(4) internationally used to plan a crime, attempt to commit, or commit a crime, or conceal an ongoing crime or
criminal activity;
(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 protected by law; but this exception does not apply where
a child protection matter is referred to mediation by a court or a public agency participates in the child protection
mediation;
(6) sought or offered to prove or disprove a claim or complaint of professional misconduct or malpractice filed
against mediator in a proceeding; or
(7) sought or offered to prove or disprove a claim of complaint of professional misconduct of malpractice filed
against a party, nonparty participant, or representative of a party based on conduct occurring during a mediation.
(b) There is no privilege under Section 9 if a court or administrative agency, finds, after a hearing in camera, that the party
seeking discovery of the proponent of the evidence has shown that the evidence is not otherwise available, that there is a
need for the evidence that substantially outweighs the interest in protecting confidentiality, and the mediation
communication is sought or offered in:
(1) a court proceeding involving a crime or felony; or
(2) a proceeding to prove a claim or defense that under the law is sufficient to reform or avoid a liability on a
contract arising out of the mediation.
(c) A mediator may not be compelled to provide evidence of a mediation communication or testify in such proceeding.
(d) If a mediation communication is not privileged under an exception in subsection (a) or (b), only the portion of the
communication necessary for the application of the exception for nondisclosure may be admitted. The admission of
particular evidence for the limited purpose of an exception does not render that evidence, or any other mediation
communication, admissible for any other purpose.
- Protective Orders [Rule 10, Special ADR Rules; See Part I (II) (G.3), supra]
RULE 10: CONFIDENTIALITY/PROTECTIVE ORDERS
Rule 10.1. Who may request confidentiality. - A party, counsel or witness who disclosed or who was compelled to disclose
information relative to the subject of ADR under circumstances that would create a reasonable expectation, on behalf of the source,
that the information shall be kept confidential has the right to prevent such information from being further disclosed without the
express written consent of the source or the party who made the disclosure.
Rule 10.2. When request made. - A party may request a protective order at anytime there is a need to enforce the confidentiality of
the information obtained, or to be obtained, in ADR proceedings.
Rule 10.3. Venue. - A petition for a protective order may be filed with the Regional Trial Court where that order would be
implemented.
If there is a pending court proceeding in which the information obtained in an ADR proceeding is required to be divulged or is being
divulged, the party seeking to enforce the confidentiality of the information may file a motion with the court where the proceedings
are pending to enjoin the confidential information from being divulged or to suppress confidential information.
Rule 10.4. Grounds. - A protective order may be granted only if it is shown that the applicant would be materially prejudiced by an
unauthorized disclosure of the information obtained, or to be obtained, during an ADR proceeding.
Rule 10.5. Contents of the motion or petition. - The petition or motion must state the following:
a. That the information sought to be protected was obtained, or would be obtained, during an ADR proceeding;
b. The applicant would be materially prejudiced by the disclosure of that information;
c. The person or persons who are being asked to divulge the confidential information participated in an ADR proceedings;
and
d. The time, date and place when the ADR proceedings took place.
Apart from the other submissions, the movant must set the motion for hearing and contain a notice of hearing in accordance with
Rule 15 of the Rules of Court.
Rule 10.6. Notice. - Notice of a request for a protective order made through a motion shall be made to the opposing parties in
accordance with Rule 15 of the Rules of Court.
Rule 10.7. Comment/Opposition. - The comment/opposition must be filed within fifteen (15) days from service of the petition. The
opposition or comment may be accompanied by written proof that (a) the information is not confidential, (b) the information was
not obtained during an ADR proceeding, (c) there was a waiver of confidentiality, or (d) the petitioner/movant is precluded from
asserting confidentiality.
Rule 10.8. Court action. - If the court finds the petition or motion meritorious, it shall issue an order enjoining a person or persons
from divulging confidential information.
Confidential information shall not be subject to discovery and shall be inadmissible in any adversarial proceeding, whether judicial or
quasi judicial. However, evidence or information that is otherwise admissible or subject to discovery does not become inadmissible
or protected from discovery solely by reason of its use therein.
For mediation proceedings, the court shall be further guided by the following principles:
a. Information obtained through mediation shall be privileged and confidential.
b. A party, a mediator, or a nonparty participant may refuse to disclose and may prevent any other person from disclosing a
mediation communication.
c. In such an adversarial proceeding, the following persons involved or previously involved in a mediation may not be
compelled to disclose confidential information obtained during the mediation: (1) the parties to the dispute; (2) the
mediator or mediators; (3) the counsel for the parties: (4) the nonparty participants; (5) any persons hired or engaged in
connection with the mediation as secretary, stenographer; clerk or assistant; and (6) any other person who obtains or
possesses confidential information by reason of his/ her profession.
d. The protection of the ADR Laws shall continue to apply even if a mediator is found to have failed to act impartially.
e. A mediator may not be called to testify to provide information gathered in mediation. A mediator who is wrongfully
subpoenaed shall be reimbursed the full cost of his attorney fees and related expenses.
Rule 10.9. Relief against court action. - The order enjoining a person or persons from divulging confidential information shall be
immediately executory and may not be enjoined while the order is being questioned with the appellate courts.
If the court declines to enjoin a person or persons from divulging confidential information, the petitioner may file a motion for
reconsideration or appeal.
Rule 10.10. Consequence of disobedience. - Any person who disobeys the order of the court to cease from divulging confidential
information shall be imposed the proper sanction by the court.
C. Mediated Settlement Agreement

- Section 17, ADR, Rule 15.1-15.2, 15.5, and 15.8, Special ADR Rules.
SEC. 17. Enforcement of Mediated Settlement Agreement. - The mediation shall be guided by the following operative principles:
(a) A settlement agreement following successful mediation shall be prepared by the parties with the assistance of their
respective counsel, if any, and by the mediator.
The parties and their respective counsels shall endeavor to make the terms and condition thereof complete and make
adequate provisions for the contingency of breach to avoid conflicting interpretations of the agreement.
(b) The parties and their respective counsels, if any, shall sign the settlement agreement. The mediator shall certify that
he/she explained the contents of the settlement agreement to the parties in a language known to them.
(c) If the parties so desire, they may deposit such settlement agreement with the appropriate Clerk of a Regional Trial Court
of the place where one of the parties resides. Where there is a need to enforce the settlement agreement, a petition may
be filed by any of the parties with the same court, in which case, the court shall proceed summarily to hear the petition, in
accordance with such rules of procedure as may be promulgated by the Supreme Court.
(d) The parties may agree in the settlement agreement that the mediator shall become a sole arbitrator for the dispute and
shall treat the settlement agreement as an arbitral award which shall be subject to enforcement under Republic Act No.
876, otherwise known as the Arbitration Law, notwithstanding the provisions of Executive Order No. 1008 for mediated
dispute outside of the CIAC.
Rule 15.1. Who makes a deposit. - Any party to a mediation that is not court-annexed may deposit with the court the written
settlement agreement, which resulted from that mediation.
Rule 15.2. When deposit is made. - At any time after an agreement is reached, the written settlement agreement may be deposited.
Rule 15.5. Enforcement of mediated settlement agreement. - Any of the parties to a mediated settlement agreement, which was
deposited with the Clerk of Court of the Regional Trial Court, may, upon breach thereof, file a verified petition with the same court
to enforce said agreement.
Rule 15.8. Court action. - After a summary hearing, if the court finds that the agreement is a valid mediated settlement agreement,
that there is no merit in any of the affirmative or negative defenses raised, and the respondent has breached that agreement, in
whole or in part, the court shall order the enforcement thereof; otherwise, it shall dismiss the petition.
Miguel v. Montanez. GR. No. 191336
The petitioner contends that the CA erred in ruling that she should have followed the procedure for enforcement of the
amicable settlement as provided in the Revised Katarungang Pambarangay Law, instead of filing a collection case. The
petitioner points out that the cause of action did not arise from the Kasunduang Pag-aayos but on the respondent’s breach
of the original loan agreement.15
This Court agrees with the petitioner.
It is true that an amicable settlement reached at the barangay conciliation proceedings, like the Kasunduang Pag-aayos in
this case, is binding between the contracting parties and, upon its perfection, is immediately executory insofar as it is not
contrary to law, good morals, good customs, public order and public policy. 16 This is in accord with the broad precept of
Article 2037 of the Civil Code, viz:
A compromise has upon the parties the effect and authority of res judicata; but there shall be no execution except in
compliance with a judicial compromise.
Being a by-product of mutual concessions and good faith of the parties, an amicable settlement has the force and effect of
res judicata even if not judicially approved. 17 It transcends being a mere contract binding only upon the parties thereto, and
is akin to a judgment that is subject to execution in accordance with the Rules. 18 Thus, under Section 417 of the Local
Government Code,19 such amicable settlement or arbitration award may be enforced by execution by the Barangay Lupon
within six (6) months from the date of settlement, or by filing an action to enforce such settlement in the appropriate city or
municipal court, if beyond the six-month period.
Under the first remedy, the proceedings are covered by the Local Government Code and the Katarungang Pambarangay
Implementing Rules and Regulations. The Punong Barangay is called upon during the hearing to determine solely the fact of
non-compliance of the terms of the settlement and to give the defaulting party another chance at voluntarily complying
with his obligation under the settlement. Under the second remedy, the proceedings are governed by the Rules of Court, as
amended. The cause of action is the amicable settlement itself, which, by operation of law, has the force and effect of a
final judgment.20
It must be emphasized, however, that enforcement by execution of the amicable settlement, either under the first or the
second remedy, is only applicable if the contracting parties have not repudiated such settlement within ten (10) days from
the date thereof in accordance with Section 416 of the Local Government Code. If the amicable settlement is repudiated by
one party, either expressly or impliedly, the other party has two options, namely, to enforce the compromise in accordance
with the Local Government Code or Rules of Court as the case may be, or to consider it rescinded and insist upon his
original demand. This is in accord with Article 2041 of the Civil Code, which qualifies the broad application of Article 2037,
viz:
If one of the parties fails or refuses to abide by the compromise, the other party may either enforce the compromise or
regard it as rescinded and insist upon his original demand.
D. Distinguished from Court-Annex Mediation and Court-Referred Mediation

- Sections 3(l) and 3(m), ADR.
Sec. 3(l) - "Court-Annexed Mediation" means any mediation process conducted under the auspices of the court, after such court has
acquired jurisdiction of the dispute;
Sec. 3 (m) - "Court-Referred Mediation" means mediation ordered by a court to be conducted in accordance with the Agreement of
the Parties when as action is prematurely commenced in violation of such agreement;
II. Early Neutral Evaluation and Mini-Trial
- Definition [Sections 3 (n) and 3 (u), ADR].
Sec. 3 (n) - "Early Neutral Evaluation" means an ADR process wherein parties and their lawyers are brought together early in a pre-
trial phase to present summaries of their cases and receive a nonbinding assessment by an experienced, neutral person, with
expertise in the subject in the substance of the dispute;
Sec. 3 (u) - "Mini-Trial" means a structured dispute resolution method in which the merits of a case are argued before a panel
comprising senior decision makers with or without the presence of a neutral third person after which the parties seek a negotiated
settlement;
Guide Qs:
What are the cases referrable to mediation? What are those cases prohibited by law to be subject to mediation?
Re: Anonymous Complaints against Hon. Dinah Evangeline B. Bandong, former Presiding Judge, Regional Trial Court, Branch 59,
Lucena City, Quezon Province. , October 9, 2017. See Footnotes 32-33.
To decongest court dockets and enhance access to justice, the Court through A.M. No. 01-10-05-SC-PHILJA
approved the institutionalization of mediation in the Philippines through court-annexed mediation. Along with this,
structures and guidelines for the implementation of court-annexed mediation were put in place. Trial courts, therefore,
cannot just indiscriminately refer for mediation any case to just anybody. For one, there are cases which shall 32 and shall
not33 be referred to court-annexed mediation. For another, mediatable cases where amicable settlement is possible must
be referred by the trial courts to the PMC, who in turn, shall assist the parties in selecting a mutually acceptable mediator
from its list of duly accredited mediators. Here, Criminal Case No. 2005-1127 involving frustrated homicide is apparently not
a mediatable case. Clearly on this score alone, Judge Bandong had already violated A.M. No. 01-10-05-SCPHILJA. Worse,
Judge Bandong entrusted the settlement of the case to Parfan, a Court Stenographer, who obviously was not a qualified,
trained, or an accredited mediator. It must be emphasized that while courts and their personnel are enjoined to assist in
the successful implementation of mediation, A.M. No. 01-10- 05-SC-PHILJA does not authorize them to conduct the
mediation themselves. Mediation of cases can only be done by individuals who possess the basic qualifications for the
position, have undergone relevant trainings, seminars-workshops, and internship programs and were duly accredited by the
court as mediators. These are to ensure that the mediators have the ability to discharge their responsibility of seeing to it
that the parties to a case consider and understand the terms of a settlement agreement. Unlike therefore when the
mediation is facilitated by an accredited mediator, there is great danger that legal rights or obligations of parties may be
adversely affected by an improper settlement if mediation is handled by an ordinary court employee.
The above important points could not have been unwittingly missed out by Judge Bandong. As opined by the OCA,
Judge Bandong could not feign ignorance of A.M. No. 01-10-05-SC-PHILJA since the Philippine Judicial Academy frequently
conducts "conventions and seminars for judges and clerks of court nationwide regarding the implementation of court-
annexed mediations and judicial dispute resolutions." 34 To the mind of the Court, Judge Bandong knowingly made the
wrongful referral because her indolence got the better of her. Indeed, this wanton disregard and mockery of the proper
procedure in mediation of cases, as correctly held by the OCA, was tantamount to misconduct.
Misconduct is defined as a transgression of some established and definite rule of action, a forbidden act, a dereliction of
duty, unlawful behavior, willful in character, improper or wrong behavior. The misconduct is grave if it involves any of the
additional elements of corruption, willful intent to violate the law, or to disregard established rules, which must be
established by substantial evidence. As distinguished from simple misconduct, the elements of corruption, clear intent to
violate the law, or flagrant disregard of established rule, must be manifest in a charge of grave misconduct. 35
Here, the misconduct committed by Judge Bandong was grave since the circumstances obtaining established her flagrant
disregard of the rules on referral of cases for mediation. Judge Bandong committed a patent deviation from the rules when
she wrongfully referred a non-mediatable case to her staff, a court stenographer, who was not an accredited mediator .
This was despite the expectation that as a member of the bench, she not only knows the rules and regulations promulgated
by this Court but also faithfully complies with it. Indeed, Judge Bandong is guilty of grave misconduct.
What are the legal consequences of failure of a party to appear before mediation proceeding?
CHAN KENT, represented by ROSITA MANALANG, vs. MICAREZ, G.R. No. 185758, March 9, 2011
ISSUE: whether the RTC erred in dismissing Civil Case No. 13-2007 due to the failure of petitioner’s duly
authorized representative, Manalang, and her counsel to attend the mediation proceedings under the provisions of A.M. No.
01-10-5-SC-PHILJA and 1997 Rules on Civil Procedure.
RULING: In the interest of justice, the Court grants the petition.
A.M. No. 01-10-5-SC-PHILJA dated October 16, 2001, otherwise known as the Second Revised Guidelines for the
Implementation of Mediation Proceedings, was issued pursuant to par. (5), Section 5, Article VII of the 1987 Constitution
mandating this Court to promulgate rules providing for a simplified and inexpensive procedure for the speedy disposition of
cases. Also, Section 2(a), Rule 18 of the 1997 Rules of Civil Procedure, as amended, requires the courts to consider the
possibility of an amicable settlement or of submission to alternative modes of resolution for the early settlement of
disputes so as to put an end to litigations. The provisions of A.M. No. 01-10-5-SC-PHILJA pertinent to the case at bench are
as follows:
9. Personal appearance/Proper authorizations
Individual parties are encouraged to personally appear for mediation. In the event they cannot attend, their representatives
must be fully authorized to appear, negotiate and enter into a compromise by a Special Power of Attorney. A corporation
shall, by board resolution, fully authorize its representative to appear, negotiate and enter into a compromise agreement.
12. Sanctions
Since mediation is part of Pre-Trial, the trial court shall impose the appropriate sanction including but not limited
to censure, reprimand, contempt and such other sanctions as are provided under the Rules of Court for failure to appear for
pre-trial, in case any or both of the parties absent himself/themselves, or for abusive conduct during mediation
proceedings. [Underscoring supplied]
To reiterate, A.M. No. 01-10-5-SC-PHILJA regards mediation as part of pre-trial where parties are encouraged to personally
attend the proceedings. The personal non-appearance, however, of a party may be excused only when the representative,
who appears in his behalf, has been duly authorized to enter into possible amicable settlement or to submit to alternative
modes of dispute resolution. To ensure the attendance of the parties, A.M. No. 01-10-5-SC-PHILJA specifically enumerates
the sanctions that the court can impose upon a party who fails to appear in the proceedings which includes censure,
reprimand, contempt, and even dismissal of the action in relation to Section 5, Rule 18 of the Rules of Court. 15 The
respective lawyers of the parties may attend the proceedings and, if they do so, they are enjoined to cooperate with the
mediator for the successful amicable settlement of disputes 16 so as to effectively reduce docket congestion.
Although the RTC has legal basis to order the dismissal of Civil Case No. 13-2007, the Court finds this sanction too severe to
be imposed on the petitioner where the records of the case is devoid of evidence of willful or flagrant disregard of the rules
on mediation proceedings. There is no clear demonstration that the absence of petitioner’s representative during
mediation proceedings on March 1, 2008 was intended to perpetuate delay in the litigation of the case. Neither is it
indicative of lack of interest on the part of petitioner to enter into a possible amicable settlement of the case.
Is there a special qualification/s for mediators required by law or jurisprudence?
CHAN KENT, represented by ROSITA MANALANG, vs. MICAREZ, G.R. No. 185758, March 9, 2011
Rule on confidentiality
Federal Express Corp. v. Airfreight 2100, Inc., 809 SCRA 382 (2016)].
The crucial issue in this case is whether the testimony of Jennings given during the arbitration proceedings falls within the
ambit of confidential information and, therefore, covered by the mantle of a confidentiality/protection order.
The Court finds the petition meritorious.
Section 3(h) of Republic Act (R.A.) No. 9285 or the Alternative Dispute Resolution of 2004 (ADR Act) defines confidential
information as follows:
"Confidential information" means any information, relative to the subject of mediation or arbitration, expressly intended
by the source not to be disclosed, or obtained under circumstances that would create a reasonable expectation on behalf of
the source that the information shall not be disclosed. It shall include (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, as defined in this Act; (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; and (3)
pleadings, motions manifestations, witness statements, reports filed or submitted in an arbitration or for expert
evaluation. [Emphases Supplied]
The said list is not exclusive and may include other information as long as they satisfy the requirements of express
confidentiality or implied confidentiality. 18
Plainly, Rule 10.1 of A.M. No. 07-11-08-SC or the Special Rules of Court on Alternative Dispute Resolution (Special ADR
Rules) allows "[a] party, counsel or witness who disclosed or who was compelled to disclose information relative to the
subject of ADR under circumstances that would create a reasonable expectation, on behalf of the source, that the
information shall be kept confidential xxx the right to prevent such information from being further disclosed without the
express written consent of the source or the party who made the disclosure." Thus, the rules on confidentiality and
protective orders apply when:
1. An ADR proceeding is pending;
2. A party, counsel or witness disclosed information or was otherwise compelled to disclose information;
3. The disclosure was made under circumstances that would create a reasonable expectation, on behalf of the source, that
the information shall be kept confidential;
4. The source of the information or the party who made the disclosure has the right to prevent such information from being
disclosed;
5. The source of the information or the party who made the disclosure has not given his express consent to any disclosure;
and
6. The applicant would be materially prejudiced by an unauthorized disclosure of the information obtained, or to be
obtained, during the ADR proceeding.
Gauged by the said parameters, the written statements of witnesses Ross, Holmes and Jennings, as well as the latter's oral
testimony in the April 25, 2013 arbitration hearing, both fall under Section 3 (h) [1] and [3] of the ADR Act which states
that "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, as defined in this Act; and (3) pleadings, motions,
manifestations, witness statements, reports filed or submitted in an arbitration or for expert valuation," constitutes
confidential information.
Notably, both the parties and the Arbitral Tribunal had agreed to the Terms of Reference (TOR) that "the arbitration
proceedings should be kept strictly confidential as provided in Section 23 of the ADR Act and Article 25-A 19 of the PDRCI
Arbitration Rules (Arbitration Rules) and that they should all be bound by such confidentiality requirements."
The provisions of the ADR Act and the Arbitration Rules repeatedly employ the word "shall" which, in statutory
construction, is one of mandatory character in common parlance and in ordinary signification. 20 Thus, the general rule is
that information disclosed by a party or witness in an ADR proceeding is considered privileged and confidential.
In evaluating the merits of the petition, Rule 10.8 of the Special ADR Rules mandates that courts should be guided by the
principle that confidential information shall not be subject to discovery and shall be inadmissible in any adversarial
proceeding, to wit:
Confidential information shall not be subject to discovery and shall be inadmissible in any adversarial proceeding, whether
judicial or quasi judicial. However, evidence or information that is otherwise admissible or subject to discovery does not
become inadmissible or protected from discovery solely by reason of its use therein.
Article 5.42 of the Implementing Rules and Regulations (JRR)21 of the ADR Act likewise echoes that arbitration proceedings,
records, evidence and the arbitral award and other confidential information are privileged and confidential and shall not be
published except [i] with the consent of the parties; or [ii] for the limited purpose of disclosing to the court relevant
documents where resort to the court is allowed. Given that the witness statements of Ross, Holmes and Jennings, and the
latter's arbitration testimony, fall within the ambit of confidential information, they must, as a general rule, remain
confidential. Although there is no unbridled shroud of confidentiality on information obtained or disclosed in an arbitration
proceeding, the presence of the above criteria must be apparent; otherwise, the general rule should be applied. Here in this
case, only a perceived imputation of a wrongdoing was alleged by the respondents.
In denying the said application for confidentiality/protection order, the RTC and the CA did not consider the declarations
contained in the said witness statements and arbitration testimony to be related to the subject of arbitration and,
accordingly, ruled that they could not be covered by a confidentiality order.
The Court does not agree. Suffice it to say that the phrase "relative to the subject of mediation or arbitration" need not be
strictly confined to the discussion of the core issues in the arbitral dispute. By definition, "relative" simply means
"connected to," which means that parties in arbitration proceedings are encouraged to discuss openly their grievances and
explore the circumstances which might have any connection in identifying the source of the conflict in the hope of finding a
better alternative to resolve the parties' dispute. An ADR proceeding is aimed at resolving the parties' conflict without court
intervention. It was not designed to be strictly technical or legally confined at all times. By mutual agreement or consent of
the parties to a controversy or dispute, they acquiesce to submit their differences to arbitrators for an informal hearing and
extra-judicial determination and resolution. Usually, an ADR hearing is held in private and the decision of the persons
selected to comprise the tribunal will take the place of a court judgment. This avoids the formalities, delays and expenses of
an ordinary litigation. Arbitration, as envisioned by the ADR Act, must be taken in this perspective.
Verily, it is imperative that legislative intent or spirit be the controlling factor, the leading star and guiding light in the
application and interpretation of a statute. 22 If a statute needs construction, the influence most dominant in that process is
the intent or spirit of the act.23 A thing which is within the intent of the lawmaker is as much within the statute as if within
the letter; and a thing which is within the letter of the statute is not within the statute unless within the intent of the
lawmakers.24 In other words, a statute must be read according to its spirit or intent and legislative intent is part and parcel
of the statute. It is the controlling factor in interpreting a statute. Any interpretation that contradicts the legislative intent is
unacceptable.
In the case at bench, the supposed questionable statements surfaced when FedEx's suspended IFF license was discussed
during the arbitration hearing. In fact, when Jennings was asked by Arbitrator Panga to expound on how the opposition of
Ace and Merit could be related to the ongoing arbitration, Jennings replied that, to his mind, it was indicative of the
leverage that Air21 had over FedEx as it was able to withhold large sums of money and siphon their joint plans from being
properly established. Whether the information disclosed in the arbitration proceeding would be given weight by the
tribunal in the resolution of their dispute is a separate matter. Likewise, the relevance or materiality of the said statements
should be best left to the arbitrators' sound appreciation and judgment. Even granting that the weight of the said
statements was not fundamental to the issues in the arbitration process, nevertheless, they were still connected to, and
propounded by, a witness who relied upon the confidentiality of the proceedings and expect that his responses be
reflected.
Arbitration, being an ADR proceeding, was primarily designed to be a prompt, economical and amicable forum for the
resolution of disputes.1âwphi1 It guarantees confidentiality in its processes to encourage parties to ventilate their claims or
disputes in a less formal, but spontaneous manner. It should be emphasized that the law favors settlement of controversies
out of court. Thus, a person who participates in an arbitration proceeding is entitled to speak his or her piece without fear
of being prejudiced should the process become unsuccessful. Hence, any communication made towards that end should be
regarded as confidential and privileged.
To restate, the confidential nature of the arbitration proceeding is well-entrenched in Section 23 of the ADR Act:
SEC. 23. Confidentiality of Arbitration Proceedings. - The arbitration proceedings, including the records, evidence and the
arbitral award, shall be considered confidential and shall not be published except (1) with the consent of the parties, or (2)
for the limited purpose of disclosing to the court of relevant documents in cases where resort to the court is allowed herein.
Provided, however, that the court in which the 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.
If Lina had legal grounds to suspect that Jennings committed slanderous remarks even before the arbitration proceeding
commenced, then he must present evidence independent and apart from some quoted portions of the arbitration
documents.
It must be stressed that the very soul of an arbitration proceeding would be rendered useless if it would be simply used as
an avenue for evidence gathering or an entrapment mechanism to lure the other unsuspecting party into conveying
information that could be potentially used against him in another forum or in court.
Ultimately, the RTC and the CA failed to consider the fact that an arbitration proceeding is essentially a unique proceeding
that is non-litigious in character where the parties are bound by a different set of rules as clearly encapsulated under the
Special ADR Rules. Inevitably, when Lina cited portions of the said arbitration documents, he violated their covenant in the
TOR to resolve their dispute through the arbitration process and to honor the confidentiality of the said proceeding. To
disregard this commitment would impair the very essence of the ADR proceeding. By itself, this would have served as a
valid justification for the grant of the confidentiality/protection order in favor of FedEx and Jennings.
Thus, the claimed slanderous statements by Jennings during the arbitration hearing are deemed confidential information
and the veil of confidentiality over them must remain.
WHEREFORE, the petition is GRANTED. The January 20, 2015 Decision of the Court of Appeals (CA), in CA-G.R. SP No.
135835, is REVERSED and SET ASIDE.

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PART I - ARBITRATION

I. General Principles in Arbitration

What are remedies from a final domestic

- Distinguish Ad Hoc from Institutional Arbitration

Domestic Arbitration International Arbitration Commercial Arbitration

B. The Arbitration Agreement

The foregoing provision speaks of two modes of arbitration:

Article 35 (1) UNCITRAL Rules:

Article 21 (1) ICC Rules:

C. Pathological Arbitration Clause

MINDANAO PORTLAND CEMENT CORPORATION, vs. McDONOUGH CONSTRUCTION COMPANY OF FLORIDA

II. Commencement of Arbitration

See Section 10 of the Arbitration Law; see also

(a) to waive the presumptive disqualifying circumstances; or

- Difference between Commencement in Ad Hoc and Institutional Arbitration;

Article 5.20. Commencement of Arbitral Proceedings.

Section 5. Preliminary procedure. - An arbitration shall be instituted by:

Article 5.20. Commencement of Arbitral Proceedings.

Article 5.15. Competence of Arbitral Tribunal to Rule on its Jurisdiction.

Article 5.3. Waiver of Right to Object.

Article 4.16. Competence of Arbitral Tribunal to Rule on its Jurisdiction.

B. Judicial Relief Pre and Post Commencement

See Rule 3.1, Special ADR Rules.

- The concept of lex arbitri

Most significant contacts.

o Definition and importance.

296 scra … 1998

- Grounds and contents of petition [Rules 3.5-3.6, Special ADR Rules].

b. The nature and substance of the dispute between the parties;

d. The relief/s sought.

What is the principle of competence-competence?

What is the policy in implementing the competence-competence principle?

- Relief against court action [Rule 3.11, Special ADR Rules].

B2. Judicial Relief Post-Commencement

- Grounds and contents of petition [Rules 3.15-3.16, Special ADR Rules].

Rule 3.16. Contents of petition. - The petition shall state the following:

b. The nature and substance of the dispute between the parties;

d. The relief/s sought.

- Relief against court action [Rule 3.19, Special ADR Rules].

Reckoning - dependent on ruling of arbitral tribunal.

B3. Referral to Alternative Dispute Resolution

RULE 4: REFERRAL TO ADR

SUBJECT TO REFER DURING OR AFTER PRE TRIAL.

- Apparent exception to forum shopping [Rule 4.7, Special ADR Rules].

d. Referral to arbitration does not appear to be the most prudent action; or

TEODORO VEGA, vs. THE SAN CARLOS MILLING CO., LTD.

G.R. No. L-21549 October 22, 1924

WON arbitration is a condition precedent to a suit upon the contract

We find no merit in the first assignment of error.

NOT GOOD LAW ANYMORE!!!!

- Distinguish with Petition to Compel Arbitration.

MOTION TO REFER VS PETITION TO COMPEL

Qualifications of Arbitrators [see Section 10, DAL]

MAGELLAN CAPITAL MANAGEMENT CORP. v. ZOSA

Section 5. Preliminary procedure. - An arbitration shall be instituted by:

Article 5.20 Commencement of Arbitral Proceedings

Appointment of Substitute Arbitrator [see Article 5.14, ADR Act-IRR]

Article 5.11. Grounds for Challenge.

(b) An arbitrator may be challenged only if:

The challenge shall be made before them.

Acceptance of appointment [see Article 5.10, ADR Act-IRR]

(c) Failing such agreement,

(d) Where, under an appointment procedure agreed upon by the parties,

Constitution of the Arbitral Tribunal [Section 28, ADR]