ADR

Prof: Atty. Ever Rose Paling

ASSIGNMENT
> Review oblicon (capacity,kinds of contracts, how contracts are made, meeting of minds definition,
consent qualificationsn: individual, juridical, state

Article 1305. A contract is a meeting of minds between two persons whereby one binds himself, with
respect to the other, to give something or to render some service.

 Convention – broad enough to include any kind of agreement which may create, modify or extinguish
patrimonial and even family relations; the genus
 Contracts – limited exclusively to those agreements which produce patrimonial obligations; the
species

Definition of Consent
-
ELEMENTS OF A CONTRACT
1. Essential elements — those without which there can be no contract
a. Consent
b. Subject matter
c. Cause or consideration

Requisites of consent (LM-CR)

1) Legal capacity of the contracting parties;
 based on the law of the place where the person can be found or a citizen

NOTE: Hence, if any one party to a supposed contract was already dead at the time of its execution,
such contract is undoubtedly simulated and false and, therefore, null and void by reason of its
having been made after the death of the party who appears as one of the contracting parties
therein. The death of a person terminates contractual capacity (Milagros De Belen Vda. De Cabalu,
et. al. v. Sps. Renato Dolores Tabu and Laxamana, G.R. No. 188417, September 24, 2012).

2) Manifestation of the conformity of the contracting parties; (consent must be manifested by the
concurrence of the offer and the acceptance)
3) Parties’ Conformity to the object, cause, terms and condition of the contract must be intelligent,
spontaneous and free from all vices of consent; and
NOTE: Intelligence in consent is vitiated by error; freedom by violence, intimidation or undue
influence; and spontaneity by fraud.
4) Conformity must be Real

Who cannot give consent

Art 1327 The following cannot give consent to a contract:
1. Unemancipated minors
2. Insane or demented persons
3. Deaf-mutes who do not know how to write

Meeting of the Minds

 A meeting of the minds is an essential element in the validation of a legally
binding contract.
 comprehension and mutual agreement or mutual assent of both parties to
a contract’s terms. Arbitrarily, it denotes the time of mutual agreement,
though the acts of mutual agreement need not necessarily occur
simultaneously.

KINDS OF CONTRACTS AS TO THE MODE OF PERFECTION

1. Consensual contracts — that referred to in Art. 1315, these are contracts which are perfected by
mere consent, which is the meeting of the minds of the parties upon the terms of the contract. The
consent may be made expressly or impliedly. They are are perfected from the moment there is
agreement (consent) on the subject matter, and the cause or consideration.

2. Real contracts — that referred to in Art. 1316, these are contracts which are not perfected by mere
consent perfected but such perfection also requires the delivery of the object of the contract.

Such as — deposit, pledge and commodatum

3. Formal or solemn contracts — contracts which require compliance with special external
formalities for the validity and perfection of the contract
‣ Such as — A simple donation inter vivos of real property, to be valid and perfected, must be in a public
instrument (Art. 749)

STAGES IN THE PERFECTION OF A CONTRACT; HOW CONSENT IS ACHIEVED

1. STEP 1 — There is an offer initiated and made by one of the parties which is certain, definite,
complete and intentional
2. STEP 2 — There is an unconditional acceptance by the other party
3. STEP 3 — Knowledge of the acceptance by the offeror

Requisites for the meeting of the minds

1. An offer that must be certain an definite
2. An acceptance that must be certain, absolute and
unqualified.
2 types of activities that govt
-propriety
-governmental

> Review PIL, PIL definition what is a state, elements, how do states enter into a contract, how do a
state become a state,

PIL DEFINITION
 Body of rules and principles that are recognized as legally binding and which govern the
relations of states and other entities invested with international legal personality . Formerly
known as “law of nations” .

STATE - community of persons more or less numerous, permanently occupying a definite portion of
territory, independent of external control, and possessing an organized government to which the great
body of inhabitants render habitual obedience.

(a) States
(i) Characteristics of Statehood
Article 1 of the Convention on Rights and Duties of States (or the 1933 Montevideo Convention)
provides for the qualifications of a State:
1. permanent population
2. defined territory
3. government
4. capacity to enter into relations

> 1907 Hague convention (IMPORTANT)

International

Sources of international laws

Etetb Bono
General accepted principles of law

declaratory theory prescribes that

recognition of a State by existing States is nothing more than expressing the willingness
to enter into relations with that State: in other words, accepting the existing conditions
of statehood. The declaratory theory appears to be consistent with the current practice of
recognition, which is primarily used as a political tool by States.2
In contrast, according to the „constitutive‟ theory, a State only becomes a State by
virtue of recognition by the other States. Once the three factual criteria of the
declaratory theory have been met, this „factuality‟ must then be confirmed by the
existing States. This doctrine has proved untenable in practice, as there is no
international body with the authority to acknowledge the existence of States on behalf
of the entire community of States. Therefore, each State may individually decide
whether a new State has come into being (and recognize it). If the constitutive theory
would serve as the basis for statehood, it would lead to the strange consequence that an
entity would be considered a State by some States (those that have recognized it) and
not a State by other States (those that have not recognized it).34 Consequently, the
question arises what the status of such a territorial entity is under international law, and
– by extension - how it should be treated by the other members of the international
community: is such an entity entitled to any form of sovereignty for example? In
addition, there is no international obligation for States to recognize a territorial entity as
a State once it fulfills the factual criteria for statehood: recognition often relies

RECOGNITION
 Formal Acknowledgement or acceptance as an international personality by the existing state of
international community

Elements of a State

2. The Security Council shall, when it deems necessary, call upon the parties to settle their dispute by
such means.

Default is mediation, not arbitration

International Court of Justice

www.icj-cij.org

The International Court of Justice (ICJ) is the principal judicial organ of the United Nations (UN). It was
established in June 1945 by the Charter of the United Nations and began work in April 1946.

The seat of the Court is at the Peace Palace in The Hague (Netherlands). Of the six principal organs of
the United Nations, it is the only one not located in New York (United States of America).

The Court’s role is to settle, in accordance with international law, legal disputes submitted to it by States
and to give advisory opinions on legal questions referred to it by authorized United Nations organs and
specialized agencies.
1. People

2. Territory

3. Government

4. Sovereignty

5. Recognition

6. Degree of civilization
Convention of settlement of international disputes

Peace convention

Established in 1899 to facilitate arbitration and other forms of dispute resolution between states, the
PCA has developed into a modern, multi-faceted arbitral institution that is now perfectly situated at the
juncture between public and private international law to meet the rapidly evolving dispute resolution
needs of the international community.

The PCA is not a court in the traditional sense, but a permanent framework for arbitral tribunals
constituted to resolve specific disputes.

Good Offices

- relationship is severed; State at variance

- a third person offers to mediate and consists in reconciling the opposing claims and appeasing the
feelings of resentment which may have arisen between the States at variance

- not considered as an unfriendly act

- undertaken upon request of parties in dispute or on initiative of Powers

 Foundational for the system of international dispute settlement

 Established a permanent court arbitration PCA, not a court
 Discussed traditional methods, negotiation, mediation , good offices
 Establishment of international arbitration tribunal
Compromis’

- a formal submitting agreement between nations a dispute to arbitration and defining the terms of the
submission, the powers of the tribunal to serve as arbitrator, and the procedure to be followed signed
by Powers which have recourse to arbitration

TERMS
Third party - we do not use the term in ADR. In litigation we call them intervenor. The terms used are
mediator, arbitrator, conciliator.
How many parties in ADR?
Neutral and parties.
Respondent, applicant, complainant. Non-party participants (secretary, stenographer, clerk).
PARTIES IN THE DISPUTE
Conflict can happen between Individual - Individual Individual - Juridicial Entity Individual - State
Juridical Entity - State
Can other methods be used aside from mediation or arbitration? Can you have a different name and call
it partnering? Yes. The parties can invent a mode of dispute settlement and name it. The different
methods provided by law is to set examples.
Principles:
GENERAL RULE: ADR does not have hierarchy
• You can use one system one method in any order
• EXCEPTION: when the parties decide to use arbitration, they cannot
jump to another method without all the other parties in agreement
In ADR, do you need to exhaust administrative remedies?
NO. Exhaustion of administrative remedy is ADR itself. Exhaustion of administrative remedy is a court
term. Why does the court not have jurisdiction? There is no issue ripe for judicial determination yet,
which is an element before filing a case before court.
You cannot go through ADR without consent. Parties to ADR need to give consent.
The immunity of the State from suit, known also as the doctrine of sovereign immunity or non-suability
of the State, is expressly provided

in Article XVI of the 1987 Constitution which states: Section 3. The State may not be sued without its
consent.
The contract is the best evidence of the agreement between the parties. Different states have different
laws of what are valid and invalid contracts.
Mediation - you can bring parties to an office, the relationship still exists.
Good Office under Hague Convention - somebody who has an office and who exudes influence and uses
his office to help the parties to resolve their issues or controversies, but he will not bring any parties to
any office. The relationship between the parties are already severed. The other state already kicked out
the legation of the other state. The only way for them to communicate is for the Good Office to use
his/her office.
The parties are free to determine the rules.
Arbitration is still voluntary in nature despite the fact someone is going to issue an award.
JURISDICTION OF PCA UNDER HAGUE CONVENTION:
Must be a general treaty of arbitration, a dispute arising from contract (?) by one power by another
power as due to its nationals.
e.g. China v. Philippines - South China Sea (UNCLOS treaty, both signatories)
Why not ICJ? Consent issues. Before you can sue a state it needs consent.
Admissibility vs. Jurisdiction
Non-participation of China does not deprive PCA of jurisdiction. A dispute covered by general treaty of
arbitration is covered by PCA so it is covered because both parties are signatories to the UNCLOS. There
is no time limit to award for arbitration. It can be enforced any time anywhere. It can be used and re-
used until it is satisfied.

IS PCA A COURT?
There is no permanent court, it is not a court. It is only when a dispute happens when a tribunal is
created (ad hoc). There is no tribunal permanent inside the PCA. It is merely a registry of cases.
STRUCTURE OF PCA
HQ: The Hague in Netherlands
Dispute resolution proceeding can take place anywhere in the world. It has a permanent Secretary
General.
Supervisory activity over PCA.
1st convemtion: Under the first convention only States can be parties to the dispute.
2nd convention: Also international organisations with personality can be a party. Must be capable of
suing under international law. How is I.O. created? Based on agreement of parties (state - only states
can create I.O.). They define the roles and powers
FORMS OF SETTLING DISPUTES UNDER HAGUE CONVENTION: Mediation, Good offices, Arbitration
1. Law applicable to substance of the dispute
- Issues which need to be resolved
- Usually contained in main contract (e.g. contract of sale)
2. Law applicable to the arbitration agreement
- grounds to invalidate a contract - same ground to invalidate an arbitration agreement
3. Law applicable to the arbitration proceeding - fora
-the parties determine the place, they choose the law that will govern the arbitration proceeding. They
have to comply with the law of the country where it is sitting. Reason? Territoriality. The arbitrator
cannot violate the law of the country where they are sitting

WHY IS UNCITRAL MODEL LAW NOT A LAW?

Merely a pattern the purpose of which is to harmonise the laws of countries when it comes to
international commercial arbitration who would like to adopt.
If a country has a law already, are they encouraged to adopt this? Yes. The intention is to have a
common law. The doctrine of transformation is needed for it to become law. Needs to be adopted.
Doctrine of Incorporation and Doctrine of Transformation applies also in the Philippines. Yes the
Philippines adopted UNCITRAL in RA 9285
3 TYPES OF ARBITRATION
1. Domestic
2. Foreign
3. International Commercial
2 TYPES OF ARBITRATION PROCEEDING:
1. Whether administered by permanent arbitral institution 2. Ad hoc
2 TYPES OF ARBITRATION AGREEMENT:
1. Clause incorporated in the contract
2. Submission agreement - document attached to the principal
contract the purpose of which is to resolve the dispute of the parties; they forgot to put it in the
contract and they want an attachment in case1
Arbitration agreement - agreement by parties to submit to arbitration
Interim measure
-can be given by arbitral tribunal or court
-given before, during but NEVER AFTER arbitration

-merely to protect parties’ interest so position in dispute settlement will not be compromised
- -e.g. injunction, preliminary attachment, ocular inspection,
production of documents, appearance of witness
- If issued by arbitral tribunal, no power to issue contempt unlike
courts
Can courts interfere?
The courts cannot interfere except as provided in this law (the domestic law of the country)

Assignment:

1907 Hague Convention

UNCITRAL

Jurisdiction of PCA, What is PCA, is PCA a court,

UNCITRAL MODEL Law on International Commercial Arbitration 1985 with amendments.

International Arbitration (PCA)

- settlement of disputes between States by Judges of their own choice
- on the basis of respect for law
- engagement to submit in good faith to the Award

Jurisdiction of PCA (Articles 53 and 54)

The International Court of Arbitration® is the world's leading body for the resolution of international
disputes by arbitration.

The universal scope of the International Court of Arbitration, commonly known as "the Court", is
evidenced by the fact that each year, numerous parties, arbitrators and lawyers from countries of every
economic, political and social system are present in ICC arbitrations.

The Court members’ diverse professional, legal and cultural backgrounds brings a richness to the Court’s
daily work and decision making processes.

The Court is one of the world's most experienced and renowned international arbitration institutions.
Working closely with its Secretariat, the Court’s primary role is to administer ICC Arbitrations. It
performs the functions entrusted to it under the ICC Rules of Arbitration and continually strives to assist
parties and arbitrators to overcome any procedural obstacles that arise.
Main Activities of ICC

 Rule setting  Dispute resolution  Policy advocacy

The Permanent Court is competent to settle the 'Compromis', if the parties are agreed to have recourse
to it for the purpose. It is similarly competent, even if the request is only made by one of the parties,
when all attempts to reach an understanding through the diplomatic channel have failed, in the case of:

1. A dispute covered by a general Treaty of Arbitration concluded or renewed after the present
Convention has come into force, and providing for a 'Compromis' in all disputes and not either explicitly
or implicitly excluding the settlement of the 'Compromis' from the competence of the Court. Recourse
cannot, however, be had to the Court if the other party declares that in its opinion the dispute does not
belong to the category of disputes which can be submitted to compulsory arbitration, unless the Treaty
of Arbitration confers upon the Arbitration Tribunal the power of deciding this preliminary question.

2. A dispute arising from contract debts claimed from one Power by another Power as due to its
nationals, and for the settlement of which the offer of arbitration has been accepted. This arrangement
is not applicable if acceptance is subject to the condition that the 'Compromis' should be settled in some
other way.

In the cases contemplated in the preceding Article, the 'Compromis' shall be settled by a Commission
consisting of five members selected in the manner arranged for in Article 45, paragraphs 3 to 6. The fifth
member is President of the Commission ex officio.

PCA purpose:
 Permanent forum to assist the resolution of international disputes
 • Originally focused on disputes between States
 • Has come to include international disputes between States and private parties

Basis for Jurisdiction in PCA Cases

• Dispute settlement provision in bilateral or multilateral treaty

• Agreement to arbitrate a particular dispute (compromis)

• Treaties providing for general jurisdiction

connection between PCA and UN, how

On July 12, 2016, an award in the arbitration case between the Philippines and China
over the South China Sea was announced, which denied China’s “historic rights” in the
South China Sea. As the award was released by the Permanent Court of Arbitration
(PCA) in The Hague, the media reported that the PCA “ruled” the case, describing the
award as a “PCA ruling.”
 
But it is a factual error. The award is not a PCA ruling. It was released by the PCA but
made by an arbitral tribunal constituted under the United Nations Convention on the
Law of the Sea (UNCLOS). The PCA served just as the registry or secretariat.
 
The error is also misleading and undermining the award’s implications. China has no
legal obligation to use the PCA for dispute settlement. But, as a party to UNCLOS, China
has an obligation to accept the compulsory dispute settlement procedures entailing
binding decisions at the unilateral request of any party to the dispute. Confusing the
final and binding award under UNCLOS with a ruling by the PCA underestimates the
challenges China poses to the entire UNCLOS regime.

What is the PCA?

The PCA was established by the 1899 Hague Conventions for the Pacific Settlement of
International Disputes, and its function was expanded by the 1907 Hague Conventions
for the Pacific Settlement of International Disputes. Those two Conventions themselves
provide an arbitration procedure,and “a PCA ruling” literally means a ruling made by
the PCA as a tribunal under the two Hague Conventions. But states have rarely used the
Conventions’ arbitration procedure and the PCA as a tribunal since the end of World
War II. Instead, the International Court of Justice (ICJ) has worked as a primary
tribunal for interstate cases.
 
In essence, the PCA
 not a “court” in the general sense
 but an administrative body with the object of having permanent and readily
available means for arbitration.
 The PCA serves as the registry, rather than as a tribunal, and facilitates
arbitration and other dispute resolution proceedings among states,
intergovernmental organizations, and private parties.
 
The PCA’s International Bureau
 provides administrative services to arbitral tribunals held at the PCA as
secretariat.
 include assisting with the identification and appointment of experts, publishing
information about the arbitration and issuing press releases, organizing the
hearings at the Peace Palace in The Hague, and the financial management of the
case.
 
Unlike the ICJ, the PCA is not a UN organization although they are collocated in
the Peace Palace in The Hague. The PCA obtained a permanent observer status in
the UN General Assembly in 1993, thereby strengthening communication with
the UN.  The PCA and the International Tribunal for Law of the Sea (ITLOS) in
 Hamburg, established by UNCLOS, have agreed to cooperate for relevant legal
and administrative matters, particularly those connected with disputes under
Annex VII of UNCLOS.
 
So far, the PCA has acted as registry in all the arbitration cases but one under
Annex VII of UNCLOS.[1] The 12 cases arbitrated under the auspices of the PCA
include the Arctic Sunrise case (the Netherlands v. the Russian Federation) and
the maritime delimitation case (Guyana v. Suriname). The PCA has gained
unique experience in dealing with UNCLOS arbitrations.

why the PH was able to use the PCA against China.

The South China Sea arbitral tribunal, constituted on June 21, 2013, appointed the International
Bureau of the PCA to serve as registry for the proceedings. 

As a registry, the PCA undertook financial management of the case, which involved collecting
payment from both parties, and paying fees to arbitrator, experts, technical support, court reporters,
among others. 

In the South China Sea case, due to China's firm stance of nonparticipation, the Philippines paid
shares of both parties, in order for the arbitration to proceed. 

According to the "Rules of Procedures" of the tribunal, the functions of the registry also included
maintaining an archive of the arbitral proceedings, providing appropriate registry services as directed
by the tribunal, publishing information about the arbitration and issuing press releases, and
organizing hearings at the Peace Palace, the seat of the PCA. 

On the PCA's relationship to the UN

 although it is housed in the same premises with the ICJ, the PCA is not a UN organ. 

"The PCA is an intergovernmental organization that predates the UN and is independent of

the UN," she explained. "The PCA was established by the 1899 Convention for the Pacific
Settlement of International Disputes. China became a member State of the PCA in 1904." 

UNCITRAL Model Law on

International Commercial Arbitration
(1985), with amendments as adopted in
2006
The Model Law is designed to assist States in reforming and modernizing their laws on
arbitral procedure so as to take into account the particular features and needs of
international commercial arbitration. It covers all stages of the arbitral process from the
arbitration agreement, the composition and jurisdiction of the arbitral tribunal and the
extent of court intervention through to the recognition and enforcement of the arbitral
award. It reflects worldwide consensus on key aspects of international arbitration
practice having been accepted by States of all regions and the different legal or
economic systems of the world.
Amendments to articles 1 (2), 7, and 35 (2), a new chapter IV A to replace article 17 and
a new article 2 A were adopted by UNCITRAL on 7 July 2006. The revised version of
article 7 is intended to modernise the form required of an arbitration agreement to better
conform with international contract practices. The newly introduced chapter IV A
establishes a more comprehensive legal regime dealing with interim measures in
support of arbitration. As of 2006, the standard version of the Model Law is the
amended version. The original 1985 text is also reproduced in view of the many national
enactments based on this original version.

Why the PH - PCA

- Consent issue in the treaties or conventions

Not a court
-because Only tribunal happens when theres a dispute

Ad hoc tribunal
-Only be called when there's a necessity

Negotiation is part of the Hague Convention

- each part of the process consists of discussion which is a nature of negotiation

Negotiaol

What Hague includes

Don't include conciliation i

PCA has a three-part organisational structure consisting of an Administrative Council that oversees its
policies and budgets, a panel of independent potential arbitrators known as the Members of the Court,
and its Secretariat, known as the International Bureau, headed by the Secretary-General. The
Permanent Court of Arbitration tribunals have jurisdiction for disputes based on the PCA founding
documents (the Conventions on Pacific Settlement of International Disputes), or based on bilateral and
multilateral treaties. Its Secretary-General furthermore acts as an appointing authority for arbitration.
UNCITRAL
: A model law is created as a suggested pattern for lawmakers to consider adopting as part of their
domestic legislation. Since States enacting legislation based upon a model law have the flexibility to
depart from the text, the above list is only indicative of the enactments that were made known to the
UNCITRAL Secretariat. The legislation of each State should be considered in order to identify the exact
nature of any possible deviation from the model in the legislative text that was adopted. The year of
enactment indicated above is the year the legislation was passed by the relevant legislative body, as
indicated to the UNCITRAL Secretariat; it does not address the date of entry into force of that piece of
legislation, the procedures for which vary from State to State, and could result in entry into force some
time after enactment.

International chamber arbitration

Porcedure when 1 is dealing with ICA

Doctirne of Incorporation, principle of Transformation both applies

3 types of Arbitration
Domestic, intl,, international commercial arbitration

International arbitration
-

When do you consider arbitration domestic, itl,

domestic arbitration is one concerned with purely national or domestic issues. This means, in general
terms, that all aspects of the arbitration proceedings are related to a single jurisdiction. For example, the
nationality of the parties, the governing law of the contract, the place of performance of the contract
and the facts giving rise to the dispute will all relate to the same jurisdiction.

An international arbitration,
-NOT DOMESTIC
- on the other hand, will reach beyond the borders of a single jurisdiction. Broadly speaking, the
domestic laws of different jurisdictions adopt one of three different approaches to determining whether
an arbitration is truly international:

•
the nature of the dispute approach—the arbitration is considered international if the dispute concerns
cross-border commercial activity

•
the party nationality approach—the arbitration is considered
-

INTERNATIONAL COMMERCIAL ARBITRATION

Arbitration
- whether or not administered by

Court interference
- no unless

3 kinds of Arbitration

2 ways arbitration
- adhoc,
-institutional

Intri measure

Appointing authority

Grounds for challenge (there are 4)

An arbitrator may be challenged only if circumstances exist that, from the
perspective of a reasonable third person having knowledge of the relevant facts,
give rise to:
 justifiable doubts as to his impartiality(has to do with conflict of interest)
 Questions of independence,
 or if he does not possess qualifications agreed to by the parties
(depending on the country where the arbitrator will sit)

 Failure of disclose the circumstances

3 laws
- law of Arbitration agreement

How to challenge:
 How many days – 30 days

Where to file:
GR: The agreement between the parties is the law between them.
XPN: contrary to law , public order, public policy , and for the commission of a crime

What law will dictate, or applicable to the substance of the dispute

 The law agreed by the parties in the contract
 Where it is executed
 Law applicable to the arbitration agreement

Law applicable to the arbitration proceeding

 The law of place of arbitration tribunal is sitting will dictate the place to the arbitration
proceeding

ASSIGNMENT:
 Continuation of the UNCITRAL MODEL LAW
o We stopped on the grounds of challenge
 RA9285 – New York convention
o IRR

WHY IS UNCITRAL MODEL LAW NOT A LAW?

Merely a pattern the purpose of which is to harmonise the laws of countries when it comes to
international commercial arbitration who would like to adopt.
If a country has a law already, are they encouraged to adopt this? Yes. The intention is to have a
common law. The doctrine of transformation is needed for it to become law. Needs to be adopted.
Doctrine of Incorporation and Doctrine of Transformation applies also in the Philippines. Yes the
Philippines adopted UNCITRAL in RA 9285

3 TYPES OF ARBITRATION
1. Domestic
2. Foreign
3. International Commercial

2 TYPES OF ARBITRATION PROCEEDING:

1. Whether administered by permanent arbitral institution
2. Ad hoc

2 TYPES OF ARBITRATION AGREEMENT:

1. Clause incorporated in the contract
2. Submission agreement - document attached to the principal
contract the purpose of which is to resolve the dispute of the parties; they forgot to put it in the
contract and they want an attachment in case1

Arbitration agreement - agreement by parties to submit to arbitration

Jurisdiction of AT


Source of jurisdiction of the AT

 The agreement of the parties

Law of the Substance of the dispute

You can appoint a substitute arbitrator

When do we commence arbitration

 On the date on which the request for that dispute to be referred to arbitration is received by
respondent

Interim measure
-can be given by arbitral tribunal or court
-given before, during but NEVER AFTER arbitration
-merely to protect parties’ interest so position in dispute settlement will not be compromised
- -e.g. injunction, preliminary attachment, ocular inspection,
production of documents, appearance of witness
- If issued by arbitral tribunal, no power to issue contempt unlike
Courts

Can courts interfere?

The courts cannot interfere except as provided in this law (the domestic law of the country)
  Courts act as the appointing authority to appoint arbtitrators in the following instances:
o Any of the parties fails or refuses to appoint an arbitrator
o Fails to reach an agreement on the sole arbitrator
 Court assistance
o Before the arbitration is commenced
o After the arbitration is commenced but before the constitution of the arbitral tribunal
o After the Consti of the tribunal and at any time during arbitral proceedings but at this
stage, only to the extent that arbitral tribunal has no power to act or is unable to act
effectively

Default of a party
A . Claimant fails to communicate his statement of claim , AT shall terminate the proceedings
b. respondent fails to communicate his statement of defense , AT shall continue the proceedings
without treating such failure in itself admission of the claimant’s allegation
c. Any party fails to appear at a hearing or to produce documentary evidence,AT may continue the
proceedings and make the award on the evidence before it

4 types of award

Memo ADR definition

ADR of 2004 RA9285

 Promote autonomy in the reso of disputes or the freedoms of the parties to make their own
agreements to resolve disputes
 Encourage and actively promote the use of ADR as an important means to achieve speedy and
impartial justice to declog court dockets

Negotiation - pwede wlang impartial person

Mini trial concept

Types of Adr

Assignment : RA 925, IRR, Ra 876

Alternative Dispute Resolution System"

 any process or procedure used to resolve a dispute or controversy, other than by
adjudication of a presiding judge of a court or an officer of a government agency, as defined
in this Act, in which a neutral third party participates to assist in the resolution of issues,
 which includes arbitration, mediation, conciliation, early neutral evaluation, mini-trial, or any
combination thereof;

Purpose :

a) To promote party autonomy in the resolution of disputes or the freedom of the parties to
make their own arrangements to resolve their disputes;

(b) To encourage and actively promote the use of ("ADR") as an important means to
achieve speedy and impartial justice and declog court dockets;

(c) To provide means for the use of ADR as an efficient tool and an alternative procedure for
the resolution of appropriate cases; and

(d) To enlist active private sector participation in the settlement of disputes through ADR

Exception to the Application

> (a) labor disputes covered by PD No. 442, "Labor Code of the Philippines, as a amended",
and its IRR;
(b) the civil status of persons;
(c) the validity of marriage;
(d) any ground for legal separation;
(e) the jurisdiction of courts;
(f) future legitimate;
(g) criminal liability;
(h) those disputes which by law cannot be compromised; and
(i) disputes referred to court-annexed mediation.

1. Ad hoc Mediation means any mediation other than institutional or court-annexed.

2. Institutional Mediation means any mediation process conducted under the rules of a mediation
institution.

3. Court-Annexed Mediation means mediation process conducted under the auspices of the court
and in accordance with Supreme Court approved guidelines, after such court has acquired
jurisdiction of the dispute.

OADR
 Attached to the DOJ
 Has secretariat , headed by executive director, appointed by the Pres taking into consideration
the reco of Sec Of Justice
 Provide means for the use of ADR as an efficient tool and an alternative tool for reso
 Enlist active private sector participation in the settlement of disputes through ADR
  RULE 2- Selection of a Mediator
Article 3.3. Freedom to Select mediator. 
 > The parties have the freedom to select mediator. The parties may request the OADR to
provide them with a list or roster or the resumes of its certified mediators. The OADR may be
requested to inform the mediator of his/her selection
.
 Article 3.5. Refusal or Withdrawal of Mediator. A mediator may refuse from acting as such,
withdraw or may be compelled to withdraw from mediator proceedings under the following
circumstances:

(a) If any of the parties so requests the mediator to withdraw;

(b) The mediator does not have the qualifications, training and experience to enable him/her to
meet the reasonable expectations of the parties;

(c) Where the mediator's impartially is in question;

(d) If continuation of the process would violate any ethical standards;

(e) If the safety of any of the parties would be jeopardized;

(f) If the mediator is unable to provide effective services;

(g) In case of conflict of interest; and

(h) In any of the following instances, if the mediator is satisfied that:

(i) one or more of the parties is/are not acting in good faith;

(ii) the parties' agreement would be illegal or involve the commission of a crime;

(iii) continuing the dispute resolution would give rise to an appearance of impropriety;

(iv) continuing with the process would cause significant harm to a non-participating person
or to the public; or

(v) continuing discussion would not be in the best interest of the parties, their minor
children or the dispute resolution process.

Article 3.10. Separation of Mediation from Counseling and Legal Advice. (a) Except in evaluative
mediation or when the parties so request, a mediator shall:

(i) refrain from giving legal or technical advice and otherwise engaging in counseling
or advocacy; and
 (ii) abstain from expressing his/her personal opinion on the rights and duties of the
parties and the merits of any proposal made.

(b) Where appropriate and where either or both parties are not represented by counsel, a
mediator shall;

(i) recommend that the parties seek outside professional advice to help them make
informed decision and to understand the implication of any proposal; and

(ii) suggest that the parties seek independent legal and/or technical advice before a
settlement agreement is signed.

(c) without the consent of al parties, and for a reasonable time under the particular
circumstance, a mediator who also practices another profession shall not establish a
professional relationship in that other profession with one of the parties, or any person or
entity, in a substantially and factually related matter.

Article 3.14. Designation of Counsel or Any Person to Assist Mediation

Except as otherwise provided by the ADR Act or by these Rules, a party may designate a
lawyer or any other person to provide assistance in the mediation. A waiver of this right shall
be made in writing by the party waiving it. A waiver of participation or legal representation
may be rescinded at any time.

Article 3.15.  Role of Counsel. (a) The lawyer shall view his/her role in the mediation as a
collaborator with the other lawyer in working together toward the common goal of helping
their clients resolve their differences to their mutual advantage.

(b) The lawyer shall encourage and assist his/her client to actively participate in positive
discussions and cooperate in crafting an agreement to resolve their dispute.

(c) The lawyer must assist his/her client to comprehend and appreciate the mediation
process and its benefits, as well as the client’s greater personal responsibility for the success
of mediation in resolving the dispute.

(d) In preparing for participation in mediation, the lawyer shall confer and discuss with his/her
client the following:

(i) The mediation process as essentially a negotiation between the parties assisted
by their respective lawyers, and facilitated by a mediator, stressing it its difference
from litigation, its advantages and benefits, the clients heightened role in mediation
and responsibility for its success and explaining the role of the lawyer in mediation
proceedings,

(ii) The substance of the upcoming mediation such as;

 (aa) The substantive issues involved in the dispute and their prioritization in
terms of importance to his/her client’s real interests and needs.

(bb) The study of other party’s position in relation to the issues with a view to
understanding the underlying interests, fears, concerns and needs;

(cc) The information or facts to be gathered or sought from the other side or
to be exchanged that are necessary for informed decision-making;

(dd) The possible options for settlement but stressing the need to be open-
minded about other possibilities; and 

(ee) The best, worst and most likely alternative to a non-negotiated

settlement.

Article 3.16.  Other Matters which the Counsel shall do to Assist Mediation. The lawyer;

(a) shall give support to the mediator so that his/her client will fully understand the rules and
processes of mediation;

(b) shall impress upon his/her client the importance of speaking for himself/herself and taking
responsibility for making decisions during the negotiations within the mediation process.;

(c) may ask for a recess in order to give advice or suggestions to his/her client in private, if
he/she perceives that his/her client is unable to bargain effectively;

(d) shall assist his/her client and the mediator put in writing the terms of the settlement
agreement that the parties have entered into. That lawyers shall see to it that the terms of
the settlement agreement are not contrary to law, morals, good customs, public order or
public policy.

Article 3.18. Agreement of Parties on the Place of Mediation

  The parties are free to agree on the place of mediation.

 Failing such agreement, the place of mediation shall be any place convenient and
appropriate to all parties.

RULE 8 – Enforcement of Mediated Settlement Agreement

Article 3.20. Operative Principles to Guide Mediation. 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 counsels. If any, and by the mediator. The parties and
their respective counsels shall endeavor to make the terms and condition of the settlement
agreement complete and to make adequate provision 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 agree, the settlement agreement may be jointly deposited by the parties or
deposited by one party with prior notice to the other party/ties with the Clerk of Court of the
RTC (a) where the principal place of business in the Phil of any of the parties is located; (b) if
any of the parties is an individual, where any of those individuals resides; or (c) in the
National Capital Judicial Region. 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 the Special ADR
Rules.

(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 know as "The
Arbitration Law", notwithstanding the provisions of Executive Order No. 1008, s. 1985, other
wise known as the "Construction Industry Arbitration Law" for mediated disputes outside the
Construction Industry Arbitration Commission.

CHAPTER 4
INTERNATIONAL COMMERCIAL ARBITRATION

Article 4.7 Definition and Form of Arbitration Agreement.

The Arbitration agreement - shall be in writing.

 is in writing if it is contained in a document signed by the parties or in an exchange of letters,

telex, telegrams or other means of telecommunication which provide a record of the
agreement, or in an exchange of statements of claim and defense in which the existence of
an agreement, or in an exchange of statements of claim and defense in which the existence
of an agreement is alleged by one party and not denied by another. The reference in a
contract to a document containing an arbitration clause constitutes an arbitration agreement
provided that the contracts is writing and the reference is such as to make that clause part of
the contract.
 RA 876”

- Qualitfications of arbitrators ( sec 10)

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.

Coverage of 9285

Confidentiality vs Privileged communication

Sec 9

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. –

 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. 16. Effect of Agreement to Submit Dispute to Mediation Under Institutional Rules. - An

agreement to submit a dispute to mediation by any institution shall include an agreement to be
bound by the internal mediation and administrative policies of such institution. Further, an agreement
to submit a dispute to mediation under international mediation rule shall be deemed to include an
agreement to have such rules govern the mediation of the dispute and for the mediator, the parties,
their respective counsel, and nonparty participants to abide by such rules.
In case of conflict between the institutional mediation rules and the provisions of this Act,

 Institutional mediation shall prevail.

Why important to deposit:

Nominal Value – concept of money value

Do not accept any gift , taking into account of nominal value

Interim measure -

An arbitration is international if:

(a) the parties to an arbitration agreement have, at the time of the conclusion of that agreement, their
places of business in different States; or
(b) one of the following places is situated outside the State in which the parties have their places of
business:
(i) the place of arbitration if determined in, or pursuant to, the arbitration agreement;
(ii) any place where a substantial part of the obligations of the commercial relationship is to be
performed or the place with which the subject-matter of the dispute is most closely connected; or
(c) the parties have expressly agreed that the subje

Assignment for next meeting:

1. Continuation of RA9285 and its IRR
2. RA 876
3. Special Rules of Court
R.A. 876 – Arbitration Law Reviewer

Section 2. Persons and matters subject to arbitration.

Who may submit matters to arbitrators?

- 2 or more persons where any controversy exist between them which may be the subject of an action
or a controversy in a contract.
- The parties to any contract may in such contract agree to settle by arbitration a controversy thereafter
arising between them.
o i.e. there is an arbitration clause in said contract

submission or contract - shall be valid, enforceable and irrevocable, save upon such grounds as
exist at law for the revocation of any contract.

The submission or contract may include question arising out of what?

- Valuation
- Appraisal
- Other controversies which may be collateral,incidental, precedent or subsequent to any issue between
the parties

When a controversy cannot be arbitrated? Where one of the parties is a:

a) Infant
b) Judicially declared to be incompetent, unless petitioned by the guardian or guardian ad litem and
approved by a court having jurisdiction

Where a person capable of entering into a submission or contract has knowingly entered into the same
with a person incapable of so doing, may the former object on the ground of incapacity?

No. The incapacity can be taken only in behalf of the person so incapacitated.

Section 3. Controversies or cases not subject to the provisions of this Act.

What are controversies or cases not subject to the provisions of this Act?

 Controversies and to cases which are subject to the jurisdiction of the NLRC

Section 4. Form of arbitration agreement.

 In writing and subscribed by the party sought to be charged, or by his lawful agent.

What shall be deemed the making of a contract or submission for arbitration described in section
2 providing for arbitration of any controversy?
 A consent of the parties to the jurisdiction of the R.T.C. of the province or city where any of the
parties resides, to enforce such contract or submission.

Section 5. Preliminary procedure.

(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, how shall such demand be
set forth?
o nature of the controversy,
o amount involved,
o relief sought, together with the
o True copy of the contract providing for arbitration.
The demand shall be either in person or by registered mail.

In the event that the contract between the parties provides for the appointment of a single
arbitrator, how shall such demand be set forth?

 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 3 arbitrators, one to be
selected by each party, the demand shall state what?
 Name the arbitrator appointed by the party making the demand;
 and shall require that the party upon whom the demand is made shall within 15 days after
receipt 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 with its 10 days from the date of such notice
.
(B) In the event that one party defaults in answering the demand, what is the remedy of the
aggrieved party?
 File with the Clerk of the R.T.C. 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.
C) In the case of the submission of an existing controversy by the filing with the Clerk of the CFI
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.

Section 6. Hearing by court.

A party aggrieved by the failure, neglect or refusal of another to perform under an agreement in
writing providing for arbitration may do what?

 Petition the court for an order directing that such arbitration proceed in the manner
provided for in such agreement.

How many days after notice of hearing of such application shall be served either personally or by
registered mail upon the party in default before?
 5 days notice in writing

The court shall hear the parties, shall make an order directing the parties to proceed to arbitration
in accordance with the terms of the agreement after what condition?
 Upon being satisfied that the making of the agreement or such failure to comply therewith
is not in issue

When shall the court not submit the matter to arbitration but proceed to summarily hear the issue?
 If the making of the agreement or default be in issue

When shall the proceeding be dismissed by the court upon petition for arbitration?
 When the court finds that no agreement in writing providing for arbitration was made, or
that there is no default in the proceeding thereunder

The court shall decide all motions, petitions or applications filed under the provisions of this Act,
within how many days after such motions, petitions, or applications have been heard by it?
10 days

7. Stay of civil action

What shall the court do if any suit or proceeding be brought upon an issue arising out of an
agreement providing for the arbitration thereof, the court in which such suit or proceeding is
pending,
upon being satisfied that the issue involved in such suit or

proceeding is referable to arbitration?

The court shall stay the action or proceeding until an arbitration has been had in accordance with the
terms of the agreement: Provided, that the applicant, for the stay is not in default in proceeding with
such arbitration.

Section 8. Appointment of arbitrators

When will the R.T.C. shall appoint an arbitrator or arbitrators in the following instances?

The R.T.C. shall appoint an arbitrator or arbitrators, in the following instances:

(a) 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 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) In case of arbitrator DECLINES, the court, 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

Remindher:
1. In connection with the SpADR - New York Convention (to be explained)
2. Distinction between litigation and arbitration in relation to the award.

Assignment:

Review of the 876

Special ADR Rules

Exam:
August 16
SPECIAL RULES OF COURT ON ADR
WHAT ARE THE SUBJECT MATTERS COVERED BY SPECIAL ADR RULES?

• Relief on the issue of existence, validity, or enforceability of the arbitration agreement;

• Referral to ADR
• Interim measures of protection
• Appointment of arbitrator
• Challenge to appointment of arbitrator
• Termination of mandate of arbitrator
• Assistance in taking evidence
• Confirmation, correction or vacation of award in domestic arbitration
• Recognition and enforcement or setting aside of an award in international commercial arbitration
• Recognition and enforcement of a foreign arbitral award
• Confidentiality/ protective orders
• Deposit and enforcement of mediated settlement agreements

WHAT IS THE NATURE OF THE ADR PROCEEDINGS?

• Special

WHAT MUST BE DONE BY THE PETITIONER PRIOR TO THE FILING OF THE PETITION IN COURT?

• 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.

WHAT CONSTITUTE PROOF OF SERVICE?

• 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

HOW MANY DAYS DOES THE COURT GAVE TO RESOLVE THE MATTER?

• 30 days from the day of the hearing

ARE PLEADINGS FILED UNDER THE SPECIAL ADR RULES NEED TO BE VERIFIED?

• Yes. Any pleading, motion, opposition, comment, defense or claim filed under the special ADR
rules by the proper party shall be supported by verified statements that the affiant has read the
same and that the factual allegations therein are true and correct of his own personal
knowledge or based on authentic records and shall contain as annexes the supporting
documents

WHAT MAY BE INCLUDED IN THE ANNEXES TO THE PLEADINGS?

• The annexes to the pleading, motion, opposition, comment, defense or claim filed by the
proper party may include a legal brief duly verified by the lawyer submitting it, stating the
pertinent facts, the applicable law and jurisprudence to justify the necessity for the court to rule
upon the issue raised.

IS A CERTIFICATION AGAINST FORUM SHOPPING REQUIRED?

• Yes, a certification against forum shopping shall be appended to all initiatory pleadings except
a motion to refer the dispute to ADR.

• A CAFS is one made under oath by the petitioner or movant: that he has not theretofore
commenced any action or filed any claim involving the same issues in any court, tribunal or
quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending
therein; if there is such other pending action or claim, a complete statement of the present
status thereof; and if he should thereafter learn that the same or similar action or claim has
been filed or is pending, he shall report that fact within 5 days therefrom to the court wherein
his aforementioned petition or motion has been filed