ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 1

Contents

I. INTRODUCTION..............................................2
1.1 BRIEF DESCRIPTION OF ADR SYSTEM 2
Alternative Dispute Resolution (ADR)..................2
1.2 BASIC PRINCIPLE OF ADR.................2
1.3 UNDERSTANDING DISPUTE RESOLUTION OPTIONS 3
1.4 Advantages/Benefits and Disadvantages of Alternative Dispute Resolution 5
1.4.1 Benefits of ADR.............................5
1.4.2 Disadvantages of ADR...................8
1.4.3 BENEFITS OF ALTERNATIVE DISPUTE RESOLUTION 9
1.5 COMPARISON BETWEEN Litigation AND ADR 10
1.5.1 Litigation (Court Based Adjudication) 10
1.5.2 Alternative Dispute Resolution (ADR) 10
1.5.3 Litigation and ADR Contrasted.....11
1.6 LIMITATION OF ADR IN GENERAL...11
1.7 SUBJECT OF ADR.............................11
2 INTERNATIONAL ALTERNATIVE DISPUTE RESOLUTION/ PEACEFUL SETTLEMENT OF
INTERNATIONAL DISPUTE.............................17
2.1 INTRODUCTION TO PUBLIC INTERNATIONAL LAW AND PRIVATE INTERNATIONAL LAW 17
Public international law......................................17
Private international law....................................17
Conflicts between public international law and national sovereignty17
2.1.1 BASIC PRINCIPLES OF INTERNATIONAL LAW (SOVEREIGNTY, JURISDICTION,
INDEPENDENCE etc.)...............................18
2.1.1.1 Sovereignty.........................................18
2.1.1.3 Independence.....................................19
2.1.2 ARTICLE 33 PARAGRAPH 1 OF THE UN CHARTER 21
2.1.3 INTERNATIONAL COURT OF JUSTICE 21
2.2 RELEVANT ALTERNATIVE DISPUTE SETTLEMENT INSTITUTIONS 21
2.2.2 INTERNATIONAL COURT OF ARBITRATION (INTERNATIONAL CHAMBER OF
COMMERCE).............................................23
Membership...................................................23
Governing bodies...........................................24
World Council.............................................24
Executive Board.........................................24
International Secretariat.............................24
National Committees..................................24
Finance Committee....................................24
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 2

Dispute Resolution Services..........................24

Policy and business practices........................24
2.2.3 INTERNATIONAL CENTER FOR SETTLEMENT OF INVESTMENT DISPUTES (ICSID)
(CONVENTION ON THE SETTLEMENT OF INESTMENT DISPUTE BETWEEN STATES AND
NATIONALS OF OTHER STATES)............24
2.2.4 UNITED NATIONS COMMISSION FOR INTERNATIONAL TRADE LAW (UNICITRAL
MODEL LAW ON INTRNATIONAL COMMERCIAL ARBITRATION-1985) 26
History...........................................................26
Membership...................................................26
Conventions...................................................27
Model laws.....................................................27
CLOUT (Case Law on UNCITRAL Texts)......27
2.2.5 WORLD TRADE ORGANIZATION (MARRAKESH AGREEMENT) (DISPUTE SETTLEMENT
UNDERSTANDING)...................................27
2.3 ENFORCEMENT AND RECOGNITION OF AWARDS 36
Convention on the Recognition and Enforcement of Foreign Arbitral Awards 36
Contents........................................................36
Background....................................................36
Summary of provisions..................................37
Parties to the New York Convention..............37
United States Issues......................................37
2.4 TYPES OF ADR..................................38
2.4.1 1. Negotiation...............................38
2.4.2 Assisted negotiation.....................38
2.4.3 2. Mediation.................................38
2.4.4 3. Conciliation..............................38
2.4.5 4. Arbitration.................................38
Case presentation or mini-trial....................41
Independent expert appraisal or early neutral evaluation 41
Litigation.....................................................41
2.4.6 5. INQUIRY AND FACT FINDING41
2.4.7 6. GOOD OFFICES......................41
3 DOMESTIC ARBITRATION.......................41
3.1 INTRODUCTION TO DOMESTIC COMMERCIAL DISPUTE RESOLUTION 41
3.2 ALTERNATIVE DISPUTE RESOLUTION ACT OF 2004 41
Republic Act No. 9285...................................41
April 2, 2004...................................................41
3.3 REPUBLIC ACT NO. 876 ARBITRATION LAW OF THE PHILIPPINES 50
3.4 A.M. No. 07-11-08-SC SPECIAL RULES OF COURT ON ALTERNATIVE DISPUTE
RESOLUTION September 1, 2009...............55
3.5 DEPARTMENT CIRCULAR NO. 98....87
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3.6 OTHER SC ISSUANCES ON ADR. . .126
3.7 JUDICIAL DISPUTE RESOLUTION..126
Judicial dispute resolution (JDR).....................126
I. INTRODUCTION
1. BRIEF DESCRIPTION OF ADR
SYSTEM
Alternative Dispute Resolution
(ADR) also known as external dispute resolution in
some countries, such as Australia includes dispute
resolution processes and techniques that act as a
means for disagreeing parties to come to an agreement
short of litigation. It is a collective term for the ways
that parties can settle disputes, with (or without) the
help of a third party.
Despite historic resistance to ADR by many popular
parties and their advocates, ADR has gained
widespread acceptance among both the general public
and the legal profession in recent years. In fact, some
courts now require some parties to resort to ADR of
some type, usually mediation, before permitting the
parties' cases to be tried (indeed the European
Mediation Directive (2008) expressly contemplates so-
called "compulsory" mediation; attendance that is, not
settlement at mediation).
The rising popularity of ADR can be explained by the
increasing caseload of traditional courts, the
perception that ADR imposes fewer costs than
litigation, a preference for confidentiality, and the
desire of some parties to have greater control over the
selection of the individual or individuals who will
decide their dispute.
Some of the senior judiciary in certain jurisdictions (of
which England and Wales is one) are strongly in favor
of the use of mediation to settle disputes.1
A type of dispute resolution that seeks to limit the costs of litigation
by using alternative, often out-of-court means, such as
,
arbitration conciliation
and summary possession proceedings. Alternative
dispute resolutionoptions
are voluntary, and often involve a neutral
third party
to make .
decisions 2
2. BASIC PRINCIPLE OF ADR
• ADR is based on several key principles. First,
consensual processes (participation, scope and
structure) are more likely to result in outcomes
satisfactory to the disputants than a solution
imposed by a court. Inherent in this principle
1http://en.wikipedia.org/wiki/Alternative_dispute_resolution
2http://www.businessdictionary.com/definition/alternative-dispute-
resolution.html#ixzz204cSk0Xz
is the ability of the parties to structure a
process that is tailored to the situation and to
the dispute at hand. There is ample experience
demonstrating that disputants are more likely
to achieve outcomes that serve all disputants’
interests and purposes -- the “win/win”
solution -- than solutions imposed by an
outside decision maker.
• The second key principle is the involvement of
a third-party neutral whose presence can
improve the dynamics of the dialogue needed
to achieve a settlement and, in environmental
disputes, knowledge and expertise to evaluate
the merits and to help frame options for
solution if so desired by the parties. The third
party’s role is to assist in the process, not to
dictate the outcome. This individual is neutral
in the sense of having no stake in the outcome
or in the parties. A third-party neutral has no
authority except as granted under the order or
agreement defining the ADR process.
• One of the principal objectives of the ADR
process is to help the parties communicate
with each other civilly, by providing a clear
statement of the interests driving the dispute
and, most importantly, by truly listening to the
other side of the dispute. Parties often lack a
clear idea of what they are fighting for, much
less a good idea of what needs are driving their
opponents.
• Finally, ADR processes generally are
confidential except as otherwise agreed by the
parties, with the exception of public policy
disputes that often facilitate in full public view.
Agreements to engage in most ADR processes
typically have a confidentiality clause.
Mediation conducted in Michigan court
proceedings is expressly made confidential by
MCR 2.411(C)(5). As of mid 2010, the
confidentiality provisions under MCR 2.411
are being considered for revision. SCAO
August 2010 Report on MCR 2.411.
• When the ADR process is not ordered under
MCR 2.411, the parties must provide for
confidentiality by agreement. Where disputes
are mediated before or during civil litigation,
MRE 408 and FRE 408 make settlement offers
and conduct and statements made in
settlement negotiations (i.e., during the ADR
process), not admissible. These rules, however,
do not require the exclusion of evidence
otherwise discoverable merely because it is
presented in the course of settlement
discussions.
• The Michigan mediation rule expressly
provides that a mediator may not disclose
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anything that transpired during the mediation 3. UNDERSTANDING DISPUTE

to the trial judge except the date of completion
of the process, who participated in the
mediation, whether settlement was reached
and whether further ADR proceedings are
contemplated. MCR 2.411(C)(3). Best practice
in drafting the mediation agreement should
provide the express requirement that the
mediator make his or her report to the court in
writing with copies to the parties, so that the
parties can be assured this rule has been
observed. Note that this rule does not permit
the mediator to report to the trial court
whether any party appeared to be acting in
good faith.
• Likewise, communications made during ADR
processes convened by a federal court are
protected from disclosure, 28 USC 652(d),
although the scope of the protection is not as
broad as under the Michigan Court Rules. 3
In its August 2005 resolution (Resolution ALJ-185),
the Commission announced five basic principles that
are the foundation of the CPUC ADR program:
VOLUNTARY
The parties usually must agree to submit their dispute
to mediation or early neutral evaluation. An ALJ,
however, may require parties to attend facilitated
workshops, settlement conferences, or meet with a
neutral to explore the feasibility of mediation.
TIMELINESS
ADR should shorten, not prolong, proceedings. But
even if a negotiated settlement takes longer, the result
may be more beneficial to all.
GOOD FAITH
RESOLUTION OPTIONS
There are many ways to approach dispute resolution.
The great majority of problems encountered by small
business are resolved through simple discussion and
common sense between the parties and do not escalate
into a dispute.
In virtually all instances, small businesses should at
first attempt to resolve their disputes through direct
discussion and negotiation.
Disputes will occur, however, where there is a lack of
communication, where there are unrealistic
expectations or where there is a grievance that cannot
be resolved through direct discussion.
When a dispute occurs, each party has a choice about
the dispute resolution method that they would like to
pursue. Unfortunately, litigation is usually the norm
and dispute resolution is often approached as a matter
between lawyers and the Courts. There are, however, a
variety of other approaches available which may save
time and money and preserve business relationships.
Dispute resolution options for small business range
from negotiation-based methods, where the parties
have full control over the outcome (generally known as
'alternative dispute resolution' - ADR), to adversarial
methods where the parties have less control over the
outcome (such as arbitration and litigation). Where a
negotiated settlement is reached through ADR, the
terms of the settlement, once agreed and signed by the
parties, are legally binding and can be enforced if
necessary.
The chart below sets out some of the advantages and
disadvantages of different approaches to dispute
resolution.

Those who engage in ADR should do so in an attempt

to reach agreement--not to delay or secure tactical DISADVANTAGE
ADVANTAGES METHOD
advantage. S

CONFIDENTIALITY
• Parties
Most ADR processes require confidentiality so that the Control • Does Not
parties' fundamental interests can be explored. Outcome Establish
Alternative Legal
• Time -
COMMISSION APPROVAL → Dispute Precedent
Efficient ←
Resolution • Not Open
The CPUC will expeditiously approve settlements that • Cost - (ADR) To Public
are legally sufficient.4 Efficient Scrutiny
• Confidenti
al

3http://envdeskbook.org/CH19/Ch19ADR.htm#_Toc325551391
4 http://www.cpuc.ca.gov/PUC/ADR/adrprinciples.htm
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their needs and interests. The informal

• Maintains process is speedy and cost effective and caters
Business • Not for on-going business relationships.
Relationshi Appropriate
ps For Fraud INTERMEDIATION
• Non- Or Criminal • Similar to Mediation in concept but more
Adversarial Behaviour sophisticated. The neutral third party closely
, Informal interacts with the parties in dispute to assess
Process all relevant material, identify key issues, and
most importantly, helps to design a process
that will lead to resolution of the dispute.
• Appropriat
e For • Parties The process involves separate meetings with
Fraud Or Have the parties at their offices to conduct extensive
Criminal Limited reality testing, and analysis of parties' legal,
Matters Control commercial and financial positions. The
Over The process utilises creative thinking techniques
• Can
Outcome
Establish a Adversal and is suitable for more complex, large or
Legal Approaches • High Cost & sensitive matters.
→
Precedent ← Lengthy
litigation Process FACILITATION
• Appropriat arbitration • The parties appoint a neutral facilitator to
e Where • May manage the dispute resolution process,
One Party Destroy identify issues and apply specialist techniques
Has No Business to achieve the desired outcome. The facilitator
Intention Relationshi assists by preparing an agenda, chairing
Of ps meetings, distributing relevant information
Complianc between the parties and steering them to
e reach agreed objectives. The process is less
formal and more flexible than Mediation. It
has wide application and is often used where
there are several parties or groups involved
AN EXPLANATION OF ALTERNATIVE with differing points of view, such as creditors
DISPUTE RESOLUTION METHODS or multi-party claimants, joint venture
negotiations, and environmental and planning
disputes.
ASSISTED NEGOTIATION
• The parties engage a professional negotiator EXPERT DETERMINATION/RECOMMENDATION
or 'go-between' to assist parties reach a • The parties agree to an independent expert to
desired result. It is usually informal and the provide a report on specific aspects of a
negotiator can either be appointed by one
dispute by examining relevant documentation
party or both. In the latter situation he/she is and material. The expert is usually
a joint negotiator. This method is often helpful
commissioned to report on technical matters
in smaller disputes where parties are still such as standards, compliance, quality
talking to one another and need help to break
specifications, quantification of loss or similar
an impasse, and where they have identified all issues. The expert may be asked to provide a
the issues to be negotiated.
recommendation or a determination on the
matter depending on the circumstances.
MEDIATION
• Mediation is a process where an independent PARTNERING
person is used to assist the parties in dispute • Often used for long term contracts or in the
to find a mutually acceptable solution. The building/construction industries and in joint
mediator will systematically work through the
venture type projects. A Partnering agreement
issues, help identify alternatives, and facilitate or charter is based on the parties' need to act
final agreement. The process is non-
in good faith and with fair dealing to one
adversarial and focuses on the parties' another. The Partnering process focuses on
resolving the dispute themselves using the
the definition of mutual objectives, improved
skills of a mediator. The key principle of communication, the identification of likely
mediation is that the parties work together to
problems and development of formal problem
arrive at an agreement that suits both. This is solving and dispute resolution strategies. It is
in contrast to litigation and arbitration where
useful, for example, where there is a need to
a judge or arbitrator imposes a decision which complete a technical or building project with a
may be disappointing for one or both parties.
minimum of disruption and cost and within a
tight time frame.
A mediator is appointed by the parties to help
establish effective communication and by
doing so find a solution which satisfies both
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AN EXPLANATION OF ADVERSARIAL
DISPUTE RESOLUTION METHODS
LITIGATION
• Litigation is an adversarial legal process
conducted in a Court of law, in accordance
with strict procedures, where the parties
present legal arguments and evidence to
support their claims before a judge. The judge
applies the relevant law to the evidence,
resulting in a judgement in favour of one of
the parties involved.
ARBITRATION
• Arbitration is an adversarial process, agreed
by the parties in dispute, in which each party
presents legal arguments and evidence, in
accordance with formal procedures, to a
mutually agreed arbitrator. The arbitrator
makes a determination in favour of one of the
parties. This determination is usually legally
binding.
4. Advantages/Benefits and
Disadvantages of Alternative
Dispute Resolution
The take-up of ADR depends on a combination of three
critical factors. First, the extent to which disputants
and their advisors are aware of ADR. Second, the
adequacy of the supply of ADR services for those that
would wish to take-up ADRservices. Third, the
perceived advantages and disadvantages of ADR.
This section is concerned primarily with the third of
those factors. It notes, however, the low level of
awareness of ADR among disputants, the critical and
influential position of lawyers in determining whether
disputants seek resolution through ADR, and
comments on the extent to which the court system
raises awareness about the potential for ADR as a
dispute resolution pathway.
1. Benefits of ADR
ADR has been both; increasingly used alongside,
and integrated formally, into legal systems
internationally in order to capitalise on the typical
advantages of ADR over litigation:
• Suitability for multi-party disputes
• Flexibility of procedure - the process is
determined and controlled by the parties
the dispute
• Lower costs
• Less complexity ("less is more")
• Parties choice of neutral third party (and
therefore expertise in area of dispute) to
direct negotiations/adjudicate
• Likelihood and speed of settlements
• Practical solutions tailored to parties’
interests and needs (not rights and
wants,as they may perceive them)
• Durability of agreements
• Confidentiality
• The preservation of relationships;[11] and
the preservation of reputations.5
The international literature on ADR identifies five
major outcomes from ADR. They are:
• increased settlement
• improved satisfaction with the outcome or
manner in which the dispute is resolved
among disputants
• reduced time in dispute
• reduced costs in relating to the dispute
resolution
• increased compliance with agreed solutions.
Among stakeholders there is broad agreement that
dispute resolution throughADR mechanisms can be
beneficial. Nevertheless, there are some significant
variations among stakeholders about the extent and
nature of those benefits for disputants. ADR
practitioners are most enthusiastic about the benefits
of ADRtake-up. Lawyers and disputants tend to be
more qualified with regard to the actual benefits
associated with ADR.
ADR Practitioners' View of ADR Benefits
Participants in the ADR Practitioners Survey were
convinced of the efficacyof ADR techniques in
resolving disputes that were already or could be filed in
the District or High Courts. Two thirds of the
respondents (66 percent) reported that they believed
that more that 80 percent of disputes could be resolved
through ADR. Only 4 percent reported that they
believed that 55 percent or fewer disputes were
amenable to effective resolution through ADR (Table
4.1).
ADR Practitioners' Estimates of Disputes
Effectively Settled by ADR(ADR Practitioners
Survey n=139)*
Proportion of Disputes Settled byADRPractitioners
ADR Responses %
0-20 percent of disputes 0 0
21-30 percent of disputes 1 <1
31-40 percent of disputes 0 0
41-50 percent of disputes 4 3
51-60 percentof disputes 9 6
61-70 percent of disputes 5 4
71-80 percent of disputes 28 20
81-90 percent of disputes 32 23
5http://en.wikipedia.org/wiki/Alternative_dispute_resolution#Benefits
 ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 7

91-100 percent of disputes 60 43 Desire for more control over

80 40.8
process and outcome

Privacy and confidentiality 74 37.8

* Six missing cases.
It was noted in the ADR practitioner focus groups, Directed by contract, statute or
61 31.1
however, that not all ADRtechniques generated existing agreement
benefits in the same way or to the same extent. A
Desire for creative solution 48 24.5
strong distinction was made between mediation and
arbitration. Table 4.2 represents ADRpractitioners' Concerns about court
assessment of the relative potential of arbitration and 39 19.9
procedures [8]
mediation in relation to the benefits typically
associated with ADR.
ADR Practitioner Views on the Relative * Multiple response.
Potential of Arbitration and Mediation
Mediation and negotiation are seen as more likely than
Arbitration Mediation arbitration to generate ADR benefits including:

Reduced financial costs Low-Medium Medium-High

• increased opportunities to resolve a dispute in
a way satisfactory to the parties
Flexible solution Low High • increased likelihood of the parties complying
Confidentiality High High with the remedies or solutions generated
through ADR
Ability to influence outcomeLow High
• reductions in time delays
Disputant control Medium High • reductions in costs, and
Disputants satisfaction Low-High Medium-High • maintenance of confidentiality about both the
dispute, the remedies sought and the
Speedy resolution High High outcomes.
For lawyers, reaping the potential benefits of ADR is by
no means straightforward. For most lawyers the
ADR practitioners see the real benefits of arbitration effectiveness of ADR is contingent on two major
lying in the abilityof the disputants to select an factors. Firstly, the willingness of disputants to engage
arbitrator by mutual agreement and the considerable in a resolution process, and, secondly, the experience
specialist expertise an arbitrator may bring to the of the ADR practitioners (Table 4.3).
resolution of a dispute with substantial technical
components. It is for the latter reason that arbitrators Lawyers' Perceptions of Determinants of ADR
have so frequently been used in technical sectors such Efficacy (Lawyers Survey)
as the building industry.
Lawyers
• Lawyers' Perceptions of ADR Benefits Lawyers Lawyers Working
Working Working Equally in
The majority of lawyers believe that disputants seek
Perceived Primarily Primarily High
ADR resolution ofdisputes in an effort to: Total
Determinant in Districtin HighCourt and
• reduce the cost of a dispute Court Court District
(n=74) (n=64) Court
• speed resolution, and
(n=58)
• reduce uncertainty around the outcome of
judgment in the court system (Table 4.2). Disputant
76.0% 80.8% 78.1% 69.0%
willingness
Lawyers' Perceptions of Disputants' Reasons
for ADR Take-up* (Lawyers Survey) Experienced
ADR 62.8% 68.5% 60.0% 66.1%
Perceived Disputant % of Lawyers
Responses practitioner
Reason (n=196)
Supportive
Want to reduce costs 183 93.4 40.3% 37.5% 40.6% 45.6%
counsel
Want speedy resolution 159 81.1
Judicial support 14.8% 21.9% 10.9% 10.7%
Uncertainty of court outcome 142 72.4
Ongoing
Preservation of ongoing relationship
86 43.9 14.3% 13.7% 15.6% 14.3%
relationship between
disputants
Desire for compromise solution82 41.8
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The quantitative data does indicate some of the
subtleties around this issue, however, in relation to the
importance of judicial and counsel support as factors
in the efficacy of ADR. Overall, 40.3 percent of lawyers
saw counsel support as an important determinant.
Lawyers working in the High Court or equally in the
District Court and High Court were over-represented
among those who saw counsel support as an important
factor. Lawyers working primarily in the District Court
were significantly more likely than lawyers working
primarily in the High Court to see judicial support as
an important factor in the efficacy ofADR.
It is unclear why those differences emerge. The lawyer
survey data suggests that there may be some
relationship between the ADR skills and experience
oflawyers and the extent to which they perceive the
importance of their own role in encouraging effective
ADR. The High Court lawyers are more likely to be
trained in and/or engaged in delivering ADR services
than the lawyers working primarily in the District
Court (Table 4.4).
ADR Training* and ADR Practice Among
Lawyers (Lawyers Survey)
retrospectoften find the experience very useful. This
view is consistent with the findingsof the disputant
research project.
Disputants' Perceptions of ADR Benefits
In-depth interviews with 60 disputants with civil cases
filed with the court system in the 2000-2002 period
revealed that only fourteen used ADR to help resolve
their dispute.
As shows, settlement was achieved in eleven of those
cases throughADR and for a further case ADR resolved
some issues. Eleven of those fourteen disputants
reported that they would use ADR if ADR was 'suited'
to the nature ofthe dispute.
Disputant Views on ADR's Contribution to
Resolution of their Dispute (Disputant In-
depth Interviews n=14)
ADR's Contribution to Resolving the
Case Interviewees
The case settled as a result of ADR 11
ADR did not lead to settlement 2

Lawyers ADR resolved some issues in the case 1

Lawyers Lawyers
Working
Working Working Total 14
Equally in
Primarily inPrimarily in
High Court
District HighCourt
and District
Court (n=74) (n=64)
Court (n=58) Overall, thirty of the sixty disputant interviewees had
had some experienceof using ADR to resolve a dispute.
N % N % N % A further twenty disputants knew of ADR. Forty-nine
Combines legal
of the sixty disputants involved in in-depth interviews
felt able to make some comment about the advantages
practice with8 10.8 17 26.6 12 20.7
and disadvantages of ADR. It is clear that ADR is seen
ADR Practice
as a less costly approach to dispute resolution than
Trained LEADR having the dispute resolved through a judgment given
Accreditation 2 2.7 13 20.3 3 5.2 by the Court. Almost as many see ADRas a
Workshop comparatively faster mechanism for dispute resolution
(Table 4.6).
AMINZ Disputant Views on the Advantages of ADR
Associate or3 4.1 2 3.1 6 10.3 Identified by Interviewees (Disputant In-depth
Fellow Interviews n=49)*
Massey Responses %
University ADR Advantages
(n=49)* ofInterviewees
Dispute 1 1.4 0 0.0 1 1.7
Resolution Cheaper resolution 30 61.2
Diploma
Faster resolution 27 55.1
Dispute
Resolution More control 8 16.3
1 1.4 1 1.6 1 1.7
paper(s) as part Informal
of LLB process/relaxed/less 6 12.2
On-goingADR stressful
training - More creative solutions 5 10.2
4 5.4 8 12.5 4 6.9
workshops,
seminars etc Other 5 10.2

Preserves relationships 3 6.1

* Multiple response.
In relation to the willingness of the disputants, it was * Multiple response.
also noted by manyADR practitioners, lawyers and the
judiciary that although disputants may initially feel
hesitant and uncomfortable about ADR, disputants in
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2. Disadvantages of ADR Lawyers' Views on the Disadvantagesof ADR

There was widespread support across stakeholders for
the use of ADRtechniques to resolve disputes. ADR
was not always seen as an alternative to resolution
through the courts, however. Moreover, even the most
enthusiastic supporters of ADR - ADR practitioners -
still saw some potential disadvantagesfor disputants in
using ADR.
ADR Practitioners' Views on the
Disadvantages of ADR
Unlike other stakeholders, ADR practitioners tended to
see any disadvantagesof ADR for disputants as being
related primarily to the particular ADR technique used
or the methods by which ADR techniques are
implemented.
It has already been noted that ADR practitioners, like
lawyers and disputants, see arbitration as a less
attractive ADR technique than mediation. It should
also be recognised, however, that even within
mediation, some processes are seen as more likely to
achieve all the benefits claimed for ADRthan others.
ADR practitioners recognise that mediation may
encompass a variety of models, ranging from
developing consensual solutions to risk management
or evaluative models for dispute resolution. As Boulle
notes, mediation is:
"a decision-making process in which the parties are
assisted by a third-party, the mediator; the mediator
attempts to improve the process ofdecision-making
and to assist the parties reach an outcome to which
each of them can consent". [9]
Many ADR practitioners believed the full range of
potential benefits, especially those related to increased
user satisfaction with outcomes and compliance with
ADR resolutions, were less likely to be achieved where
mediation focused on risk assessment, cost-benefit
review, or evaluation of the likelihoodof success in
court rather than consensual solution development.
Many ADR practitioners, both those who combine
their ADR practice with legal practice and those who
do not, expressed considerable concern at techniques
directed primarily at trading-off the probability of Key
success in court. This was perceived as particularly ADRLimitatio (n=196)*
prevalent in the Auckland region and was n Response %
characterised by some ADR practitioners as a model
which allowed disputants to be 'bullied'. It was a model
that some found antithetical to what they believed to Enforceability
be the core philosophical values of mediation and the
core elements which led to better quality solutions - Delaying tactics 35
the empowerment of the disputants, and the
expectation that disputants should take responsibility Increased Costs 80
for mutually generating and committing to consensual
solutions.
A trading-off approach in mediation was perceived by
ADR practitioners to be particularly widespread in
disputes around insurance and employment matters.
Some concern was expressed that if that type of
approach became prevalent, or the dominant
perception of mediation, there would be a backlash
against mediation, a hesitancy to take-up mediation
opportunities, and a failure to capture the potential
benefits of mediation such as solution flexibility,
reduction in stress and relationship repair.
For lawyers concerns about ADR focus on three issues.
Those are whether ADR:
• delivers reduced costs and increases
timeliness
• delivers a sound and fair outcome, and
• generates agreements that can be sustained
and enforced.
Lawyers were directly involved in two of the
stakeholders research projects. Some of the ADR
practitioners were lawyers and some practising lawyers
were participants in the ADR practitioner research
project as well as the lawyers' research project.
What emerged from the lawyer and ADR practitioner
research projects as well as the disputant research
project was that lawyers have, perhaps more than
anyof the other stakeholder groups, a diversity of views
around the merits and potential problems of ADR. In
particular there is a view among some lawyers
thatADR both delays dispute resolution and increases
costs. Increased cost was seen by lawyers participating
in the lawyers' survey as a particular limitation
ofarbitration. Delay was seen as a particular problem
associated with mediation.
As shows only a minority of lawyers participating in
the lawyers' survey saw significant limitations with
ADR techniques. It is notable that the pattern of those
minority concerns differed in relation to arbitration
and mediation respectively. With regard to arbitration
a substantial minority oflawyers expressed concern
that arbitration increased the costs of dispute
resolution. By comparison, with regard to mediation
the most substantial minority of lawyers expressed
concern that mediation could be used as a delaying
tactic. A smaller but still substantial minority of
lawyers expressed concerns about mediation's
enforceability.
Limitations of Arbitration and Mediation
(Lawyers Survey)
Limitations of
Limitations of
Arbitration
Mediation (n=196)*
ofResponse % of
s Lawyers s Lawyers
17 8.7 54 27.6
17.9 74 37.8
40.8 35 17.9
* Multiple response.
Only a minority of the lawyers participating in the
lawyers' survey expressed concerns about those issues.
However, the disputants research does reveal how
powerful lawyers' views can be in relation to take-up of
ADR. A small group ofdisputants were explicitly
advised by their lawyer not to take-up ADR on the
grounds that it was too expensive or ADR would be
ineffective. Some disputants assumed that if lawyer-to-
 ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 10

lawyer informal discussion had failed to resolve the One of the largest reasons parties choose to resolve
dispute then ADR would simply not be an option. their disputes outside of the courts is cost. Alternative
Overall, however, surveyed lawyers tended to be dispute resolution usually costs much less than
supportive of ADR. Indeed, among the lawyers litigation, allowing smaller financial disputes a
participating in the lawyers' survey around 64.4 financially viable way to be settled.
percent accepted the notion that there might be merit
in the court ordering parties to take-up ADR prior to Speed:
proceeding with a case. It is notable, however, that
only 22.2 percent of the participant lawyers felt court ADR can be scheduled by the parties and the panelist
orders to arbitration were acceptable, compared to as soon as they are able to meet. Compared to the court
53.7 percent who accepted the notion of the courts
process, where waits of 2-3 years are normal, dispute
ordering parties to mediation.
resolution is as fast as the parties want it to be.
Even among lawyers who believed the benefits of ADR
were such as to justify some mechanism by which the Control:
courts could order parties to mediation, there was still
a concern that ADR should not be promoted in a The parties control some of the process; selecting what
manner that compromised litigants' access to justice. method of ADR they want to follow, selecting the
Disputants' Views on the Disadvantages of panelist for their dispute resolution; the length of the
ADR process; and, in a mediations case, even the outcome.
Although ADR was seen by the disputants Opposed to the court system, where the legal system
participating in the in-depth interviews as a less costly and the judge control every aspect, ADR is much more
pathway than the court system, a small proportion flexible.
ofthe 49 interviewees who felt they could comment on
the merits of ADR, identified a series of potential Confidentiality:
drawbacks with ADR. Those are set out in Table 4.8
Disadvantages of ADR Identified by Disputes resolved in court are public and any
Interviewees (Disputant In-depth Interviews judgments awarded are also public. Mediation,
n=49)* arbitration, and mini trials are all conducted in private
Key Disadvantages % of and in strict confidentiality.
Responses
Identified Interviewees
Experienced Neutral Panelists:
Lackof enforcement 10 20.4
Our panelists are professional mediators and
Increased costs 9 18.4 arbitrators with training and expertise in dispute
Delaying tactic 9 18.4 resolution and insurance. Disputing parties are able to
select their panelist from a list of qualified individuals
Other 7 14.3 who are specialized in specific aspects of insurance. In
Compromise of principles 7 14.3 the court system, binding decisions are made by judges
who may lack expertise in insurance practices.
ADR practitioner may not have
3 6.1
the technical skills required Cooperative Approach:
Need other party to be willing
2 4.1 All ADR services take place in a more informal, less
to come to the table
confrontational atmosphere. This is more conducive to
No right of appeal 2 4.1 maintaining a positive business relationship between
the two parties. With mediation, specifically, the result
is collaboration between the two parties.
* Multiple response.
Twelve of 49 disputants stated that they saw only 5. COMPARISON BETWEEN
advantages and no disadvantages associated with Litigation AND ADR8
ADR.6 At some point in life, and perhaps several times, you
will be faced with a dispute that needs to be settled and
3. BENEFITS OF ALTERNATIVE DISPUTE
7 you must decide just how to reach a solution. Court
RESOLUTION based adjudication and ADR are two of the methods
Cost:
used in settling those disputes; and distributive and
integrative are two types of bargaining utilized in the
ADR processes.
6 http://www.justice.govt.nz/publications/global-
publications/a/alternative-dispute-resolution-general-
civil-cases/4-advantages-and-disadvantages-of-adr 8 http://general-law.knoji.com/litigation-vs-alternative-
7 http://www.ibabc.org/idrsbc/benefits.html dispute-resolution-adr/
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 11
4. Litigation (Court Based Adjudication)
Litigation is a lawsuit to be decided in court before a
judge or jury. However, litigation can be intimidating
and risky for the litigants. In addition, because court
proceedings are adversarial, a battle between lawyers,
the truth is not always the end result. A prominent
New York defense attorney and Criminal Court Judge
said in all honesty, “I have nothing to do with justice…
Justice is not even part of the equation.”
Through the courts and litigation you can obtain
money, put a stop to certain activities, and have
statutes and documents interpreted; but the outcome
is that one person wins and one loses. Litigation is
expensive, sometimes prohibitively, preventing some
from taking their cases into the courts. Even if one can
afford litigation, then you must face the crowded court
docket and be willing to wait as the lengthy process
begins – a lengthy process which keeps disputes
broiling and relationships torn apart.
An additional issue is the fact that the dispute must be
able to be translated into legal issues – so some
disputes that seem real may not be able to be framed
into a legal issue that can be decided in court.
On the plus side, litigation ends in a decision that is
binding and enforceable; and it is appealable.
Adjudication is public and has more safeguards than
many other processes. Secondly, court decisions are
based on precedent and are more predictable than
alternative resolutions which can be formulated by the
neutral party.
In the final analysis, each person deserves their day in
court if that is the method they prefer. However,
regardless of the pros and cons of litigation, one major
consideration in making a decision as to the resolution
method is the importance of the relationship between
the two parties in the dispute. In litigation most
relationships are left unable to be repaired. If your
relationship with the opposing party is important to
you or it is one that must be maintained, it is time to
perhaps consider an ADR process.
5. Alternative Dispute Resolution (ADR)
ADR is a series of methods for settling disputes other
than court based adjudication. There are several ADR
processes which can be voluntary or ordered by the
courts. Some states require persons to enter into
arbitration or mediation before their case can be heard
in court. Hoping the case can be settled in this manner,
states do this for economic reasons as well as to assist
in clearing court dockets. In other cases such as
employment and some other contracts, arbitration is
required for settling disputes. In these contractual
cases arbitration decisions are final and cannot be
appealed in court in most instances.
One of the objections to litigation is that it can be
intimidating – the powerful against the weak – the rich
against the poor. The fact is that some forms of ADR
like arbitration can prove to be just as intimidating.
Methods of negotiation in ADR can be divided into
two basic types: distributive; and, integrative.
Distributive:
Distributive negotiating has a win or lose outcome –
the pie only has so many pieces and the more one side
gets, the less the other side has. Most often this type of
bargaining is utilized when there are fixed resources in
dispute such as money or property. Personal
relationships are low on the scale of importance.
Distributive processes are often criticized because they
put emphasis on the parties’ differences and lead to
destructive actions. To be successful in distributive
negotiating parties must guard their information and
try to get as much information from the opponent as
possible. Hardball is often necessary in distributive
techniques and relationships become second place or
are neglected and ignored.
Even when some cooperative bargaining techniques
may prove beneficial and are put in place, there may be
portions of the negotiations that can only be settled by
dividing the pie or using distributive techniques.
Integrative:
Integrative bargaining is interest based and looks for a
win/win solution. These techniques encourage
cooperative problem solving which addresses all
parties’ needs and interests. Negotiators here envision
a pie with more unlimited pieces and desire an
outcome that will maintain, rather than destroy,
relationships.
At times, even in disputes that involve money, it
becomes clear to neutral parties that they must mend
the relationship before the money issue can be
resolved – this means including integrative bargaining.
In order to be successful in integrative negotiations all
the interests on both sides must be identified and fears
must be addressed. The goal is to have both sides work
on a solution that will be beneficial to both and allow
their relationship to remain intact.
While there are many ADR processes, they all utilize
either distributive or integrative strategies; or a
combination of both. These processes cover a wide
spectrum from binding arbitration normally narrow in
scope to reconciliation being a lengthy process focused
on mending relationships between people, races,
religions and even countries.
If the dispute you are involved in has a fixed quantity
to work with and the other party is not a friend or
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 12
someone with whom you must maintain a relationship,
then you could chose from court ordered adjudication,
arbitration (binding or non-binding), mediation (non-
binding); but consider the time and the expense of
court. Consider too, that ADR can also be expensive
and if you chose to go to court when ADR fails, then
you can be faced with great expense. The process here
will be the distributive type – adversarial, demanding
concession, win at all cost.
If, on the other hand, the dispute involves friends or
lasting relationships, you might wish to avoid court
and work to maintain those relationships. Here the
process will be the integrative type – parties are joint
problem solvers, focusing on interests, and working
toward a wise decision that is good for all. You could
utilize mediation, a reconciliation process, restorative
justice or restitution among others.
The deciding factors in your decision of whether to go
to court or utilize one of the many ADR methods will
be the type of dispute, the outcome you desire, the
relationship you have with the opposing party, and the
cost involved in each. Should you decide on ADR, then
you will need to decide whether this will be a
distributive or integrative negotiation.
9 example, mediation, consensus-building, or a lawsuit)
6. Litigation and ADR Contrasted
A crucial distinction between litigation and ADR is that
whilst many legal practitioners engage in ADR
processes, there is no legal or professional requirement
for either the ADR practitioner or for party
representatives at ADR processes to be legally qualified
or to be members of legal professions such as the bar
or the law society. Many of those who engage in ADR
practice are first and foremost experts in particular
fields such as architects, builders, civil engineers,
mariners, scientists and social workers, albeit with a
thorough understanding of ADR processes and some
knowledge and understanding of law. In house legal
experts in large corporate organisations can take part
in the entire ADR process without engaging
professional lawyers thus cutting costs further, both in
terms of time lost through communicating with the
professionals and in respect of legal fees and costs.
It is also the practical knowledge and understanding of
industry and commerce which assures the parties to
ADR processes that the people responsible for settling
their dispute or assisting them to reach a settlement
understand their business and their concerns. It
further assures them that the outcome will not be
based purely on legal technicalities but will take into
account commercial practicalities and technical details
which lawyers may not fully comprehend.
9 http://www.nadr.co.uk/background/contrast.php
6. LIMITATION OF ADR IN GENERAL
Generally ADR are usually faster, and cheaper than
litigation.. they are also private and informal when also
compared to litigation and it gets both parties involved
in the settlement process and the decisions are not
necessarily final. However ADR does not alway
guarantee an agreed upon decision and with
arbitration the decision is final.10
----SEE DISADVANTAGES----
7. SUBJECT OF ADR
Typical ADR Processes :
A process is any procedure agreed to by the parties and
the third party neutral by which the parties will work
to resolve their dispute. Figure 19-1 illustrates the
spectrum of ADR processes. For further discussion see
SCAO’s Taxonomy of Alternative Dispute Resolution
Processes. The most common ADR procedures are as
follows.
Convening (also called conflict assessment) involves
the use of a neutral third party to help assess the
causes of the conflict, to identify the persons or entities
that would be affected by the outcome of the conflict,
and to help these parties consider the best process (for
for them to deal with the conflict. The convener may
also help get the parties ready for participation in a
dispute resolution process by providing educating the
parties on the nature of the selected process.
Facilitation or Consensus Building is a process used to
help a group of people or parties have constructive
discussions about complex or potentially controversial
issues. The facilitator helps the parties set ground rules
for these discussions, promotes effective
communication, elicits creative options, and keeps the
group focused and on track. Facilitation can be used
even where parties have not yet agreed to attempt to
resolve a conflict.
Mediation is a process in which a neutral third party
(the mediator) assists disputants in reaching a
mutually satisfying settlement of their differences.
Mediation is voluntary, informal, and confidential. The
mediator helps the disputants to communicate clearly,
to listen carefully, and to consider creative ways for
reaching resolution. The mediator makes no
judgments about the people or the conflict (unless
requested under the evaluative model), and issues no
decision. Any agreement that is reached must satisfy
all the disputants. The Michigan Court Rules define
mediation as a “process in which a neutral third party
facilitates communication between parties, assists in
10http://wiki.answers.com/Q/
What_are_the_disadvantages_and_advantages_of_Alt
ernative_dispute_resolution#ixzz204zUKU00
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 13
identifying issue, and helps explore solutions to
promote a mutually acceptable settlement.” MCR
2.411(A)(2). A mediator has no authoritative decision-
making power. Id.
In Michigan, the terms mediation and facilitation are
often used interchangeably to describe what is known
generally elsewhere as mediation.
Case Evaluation is an ADR process created by MCR
2.403 in which a three-person panel hears
presentations by litigants and provides a written
evaluation of the value of the case. If all of the parties
accept, a final judgment is entered on all claims
asserted in the case in the amount of the evaluation. If
one or both parties reject, the rule provides for the
imposition of sanctions in certain circumstances. The
evaluation is limited to a monetary amount, so it is not
well suited to resolving disputes seeking any form of
injunctive or other equitable relief. Although case
evaluation panels are usually assigned by the office
carrying out a circuit court’s case evaluation program,
see generally MCR 2.404, in more complex disputes
the parties often stipulate to specific panel members
who the disputants believe have expertise in the
subject matter involved in the dispute. This has the
effect of giving the parties more confidence in the case
evaluation award when made. This deviation from
usual procedure should be undertaken after obtaining
an appropriate court order.
Early Neutral Evaluation is an evaluative ADR process
initiated early in a case, often at the direction of the
court, in which the third party, who has experience or
expertise in the subject matter of the suit, meets with
the parties and may receive presentations, after which
the neutral provides the parties with an evaluation of
the likelihood of success and likely ranges of damages.
The expectation is that an early evaluation from a
knowledgeable, objective expert will prompt the
parties to take a more realistic approach to settling
their dispute. There are many variations on this
process, including use of the process to simplify or
focus issues. In some cases, the neutral may withhold
the evaluation from the parties and proceed to mediate
the conflict, revealing the evaluation only if the
mediation is unsuccessful.
Mini and Summary Jury Trials involve advisory trial
proceedings. In the first case, the dispute is presented
to a third-party neutral. A summary jury trial involves
impaneling an advisory jury to whom the parties make
an abbreviated presentation of their cases. The neutral
or the jury, as the case may be, then deliberates and
renders an advisory verdict. Where the credibility of
key witness is central to a case, such a trial may
provide valuable guidance to counsel about the likely
success of their case.
Arbitration is an adjudicatory process in which a
person or panel, other than a judge, controls pretrial
procedures, takes evidence, and renders an award
which is the equivalent of a verdict. To be enforceable
in a court the award must be entered as a judgment in
a court of competent jurisdiction. MCL 600.5025
There are narrow grounds for appeal and the parties
may agree that no appeal will be permitted. Although
some treatises discuss “non binding” arbitration, any
nonbinding process is some form of mediation and
that the term “arbitration” is best used only for a
binding process. Arbitration offers several advantages
over adjudication by a court. First, the parties can
assert more control in defining the procedure. Second,
arbitrations are private although awards usually are
entered as judgments by a court, making the terms of
the outcome public. The process generally is quicker
than court proceedings and is intended to be, and
usually is, less expensive than litigation.
The American Arbitration Association (AAA) is a major
arbitration service provider but there are many other
service providers. The parties are free to fashion their
own approach to arbitration but, unlike other ADR
processes, the parties cannot withdraw from
arbitration once it has been commenced. Because
arbitration is binding, the parties should be very
familiar with the Michigan Arbitration Act and the
Federal Arbitration Act (discussed in § 19.19) before
agreeing to arbitration. In addition, because AAA’s
arbitration rules are often incorporated into
agreements whether or not the AAA is the arbitration
services provider, parties should be familiar with these
procedures before agreeing to be bound by them.
Practitioners should review the arbitrator’s authority
to compel discovery and attendance of witnesses under
any applicable statute and the procedures under which
the arbitration is conducted. For example, the
arbitrator’s authority is broader under the Federal
Arbitration Act and narrower under the AAA’s
procedures. The parties’ agreement to arbitrate may
specify discovery obligations as a matter of contract.
If arbitration may be subject to international rules,
particular care should be taken because these
procedures may be very different from the American
norm.
Med-Arb is an ADR process in which the parties agree
in advance to commence mediation but to continue to
binding arbitration of any issues not resolved by
mediation. A different neutral generally is used for the
arbitration after the mediation is completed. This
process offers the advantage of achieving a final
resolution if mediation does not fully settle all matters.
It is not often used in environmental disputes.
Modes of ADR
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 14
The most common approaches in Michigan for
environmental disputes are mediation (both evaluative
and facilitative models), third-party neutral fact
finding, and facilitated rule or policy development.
Most two-party environmental disputes utilize
mediation at some point, whether initiated by the
parties or ordered by the court. Participants usually
include attorneys, party representatives and experts.
Where the facilitative model is employed, the third-
party neutral is usually one individual. Where the
parties seek evaluative input, it is not uncommon to
use a three-person panel. In some cases, the mediation
follows the facilitative model but if the parties do not
reach an agreement, the neutral is asked to provide an
evaluation either as a general advisory number or in
the form of an evaluation to be accepted or rejected by
the parties. In the latter case, the evaluator receives the
acceptance or rejections from each party in confidence.
Only if both sides accept does the neutral disclose the
parties’ responses. This way, if only one party accepts,
it does not lose any bargaining position by having its
acceptance disclosed to the other side.
Because many environmental disputes deal with not
just a specific sum certain but often involve definition
of the respective parties’ duties and liabilities after the
settlement, neutrals in environmental mediations may
play a more active role than in more typical tort or
contract disputes where the principal dispute is usually
money. For this same reason, environmental
mediation may result in numerous sessions conducted
over a substantial time period.
ADR Techniques or Methods11
Binding arbitration involves the presentation of a
dispute to an impartial or neutral individual
(arbitrator) or panel (arbitration panel) for issuance of
a binding decision. Unless arranged otherwise, the
parties usually have the ability to decide who the
individuals are that serve as arbitrators. In some cases,
the parties may retain a particular arbitrator (often
from a list of arbitrators) to decide a number of cases
or to serve the parties for a specified length of time
(this is common when a panel is involved). Parties
often select a different arbitrator for each new dispute.
A common understanding by the parties in all cases,
however, is that they will be bound by the opinion of
the decision maker rather than simply be obligated to
"consider" an opinion or recommendation. Under this
method, the third party's decision generally has the
force of law but does not set a legal precedent. It is
usually not reviewable by the courts.
Binding arbitration is a statutorily-mandated feature of
Federal labor management agreements. Consistent
with statute, the parties to such agreements are free to
11 http://www.opm.gov/er/adrguide/section1-a.asp
negotiate the terms and conditions under which
arbitrators are used to resolve disputes, including the
procedures for their selection. Some agreements may
provide for "permanent" arbitrators and some may
provide for arbitration panels.
Conciliation involves building a positive relationship
between the parties to a dispute. A third party or
conciliator (who may or may not be totally neutral to
the interests of the parties) may be used by the parties
to help build such relationships.
A conciliator may assist parties by helping to establish
communication, clarifying misperceptions, dealing
with strong emotions, and building the trust necessary
for cooperative problem-solving. Some of the
techniques used by conciliators include providing for a
neutral meeting place, carrying initial messages
between/among the parties, reality testing regarding
perceptions or misperceptions, and affirming the
parties' abilities to work together. Since a general
objective of conciliation is often to promote openness
by the parties (to take the risk to begin negotiations),
this method allows parties to begin dialogues, get to
know each other better, build positive perceptions, and
enhance trust. The conciliation method is often used in
conjunction with other methods such as facilitation or
mediation.
Cooperative problem-solving is one of the most basic
methods of dispute resolution. This informal process
usually does not use the services of a third party and
typically takes place when the concerned parties agree
to resolve a question or issue of mutual concern. It is a
positive effort by the parties to collaborate rather than
compete to resolve a dispute.
Cooperative problem-solving may be the procedure of
first resort when the parties recognize that a problem
or dispute exists and that they may be affected
negatively if the matter is not resolved. It is most
commonly used when a conflict is not highly polarized
and prior to the parties forming "hard line" positions.
This method is a key element of labor-management
cooperation programs.
Dispute panels use one or more neutral or impartial
individuals who are available to the parties as a means
to clarify misperceptions, fill in information gaps, or
resolve differences over data or facts. The panel
reviews conflicting data or facts and suggests ways for
the parties to reconcile their differences. These
recommendations may be procedural in nature or they
may involve specific substantive recommendations,
depending on the authority of the panel and the needs
or desires of the parties. Information analyses and
suggestions made by the panel may be used by the
parties in other processes such as negotiations.
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 15
This method is generally an informal process and the
parties have considerable latitude about how the panel
is used. It is particularly useful in those organizations
where the panel is non-threatening and has established
a reputation for helping parties work through and
resolve their own disputes short of using some formal
dispute resolution process.
Early neutral evaluation uses a neutral or impartial
third party to provide a non-binding evaluation,
sometimes in writing, which gives the parties to a
dispute an objective perspective on the strengths and
weaknesses of their cases. Under this method, the
parties will usually make informal presentations to the
neutral to highlight the parties' cases or positions. The
process is used in a number of courts across the
country, including U.S. District Courts.
Early neutral evaluation is appropriate when the
dispute involves technical or factual issues that lend
themselves to expert evaluation. It is also used when
the parties disagree significantly about the value of
their cases and when the top decision makers of one or
more of the parties could be better informed about the
real strengths and weaknesses of their cases. Finally, it
is used when the parties are seeking an alternative to
the expensive and time-consuming process of
following discovery procedures.
Facilitation involves the use of techniques to improve
the flow of information in a meeting between parties to
a dispute. The techniques may also be applied to
decision-making meetings where a specific outcome is
desired (e.g., resolution of a conflict or dispute). The
term "facilitator" is often used interchangeably with
the term "mediator," but a facilitator does not typically
become as involved in the substantive issues as does a
mediator. The facilitator focuses more on the process
involved in resolving a matter.
The facilitator generally works with all of the meeting's
participants at once and provides procedural
directions as to how the group can move efficiently
through the problem-solving steps of the meeting and
arrive at the jointly agreed upon goal. The facilitator
may be a member of one of the parties to the dispute or
may be an external consultant. Facilitators focus on
procedural assistance and remain impartial to the
topics or issues under discussion.
The method of facilitating is most appropriate when:
(1) the intensity of the parties' emotions about the
issues in dispute are low to moderate; (2) the parties or
issues are not extremely polarized; (3) the parties have
enough trust in each other that they can work together
to develop a mutually acceptable solution; or (4) the
parties are in a common predicament and they need or
will benefit from a jointly-acceptable outcome.
Factfinding is the use of an impartial expert (or group)
selected by the parties, an agency, or by an individual
with the authority to appoint a factfinder in order to
determine what the "facts" are in a dispute. The
rationale behind the efficacy of factfinding is the
expectation that the opinion of a trusted and impartial
neutral will carry weight with the parties. Factfinding
was originally used in the attempt to resolve labor
disputes, but variations of the procedure have been
applied to a wide variety of problems in other areas as
well.
Factfinders generally are not permitted to resolve or
decide policy issues. The factfinder may be authorized
only to investigate or evaluate the matter presented
and file a report establishing the facts in the matter. In
some cases, he or she may be authorized to issue either
a situation assessment or a specific non-binding
procedural or substantive recommendation as to how a
dispute might be resolved. In cases where such
recommendations are not accepted, the data (or facts)
will have been collected and organized in a fashion that
will facilitate further negotiations or be available for
use in later adversarial procedures.
Interest-based problem-solving is a technique that
creates effective solutions while improving the
relationship between the parties. The process separates
the person from the problem, explores all interests to
define issues clearly, brainstorms possibilities and
opportunities, and uses some mutually agreed upon
standard to reach a solution. Trust in the process is a
common theme in successful interest-based problem-
solving.
Interest-based problem-solving is often used in
collective bargaining between labor and management
in place of traditional, position-based bargaining.
However, as a technique, it can be effectively applied in
many contexts where two or more parties are seeking
to reach agreement.
Mediated arbitration, commonly known as "med-arb,"
is a variation of the arbitration procedure in which an
impartial or neutral third party is authorized by the
disputing parties to mediate their dispute until such
time as they reach an impasse. As part of the process,
when impasse is reached, the third party is authorized
by the parties to issue a binding opinion on the cause
of the impasse or the remaining issue(s) in dispute.
In some cases, med-arb utilizes two outside parties--
one to mediate the dispute and another to arbitrate any
remaining issues after the mediation process is
completed. This is done to address some parties'
concerns that the process, if handled by one third
party, mixes and confuses procedural assistance (a
characteristic of mediation) with binding decision
making (a characteristic of arbitration). The concern is
that parties might be less likely to disclose necessary
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 16
information for a settlement or are more likely to
present extreme arguments during the mediation stage
if they know that the same third party will ultimately
make a decision on the dispute.
Mediated arbitration is useful in narrowing issues
more quickly than under arbitration alone and helps
parties focus their resources on the truly difficult
issues involved in a dispute in a more efficient and
effective manner.
Mediation is the intervention into a dispute or
negotiation of an acceptable, impartial and neutral
third party who has no decision-making authority. The
objective of this intervention is to assist the parties in
voluntarily reaching an acceptable resolution of issues
in dispute. Mediation is useful in highly-polarized
disputes where the parties have either been unable to
initiate a productive dialogue, or where the parties
have been talking and have reached a seemingly
insurmountable impasse.
A mediator, like a facilitator, makes primarily
procedural suggestions regarding how parties can
reach agreement. Occasionally, a mediator maysuggest
some substantive options as a means of encouraging
the parties to expand the range of possible resolutions
under consideration. A mediator often works with the
parties individually, in caucuses, to explore acceptable
resolution options or to develop proposals that might
move the parties closer to resolution.
Mediators differ in their degree of directiveness or
control while assisting disputing parties. Some
mediators set the stage for bargaining, make minimal
procedural suggestions, and intervene in the
negotiations only to avoid or overcome a deadlock.
Other mediators are much more involved in forging
the details of a resolution. Regardless of how directive
the mediator is, the mediator performs the role of
catalyst that enables the parties to initiate progress
toward their own resolution of issues in dispute.
Minitrials involve a structured settlement process in
which each side to a dispute presents abbreviated
summaries of its cases before the major decision
makers for the parties who have authority to settle the
dispute. The summaries contain explicit data about the
legal basis and the merits of a case. The rationale
behind a minitrial is that if the decision makers are
fully informed as to the merits of their cases and that
of the opposing parties, they will be better prepared to
successfully engage in settlement discussions. The
process generally follows more relaxed rules for
discovery and case presentation than might be found
in the court or other proceeding and usually the parties
agree on specific limited periods of time for
presentations and arguments.
A third party who is often a former judge or individual
versed in the relevant law is the individual who
oversees a minitrial. That individual is responsible for
explaining and maintaining an orderly process of case
presentation and usually makes an advisory ruling
regarding a settlement range, rather than offering a
specific solution for the parties to consider. The parties
can use such an advisory opinion to narrow the range
of their discussions and to focus in on acceptable
settlement options--settlement being the ultimate
objective of a minitrial.
The minitrial method is a particularly efficient and cost
effective means for settling contract disputes and can
be used in other cases where some or all of the
following characteristics are present: (1) it is important
to get facts and positions before high-level decision
makers; (2) the parties are looking for a substantial
level of control over the resolution of the dispute; (3)
some or all of the issues are of a technical nature; and
(4) a trial on the merits of the case would be very long
and/or complex.
Negotiated rulemaking, commonly known as "reg-
neg," brings together representatives of various
interest groups and a Federal agency to negotiate the
text of a proposed rule. The method is used before a
proposed rule is published in the Federal Register
under the Administrative Procedures Act (APA). The
first step is to set up a well-balanced group
representing the regulated public, public interest
groups, and state and local governments, and join
them with a representative of the Federal agency in a
Federally chartered advisory committee to negotiate
the text of the rule. If the committee reaches consensus
on the rule, then the Federal agency can use this
consensus as a basis for its proposed rule.
While reg-neg may result in agreement on composition
of a particular rule an agency may wish to propose,
when the rule is proposed it is still subject to public
review under the APA. This is the last step in the
process. Federal agency experience is that the process
shortens considerably the amount of time and reduces
the resources needed to promulgate sensitive, complex,
and far-reaching regulations--often regulations
mandated by statute.
Settlement conferences involve a pre-trial conference
conducted by a settlement judge or referee and
attended by representatives for the opposing parties
(and sometimes attended by the parties themselves) in
order to reach a mutually acceptable settlement of the
matter in dispute. The method is used in the judicial
system and is a common practice in some jurisdictions.
Courts that use this method may mandate settlement
conferences in certain circumstances.
The role of a settlement judge is similar to that of a
mediator in that he or she assists the parties
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 17
procedurally in negotiating an agreement. Such judges
play much stronger authoritative roles than mediators,
since they also provide the parties with specific
substantive and legal information about what the
disposition of the case might be if it were to go to
court. They also provide the parties with possible
settlement ranges that could be considered.
Non-binding arbitration involves presenting a dispute
to an impartial or neutral individual (arbitrator) or
panel (arbitration panel) for issuance of an advisory or
non-binding decision. This method is generally one of
the most common quasi-judicial means for resolving
disputes and has been used for a long period of time to
resolve labor/management and commercial disputes.
Under the process, the parties have input into the
selection process, giving them the ability to select an
individual or panel with some expertise and knowledge
of the disputed issues, although this is not a
prerequisite for an individual to function as an
arbitrator. Generally, the individuals chosen are those
known to be impartial, objective, fair, and to have the
ability to evaluate and make judgments about data or
facts. The opinions issued by the third party in such
cases are non-binding; however, parties do have the
flexibility to determine, by mutual agreement, that an
opinion will be binding in a particular case.
Non-binding arbitration is appropriate for use when
some or all of the following characteristics are present
in a dispute: (1) the parties are looking for a quick
resolution to the dispute; (2) the parties prefer a third
party decision maker, but want to ensure they have a
role in selecting the decision maker; and (3) the parties
would like more control over the decision making
process than might be possible under more formal
adjudication of the dispute.
Ombudsmen are individuals who rely on a number of
techniques to resolve disputes. These techniques
include counseling, mediating, conciliating, and
factfinding. Usually, when an ombudsman receives a
complaint, he or she interviews parties, reviews files,
and makesrecommendations to the disputants.
Typically, ombudsmen do not impose solutions. The
power of the ombudsman lies in his or her ability to
persuade the parties involved to accept his or her
recommendations. Generally, an individual not
accepting the proposed solution of the ombudsman is
free to pursue a remedy in other forums for dispute
resolution.
Ombudsmen may be used to handle employee
workplace complaints and disputes or complaints and
disputes from outside of the place of employment, such
as those from customers or clients. Ombudsmen are
often able to identify and track systemic problems and
suggest ways of dealing with those problems.
Partnering is used to improve a variety of working
relationships, primarily between the Federal
Government and contractors, by seeking to prevent
disputes before they occur. The method relies on an
agreement in principle to share the risks involved in
completing a project and to establish and promote a
nurturing environment. This is done through the use of
team-building activities to help define common goals,
improve communication, and foster a problem-solving
attitude among the group of individuals who must
work together throughout a contract's term.
Partnering in the contract setting typically involves an
initial partnering workshop after the contract award
and before the work begins. This is a facilitated
workshop involving the key stakeholders in the project.
The purpose of the workshop is to develop a team
approach to the project. This generally results in a
partnership agreement that includes dispute
prevention and resolution procedures.
Peer review is a problem-solving process where an
employee takes a dispute to a group or panel of fellow
employees and managers for a decision. The decision
may or may not be binding on the employee and/or the
employer, depending on the conditions of the
particular process. If it is not binding on the employee,
he or she would be able to seek relief in traditional
forums for dispute resolution if dissatisfied with the
decision under peer review. The principle objective of
the method is to resolve disputes early before they
become formal complaints or grievances.
Typically, the panel is made up of employees and
managers who volunteer for this duty and who are
trained in listening, questioning, and problem-solving
skills as well as the specific policies and guidelines of
the panel. Peer review panels may be standing groups
of individuals who are available to address whatever
disputes employees might bring to the panel at any
given time. Other panels may be formed on an ad hoc
basis through some selection process initiated by the
employee, e.g., blind selection of a certain number of
names from a pool of qualified employees and
managers.
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INTERNATIONAL
ALTERNATIVE DISPUTE
RESOLUTION/
PEACEFUL
SETTLEMENT OF
INTERNATIONAL
DISPUTE
8. INTRODUCTION TO PUBLIC
INTERNATIONAL LAW AND
PRIVATE INTERNATIONAL
LAW
Public international law, which governs the
relationship between provinces and international
entities. It includes these legal fields: treaty law, law of
sea, international criminal law, the laws of war or
international humanitarian law and international
human rights law.
Public international law concerns the structure
and conduct of sovereign states; analogous
entities, such as the Holy See; and
intergovernmental organizations. To a lesser
degree, international law also may affect
multinational corporations and individuals, an
impact increasingly evolving beyond domestic
legal interpretation and enforcement. Public
international law has increased in use and
importance vastly over the twentieth century, due
to the increase in global trade, environmental
deterioration on a worldwide scale, awareness of
human rights violations, rapid and vast increases
in international transportation and a boom in
global communications.
The field of study combines two main branches:
the law of nations (jus gentium) and
international agreements and conventions (jus
inter gentes), which have different foundations
and should not be confused.
Public international law should not be confused
with "private international law", which is
concerned with the resolution of conflict of laws.
In its most general sense, international law
"consists of rules and principles of general
application dealing with the conduct of states and
of intergovernmental organizations and with their
relations inter se, as well as with some of their
relations with persons, whether natural or
juridical.
Private international law, or conflict of
laws, which addresses the questions of (1) which
jurisdiction may hear a case, and (2) the law
concerning which jurisdiction applies to the issues in
the case.12
Conflict of laws (or private international law) is a set of
procedural rules that determines which legal system
and which jurisdiction's applies to a given dispute. The
rules typically apply when a legal dispute has a
"foreign" element such as a contract agreed to by
parties located in different countries, although the
"foreign" element also exists in multi-jurisdictional
countries such as the United Kingdom, the United
States, Australia and Canada.
The term conflict of laws itself originates from
situations where the ultimate outcome of a legal
dispute depended upon which law applied, and the
common law courts manner of resolving the conflict
between those laws. In civil law, lawyers and legal
scholars refer to conflict of laws as private
international law. Private international law has no real
connection with public international law, and is
instead a feature of local law which varies from country
to country.
The three branches of conflict of laws are
• Jurisdiction – whether the forum court has
the power to resolve the dispute at hand
• Choice of law – the law which is being applied
to resolve the dispute
• Foreign judgments – the ability to recognize
and enforce a judgment from an external
forum within the jurisdiction of the
adjudicating forum
• Conflicts between public
international law and national
sovereignty
See also: Monism and dualism in international law
The conflict between international law and national
sovereignty is subject to vigorous debate and dispute in
academia, diplomacy, and politics. Certainly, there is a
growing trend toward judging a state's domestic
actions in the light of international law and standards.
Numerous people now view the nation-state as the
primary unit of international affairs, and believe that
only states may choose to voluntarily enter into
12 http://en.wikipedia.org/wiki/International_law
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 19
commitments under international law, and that they
have the right to follow their own counsel when it
comes to interpretation of their commitments. Certain
scholars and political leaders feel that these modern
developments endanger nation states by taking power
away from state governments and ceding it to
international bodies such as the U.N. and the World
Bank, argue that international law has evolved to a
point where it exists separately from the mere consent
of states, and discern a legislative and judicial process
to international law that parallels such processes
within domestic law. This especially occurs when states
violate or deviate from the expected standards of
conduct adhered to by all civilized nations.
A number of states place emphasis on the principal of
territorial sovereignty, thus seeing states as having free
rein over their internal affairs. Other states oppose this
view. One group of opponents of this point of view,
including many European nations, maintain that all
civilized nations have certain norms of conduct
expected of them, including the prohibition of
genocide, slavery and the slave trade, wars of
aggression, torture, and piracy, and that violation of
these universal norms represents a crime, not only
against the individual victims, but against humanity as
a whole. States and individuals who subscribe to this
view opine that, in the case of the individual
responsible for violation of international law, he "is
become, like the pirate and the slave trader before him,
hostis humani generis, an enemy of all mankind",[4]
and thus subject to prosecution in a fair trial before
any fundamentally just tribunal, through the exercise
of universal jurisdiction.
Though the European democracies tend to support
broad, universalistic interpretations of international
law, many other democracies have differing views on
international law. Several democracies, including
India, Israel and the United States, take a flexible,
eclectic approach, recognizing aspects of public
international law such as territorial rights as universal,
regarding other aspects as arising from treaty or
custom, and viewing certain aspects as not being
subjects of public international law at all. Democracies
in the developing world, due to their past colonial
histories, often insist on non-interference in their
internal affairs, particularly regarding human rights
standards or their peculiar institutions, but often
strongly support international law at the bilateral and
multilateral levels, such as in the United Nations, and
especially regarding the use of force, disarmament
obligations, and the terms of the UN Charter.
7. BASIC PRINCIPLES OF INTERNATIONAL
LAW (SOVEREIGNTY,
JURISDICTION, INDEPENDENCE
etc.)
1. Sovereignty
is the quality of having supreme, independent
authority over a geographic area, such as a territory. [1]
It can be found in a power to rule and make law that
rests on a political fact for which no purely legal
explanation can be provided. In theoretical terms, the
idea of "sovereignty", historically, from Socrates to
Thomas Hobbes, has always necessitated a moral
imperative on the entity exercising it.
For centuries past, the idea that a state could be
sovereign was always connected to its ability to
guarantee the best interests of its own citizens. Thus, if
a state could not act in the best interests of its own
citizens, it could not be thought of as a “sovereign”
state.[2]
The concept of sovereignty has been discussed
throughout history, from the time of the Romans
through to the present day. It has changed in its
definition, concept, and application throughout,
especially during the Age of Enlightenment. The
current notion of state sovereignty is often traced back
to the Peace of Westphalia (1648), which, in relation to
states, codified the basic principles:
territorial integrity
• border inviolability
• supremacy of the state (rather than the
Church)
• a sovereign is the supreme lawmaking
authority within its jurisdiction. 13
2. Universal jurisdiction14
is a principle of international law that allows states to
investigate and prosecute a national of any state found
within their borders who is alleged to have committed
certain international crimes.
This principle is premised upon the idea that crimes
under international law such as war crimes, crimes
against humanity, airplane hijacking and genocide as
well as torture, extrajudicial killings, and forced
disappearances are so serious and reprehensible that
any state may prosecute the offender regardless of
nationality because they are in essence an “enemy of
mankind.”
In exercising universal jurisdiction, the investigating
and prosecuting state represents the interests of the
international community as a whole in enforcing
international law and ending impunity for atrocities
and crimes that shock the consciousness of humanity.
13 http://en.wikipedia.org/wiki/Sovereignty
14
http://www.judicialmonitor.org/archive_1007/generalprinciples.html
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 20
Universal jurisdiction allows a state to prosecute an
individual in its courts where none of the traditional
bases for jurisdiction, i.e. territorial, nationality,
passive personality, or protective, exists. Universal
jurisdiction is usually a type of permissive jurisdiction,
in that it requires a State to establish domestic laws
authorizing the right to exercise jurisdiction over
specified crimes.
The main limitation on the exercise of universal
jurisdiction is head of state immunity, which has been
extended to other certain high-ranking state ministers.
A sitting head of state or high-ranking minister is
immune from prosecution by another state. This
principle was reaffirmed by the International Court of
Justice in the Case Concerning The Arrest Warrant of
11 April 2000 (Congo v. Belgium). Yerodia Ndombasi,
Congo’s Foreign Minister, was found to be immune
from prosecution by Belgium. The ICJ, however, in a
concurring opinion, reaffirmed the underlying
principle of universal jurisdiction as being lawful.
Universal jurisdiction or universality principle is a
principle in public international law (as opposed to
private international law) whereby states claim
criminal jurisdiction over persons whose alleged
crimes were committed outside the boundaries of the
prosecuting state, regardless of nationality, country of
residence, or any other relation with the prosecuting
country. The state backs its claim on the grounds that
the crime committed is considered a crime against all,
which any state is authorized to punish, as it is too
serious to tolerate jurisdictional arbitrage.
The concept of universal jurisdiction is therefore
closely linked to the idea that some international
norms are erga omnes, or owed to the entire world
community, as well as the concept of jus cogens – that
certain international law obligations are binding on all
states and cannot be modified by treaty. [1]
According to critics, the principle justifies a unilateral
act of wanton disregard of the sovereignty of a nation
or the freedom of an individual concomitant to the
pursuit of a vendetta or other ulterior motives, with the
obvious assumption that the person or state thus
disenfranchised is not in a position to bring retaliation
to the state applying this principle.
The concept received a great deal of prominence with
Belgium's 1993 "law of universal jurisdiction", which
was amended in 2003 in order to reduce its scope
following a case before the International Court of
Justice regarding an arrest warrant issued under the
law, entitled Case Concerning the Arrest Warrant of 11
April 2000 (Democratic Republic of the Congo v.
Belgium).[2] The creation of the International
Criminal Court (ICC) in 2002 reduced the perceived
need to create universal jurisdiction laws, although the
ICC is not entitled to judge crimes committed before
2002.
According to Amnesty International, a proponent of
universal jurisdiction, certain crimes pose so serious a
threat to the international community as a whole, that
states have a logical and moral duty to prosecute an
individual responsible for it; no place should be a safe
haven for those who have committed genocide,[3]
crimes against humanity, extrajudicial executions, war
crimes, torture and forced disappearances.[4]
Opponents, such as Henry Kissinger, argue that
universal jurisdiction is a breach on each state's
sovereignty: all states being equal in sovereignty, as
affirmed by the United Nations Charter, "Widespread
agreement that human rights violations and crimes
against humanity must be prosecuted has hindered
active consideration of the proper role of international
courts. Universal jurisdiction risks creating universal
tyranny — that of judges."[5][6] According to
Kissinger, as a practical matter, since any number of
states could set up such universal jurisdiction
tribunals, the process could quickly degenerate into
politically-driven show trials to attempt to place a
quasi-judicial stamp on a state's enemies or opponents.
The United Nations Security Council Resolution 1674,
adopted by the United Nations Security Council on
April 28, 2006, "Reaffirm[ed] the provisions of
paragraphs 138 and 139 of the 2005 World Summit
Outcome Document regarding the responsibility to
protect populations from genocide, war crimes, ethnic
cleansing and crimes against humanity" and commits
the Security Council to action to protect civilians in
armed conflict.15
3. Independence of the Judiciary16
In Brief
International law requires that cases presented in
international tribunals and cases presented in
domestic tribunals where international law is
applicable be resolved by tribunals that are
independent and that are composed of independent
judges.
In Theory
Asserting that the above is a principle of international
law may seem strange, because it is not usually
included in the litany of principles of international law
that a student would encounter in studying
international law, or that a professor of international
law would enunciate in his or her lectures on
international law. For example and by analogy, law
students in the United States studying constitutional
15 http://en.wikipedia.org/wiki/Universal_jurisdiction
16
http://www.judicialmonitor.org/archive_0506/generalprinciples.html
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 21
law or criminal law would not be confronted by a
professor with cases which discuss, or texts that
espouse, the concept of an independent judiciary in
either the federal court system or the court systems of
the individual states. Perhaps the reason is because the
necessity of an independent judiciary in a country
espousing democracy and the rule of law is self-
evident. Nevertheless it is important to highlight this
principle and resolve any questions that might be
raised as to the validity of it as a principle in
international law.
One might, in an attempt to resolve any doubt or
question about this principle, respond by simply
stating, as indicated above, that international law,
because it is law, presumes or has as its basis the “rule
of law.” And the rule of law necessarily incorporates
the idea of dispute resolution by peaceful means, and
the further idea of the conduct or hearing of cases
according to recognized procedures, including
recognized tribunals. And given the necessity of
tribunals to resolve disputes and hear cases, to have
any validity those tribunals must necessarily be
independent and made up of independent judges. Thus
one argument would be simply that the whole idea of
international law requires independent tribunals and
independent judges.
There is, however, another approach that may be taken
in asserting that independent tribunals and
independent judges in the dispute resolution and case-
hearing aspects of international law together form a
principle of international law. One definition of law is
that it is simply those principles or rules that a court
would enforce or give effect to in resolving a case. Thus
in cases involving the public or the government, courts
would look to a constitution, a statute, or a regulation
adopted by a regulatory body. In private disputes,
courts would look to the “private law” of the parties,
such as a contract or agreement. Using this definition
of law, is the guarantee of an independent judiciary a
principle of international law that would be recognized
and applied by an international tribunal? For example,
if a question arose in the International Court of
Justice, the grandfather of international courts,
whether the guarantee of an independent judiciary is a
recognized principle of international law, how would
the ICJ resolve that issue?
Actual Support for Principle
The International Court of Justice might look no
further than the statute that created it, the Statute of
the International Court of Justice, adopted by
countries in conjunction with the creation of the
United Nations in 1945 (the ICJ is the immediate
successor to the Permanent Court of International
Justice, created at the time of the establishment of the
League of Nations following World War I). Article 2 of
that Statute provides:
The Court shall be composed of a body of independent
judges, elected regardless of their nationality from
among persons of high moral character, who possess
the qualifications required in their respective countries
for appointment to the highest judicial offices, or are
jurisconsults of recognized competence in
international law.
In addition, article 30 requires that the judges who sit
on that court exercise their powers “impartially and
conscientiously.”
In resolving any doubt, the ICJ might review Article 38
of the Statute, which enunciates sources of law to be
applied by the Court:
The Court, whose function is to decide in accordance
with international law such disputes as are submitted
to it, shall apply:
a. international conventions, whether general or
particular, establishing rules expressly recognized by
the contesting states;
b. international custom, as evidence of a general
practice accepted as law;
c. the general principles of law recognized by civilized
nations;
d. subject to the provisions of Article 59, judicial
decisions and the teachings of the most highly
qualified publicists of the various nations, as
subsidiary means for the determination of rules of law.
The Court would then inquire whether any of these
“sources” of law require an independent judiciary to
resolve international cases or domestic cases with an
ingredient of international law. With respect to
international conventions Article 10 of the Universal
Declaration of Human Rights states:
Everyone is entitled in full equality to a fair and public
hearing by an independent and impartial tribunal, in
the determination of his rights and obligations and of
any criminal charge against him.
In addition part of Article 5 of the European
Convention on Human Rights states:
In the determination of his civil rights and obligations
or of any criminal charge against him, everyone is
entitled to a fair and public hearing within a
reasonable time by an independent and impartial
tribunal established by law.
One other convention, the International Covenant on
Civil and Political Rights, guarantees in the
determination of any criminal charge or of rights and
obligations at a suit at law, a fair and public hearing by
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 22
a competent, independent and impartial tribunal
established by law.
There are undoubtedly other international conventions
that have similar provisions. Thus the Court could
apply these provisions of international conventions in
ruling that an independent judiciary is a principle of
international law.
Moreover, most countries have some kind of provision
in their constitution or in a national statute that
provides for an independent judiciary. Former
Associate Justice of the U.S. Supreme Court, Sandra
Day O’Connor, in a speech in 2003 before the Arab
Judicial Forum, pointed out that the constitutions of
almost all Arab countries contain provisions for an
independent judiciary. She specifically mentioned in
the speech the constitutions of Bahrain, Egypt, and
Jordan. Other countries where an independent
judiciary is part of the fabric of the legal system are the
United States, Canada, and Australia. Thus the concept
of an independent judiciary is a general principle of
law recognized by civilized nations.
Other Source Documents
Finally, the concept of an independent judiciary is
included in the “teachings of the most highly qualified
publicists of the various nations.” The International
Commission of Jurists, one of the most prestigious
bodies of international jurists and lawyers, in 2004,
issued what is known as the Berlin Declaration on
Upholding Human Rights and the Rule of Law in
Combating Terrorism, which confirmed the idea of an
independent judiciary “in the development and
implementation of counter-terrorism measures.” Also
a group of chief justices from various countries,
meeting in The Hague in 2001-2002, issued what is
known as the Bangalore Draft Code of Judicial
Conduct 2001, Adopted by the Judicial Group on
Strengthening Judicial Integrity, as revised at the
Round Table Meeting of Chief Justices Held at the
Peace Palace, The Hague, November 25-26, 2002.
Value I of that declaration is independence of the
judiciary, and the following items 1.1-1.4 specifically
spell out what is meant by or contained in that value.
Thus three out of the four sources of international law
that are authorized for use by the International Court
of Justice in its organic statute confirm that an
independent judiciary is a principle of international
law.
8. ARTICLE 33 PARAGRAPH 1 OF THE UN
CHARTER
• The parties to any dispute, the continuance of
which is likely to endanger the maintenance
of international peace and security, shall,
first of all, seek a solution by negotiation,
enquiry, mediation, conciliation,
arbitration, judicial settlement, resort
to regional agencies or arrangements,
or other peaceful means of their own
choice.
9. INTERNATIONAL COURT OF JUSTICE
The International Court of Justice (French: Cour
internationale de Justice; commonly referred to as the
World Court or ICJ) is the primary judicial organ of
the United Nations. It is based in the Peace Palace in
The Hague, Netherlands. Its main functions are to
settle legal disputes submitted to it by states and to
provide advisory opinions on legal questions submitted
to it by duly authorized international organs, agencies,
and the UN General Assembly.
Jurisdiction
As stated in Article 93 of the UN Charter, all 193 UN
members are automatically parties to the Court's
statute.[11] Non-UN members may also become parties
to the Court's statute under the Article 93(2)
procedure. For example, before becoming a UN
member state, Switzerland used this procedure in 1948
to become a party. And Nauru became a party in 1988.
Once a state is a party to the Court's statute, it is
entitled to participate in cases before the Court.
However, being a party to the statute does not
automatically give the Court jurisdiction over disputes
involving those parties. The issue of jurisdiction is
considered in the two types of ICJ cases: contentious
issues and advisory opinions.
9. RELEVANT ALTERNATIVE
DISPUTE SETTLEMENT
INSTITUTIONS
4. PERMANENT COURT OF
ARBITRATION (HAGUE
CONVENTION OF 1907)
The Permanent Court of Arbitration (PCA), is an
international organization based in The Hague in the
Netherlands.
HISTORY- The court was established in 1899 as one of
the acts of the first Hague Peace Conference, which
makes it the oldest institution for international dispute
resolution.
The creation of the PCA is set out under Articles 20 to
29 of the 1899 Hague Convention for the pacific
settlement of international disputes, which was a result
of the first Hague Peace Conference. At the second
Hague Peace Conference, the earlier Convention was
revised by the 1907 Convention for the Pacific
Settlement of International Disputes.
Unlike the ICJ, the PCA is not just open to states but
also to other parties. The PCA provides services for the
resolution of disputes involving various combinations
of states, state entities, intergovernmental
organizations, and private parties.
PCA courtroom.
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 23
The PCA is not a “court in the conventional
understanding of that term, but an administrative
organization with the object of having permanent and
readily available means to serve as the registry for
purposes of international arbitration and other related
procedures, including commissions of enquiry and
conciliation.”[2] It is a permanent framework available
to assist temporary arbitral tribunals or commissions.
The judges or abitrators that hear cases are officially
called "Members" of the Court.
The PCA is housed in the Peace Palace in The Hague,
which was built specially for the Court in 1913 with an
endowment from Andrew Carnegie. From 1922 on, the
building also housed the distinctly separate Permanent
Court of International Justice, which was replaced by
the International Court of Justice in 1946.
In the early 1980s, the PCA helped in setting up the
administrative services of the Iran-United States
Claims Tribunal.
The public at large is usually more familiar with the
International Court of Justice than with the Permanent
Court of Arbitration, partly because of the closed
nature of cases handled by the PCA and to the low
number of cases dealt with between 1946 and 1990.
The PCA's caseload has, however, increased since then.
The PCA administers cases arising out of international
treaties (including bilateral and multilateral
investment treaties), and other agreements to
arbitrate. The cases conducted by the PCA span a wide
range of legal issues, including disputes over territorial
and maritime boundaries, sovereignty, human rights,
international investment (investor-state arbitrations),
and matters concerning international and regional
trade.
Hearings are rarely open to the public and sometimes
even the decision itself is kept confidential at the
request of the parties. Many decisions and related
documents are available on the PCA website.
5. Hague Convention of 1907
The Hague Conventions were two international
treaties negotiated at international peace conferences
at The Hague in the Netherlands: The First Hague
Conference in 1899 and the Second Hague Conference
in 1907. Along with the Geneva Conventions, the
Hague Conventions were among the first formal
statements of the laws of war and war crimes in the
body of secular international law. A third conference
was planned for 1914 and later rescheduled for 1915,
but never took place due to the start of World War I.
The German international law scholar and neo-
Kantian pacifist Walther Schücking called the
assemblies the "international union of Hague
conferences".[1] and saw them as a nucleus of an
international federation that was to meet at regular
intervals to administer justice and develop
international law procedures for the peaceful
settlement of disputes, asserting "that a definite
political union of the states of the world has been
created with the First and Second Conferences." The
various agencies created by the Conferences, like the
Permanent Court of Arbitration, "are agents or organs
of the union."
A major effort in both the conferences was to create a
binding international court for compulsory arbitration
to settle international disputes, which was considered
necessary to replace the institution of war. This effort,
however, failed to realize success either in 1899 or in
1907. The First Conference was generally a success and
was focused on disarmament efforts. The Second
Conference failed to create a binding international
court for compulsory arbitration but did enlarge the
machinery for voluntary arbitration, and established
conventions regulating the collection of debts, rules of
war, and the rights and obligations of neutrals. Along
with disarmament and obligatory arbitration, both
conferences included negotiations concerning the laws
of war and war crimes. Many of the rules laid down at
the Hague Conventions were violated in the First
World War. The German invasion of Belgium, for
instance, was a violation of Hague III (1907), which
states that hostilities must not commence without
explicit warning
Most of the great powers, including the United States,
Britain, Russia, France, China, and Persia, favored a
binding international arbitration, but the condition
was that the vote should be unanimous, and a few
countries, led by Germany, vetoed the idea.
The second conference, in 1907, was generally a
failure, with few major decisions. However, the
meeting of major powers did prefigure later 20th-
century attempts at international cooperation.
The second conference was called at the suggestion of
President Theodore Roosevelt in 1904, but postponed
because of the war between Russia and Japan. The
Second Peace Conference was held from June 15 to
October 18, 1907, to expand upon the original Hague
Convention, modifying some parts and adding others,
with an increased focus on naval warfare. The British
tried to secure limitation of armaments, but were
defeated by the other powers, led by Germany, which
feared a British attempt to stop the growth of the
German fleet. Germany also rejected proposals for
compulsory arbitration. However, the conference did
enlarge the machinery for voluntary arbitration, and
established conventions regulating the collection of
debts, rules of war, and the rights and obligations of
neutrals.
The Final Agreement was signed on October 18, 1907,
and entered into force on January 26, 1910. It
consisted of thirteen sections, of which twelve were
ratified and entered into force:
: The Pacific Settlement of International Disputes
I
: The Limitation of Employment of Force for Recovery
II
of Contract Debts
III
: The Opening of Hostilities
IV
: The Laws and Customs of War on Land
o includes the Annex on The
Qualifications of Belligerents, Chapter
II: Prisoners of War
V
: The Rights and Duties of Neutral Powers and
Persons in Case of War on Land
: The Status of Enemy Merchant Ships at the
VI
Outbreak of Hostilities
VII
: The Conversion of Merchant Ships into War-Ships
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 24
VIII
: The Laying of Automatic Submarine Contact Mines
IX
: Bombardment by Naval Forces in Time of War
X
: Adaptation to Maritime War of the Principles of the
Geneva Convention
XI
: Certain Restrictions with Regard to the Exercise of
the Right of Capture in Naval War
• XII: The Creation of an International Prize Court
[Not
Ratified][5]
: The Rights and Duties of Neutral Powers in Naval
XIII
War
Two declarations were signed as well:
• Declaration I: extending Declaration II from
the 1899 Conference to other types of
aircraft[6]
• Declaration II: on the obligatory arbitration
The Brazilian delegation was led by the statesman Ruy
Barbosa, whose contribution was essential for the
defense of the principle of legal equality of nations. [7]
The British delegation included the 11th Lord Reay
(Donald James Mackay), Sir Ernest Satow and Eyre
Crowe. The Russian delegation was led by Fyodor
Martens.The Uruguayan delegation was led by José
Batlle y Ordóñez, great defender of the compulsory
arbitration by creating the idea of an International
Court of Arbitration, and an alliance of nations to force
the arbitration.
Korea made a futile effort to take part in the
conference, in an incident known as the Hague Secret
Emissary Affair. King Gojong dispatched Yi Jun, Yi
Sang-Seol and Yi Wi-Jong as envoys to the second
peace conference, to argue that Eulsa Treaty was
unjust and ask for help from the international society
to recover Korea’s diplomatic sovereignty. An
American missionary, Homer Hulbert, also travelled to
The Hague to argue against the treaty. All four men
were denied entry17
10. INTERNATIONAL COURT OF
ARBITRATION (INTERNATIONAL
CHAMBER OF COMMERCE)
The International Court of Arbitration is an
institution for the resolution of international
commercial disputes. The International Court of
Arbitration is part of the International Chamber of
Commerce.
There are an increasing number of cases being brought
before the International Court of Arbitration. There
have been more than 500 cases a year handled by the
International Court of Arbitration since 1999.
The International Chamber of Commerce (ICC)
is the largest, most representative business
organization in the world.[citation needed] Its
hundreds of thousands of member companies in over
17
http://en.wikipedia.org/wiki/Hague_Conventions_of_1899_and_1907
130 countries have interests spanning every sector of
private enterprise.
A world network of national committees keeps the ICC
International Secretariat in Paris informed about
national and regional business priorities. More than
2,000 experts drawn from ICC’s member companies
feed their knowledge and experience into crafting the
ICC stance on specific business issues.
The UN, the World Trade Organization, and many
other intergovernmental bodies, both international
and regional, are kept in touch with the views of
international business through ICC.
History
The International Chamber of Commerce was founded
in 1919 to serve world business by promoting trade and
investment, open markets for goods and services, and
the free flow of capital. The organization's
international secretariat was established in Paris and
the ICC's International Court of Arbitration was
created in 1923.
ICC's first Chairman was 20th c. French Minister of
Finance Etienne Clémentel. ICC's current Chairman is
Gerard Worms[1]. Harold McGraw III[2] is Vice-
Chairman and Victor K. Fung[3] is Honorary Chairman.
In January 2011, Jean-Guy Carrier [4] was elected
Secretary General of ICC by the ICC World Council.
Membership
There are two ways to become a member of ICC[5]:
1. Through affiliation with an ICC national committee
or group.
2. By direct membership with the ICC International
Secretariat when a national committee/group has not
yet been established in your country/territory.
Governing bodies
World Council
ICC' s supreme governing body is the World Council,
consisting of representatives of national committees.
The World Council elects ICC’s highest officers,
including the Chairman and the Vice-Chairman, each
of whom serves a two-year term. The Chairman, Vice-
Chairman and the Honorary Chairman (the immediate
past Chairman) provide the organization with high-
level world leadership.They play an important role in
ICC section.
Executive Board
Strategic direction for ICC is provided by its Executive
Board, consisting of up to 30 business leaders and ex-
officio members. It is elected by the World Council on
the recommendation of the Chairmanship. Meeting
three times a year, the Executive Board oversees the
establishment of ICC’s strategic priorities and the
implementation of its policies.
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 25
International Secretariat
The ICC International Secretariat, based in Paris, is the
operational arm of ICC. It develops and carries out
ICC’s work programme, feeding business views into
intergovernmental organizations on issues that directly
affect business operations. The International
Secretariat is led by the Secretary General, who is
appointed by the World Council.
National Committees
In 90 of the world’s nations, members have established
formal ICC structures called national committees. In
countries where there is no national committee,
companies and organizations such as chambers of
commerce and professional associations can become
direct members.
Finance Committee
The Finance Committee advises the Executive Board
on all financial matters. On behalf of the Executive
Board, it prepares the budget and regularly reports to
the board. It reviews the financial implications of ICC
activities and supervises the flow of revenues and
expenses of the organization.
Dispute Resolution Services
ICC International Court of Arbitration has received
15,000 cases since its inception in 1923. [28] Over the
past decade, the Court's workload has considerably
expanded.
The Court's membership has also grown and now
covers 86 countries. With representatives in North
America, Latin and Central America, Africa and the
Middle East and Asia, the ICC Court has significantly
increased its training activities on all continents and in
all major languages used in international trade.
ICC Dispute Resolution Services exist in many forms:
• Amicable dispute resolution offers a
framework for the settlement of disputes with
the assistance of a neutral. Parties choose the
settlement technique, such as negotiation or a
mini-trial.
• Dispute boards are independent bodies
designed to help resolve disagreements arising
during the course of a contract.
• Expertise is a way of finding the right person
to make an independent assessment on any
subject relevant to business operations.
• DOCDEX provides expert decisions to resolve
disputes related to documentary credits,
collections and demand guarantees,
incorporating ICC banking rules.
• Policy and business practices
ICC policies, rules and standards are prepared by
specialized working bodies. Normal procedure requires
policy statements first to be adopted by a commission,
in consultation with national committees, and then
approved by the Executive Board, before they can be
regarded as official and public ICC positions.
Commissions examine major policy issues of interest
to world business. Each national committee (NC) or
group may appoint delegates to represent it at
meetings. Officers are appointed by the Chairman and
Secretary General in consultation with NCs. Meetings
of commissions are normally held twice a year.
Task forces are constituted under the various
commissions for a limited period to undertake specific
projects and report back to their parent commission.
Some task forces may include representatives of more
than one commission.
1. INTERNATIONAL CENTER FOR
SETTLEMENT OF INVESTMENT DISPUTES
(ICSID) (CONVENTION ON THE SETTLEMENT
OF INESTMENT DISPUTE BETWEEN STATES
AND NATIONALS OF OTHER STATES)
The International Centre for Settlement of Investment
Disputes (ICSID), an institution of the World Bank
Group based in Washington, D.C., United States, was
established in 1966 pursuant to the Convention on the
Settlement of Investment Disputes between States and
Nationals of Other States (the ICSID Convention or
Washington Convention). As of May 2011, 157
countries had signed the ICSID Convention.
ICSID has an Administrative Council, chaired by the
World Bank's President, and a Secretariat. It provides
facilities for the conciliation and arbitration of
investment disputes between member countries and
individual investors.
During the first decade of the 21st century, with the
proliferation of bilateral investment treaties (BITs),
most of which refer present and future investment
disputes to the ICSID, the caseload of the ICSID
substantially increased. As of 30 March 2007, ICSID
had registered 263 cases, more than 30 of which were
pending against Argentina, most resulting from
Argentine government actions precipitated by
Argentina's economic crisis. ICSID caseload may be
reduced by announcements from Nicaragua and
Venezuela that they intend to withdraw from the
ICSID.[1][2]
Establishment
On a number of occasions in the past, the World Bank
as an institution and the President of the Bank in his
personal capacity have assisted in mediation or
conciliation of investment disputes between
governments and private foreign investors. The
creation of the International Centre for Settlement of
Investment Disputes (ICSID) in 1966 was in part
intended to relieve the President and the staff of the
burden of becoming involved in such disputes. But the
Bank's overriding consideration in creating ICSID was
the belief that an institution specially designed to
facilitate the settlement of investment disputes
between governments and foreign investors could help
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 26
to promote increased flows of international
investment.
ICSID was established under the Convention on the
Settlement of Investment Disputes between States and
Nationals of Other States which came into force on
October 14, 1966. ICSID has an Administrative Council
and a Secretariat. The Administrative Council is
chaired by the World Bank's President and consists of
one representative of each State which has ratified the
Convention. Annual meetings of the Council are held
in conjunction with the joint Bank/Fund annual
meetings.
ICSID is an autonomous international organization.
However, it has close links with the World Bank. All of
ICSID's members are also members of the Bank.
Unless a government makes a contrary designation, its
Governor for the Bank sits ex officio on ICSID's
Administrative Council. The expenses of the ICSID
Secretariat are financed out of the Bank's budget,
although the costs of individual proceedings are borne
by the parties involved.[3]
Membership
Members of the ICSID are 156 of the UN members and
Kosovo.
Signed, but not ratified, have Belize, Canada,
Dominican Republic, Ethiopia, Guinea-Bissau,
Kyrgyzstan, Namibia, Russia, Sao Tome and Principe,
Thailand
Former members are Bolivia, Ecuador, and soon to be
Venezuela.[4]
Other non-members are Andorra, Angola, Antigua and
Barbuda, Bhutan, Brazil, Cook Islands, Cuba, Djibouti,
Dominica, Equatorial Guinea, Eritrea, India, Iran,
Iraq, Kiribati, Laos, Liechtenstein, Libya, Maldives,
Marshall Islands, Mexico, Monaco, Montenegro,
Myanmar, Nauru, Niue, North Korea, Palau, Poland,
San Marino, South Africa, Suriname, Tajikistan,
Tuvalu, Vanuatu, Vatican City, Vietnam, and the rest of
states with limited recognition.
Activities
Pursuant to the Convention, ICSID provides facilities
for the conciliation and arbitration of disputes between
member countries and investors who qualify as
nationals of other member countries. Recourse to
ICSID conciliation and arbitration is entirely
voluntary. However, once the parties have consented
to arbitration under the ICSID Convention, neither can
unilaterally withdraw its consent.[5] Moreover, all
ICSID Contracting States, whether or not parties to the
dispute, are required by the Convention to recognize
and enforce ICSID arbitral awards.
Besides this original role, the Centre has since 1978
had a set of Additional Facility Rules authorizing the
ICSID Secretariat to administer certain types of
proceedings between States and foreign nationals
which fall outside the scope of the Convention. These
include conciliation and arbitration proceedings where
either the State party or the home State of the foreign
national is not a member of ICSID. Additional Facility
conciliation and arbitration are also available for cases
where the dispute is not an investment dispute
provided it relates to a transaction which has "features
that distinguishes it from an ordinary commercial
transaction." The Additional Facility Rules further
allow ICSID to administer a type of proceedings not
provided for in the Convention, namely fact-finding
proceedings to which any State and foreign national
may have recourse if they wish to institute an inquiry
"to examine and report on facts."
A third activity of ICSID in the field of the settlement
of disputes has consisted in the Secretary-General of
ICSID accepting to act as the appointing authority of
arbitrators for ad hoc (i.e., non-institutional)
arbitration proceedings. This is most commonly done
in the context of arrangements for arbitration under
the Arbitration Rules of the United Nations
Commission on International Trade Law (UNCITRAL),
which are specially designed for ad hoc proceedings.
Provisions on ICSID arbitration are commonly found
in investment contracts between governments of
member countries and investors from other member
countries. Advance consents by governments to submit
investment disputes to ICSID arbitration can also be
found in about twenty investment laws and in over 900
bilateral investment treaties. Arbitration under the
auspices of ICSID is similarly one of the main
mechanisms for the settlement of investment disputes
under four recent multilateral trade and investment
treaties (the North American Free Trade Agreement,
the Energy Charter Treaty, the Cartagena Free Trade
Agreement and the Colonia Investment Protocol of
Mercosur).
In addition to these activities, ICSID also carries on
advisory and research activities, publishing Investment
Laws of the World and of Investment Treaties, and
collaborates with other World Bank Group units. Since
April 1986, the Centre has published a semi-annual
law journal entitled ICSID Review: Foreign Investment
Law Journal.
ICSID proceedings do not necessarily take place in
Washington, D.C. Other possible locations include the
Permanent Court of Arbitration at The Hague, the
Regional Arbitration Centres of the Asian-African
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 27
Legal Consultative Committee at Cairo and Kuala
Lumpur, the Australian Centre for International
Commercial Arbitration at Melbourne, the Australian
Commercial Disputes Centre at Sydney, the Singapore
International Arbitration Centre, the GCC Commercial
Arbitration Centre at Bahrain and the Frankfurt
International Arbitration Center of German Institution
of Arbitration (DIS) and the Frankfurt Chamber of
Commerce and Industry.18
11. UNITED NATIONS COMMISSION FOR
INTERNATIONAL TRADE LAW
(UNICITRAL MODEL LAW ON
INTRNATIONAL COMMERCIAL
ARBITRATION-1985)
International commercial law is the body of law that
governs international sale transactions. A transaction
will qualify to be international if elements of more than
one country are involved.
Since World War II international trade has grown
extensively, seeing the increasing importance of
international commercial law. It plays a vital role in
world development, particularly through the
integration of world markets.
Lex mercatoria refers to that part of international
commercial law which is unwritten, including
customary commercial law; customary rules of
evidence and procedure; and general principles of
commercial law
The United Nations Commission on
International Trade Law (UNCITRAL) was
established by the United Nations General Assembly
by its Resolution 2205 (XXI) of 17 December 1966 "to
promote the progressive harmonization and
unification of international trade law".
UNCITRAL carries out its work at annual sessions held
alternately in New York City and Vienna.
History
When world trade began to expand dramatically in the
1960s, national governments began to realize the need
for a global set of standards and rules to harmonize
national and regional regulations, which until then
governed international trade.
Membership
UNCITRAL's original membership comprised 29
states, and was expanded to 36 in 1973, and again to
60 in 2002. Member states of UNCITRAL are
representing different legal traditions and levels of
economic development, as well as different geographic
regions. States includes 14 African states, 14 Asian
states, 8 Eastern European states, 10 Latin American
and Caribbean states, and 14 Western European states.
The Commission member States are elected by the
General Assembly. Membership is structured so as to
be representative of the world's various geographic
18http://en.wikipedia.org/wiki/
International_Centre_for_Settlement_of_Investment_Disputes
regions and its principal economic and legal systems.
Members of the commission are elected for terms of
six years, the terms of half the members expiring every
three years. As of 21 June 2010, the members of
UNCITRAL, and the years when their memberships
expire, are:
The methods of work are organized at three levels. The
first level is UNCITRAL itself (The Commission),
which holds an annual plenary session. The second
level is the intergovernmental working groups (which
is developing the topics on UNCITRAL's work
program. Texts designed to simplify trade transactions
and reduce associated costs are developed by working
groups comprising all member States of UNCITRAL,
which meet once or twice per year. Non-member States
and interested international and regional
organizations are also invited and can actively
contribute to the work since decisions are taken by
consensus, not by vote. Draft texts completed by these
working groups are submitted to UNCITRAL for
finalization and adoption at its annual session. The
International Trade Law Division of the United
Nations Office of Legal Affairs provides substantive
secretariat services to UNCITRAL, such as conducting
research and preparing studies and drafts. This is the
third level, which assists the other two in the
preparation and conduct of their work.
Uncitral is:
• Coordinating the work of organizations active
and encouraging cooperation among them.
• Promoting wider participation in existing
international conventions and wider
acceptance of existing model and uniform
laws.
• Preparing or promoting the adoption of new
international conventions, model laws and
uniform laws and promoting the codification
and wider acceptance of international trade
terms, provisions, customs and practice, in
collaboration, where appropriate, with the
organizations operating in this field.
• Promoting ways and means of ensuring a
uniform interpretation and application of
international conventions and uniform laws in
the field of the law of international trade.
• Collecting and disseminating information on
national legislation and modern legal
developments, including case law, in the field
of the law of international trade.
• Establishing and maintaining a close
collaboration with the UN Conference on
Trade and development.
• Maintaining liaison with other UN organs and
specialized agencies concerned with
international trade.
• Conventions
The Convention is an agreement among participating
states establishing obligations binding upon those
States that ratify or accede to it. A convention is
designed to unify law by establishing binding legal
obligations To become a party to a convention, States
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 28
are required formally to deposit a binding instrument
of ratification or accession with the depositary. The
entry into force of a convention is usually dependent
upon the deposit of a minimum number of instruments
of ratification.
UNCITRAL conventions:
• the Convention on the Limitation Period in
the International Sale of Goods (1974) (text)
• the United Nations Convention on the Carriage of Goods by Sea
• the United Nations Convention on Contracts for the International Sale of
Goods (1980)
• the United Nations Convention
International Bills of Exchange
International Promissory Notes (1988)
• the United Nations Convention on the
Liability of Operators of Transport Terminals
in International Trade (1991)
• the United Nations Convention on
Independent Guarantees and Stand-by Letters
of Credit (1995)
• the United Nations Convention on the
Assignment of Receivables in International
Trade (2001)
• the United Nations Convention on the Use of
Electronic Communications in International
Contracts (2005)
• the United Nations Convention on Contracts for the International Carriage
of Goods Wholly or Partly by Sea
(2008)
• Model laws
A model law is a legislative text that is recommended
to States for enactment as part of their national law.
Model laws are generally finalized and adapted by
UNCITRAL, at its annual session, while conventions
requires the convening of a diplomatic conference.
UNCITRAL Model Law on International Commercial Arbitration
• Model Law on International Credit Transfers
(1992)
• UNCITRAL Model Law on Procurement of
Goods, Construction and Services (1994)
• UNCITRAL Model Law
Commerce (1996)
• Model Law on Cross-border Insolvency (1997)
• UNCITRAL Model Law
Signatures (2001)
• UNCITRAL Model Law on International
Commercial Conciliation (2002)
• Model Legislative Provisions on Privately
Financed Infrastructure Projects (2003)
UNCITRAL also drafted the:
• UNCITRAL Arbitration Rules (1976) (text)—
revised rules will be effective August 15, 2010;
pre-released, July 12, 2010
• UNCITRAL Conciliation Rules (1980)
• UNCITRAL Arbitration Rules (1982)
• UNCITRAL Notes on Organizing Arbitral
Proceedings (1996)
• CLOUT (Case Law on UNCITRAL Texts)
The Case Law on UNCITRAL Texts system is a
collection of court decisions and arbitral awards
interpreting UNCITRAL texts.
CLOUT includes case abstracts in the six United
(1978) Nations languages on the United Nations Convention
on Contracts for the International Sale of Goods
(CISG) (Vienna, 1980) and the UNCITRAL Model Law
on International Commercial Arbitration (1985).
on
12. WORLD TRADE ORGANIZATION
and
(MARRAKESH AGREEMENT)
(DISPUTE SETTLEMENT
UNDERSTANDING)
The Parties to this Agreement,
Recognizing that their relations in the field of trade
and economic endeavour should be conducted with a
view to raising standards of living, ensuring full
employment and a large and steadily growing volume
of real income and effective demand, and expanding
the production of and trade in goods and services,
while allowing for the optimal use of the world’s
resources in accordance with the objective of
sustainable development, seeking both to protect and
preserve the environment and to enhance the means
for doing so in a manner consistent with their
respective needs and concerns at different levels of
economic development,
Recognizing further that there is need for positive
efforts designed to ensure that developing countries,
and especially the least developed among them, secure
a share in the growth in international trade
(1985) (text) commensurate with the needs of their economic
development,
Being desirous of contributing to these objectives by
entering into reciprocal and mutually advantageous
arrangements directed to the substantial reduction of
on Electronic tariffs and other barriers to trade and to the
elimination of discriminatory treatment in
international trade relations,
on Electronic
Resolved, therefore, to develop an integrated, more
viable and durable multilateral trading system
encompassing the General Agreement on Tariffs and
Trade, the results of past trade liberalization efforts,
and all of the results of the Uruguay Round of
Multilateral Trade Negotiations,
Determined to preserve the basic principles and to
further the objectives underlying this multilateral
trading system,
Agree as follows:
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 29
Article I back to top
Establishment of the Organization
The World Trade Organization (hereinafter referred to
as “the WTO”) is hereby established.
Article II back to top
Scope of the WTO
1. The WTO shall provide the common institutional
framework for the conduct of trade relations among its
Members in matters related to the agreements and
associated legal instruments included in the Annexes
to this Agreement.
2. The agreements and associated legal instruments
included in Annexes 1, 2 and 3 (hereinafter referred to
as “Multilateral Trade Agreements”) are integral parts
of this Agreement, binding on all Members.
3. The agreements and associated legal instruments
included in Annex 4 (hereinafter referred to as
“Plurilateral Trade Agreements”) are also part of this
Agreement for those Members that have accepted
them, and are binding on those Members. The
Plurilateral Trade Agreements do not create either
obligations or rights for Members that have not
accepted them.
4. The General Agreement on Tariffs and Trade
1994 as specified in Annex 1A (hereinafter referred to
as “GATT 1994”) is legally distinct from the General
Agreement on Tariffs and Trade, dated 30 October
1947, annexed to the Final Act Adopted at the
Conclusion of the Second Session of the Preparatory
Committee of the United Nations Conference on Trade
and Employment, as subsequently rectified, amended
or modified (hereinafter referred to as “GATT 1947”).
Article III back to top
Functions of the WTO
1. The WTO shall facilitate the implementation,
administration and operation, and further the
objectives, of this Agreement and of the Multilateral
Trade Agreements, and shall also provide the
framework for the implementation, administration and
operation of the Plurilateral Trade Agreements.
2. The WTO shall provide the forum for
negotiations among its Members concerning their
multilateral trade relations in matters dealt with under
the agreements in the Annexes to this Agreement. The
WTO may also provide a forum for further
negotiations among its Members concerning their
multilateral trade relations, and a framework for the
implementation of the results of such negotiations, as
may be decided by the Ministerial Conference.
3. The WTO shall administer the Understanding on
Rules and Procedures Governing the Settlement of
Disputes (hereinafter referred to as the “Dispute
Settlement Understanding” or “DSU”) in Annex 2 to
this Agreement.
4. The WTO shall administer the Trade Policy
Review Mechanism (hereinafter referred to as the
“TPRM”) provided for in Annex 3 to this Agreement.
5. With a view to achieving greater coherence in
global economic policy-making, the WTO shall
cooperate, as appropriate, with the International
Monetary Fund and with the International Bank for
Reconstruction and Development and its affiliated
agencies.
Article IV back to top
Structure of the WTO
1. There shall be a Ministerial Conference
composed of representatives of all the Members, which
shall meet at least once every two years. The
Ministerial Conference shall carry out the functions of
the WTO and take actions necessary to this effect. The
Ministerial Conference shall have the authority to take
decisions on all matters under any of the Multilateral
Trade Agreements, if so requested by a Member, in
accordance with the specific requirements for decision-
making in this Agreement and in the relevant
Multilateral Trade Agreement.
2. There shall be a General Council composed of
representatives of all the Members, which shall meet as
appropriate. In the intervals between meetings of the
Ministerial Conference, its functions shall be
conducted by the General Council. The General
Council shall also carry out the functions assigned to it
by this Agreement. The General Council shall establish
its rules of procedure and approve the rules of
procedure for the Committees provided for in
paragraph 7.
3. The General Council shall convene as
appropriate to discharge the responsibilities of the
Dispute Settlement Body provided for in the Dispute
Settlement Understanding. The Dispute Settlement
Body may have its own chairman and shall establish
such rules of procedure as it deems necessary for the
fulfilment of those responsibilities.
4. The General Council shall convene as
appropriate to discharge the responsibilities of the
Trade Policy Review Body provided for in the TPRM.
The Trade Policy Review Body may have its own
chairman and shall establish such rules of procedure as
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 30
it deems necessary for the fulfilment of those
responsibilities.
5. There shall be a Council for Trade in Goods, a
Council for Trade in Services and a Council for Trade-
Related Aspects of Intellectual Property Rights
(hereinafter referred to as the “Council for TRIPS”),
which shall operate under the general guidance of the
General Council. The Council for Trade in Goods shall
oversee the functioning of the Multilateral Trade
Agreements in Annex 1A. The Council for Trade in
Services shall oversee the functioning of the General
Agreement on Trade in Services (hereinafter referred
to as “GATS”). The Council for TRIPS shall oversee the
functioning of the Agreement on Trade-Related
Aspects of Intellectual Property Rights (hereinafter
referred to as the “Agreement on TRIPS”). These
Councils shall carry out the functions assigned to them
by their respective agreements and by the General
Council. They shall establish their respective rules of
procedure subject to the approval of the General
Council. Membership in these Councils shall be open
to representatives of all Members. These Councils shall
meet as necessary to carry out their functions.
6. The Council for Trade in Goods, the Council for
Trade in Services and the Council for TRIPS shall
establish subsidiary bodies as required. These
subsidiary bodies shall establish their respective rules
of procedure subject to the approval of their respective
Councils.
7. The Ministerial Conference shall establish a
Committee on Trade and Development, a Committee
on Balance-of-Payments Restrictions and a Committee
on Budget, Finance and Administration, which shall
carry out the functions assigned to them by this
Agreement and by the Multilateral Trade Agreements,
and any additional functions assigned to them by the
General Council, and may establish such additional
Committees with such functions as it may deem
appropriate. As part of its functions, the Committee on
Trade and Development shall periodically review the
special provisions in the Multilateral Trade
Agreements in favour of the least-developed country
Members and report to the General Council for
appropriate action. Membership in these Committees
shall be open to representatives of all Members.
8. The bodies provided for under the Plurilateral
Trade Agreements shall carry out the functions
assigned to them under those Agreements and shall
operate within the institutional framework of the
WTO. These bodies shall keep the General Council
informed of their activities on a regular basis.
Article V back to top
Relations with Other Organizations
1. The General Council shall make appropriate
arrangements for effective cooperation with other
intergovernmental organizations that have
responsibilities related to those of the WTO.
2. The General Council may make appropriate
arrangements for consultation and cooperation with
non-governmental organizations concerned with
matters related to those of the WTO.
Article VI back to top
The Secretariat
1. There shall be a Secretariat of the WTO
(hereinafter referred to as “the Secretariat”) headed by
a Director-General.
2. The Ministerial Conference shall appoint the
Director-General and adopt regulations setting out the
powers, duties, conditions of service and term of office
of the Director-General.
3. The Director-General shall appoint the members
of the staff of the Secretariat and determine their
duties and conditions of service in accordance with
regulations adopted by the Ministerial Conference.
4. The responsibilities of the Director-General and
of the staff of the Secretariat shall be exclusively
international in character. In the discharge of their
duties, the Director-General and the staff of the
Secretariat shall not seek or accept instructions from
any government or any other authority external to the
WTO. They shall refrain from any action which might
adversely reflect on their position as international
officials. The Members of the WTO shall respect the
international character of the responsibilities of the
Director-General and of the staff of the Secretariat and
shall not seek to influence them in the discharge of
their duties.
Article VII back to top
Budget and Contributions
1. The Director-General shall present to the
Committee on Budget, Finance and Administration the
annual budget estimate and financial statement of the
WTO. The Committee on Budget, Finance and
Administration shall review the annual budget
estimate and the financial statement presented by the
Director-General and make recommendations thereon
to the General Council. The annual budget estimate
shall be subject to approval by the General Council.
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 31
2. The Committee on Budget, Finance and
Administration shall propose to the General Council
financial regulations which shall include provisions
setting out:
(a) the scale of contributions apportioning the
expenses of the WTO among its Members; and
(b) the measures to be taken in respect of Members
in arrears.
The financial regulations shall be based, as far as
practicable, on the regulations and practices of GATT
1947.
3. The General Council shall adopt the financial
regulations and the annual budget estimate by a two-
thirds majority comprising more than half of the
Members of the WTO.
4. Each Member shall promptly contribute to the
WTO its share in the expenses of the WTO in
accordance with the financial regulations adopted by
the General Council.
Article VIII back to top
Status of the WTO
1. The WTO shall have legal personality, and shall
be accorded by each of its Members such legal capacity
as may be necessary for the exercise of its functions.
2. The WTO shall be accorded by each of its
Members such privileges and immunities as are
necessary for the exercise of its functions.
3. The officials of the WTO and the representatives
of the Members shall similarly be accorded by each of
its Members such privileges and immunities as are
necessary for the independent exercise of their
functions in connection with the WTO.
4. The privileges and immunities to be accorded by
a Member to the WTO, its officials, and the
representatives of its Members shall be similar to the
privileges and immunities stipulated in the Convention
on the Privileges and Immunities of the Specialized
Agencies, approved by the General Assembly of the
United Nations on 21 November 1947.
5. The WTO may conclude a headquarters
agreement.
Article IX back to top
Decision-Making
1. The WTO shall continue the practice of decision-
making by consensus followed under GATT 1947(1).
Except as otherwise provided, where a decision cannot
be arrived at by consensus, the matter at issue shall be
decided by voting. At meetings of the Ministerial
Conference and the General Council, each Member of
the WTO shall have one vote. Where the European
Communities exercise their right to vote, they shall
have a number of votes equal to the number of their
member States(2)which are Members of the WTO.
Decisions of the Ministerial Conference and the
General Council shall be taken by a majority of the
votes cast, unless otherwise provided in this
Agreement or in the relevant Multilateral Trade
Agreement(3).
2. The Ministerial Conference and the General
Council shall have the exclusive authority to adopt
interpretations of this Agreement and of the
Multilateral Trade Agreements. In the case of an
interpretation of a Multilateral Trade Agreement in
Annex 1, they shall exercise their authority on the basis
of a recommendation by the Council overseeing the
functioning of that Agreement. The decision to adopt
an interpretation shall be taken by a three-fourths
majority of the Members. This paragraph shall not be
used in a manner that would undermine the
amendment provisions in Article X.
3. In exceptional circumstances, the Ministerial
Conference may decide to waive an obligation imposed
on a Member by this Agreement or any of the
Multilateral Trade Agreements, provided that any such
decision shall be taken by three fourths (4) of the
Members unless otherwise provided for in this
paragraph.
(a) A request for a waiver concerning this
Agreement shall be submitted to the Ministerial
Conference for consideration pursuant to the practice
of decision-making by consensus. The Ministerial
Conference shall establish a time-period, which shall
not exceed 90 days, to consider the request. If
consensus is not reached during the time-period, any
decision to grant a waiver shall be taken by three
fourths4 of the Members.
(b) A request for a waiver concerning the
Multilateral Trade Agreements in Annexes 1A or 1B or
1C and their annexes shall be submitted initially to the
Council for Trade in Goods, the Council for Trade in
Services or the Council for TRIPS, respectively, for
consideration during a time-period which shall not
exceed 90 days. At the end of the time-period, the
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 32
relevant Council shall submit a report to the
Ministerial Conference.
4. A decision by the Ministerial Conference
granting a waiver shall state the exceptional
circumstances justifying the decision, the terms and
conditions governing the application of the waiver, and
the date on which the waiver shall terminate. Any
waiver granted for a period of more than one year shall
be reviewed by the Ministerial Conference not later
than one year after it is granted, and thereafter
annually until the waiver terminates. In each review,
the Ministerial Conference shall examine whether the
exceptional circumstances justifying the waiver still
exist and whether the terms and conditions attached to
the waiver have been met. The Ministerial Conference,
on the basis of the annual review, may extend, modify
or terminate the waiver.
5. Decisions under a Plurilateral Trade Agreement,
including any decisions on interpretations and waivers,
shall be governed by the provisions of that Agreement.
Article X back to top
Amendments
1. Any Member of the WTO may initiate a proposal
to amend the provisions of this Agreement or the
Multilateral Trade Agreements in Annex 1 by
submitting such proposal to the Ministerial
Conference. The Councils listed in paragraph 5 of
Article IV may also submit to the Ministerial
Conference proposals to amend the provisions of the
corresponding Multilateral Trade Agreements in
Annex 1 the functioning of which they oversee. Unless
the Ministerial Conference decides on a longer period,
for a period of 90 days after the proposal has been
tabled formally at the Ministerial Conference any
decision by the Ministerial Conference to submit the
proposed amendment to the Members for acceptance
shall be taken by consensus. Unless the provisions of
paragraphs 2, 5 or 6 apply, that decision shall specify
whether the provisions of paragraphs 3 or 4 shall
apply. If consensus is reached, the Ministerial
Conference shall forthwith submit the proposed
amendment to the Members for acceptance. If
consensus is not reached at a meeting of the
Ministerial Conference within the established period,
the Ministerial Conference shall decide by a two-thirds
majority of the Members whether to submit the
proposed amendment to the Members for acceptance.
Except as provided in paragraphs 2, 5 and 6, the
provisions of paragraph 3 shall apply to the proposed
amendment, unless the Ministerial Conference decides
by a three-fourths majority of the Members that the
provisions of paragraph 4 shall apply.
2. Amendments to the provisions of this Article and
to the provisions of the following Articles shall take
effect only upon acceptance by all Members:
Article IX of this Agreement;
Articles I and II of GATT 1994;
Article II:1 of GATS;
Article 4 of the Agreement on TRIPS.
3. Amendments to provisions of this Agreement, or
of the Multilateral Trade Agreements in Annexes 1A
and 1C, other than those listed in paragraphs 2 and 6,
of a nature that would alter the rights and obligations
of the Members, shall take effect for the Members that
have accepted them upon acceptance by two thirds of
the Members and thereafter for each other Member
upon acceptance by it. The Ministerial Conference may
decide by a three-fourths majority of the Members that
any amendment made effective under this paragraph is
of such a nature that any Member which has not
accepted it within a period specified by the Ministerial
Conference in each case shall be free to withdraw from
the WTO or to remain a Member with the consent of
the Ministerial Conference.
4. Amendments to provisions of this Agreement or
of the Multilateral Trade Agreements in Annexes 1A
and 1C, other than those listed in paragraphs 2 and 6,
of a nature that would not alter the rights and
obligations of the Members, shall take effect for all
Members upon acceptance by two thirds of the
Members.
5. Except as provided in paragraph 2 above,
amendments to Parts I, II and III of GATS and the
respective annexes shall take effect for the Members
that have accepted them upon acceptance by two thirds
of the Members and thereafter for each Member upon
acceptance by it. The Ministerial Conference may
decide by a three-fourths majority of the Members that
any amendment made effective under the preceding
provision is of such a nature that any Member which
has not accepted it within a period specified by the
Ministerial Conference in each case shall be free to
withdraw from the WTO or to remain a Member with
the consent of the Ministerial Conference.
Amendments to Parts IV, V and VI of GATS and the
respective annexes shall take effect for all Members
upon acceptance by two thirds of the Members.
6. Notwithstanding the other provisions of this
Article, amendments to the Agreement on TRIPS
meeting the requirements of paragraph 2 of Article 71
thereof may be adopted by the Ministerial Conference
without further formal acceptance process.
7. Any Member accepting an amendment to this
Agreement or to a Multilateral Trade Agreement in
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 33
Annex 1 shall deposit an instrument of acceptance with
the Director-General of the WTO within the period of
acceptance specified by the Ministerial Conference.
8. Any Member of the WTO may initiate a proposal
to amend the provisions of the Multilateral Trade
Agreements in Annexes 2 and 3 by submitting such
proposal to the Ministerial Conference. The decision to
approve amendments to the Multilateral Trade
Agreement in Annex 2 shall be made by consensus and
these amendments shall take effect for all Members
upon approval by the Ministerial Conference.
Decisions to approve amendments to the Multilateral
Trade Agreement in Annex 3 shall take effect for all
Members upon approval by the Ministerial
Conference.
9. The Ministerial Conference, upon the request of
the Members parties to a trade agreement, may decide
exclusively by consensus to add that agreement to
Annex 4. The Ministerial Conference, upon the request
of the Members parties to a Plurilateral Trade
Agreement, may decide to delete that Agreement from
Annex 4.
10. Amendments to a Plurilateral Trade Agreement
shall be governed by the provisions of that Agreement.
Article XI back to top
Original Membership
1. The contracting parties to GATT 1947 as of the
date of entry into force of this Agreement, and the
European Communities, which accept this Agreement
and the Multilateral Trade Agreements and for which
Schedules of Concessions and Commitments are
annexed to GATT 1994 and for which Schedules of
Specific Commitments are annexed to GATS shall
become original Members of the WTO.
2. The least-developed countries recognized as such
by the United Nations will only be required to
undertake commitments and concessions to the extent
consistent with their individual development, financial
and trade needs or their administrative and
institutional capabilities.
Article XII back to top
Accession
1. Any State or separate customs territory
possessing full autonomy in the conduct of its external
commercial relations and of the other matters
provided for in this Agreement and the Multilateral
Trade Agreements may accede to this Agreement, on
terms to be agreed between it and the WTO. Such
accession shall apply to this Agreement and the
Multilateral Trade Agreements annexed thereto.
2. Decisions on accession shall be taken by the
Ministerial Conference. The Ministerial Conference
shall approve the agreement on the terms of accession
by a two-thirds majority of the Members of the WTO.
3. Accession to a Plurilateral Trade Agreement shall
be governed by the provisions of that Agreement.
Article XIII back to top
Non-Application of Multilateral Trade Agreements
between Particular Members
1. This Agreement and the Multilateral Trade
Agreements in Annexes 1 and 2 shall not apply as
between any Member and any other Member if either
of the Members, at the time either becomes a Member,
does not consent to such application.
2. Paragraph 1 may be invoked between original
Members of the WTO which were contracting parties
to GATT 1947 only where Article XXXV of that
Agreement had been invoked earlier and was effective
as between those contracting parties at the time of
entry into force for them of this Agreement.
3. Paragraph 1 shall apply between a Member and
another Member which has acceded under Article XII
only if the Member not consenting to the application
has so notified the Ministerial Conference before the
approval of the agreement on the terms of accession by
the Ministerial Conference.
4. The Ministerial Conference may review the
operation of this Article in particular cases at the
request of any Member and make appropriate
recommendations.
5. Non-application of a Plurilateral Trade
Agreement between parties to that Agreement shall be
governed by the provisions of that Agreement.
Article XIV back to top
Acceptance, Entry into Force and Deposit
1. This Agreement shall be open for acceptance, by
signature or otherwise, by contracting parties to GATT
1947, and the European Communities, which are
eligible to become original Members of the WTO in
accordance with Article XI of this Agreement. Such
acceptance shall apply to this Agreement and the
Multilateral Trade Agreements annexed hereto. This
Agreement and the Multilateral Trade Agreements
annexed hereto shall enter into force on the date
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 34
determined by Ministers in accordance with paragraph
3 of the Final Act Embodying the Results of the
Uruguay Round of Multilateral Trade Negotiations and
shall remain open for acceptance for a period of two
years following that date unless the Ministers decide
otherwise. An acceptance following the entry into force
of this Agreement shall enter into force on the 30th
day following the date of such acceptance.
2. A Member which accepts this Agreement after its
entry into force shall implement those concessions and
obligations in the Multilateral Trade Agreements that
are to be implemented over a period of time starting
with the entry into force of this Agreement as if it had
accepted this Agreement on the date of its entry into
force.
3. Until the entry into force of this Agreement, the
text of this Agreement and the Multilateral Trade
Agreements shall be deposited with the Director-
General to the CONTRACTING PARTIES to GATT
1947. The Director-General shall promptly furnish a
certified true copy of this Agreement and the
Multilateral Trade Agreements, and a notification of
each acceptance thereof, to each government and the
European Communities having accepted this
Agreement. This Agreement and the Multilateral Trade
Agreements, and any amendments thereto, shall, upon
the entry into force of this Agreement, be deposited
with the Director-General of the WTO.
4. The acceptance and entry into force of a
Plurilateral Trade Agreement shall be governed by the
provisions of that Agreement. Such Agreements shall
be deposited with the Director-General to the
CONTRACTING PARTIES to GATT 1947. Upon the
entry into force of this Agreement, such Agreements
shall be deposited with the Director-General of the
WTO.
Article XV back to top
Withdrawal
1. Any Member may withdraw from this Agreement.
Such withdrawal shall apply both to this Agreement
and the Multilateral Trade Agreements and shall take
effect upon the expiration of six months from the date
on which written notice of withdrawal is received by
the Director-General of the WTO.
2. Withdrawal from a Plurilateral Trade Agreement
shall be governed by the provisions of that Agreement.
Article XVI back to top
Miscellaneous Provisions
1. Except as otherwise provided under this
Agreement or the Multilateral Trade Agreements, the
WTO shall be guided by the decisions, procedures and
customary practices followed by the CONTRACTING
PARTIES to GATT 1947 and the bodies established in
the framework of GATT 1947.
2. To the extent practicable, the Secretariat of GATT
1947 shall become the Secretariat of the WTO, and the
Director-General to the CONTRACTING PARTIES to
GATT 1947, until such time as the Ministerial
Conference has appointed a Director-General in
accordance with paragraph 2 of Article VI of this
Agreement, shall serve as Director-General of the
WTO.
3. In the event of a conflict between a provision of
this Agreement and a provision of any of the
Multilateral Trade Agreements, the provision of this
Agreement shall prevail to the extent of the conflict.
4. Each Member shall ensure the conformity of its
laws, regulations and administrative procedures with
its obligations as provided in the annexed Agreements.
5. No reservations may be made in respect of any
provision of this Agreement. Reservations in respect of
any of the provisions of the Multilateral Trade
Agreements may only be made to the extent provided
for in those Agreements. Reservations in respect of a
provision of a Plurilateral Trade Agreement shall be
governed by the provisions of that Agreement.
6. This Agreement shall be registered in accordance
with the provisions of Article 102 of the Charter of the
United Nations.
DONE at Marrakesh this fifteenth day of April one
thousand nine hundred and ninety-four, in a single
copy, in the English, French and Spanish languages,
each text being authentic.
Explanatory Notes: back to top
The terms “country” or “countries” as used in this
Agreement and the Multilateral Trade Agreements are
to be understood to include any separate customs
territory Member of the WTO.
In the case of a separate customs territory Member of
the WTO, where an expression in this Agreement and
the Multilateral Trade Agreements is qualified by the
term “national”, such expression shall be read as
pertaining to that customs territory, unless otherwise
specified.
Dispute settlement is regarded by the World Trade
Organization (WTO) as the central pillar of the
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 35
multilateral trading system, and as the organization's
"unique contribution to the stability of the global
economy".[1] A dispute arises when one member
country adopts a trade policy measure or takes some
action that one or more fellow members considers to a
breach of WTO agreements or to be a failure to live up
to obligations. By joining the WTO, member countries
have agreed that if they believe fellow members are in
violation of trade rules, they will use the multilateral
system of settling disputes instead of taking action
unilaterally — this entails abiding by agreed
procedures (Dispute Settlement Understanding) and
respecting judgments, primarily of the Dispute
Settlement Body (DSB), the WTO organ responsible
for adjudication of disputes.[2] A former WTO
Director-General characterized the WTO dispute
settlement system as "the most active international
adjudicative mechanism in the world today."[3]
Dispute Settlement Understanding
Prompt compliance with recommendations or rulings
of the DSB is essential in order to ensure effective
resolution of disputes to the benefit of all Members.
— World Trade Organization, Article 21.1 of the DSU
In 1994, the WTO members agreed on the
Understanding on Rules and Procedures Governing
the Settlement of Disputes or Dispute Settlement
Understanding (DSU) (annexed to the "Final Act"
signed in Marrakesh in 1994).[4] Pursuant to the rules
detailed in the DSU, member states can engage in
consultations to resolve trade disputes pertaining to a
"covered agreement" or, if unsuccessful, have a WTO
panel hear the case.[5] The priority, however, is to
settle disputes, through consultations if possible. By
January 2008, only about 136 of the nearly 369 cases
had reached the full panel process.[2]
Duration of a Dispute Settlement procedure
These approximate periods for each stage of a dispute
settlement
procedure are target figures
The agreement is flexible. In addition, the countries
can settle
their dispute themselves at any stage.
Totals are also approximate.
60 days
Consultations, mediation, etc.
45 days
Panel set up and panellists appointed
6 months
Final panel report to parties
3 weeks
Final panel report to WTO members
60 days
Dispute Settlement Body adopts report (if no appeal)
Total = 1 year (without appeal)
60–90 days
Appeals report
30 days
Dispute Settlement Body adopts appeals report
Total = 1 year 3 months (with appeal)
Source:Understanding the WTO: Settling Disputes - A
unique contribution
The operation of the WTO dispute settlement process
involves the parties and third parties to a case and may
also involve the DSB panels, the Appellate Body, the
WTO Secretariat, arbitrators, independent experts,
and several specialized institutions.[6] The General
Council discharges its responsibilities under the DSU
through the Dispute Settlement Body (DSB).[7] Like
the General Council, the DSB is composed of
representatives of all WTO Members. The DSB is
responsible for administering the DSU, i.e. for
overseeing the entire dispute settlement process. It
also has the authority to establish panels, adopt panel
and Appellate Body reports, maintain surveillance of
implementation of rulings and recommendations, and
authorize the suspension of obligations under the
covered agreements.[8] The DSB meets as often as
necessary to adhere to the timeframes provided for in
the DSU.[9]
[edit] From complaint to final report
If a member state considers that a measure adopted by
another member state has deprived it of a benefit
accruing to it under one of the covered agreements, it
may call for consultations with the other member state.
[10] If consultations fail to resolve the dispute within
60 days after receipt of the request for consultations,
the complainant state may request the establishment
of a Panel. It is not possible for the respondent state to
prevent or delay the establishment of a Panel, unless
the DSB by consensus decides otherwise.[11] The
panel, normally consisting of three members
appointed ad hoc by the Secretariat, sits to receive
written and oral submissions of the parties, on the
basis of which it is expected to make findings and
conclusions for presentation to the DSB. The
proceedings are confidential, and even when private
parties are directly concerned, they are not permitted
to attend or make submissions separate from those of
the state in question.[12] Disputes can also arise under
Non-violation nullification of benefits claims.[13]
The final version of the panel's report is distributed
first to the parties; two weeks later it is circulated to all
the members of the WTO. In sharp contrast with other
systems, the report is required to be adopted at a
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 36
meeting of the DSB within 60 days of its circulation,
unless the DSB by consensus decides not to adopt the
report or a party to the dispute gives notice of its
intention to appeal.[14] A party may appeal a panel
report to the standing Appellate Body, but only on
issues of law and legal interpretations developed by the
panel. Each appeal is heard by three members of the
permanent seven-member Appellate Body set up by
the Dispute Settlement Body and broadly representing
the range of WTO membership. Members of the
Appellate Body have four-year terms. They must be
individuals with recognized standing in the field of law
and international trade, not affiliated with any
government. The Appellate Body may uphold, modify
or reverse the panel's legal findings and conclusions.
Normally appeals should not last more than 60 days,
with an absolute maximum of 90 days.[15] The
possibility for appeal makes the WTO dispute
resolution system unique among the judicial processes
of dispute settlement in general public international
law.[16]
Members may express their views on the report of the
Appellate Body, but they cannot derail it. The DSU
states unequivocally that an Appellate Body report
shall be adopted by the DSB and unconditionally
accepted by the parties, unless the DSB decides by
consensus within thirty days of its circulation not to
adopt the report.[17] Unless otherwise agreed by the
parties to the dispute, the period from establishment of
the panel to consideration of the report by the DSB
shall as a general rule not exceed nine months if there
is no appeal, and twelve months if there is an appeal.
[18]
[edit] Compliance
The DSU addresses the question of compliance and
retaliation. Within thirty days of the adoption of the
report, the member concerned is to inform the DSB of
its intentions in respect of implementation of the
recommendations and rulings. If the member explains
that it is impracticable to comply immediately with the
recommendations and rulings, it is to have a
"reasonable period of time" in which to comply. If no
agreement is reached about the reasonable period for
compliance, that issue is to be the subject of binding
arbitration; the arbitrator is to be appointed by
agreement of the parties. If there is a disagreement as
to the satisfactory nature of the measures adopted by
the respondent state to comply with the report, that
disagreement is to be decided by a panel, if possible
the same panel that heard the original dispute, but
apparently without the possibility of appeal from its
decision. The DSU provides that even if the respondent
asserts that it has complied with the recommendation
in a report, and even if the complainant party or the
panel accepts that assertion, the DSB is supposed to
keep the implementation of the recommendations
under surveillance.[19]
[edit] Compensation and retaliation
If all else fails, two more possibilities are set out in the
DSU:
If a member fails within the "reasonable period" to
carry out the recommendations and rulings, it may
negotiate with the complaining state for a mutually
acceptable compensation. Compensation is not
defined, but may be expected to consist of the grant of
a concession by the respondent state on a product or
service of interest to the complainant state.[20]
If no agreement on compensation is reached within
twenty days of the expiry of the "reasonable period",
the prevailing state may request authorization from the
DSB to suspend application to the member concerned
of concessions or other obligations under the covered
agreements.[20] The DSU makes clear that retaliation
is not favored, and sets the criteria for retaliation.[21]
In contrast to prior GATT practice, authorization to
suspend concessions in this context is semi-automatic,
in that the DSB "shall grant the authorization [...]
within thirty days of the expiry of the reasonable
period", unless it decides by consensus to reject the
request.[22] Any suspension or concession or other
obligation is to be temporary. If the respondent state
objects to the level of suspension proposed or to the
consistency of the proposed suspension with the DSU
principles, still another arbitration is provided for, if
possible by the original panel members or by an
arbitrator or arbitrators appointed by the Director-
General, to be completed within sixty days from
expiration of the reasonable period.[22]
While such "retaliatory measures" are a strong
mechanism when applied by economically powerful
countries like the United States or the European
Union, when applied by economically weak countries
against stronger ones, they can often be ignored.[23]
This has been the case, for example, with the March
2005 Appellate Body ruling in case DS 267,[24] which
declared US cotton subsidies illegal.[citation needed]
Whether or not the complainant has taken a measure
of retaliation, surveillance by the DSB is to continue, to
see whether the recommendations of the panel or the
Appellate Body have been implemented.[25]
[edit] Developing countries
Like most of the agreements adopted in the Uruguay
Round, the DSU contains several provisions directed to
developing countries.[26] The Understanding states
that members should give "special attention" to the
problems and interests of developing country
members.[27] Further, if one party to a dispute is a
developing country, that party is entitled to have at
 ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 37

least one panelist who comes from a developing

country.[28] If a complaint is brought against a
developing country, the time for consultations (before
a panel is convened) may be extended, and if the
dispute goes to a panel, the deadlines for the The Convention on the Recognition and
developing country to make its submissions may be Enforcement of Foreign Arbitral Awards, also
known as the New York Convention, was adopted
relaxed.[29] Also, the Secretariat is authorized to make by a United Nations diplomatic conference on 10 June
a qualified legal expert available to any developing 1958 and entered into force on 7 June 1959. The
country on request. Formal complaints against least Convention requires courts of contracting states to give
developed countries are discouraged, and if effect to private agreements to arbitrate and to
consultations fail, the Director-General and the recognize and enforce arbitration awards made in
Chairman of the DSB stand ready to offer their good other contracting states. Widely considered the
foundational instrument for international arbitration,
offices before a formal request for a panel is made.[30]
it applies to arbitrations which are not considered as
As to substance, the DSU provides that the report of domestic awards in the state where recognition and
panels shall "explicitly indicate" how account has been enforcement is sought. Though other international
taken of the "differential and more favorable conventions apply to the cross-border enforcement of
treatment" provisions of the agreement under which arbitration awards, the New York Convention is by far
the complaint is brought. Whether or not a developing the most important.
country is a party to a particular proceeding, Contents
"particular attention" is to be paid to the interests of [hide]
the developing countries in the course of implementing
recommendations and rulings of panels.[31] In order 1 Background

to assist developing countries in overcoming their 2 Summary of provisions

limited expertise in WTO law and assist them in 3 Parties to the New York Convention
managing complex trade disputes, an Advisory Centre
4 States which are Not Party to the New York Convention
on WTO Law was established in 2001. The aim is to
level the playing field for these countries and customs 5 United States Issues

territories in the WTO system by enabling them to 6 External links

have a full understanding of their rights and 7 References

obligations under the WTO Agreement

Background
10. ENFORCEMENT AND In 1953, the International Chamber of Commerce
RECOGNITION OF AWARDS (ICC) produced the first draft Convention on the
Recognition and Enforcement of International Arbitral
11. Awards to the United Nations Economic and Social
12. Convention on the Recognition and Council. With slight modifications, the Council
Enforcement of Foreign Arbitral submitted the convention to the International
Awards Conference in the Spring of 1958. The Conference was
chaired by Willem Schurmann, the Dutch Permanent
Representative to the United Nations and Oscar
From Wikipedia, the free encyclopedia Schachter, a leading figure in international law who
later taught at Columbia Law School and the Columbia
Jump to: navigation, search School of International and Public Affairs, and served
as the President of the American Society of
New York Convention International Law.

Convention on the Recognition and Enforcement of International arbitration is an increasingly popular

Foreign Arbitral Awards means of alternative dispute resolution for cross-
border commercial transactions. The primary
Signed June 10, 1958 advantage of international arbitration over court
Location New York
, US litigation is enforceability: an international arbitration
award is enforceable in most countries in the world.
Effective 7 June 1959 Other advantages of international arbitration include
Condition 3 ratifications the ability to select a neutral forum to resolve disputes,
that arbitration awards are final and not ordinarily
Signatories 24 subject to appeal, the ability to choose flexible
Parties 146 procedures for the arbitration, and confidentiality.
Depositaries Secretary-General of the United Nations Once a dispute between parties is settled, the winning
party needs to collect the award or judgment. Unless
Languages Chinese, English, French, Russian and Spanish the assets of the losing party are located in the country
Convention on the Recognition and Enforcement of Foreign Arbitral Awards
at Wikisource where the court judgment was rendered, the winning
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 38
party needs to obtain a court judgment in the
jurisdiction where the other party resides or where its
assets are located. Unless there is a treaty on
recognition of court judgments between the country
where the judgment is rendered and the country where
the winning party seeks to collect, the winning party
will be unable to use the court judgment to collect.
Countries which have adopted the New York
Convention have agreed to recognize and enforce
international arbitration awards. As of July 23, 2011,
there are 146 signatories which have adopted the New
York Convention: 144 of the 193 United Nations
Member States, the Cook Islands (a New Zealand
dependent territory), and the Holy See have adopted
the New York Convention.[1] 49 U.N. Member States
have not yet adopted the New York Convention. A
number of British dependent territories have not yet
had the Convention extended to them by Order in
Council.
Summary of provisions
Under the Convention, an arbitration award issued in
any other state can generally be freely enforced in any
other contracting state (save that some contracting
states may elect to enforce only awards from other
contracting states - the "reciprocity" reservation), only
subject to certain, limited defenses. These defenses
are:
1. a party to the arbitration agreement was,
under the law applicable to him, under some
incapacity
; Recognition and Enforcement of Foreign
2. the arbitration agreement was not valid under
its governing law;
3. a party was not given proper notice of the
appointment of the arbitrator or of the
arbitration proceedings, or was otherwise
unable to present its case;
4. the award deals with an issue not
contemplated by or not falling within the
terms of the submission to arbitration, or
contains matters beyond the scope of the
arbitration (subject to the proviso that an
award which contains decisions on such
matters may be enforced to the extent that it
contains decisions on matters submitted to
arbitration which can be separated from those
matters not so submitted);
5. the composition of the was not in
arbitral tribunal
accordance with the agreement of the parties
or, failing such agreement, with the law of the
place where the hearing took place (the " lex loci
arbitri
");
6. the award has not yet become binding upon
the parties, or has been set aside or suspended
by a competent authority, either in the country
where the arbitration took place, or pursuant
to the law of the arbitration agreement;
7. the subject matter of the award was not
capable of resolution by arbitration; or
8. enforcement would be contrary to "public policy".
9.
10. Parties to the New York
Convention
As of May 2012, 146 of the 193 United Nations
Member States have adopted the New York
Convention. The Convention has also been ratified by
Holy See and the Cook Islands. About fifty of the U.N.
Member States have not adopted the Convention. In
addition, Taiwan has not adopted the Convention and
a number of British Overseas Territories have not had
the Convention extended to them by Order in Council.
British Overseas Territories to which the New York
Convention has not yet been extended by Order in
Council are: Anguilla, British Virgin Islands, Falkland
Islands, Turks and Caicos Islands, Montserrat, Saint
Helena (including Ascension and Tristan da Cunha).
The British Virgin Islands have implemented the New
York Convention into domestic law (Arbitration
Ordinance 1976), although Britain has never issued an
Order in Council legally extending the New York
Convention to the British Virgin Islands.
United States Issues
Under American law, the recognition of foreign
arbitral awards is governed by chapter 2 of the Federal
Arbitration Act, which incorporate the New York
Convention.[2]
However, the New York Convention on the
Arbitral Awards (the "Convention") does not
preempt state law. In Foster v. Neilson, the Supreme
Court held “Our constitution declares a treaty to be the
law of the land. It is, consequently, to be regarded in
courts of justice as equivalent to an act of the
Legislature, whenever it operates of itself without the
aid of any legislative provision.” Foster v. Neilson, 27
U.S. 253, 314 (1829). See also Valentine v. U.S. ex rel.
Neidecker, 57 S.Ct. 100, 103 (1936); Medellin v.
Dretke, 125 S.Ct. 2088, 2103 (2005); Sanchez-Llamas
v. Oregon, 126 S.Ct. 2669, 2695 (2006). Thus, over a
course of 181 years, the United States Supreme Court
has repeatedly held that a self-executing treaty is an
act of the Legislature (i.e., act of Congress).
13. TYPES OF ADR
13. 1. Negotiation
Negotiation involves “conferring with another with a
view to agreement”. There are no formal rules to
governing how negotiations should be conducted,
although there are culturally acceptable approaches.
Negotiation is much more than persuasion. Although
you can try to persuade a difficult person to see it your
way, you are merely discussing or arguing your way
through a problem unless you can vary the terms and
commit resources.
14. Assisted negotiation
Here the parties are assisted in their negotiations by a
third party who coaches or represents them in the
negotiations without a formalised structure. Lawyers,
accountants, trusted friends or other technical or
professional advisers are often called upon to fulfil this
role.
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 39
15. 2. Mediation
In mediation, a neutral third party mediator facilitates
the negotiation of a solution by the parties involved.
LEADR NZ mainly deals with mediation. Explore our
mediation section for full details.
16. 3. Conciliation
• This is used to refer to a number of different
processes. The most common are:
• where a third party acts as a conduit,
transmitting offers of settlement
between the parties but taking a much
less active role in the negotiation than
a mediator, or
• the processes used in agencies that
administer legislative rights, in which
case participation may be mandatory
and the conciliator may be obliged to
ensure that the solution reached
adheres to the relevant legislation.
17. 4. Arbitration
Arbitration involves submitting a dispute to an
arbitrator who hears arguments from the parties then
resolves the conflict by making a decision (usually
binding) called an ‘award’. The courts can enforce the
award. There are varying degree of formality in how
evidence is presented during arbitration. This
approach provides greater flexibility and more party
control than the formal court system. It is also usually
private and confidential.
Arbitration, a form of alternative dispute resolution
(ADR), is a legal technique for the resolution of
disputes outside the courts, where the parties to a
dispute refer it to one or more persons (the
"arbitrators", "arbiters" or "arbitral tribunal"), by whose
decision (the "award") they agree to be bound. It is a
resolution technique in which a third party reviews the
evidence in the case and imposes a decision that is
legally binding for both sides and enforceable.[1] Other
forms of ADR include mediation[2] (a form of
settlement negotiation facilitated by a neutral third
party) and non-binding resolution by experts.
Arbitration is often used for the resolution of
commercial disputes, particularly in the context of
international commercial transactions. The use of
arbitration is also frequently employed in consumer
and employment matters, where arbitration may be
mandated by the terms of employment or commercial
contracts.
Arbitration can be either voluntary or mandatory
(although mandatory arbitration can only come from a
statute or from a contract that is voluntarily entered
into, where the parties agree to hold all existing or
future disputes to arbitration, without necessarily
knowing, specifically, what disputes will ever occur)
and can be either binding or non-binding. Non-binding
arbitration is similar to mediation in that a decision can
not be imposed on the parties. However, the principal
distinction is that whereas a mediator will try to help
the parties find a middle ground on which to
compromise, the (non-binding) arbitrator remains
totally removed from the settlement process and will
only give a determination of liability and, if appropriate,
an indication of the quantum of damages payable. By
one definition arbitration is binding and so non-binding
arbitration is technically not arbitration.
Arbitration is a proceeding in which a dispute is
resolved by an impartial adjudicator whose decision
the parties to the dispute have agreed, or legislation
has decreed, will be final and binding. There are
limited rights of review and appeal of arbitration
awards. Arbitration is not the same as:
judicial proceedings, although in some jurisdictions,
court proceedings are sometimes referred as
arbitrations[3]
alternative dispute resolution (or ADR)
Parties often seek to resolve their disputes through
arbitration because of a number of perceived potential
advantages over judicial proceedings:
when the subject matter of the dispute is highly
technical, arbitrators with an appropriate degree of
expertise can be appointed (as one cannot "choose
the judge" in litigation)[5]
arbitration is often faster than litigation in court )[6]
arbitration can be cheaper and more flexible for
businesses[citation needed]
arbitral proceedings and an arbitral award are
generally non-public, and can be made confidential[7]
in arbitral proceedings the language of arbitration may
be chosen, whereas in judicial proceedings the official
language of the country of the competent court will be
automatically applied
because of the provisions of the New York Convention
1958, arbitration awards are generally easier to
enforce in other nations than court judgments
in most legal systems there are very limited avenues
for appeal of an arbitral award, which is sometimes an
advantage because it limits the duration of the dispute
and any associated liability
Some of the disadvantages include:
arbitration may become highly complex[citation
needed]
arbitration may be subject to pressures from powerful
law firms representing the stronger and wealthier
party[citation needed]
arbitration agreements are sometimes contained in
ancillary agreements, or in small print in other
agreements, and consumers and employees often do
not know in advance that they have agreed to
mandatory binding pre-dispute arbitration by
purchasing a product or taking a job
if the arbitration is mandatory and binding, the parties
waive their rights to access the courts and to have a
judge or jury decide the case
in some arbitration agreements, the parties are
required to pay for the arbitrators, which adds an
additional layer of legal cost that can be prohibitive,
especially in small consumer disputes[citation needed]
in some arbitration agreements and systems, the
recovery of attorneys' fees is unavailable, making it
difficult or impossible for consumers or employees to
get legal representation[citation needed]; however
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 40
most arbitration codes and agreements provide for the
same relief that could be granted in court
if the arbitrator or the arbitration forum depends on the
corporation for repeat business, there may be an
inherent incentive to rule against the consumer or
employee
there are very limited avenues for appeal, which
means that an erroneous decision cannot be easily
overturned
although usually thought to be speedier, when there
are multiple arbitrators on the panel, juggling their
schedules for hearing dates in long cases can lead to
delays
in some legal systems, arbitrary awards have fewer
enforcement options than judgments; although in the
United States arbitration awards are enforced in the
same manner as court judgments and have the same
effect
arbitrators are generally unable to enforce
interlocutory measures against a party, making it
easier for a party to take steps to avoid enforcement of
member or a small group of members in arbitration
due to increasing legal fees, without explaining to the
members the adverse consequences of an
unfavorable ruling
rule of applicable law is not necessarily binding on the
arbitrators, although they cannot disregard the
law[citation needed]
discovery may be more limited in arbitration or entirely
nonexistent
the potential to generate billings by attorneys may be
less than pursuing the dispute through trial
unlike court judgments, arbitration awards themselves
are not directly enforceable. A party seeking to enforce
an arbitration award must resort to judicial remedies,
called an action to "confirm" an award
although grounds for attacking an arbitration award in
court are limited, efforts to confirm the award can be
fiercely fought[citation needed], thus necessitating
huge legal expenses that negate the perceived
economic incentive to arbitrate the dispute in the first
place.
[edit] Arbitrability
By their nature, the subject matter of some disputes is
not capable of arbitration. In general, two groups of
legal procedures cannot be subjected to arbitration:
Procedures which necessarily lead to a determination
which the parties to the dispute may not enter into an
agreement upon:[8] Some court procedures lead to
judgments which bind all members of the general
public, or public authorities in their capacity as such, or
third parties, or which are being conducted in the
public interest. For example, until the 1980s, antitrust
matters were not arbitrable in the United States.[9]
Matters relating to crimes, status and family law are
generally not considered to be arbitrable, as the power
of the parties to enter into an agreement upon these
matters is at least restricted. However, most other
disputes that involve private rights between two parties
can be resolved using arbitration. In some disputes,
parts of claims may be arbitrable and other parts not.
For example, in a dispute over patent infringement, a
determination of whether a patent has been infringed
could be adjudicated upon by an arbitration tribunal,
but the validity of a patent could not: As patents are
subject to a system of public registration, an arbitral
panel would have no power to order the relevant body
to rectify any patent registration based upon its
determination.
Some legal orders exclude or restrict the possibility of
arbitration for reasons of the protection of weaker
members of the public, e.g. consumers. Examples:
German law excludes disputes over the rental of living
space from any form of arbitration[10], while arbitration
agreements with consumers are only considered valid
if they are signed by either party,[11] and if the signed
document does not bear any other content than the
arbitration agreement.[12]
Arbitration agreement
See also: Arbitration clause
In theory, arbitration is a consensual process; a party
cannot be forced to arbitrate a dispute unless he
agrees to do so. In practice, however, many fine-print
arbitration agreements are inserted in situations in
which consumers and employees have no bargaining
power. Moreover, arbitration clauses are frequently
placed within sealed users' manuals within products,
within lengthy click-through agreements on websites,
and in other contexts in which meaningful consent is
not realistic. Such agreements are generally divided
into two types:
agreements which provide that, if a dispute should
arise, it will be resolved by arbitration. These will
generally be normal contracts, but they contain an
arbitration clause
agreements which are signed after a dispute has
arisen, agreeing that the dispute should be resolved by
arbitration (sometimes called a "submission
agreement")
The former is the far more prevalent type of arbitration
agreement. Sometimes, legal significance attaches to
the type of arbitration agreement. For example, in
certain Commonwealth countries, it is possible to
provide that each party should bear their own costs in
a conventional arbitration clause, but not in a
submission agreement.
In keeping with the informality of the arbitration
process, the law is generally keen to uphold the
validity of arbitration clauses even when they lack the
normal formal language associated with legal
contracts. Clauses which have been upheld include:
"arbitration in London - English law to apply"[13]
"suitable arbitration clause"[14]
"arbitration, if any, by ICC Rules in London"[15]
The courts have also upheld clauses which specify
resolution of disputes other than in accordance with a
specific legal system. These include provision
indicating:
that the arbitrators "must not necessarily judge
according to the strict law but as a general rule ought
chiefly to consider the principles of practical
business"[16]
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 41
"internationally accepted principles of law governing
contractual relations"[17]
Agreements to refer disputes to arbitration generally
have a special status in the eyes of the law. For
example, in disputes on a contract, a common defence
is to plead the contract is void and thus any claim
based upon it fails. It follows that if a party successfully
claims that a contract is void, then each clause
contained within the contract, including the arbitration
clause, would be void. However, in most countries, the
courts have accepted that:
1.a contract can only be declared void by a court or
other tribunal; and
2.if the contract (valid or otherwise) contains an
arbitration clause, then the proper forum to determine
whether the contract is void or not, is the arbitration
tribunal.[18]
Arguably, either position is potentially unfair; if a
person is made to sign a contract under duress, and
the contract contains an arbitration clause highly
favourable to the other party, the dispute may still
referred to that arbitration tribunal.[citation needed]
Conversely a court may be persuaded that the
arbitration agreement itself is void having been signed
under duress. However, most courts will be reluctant to
interfere with the general rule which does allow for
commercial expediency; any other solution (where one
first had to go to court to decide whether one had to go
to arbitration) would be self defeating.
Sources of law---- States regulate arbitration through a
variety of laws. The main body of law applicable to
arbitration is normally contained either in the national
Private International Law Act (as is the case in
Switzerland) or in a separate law on arbitration (as is
the case in England). In addition to this, a number of
national procedural laws may also contain provisions
relating to arbitration.
By far the most important international instrument on
arbitration law[citation needed] is the 1958 New York
Convention on Recognition and Enforcement of
Foreign Arbitral Awards. Some other relevant
international instruments are:
The Geneva Protocol of 1923
The Geneva Convention of 1927
The European Convention of 1961
The Washington Convention of 1965
(governing settlement of international
investment disputes)
The UNCITRAL Model Law (providing a
model for a national law of arbitration)
The UNCITRAL Arbitration Rules (providing a
set of rules for an ad hoc arbitration)
Case presentation or mini-trial
This is where in-house representatives present brief
summaries of the parties’ cases to senior executives of
both parties with authority to settle the dispute, in a
structured information exchange. The senior
executives then negotiate a solution, taking into
account the information presented to them. Sometimes
an independent third party will chair the presentation.
Independent expert appraisal or early neutral
evaluation
This is where the parties appoint an independent
expert to investigate and provide an opinion on the
issues in dispute, either as a basis for solution or
simply to clarify the issues. In some cases, the parties
agree to be bound by the opinion, which is often
submitted to them in draft form before being finalised.
The process may then become a type of mediation on
the draft opinion, putting responsibility for a solution
back into the hands of the parties.
Litigation
This is the system in which the courts impose a binding
decision on the parties. It is formal, with strict rules of
evidence, and adversarial. The legal framing, analysis
and argument, together with the adversarial nature of
the process, means that the system has little scope for
reconciling or accommodating the parties' interests. It
also produces 'winners and losers'.
18. 5. INQUIRY AND FACT FINDING
19. 6. GOOD OFFICES
DOMESTIC ARBITRATION
14. INTRODUCTION TO DOMESTIC
COMMERCIAL DISPUTE
RESOLUTION
15. ALTERNATIVE DISPUTE
RESOLUTION ACT OF 2004
16. Republic Act No. 9285
17. April 2, 2004
AN ACT TO INSTITUTIONALIZE THE USE OF AN
ALTERNATIVE DISPUTE RESOLUTION SYSTEM IN
THE PHILIPPINES AND TO ESTABLISH THE
OFFICE FOR ALTERNATIVE DISPUTE
RESOLUTION, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of
Representatives of the Philippines in Congress
assembled:
CHAPTER 1 - GENERAL PROVISIONS
SECTION 1. Title. - This act shall be known as the
"Alternative Dispute Resolution Act of 2004."
SEC. 2. Declaration of Policy. - it is hereby declared the
policy of the State to actively promote party autonomy
in the resolution of disputes or the freedom of the
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 42
party to make their own arrangements to resolve their
disputes. Towards this end, the State shall encourage
and actively promote the use of Alternative Dispute
Resolution (ADR) as an important means to achieve
speedy and impartial justice and declog court dockets.
As such, the State shall provide means for the use of
ADR as an efficient tool and an alternative procedure
for the resolution of appropriate cases. Likewise, the
State shall enlist active private sector participation in
the settlement of disputes through ADR. This Act shall
be without prejudice to the adoption by the Supreme
Court of any ADR system, such as mediation,
conciliation, arbitration, or any combination thereof as
a means of achieving speedy and efficient means of
resolving cases pending before all courts in the
Philippines which shall be governed by such rules as
the Supreme Court may approve from time to time.
SEC. 3. Definition of Terms. - For purposes of this Act,
the term:
(a) "Alternative Dispute Resolution System" means 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;
(b) "ADR Provider" means institutions or persons
accredited as mediator, conciliator, arbitrator, neutral
evaluator, or any person exercising similar functions in
any Alternative Dispute Resolution system. This is
without prejudice to the rights of the parties to choose
nonaccredited individuals to act as mediator,
conciliator, arbitrator, or neutral evaluator of their
dispute.
Whenever reffered to in this Act, the term "ADR
practitioners" shall refer to individuals acting as
mediator, conciliator, arbitrator or neutral evaluator;
(c) "Authenticate" means to sign, execute or adopt a
symbol, or encrypt a record in whole or in part,
intended to identity the authenticating party and to
adopt, accept or establish the authenticity of a record
or term;
(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;
(e) "Arbitrator" means the person appointed to render
an award, alone or with others, in a dispute that is the
subject of an arbitration agreement;
(f) "Award" means any partial or final decision by an
arbitrator in resolving the issue in a controversy;
(g) "Commercial Arbitration" An arbitration is
"commercial if it covers matter arising from all
relationships of a commercial nature, whether
contractual or not;
(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;
(i) "Convention Award" means a foreign arbitral award
made in a Convention State;
(j) "Convention State" means a State that is a member
of the New York Convention;
(k) "Court" as referred to in Article 6 of the Model Law
shall mean a Regional Trial Court;
(l) "Court-Annexed Mediation" means any mediation
process conducted under the auspices of the court,
after such court has acquired jurisdiction of the
dispute;
(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;
(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;
(o) "Government Agency" means any government
entity, office or officer, other than a court, that is
vested by law with quasi-judicial power to resolve or
adjudicate dispute involving the government, its
agencies and instrumentalities, or private persons;
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(p) "International Party" shall mean an entity whose
place of business is outside the Philippines. It shall not
include a domestic subsidiary of such international
party or a coventurer in a joint venture with a party
which has its place of business in the Philippines.
The term foreigner arbitrator shall mean a person who
is not a national of the Philippines.
(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.
(r) "Mediator" means a person who conducts
mediation;
(s) "Mediation Party" means a person who participates
in a mediation and whose consent is necessary to
resolve the dispute;
(t) "Mediation-Arbitration" or Med-Arb is a step
dispute resolution process involving both mediation
and arbitration;
(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;
(v) "Model Law" means the Model Law on
International Commercial Arbitration adopted by the
United Nations Commission on International Trade
Law on 21 June 1985;
(w) "New York Convention" means the United Nations
Convention on the Recognition and Enforcement of
Foreign Arbitral Awards approved in 1958 and ratified
by the Philippine Senate under Senate Resolution No.
71;
(x) "Non-Convention Award" means a foreign arbitral
award made in a State which is not a Convention State;
(y) "Non-Convention State" means a State that is not a
member of the New York Convention.
(z) "Non-Party Participant" means a person, other than
a party or mediator, who participates in a mediation
proceeding as a witness, resource person or expert;
(aa) "Proceeding" means a judicial, administrative, or
other adjudicative process, including related pre-
hearing motions, conferences and discovery;
(bb) "Record" means an information written on a
tangible medium or stored in an electronic or other
similar medium, retrievable form; and
(cc) "Roster" means a list of persons qualified to
provide ADR services as neutrals or to serve as
arbitrators.
SEC. 4. Electronic Signatures in Global and E-
Commerce Act. - The provisions of the Electronic
Signatures in Global and E-Commerce Act, and its
implementing Rules and Regulations shall apply to
proceeding contemplated in this Act.
SEC. 5. Liability of ADR Provider and Practitioner. -
The ADR providers and practitioners shall have the
same civil liability for the Acts done in the
performance of then duties as that of public officers as
provided in Section 38 (1), Chapter 9, Book of the
Administrative Code of 1987.
SEC. 6. Exception to the Application of this Act. - The
provisions of this Act shall not apply to resolution or
settlement of the following: (a) labor disputes covered
by Presidential Decree No. 442, otherwise known as
the Labor Code of the Philippines, as amended and its
Implementing Rules and Regulations; (b) the civil
status of persons; (c) the validity of a marriage; (d) any
ground for legal separation; (e) the jurisdiction of
courts; (f) future legitime; (g) criminal liability; and (h)
those which by law cannot be compromised.
CHAPTER 2 - MEDIATION
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.
SEC. 8. Application and Interpretation. - In applying
construing the provisions of this Chapter,
consideration must be given to the need to promote
candor or parties and mediators through
confidentiality of the mediation process, the policy of
fostering prompt, economical, and amicable resolution
of disputes in accordance with the principles of
integrity of determination by the parties, and the
policy that the decision-making authority in the
mediation process rests with the parties.
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.
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(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. 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
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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.
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.
SEC. 13. Mediator's Disclosure and Conflict of Interest.
- The mediation shall be guided by the following
operative principles:
(a) Before accepting a mediation, an individual who is
requested to serve as a mediator shall:
(1) make an inquiry that is reasonable under the
circumstances to determinate whether there are any
known facts that a reasonable individual would
consider likely to affect the impartiality of the
mediator, including a financial or personal interest in
the outcome of the mediation and any existing or past
relationship with a party or foreseeable participant in
the mediation; and
(2) disclosure to the mediation parties any such fact
known or learned as soon as is practical before
accepting a mediation.
(b) If a mediation learns any fact described in
paragraph (a) (1) of this section after accepting a
mediation, the mediator shall disclose it as soon as
practicable.
At the request of a mediation party, an individual who
is requested to serve as mediator shall disclose his/her
qualifications to mediate a dispute.
This Act does not require that a mediator shall have
special qualifications by background or profession
unless the special qualifications of a mediator are
required in the mediation agreement or by the
mediation parties.
SEC. 14. Participation in Mediation. - Except as
otherwise provided in this Act, a party may designate a
lawyer or any other person to provide assistance in the
mediation. A lawyer 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.
SEC. 15. 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.
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, the latter shall
prevail.
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
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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.
CHAPTER 3 - OTHER ADR FORMS
SEC. 18. Referral of Dispute to other ADR Forms. - The
parties may agree to refer one or more or all issues
arising in a dispute or during its pendency to other
forms of ADR such as but not limited to (a) the
evaluation of a third person or (b) a mini-trial, (c)
mediation-arbitration, or a combination thereof.
For purposes of this Act, the use of other ADR forms
shall be governed by Chapter 2 of this Act except where
it is combined with arbitration in which case it shall
likewise be governed by Chapter 5 of this Act.
CHAPTER 4 - INTERNATIONAL COMMERCIAL
ARBITRATION
SEC. 19. Adoption of the Model Law on International
Commercial Arbitration. - International commercial
arbitration shall be governed by the Model Law on
International Commercial Arbitration (the "Model
Law") adopted by the United Nations Commission on
International Trade Law on June 21, 1985 (United
Nations Document A/40/17) and recommended
approved on December 11, 1985, copy of which is
hereto attached as Appendix "A".
SEC. 20. Interpretation of Model Law. - In interpreting
the Model Law, regard shall be had to its international
origin and to the need for uniformity in its
interpretation and resort may be made to the travaux
preparatories and the report of the Secretary General
of the United Nations Commission on International
Trade Law dated March 25, 1985 entitled,
"International Commercial Arbitration: Analytical
Commentary on Draft Trade identified by reference
number A/CN. 9/264."
SEC. 21. Commercial Arbitration. - An arbitration is
"commercial" if it covers matters arising from all
relationships of a commercial nature, whether
contractual or not. Relationships of a transactions: any
trade transaction for the supply or exchange of goods
or services; distribution agreements; construction of
works; commercial representation or agency;
factoring; leasing, consulting; engineering; licensing;
investment; financing; banking; insurance; joint
venture and other forms of industrial or business
cooperation; carriage of goods or passengers by air,
sea, rail or road.
SEC. 22. Legal Representation in International
Arbitration. - In international arbitration conducted in
the Philippines, a party may be presented by any
person of his choice. Provided, that such
representative, unless admitted to the practice of law
in the Philippines, shall not be authorized to appear as
counsel in any Philippine court, or any other quasi-
judicial body whether or not such appearance is in
relation to the arbitration in which he appears.
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.
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 that 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.
SEC. 25. Interpretation of the Act. - In interpreting the
Act, the court shall have due regard to the policy of the
law in favor of arbitration. Where action is commenced
by or against multiple parties, one or more of whom
are parties who are bound by the arbitration
agreement although the civil action may continue as to
those who are not bound by such arbitration
agreement.
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.
SEC. 27. What Functions May be Performed by
Appointing Authority. - The functions referred to in
Articles 11(3), 11(4), 13(3) and 14(1) of the Model Law
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 47
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.
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.
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.
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.
SEC. 31. Language of the Arbitration. - The parties are
free to agree on the language or languages to be used in
the arbitral proceedings. Failing such agreement, the
language to be used shall be English in international
arbitration, and English or Filipino for domestic
arbitration, unless the arbitral tribunal shall determine
a different or another language or languages to be used
in the proceedings. This agreement or determination,
unless otherwise specified therein, shall apply to any
written statement by a party, any hearing and any
award, decision or other communication by the
arbitral tribunal.
The arbitral tribunal may order that any documentary
evidence shall be accompanied by a translation into the
language or languages agreed upon by the parties or
determined in accordance with paragraph 1 of this
section.
CHAPTER 5 - DOMESTIC ARBITRATION
SEC. 32. Law Governing Domestic Arbitration. -
Domestic arbitration shall continue to be governed by
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Republic Act No. 876, otherwise known as "The
Arbitration Law" as amended by this Chapter. The
term "domestic arbitration" as used herein shall mean
an arbitration that is not international as defined in
Article (3) of the Model Law.
SEC. 33. Applicability to Domestic Arbitration. -
Article 8, 10, 11, 12, 13, 14, 18 and 19 and 29 to 32 of
the Model Law and Section 22 to 31 of the preceding
Chapter 4 shall apply to domestic arbitration.
CHAPTER 6 - ARBITRATION OF CONSTRUCTION
DISPUTES
SEC. 34. Arbitration of Construction Disputes:
Governing Law. - The arbitration of construction
disputes shall be governed by Executive Order No.
1008, otherwise known as the Constitution Industry
Arbitration Law.
SEC. 35. Coverage of the Law. - Construction disputes
which fall within the original and exclusive jurisdiction
of the Construction Industry Arbitration Commission
(the "Commission") shall include those between or
among parties to, or who are otherwise bound by, an
arbitration agreement, directly or by reference whether
such parties are project owner, contractor,
subcontractor, quantity surveyor, bondsman or issuer
of an insurance policy in a construction project.
The Commission shall continue to exercise original
and exclusive jurisdiction over construction disputes
although the arbitration is "commercial" pursuant to
Section 21 of this Act.
SEC. 36. Authority to Act as Mediator or Arbitrator. -
By written agreement of the parties to a dispute, an
arbitrator may act as mediator and a mediator may act
as arbitrator. The parties may also agree in writing
that, following a successful mediation, the mediator
shall issue the settlement agreement in the form of an
arbitral award.
SEC. 37. Appointment of Foreign Arbitrator. - The
Construction Industry Arbitration Commission (CIAC)
shall promulgate rules to allow for the appointment of
a foreign arbitrator or coarbitrator or chairman of a
tribunal a person who has not been previously
accredited by CIAC: Provided, That:
(a) the dispute is a construction dispute in which one
party is an international party
(b) the person to be appointed agreed to abide by the
arbitration rules and policies of CIAC;
(c) he/she is either coarbitrator upon the nomination
of the international party; or he/she is the common
choice of the two CIAC-accredited arbitrators first
appointed one of whom was nominated by the
international party; and
(d) the foreign arbitrator shall be of different
nationality from the international party.
SEC. 38. Applicability to Construction Arbitration. -
The provisions of Sections 17 (d) of Chapter 2, and
Section 28 and 29 of this Act shall apply to arbitration
of construction disputes covered by this Chapter.
SEC. 39. Court to Dismiss Case Involving a
Construction Dispute. - A regional trial court which a
construction dispute is filed shall, upon becoming
aware, not later than the pretrial conference, that the
parties had entered into an arbitration to be conducted
by the CIAC, unless both parties, assisted by their
respective counsel, shall submit to the regional trial
court a written agreement exclusive for the Court,
rather than the CIAC, to resolve the dispute.
CHAPTER 7 - JUDICIAL REVIEW OF ARBITRAL
AWARDS
A. DOMESTIC AWARDS
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.
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.
B. FOREIGN ARBITRAL AWARDS
SEC. 42. Application of the New York Convention. -
The New York Convention shall govern the recognition
and enforcement of arbitral awards covered by the said
Convention.
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The recognition and enforcement of such arbitral
awards shall be filled with 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 a 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.
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, grounds of comity and
reciprocity, recognize and enforce a nonconvention
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 a
judgment of a foreign court.
A foreign arbitral award, when confirmed by the
regional trial court, shall be 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.
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 procedural 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.
SEC. 46. Appeal from Court Decisions on 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 of
procedure to be promulgated by the Supreme Court.
The losing party who appeals from the judgment of the
court confirming an arbitral award shall required by
the appealant court to post 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.
SEC. 47. Venue and Jurisdiction. - Proceedings for
recognition and enforcement of an arbitration
agreement or for vacation, 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
filled 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 party cannot be served notice at such address, at
such party's last known address. The notice shall be
sent at least fifteen (15) days before the date set for the
initial hearing of the application.
CHAPTER 8 - MISCELLANEOUS PROVISIONS
SEC. 49. Office for Alternative Dispute Resolution. -
There is hereby established the Office for Alternative
Dispute Resolution as an attached agency to the
Department of Justice (DOJ) which shall have a
Secretariat to be headed by an executive director. The
executive director shall be appointed by the President
of the Philippines.
The objective of the office are:
(a) to promote, develop and expand the use of ADR in
the private and public sectors; and
To assist the government to monitor, study and
evaluate the use by the public and the private sector of
ADR, and recommend to Congress needful statutory
changes to develop. Strengthen and improve ADR
practices in accordance with world standards.
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SEC. 50. Powers and Functions of the Office for
Alternative Dispute Resolution. - The Office for
Alternative Dispute Resolution shall have the following
powers and functions:
(a) To formulate standards for the training of the ADR
practitioners and service providers;
(b) To certify that such ADR practitioners and ADR
service providers have undergone the professional
training provided by the office;
(c) To coordinate the development, implementation,
monitoring, and evaluation of government ADR
programs;
(d) To charge fees for their services; and
(e) To perform such acts as may be necessary to carry
into effect the provisions of this Act.
SEC. 51. Appropriations. - The amount necessary to
carry out the provisions of this Act shall be included in
the General Appropriations Act of the year following
its enactment into law and thereafter.
SEC. 52. Implementing Rules and Regulations (IRR). -
Within one (1) month after the approval of this Act, the
secretary of justice shall convene a committee that
shall formulate the appropriate rules and regulations
necessary for the implementation of this Act. The
committee, composed of representatives from:
(a) the Department of Justice;
(b) the Department of Trade and Industry;
(c) the Department of the Interior and Local
Government;
(d) the president of the Integrated Bar of the
Philippines;
(e) A representative from the arbitration profession;
and
(f) A representative from the mediation profession;
and
(g) A representative from the ADR organizations
shall within three (3) months after convening, submit
the IRR to the Joint Congressional Oversight
Committee for review and approval. The Oversight
Committee shall be composed of the chairman of the
Senate Committee on Justice and Human Rights,
chairman of the House Committee on Justice, and one
(1) member each from the majority and minority of
both Houses.
The Joint Oversight Committee shall become functus
officio upon approval of the IRR.
SEC. 53. Applicability of the Katarungan
Pambarangay. - This Act shall not be interpreted to
repeal, amend or modify the jurisdiction of the
Katarungan Pambarangay under Republic Act No.
7160, otherwise known as the Local Government Code
of 1991.
SEC. 54. Repealing Clause. - All laws, decrees,
executive orders, rules and regulations which are
inconsistent with the provisions of this Act are hereby
repealed, amended or modified accordingly.
SEC. 55. Separability Clause. - If for any reason or
reasons, any portion or provision of this Act shall be
held unconstitutional or invalid, all other parts or
provisions not affected shall thereby continue to
remain in full force and effect.
SEC. 56. Effectivity. - This act shall take effect fifteen
days (15) after its publication in at least two (2)
national newspapers of general circulation.
18. REPUBLIC ACT NO. 876
ARBITRATION LAW OF THE
PHILIPPINES
AN ACT TO AUTHORIZE THE MAKING OF
ARBITRATION AND SUBMISSION AGREEMENTS,
TO PROVIDE FOR THE APPOINTMENT OF
ARBITRATORS AND THE PROCEDURE FOR
ARBITRATION IN CIVIL CONTROVERSIES, AND
FOR OTHER PURPOSES
Section 1. Short Title. - This Act shall be known as "The
Arbitration Law."
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,
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 51
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.
Section 3. Controversies or cases not subject to the
provisions of this Act. - This Act shall not apply to
controversies and to cases which are subject to the
jurisdiction of the Court of Industrial Relations or
which have been submitted to it as provided by
Commonwealth Act Numbered One hundred and
three, as amended.
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.
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.
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
petition the court for an order directing that such
arbitration proceed in the manner provided for in such
agreement. Five days notice in writing of the hearing of
such application shall be served either personally or by
registered mail upon the party in default. The court
shall hear the parties, and upon being satisfied that the
making of the agreement or such failure to comply
therewith is not in issue, shall make an order directing
the parties to proceed to arbitration in accordance with
the terms of the agreement. If the making of the
agreement or default be in issue the court shall
proceed to summarily hear such issue. If the finding be
that no agreement in writing providing for arbitration
was made, or that there is no default in the proceeding
thereunder, the proceeding shall be dismissed. If the
finding be that a written provision for arbitration was
made and there is a default in proceeding thereunder,
an order shall be made summarily directing the parties
to proceed with the arbitration in accordance with the
terms thereof.
The court shall decide all motions, petitions or
applications filed under the provisions of this Act,
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within ten days after such motions, petitions, or
applications have been heard by it.
Section 7. Stay of civil action. - 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, 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. - 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.
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.
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.
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Section 12. Procedure by arbitrators. - Subject to the
terms of the submission or contract, if any are
specified therein, are arbitrators selected as prescribed
herein must, within five days after appointment if the
parties to the controversy reside within the same city
or province, or within fifteen days after appointment if
the parties reside in different provinces, set a time and
place for the hearing of the matters submitted to them,
and must cause notice thereof to be given to each of the
parties. The hearing can be postponed or adjourned by
the arbitrators only by agreement of the parties;
otherwise, adjournment may be ordered by the
arbitrators upon their own motion only at the hearing
and for good and sufficient cause. No adjournment
shall extend the hearing beyond the day fixed in the
submission or contract for rendering the award, unless
the time so fixed is extended by the written agreement
of the parties to the submission or contract or their
attorneys, or unless the parties have continued with
the arbitration without objection to such adjournment.
The hearing may proceed in the absence of any party
who, after due notice, fails to be present at such
hearing or fails to obtain an adjournment thereof. An
award shall not be made solely on the default of a
party. The arbitrators shall require the other party to
submit such evidence as they may require for making
an award.
No one other than a party to said arbitration, or a
person in the regular employ of such party duly
authorized in writing by said party, or a practicing
attorney-at-law, shall be permitted by the arbitrators
to represent before him or them any party to the
arbitration. Any party desiring to be represented by
counsel shall notify the other party or parties of such
intention at least five days prior to the hearing.
The arbitrators shall arrange for the taking of a
stenographic record of the testimony when such a
record is requested by one or more parties, and when
payment of the cost thereof is assumed by such party
or parties.
Persons having a direct interest in the controversy
which is the subject of arbitration shall have the right
to attend any hearing; but the attendance of any other
person shall be at the discretion of the arbitrators.
Section 13. Oath of arbitrators. - Before hearing any
testimony, arbitrators must be sworn, by any officer
authorized by law to administer an oath, faithfully and
fairly to hear and examine the matters in controversy
and to make a just award according to the best of their
ability and understanding. Arbitrators shall have the
power to administer the oaths to all witnesses
requiring them to tell the whole truth and nothing but
the truth in any testimony which they may give in any
arbitration hearing. This oath shall be required of
every witness before any of his testimony is heard.
Section 14. Subpoena and subpoena duces tecum. -
Arbitrators shall have the power to require any person
to attend a hearing as a witness. They shall have the
power to subpoena witnesses and documents when the
relevancy of the testimony and the materiality thereof
has been demonstrated to the arbitrators. Arbitrators
may also require the retirement of any witness during
the testimony of any other witness. All of the
arbitrators appointed in any controversy must attend
all the hearings in that matter and hear all the
allegations and proofs of the parties; but an award by
the majority of them is valid unless the concurrence of
all of them is expressly required in the submission or
contract to arbitrate. The arbitrator or arbitrators shall
have the power at any time, before rendering the
award, without prejudice to 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.
Section 15. Hearing by arbitrators. - Arbitrators may,
at the commencement of the hearing, ask both parties
for brief statements of the issues in controversy and/or
an agreed statement of facts. Thereafter the parties
may offer such evidence as they desire, and shall
produce such additional evidence as the arbitrators
shall require or deem necessary to an understanding
and determination of the dispute. The arbitrators shall
be the sole judge of the relevancy and materiality of the
evidence offered or produced, and shall not be bound
to conform to the Rules of Court pertaining to
evidence. Arbitrators shall receive as exhibits in
evidence any document which the parties may wish to
submit and the exhibits shall be properly identified at
the time of submission. All exhibits shall remain in the
custody of the Clerk of Court during the course of the
arbitration and shall be returned to the parties at the
time the award is made. The arbitrators may make an
ocular inspection of any matter or premises which are
in dispute, but such inspection shall be made only in
the presence of all parties to the arbitration, unless any
party who shall have received notice thereof fails to
appear, in which event such inspection shall be made
in the absence of such party.
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 filed by the parties within fifteen
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 54
days after the close of the oral hearings; the reply
briefs, if any, shall be filed within five days following
such fifteen-day period.
Section 17. Reopening of hearing. - The hearing may be
reopened by the arbitrators on their own motion or
upon the request of any party, upon good cause, shown
at any time before the award is rendered. When
hearings are thus reopened the effective date for the
closing of the hearings shall be the date of the closing
of the reopened hearing.
Section 18. Proceeding in lieu of hearing. - The parties
to a submission or contract to arbitrate may, by written
agreement, submit their dispute to arbitration by other
than oral hearing. The parties may submit an agreed
statement of facts. They may also submit their
respective contentions to the duly appointed
arbitrators in writing; this shall include a statement of
facts, together with all documentary proof. Parties may
also submit a written argument. Each party shall
provide all other parties to the dispute with a copy of
all statements and documents submitted to the
arbitrators. Each party shall have an opportunity to
reply in writing to any other party's statements and
proofs; but if such party fails to do so within seven
days after receipt of such statements and proofs, he
shall be deemed to have waived his right to reply. Upon
the delivery to the arbitrators of all statements and
documents, together with any reply statements, the
arbitrators shall declare the proceedings in lieu of
hearing closed.
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.alf-itc
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.
Section 21. Fees of arbitration. - The fees of the
arbitrators shall be fifty pesos per day unless the
parties agree otherwise in writing prior to the
arbitration.
Section 22. Arbitration deemed a special proceeding. -
Arbitration under a contract or submission shall be
deemed a special proceeding, of which the court
specified in the contract or submission, or if none be
specified, the Court of First Instance for the province
or city in which one of the parties resides or is doing
business, or in which the arbitration was held, shall
have jurisdiction. Any application to the court, or a
judge thereof, hereunder shall be made in manner
provided for the making and hearing of motions,
except as otherwise herein expressly provided.
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 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
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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.
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.
Section 26. Motion to vacate, modify or correct award:
when made. - Notice of a motion to vacate, modify or
correct the award must be served upon the adverse
party or his counsel within thirty days after award is
filed or delivered, as prescribed by law for the service
upon an attorney in an action.
Section 27. Judgment. - Upon the granting of an order
confirming, modifying or correcting an award,
judgment may be entered in conformity therewith in
the court wherein said application was filed. Costs of
the application and the proceedings subsequent
thereto may be awarded by the court in its discretion.
If awarded, the amount thereof must be included in the
judgment.
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.
Section 29. Appeals. - An appeal may be taken from an
order made in a proceeding under this Act, or from a
judgment entered upon an award through certiorari
proceedings, but such appeals shall be limited to
questions of law. The proceedings upon such an
appeal, including the judgment thereon shall be
governed by the Rules of Court in so far as they are
applicable.
Section 30. Death of party. - Where a party dies after
making a submission or a contract to arbitrate as
prescribed in this Act, the proceedings may be begun
or continued upon the application of, or notice to, his
executor or administrator, or temporary administrator
of his estate. In any such case, the court may issue an
order extending the time within which notice of a
motion to confirm, vacate, modify or correct an award
must be served. Upon confirming an award, where a
party has died since it was filed or delivered, the court
must enter judgment in the name of the original party;
and the proceedings thereupon are the same as where
a party dies after a verdict.
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Section 31. Repealing clause. - The provisions of
chapters one and two, Title XIV, of the Civil Code shall
remain in force. All other laws and parts of laws
inconsistent with this Act are hereby repealed. If any
provision of this Act shall be held invalid the
remainder that shall not be affected thereby.
Section 32. Effectivity. - This Act shall take effect six
months after its approval.
19. A.M. No. 07-11-08-SC
SPECIAL RULES OF COURT
ON ALTERNATIVE DISPUTE
RESOLUTION September 1,
2009
Acting on the recommendation of the Chairperson of
the Sub-Committee on the Rules on Alternative
Dispute Resolution submitting for this Court’s
consideration and approval the proposed Special Rules
of Court on Alternative Dispute Resolution, the Court
Resolved to APPROVE the same.
This Rule shall take effect on October 30, 2009
following its publication in three (3) newspapers of
general circulation.
SPECIAL RULES OF COURT ON ALTERNATIVE
DISPUTE RESOLUTION
PART I
GENERAL PROVISIONS AND POLICIES
RULE 1: GENERAL PROVISIONS
Rule 1.1. Subject matter and governing rules.-The
Special Rules of Court on Alternative Dispute
Resolution (the "Special ADR Rules") shall apply to
and govern the following cases:
a. Relief on the issue of Existence, Validity, or
Enforceability of the Arbitration Agreement;
b. Referral to Alternative Dispute Resolution ("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. Confirmation, Correction or Vacation of Award in
Domestic Arbitration;
i. Recognition and Enforcement or Setting Aside of an
Award in International Commercial Arbitration;
j. Recognition and Enforcement of a Foreign Arbitral
Award;
k. Confidentiality/Protective Orders; and
l. Deposit and Enforcement of Mediated Settlement
Agreements.
Rule 1.2. Nature of the proceedings.-All proceedings
under the Special ADR Rules are special proceedings.
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
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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.
Rule 1.4. Verification and submissions. -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.
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.
Rule 1.5. Certification Against Forum Shopping. - A
Certification Against Forum Shopping is one made
under oath made by the petitioner or movant: (a) 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; (b) if there is such other pending action or
claim, a complete statement of the present status
thereof; and (c) 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 five (5) days
therefrom to the court wherein his aforementioned
petition or motion has been filed.
A Certification Against Forum Shopping shall be
appended to all initiatory pleadings except a Motion to
Refer the Dispute to Alternative Dispute Resolution.
Rule 1.6. Prohibited submissions. - The following
pleadings, motions, or petitions shall not be allowed in
the cases governed by the Special ADR Rules and shall
not be accepted for filing by the Clerk of Court:
a. Motion to dismiss;
b. Motion for bill of particulars;
c. Motion for new trial or for reopening of trial;
d. Petition for relief from judgment;
e. Motion for extension, except in cases where an ex-
parte temporary order of protection has been issued;
f. Rejoinder to reply;
g. Motion to declare a party in default; and
h. Any other pleading specifically disallowed under any
provision of the Special ADR Rules.
The court shall motu proprio order a pleading/motion
that it has determined to be dilatory in nature be
expunged from the records.
Rule 1.7. Computation of time. - In computing any
period of time prescribed or allowed by the Special
ADR Rules, or by order of the court, or by any
applicable statute, the day of the act or event from
which the designated period of time begins to run is to
be excluded and the date of performance included. If
the last day of the period, as thus computed, falls on a
Saturday, a Sunday, or a legal holiday in the place
where the court sits, the time shall not run until the
next working day.
Should an act be done which effectively interrupts the
running of the period, the allowable period after such
interruption shall start to run on the day after notice of
the cessation of the cause thereof.
The day of the act that caused the interruption shall be
excluded from the computation of the period.
Rule 1.8. Service and filing of pleadings, motions and
other papers in non-summary proceedings. - The
initiatory pleadings shall be filed directly with the
court. The court will then cause the initiatory pleading
to be served upon the respondent by personal service
or courier. Where an action is already pending,
pleadings, motions and other papers shall be filed
and/or served by the concerned party by personal
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service or courier. Where courier services are not
available, resort to registered mail is allowed.
(A) Proof of filing. - The filing of a pleading shall be
proved by its existence in the record of the case. If it is
not in the record, but is claimed to have been filed
personally, the filing shall be proved by the written or
stamped acknowledgment of its filing by the clerk of
court on a copy of the same; if filed by courier, by the
proof of delivery from the courier company.
(B) Proof of service. - Proof of personal service shall
consist of a written admission by the party served, or
the official return of the server, or the affidavit of the
party serving, containing a full statement of the date,
place and manner of service. If the service is by
courier, proof thereof shall consist of an affidavit of the
proper person, stating facts showing that the document
was deposited with the courier company in a sealed
envelope, plainly addressed to the party at his office, if
known, otherwise at his residence, with postage fully
pre-paid, and with instructions to the courier to
immediately provide proof of delivery.
(C) Filing and service by electronic means and proof
thereof. - Filing and service of pleadings by electronic
transmission may be allowed by agreement of the
parties approved by the court. If the filing or service of
a pleading or motion was done by electronic
transmission, proof of filing and service shall be made
in accordance with the Rules on Electronic Evidence.
Rule 1.9. No summons. - In cases covered by the
Special ADR Rules, a court acquires authority to act on
the petition or motion upon proof of jurisdictional
facts, i.e., that the respondent was furnished a copy of
the petition and the notice of hearing.
(A) Proof of service. - A proof of service of the petition
and notice of hearing upon respondent shall be made
in writing by the server and shall set forth the manner,
place and date of service.
(B) Burden of proof. - The burden of showing that a
copy of the petition and the notice of hearing were
served on the respondent rests on the petitioner.
The technical rules on service of summons do not
apply to the proceedings under the Special ADR Rules.
In instances where the respondent, whether a natural
or a juridical person, was not personally served with a
copy of the petition and notice of hearing in the
proceedings contemplated in the first paragraph of
Rule 1.3 (B), or the motion in proceedings
contemplated in the second paragraph of Rule 1.3 (B),
the method of service resorted to must be such as to
reasonably ensure receipt thereof by the respondent to
satisfy the requirement of due process.
Rule 1.10. Contents of petition/motion. - The initiatory
pleading in the form of a verified petition or motion, in
the appropriate case where court proceedings have
already commenced, shall include the names of the
parties, their addresses, the necessary allegations
supporting the petition and the relief(s) sought.
Rule 1.11. Definition. - The following terms shall have
the following meanings:
a. "ADR Laws" refers to the whole body of ADR laws in
the Philippines.
b. "Appointing Authority" shall mean the person or
institution named in the arbitration agreement as the
appointing authority; or the regular arbitration
institution under whose rule 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 arbitrators shall be made by
the National President of the Integrated Bar of the
Philippines or his duly authorized representative.
c. "Authenticate" means to sign, execute or use a
symbol, or encrypt a record in whole or in part,
intended to identify the authenticating party and to
adopt, accept or establish the authenticity of a record
or term.
d. "Foreign Arbitral Award" is one made in a country
other than the Philippines.
e. "Legal Brief" is a written legal argument submitted
to a court, outlining the facts derived from the factual
statements in the witness’s statements of fact and
citing the legal authorities relied upon by a party in a
case submitted in connection with petitions, counter-
petitions (i.e., petitions to vacate or to set aside and/or
to correct/modify in opposition to petitions to confirm
or to recognize and enforce, or petitions to confirm or
to recognize and enforce in opposition to petitions to
vacate or set aside and/or correct/modify), motions,
evidentiary issues and other matters that arise during
the course of a case. The legal brief shall state the
applicable law and the relevant jurisprudence and the
legal arguments in support of a party’s position in the
case.
f. "Verification" shall mean a certification under oath
by a party or a person who has authority to act for a
party that he has read the pleading/motion, and that
he certifies to the truth of the facts stated therein on
the basis of his own personal knowledge or authentic
documents in his possession. When made by a lawyer,
verification shall mean a statement under oath by a
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lawyer signing a pleading/motion for delivery to the
Court or to the parties that he personally prepared the
pleading/motion, that there is sufficient factual basis
for the statements of fact stated therein, that there is
sufficient basis in the facts and the law to support the
prayer for relief therein, and that the pleading/motion
is filed in good faith and is not interposed for delay.
Rule 1.12. Applicability of Part II on Specific Court
Relief. - Part II of the Special ADR Rules on Specific
Court Relief, insofar as it refers to arbitration, shall
also be applicable to other forms of ADR.
Rule 1.13. Spirit and intent of the Special ADR Rules. –
In situations where no specific rule is provided under
the Special ADR Rules, the court shall resolve such
matter summarily and be guided by the spirit and
intent of the Special ADR Rules and the ADR Laws.
RULE 2: STATEMENT OF POLICIES
Rule 2.1. General policies. - It is the policy of the State
to actively promote the use of various modes of ADR
and to respect party autonomy or the freedom of the
parties to make their own arrangements in the
resolution of disputes with the greatest cooperation of
and the least intervention from the courts. To this end,
the objectives of the Special ADR Rules are to
encourage and promote the use of ADR, particularly
arbitration and mediation, as an important means to
achieve speedy and efficient resolution of disputes,
impartial justice, curb a litigious culture and to de-clog
court dockets.
The court shall exercise the power of judicial review as
provided by these Special ADR Rules. Courts shall
intervene only in the cases allowed by law or these
Special ADR Rules.
Rule 2.2. Policy on arbitration.- (A) Where the parties
have agreed to submit their dispute to arbitration,
courts shall refer the parties to arbitration pursuant to
Republic Act No. 9285 bearing in mind that such
arbitration agreement is the law between the parties
and that they are expected to abide by it in good faith.
Further, the courts shall not refuse to refer parties to
arbitration for reasons including, but not limited to,
the following:
a. The referral tends to oust a court of its jurisdiction;
b. The court is in a better position to resolve the
dispute subject of arbitration;
c. The referral would result in multiplicity of suits;
d. The arbitration proceeding has not commenced;
e. The place of arbitration is in a foreign country;
f. One or more of the issues are legal and one or more
of the arbitrators are not lawyers;
g. One or more of the arbitrators are not Philippine
nationals; or
h. One or more of the arbitrators are alleged not to
possess the required qualification under the
arbitration agreement or law.
(B) Where court intervention is allowed under ADR
Laws or the Special ADR Rules, courts shall not refuse
to grant relief, as provided herein, for any of the
following reasons:
a. Prior to the constitution of the arbitral tribunal, the
court finds that the principal action is the subject of an
arbitration agreement; or
b. The principal action is already pending before an
arbitral tribunal.
The Special ADR Rules recognize the principle of
competence-competence, which 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.
The Special ADR Rules recognize the principle of
separability of the arbitration clause, which means that
said clause shall be treated as an agreement
independent of the other terms of the contract of which
it forms part. A decision that the contract is null and
void shall not entail ipso jure the invalidity of the
arbitration clause.
Rule 2.3. Rules governing arbitral proceedings. - The
parties are free to agree on the procedure to be
followed in the conduct of arbitral proceedings. Failing
such agreement, the arbitral tribunal may conduct
arbitration in the manner it considers appropriate.
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
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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 2.5. Policy on mediation. - The Special ADR Rules
do not apply to Court-Annexed Mediation, which shall
be governed by issuances of the Supreme Court.
Where the parties have agreed to submit their dispute
to mediation, a court before which that dispute was
brought shall suspend the proceedings and direct the
parties to submit their dispute to private mediation. If
the parties subsequently agree, however, they may opt
to have their dispute settled through Court-Annexed
Mediation.
Rule 2.6. Policy on Arbitration-Mediation or
Mediation-Arbitration. - 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
that arbitrator. Conversely, no mediator shall act as
arbitrator in any proceeding in which he acted as
mediator.
Rule 2.7. Conversion of a settlement agreement to an
arbitral award. - Where the parties to mediation have
agreed in the written settlement agreement that the
mediator shall become the sole arbitrator for the
dispute or that the settlement agreement shall become
an arbitral award, the sole arbitrator shall issue the
settlement agreement as an arbitral award, which shall
be subject to enforcement under the law.
PART II
SPECIFIC COURT RELIEF
RULE 3: JUDICIAL RELIEF INVOLVING THE ISSUE
OF EXISTENCE, VALIDITY AND ENFORCEABILITY
OF THE ARBITRATION AGREEMENT
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.
A. Judicial Relief before Commencement of Arbitration
Rule 3.2. Who may file petition. - Any party to an
arbitration agreement may petition the appropriate
court to determine any question concerning the
existence, validity and enforceability of such
arbitration agreement serving a copy thereof on the
respondent in accordance with Rule 1.4 (A).
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.
Rule 3.4. Venue. - A petition questioning the existence,
validity and enforceability of an arbitration agreement
may be filed before the Regional Trial Court of the
place where any of the petitioners or respondents has
his principal place of business or residence.
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.
Rule 3.7. Comment/Opposition.-The
comment/opposition of the respondent must be filed
within fifteen (15) days from service of the petition.
Rule 3.8. Court action. - In resolving the petition, the
court must exercise judicial restraint in accordance
with the policy set forth in Rule 2.4, deferring to the
competence or jurisdiction of the arbitral tribunal to
rule on its competence or jurisdiction.
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Rule 3.9. No forum shopping. - A petition for judicial
relief under this Rule may not be commenced when the
existence, validity or enforceability of an arbitration
agreement has been raised as one of the issues in a
prior action before the same or another court.
Rule 3.10. Application for interim relief. - If the
petitioner also applies for an interim measure of
protection, he must also comply with the requirements
of the Special ADR Rules for the application for an
interim measure of protection.
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.
B. Judicial Relief after Arbitration Commences
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.
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.
Rule 3.17. Comment/Opposition. - The
comment/opposition must be filed within fifteen (15)
days from service of the petition.
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.
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.
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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.
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.
Rule 3.22. Arbitral tribunal a nominal party. - The
arbitral tribunal is only a nominal party. The court
shall not require the arbitral tribunal to submit any
pleadings or written submissions but may consider the
same should the latter participate in the proceedings,
but only as nominal parties thereto.
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 4.3. 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 4.4. Comment/Opposition. - The
comment/opposition must be filed within fifteen (15)
days from service of the petition. The
comment/opposition should show that: (a) there is no
agreement to refer the dispute to arbitration; and/or
(b) the agreement is null and void; and/or (c) the
subject-matter of the dispute is not capable of
settlement or resolution by arbitration in accordance
with Section 6 of the ADR Act.
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.
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;
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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.
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.
RULE 5: INTERIM MEASURES OF PROTECTION
Rule 5.1. Who may ask for interim measures of
protection. - A party to an arbitration agreement may
petition the court for interim measures of protection.
Rule 5.2. When to petition. - A petition for an interim
measure of protection may be made (a) before
arbitration is commenced, (b) after arbitration is
commenced, but before the constitution of the arbitral
tribunal, or (c) after the constitution of the arbitral
tribunal and at any time during arbitral proceedings
but, at this stage, only to the extent that the arbitral
tribunal has no power to act or is unable to act
effectively.
Rule 5.3. Venue. - A petition for an interim measure of
protection may be filed with the Regional Trial Court,
which has jurisdiction over any of the following places:
a. Where the principal place of business of any of the
parties to arbitration is located;
b. Where any of the parties who are individuals
resides;
c. Where any of the acts sought to be enjoined are
being performed, threatened to be performed or not
being performed; or
d. Where the real property subject of arbitration, or a
portion thereof is situated.
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.
Rule 5.5. Contents of the petition. - The verified
petition must state the following:
a. The fact that there is an arbitration agreement;
b. The fact that the arbitral tribunal has not been
constituted, or if constituted, is unable to act or would
be unable to act effectively;
c. A detailed description of the appropriate relief
sought;
d. The grounds relied on for the allowance of the
petition
Apart from other submissions, the petitioner must
attach to his petition an authentic copy of the
arbitration agreement.
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.
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.
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Rule 5.8. Comment/Opposition. - The
comment/opposition must be filed within fifteen (15)
days from service of the petition. The opposition or
comment should state the reasons why the interim
measure of protection should not be granted.
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.
If the other parties fail to file their opposition on or
before the day of the hearing, the court shall motu
proprio render judgment only on the basis of the
allegations in the petition that are substantiated by
supporting documents and limited to what is prayed
for therein.
In cases where, based solely on the petition, the court
finds 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, it shall issue an immediately executory
temporary order of protection and require the
petitioner, within five (5) days from receipt of that
order, to post a bond to answer for any damage that
respondent may suffer as a result of its order. The ex-
parte temporary order of protection shall be valid only
for a period of twenty (20) days from the service on the
party required to comply with the order. Within that
period, the court shall:
a. Furnish the respondent a copy of the petition and a
notice requiring him to comment thereon on or before
the day the petition will be heard; and
b. Notify the parties that the petition shall be heard on
a day specified in the notice, which must not be beyond
the twenty (20) day period of the effectivity of the ex-
parte order.
The respondent has the option of having the temporary
order of protection lifted by posting an appropriate
counter-bond as determined by the court.
If the respondent requests the court for an extension of
the period to file his opposition or comment or to reset
the hearing to a later date, and such request is granted,
the court shall extend the period of validity of the ex-
parte temporary order of protection for no more than
twenty days from expiration of the original period.
After notice and hearing, the court may either grant or
deny the petition for an interim measure of protection.
The order granting or denying any application for
interim measure of protection in aid of arbitration
must indicate that it is issued without prejudice to
subsequent grant, modification, amendment, revision
or revocation by an arbitral tribunal.
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.
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 5.12. Security. - The order granting an interim
measure of protection may be conditioned upon the
provision of security, performance of an act, or
omission thereof, specified in the order.
The Court may not change or increase or decrease the
security ordered by the arbitral tribunal.
Rule 5.13. Modification, amendment, revision or
revocation of court’s previously issued interim
measure of protection. - Any court order granting or
denying interim measure/s of protection is issued
without prejudice to subsequent grant, modification,
amendment, revision or revocation by the arbitral
tribunal as may be warranted.
An interim measure of protection issued by the arbitral
tribunal shall, upon its issuance be deemed to have
ipso jure modified, amended, revised or revoked an
interim measure of protection previously issued by the
court to the extent that it is inconsistent with the
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subsequent interim measure of protection issued by
the arbitral tribunal.
Rule 5.14. Conflict or inconsistency between interim
measure of protection issued by the court and by the
arbitral tribunal. - Any question involving a conflict or
inconsistency between an interim measure of
protection issued by the court and by the arbitral
tribunal shall be immediately referred by the court to
the arbitral tribunal which shall have the authority to
decide such question.
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.
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.
RULE 6: APPOINTMENT OF ARBITRATORS
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 6.2. Who may request for appointment. - Any
party to an arbitration may request the court to act as
an Appointing Authority in the instances specified in
Rule 6.1 above.
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.
Rule 6.4. Contents of the petition. -The petition shall
state the following:
a. The general nature of the dispute;
b. If the parties agreed on an appointment procedure, a
description of that procedure with reference to the
agreement where such may be found;
c. The number of arbitrators agreed upon or the
absence of any agreement as to the number of
arbitrators;
d. The special qualifications that the arbitrator/s must
possess, if any, that were agreed upon by the parties;
e. The fact that the Appointing Authority, without
justifiable cause, has failed or refused to act as such
within the time prescribed or in the absence thereof,
within a reasonable time, from the date a request is
made; and
f. The petitioner is not the cause of the delay in, or
failure of, the appointment of the arbitrator.
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Apart from other submissions, the petitioner must
attach to the petition (a) an authentic copy of the
arbitration agreement, and (b) proof that the
Appointing Authority has been notified of the filing of
the petition for appointment with the court.
Rule 6.5. Comment/Opposition. - The
comment/opposition must be filed within fifteen (15)
days from service of the petition.
Rule 6.6. Submission of list of arbitrators. - The court
may, at its option, also require each party to submit a
list of not less than three (3) proposed arbitrators
together with their curriculum vitae.
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 6.8. 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.
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.
RULE 7: CHALLENGE TO APPOINTMENT OF
ARBITRATOR
Rule 7.1. Who may challenge. - Any of the parties to an
arbitration may challenge an arbitrator.
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.
Rule 7.3. Venue. - The challenge shall be filed with 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.
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 7.6. Comment/Opposition. - The challenged
arbitrator or other parties may file a comment or
opposition within fifteen (15) days from service of the
petition.
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.
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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.
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.
RULE 8: TERMINATION OF THE MANDATE OF
ARBITRATOR
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.
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 8.4. Contents of the petition. - The petition shall
state the following:
a. The name of the arbitrator whose mandate is sought
to be terminated;
b. The ground/s for termination;
c. The fact that one or all of the parties had requested
the arbitrator to withdraw but he failed or refused to
do so;
d. The fact that one or all of the parties requested the
Appointing Authority to act on the request for the
termination of the mandate of the arbitrator and
failure or inability of the Appointing Authority to act
within thirty (30) days from the request of a party or
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parties or within such period as may have been agreed
upon by the parties or allowed under the applicable
rule.
The petitioner shall further allege that one or all of the
parties had requested the arbitrator to withdraw but he
failed or refused to do so.
Rule 8.5. Comment/Opposition. - The
comment/opposition must be filed within fifteen (15)
days from service of the petition.
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.
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.
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.
RULE 9: 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.
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.
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.
Rule 9.6. Contents of the petition. - The petition must
state the following:
a. The fact that there is an ongoing arbitration
proceeding even if such proceeding could not continue
due to some legal impediments;
b. The arbitral tribunal ordered the taking of evidence
or the party desires to present evidence to the arbitral
tribunal;
c. Materiality or relevance of the evidence to be taken;
and
d. The names and addresses of the intended
witness/es, place where the evidence may be found, the
place where the premises to be inspected are located or
the place where the acts required are to be done.
Rule 9.7. Comment/Opposition. - The
comment/opposition must be filed within fifteen (15)
days from service of the petition.
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.
Rule 9.9. Relief against court action. - The order
granting assistance in taking evidence shall be
immediately executory and not subject to
reconsideration or appeal. If the court declines to grant
assistance in taking evidence, the petitioner may file a
motion for reconsideration or appeal.
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Rule 9.10. Perpetuation of testimony before the
arbitral tribunal is constituted. - At anytime before
arbitration is commenced or before the arbitral
tribunal is constituted, any person who desires to
perpetuate his testimony or that of another person may
do so in accordance with Rule 24 of the Rules of Court.
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: 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.
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,
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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.
RULE 11: CONFIRMATION, CORRECTION OR
VACATION OF AWARD IN DOMESTIC
ARBITRATION
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.
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.
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
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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.
Rule 11.5. Form of petition. - An application to vacate
an arbitral award shall be in the form of a petition to
vacate or as a petition to vacate in opposition to a
petition to confirm the same award.
An application to correct/modify an arbitral award
may be included in a petition to confirm an arbitral
award or in a petition to vacate in opposition to
confirm the same award.
When a petition to confirm an arbitral award is
pending before a court, the party seeking to vacate or
correct/modify said award may only apply for those
reliefs through a petition to vacate or correct/modify
the award in opposition to the petition to confirm the
award provided that such petition to vacate or
correct/modify is filed within thirty (30) days from his
receipt of the award. A petition to vacate or
correct/modify an arbitral award filed in another court
or in a separate case before the same court shall be
dismissed, upon appropriate motion, as a violation of
the rule against forum-shopping.
When a petition to vacate or correct/modify an arbitral
award is pending before a court, the party seeking to
confirm said award may only apply for that relief
through a petition to confirm the same award in
opposition to the petition to vacate or correct/modify
the award. A petition to confirm or correct/modify an
arbitral award filed as separate proceeding in another
court or in a different case before the same court shall
be dismissed, upon appropriate motion, as a violation
of the rule against forum shopping.
As an alternative to the dismissal of a second petition
for confirmation, vacation or correction/modification
of an arbitral award filed in violation of the non-forum
shopping rule, the court or courts concerned may allow
the consolidation of the two proceedings in one court
and in one case.
Where the petition to confirm the award and petition
to vacate or correct/modify were simultaneously filed
by the parties in the same court or in different courts
in the Philippines, upon motion of either party, the
court may order the consolidation of the two cases
before either court.
In all instances, the petition must be verified by a
person who has knowledge of the jurisdictional facts.
Rule 11.6. Contents of petition. - The petition must
state the following:
a. The addresses of the parties and any change thereof;
b. The jurisdictional issues raised by a party during
arbitration proceedings;
c. The grounds relied upon by the parties in seeking
the vacation of the arbitral award whether the petition
is a petition for the vacation or setting aside of the
arbitral award or a petition in opposition to a petition
to confirm the award; and
d. A statement of the date of receipt of the arbitral
award and the circumstances under which it was
received by the petitioner.
Apart from other submissions, the petitioner must
attach to the petition the following:
a. An authentic copy of the arbitration agreement;
b. An authentic copy of the arbitral award;
c. A certification against forum shopping executed by
the applicant in accordance with Section 5 of Rule 7 of
the Rules of Court; and
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d. An authentic copy or authentic copies of the
appointment of an arbitral tribunal.
Rule 11.7. Notice. - Upon finding that the petition filed
under this Rule is sufficient both in form and in
substance, the Court shall cause notice and a copy of
the petition to be delivered to the respondent allowing
him to file a comment or opposition thereto within
fifteen (15) days from receipt of the petition. In lieu of
an opposition, the respondent may file a petition in
opposition to the petition.
The petitioner may within fifteen (15) days from
receipt of the petition in opposition thereto file a reply.
Rule 11.8. Hearing. - If the Court finds from the
petition or petition in opposition thereto that there are
issues of fact, it shall require the parties, within a
period of not more than fifteen (15) days from receipt
of the order, to simultaneously submit the affidavits of
all of their witnesses and reply affidavits within ten
(10) days from receipt of the affidavits to be replied to.
There shall be attached to the affidavits or reply
affidavits documents relied upon in support of the
statements of fact in such affidavits or reply affidavits.
If the petition or the petition in opposition thereto is
one for vacation of an arbitral award, the interested
party in arbitration may oppose the petition or the
petition in opposition thereto for the reason that the
grounds cited in the petition or the petition in
opposition thereto, assuming them to be true, do not
affect the merits of the case and may be cured or
remedied. Moreover, the interested party may request
the court to suspend the proceedings for vacation for a
period of time and to direct the arbitral tribunal to
reopen and conduct a new hearing and take such other
action as will eliminate the grounds for vacation of the
award. The opposition shall be supported by a brief of
legal arguments to show the existence of a sufficient
legal basis for the opposition.
If the ground of the petition to vacate an arbitral award
is that the arbitration agreement did not exist, is
invalid or otherwise unenforceable, and an earlier
petition for judicial relief under Rule 3 had been filed,
a copy of such petition and of the decision or final
order of the court shall be attached thereto. But if the
ground was raised before the arbitral tribunal in a
motion to dismiss filed not later than the submission
of its answer, and the arbitral tribunal ruled in favor of
its own jurisdiction as a preliminary question which
was appealed by a party to the Regional Trial Court, a
copy of the order, ruling or preliminary award or
decision of the arbitral tribunal, the appeal therefrom
to the Court and the order or decision of the Court
shall all be attached to the petition.
If the ground of the petition is that the petitioner is an
infant or a person judicially declared to be
incompetent, there shall be attached to the petition
certified copies of documents showing such fact. In
addition, the petitioner shall show that even if the
submission or arbitration agreement was entered into
by a guardian or guardian ad litem, the latter was not
authorized by a competent court to sign such the
submission or arbitration agreement.
If on the basis of the petition, the opposition, the
affidavits and reply affidavits of the parties, the court
finds that there is a need to conduct an oral hearing,
the court shall set the case for hearing. This case shall
have preference over other cases before the court,
except criminal cases. During the hearing, the
affidavits of witnesses shall take the place of their
direct testimonies and they shall immediately be
subject to cross-examination thereon. The Court shall
have full control over the proceedings in order to
ensure that the case is heard without undue delay.
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.
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RULE 12: RECOGNITION AND ENFORCEMENT OR
SETTING ASIDE OF AN
INTERNATIONALCOMMERCIAL ARBITRATION
AWARD
Rule 12.1. Who may request recognition and
enforcement or setting aside. - Any party to an
international commercial arbitration in the Philippines
may petition the proper court to recognize and enforce
or set aside an arbitral award.
Rule 12.2. When to file petition. - (A) Petition to
recognize and enforce. - The petition for enforcement
and recognition of an arbitral award may be filed
anytime from receipt of the award. If, however, 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.
(B) Petition to set aside. - The petition to set aside an
arbitral award may only be filed within three (3)
months from the time the petitioner receives a copy
thereof. If a timely request is made with the arbitral
tribunal for correction, interpretation or additional
award, the three (3) month period shall be counted
from the time the petitioner receives the resolution by
the arbitral tribunal of that request.
A petition to set aside can no longer be filed after the
lapse of the three (3) month period. The dismissal of a
petition to set aside an arbitral award for being time-
barred shall not automatically result in the approval of
the petition filed therein and in opposition thereto for
recognition and enforcement of the same award.
Failure to file a petition to set aside shall preclude a
party from raising grounds to resist enforcement of the
award.
Rule 12.3. Venue. - A petition to recognize and enforce
or set aside an arbitral award may, at the option of the
petitioner, be filed with the Regional Trial Court: (a)
where arbitration proceedings were conducted; (b)
where any of the assets to be attached or levied upon is
located; (c) where the act to be enjoined will be or is
being performed; (d) where any of the parties to
arbitration resides or has its place of business; or (e) in
the National Capital Judicial Region.
Rule 12.4. Grounds to set aside or resist enforcement. -
The court may set aside or refuse the enforcement of
the arbitral award only if:
a. The party making the application furnishes proof
that:
(i). A party to the arbitration agreement was under
some incapacity, or the said agreement is not valid
under the law to which the parties have subjected it or,
failing any indication thereof, under Philippine law; or
(ii). The party making the application to set aside or
resist enforcement was not given proper notice of the
appointment of an arbitrator or of the arbitral
proceedings or was otherwise unable to present his
case; or
(iii). The award deals with a dispute not contemplated
by or not falling within the terms of the submission to
arbitration, or contains decisions on matters beyond
the scope of the submission to arbitration; provided
that, if the decisions on matters submitted to
arbitration can be separated from those not so
submitted, only that part of the award which contains
decisions on matters not submitted to arbitration may
be set aside or only that part of the award which
contains decisions on matters submitted to arbitration
may be enforced; or
(iv). The composition of the arbitral tribunal or the
arbitral procedure was not in accordance with the
agreement of the parties, unless such agreement was in
conflict with a provision of Philippine law from which
the parties cannot derogate, or, failing such agreement,
was not in accordance with Philippine law;
b. The court finds that:
(i). The subject-matter of the dispute is not capable of
settlement by arbitration under the law of the
Philippines; or
(ii). The recognition or enforcement of the award
would be contrary to public policy.
In deciding the petition, the Court shall disregard any
other ground to set aside or enforce the arbitral award
other than those enumerated above.
The petition to set-aside or a pleading resisting the
enforcement of an arbitral award on the ground that a
party was a minor or an 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.
Rule 12.5. Exclusive recourse against arbitral award. -
Recourse to a court against an arbitral award shall be
made only through a petition to set aside the arbitral
award and on grounds prescribed by the law that
governs international commercial arbitration. Any
other recourse from the arbitral award, such as by
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appeal or petition for review or petition for certiorari
or otherwise, shall be dismissed by the court.
Rule 12.6. Form. - The application to recognize and
enforce or set aside an arbitral award, whether made
through a petition to recognize and enforce or to set
aside or as a petition to set aside the award in
opposition thereto, or through a petition to set aside or
petition to recognize and enforce in opposition thereto,
shall be verified by a person who has personal
knowledge of the facts stated therein.
When a petition to recognize and enforce an arbitral
award is pending, the application to set it aside, if not
yet time-barred, shall be made through a petition to set
aside the same award in the same proceedings.
When a timely petition to set aside an arbitral award is
filed, the opposing party may file a petition for
recognition and enforcement of the same award in
opposition thereto.
Rule 12.7. Contents of petition. - (A) Petition to
recognize and enforce. - The petition to recognize and
enforce or petition to set aside in opposition thereto, or
petition to set aside or petition to recognize and
enforce in opposition thereto, shall state the following:
a. The addresses of record, or any change thereof, of
the parties to arbitration;
b. A statement that the arbitration agreement or
submission exists;
c. The names of the arbitrators and proof of their
appointment;
d. A statement that an arbitral award was issued and
when the petitioner received it; and
e. The relief sought.
Apart from other submissions, the petitioner shall
attach to the petition the following:
a. An authentic copy of the arbitration agreement;
b. An authentic copy of the arbitral award;
c. A verification and certification against forum
shopping executed by the applicant in accordance with
Sections 4 and 5 of Rule 7 of the Rules of Court; and
d. An authentic copy or authentic copies of the
appointment of an arbitral tribunal.
(B) Petition to set aside. - The petition to set aside or
petition to set aside in opposition to a petition to
recognize and enforce an arbitral award in
international commercial arbitration shall have the
same contents as a petition to recognize and enforce or
petition to recognize and enforce in opposition to a
petition to set aside an arbitral award. In addition, the
said petitions should state the grounds relied upon to
set it aside.
Further, if the ground of the petition to set aside is that
the petitioner is a minor or found incompetent by a
court, there shall be attached to the petition certified
copies of documents showing such fact. In addition,
the petitioner shall show that even if the submission or
arbitration agreement was entered into by a guardian
or guardian ad litem, the latter was not authorized by a
competent court to sign such the submission or
arbitration agreement.
In either case, if another court was previously
requested to resolve and/or has resolved, on appeal,
the arbitral tribunal’s preliminary determination in
favor of its own jurisdiction, the petitioner shall
apprise the court before which the petition to recognize
and enforce or set aside is pending of the status of the
appeal or its resolution.
Rule 12.8. Notice. - Upon finding that the petition filed
under this Rule is sufficient both in form and in
substance, the court shall cause notice and a copy of
the petition to be delivered to the respondent directing
him to file an opposition thereto within fifteen (15)
days from receipt of the petition. In lieu of an
opposition, the respondent may file a petition to set
aside in opposition to a petition to recognize and
enforce, or a petition to recognize and enforce in
opposition to a petition to set aside.
The petitioner may within fifteen (15) days from
receipt of the petition to set aside in opposition to a
petition to recognize and enforce, or from receipt of the
petition to recognize and enforce in opposition to a
petition to set aside, file a reply.
Rule 12.9. Submission of documents. - If the court
finds that the issue between the parties is mainly one
of law, the parties may be required to submit briefs of
legal arguments, not more than fifteen (15) days from
receipt of the order, sufficiently discussing the legal
issues and the legal basis for the relief prayed for by
each of them.
If the court finds from the petition or petition in
opposition thereto that there are issues of fact relating
to the ground(s) relied upon for the court to set aside,
it shall require the parties within a period of not more
than fifteen (15) days from receipt of the order
simultaneously to submit the affidavits of all of their
witnesses and reply affidavits within ten (10) days
from receipt of the affidavits to be replied to. There
shall be attached to the affidavits or reply affidavits, all
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documents relied upon in support of the statements of
fact in such affidavits or reply affidavits.
Rule 12.10. Hearing. - If on the basis of the petition,
the opposition, the affidavits and reply affidavits of the
parties, the court finds that there is a need to conduct
an oral hearing, the court shall set the case for hearing.
This case shall have preference over other cases before
the court, except criminal cases. During the hearing,
the affidavits of witnesses shall take the place of their
direct testimonies and they shall immediately be
subject to cross-examination thereon. The court shall
have full control over the proceedings in order to
ensure that the case is heard without undue delay.
Rule 12.11. Suspension of proceedings to set aside. -
The court when asked to set aside an arbitral award
may, where appropriate and upon request by a party,
suspend the proceedings for a period of time
determined by it to give the arbitral tribunal an
opportunity to resume the arbitral proceedings or to
take such other action as in the arbitral tribunal’s
opinion will eliminate the grounds for setting aside.
The court, in referring the case back to the arbitral
tribunal 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.
The court when asked to set aside an arbitral award
may also, when the preliminary ruling of an arbitral
tribunal affirming its jurisdiction to act on the matter
before it had been appealed by the party aggrieved by
such preliminary ruling to the court, suspend the
proceedings to set aside to await the ruling of the court
on such pending appeal or, in the alternative,
consolidate the proceedings to set aside with the
earlier appeal.
Rule 12.12. Presumption in favor of confirmation. - It is
presumed that an arbitral award was made and
released in due course and is subject to enforcement by
the court, unless the adverse party is able to establish a
ground for setting aside or not enforcing an arbitral
award.
Rule 12.13. Judgment of the court. - Unless a ground to
set aside an arbitral award under Rule 12.4 above is
fully established, the court shall dismiss the petition.
If, in the same proceedings, there is a petition to
recognize and enforce the arbitral award filed in
opposition to the petition to set aside, the court shall
recognize and enforce the award.
In resolving the petition or petition in opposition
thereto in accordance with the Special ADR Rules, the
court shall either set aside or enforce the arbitral
award. The court shall not disturb the arbitral
tribunal’s determination of facts and/or interpretation
of law.
Rule 12.14. Costs. - Unless otherwise agreed upon by
the parties in writing, at the time the case is submitted
to the court for decision, the party praying for
recognition and enforcement or setting aside of an
arbitral award shall submit a statement under oath
confirming the costs he has incurred only in the
proceedings for such recognition and enforcement or
setting aside. The costs shall include the attorney’s fees
the party has paid or is committed to pay to his counsel
of record.
The prevailing party shall be entitled to an award of
costs, which shall include reasonable attorney’s fees of
the prevailing party against the unsuccessful party. The
court shall determine the reasonableness of the claim
for attorney’s fees.
RULE 13: RECOGNITION AND ENFORCEMENT OF
A FOREIGN ARBITRAL AWARD
Rule 13.1. Who may request recognition and
enforcement. - Any party to a foreign arbitration may
petition the court to recognize and enforce a foreign
arbitral award.
Rule 13.2. When to petition. - At any time after receipt
of a foreign arbitral award, any party to arbitration
may petition the proper Regional Trial Court to
recognize and enforce such award.
Rule 13.3. Venue. - The petition to recognize and
enforce a foreign arbitral award shall be filed, at the
option of the petitioner, with the Regional Trial Court
(a) where the assets to be attached or levied upon is
located, (b) where the act to be enjoined is being
performed, (c) in the principal place of business in the
Philippines of any of the parties, (d) if any of the
parties is an individual, where any of those individuals
resides, or (e) in the National Capital Judicial Region.
Rule 13.4. Governing law and grounds to refuse
recognition and enforcement. - The recognition and
enforcement of a foreign arbitral award shall be
governed by the 1958 New York Convention on the
Recognition and Enforcement of Foreign Arbitral
Awards (the "New York Convention") and this Rule.
The court may, upon grounds of comity and
reciprocity, recognize and enforce a foreign arbitral
award made in a country that is not a signatory to the
New York Convention as if it were a Convention
Award.
A Philippine court shall not set aside a foreign arbitral
award but may refuse it recognition and enforcement
on any or all of the following grounds:
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a. The party making the application to refuse
recognition and enforcement of the award furnishes
proof that:
(i). A party to the arbitration agreement was under
some incapacity; or the said agreement is not valid
under the law to which the parties have subjected it or,
failing any indication thereof, under the law of the
country where the award was made; or
(ii). The party making the application was not given
proper notice of the appointment of an arbitrator or of
the arbitral proceedings or was otherwise unable to
present his case; or
(iii). The award deals with a dispute not contemplated
by or not falling within the terms of the submission to
arbitration, or contains decisions on matters beyond
the scope of the submission to arbitration; provided
that, if the decisions on matters submitted to
arbitration can be separated from those not so
submitted, only that part of the award which contains
decisions on matters not submitted to arbitration may
be set aside; or
(iv). The composition of the arbitral tribunal or the
arbitral procedure was not in accordance with the
agreement of the parties or, failing such agreement,
was not in accordance with the law of the country
where arbitration took place; or
(v). The award has not yet become binding on the
parties or has been set aside or suspended by a court of
the country in which that award was made; or
b. The court finds that:
(i). The subject-matter of the dispute is not capable of
settlement or resolution by arbitration under
Philippine law; or
(ii). The recognition or enforcement of the award
would be contrary to public policy.
The court shall disregard any ground for opposing the
recognition and enforcement of a foreign arbitral
award other than those enumerated above.
Rule 13.5. Contents of petition. - The petition shall
state the following:
a. The addresses of the parties to arbitration;
b. In the absence of any indication in the award, the
country where the arbitral award was made and
whether such country is a signatory to the New York
Convention; and
c. The relief sought.
Apart from other submissions, the petition shall have
attached to it the following:
a. An authentic copy of the arbitration agreement; and
b. An authentic copy of the arbitral award.
If the foreign arbitral award or agreement to arbitrate
or submission is not made in English, the petitioner
shall also attach to the petition a translation of these
documents into English. The translation shall be
certified by an official or sworn translator or by a
diplomatic or consular agent.
Rule 13.6. Notice and opposition. - Upon finding that
the petition filed under this Rule is sufficient both in
form and in substance, the court shall cause notice and
a copy of the petition to be delivered to the respondent
allowing him to file an opposition thereto within thirty
(30) days from receipt of the notice and petition.
Rule 13.7. Opposition. - The opposition shall be
verified by a person who has personal knowledge of the
facts stated therein.
Rule 13.8. Submissions. - If the court finds that the
issue between the parties is mainly one of law, the
parties may be required to submit briefs of legal
arguments, not more than thirty (30) days from receipt
of the order, sufficiently discussing the legal issues and
the legal bases for the relief prayed for by each other.
If, from a review of the petition or opposition, there are
issues of fact relating to the ground/s relied upon for
the court to refuse enforcement, the court shall, motu
proprio or upon request of any party, require the
parties to simultaneously submit the affidavits of all of
their witnesses within a period of not less than fifteen
(15) days nor more than thirty (30) days from receipt
of the order. The court may, upon the request of any
party, allow the submission of reply affidavits within a
period of not less than fifteen (15) days nor more than
thirty (30) days from receipt of the order granting said
request. There shall be attached to the affidavits or
reply affidavits all documents relied upon in support of
the statements of fact in such affidavits or reply
affidavits.
Rule 13.9. Hearing. - The court shall set the case for
hearing if on the basis of the foregoing submissions
there is a need to do so. The court shall give due
priority to hearings on petitions under this Rule.
During the hearing, the affidavits of witnesses shall
take the place of their direct testimonies and they shall
immediately be subject to cross-examination. The
court shall have full control over the proceedings in
order to ensure that the case is heard without undue
delay.
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Rule 13.10. Adjournment/deferment of decision on
enforcement of award. - The court before which a
petition to recognize and enforce a foreign arbitral
award is pending, may adjourn or defer rendering a
decision thereon if, in the meantime, an application for
the setting aside or suspension of the award has been
made with a competent authority in the country where
the award was made. Upon application of the
petitioner, the court may also require the other party to
give suitable security.
Rule 13.11. Court action. - It is presumed that a foreign
arbitral award was made and released in due course of
arbitration and is subject to enforcement by the court.
The court shall recognize and enforce a foreign arbitral
award unless a ground to refuse recognition or
enforcement of the foreign arbitral award under this
rule is fully established.
The decision of the court recognizing and enforcing a
foreign arbitral award is immediately executory.
In resolving the petition for recognition and
enforcement of a foreign arbitral award in accordance
with these Special ADR Rules, the court shall either [a]
recognize and/or enforce or [b] refuse to recognize and
enforce the arbitral award. The court shall not disturb
the arbitral tribunal’s determination of facts and/or
interpretation of law.
Rule 13.12. Recognition and enforcement of non-
convention award. - The court shall, only upon
grounds provided by these Special ADR Rules,
recognize and enforce a foreign arbitral award made in
a country not a signatory to the New York Convention
when such country extends comity and reciprocity to
awards made in the Philippines. If that country does
not extend comity and reciprocity to awards made in
the Philippines, the court may nevertheless treat such
award as a foreign judgment enforceable as such under
Rule 39, Section 48, of the Rules of Court.
PART III
PROVISIONS SPECIFIC TO MEDIATION
RULE 14: GENERAL PROVISIONS
Rule 14.1. Application of the rules on arbitration. -
Whenever applicable and appropriate, the pertinent
rules on arbitration shall be applied in proceedings
before the court relative to a dispute subject to
mediation.
RULE 15: DEPOSIT AND ENFORCEMENT OF
MEDIATED SETTLEMENT AGREEMENTS
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 15.3. Venue. - The written settlement agreement
may be jointly deposited by the parties or deposited by
one party with prior notice to the other party/ies with
the Clerk of Court of the Regional Trial Court (a) where
the principal place of business in the Philippines 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.
Rule 15.4. Registry Book. - The Clerk of Court of each
Regional Trial Court shall keep a Registry Book that
shall chronologically list or enroll all the mediated
settlement agreements/settlement awards that are
deposited with the court as well as the names and
address of the parties thereto and the date of
enrollment and shall issue a Certificate of Deposit to
the party that made the deposit.
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 15.6. Contents of petition. - The verified petition
shall:
a. Name and designate, as petitioner or respondent, all
parties to the mediated settlement agreement and
those who may be affected by it;
b. State the following:
(i). The addresses of the petitioner and respondents;
and
(ii). The ultimate facts that would show that the
adverse party has defaulted to perform its obligation
under said agreement; and
c. Have attached to it the following:
(i). An authentic copy of the mediated settlement
agreement; and
(ii). Certificate of Deposit showing that the mediated
settlement agreement was deposited with the Clerk of
Court.
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Rule 15.7. Opposition. - The adverse party may file an
opposition, within fifteen (15) days from receipt of
notice or service of the petition, by submitting written
proof of compliance with the mediated settlement
agreement or such other affirmative or negative
defenses it may have.
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.
PART IV
PROVISIONS SPECIFIC TO CONSTRUCTION
ARBITRATION
RULE 16: GENERAL PROVISIONS
Rule 16.1. Application of the rules on arbitration. -
Whenever applicable and appropriate, the rules on
arbitration shall be applied in proceedings before the
court relative to a dispute subject to construction
arbitration.
RULE 17: REFERRAL TO CIAC
Rule 17.1. Dismissal of action. - A Regional Trial Court
before which a construction dispute is filed shall, upon
becoming aware that the parties have entered into an
arbitration agreement, motu proprio or upon motion
made not later than the pre-trial, dismiss the case and
refer the parties to arbitration to be conducted by the
Construction Industry Arbitration Commission
(CIAC), unless all parties to arbitration, assisted by
their respective counsel, submit to the court a written
agreement making the court, rather than the CIAC, the
body that would exclusively resolve the dispute.
Rule 17.2. Form and contents of motion. - The request
for dismissal of the civil action and referral to
arbitration shall be through a verified motion that shall
(a) contain a statement showing that the dispute is a
construction dispute; and (b) be accompanied by proof
of the existence of the arbitration agreement.
If the arbitration agreement or other document
evidencing the existence of that agreement is already
part of the record, those documents need not be
submitted to the court provided that the movant has
cited in the motion particular references to the records
where those documents may be found.
The motion shall also contain a notice of hearing
addressed to all parties and shall specify the date and
time when the motion will be heard, which must not be
later than fifteen (15) days after the filing of the
motion. The movant shall ensure receipt by all parties
of the motion at least three days before the date of the
hearing.
Rule 17.3. Opposition. - Upon receipt of the motion to
refer the dispute to arbitration by CIAC, the other
party may file an opposition to the motion on or before
the day such motion is to be heard. The opposition
shall clearly set forth the reasons why the court should
not dismiss the case.
Rule 17.4. Hearing. - The court shall hear the motion
only once and for the purpose of clarifying relevant
factual and legal issues.
Rule 17.5. Court action. - If the other parties fail to file
their opposition on or before the day of the hearing,
the court shall motu proprio resolve the motion only
on the basis of the facts alleged in the motion.
After hearing, the court shall dismiss the civil action
and refer the parties to arbitration if it finds, based on
the pleadings and supporting documents submitted by
the parties, that there is a valid and enforceable
arbitration agreement involving a construction
dispute. Otherwise, the court shall proceed to hear the
case.
All doubts shall be resolved in favor of the existence of
a construction dispute and the arbitration agreement.
Rule 17.6. Referral immediately executory. - An order
dismissing the case and referring the dispute to
arbitration by CIAC shall be immediately executory.
Rule 17.7. Multiple actions and parties. - The court
shall not decline to dismiss the civil action and make a
referral to arbitration by CIAC 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. Dismissal of the civil action would prejudice the
rights of the parties to the civil action who are not
bound by the arbitration agreement.
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The court may, however, issue an order directing the
inclusion in arbitration of those parties who are bound
by the arbitration agreement directly or by reference
thereto pursuant to Section 34 of Republic Act No.
9285.
Furthermore, the court shall issue an order directing
the case to proceed with respect to the parties not
bound by the arbitration agreement.
Rule 17.8. Referral - If the parties manifest that they
have agreed to submit all or part of their dispute
pending with the court to arbitration by CIAC, the
court shall refer them to CIAC for arbitration.
PART V
PROVISIONS SPECIFIC TO OTHER FORMS OF ADR
RULE 18: GENERAL PROVISIONS
Rule 18.1. Applicability of rules to other forms of ADR.
- This rule governs the procedure for matters brought
before the court involving the following forms of ADR:
a. Early neutral evaluation;
b. Neutral evaluation;
c. Mini-trial;
d. Mediation-arbitration;
e. A combination thereof; or
f. Any other ADR form.
Rule 18.2. Applicability of the rules on mediation. - If
the other ADR form/process is more akin to mediation
(i.e., the neutral third party merely assists the parties
in reaching a voluntary agreement), the herein rules on
mediation shall apply.
Rule 18.3. Applicability of rules on arbitration.-If the
other ADR form/process is more akin to arbitration
(i.e., the neutral third party has the power to make a
binding resolution of the dispute), the herein rules on
arbitration shall apply.
Rule 18.4. Referral. - If a dispute is already before a
court, either party may before and during pre-trial, file
a motion for the court to refer the parties to other ADR
forms/processes. At any time during court
proceedings, even after pre-trial, the parties may
jointly move for suspension of the action pursuant to
Article 2030 of the Civil Code of the Philippines where
the possibility of compromise is shown.
Rule 18.5. Submission of settlement agreement. -
Either party may submit to the court, before which the
case is pending, any settlement agreement following a
neutral or an early neutral evaluation, mini-trial or
mediation-arbitration.
PART VI
MOTION FOR RECONSIDERATION, APPEAL AND
CERTIORARI
RULE 19: MOTION FOR RECONSIDERATION,
APPEAL AND CERTIORARI
A. MOTION FOR RECONSIDERATION
Rule 19.1. Motion for reconsideration, when allowed. -
A party may ask the Regional Trial to reconsider its
ruling on the following:
a. That the arbitration agreement is inexistent, invalid
or unenforceable pursuant to Rule 3.10 (B);
b. Upholding or reversing the arbitral tribunal’s
jurisdiction pursuant to Rule 3.19;
c. Denying a request to refer the parties to arbitration;
d. Granting or denying a party an interim measure of
protection;
e. Denying a petition for the appointment of an
arbitrator;
f. Refusing to grant assistance in taking evidence;
g. Enjoining or refusing to enjoin a person from
divulging confidential information;
h. Confirming, vacating or correcting a domestic
arbitral award;
i. Suspending the proceedings to set aside an
international commercial arbitral award and referring
the case back to the arbitral tribunal;
j. Setting aside an international commercial arbitral
award;
k. Dismissing the petition to set aside an international
commercial arbitral award, even if the court does not
recognize and/or enforce the same;
l. Recognizing and/or enforcing, or dismissing a
petition to recognize and/or enforce an international
commercial arbitral award;
m. Declining a request for assistance in taking
evidence;
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n. Adjourning or deferring a ruling on a petition to set
aside, recognize and/or enforce an international
commercial arbitral award;
o. Recognizing and/or enforcing a foreign arbitral
award, or refusing recognition and/or enforcement of
the same; and
p. Granting or dismissing a petition to enforce a
deposited mediated settlement agreement.
No motion for reconsideration shall be allowed from
the following rulings of the Regional Trial Court:
a. A prima facie determination upholding the
existence, validity or enforceability of an arbitration
agreement pursuant to Rule 3.1 (A);
b. An order referring the dispute to arbitration;
c. An order appointing an arbitrator;
d. Any ruling on the challenge to the appointment of an
arbitrator;
e. Any order resolving the issue of the termination of
the mandate of an arbitrator; and
f. An order granting assistance in taking evidence.
Rule 19.2. When to move for reconsideration. - A
motion for reconsideration may be filed with the
Regional Trial Court within a non-extendible period of
fifteen (15) days from receipt of the questioned ruling
or order.
Rule 19.3. Contents and notice. - The motion shall be
made in writing stating the ground or grounds therefor
and shall be filed with the court and served upon the
other party or parties.
Rule 19.4. Opposition or comment. - Upon receipt of
the motion for reconsideration, the other party or
parties shall have a non-extendible period of fifteen
(15) days to file his opposition or comment.
Rule 19.5. Resolution of motion. - A motion for
reconsideration shall be resolved within thirty (30)
days from receipt of the opposition or comment or
upon the expiration of the period to file such
opposition or comment.
Rule 19.6. No second motion for reconsideration. - No
party shall be allowed a second motion for
reconsideration.
B. GENERAL PROVISIONS ON APPEAL AND
CERTIORARI
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.
Rule 19.8. Subject matter and governing rules. - The
remedy of an appeal through a petition for review or
the remedy of a special civil action of certiorari from a
decision of the Regional Trial Court made under the
Special ADR Rules shall be allowed in the instances,
and instituted only in the manner, provided under this
Rule.
Rule 19.9. Prohibited alternative remedies. - Where the
remedies of appeal and certiorari are specifically made
available to a party under the Special ADR Rules,
recourse to one remedy shall preclude recourse to the
other.
Rule 19.10. Rule on judicial review on arbitration in the
Philippines. - As a general rule, the court can only
vacate or set aside the decision of an arbitral tribunal
upon a clear showing that the award suffers from any
of the infirmities or grounds for vacating an arbitral
award under Section 24 of Republic Act No. 876 or
under Rule 34 of the Model Law in a domestic
arbitration, or for setting aside an award in an
international arbitration under Article 34 of the Model
Law, or for such other grounds provided under these
Special Rules.
If the Regional Trial Court is asked to set aside an
arbitral award in a domestic or international
arbitration on any ground other than those provided in
the Special ADR Rules, the court shall entertain such
ground for the setting aside or non-recognition of the
arbitral award only if the same amounts to a violation
of public policy.
The court shall not set aside or vacate the award of the
arbitral tribunal merely on the ground that the arbitral
tribunal committed errors of fact, or of law, or of fact
and law, as the court cannot substitute its judgment for
that of the arbitral tribunal.
Rule 19.11. Rule on judicial review of foreign arbitral
award. - The court can deny recognition and
enforcement of a foreign arbitral award only upon the
grounds provided in Article V of the New York
Convention, but shall have no power to vacate or set
aside a foreign arbitral award.
C. APPEALS TO THE COURT OF APPEALS
Rule 19.12. Appeal to the Court of Appeals. - An appeal
to the Court of Appeals through a petition for review
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under this Special Rule shall only be allowed from the
following final orders of the Regional Trial Court:
a. Granting or denying an interim measure of
protection;
b. Denying a petition for appointment of an arbitrator;
c. Denying a petition for assistance in taking evidence;
d. Enjoining or refusing to enjoin a person from
divulging confidential information;
e. Confirming, vacating or correcting/modifying a
domestic arbitral award;
f. Setting aside an international commercial arbitration
award;
g. Dismissing the petition to set aside an international
commercial arbitration award even if the court does
not decide to recognize or enforce such award;
h. Recognizing and/or enforcing an international
commercial arbitration award;
i. Dismissing a petition to enforce an international
commercial arbitration award;
j. Recognizing and/or enforcing a foreign arbitral
award;
k. Refusing recognition and/or enforcement of a
foreign arbitral award;
l. Granting or dismissing a petition to enforce a
deposited mediated settlement agreement; and
m. Reversing the ruling of the arbitral tribunal
upholding its jurisdiction.
Rule 19.13. Where to appeal. - An appeal under this
Rule shall be taken to the Court of Appeals within the
period and in the manner herein provided.
Rule 19.14. When to appeal. - The petition for review
shall be filed within fifteen (15) days from notice of the
decision of the Regional Trial Court or the denial of the
petitioner’s motion for reconsideration.
Rule 19.15. How appeal taken. - Appeal shall be taken
by filing a verified petition for review in seven (7)
legible copies with the Court of Appeals, with proof of
service of a copy thereof on the adverse party and on
the Regional Trial Court. The original copy of the
petition intended for the Court of Appeals shall be
marked original by the petitioner.
Upon the filing of the petition and unless otherwise
prescribed by the Court of Appeals, the petitioner shall
pay to the clerk of court of the Court of Appeals
docketing fees and other lawful fees of P3,500.00 and
deposit the sum of P500.00 for costs.
Exemption from payment of docket and other lawful
fees and the deposit for costs may be granted by the
Court of Appeals upon a verified motion setting forth
valid grounds therefor. If the Court of Appeals denies
the motion, the petitioner shall pay the docketing and
other lawful fees and deposit for costs within fifteen
days from the notice of the denial.
Rule 19.16. Contents of the Petition. - The petition for
review shall (a) state the full names of the parties to
the case, without impleading the court or agencies
either as petitioners or respondent, (b) contain a
concise statement of the facts and issues involved and
the grounds relied upon for the review, (c) be
accompanied by a clearly legible duplicate original or a
certified true copy of the decision or resolution of the
Regional Trial Court appealed from, together with
certified true copies of such material portions of the
record referred to therein and other supporting papers,
and (d) contain a sworn certification against forum
shopping as provided in the Rules of Court. The
petition shall state the specific material dates showing
that it was filed within the period fixed herein.
Rule 19.17. Effect of failure to comply with
requirements. - The court shall dismiss the petition if it
fails to comply with the foregoing requirements
regarding the payment of the docket and other lawful
fees, the deposit for costs, proof of service of the
petition, the contents and the documents, which
should accompany the petition.
Rule 19.18. Action on the petition. - The Court of
Appeals may require the respondent to file a comment
on the petition, not a motion to dismiss, within ten
(10) days from notice, or dismiss the petition if it finds,
upon consideration of the grounds alleged and the
legal briefs submitted by the parties, that the petition
does not appear to be prima facie meritorious.
Rule 19.19. Contents of Comment. - The comment shall
be filed within ten (10) days from notice in seven (7)
legible copies and accompanied by clearly legible
certified true copies of such material portions of the
record referred to therein together with other
supporting papers. The comment shall (a) point out
insufficiencies or inaccuracies in petitioner’s statement
of facts and issues, and (b) state the reasons why the
petition should be denied or dismissed. A copy thereof
shall be served on the petitioner, and proof of such
service shall be filed with the Court of Appeals.
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Rule 19.20. Due course. - If upon the filing of a
comment or such other pleading or documents as may
be required or allowed by the Court of Appeals or upon
the expiration of the period for the filing thereof, and
on the basis of the petition or the records, the Court of
Appeals finds prima facie that the Regional Trial Court
has committed an error that would warrant reversal or
modification of the judgment, final order, or resolution
sought to be reviewed, it may give due course to the
petition; otherwise, it shall dismiss the same.
Rule 19.21. Transmittal of records. - Within fifteen (15)
days from notice that the petition has been given due
course, the Court of Appeals may require the court or
agency concerned to transmit the original or a legible
certified true copy of the entire record of the
proceeding under review. The record to be transmitted
may be abridged by agreement of all parties to the
proceeding. The Court of Appeals may require or
permit subsequent correction of or addition to the
record.
Rule 19.22. Effect of appeal. - The appeal shall not stay
the award, judgment, final order or resolution sought
to be reviewed unless the Court of Appeals directs
otherwise upon such terms as it may deem just.
Rule 19.23. Submission for decision. - If the petition is
given due course, the Court of Appeals may set the case
for oral argument or require the parties to submit
memoranda within a period of fifteen (15) days from
notice. The case shall be deemed submitted for
decision upon the filing of the last pleading or
memorandum required by the Court of Appeals.
The Court of Appeals shall render judgment within
sixty (60) days from the time the case is submitted for
decision.
Rule 19.24. Subject of appeal restricted in certain
instance. - If the decision of the Regional Trial Court
refusing to recognize and/or enforce, vacating and/or
setting aside an arbitral award is premised on a finding
of fact, the Court of Appeals may inquire only into such
fact to determine the existence or non-existence of the
specific ground under the arbitration laws of the
Philippines relied upon by the Regional Trial Court to
refuse to recognize and/or enforce, vacate and/or set
aside an award. Any such inquiry into a question of
fact shall not be resorted to for the purpose of
substituting the court’s judgment for that of the
arbitral tribunal as regards the latter’s ruling on the
merits of the controversy.
Rule 19.25. Party appealing decision of court
confirming arbitral award required to post bond. - The
Court of Appeals shall within fifteen (15) days from
receipt of the petition require the party appealing from
the decision or a final order of the Regional Trial
Court, either confirming or enforcing an arbitral
award, or denying a petition to set aside or vacate the
arbitral award to post a bond executed in favor of the
prevailing party equal to the amount of the award.
Failure of the petitioner to post such bond shall be a
ground for the Court of Appeals to dismiss the petition.
D. SPECIAL CIVIL ACTION FOR CERTIORARI
Rule 19.26. Certiorari to the Court of Appeals. - When
the Regional Trial Court, in making a ruling under the
Special ADR Rules, has acted without or in excess of its
jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there is
no appeal or any plain, speedy, and adequate remedy
in the ordinary course of law, a party may file a special
civil action for certiorari to annul or set aside a ruling
of the Regional Trial Court.
A special civil action for certiorari may be filed against
the following orders of the court.
a. Holding that the arbitration agreement is inexistent,
invalid or unenforceable;
b. Reversing the arbitral tribunal’s preliminary
determination upholding its jurisdiction;
c. Denying the request to refer the dispute to
arbitration;
d. Granting or refusing an interim relief;
e. Denying a petition for the appointment of an
arbitrator;
f. Confirming, vacating or correcting a domestic
arbitral award;
g. Suspending the proceedings to set aside an
international commercial arbitral award and referring
the case back to the arbitral tribunal;
h. Allowing a party to enforce an international
commercial arbitral award pending appeal;
i. Adjourning or deferring a ruling on whether to set
aside, recognize and or enforce an international
commercial arbitral award;
j. Allowing a party to enforce a foreign arbitral award
pending appeal; and
k. Denying a petition for assistance in taking evidence.
Rule 19.27. Form. - The petition shall be accompanied
by a certified true copy of the questioned judgment,
order or resolution of the Regional Trial Court, copies
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of all pleadings and documents relevant and pertinent
thereto, and a sworn certification of non-forum
shopping as provided in the Rules of Court.
Upon the filing of the petition and unless otherwise
prescribed by the Court of Appeals, the petitioner shall
pay to the clerk of court of the Court of Appeals
docketing fees and other lawful fees of P3,500.00 and
deposit the sum of P500.00 for costs. Exemption from
payment of docket and other lawful fees and the
deposit for costs may be granted by the Court of
Appeals upon a verified motion setting forth valid
grounds therefor. If the Court of Appeals denies the
motion, the petitioner shall pay the docketing and
other lawful fees and deposit for costs within fifteen
days from the notice of the denial.
Rule 19.28. When to file petition. - The petition must
be filed with the Court of Appeals within fifteen (15)
days from notice of the judgment, order or resolution
sought to be annulled or set aside. No extension of
time to file the petition shall be allowed.
Rule 19.29. Arbitral tribunal a nominal party in the
petition. - The arbitral tribunal shall only be a nominal
party in the petition for certiorari. As nominal party,
the arbitral tribunal shall not be required to submit
any pleadings or written submissions to the court. The
arbitral tribunal or an arbitrator may, however, submit
such pleadings or written submissions if the same
serves the interest of justice.
In petitions relating to the recognition and
enforcement of a foreign arbitral award, the arbitral
tribunal shall not be included even as a nominal party.
However, the tribunal may be notified of the
proceedings and furnished with court processes.
Rule 19.30. Court to dismiss petition. - The court shall
dismiss the petition if it fails to comply with Rules
19.27 and 19.28 above, or upon consideration of the
ground alleged and the legal briefs submitted by the
parties, the petition does not appear to be prima facie
meritorious.
Rule 19.31. Order to comment. - If the petition is
sufficient in form and substance to justify such
process, the Court of Appeals shall immediately issue
an order requiring the respondent or respondents to
comment on the petition within a non-extendible
period of fifteen (15) days from receipt of a copy
thereof. Such order shall be served on the respondents
in such manner as the court may direct, together with a
copy of the petition and any annexes thereto.
Rule 19.32. Arbitration may continue despite petition
for certiorari. - A petition for certiorari to the court
from the action of the appointing authority or the
arbitral tribunal allowed under this Rule shall not
prevent the arbitral tribunal from continuing the
proceedings and rendering its award. Should the
arbitral tribunal continue with the proceedings, the
arbitral proceedings and any award rendered therein
will be subject to the final outcome of the pending
petition for certiorari.
Rule 19.33. Prohibition against injunctions. - The
Court of Appeals shall not, during the pendency of the
proceedings before it, prohibit or enjoin the
commencement of arbitration, the constitution of the
arbitral tribunal, or the continuation of arbitration.
Rule 19.34. Proceedings after comment is filed. - After
the comment is filed, or the time for the filing thereof
has expired, the court shall render judgment granting
the relief prayed for or to which the petitioner is
entitled, or denying the same, within a non-extendible
period of fifteen (15) days.
Rule 19.35. Service and enforcement of order or
judgment. - A certified copy of the judgment rendered
in accordance with the last preceding section shall be
served upon the Regional Trial Court concerned in
such manner as the Court of Appeals may direct, and
disobedience thereto shall be punished as contempt.
E. APPEAL BY CERTIORARI TO THE SUPREME
COURT
Rule 19.36. Review discretionary. - A review by the
Supreme Court is not a matter of right, but of sound
judicial discretion, which will be granted only for
serious and compelling reasons resulting in grave
prejudice to the aggrieved party. The following, while
neither controlling nor fully measuring the court's
discretion, indicate the serious and compelling, and
necessarily, restrictive nature of the grounds that will
warrant the exercise of the Supreme Court’s
discretionary powers, when the Court of Appeals:
a. Failed to apply the applicable standard or test for
judicial review prescribed in these Special ADR Rules
in arriving at its decision resulting in substantial
prejudice to the aggrieved party;
b. Erred in upholding a final order or decision despite
the lack of jurisdiction of the court that rendered such
final order or decision;
c. Failed to apply any provision, principle, policy or
rule contained in these Special ADR Rules resulting in
substantial prejudice to the aggrieved party; and
d. Committed an error so egregious and harmful to a
party as to amount to an undeniable excess of
jurisdiction.
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The mere fact that the petitioner disagrees with the
Court of Appeals’ determination of questions of fact, of
law or both questions of fact and law, shall not warrant
the exercise of the Supreme Court’s discretionary
power. The error imputed to the Court of Appeals must
be grounded upon any of the above prescribed grounds
for review or be closely analogous thereto.
A mere general allegation that the Court of Appeals has
committed serious and substantial error or that it has
acted with grave abuse of discretion resulting in
substantial prejudice to the petitioner without
indicating with specificity the nature of such error or
abuse of discretion and the serious prejudice suffered
by the petitioner on account thereof, shall constitute
sufficient ground for the Supreme Court to dismiss
outright the petition.
Rule 19.37. Filing of petition with Supreme Court. - A
party desiring to appeal by certiorari from a judgment
or final order or resolution of the Court of Appeals
issued pursuant to these Special ADR Rules may file
with the Supreme Court a verified petition for review
on certiorari. The petition shall raise only questions of
law, which must be distinctly set forth.
Rule 19.38. Time for filing; extension. - The petition
shall be filed within fifteen (15) days from notice of the
judgment or final order or resolution appealed from, or
of the denial of the petitioner's motion for new trial or
reconsideration filed in due time after notice of the
judgment.
On motion duly filed and served, with full payment of
the docket and other lawful fees and the deposit for
costs before the expiration of the reglementary period,
the Supreme Court may for justifiable reasons grant an
extension of thirty (30) days only within which to file
the petition.
Rule 19.39. Docket and other lawful fees; proof of
service of petition. - Unless he has theretofore done so
or unless the Supreme Court orders otherwise, the
petitioner shall pay docket and other lawful fees to the
clerk of court of the Supreme Court of P3,500.00 and
deposit the amount of P500.00 for costs at the time of
the filing of the petition. Proof of service of a copy
thereof on the lower court concerned and on the
adverse party shall be submitted together with the
petition.
Rule 19.40. Contents of petition. - The petition shall be
filed in eighteen (18) copies, with the original copy
intended for the court being indicated as such by the
petitioner, and shall (a) state the full name of the
appealing party as the petitioner and the adverse party
as respondent, without impleading the lower courts or
judges thereof either as petitioners or respondents; (b)
indicate the material dates showing when notice of the
judgment or final order or resolution subject thereof
was received, when a motion for new trial or
reconsideration, if any, was filed and when notice of
the denial thereof was received; (c) set forth concisely a
statement of the matters involved, and the reasons or
arguments relied on for the allowance of the petition;
(d) be accompanied by a clearly legible duplicate
original, or a certified true copy of the judgment or
final order or resolution certified by the clerk of court
of the court a quo and the requisite number of plain
copies thereof, and such material portions of the
record as would support the petition; and (e) contain a
sworn certification against forum shopping.
Rule 19.41. Dismissal or denial of petition. - The failure
of the petitioner to comply with any of the foregoing
requirements regarding the payment of the docket and
other lawful fees, deposit for costs, proof of service of
the petition, and the contents of and the documents
which should accompany the petition shall be
sufficient ground for the dismissal thereof.
The Supreme Court may on its own initiative deny the
petition on the ground that the appeal is without merit,
or is prosecuted manifestly for delay, or that the
questions raised therein are too insubstantial to
require consideration.
Rule 19.42. Due course; elevation of records. - If the
petition is given due course, the Supreme Court may
require the elevation of the complete record of the case
or specified parts thereof within fifteen (15) days from
notice.
PART VII
FINAL PROVISIONS
RULE 20: FILING AND DEPOSIT FEES
Rule 20.1. Filing fee in petitions or counter-petitions to
confirm or enforce, vacate or set aside arbitral award
or for the enforcement of a mediated settlement
agreement. - The filing fee for filing a petition to
confirm or enforce, vacate or set aside an arbitral
award in a domestic arbitration or in an international
commercial arbitration, or enforce a mediated
settlement agreement shall be as follows:
PhP 10,000.00 - if the award does not exceed PhP
1,000,000.00
PhP 20,000.00 - if the award does not exceed PhP
20,000,000.00
PhP 30,000.00 - if the award does not exceed PhP
50,000,000.00
PhP 40,000.00 - if the award does not exceed PhP
100,000,000.00
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PhP 50,000.00 - if the award exceeds PhP
100,000,000.00
The minimal filing fee payable in "all other actions not
involving property" shall be paid by the petitioner
seeking to enforce foreign arbitral awards under the
New York Convention in the Philippines.
Rule 20.2. Filing fee for action to enforce as a counter-
petition. - A petition to enforce an arbitral award in a
domestic arbitration or in an international commercial
arbitration submitted as a petition to enforce and/or
recognize an award in opposition to a timely petition to
vacate or set aside the arbitral award shall require the
payment of the filing fees prescribed in Rule 20.1
above.
Rule 20.3. Deposit fee for mediated settlement
agreements. - Any party to a mediated settlement
agreement who deposits it with the clerk of court shall
pay a deposit fee of P500.00.
Rule 20.4. Filing fee for other proceedings. - The filing
fee for the filing of any other proceedings, including
applications for interim relief, as authorized under
these Special Rules not covered under any of the
foregoing provisions, shall be P10,000.00.
RULE 21: COSTS
Rule 21.1. Costs. - The costs of the ADR proceedings
shall be borne by the parties equally unless otherwise
agreed upon or directed by the arbitrator or arbitral
tribunal.
Rule 21.2. On the dismissal of a petition against a
ruling of the arbitral tribunal on a preliminary
question upholding its jurisdiction. - If the Regional
Trial Court dismisses the petition against the ruling of
the arbitral tribunal on a preliminary question
upholding its jurisdiction, it shall also order the
petitioner to pay the respondent all reasonable costs
and expenses incurred in opposing the petition.
"Costs" shall include reasonable attorney’s fees. The
court shall award costs upon application of the
respondent after the petition is denied and the court
finds, based on proof submitted by respondent, that
the amount of costs incurred is reasonable.
Rule 21.3. On recognition and enforcement of a foreign
arbitral award. - At the time the case is submitted to
the court for decision, the party praying for recognition
and enforcement of a foreign arbitral award shall
submit a statement under oath confirming the costs he
has incurred only in the proceedings in the Philippines
for such recognition and enforcement or setting-aside.
The costs shall include attorney’s fees the party has
paid or is committed to pay to his counsel of record.
The prevailing party shall be entitled to an award of
costs which shall include the reasonable attorney’s fees
of the prevailing party against the unsuccessful party.
The court shall determine the reasonableness of the
claim for attorney’s fees.
Rule 21.4. Costs. - At the time the case is submitted to
the court for decision, the party praying for
confirmation or vacation of an arbitral award shall
submit a statement under oath confirming the costs he
has incurred only in the proceedings for confirmation
or vacation of an arbitral award. The costs shall include
the attorney’s fees the party has paid or is committed
to pay to his counsel of record.
The prevailing party shall be entitled to an award of
costs with respect to the proceedings before the court,
which shall include the reasonable attorney’s fees of
the prevailing party against the unsuccessful party. The
court shall determine the reasonableness of the claim
for attorney’s fees.
Rule 21.5. Bill of Costs. - Unless otherwise agreed upon
by the parties in writing, at the time the case is
submitted to the court for decision, the party praying
for recognition and enforcement or for setting aside an
arbitral award shall submit a statement under oath
confirming the costs he has incurred only in the
proceedings for such recognition and enforcement or
setting-aside. The costs shall include attorney’s fees the
party has paid or is committed to pay to his counsel of
record.
The prevailing party shall be entitled to an award of
costs, which shall include reasonable attorney’s fees of
the prevailing party against the unsuccessful party. The
court shall determine the reasonableness of the claim
for attorney’s fees.
Rule 21.6. Government’s exemption from payment of
fees. - The Republic of the Philippines, its agencies and
instrumentalities are exempt from paying legal fees
provided in these Special ADR Rules. Local
governments and government controlled corporation
with or with or without independent charters are not
exempt from paying such fees.
RULE 22: APPLICABILITY OF THE RULES OF
COURT
Rule 22.1. Applicability of Rules of Court. - The
provisions of the Rules of Court that are applicable to
the proceedings enumerated in Rule 1.1 of these
Special ADR Rules have either been included and
incorporated in these Special ADR Rules or specifically
referred to herein.
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In connection with the above proceedings, the Rules of
Evidence shall be liberally construed to achieve the
objectives of the Special ADR Rules.
RULE 23: SEPARABILITY
Rule 23.1. Separability Clause. - If, for any reason, any
part of the Special ADR Rules shall be held
unconstitutional or invalid, other Rules or provisions
hereof which are not affected thereby, shall continue to
be in full force and effect.
RULE 24: TRANSITORY PROVISIONS
Rule 24.1. Transitory Provision. - Considering its
procedural character, the Special ADR Rules shall be
applicable to all pending arbitration, mediation or
other ADR forms covered by the ADR Act, unless the
parties agree otherwise. The Special ADR Rules,
however, may not prejudice or impair vested rights in
accordance with law.
RULE 25: ONLINE DISPUTE RESOLUTION
Rule 25.1. Applicability of the Special ADR Rules to
Online Dispute Resolution. - Whenever applicable and
appropriate, the Special ADR Rules shall govern the
procedure for matters brought before the court
involving Online Dispute Resolution.
Rule 25.2. Scope of Online Dispute Resolution. -
Online Dispute Resolution shall refer to all electronic
forms of ADR including the use of the internet and
other web or computed based technologies for
facilitating ADR.
RULE 26: EFFECTIVITY
Rule 26.1. Effectivity. - The Special ADR Rules shall
take effect fifteen (15) days after its complete
publication in two (2) newspapers of general
circulation.
RULE A: GUIDELINES FOR THE RESOLUTION OF
ISSUES RELATED TO ARBITRATION OF LOANS
SECURED BY COLLATERAL
Rule A.1. Applicability of an arbitration agreement in a
contract of loan applies to the accessory contract
securing the loan. - An arbitration agreement in a
contract of loan extends to and covers the accessory
contract securing the loan such as a pledge or a
mortgage executed by the borrower in favor of the
lender under that contract of loan.
Rule A.2. Foreclosure of pledge or extra-judicial
foreclosure of mortgage not precluded by arbitration. -
The commencement of the arbitral proceeding under
the contract of loan containing an arbitration
agreement shall not preclude the lender from availing
himself of the right to obtain satisfaction of the loan
under the accessory contract by foreclosure of the
thing pledged or by extra-judicial foreclosure of the
collateral under the real estate mortgage in accordance
with Act No. 3135.
The lender may likewise institute foreclosure
proceedings against the collateral securing the loan
prior to the commencement of the arbitral proceeding.
By agreeing to refer any dispute under the contract of
loan to arbitration, the lender who is secured by an
accessory contract of real estate mortgage shall be
deemed to have waived his right to obtain satisfaction
of the loan by judicial foreclosure.
Rule A.3. Remedy of the borrower against an action
taken by the lender against the collateral before the
constitution of the arbitral tribunal. - The borrower
providing security for the payment of his loan who is
aggrieved by the action taken by the lender against the
collateral securing the loan may, if such action against
the collateral is taken before the arbitral tribunal is
constituted, apply with the appropriate court for
interim relief against any such action of the lender.
Such interim relief may be obtained only in a special
proceeding for that purpose, against the action taken
by the lender against the collateral, pending the
constitution of the arbitral tribunal. Any determination
made by the court in that special proceeding pertaining
to the merits of the controversy, including the right of
the lender to proceed against the collateral, shall be
only provisional in nature.
After the arbitral tribunal is constituted, the court shall
stay its proceedings and defer to the jurisdiction of the
arbitral tribunal over the entire controversy including
any question regarding the right of the lender to
proceed against the collateral.
Rule A.4. Remedy of borrower against action taken by
the lender against the collateral after the arbitral
tribunal has been constituted. - After the arbitral
tribunal is constituted, the borrower providing security
for the payment of his loan who is aggrieved by the
action taken by the lender against the collateral
securing the loan may apply to the arbitral tribunal for
relief, including a claim for damages, against such
action of the lender. An application to the court may
also be made by the borrower against any action taken
by the lender against the collateral securing the loan
but only if the arbitral tribunal cannot act effectively to
prevent an irreparable injury to the rights of such
borrower during the pendency of the arbitral
proceeding.
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An arbitration agreement in a contract of loan
precludes the borrower therein providing security for
the loan from filing and/or proceeding with any action
in court to prevent the lender from foreclosing the
pledge or extra-judicially foreclosing the mortgage. If
any such action is filed in court, the lender shall have
the right provided in the Special ADR Rules to have
such action stayed on account of the arbitration
agreement.
Rule A.5. Relief that may be granted by the arbitral
tribunal. - The arbitral tribunal, in aid of the arbitral
proceeding before it, may upon submission of
adequate security, suspend or enjoin the lender from
proceeding against the collateral securing the loan
pending final determination by the arbitral tribunal of
the dispute brought to it for decision under such
contract of loan.
The arbitral tribunal shall have the authority to resolve
the issue of the validity of the foreclosure of the thing
pledged or of the extrajudicial foreclosure of the
collateral under the real estate mortgage if the same
has not yet been foreclosed or confirm the validity of
such foreclosure if made before the rendition of the
arbitral award and had not been enjoined.
Rule A.6. Arbitration involving a third-party provider
of security. - An arbitration agreement contained in a
contract of loan between the lender and the borrower
extends to and covers an accessory contract securing
the loan, such as a pledge, mortgage, guaranty or
suretyship, executed by a person other than the
borrower only if such third-party securing the loan has
agreed in the accessory contract, either directly or by
reference, to be bound by such arbitration agreement.
Unless otherwise expressly agreed upon by the third-
party securing the loan, his agreement to be bound by
the arbitration agreement in the contract of loan shall
pertain to disputes arising from or in connection with
the relationship between the lender and the borrower
as well as the relationship between the lender and such
third-party including the right of the lender to proceed
against the collateral securing the loan, but shall
exclude disputes pertaining to the relationship
exclusively between the borrower and the provider of
security such as that involving a claim by the provider
of security for indemnification against the borrower.
In this multi-party arbitration among the lender, the
borrower and the third party securing the loan, the
parties may agree to submit to arbitration before a sole
arbitrator or a panel of three arbitrators to be
appointed either by an Appointing Authority
designated by the parties in the arbitration agreement
or by a default Appointing Authority under the law.
In default of an agreement on the manner of
appointing arbitrators or of constituting the arbitral
tribunal in such multi-party arbitration, the dispute
shall be resolved by a panel of three arbitrators to be
designated by the Appointing Authority under the law.
But even in default of an agreement on the manner of
appointing an arbitrator or constituting an arbitral
tribunal in a multi-party arbitration, if the borrower
and the third party securing the loan agree to designate
a common arbitrator, arbitration shall be decided by a
panel of three arbitrators: one to be designated by the
lender; the other to be designated jointly by the
borrower and the provider of security who have agreed
to designate the same arbitrator; and a third arbitrator
who shall serve as the chairperson of the arbitral panel
to be designated by the two party-designated
arbitrators.
20. DEPARTMENT CIRCULAR NO. 98
IMPLEMENTING RULES AND
REGULATIONS OF THE ALTERNATIVE
DISPUTE RESOLUTION ACT OF 2004.
Whereas, pursuant to Section 52 of Republic Act No.
9285, otherwise known as the "Alternative Dispute
Resolution Act of 2004" (ADR Act"), the Secretary of
Justice is directed to convene a Committee for the
formulation of the appropriate rules and regulations
necessary for the implementation of the ADR Act;
Whereas, the committee was composed of
representatives from the Department of Justice, the
Department of Trade and Industry, the Department of
the Interior and Local Government, the President of
the Integrated Bar of the Philippines, a representative
from the ADR organizations.
Wherefore, the following rules and regulations are
hereby adopted as the Implementing Rules and
Regulations of Republic Act no.9285.
IMPLEMENTING RULES AND REGULATIONS OF
THE ALTERNATIVE DISPUTE RESOLUTION ACT
OF 2004 (R.A No. 9285)
Pursuant to Section 52 of republic Act No. 9285,
otherwise known as the alternative Dispute Resolution
Act of 2004" ("ADR Act"), the following Rules and
Regulations (these "Rules") are hereby promulgated to
implement the provisions of the ADR Act:
Chapter 1
GENERAL PROVISIONS
RULE 1 – Policy and Application
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Article 1.1 Purpose. These Rules are promulgated to
prescribe the procedures and guidelines for the
implementation of the ADR Act.
Article 1.2 Declaration of policy. It is the policy of the
State:
(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
Alternative Dispute Resolution ("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
Article 1.3 Exception to the Application of the ADR Act.
The provisions of the ADR Act shall not apply to the
resolution or settlement of the following:
(a) labor disputes covered by Presidential Decree No.
442, otherwise known as the "Labor Code of the
Philippines, as a amended", and its Implementing
Rules and Regulations;
(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.
Article 1.4. Electronic Signature and E-Commerce Act.
The provisions of the Electronic Signature and E-
Commerce Act, and its implementing Rules and
Regulations shall apply to proceedings contemplated
in the ADR Act.
Article 1.5. Liability of ADR Providers/Practitioners.
The ADR provides /practitioners shall have the same
civil liability for acts done in the performance of their
official duties as that of public officers as provided in
Section 38 (1), Chapter 9, Book 1 of the Administrative
Code of 1987, upon a clear showing of bad faith, malice
or gross negligence.
RULE 2- Definition of Terms
Article 1.6 Definition of Terms. For purposes of these
Rules, the terms shall be defined as follows:
A. Terms Applicable to All Chapters
1. ADR Provider means the Institutions or persons
accredited as mediators, conciliators, arbitrators,
neutral evaluators or any person exercising similar
functions in any Alternative dispute resolution system.
This is without prejudice to the rights of the parties to
choose non-accredited individuals to act as mediator,
conciliator, arbitrator or neutral evaluator of their
dispute.
2. Alternative Dispute Resolution System means any
process or procedures 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 the ADR Act, in which neutral third
person participates to assist in the resolution of issues,
Including arbitration, mediation, conciliation, early
neutral evaluation, mini-trial or any combination
thereof.
3. Arbitration means a voluntary dispute resolution
process in which one or more arbitrators, appointed in
accordance with the agreement of the parties or these
Rules, resolve a dispute by rendering an award.
4. Arbitration Agreement means 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.
5. Authenticate means to sign, execute, adopt a symbol
or encrypt a record or establish the authenticity of a
record or term.
6. Award means any partial or final decision by an
arbitrator in resolving the issue or controversy.
7. Confidential Information means any information,
relative to the subject of mediation or arbitration,
expressly intended by the source not to disclosed, or
obtained under circumstances that would create
reasonable expectation on behalf of the source that the
information shall not be disclosed. It shall include:
(a) communication, oral or written, made in a dispute
resolution proceeding, including any memoranda,
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notes or work product of the neutral party or non-party
participant;
(b) an oral or written statement made or which occurs
during mediation or for purposes of considering,
conducting, participating, initiating, continuing or
reconvening mediation or retaining a mediator; and
(c) pleadings, motions, manifestations, witness
statements, reports filed or submitted in arbitration or
for expert evaluation.
8. Counsel means a lawyer duly admitted to the
practice of law in the Philippines and in good standing
who represents a party in any ADR process.
9. Court means Regional Trial Court Except insofar as
otherwise defined under Model Law.
10. Government Agency means any governmental
entity, office or officer, other than a court that is vested
by law with quasi-judicial power or the power to
resolve or adjudicate disputes involving the
government, its agencies and instrumentalities or
private persons.
11. Model Law means the Model on International
Commercial Arbitration adopted by the United Nations
Commission on International Trade Law on 21 June
1985.
12. Proceedings means judicial, administrative or other
adjudicative process, including related pre-hearing or
post hearing motions, conferences and discovery.
13. Record means information written on a tangible
medium or stored in an electronic or other similar
medium, retrievable in a perceivable form.
14. Roster means a list of persons qualified to provide
ADR services as neutrals or to serve as arbitrators.
15. Special ADR Rules means the Special Rules of
Court on Alternative Dispute Resolution issued by the
Supreme Court on September 1, 2009.
B. Terms and Applicable to the Chapter 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.
4. Court-Referred Mediation means mediation ordered
by a court to be conducted in accordance with the
agreement of the parties when an action is prematurely
commenced in violation of such agreement.
5. Certified Mediator means a mediator certified by the
Office for ADR as having successfully completed its
regular professional training program.
6. Mediation means a voluntary process in which a
mediator, selected by the disputing party voluntary
agreement regarding a dispute.
7. Mediation Party means a person who participates in
a mediation and whose consent is necessary to resolve
the dispute.
8. Mediator means a person who conducts mediation.
9. Non-Party Participant means a person, other than a
party or mediator, who participates in a mediation
proceeding as a witness, resource person or expert.
C. Terms Applicable to the Chapter on International
Commercial Arbitration
1. 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 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 the 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 /her
duly authorized representative.
2. Arbitral Tribunal (under the Model Law) means a
sole arbitrator or a panel of arbitrators.
3. Arbitration means any arbitration whether or not
administered by a permanent arbitration institution.
4. Commercial Arbitration means an arbitration that
covers matters arising from all relationships of a
commercial nature, whether contractual or not.
Relationships of a commercial nature include, but are
not limited to, the following commercial transactions:
any trade transaction for the supply or exchange of
goods or services; distribution agreements;
construction of works; commercial representation or
agency; factoring; leasing; consulting; engineering;
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licensing; investment; financing; banking; insurance;
joint venture and other forms of industrial or business
cooperation; carriage of goods or passengers by air, sea
rail or road.
5. Convention Award means a foreign arbitral award in
a Convention State.
6. Convention State means a state that is a member of
the New York Convention.
7. Court (under the Model Law) means a body or organ
of the judicial system of the Philippines (i.e., the
Regional Trial Court, Court of Appeals and Supreme
Court).
8. International Arbitration means an arbitration
where:
(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
Philippines 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 the subject matter of the
dispute is most closely connected; or
(c) the parties have expressly agreed that the subject
matter of the arbitration agreement relates to more
than one country.
For this purpose:
(a) if a party has more than one place of business, the
place of business is that which has the closest
relationship to the arbitration agreement;
(b) if a party does not have a place of business,
reference is to be made to his/her habitual residence.
9. New York Convention means the United Nations
Convention of the Recognition and Enforcement of
Foreign Arbitral Awards approved in 1958 and ratified
by the Philippine Senate under Senate Resolution
No.71.
10. Non-Convention Award means a foreign arbitral
ward made in a state, which is not a Convention State.
11. Non-Convention State means a state that is not a
member of the New York Convention.
D. Terms Applicable to the Chapter on Domestic
Arbitration
1. Ad hoc Arbitration means arbitration administered
by an arbitrator and/or the parties themselves. An
arbitration administered by an institution shall be
regarded as ad hoc arbitration if such institution is not
a permanent or regular arbitration institution in the
Philippines.
2. 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.
3. Appointing Authority Guidelines means the set of
rules approved or adopted by an appointing authority
for the making of a Request for Appointment,
Challenge, termination of the Mandate of Arbitrator/s
and for taking action thereon.
4. Arbitration means a voluntary dispute resolution
process in which one or more arbitrators, Appointed in
accordance with the agreement of the parties or these
Rules, resolve a dispute by rendering an award.
5. Arbitral Tribunal means a sole arbitrator or a panel,
board or committee of arbitrators.
6. Claimant means a person/s with a claim against
another and who commence/s arbitration against the
latter.
7. Court means, unless otherwise specified in these
Rules, a Regional Trial Court.
8. Day means calendar day.
9. Domestic Arbitration means arbitration that is not
international as defined in Article 1(3) of the Mode
Law.
10. Institutional Arbitration means arbitration
administered by an entity, which is registered as a
domestic corporation with the Securities and Exchange
Commission (SEC) and engaged in. among others,
arbitration of disputes in the Philippines on a regular
and permanent basis.
11. Request for Appointment means the letter-request
to the appointing authority of either or both parties for
the appointment of arbitrator/s or of the two
arbitrators first appointed by the parties for the
appointment of the third member of an arbitral
tribunal.
12. Representative is a person duly authorized in
writing by a party to a dispute, who could be a counsel,
a person in his/her employ or any other person of
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his/her choice, duly authorized to represent said party
in the arbitration proceedings.
13. Respondent means the person/s against whom the
claimant commence/s arbitration.
14. Written communication means the pleading,
motion, manifestation, notice, order, award and any
other document or paper submitted or filed with the
arbitral tribunal or delivered to a party.
E. Terms Applicable to the Chapter on Other ADR
Forms
1. Early Neutral Evaluation means an ADR process
wherein parties and their lawyers are brought together
early in the pre-trial phase to present summaries of
their cases and to receive a non-binding assessment by
an experienced neutral person, with expertise in the
subject matter or substance of the dispute.
2. Mediation-Arbitration or Med-Arb is a two-step
dispute resolution process involving mediation and
then followed by arbitration.
3. Mini-trial means a structured dispute resolution
method in which the merits of a case are argued before
a panel comprising of senior decision-makers, with or
without the presence of a neutral third person, before
which the parties seek a negotiated settlement.
CHAPTER 2
THE OFFICE FOR ALTERNATIVE DISPUTE
RESOLUTION
RULE 1- Office for Alternative Dispute Resolution
(OADR)
Article 2.1. Establishment of the Office for Alternative
Dispute Resolution. There is hereby established the
OADR as an agency attached to the Department of
Justice. It shall have a Secretariat and shall be headed
by an Executive Director, who shall be appointed by
the President of the Philippines, taking into
consideration the recommendation of the Secretary of
Justice.
Article 2.2. Powers of the OADR. The OADR shall have
the following powers;
(a) To act as appointing authority of mediators and
arbitrators when the parties agree in writing that it
shall be empowered to do so;
(b) To conduct seminars, symposia, conferences and
other public fora and publish proceedings of said
activities and relevant materials/information that
would promote, develop and expand the use of ADR;
(c) To establish an ADR library or resource center
where ADR laws, rules and regulation, jurisprudence,
books, articles and other information about ADR in the
Philippines and elsewhere may be stored and accessed;
(d) To establish training programs for ADR
providers/practitioners, both in the public and private
sectors; and to undertake periodic and continuing
training programs for arbitration and mediation and
charge fees on participants. It may do so in
conjunction with or in cooperation with the IBP,
private ADR organizations, and local and foreign
government offices and agencies and international
organizations;
(e) To certify those who have successfully completed
the regular professional training programs provided by
the OADR;
(f) To charge for services rendered such as, among
others, for training and certifications of ADR
providers;
(g) To accept donations, grants and other assistance
from local and foreign sources; and
(h) To exercise such other powers as may be necessary
and proper to carry into effect the provisions of the
ADR Act.
Article 2.3. Functions of the OADR. The OADR shall
have the following functions;
(a) To promote, develop and expand the use of ADR in
the private and public sectors through information,
education and communication;
(b) To monitor, study and evaluate the use of ADR by
the private and public sectors for purposes of, among
others, policy formulation;
(c) To recommend to Congress needful statutory
changes to develop, strengthen and improve ADR
practices in accordance with international professional
standards;
(d) To make studies on and provide linkages for the
development, implementation, monitoring and
evaluation of government and private ADR programs
and secure information about their respective
administrative rules/procedures, problems
encountered and how they were resolved;
(e) To compile and publish a list or roster of ADR
providers/practitioners, who have undergone training
by the OADR, or by such training
providers/institutions recognized or certified by the
OADR as performing functions in any ADR system.
The list or roster shall include the addresses, contact
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numbers, e-mail addresses, ADR service/s rendered
(e.g. arbitration, mediation) and experience in ADR of
the ADR providers/practitioners;
(f) To compile a list or roster of foreign or international
ADR providers/practitioners. The list or roster shall
include the addresses, contact numbers, e-mail
addresses, ADR service/s rendered (e.g. arbitration,
mediation) and experience in ADR of the ADR
providers/practitioners; and
(g) To perform such other functions as may be
assigned to it.
Article 2.4. Divisions of the OADR. The OADR shall
have the following staff and service divisions, among
others:
(a) Secretariat – shall provide necessary support and
discharge such other functions and duties as may be
directed by the Executive Director.
(b) Public information and Promotion Division – shall
be charged with the dissemination of information, the
promotion of the importance and public acceptance of
mediation, conciliation, arbitration or any combination
thereof and other ADR forms as a means of achieving
speedy and efficient means of resolving all disputes
and to help in the promotion, development and
expansion of the use of ADR.
(c) Training Division – shall be charged with the
formulation of effective standards for the training of
ADR practitioners; conduct of training in accordance
with such standards; issuance of certifications of
training to ADR practitioners and ADR service
providers who have undergone the professional
training provided by the OADR; and the coordination
of the development, implementation, monitoring and
evaluation of government and private sector ADR
programs.
(d) Records and Library Division – shall be charged
with the establishment and maintenance of a central
repository of ADR laws, rules and regulations,
jurisprudence, books, articles, and other information
about ADR in the Philippines and elsewhere.
RULE 2 – The Advisory Council
Article 2.5. Composition of the Advisory Council. There
is also created an Advisory Council composed of a
representative from each of the following:
(a) Mediation profession;
(b) Arbitration profession;
(c) ADR organizations;
(d) IBP; and
(e) Academe.
The members of the Council, who shall be appointed
by the Secretary of Justice upon the recommendation
of the OADR Executive Director, shall choose a
Chairman from among themselves.
Article 2.6. Role of the Advisory Council. The Advisory
Council shall advise the Executive Director on policy,
operational and other relevant matters. The Council
shall meet regularly, at least once every two (2)
months, or upon call by the Executive Director.
CHAPTER 3
MEDIATION
RULE 1 – General Provisions
Article 3.1. Scope of Application. These Rules apply to
voluntary mediation, whether ad hoc or institutional,
other than court-annexed mediation and only in
default of an agreement of the parties on the applicable
rules.
These Rules shall also apply to all cases pending before
an administrative or quasi-judicial agency that are
subsequently agreed upon by the parties to be referred
to mediation.
Article 3.2. Statement of Policy. In applying and
construing the provisions of these Rules, consideration
must be given to the need to promote candor of parties
and mediators through confidentiality of the mediation
process, the policy of fostering prompt, economical
and amicable resolution of disputes in accordance with
principles of integrity of determination by the parties
and the policy that the decision-making authority in
the mediation process rests with the parties.
A party may petition a court before which an action is
prematurely brought in a matter which is the subject of
a mediation agreement, if at least one party so
requests, not later than the pre-trial conference or
upon the request of both parties thereafter, to refer the
parties to mediation in accordance with the agreement
of the parties.
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.
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Article 3.4. Replacement of Mediator. If the mediator
selected is unable to act as such for any reason, the
parties may, upon being informed of such fact, select
another mediator.
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.
RULE 3 – Ethical Conduct of a Mediator
Article 3.6 Competence. It is not required that a
mediator shall have special qualifications by
background or profession unless the special
qualifications of a mediator shall :
(a) maintain the continually upgrade his/her
professional competence in mediation skills;
(b) ensure that his/her qualifications, training and
experience are known to and accepted by the parties;
and
(c) serve only when his/her qualifications, training and
experience enable him/her to meet the reasonable
expectations of the parties and shall not hold
himself/herself out or give the impression that he/she
does not have.
Upon the request of a mediation party, an individual
who is requested to serve as mediator shall disclose
his/her qualifications to mediate a dispute.
Article 3.7 Impartially. A mediator shall maintain
impartiality.
(a) Before accepting a mediation, an individual who is
requested to serve as a mediator shall:
(i) make an inquiry that is reasonable under the
circumstances to determine whether there are known
facts that a reasonable individual would consider likely
to affect the impartiality of the mediator, including a
financial or personal interest in the outcome of the
mediation and any existing or past relationship with a
party of foreseeable participant in the mediation; and
(ii) disclose to the mediation parties any such fact
known or learned as soon as practical before accepting
a mediation.
(b) If a mediator learns any fact described in paragraph
(a) of this Article after accepting a mediation, the
mediator shall disclose it as soon as practicable to the
mediation parties.
Article 3.8. Confidentiality. A mediator shall keep in
utmost confidence all confidential information
obtained in the course of the mediation process.
A mediator shall discuss issues of confidentiality and
the extent of confidentiality provided in any private
sessions or caucuses that the mediator holds with a
party.
Article 3.9. Consent and Self-Determination. (a) A
mediator shall make reasonable efforts to ensure that
each party understands the nature and character of the
mediation proceeding including private caucuses, the
issues, the available options, the alternatives to non-
settlement, and that each party is free and able to make
whatever choices he/she desires regarding
participation in mediation generally and regarding
specific settlement options.
If a mediator believes that a party, who is not
represented by counsel, is unable to understand, or
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fully participate, the mediation proceedings for any
reason, a mediator may either:
(i) limit the scope of the mediation proceedings in a
manner consistent with the party's ability to
participate, and/or recommend that the party obtain
appropriate assistance in order to continue with the
process; or
(ii) terminate the mediation proceedings.
(b) A mediator shall recognize and put in mind that the
primary responsibility of resolving a dispute and the
shaping of a voluntary and uncoerced settlement rests
with the parties.
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 3.11. Charging of Fees. (a) A mediator shall fully
disclose and explain to the parties the basis of cost,
fees and charges.
(b) The mediator who withdraws from the mediation
shall return to the parties any unearned fee and
unused deposit.
(c) A mediator shall not enter into a fee agreement,
which is contingent upon the results of the mediation
or the amount of the settlement.
Article 3.12 Promotion of Respect and Control of
Abuse of Process. The mediatorcle 3.12 Promotion of
Respect and Control of Abuse of Process. of the settle
mentcost ablish a professional relationship I shall
encourage mutual respect between the parties, and
shall take reasonable steps, subject to the principle of
self-determination, to limit abuses of the mediation
process.
Article 3.13. Solicitation or Acceptance of any Gift. No
mediator or any member of a mediator’s immediate
family or his/her agent shall request, solicit, receive or
accept any gift or any type of compensation other than
the agreed fee and expenses in connection with any
matter coming before the mediator.
RULE 4 – Role of Parties and their Counsels
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;
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(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.
RULE 5 – Conduct of Mediation
Article 3.17. Articles to be Considered in the Conduct of
Mediation. (a) The mediator shall not make untruthful
or exaggerated claims about the dispute resolution
process, its costs and benefits, its outcome or the
mediator’s qualifications and abilities during the entire
mediation process.
(b) The mediator shall held the parties reach a
satisfactory resolution to their dispute but has no
authority to impose a settlement on the parties.
(c) The parties shall personally appear for mediation
and may be assisted by a lawyer. A party maybe
represented by an agent who must have full authority
to negotiate and settle the dispute.
(d) The mediation process shall, in general, consists of
the following stages:
(i) opening statement of the mediator
(ii) individual narration by the parties;
(iii) exchange by the parties;
(iv) summary of issues;
(v) generation and evaluation of options; and
(vi) closure
(e) The mediation proceeding shall be held in private.
Person, other than the parties, their representatives
and mediator, may attend only with the consent of all
the parties,
(f) the mediation shall be closed:
(i) by the execution of a settlement agreement by the
parties;
(ii) by the withdrawal of any party from mediation; and
(iii) by the written declaration of the mediator that any
further effort at mediation would not be helpful
RULE 6 – Place of Mediation
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 7 – Effect of Agreement to Submit Dispute to
Mediation Under Institutional Rules
Article 3.19 Agreement to Submit a Dispute to
Mediation by an Institution. An agreement to submit a
dispute to mediation by an 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
institutional mediation rules 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 counsels and non-party
participants to abide by such rules.
RULE 8 – Enforcement of Mediated Settlement
Agreement
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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 Regional Trial Court (a) where the
principal place of business in the Philippines 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.
RULE 9 – Confidentiality of Information
Article 3.21. 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, mediator, or non-party participant may
refuse to disclose and may prevent any other person
from disclosing a confidential information.
(c) 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 in a mediation.
(d) In such an adversarial proceeding, the following
persons involved or previously involved in a mediation
may not be compelled to disclosed confidential
information obtained during the mediation:
(i) the parties to the dispute;
(ii) the mediator or mediators;
(iii) the counsel for the parties;
(iv) the non-party participants
(v) any person hired or engaged in connection with the
mediation as secretary, stenographer, clerk or
assistant; and
(vi) any other person who obtains or possesses
confidential information by reason of his/her
profession.
(e) The protections of the ADR Act shall continue to
apply even if a mediator is found to have failed to act
impartially.
(f) A mediator may not be called to testify to provide
confidential information gathered in mediation. A
mediator who is wrongfully subpoenaed shall be
reimbursed the full cost of his/her attorney’s fees and
related expenses.
Article 3.22. Waiver of Confidentiality. (a) 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.
(b) With the consent of the mediation parties, a
privilege arising from the confidentiality of
information may likewise be waived by a non-party
participant if the information is provided by such non-
party participant.
(c) A person who discloses confidential information
shall be precluded from asserting the privilege under
Article 3.21 (Confidentiality of Information) 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 damage as a
result of the disclosure of the confidential information,
he/she shall be entitled to damages in a judicial
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proceeding against the person who made the
disclosure.
(d) A person who discloses or makes a representation
about a mediation is precluded from asserting the
privilege mentioned in Article 3.21 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 or
disclosure.
Article 3.23. Exceptions to the Privilege of
Confidentiality of information. (a) There is no privilege
against disclosure under Article 3.21 in the following
instances:
(i) in an agreement evidenced by a record
authenticated by all parties to the agreement;
(ii) available to the public or made during a session of a
mediation which is open, or is required by law to be
open, to the public;
(iii) a threat or statement of a plan to inflict bodily
injury or commit a crime of violence;
(iv) intentionally used to plan a crime, attempt to
commit, or commit a crime, or conceal an ongoing
crime or criminal activity.
(v) 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 where a public agency
participates in the child protection mediation;
(vi) sought or offered to prove or disapprove a claim or
complaint of professional misconduct or malpractice
filed against a party, non-party participant, or
representative of a party based on conduct occurring
during a mediation.
(b) 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 confidentially, and the mediation
communication is sought or offered in:
(i) a court proceeding involving a crime or felony; or
(ii) 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 sub-section (a) or (b) hereof,
only the portion of the communication necessary for
the application of the exception for non-disclosure may
be admitted. The admission of a particular evidence for
the limited purpose of an exception does not render
that evidence, or any other mediation communication,
admissible for any other purpose.
Article 3.24. Non-Reporting or Communication by
Mediator. 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 may make a ruling on
a dispute that is the subject of a mediation, except:
(a) to state that the mediation occurred or has
terminated, or where a settlement was reached; or
(b) as permitted to be disclosed under Article 3.23
(Exception to the Privilege of Confidentiality of
Information).
The parties may, by an agreement in writing, stipulate
that the settlement agreement shall be sealed and not
disclosed to any third party including the court. Such
stipulation, however, shall not apply to a proceeding to
enforce or set aside the settlement agreement.
RULE 10 – Fees and Cost of Mediation
Article 3.25. Fees and Cost of Ad hoc Mediation. In ad
hoc mediation, the parties are free to make their own
arrangement as to mediation cost and fees. In default
thereof, the schedule of cost and fees to be approved by
the OADR shall be followed.
Article 3.26. Fees and Cost of Institutional Mediation.
(a) In institutional mediation, mediation cost shall
include the administrative charges of the mediation
institution under which the parties have agreed to be
bound, mediator’s fees and associated expenses, if any.
In default of agreement of the parties as to the amount
and manner of payment of mediation’s cost and fees,
the same shall be determined in accordance with the
applicable internal rules of the mediation service
providers under whose rules the mediation is
conducted.
(b) A mediation service provider may determine such
mediation fee as is reasonable taking into
consideration the following factors, among others:
(i) the complexity of the case;
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(ii) the number of hours spent in mediation; and
(iii) the training, experience and stature of mediators.
CHAPTER 4
INTERNATIONAL COMMERCIAL ARBITRATION
RULE 1 – General Provisions
Article 4.1. Scope of Application. (a) This Chapter
applies to international commercial arbitration,
subject to any agreement in force between the
Philippines and other state or states.
(b) This Chapter applies only if the place or seat of
arbitration is the Philippines and in default of any
agreement of the parties on the applicable rules.
(c) This Chapter shall not affect any other law of the
Philippines by virtue of which certain disputes may not
be submitted to arbitration or may be submitted to
arbitration only according to provisions other than
those of the ADR Act.
Article 4.2. Rules of Interpretation. (a) International
commercial arbitration shall be governed by the Model
Law on International Commercial Arbitration.
(b) In interpreting this Chapter, regard shall be had to
the international origin of the Model Law and to the
need for uniformity in its interpretation. Resort may be
made to the travaux preparatoires and the Report of
the Secretary-General of the United Nations
Commission on International Trade Law dated March
1985 entitled, "International Commercial Arbitration:
Analytical Commentary on Draft Text identified by
reference number A/CN. 9/264".
(c) Moreover, in interpreting this Chapter, the court
shall have due regard to the policy of the law in favor of
arbitration and the policy of the Philippines to actively
promote party autonomy in the resolution of disputes
or the freedom of the parties to make their own
arrangement to resolve their dispute.
(d) Where a provision of this Chapter, except the Rules
applicable to the substance of the dispute, leaves the
parties free to determine a certain issue, such freedom
includes the right of the parties to authorize a third
party, including an institution, to make that
determination.
(e) Where a provision of this Chapter refers to the fact
that the parties have agreed or that they may agree or
in any other way refers to an agreement of the parties,
such agreement includes any arbitration rules referred
to in that agreement.
(f) Where a provision of this Chapter, other than in
paragraph (a) of Article 4.25 (Default of a Party) and
paragraphs (b) (i) of Article 4.32 (Termination of
Proceedings), refers to a claim, it also applies to a
counter-claim, and where it refers to a defense, it also
applies to a defense to such counter-claim.
Article 4.3. Receipt of Written Communications. (a)
Unless otherwise agreed by the parties:
(i) any written communication is deemed to have been
received if it is delivered to the addressee personally or
at his/her place of business, habitual residence or
mailing address; if none of these can be found after
making a reasonable inquiry, a written communication
is deemed to have been received if it is sent to the
addressee’s last known place of business, habitual
residence or mailing address by registered letter or any
other means which provides a record of the attempt to
deliver it;
(ii) the communication is deemed to have been
received on the day it is so delivered.
(b) The provisions of this Article do not apply to
communications in court proceedings, which shall be
governed by the Rules of Court.
Article 4.4. Waiver of Right to Object. Any party who
knows that any provision of this Chapter 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 the
objections for such non-compliance without undue
delay or if a time limit is provided therefor, within such
period of time, shall be deemed to have waived the
right to object.
Article 4.5. Extent of Court Intervention. In matters
governed by this Chapter, no court shall intervene
except where so provided in the ADR Act. Resort to
Philippine courts for matters within the scope of the
ADR Act shall be governed by the Special ADR Rules.
Article 4.6. Court or Other Authority for Certain
Functions of Arbitration Assistance and Supervision.
(a) The functions referred to in paragraphs (c) and (d)
of Article 4.11 (Appointment of Arbitrators) and
paragraph (c) of Article 4.13 (Challenge Procedure)
and paragraph (a) of Article 4.14 (Failure or
Impossibility to Act) shall be performed by the
appointing authority as defined in Article 1.6 C1, 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.
The appointment of an arbitrator is not subject to
appeal or motion for reconsideration.
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(b) The functions referred to in paragraph (c) of Article
4.16 (c) (Competence of Arbitral Tribunal to Rule on its
Jurisdiction), second paragraph of Article 4.34
(Application for Setting Aside an Exclusive Recourse
Against Arbitral Award), Article 4.35 (Recognition and
Enforcement), Article 4.38 (Venue and Jurisdiction),
shall be performed by the appropriate Regional Trial
Court.
(c) A Court may not refuse to grant, implement or
enforce a petition for an interim measure, including
those provided for in Article 4.9 (Arbitration
Agreement and Interim Measures by Court), Article 4.
11 (Appointment of Arbitrators), Article 4.13
(Challenge Procedure), Article 4,27 (Court Assistance
in Taking Evidence), on the sole ground that the
Petition is merely an ancillary relief and the principal
action is pending with the arbitral tribunal.
RULE 2- Arbitration Agreement
Article 4.7 Definition and Form of Arbitration
Agreement. The Arbitration agreement, as defined in
Articles 1.6 A4, shall be in writing. An agreement 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.
Article 4.8 Arbitration Agreement and Substantive
Claim Before Court. (a) A court before which an action
is brought in a matter which is the subject of an
arbitration agreement shall, if at least one party so
requests 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.
(b) Where an action referred to in the previous
paragraph has been brought , arbitral proceedings may
nevertheless be commenced or continued, and an
award may be made, while the issue is pending before
the court.
(c) Where the action is commenced by or against
multiple parties, one or more of whom are parties to an
arbitration agreement, the court shall refer to
arbitration those parties who are bound by the
arbitration agreement although the civil action may
continue as to those who are not bound by such
arbitration agreement.
Article 4.9 Arbitration Agreement and Interim
Measures by Court. (a) It is not incompatible with an
arbitration agreement for a party to request from a
court, before the constitution of the arbitral tribunal or
during arbitral proceedings, an interim measure of
protection and for a court to grant such measure.
(b) To the extent that the arbitral tribunal has no
power to act or is unable to act effectively, a request for
interim measure of protection, or modification thereof
as provided for, and in the manner indicated in ,
Article 4.17 (Power of Tribunal to Order Interim
Measures ), may be made with the court.
The rules of interim or provisional relief provided for
in paragraph ( c ) of Article 4.17 of these Rules shall be
observed.
A party may bring a petition under this Article before
the court in accordance with the Rules of Court or the
Special ADR Rules.
RULE 3 – Composition of Arbitral Tribunal
Article 4.10 Number of Arbitrators. The parties are free
to determine the number of arbitrators Failing such
determination, the number of arbitrators shall be three
(3).
Article 4.11. Appointment of Arbitrators. (a) No person
shall be produced by reason of his/her nationality from
acting as an arbitrator, unless otherwise agreed by the
parties.
(b) The parties are free to agree on a procedure of
appointing the arbitrator or arbitrators, subject to
provisions of paragraphs (d) and (e) of this Article.
(c) Failing such agreement:
(i) in an arbitration with three (3 ) arbitrators, each
party shall appoint one arbitrator, and the two (2)
arbitrators thus appointed shall appoint the third
arbitrator; if any 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 (2) arbitrators fail to
agree on the third arbitrator within thirty days (30)
days of their 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.
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(d) Where, under an appointment procedure agreed
upon the parties,
(i) a party fails to act as required under such
procedure, or
(ii) the parties , or two arbitrators, are unable to reach
an agreement expected of them under such procedure,
or
(iii) a third party, including an institution, fails to
perform any function entrusted to it under such
procedure,
Any party may request the appointing authority to take
the necessary measure to appoint an arbitrator, unless
the agreement on the appointment procedure provides
other means for securing the appointment.
(e) A decision on a matter entrusted by paragraphs (c)
and (d) of this to the appointing authority shall be
immediate executory and not be subject to a motion
for reconsideration or appeal. The appointing
authority shall have in appointing an arbitrator, due
regard to any qualifications required of the arbitrator
by the agreement of the parties and to such
considerations as are likely to secure the appointment
of an independent and impartial arbitrator and, in the
case of a sole or third arbitrator , shall take into
account as well the advisability of appointing an
arbitrator of a nationality other than the Rules of Court
of the Special ADR Rules.
Article 4.12 Grounds for Challenge. (a) When a person
is approached in connection with his/her possible
appointment as an arbitrator, he/she impartiality or
independence. An arbitrator, from the time of his/her
appointment and throughout the arbitral proceedings
shall, without delay, disclose any such circumstance to
the parties unless they have already been informed of
them him/her.
(b) An arbitrator may be challenged only if
circumstances exist that give rise to justifiable doubts
as to his/her impartiality or independence, or if he/she
does not possess qualifications agreed to by the
parties. A party may challenge an arbitrator appointed
by him/her, or in whose appointment he/she has
participated, only for reasons of which he/she becomes
aware after the appointment has been made.
Article 4.13. Challenge Procedure. (a) The parties are
free to agree on a procedure for challenging an
arbitrator, subject to the provisions 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 circumstances
referred to in paragraph (b) of Article 4.12 (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 challenged arbitrator
withdraws from his/her office or the 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 is 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 motion for reconsideration or appeal. While
such a request is pending, the arbitral tribunal,
including the challenged arbitrator, may continue the
arbitral proceedings and make an award.
A party may bring a petition under this Article before
the court in accordance with the Rules of Court or the
Special ADR Rules.
Article 4.14. Failure or Impossibility to Act. (a) If an
arbitrator becomes de jure or de facto unable to
perform his/her functions or for other reasons fails to
act without undue delay, his/her mandate terminates if
he/she withdraws from his/her office or if the parties
agree on the termination. Otherwise, if the controversy
remains concerning any of these grounds, any party
may request the appointing authority to decide on the
termination of the mandate, which decision shall be
immediately executory and not subject for motion for
reconsideration or appeal.
(b) If, under this Article or paragraph (b) of Article
4.13 (Challenge Procedure), an arbitrator withdraws
from his/her office or a party agrees for termination of
the mandate of an arbitrator, this does not imply
acceptance of the validity of any ground referred to in
this Article or in paragraph (b) of Article 4.12 (Grounds
for Challenge).
Article 4.15. Appointment of Substitute Arbitrator.
Where the mandate of an arbitrator terminates under
Articles 4.13 (Challenge Procedure) and 4.14 (Failure
or Impossibility to Act) or because of his/her
withdrawal from office for any other reason or because
of the revocation of his/her mandate, a substitute
arbitrator shall be appointed according to the rules
that were applicable to the appointment of the
arbitrator being replaced.
RULE 4 – Jurisdiction of Arbitral Tribunal
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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
the 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
contribute the arbitral proceedings and make an
award.
Article 4.17. Power of Arbitral Tribunal to Order
Interim Measures. (a) Unless otherwise agreed by the
parties, the arbitral tribunal may, at the request of the
party, order any party to take such interim measures of
protection as the arbitral tribunal may consider
necessary in respect of the subject to matter of the
dispute following paragraph (c) of this Article. Such
interim measures may include, but shall not be limited
to, preliminary injunction directed against a party,
appointment of receivers, or detention, preservation,
inspection of property that is the subject of the dispute
in arbitration.
(b) After constitution of the arbitral tribunal, and
during arbitral proceeding, a request for interim
measures of protection, or modification thereof shall
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.
(c) The following rules on interim or provisional relief
shall be observed:
(i) Any party may request that the interim or
provisional relief shall be observed:
(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
(dd) To compel any other appropriate acts or
omissions.
(iii) The order granting provisional relief may be
conditioned upon the provision of security or any act
or omission specified in order.
(iv) Interim or 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 details of the
precise relief, the party against whom the relief is
requested, the ground for the relief, and the evidence,
supporting the request.
(v) The order granting or denying an application for
the 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 reasonable
attorney's fees, paid in obtaining the order's judicial
enforcement.
RULE 5 – Conduct of Arbitral Proceedings
Article 4.18. Equal Treatment of Parties. The parties
shall be treated with equality and each shall be given a
full opportunity of presenting his/her case.
Article 4.19. Determination of the Rules of Procedure.
(a) Subject to the provisions of this Chapter, the parties
are free to agree on the procedure to be followed by the
arbitral tribunal in conducting the proceedings.
(b) Falling such agreement, the arbitral tribunal may,
subject to this Chapter, conduct the arbitration in such
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manner as it considers appropriate. Unless the arbitral
tribunal considers it inappropriate, the UNCITRAL
Arbitration Rules adopted by the UNCITRAL on 28
April 1976 and the UN General Assemble on 15
December 1976 shall apply subject to the following
clarification: All references to the "Secretary-General
of the Permanent Court of Arbitration at the Hague"
shall be deemed to refer to the appointing authority.
(c) The power conferred upon the arbitral tribunal
includes the power to determine the admissibility,
relevance, materiality and weight of any evidence.
Article 4.20. Place of Arbitration. (a) 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.
(b) Notwithstanding the rule stated in paragraph (a) of
this provision, 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.
Article 4.21. Commencement of Arbitral Proceedings.
Unless otherwise agreed by the parties, the arbitral
proceedings in respect of a particular dispute
commence on the date on which a request for that
dispute to be referred to arbitration is received by the
respondent.
Article 4.22. Language. (a) The parties are free to agree
on the language or languages to be used in the arbitral
proceedings. Failing such agreement, the language to
be used shall be English. This agreement, unless
otherwise specified therein, shall apply to any written
statement by a party, any hearing and any award,
decision or other communication by the arbitral
tribunal.
(b) The arbitral tribunal may order that any
documentary evidence shall be accompanied by a
translation into the language or languages agreed upon
by the parties or determined by the arbitral tribunal in
accordance with paragraph (a) of this Article.
Article 4.23 Statements 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/its defense in respect of
these particulars, unless the parties 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 claim or defense
during the course of the arbitral proceedings, unless
the arbitral tribunal considers it inappropriate to allow
such amendment having regard to the delay in making
it.
Article 4.24 Hearing and Written Proceedings. (a)
Subject to any contrary agreement by the parties, the
arbitral tribunal shall decide whether to hold oral
hearings for the presentation of evidence or for oral
argument, or whether the proceedings shall be
conducted on the basis of documents and other
materials. However, unless the parties have agreed
that no hearings at an appropriate stage of the
proceedings, if so requested by a party.
(b) The parties shall be given sufficient advance notice
of any hearing and of any meeting of the arbitral
tribunal for the purposes of inspection goods, other
property or documents.
(c) All statements, documents or other information
supplied to the arbitral by one party shall be
communicated to the other party. Also, an expert
report or evidentiary document on which the arbitral
tribunal may rely in making its decision shall be
communicated to the parties.
Article 4.25 Default of a Party. Unless otherwise agreed
by the parties, if, without, showing sufficient cause,
(a) the claimant fails to communicate his statement of
claim in accordance with paragraph (a) Article 4.23
(Statement of Claim and Defense), the arbitral tribunal
shall terminate the proceedings;
(b) the respondent fails to communicate his/her/its
statement of defense in accordance with paragraph (a)
Article 4.23 (Statement of Claim and Defense), the
arbitral tribunal shall continue the proceedings
without treating such failure in itself as an admission
of the claimant’s allegations.
(c) any party’s fails to appear at a hearing or to produce
documentary evidence, the arbitral tribunal may
continue the proceedings and make the award on the
evidence before it.
Article 4.26. Expert Appointed by the Arbitral
Tribunal. Unless otherwise agreed by the parties, the
arbitral tribunal,
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(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.
Unless otherwise agreed by the parties, if a party so
requests 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 and to present expert witnesses in order to testify
on the points at issue.
Article 4.27. Court Assistance in Taking Evidence. The
arbitral tribunal or a party with the approval of the
arbitral tribunal may request from a court of the
Philippines assistance in taking evidence. The court
may execute the request within its competence and
according to its rules on taking evidence.
The arbitral tribunal shall have the power to require
any person to attend a hearing as a witness. The
arbitral tribunal shall have the power to subpoena
witnesses and documents when the relevancy of the
testimony and the materiality thereof has been
demonstrated to it. The arbitral tribunal may also
require the retirement of any witness during the
testimony of any other witness.
A party may bring a petition under this Section before
the court in accordance with the Rules of Court or the
Special ADR Rules.
Article 4.28. Rules Applicable to the Substance of
Dispute. (a) The arbitral tribunal shall decide the
dispute in accordance with such rules of law as are
chosen by the parties as applicable to the substance of
the dispute. Any designation of the law or legal system
of a given state shall be construed, unless otherwise
expressed, as directly referring to the substantive law
of that state and not its conflict of laws rules.
(b) Failing any designation by the parties, the arbitral
tribunal shall apply the law determined by the conflict
of laws rules, which it considers applicable.
(c) The arbitral tribunal shall decide ex aequo et bono
or as amiable compositeur only if the parties have
expressly authorized it to do so.
(d) In all cases, the arbitral tribunal shall decide in
accordance with the terms of the contract and shall
take into account the usages of the trade applicable to
the transaction.
Article 4.29. Decision-Making by Panel of Arbitrators.
In arbitral proceedings with more than one arbitrator,
any decision of the arbitral tribunal shall be made,
unless otherwise agreed by other parties, by a majority
of all its members. However, questions of procedure
may be decided by a presiding arbitrator , if so
authorized by the parties or all members of the arbitral
tribunal.
Article 4.30. Settlement. If, during arbitral
proceedings, the parties settle the dispute, the arbitral
tribunal shall terminate the proceedings and, if
requested by the parties and not objected to by the
arbitral tribunal, record the settlement in the form of
an arbitral award on agreed terms.
An award on agreed terms shall be made in accordance
with the provisions of Article 4.31 (Form and Contents
of Award), and shall state that it is an award. Such an
award has the same status and effect as any other
award on the merits of the case.
Article 4.31. Form and Contents of Award. (a) The
award shall be made in writing and shall be signed by
the arbitrator or arbitrators. In arbitral proceedings
with more than one arbitrator, the signatures of the
majority of all members of the arbitral tribunal shall
suffice, provided that the reason for any omitted
signature is stated.
(b) The award shall state the reasons upon which it is
based, unless the parties have agreed that no reasons
are to be given or the award is an award on agreed
terms under paragraph (a) of Article 4.20 (Place of
Arbitration).
(c) The award shall state its date and the place of
arbitration as determined in accordance with
paragraph (a) of this Article. The award shall be
deemed to have been made at that place.
(d) After the award is made, a copy signed by the
arbitrators in accordance with paragraph (a) of this
Article shall be delivered. to each party.
Article 4.32. Termination of Proceedings. (a) The
arbitral proceedings are terminated by the final award
or by an order of the arbitral tribunal in accordance
with paragraph (b) of this Article. (b) The arbitral
tribunal shall issue an order for the termination of the
arbitral proceedings when:
(i) The claimant withdraws his/her/its claim, unless
the respondent objects thereto and the arbitral
tribunal recognized a legitimate interest on his/her/its
part in obtaining a final settlement of the dispute;
(ii) The parties agree the termination of the
proceedings;
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(iii) The arbitral tribunal finds that the continuation of
the proceedings has for any other reason become
unnecessary or impossible.
(c) The mandate of the arbitral tribunal ends with
termination of the arbitral proceedings subject to the
provisions of Articles 4.33 (Correction and
Interpretation of Award, Additional Award) and
paragraph (d) of Articles 4.34 (Application for Setting
Aside an Exclusive Recourse against Arbitral Award).
(d) Notwithstanding the foregoing, the arbitral
tribunal may, for special reasons, reserve in the final
award or order, a hearing to quantity costs and
determine which party shall bear the costs or the
division thereof as may be determined to be equitable.
Pending determination of this issue, the award shall
not be deemed final for purposes of appeal ,vacation,
correction, or any post-award proceedings.
Article 4.33. Correction and Interpretation of Award,
Additional Award. (a) Within thirty (30) days from
receipt of the award, unless another period of time has
been agreed upon by the parties:
(i) A party may, with notice to the other party, request
the arbitral tribunal to correct in the award any errors
in computation, any clerical or typographical errors or
any errors of similar nature;
(ii) A party may, it so agreed by the parties and with
notice to the other party, request the arbitral tribunal
to give an interpretation of a specific point or part of
the award.
(b) If the arbitral tribunal considers the request to be
justified, It shall make the correction or give the
interpretation within thirty (30) days from receipt of
the request. The interpretation shall form part of the
award.
(c) The arbitral tribunal may correct any error of the
type referred to in paragraph (a) of this Article on its
own initiative within thirty (30) day from the date of
the award
(d) Unless otherwise agreed by the parties, a party
may, with notice to the other party, request, within
thirty (30) days receipt of the award, the arbitral
tribunal to make an additional award as to claims
presented in the arbitral proceedings but omitted from
the award. If the arbitral tribunal considers the request
to be justified, it shall make the additional award
within sixty (60) days
(e) The arbitral tribunal may extend, if necessary, the
period of time within which it shall make a correction
interpretation or an additional award under
paragraphs (a) and (b) of this Article.
(f) The provisions of Article 4.31 (Form and Contents
of Award) shall apply to a correction or interpretation
of the award or to an additional award.
Article 4.34. Aplication for Setting Aside an Exclusive
Recourse against Arbitral Award.
(a) Recourse to a court against an arbitral award may
be made only by application for setting aside in
accordance with second and third paragraphs of this
Article.
(b) An arbitral award may be set aside by the Regional
Trial Court only If:
(i) the party making the application furnishes proof
that:
(aa) a party to the arbitration agreement was under
some incapacity ; or the said agreement is not valid
under the law to which the parties have subjected it or,
failing any indication thereon, under the law of the
Philippines; or
(bb) the party making the application was not given
proper notice of the appointment of an arbitrator or of
the arbitral proceedings or was otherwise unable to
present his case; or
(cc) the award deals with a dispute not contemplated
by or not failing within the terms of the submission to
arbitration, or contains, decisions on matters beyond
the scope of the submission to arbitration, provided
that, if the decisions on matters submitted to
arbitration can be separated from those not so
submitted, only the part of the award which contains
decisions on matters not submitted to arbitration may
be set aside; or
(dd) the composition of the arbitral tribunal or the
arbitral procedure was not in accordance with the
agreement of the parties, unless such agreement was in
conflict with a provision of ADR Act from which the
parties cannot derogate, or, falling such agreement,
was not in accordance with ADR Act; or
(ii) the Court finds that:
(aa) the subject-matter of the dispute is not capable of
settlement by arbitration under the law of the
Philippines; or
(bb) the award is in conflict with the public policy of
the Philippines.
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(c) An application for setting aside may not be made
after three months have elapsed from the date on
which the party making that application had received
the award or, If a request had been made under Article
4.33 (Correction and Interpretation of Award,
Additional Award) from the date on which that request
has been disposed of by the Arbitral tribunal
(d) The court, when asked to set aside an award, may,
where appropriate and so requested by a party,
suspend the setting aside proceedings for a period of
time determined by it in order to give the arbitral
tribunal an opportunity resume the arbitral
proceedings or take such other action as in the arbitral
tribunal's opinion will eliminate the grounds for
setting aside.
(e) A party may bring a petition under this Article
before the court in accordance with the Special ADR
Rules.
RULE 6 – Recognition and Enforcement of Awards
Article 4.35. Recognition and Enforcement. (a) A
foreign arbitral award shall be recognized as binding
and, upon petition in writing to the regional trial
Court, shall be enforced subject to the provisions of
this Article and of Article 4.36 (Grounds for Refusing
Recognition or Enforcement).
(b) The petition for recognition and enforcement of
such arbitral awards shall be filled with the Regional
trial Court In accordance with Special ADR Rules.
(i) Convention Award - The New York Convention shall
govern the recognition and enforcement of arbitral
awards covered by said Convention. The petitioner
shall establish that the country in which the foreign
arbitration award was made is a party to the New York
Convention
(ii) Non-Convention Award – 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.
(c) The party relying on an award or applying for its
enforcement shall file with the Regional Trial Court the
original or duly authenticated copy of the award and
the original arbitration agreement or a duly
authenticated copy thereof. If the award or agreement
is not made in an official language of the Philippines,
the party shall supply a duly certified translation
thereof into such language.
(d) 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.
(e) 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.
(f) If the Regional Trial Court has recognized the
arbitral award but an application for rejection and/or)
suspension of enforcement of that award is
subsequently made, the Regional Trial Court may, if it
considers the application to be proper, vacate or
suspend the decision to enforce that award and may
also, on the application of the party claiming
recognition or enforcement of that award, order the
other party seeking rejection or suspension to provide
appropriate security.
Article 4.36. Grounds for Refusing Recognition or
Enforcement.
A CONVENTION AWARD.
Recognition or enforcement of an arbitral award, made
in a state, which is a party to the New York
Convention, may be refused, at the request of the party
against whom it is provoked, only if the party furnishes
to the Regional Trial Court proof that:
(a) The parties to the arbitration agreement are, under
the law applicable to them, under some incapacity; or
the said agreement is not valid under the law to which
the parties have subjected it or; failing any indication
thereon, under the law of the country where the award
was made; or
(b) the party against whom the award is invoked was
not given proper notice of the appointment of an
arbitrator or of the arbitral proceedings or was
otherwise in able to present his case; or
(c) the award deals with dispute not contemplated by
or not failing within the terms of the submission to
arbitration, or it contains decisions on matters beyond
the scope of the submission to arbitration; provided
that, if the decisions on matters submitted to
arbitration can be separated from those not so
submitted, that part of the award which contains
decisions on matters submitted to arbitration may be
recognized and enforced; or
(d) the composition of the arbitral tribunal or the
arbitral procedure was not in accordance with the
agreement of the parties or, failing such agreement,
was not in accordance with the law of the country
where the arbitration too place; or
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(e) the award has not become binding on the parties or
has been set aside or suspended by a court of the
country in which, or under the law of which, that
award was made.
Recognition and enforcement of an arbitral award may
also be refused if the Regional Trial Court where
recognition and enforcement is sought finds that:
(a) the subject-matter of the dispute is not capable of
settlement by arbitration under the law of Philippines;
or
(b) the recognition or enforcement of the award would
be contrary to the public policy of the Philippines.
A party to a foreign arbitration proceeding may oppose
an application for recognition and enforcement of the
arbitral award in accordance with the Special ADR
Rules only on the grounds enumerated under
paragraph (a) and (c) of Article 4.35 (Recognition and
Enforcement). Any other ground raised shall be
disregarded by the Regional Trial Court.
B. NON-CONVENTION AWARD.
(a) A foreign arbitral award rendered in a state which
is not a party to the New York Convention will be
recognized upon proof of the existence of comity and
reciprocity and may be treated as a convention award.
If not so treated and if no comity or reciprocity exists,
the non-convention award cannot be recognized
and/or enforced but may be deemed as presumptive
evidence of a right as between the parties in
accordance with Section 48 of the Rules of Court.
(b) If the Regional Trial Court has recognized the
arbitral award but a petition for suspension of
enforcement of that award is subsequently made, the
Regional Trial Court may, if it considers the petition to
be proper, suspend the proceedings to enforce the
award, and may also, on the application of the party
claiming recognition or enforcement of that award,
order the other party seeking suspension to provide
appropriate security.
(c) If the petition for recognition or enforcement of the
arbitral award is filed by a party and a counter-petition
for the rejection of the arbitral award is filed by the
other party, the Regional Trial Court may, if it
considers the counter-petition to be proper but the
objections thereto may be rectified or cured, remit the
award to the arbitral tribunal for appropriate action
and in the meantime suspend the recognition and
enforcement proceedings and may also on the
application of the petitioner order the counter-
petitioner to provide appropriate security.
Article 4.37. Appeal from Court Decision on Arbitral
Awards. A decision of the Regional Trial Court
recognizing, enforcing, vacating or setting aside an
arbitral award may be appealed to the Court of Appeals
in accordance with the rules of procedure to be
promulgated by the Supreme Court.
The losing party who appeals from the judgment of the
court recognizing and enforcing an arbitral award shall
be required by the Court of Appeals to post a counter-
bond executed if favor of the prevailing party equal to
the amount of the award in accordance with the
Special ADR Rules.
Any stipulation by the parties that the arbitral
tribunal’s award or decision shall be final, and
therefore not appealable, is valid. Such stipulation
carries with it a waiver of the right to appeal from an
arbitral award but without prejudice to judicial review
by way of certiorari under Rule 65 of the Rules of
Court.
Article 4.38. Venue and Jurisdiction. Proceedings for
recognition and enforcement of an arbitration
agreement or for vacation or setting aside of an arbitral
award, and any application with a court for arbitration
assistance and supervision, except appeal, shall be
deemed as special proceedings and shall be filed with
the Regional Trial Court where:
(a) the arbitration proceedings are conducted;
(b) where the asset to be attached or levied upon, or
the act to be enjoined is located;
(c) where any of the parties to the dispute resides or
has its place of business; or
(d) in the National Capital Judicial Region at the
option of the applicant.
Article 4.39. Notice of Proceedings 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 party cannot be served notice at such address, at
such party’s last known address. The notice shall be
sent at least fifteen (15) days before the date set for the
initial hearing of the application.
Article 4.40. Legal Representation in International
Commercial Arbitration. In international commercial
arbitration conducted in the Philippines, a party may
be represented by any person of his/her choice:
Provided, that such representative, unless admitted to
the practice of law in the Philippines, shall not be
authorized to appear as counsel in any Philippine court
or any other quasi-judicial body whether or not such
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appearance is in relation to the arbitration in which
he/she appears.
Article 4.41. Confidentially of Arbitration Proceedings.
The arbitration proceedings, including the records,
evidence and the arbitral award, shall be considered
confidential and shall not be poolside except:
(a) with the consent of the parties; or
(b) for the limited purpose of disclosing to the court
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.
Article 4.42. Summary nature of proceedings before
the court. A petition for recognition and enforcement
of awards brought before the court shall be heard and
dealt with summarily in accordance with the Special
ADR Rules.
Article 4.43. Death of a Party. Where a party dies after
making a submission or a contract to arbitrate as
prescribed in these Rules, the proceedings may be
begun or continued upon the application of, or notice
to, his/her executor or administrator, or temporary
administrator of his/her estate. In any such case, the
court may issue an order extending the time within
which notice of a motion to recognize or vacate an
award must be served. Upon recognizing an award,
where a party has died since it was filed or delivered,
the court must enter judgement in the name of the
original party; and the proceedings thereupon are the
same as where a party dies after a verdict.
Article 4.44. Multi-Party Arbitration. When a single
arbitration involves more than two parties, the
foregoing rules, to the extent possible, shall be used,
subject to such modifications consistent with this
Chapter as the arbitral tribunal shall deem appropriate
to address possible complexities of a multi-party
arbitration.
Article 4.45. Consolidation of Proceedings and
Concurrent Hearings. – The parties and the arbitral
tribunal may agree –
(a) that the arbitration proceedings shall be
consolidated with other arbitration proceedings; or
(b) that concurrent hearings shall be held, on such
terms as may be agreed.
Unless the parties agree to confer such power on the
arbitral tribunal, the tribunal has no power to order
consolidation of arbitration proceedings or concurrent
hearings.
Article 4.46. Costs. (a) The arbitral tribunal shall fix
the costs of arbitration in its award. The term "costs"
include only:
(i) The fees of the arbitral tribunal to be stated
separately as to each arbitrator and to be fixed by the
tribunal itself in accordance with the paragraph (b) of
this Article;
(ii) The travel and other expenses incurred by the
arbitrators;
(iii) The costs of expert advice and of other assistance
required by the arbitral tribunal;
(iv) The travel and other expenses of witnesses to the
extent such expenses are approved by the arbitral
tribunal;
(v) The costs for legal representation and assistance of
the successful party if such costs were claimed during
the arbitral proceedings, and only to the extent that the
arbitral tribunal determines that the amount of such
costs is reasonable;
(v1) Any fees and expenses of the appointing authority.
(b) The fees of the arbitral tribunal shall be reasonable
in amount, taking into account the amount in dispute,
the complexity of the subject matter, the time spent by
the arbitrators and any other relevant circumstances of
the case.
If an appointing authority has been agreed upon by the
parties and if such authority has issued a schedule of
fees for arbitrators in international cases which it
administers, the arbitral tribunal in fixing its fees shall
take that schedule of fees into account to the extent
that it considers appropriate in the circumstances of
the case.
If such appointing authority has not issued a schedule
of fees for arbitrators in international cases, any party
may, at any time request the appointing authority to
furnish a statement setting forth the basis for
establishing fees which is customarily followed in
international cases in which the authority appoints
arbitrators. If the appointing authority consents to
provide such a statement, the arbitral tribunal, in
fixing its fees, shall take such information into account
to the extent that it considers appropriate in the
circumstances of the case.
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(c) In cases referred to in the second and third sub-
paragraphs of paragraph (b) of this Article, when a
party so requests and the appointing authority
consents to perform the function, the arbitral tribunal
shall fix its fees only after consultation with the
appointing authority which may make any comment it
deems appropriate to the arbitral tribunal concerning
the fees.
(d) Except as provided in the next sub-paragraph of
this paragraph, the costs of arbitration shall, in
principle, be borne by the unsuccessful party.
However, the arbitral tribunal may apportion each of
such costs between the parties if it determines that
apportionment is reasonable, taking into account the
circumstances of the case.
With respect to the costs of legal representation and
assistance referred to in paragraph (c) of paragraph (a)
(iii) of this Article, the arbitral tribunal, taking into
account the circumstances of the case, shall be free to
determine which party shall bear such costs or may
apportion such costs between the parties if it
determines that appointment is reasonable.
When the arbitral tribunal issues an order for the
termination of the arbitral proceedings or makes an
award on agreed terms, it shall fix the costs of
arbitration referred to in paragraphs (b), (c) and (d) of
this Article in the context of that order or award.
(e) The arbitral tribunal, on its establishment, may
request each party to deposit an equal amount as an
advance for the costs referred to in paragraphs (i), (ii)
and (iii) of paragraph (a) of this Article.
During the course of the arbitral proceedings, the
arbitral tribunal may request supplementary deposits
from the parties.
If an appointing authority has been agreed upon by the
parties and when a party so requests and the
appointing authority consents to perform the function,
the arbitral tribunal shall fix the amounts of any
deposits or supplementary deposits only after
consultation with the appointing authority which may
make any comments to the arbitral tribunal which it
deems appropriate concerning the amount of such
deposits and supplementary deposits.
If the required deposits are not paid in full within
thirty (30) days after receipt of the request, the arbitral
tribunal shall so inform the parties in order that the
required payment may be made. If such payment is not
made, the arbitral tribunal may order the suspension
or termination of the arbitral proceedings.
After the award has been made, the arbitral tribunal
shall render an accounting to the parties of the
deposits received and return any unexpended balance
to the parties.
CHAPTER 5
DOMESTIC ARBITRATION
RULE 1 – General Provisions
Article 5.1. Scope of Application. (a) Domestic
arbitration, which is not international as defined in
paragraph C8 of Article 1.6 shall continue to be
governed by Republic Act No. 876, otherwise known as
"The Arbitration Law", as amended by the ADR Act.
Articles 8, 10, 11, 12, 13, 14, 18 and 19 and 29 to 32 of
the Model Law and Sections 22 to 31 of the ADR Act
are specifically applicable to domestic arbitration.
In the absence of a specific applicable provision, all
other rules applicable to international commercial
arbitration may be applied in a suppletory manner to
domestic arbitration.
(b) This Chapter shall apply to domestic arbitration
whether the dispute is commercial, as defined in
Section 21 of the ADR Act, or non-commercial, by an
arbitrator who is a private individual appointed by the
parties to hear and resolve their dispute by rendering
an award; Provided that, although a construction
dispute may be commercial, it shall continue to be
governed by E.O. No. 1008, s.1985 and the rules
promulgated by the Construction Industry Arbitration
Commission.
(c) Two or more persons or parties may submit to
arbitration by 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 questions
arising out of valuations, appraisals or other
controversies which may be collateral, incidental,
precedent or subsequent to any dispute 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 approved 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.
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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.
Article 5.2. Delivery and Receipt of Written
Communications. (a) Except as otherwise agreed by
the parties, a written communication from one party to
the other or to the arbitrator or to an arbitration
institution or from the arbitrator or arbitration
institution to the parties shall be delivered to the
addressee personally, by registered mail or by courier
service. Such communication shall be deemed to have
been received on the date it is delivered at the
addressee’s address of record, place of business,
residence or last known address. The communication,
as appropriate, shall be delivered to each party to the
arbitration and to each arbitrator, and, in institutional
arbitration, one copy to the administering institution.
(b) During the arbitration proceedings, the arbitrator
may order a mode of delivery and a rule for receipt of
written communications different from that provided
in paragraph (a) of this Article.
(c) If a party is represented by counsel or a
representative, written communications for that party
shall be delivered to the address of record of such
counsel or representative.
(d) Except as the parties may agree or the arbitrator
may direct otherwise, a written communication may be
delivered by electronic mail or facsimile transmission
or by such other means that will provide a record of the
sending and receipt thereof at the recipient’s mailbox
(electronic inbox). Such communication shall be
deemed to have been received on the same date of its
transmittal and receipt in the mailbox (electronic
inbox).
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 5.4. Extent of Court Intervention. In matters
governed by this Chapter, no court shall intervene
except in accordance with the Special ADR Rules.
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 2 – Arbitration Agreement
Article 5.6. Form of Arbitration Agreement. An
arbitration agreement shall be in writing. An
agreement 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 is alleged by one party and not denied
by the other. The reference in a contract to a document
containing an arbitration clause constitutes an
arbitration agreement provided that the contract is in
writing and the reference is such as to make that clause
part of the contract.
Article 5.7. Arbitration Agreement and Substantive
Claim Before Court. (a) A party to an action may
request the court before which it is pending to stay the
action and to refer the dispute to arbitration in
accordance with their arbitration agreement not later
than the pre-trial conference. Thereafter, both parties
may make a similar request with the court. The parties
shall be referred to arbitration unless the court finds
that the arbitration agreement is null and void,
inoperative or incapable of being performed.
(b) Where an action referred to in paragraph (a) of this
Article has been brought, arbitral proceedings may
nevertheless be commenced or continued, and an
award may be made, while the issue is pending before
the court.
(c) Where the action is commenced by or against
multiple parties, one or more of whom are parties to an
arbitration agreement, the court shall refer to
arbitration those parties who are bound by the
arbitration agreement although the civil action may
continue as to those who are not bound by such
arbitration agreement.
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Article 5.8. Arbitration Agreement and Interim
Measures by Court. (a) It is not incompatible with an
arbitration agreement for a party to request from a
court, before the constitution of the arbitral tribunal or
during arbitral proceedings, an interim measure of
protection and for a court to grant such measure.
(b) After the 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.
(c) The following rules on interim or provisional relief
shall be observed:
(i) Any party may request that interim or provisional
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 or 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 the relief is
requested, the ground for the relief, and the evidence
supporting the request.
(v) The order either grating 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 reasonable
attorney’s fees, paid in obtaining the order’s judicial
enforcement.
(d) 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
this Article. Such interim measures may include but
shall not be limited to preliminary injunction 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 measure ordered by an arbitral
tribunal.
RULE 3. Composition of Arbitral Tribunal
Article 5.9. Number of Arbitrators. The parties are free
to determine the number of arbitrators. Failing such
determination, the number of arbitrators shall be three
(3).
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.
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(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 independent and impartial
arbitrator.
(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;
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(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.
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 appointment was made.
(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.
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(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.
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.
(n) 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.
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(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.
Article 5.13. Failure or Impossibility to Act. (a) If an
arbitrator becomes de jure or de facto unable to
perform his/her functions or for other reasons fails to
act without undue delay, his/her mandate terminates if
he/she withdraws from his/her office or if the parties
agree on the termination. Otherwise, if a controversy
remains concerning any of these grounds, any party
may request the appointing authority to decide on the
termination of the mandate, which decision shall be
immediately executory and not subject to appeal or
motion for reconsideration.
(b) If, under this Article or Article 5.12 (Challenge
Procedure), an arbitrator withdraws from his/her
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 5.12.
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.
RULE 4 – Jurisdiction of Arbitral Tribunal
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.
Article 5.16 Power of Arbitral Tribunal to Order
Interim Measures. (a) Unless otherwise agreed by the
parties, the arbitral tribunal may, at the request of a
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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 this Article. Such interim
measures may include, but shall not be limited to
preliminary injunction directed against a party,
appointment of receivers or detention preservation,
inspection of property that is the subject of the dispute
in arbitration.
(b) After the constitution of the arbitral tribunal, and
during arbitral proceedings, a request for interim
measures of protection, or modification thereof, shall
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.
(c) The following rules on interim or provisional relief
shall be observed:
(i) Any party may request that the 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 or 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 the
precise relief, the party against whom the 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 reasonable
attorney’s fee paid in obtaining the order’s judicial
enforcement.
RULE 5 – Conduct of Arbitral Proceedings
Article 5.17. Equal Treatment of Parties. The parties
shall be treated with equally and each party shall be
given a full opportunity of presenting his/her/its case.
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 5.19 Place of Arbitration. (a) 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.
(b) 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.
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 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;
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(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.
(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, 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 required 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.
Article 5.21 Language (a) The parties are free to agree
on the language or languages to be used in the arbitral
proceedings. Failing such agreement, the language to
be used shall be English or Filipino. The language/s
agreed, unless otherwise specified therein, shall be in
all hearings and all written statements, orders or other
communication by the parties and the arbitral tribunal.
(b) The arbitral tribunal may order that any
documentary evidence shall be accompanied by a
translation into the language or languages agreed upon
by the parties in accordance with paragraph (a) of this
Article.
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.
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.
(b) Within thirty (30) days from the appointment of
the arbitrator or the constitution of an arbitral
tribunal, the arbitral tribunal shall call the parties and
their respective counsels to a pre-hearing conference to
discuss the following matters:
(i) The venue or place/s where the arbitration
proceeding may be conducted in an office space, a
business center, a function room or any suitable place
agreed upon by the parties and the arbitral tribunal,
which may vary per session/hearing/conference;
(ii) The manner of recording the proceedings;
(iii) The periods for the communication of the
statement of claims with or without counterclaims, and
answer to the counterclaim/s and the form and
contents of such pleadings.
(iv) The definition of the issues submitted to the
arbitral tribunal for determination and the summary of
the claims and counterclaims of the parties;
(v) The manner by which evidence may be offered if an
oral hearing is required, the submission of sworn
written statements in lieu of oral testimony, the cross-
examination and further examination of witnesses;
(vi) The delivery of certain types of communications
such as pleadings, terms of reference, order granting
interim relief, final award and the like that, if made by
electronic or similar means, shall require further
confirmation in the form of a hard copy or hard copies
delivered personally or by registered post.
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(vii) The issuance of subpoena or subpoena duces
tecum by the arbitral tribunal to compel the
production of evidence if either party shall or is likely
to request it;
(viii) The manner by which expert testimony will be
received if a party will or is likely to request the arbitral
tribunal to appoint one or more experts, and in such
case, the period for the submission to the arbitrator by
the requesting party of the proposed terms of reference
for the expert, the fees to be paid, the manner of
payment to the expert and the deposit by the parties or
the requesting party of such amount necessary to cover
all expenses associated with the referral of such issues
to the expert before the expert is appointed;
(ix) The possibility of either party applying for an order
granting interim relief either with arbitral tribunal or
with the court, and, in such case, the nature of the
relief to be applied for;
(x) The possibility of a site or ocular inspection, the
purpose of such inspection, and in such case, the date,
place and time of the inspection and the manner of
conducting it, and the sharing and deposit of any
associated fees and expenses;
(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.
(c) To the extent possible, the arbitral tribunal and the
parties shall agree upon any such matters and in
default of agreement, the arbitral tribunal shall have
the discretion and authority to make the decision,
although in making decision, regard shall be given to
the views expressed by both parties.
(d) The arbitral tribunal shall, in consultation with the
parties, fix the date/s and the time of hearing, regard
being given to the desirability of conducting and
concluding an arbitration without undue delay.
(e) The hearing set shall not be postponed except with
the conformity of the arbitrator and the parties and
only for a good and sufficient cause. The arbitral
tribunal may deny a request to postpone or to cancel a
scheduled hearing on the ground that a party has
requested or is intending to request from the court or
from the arbitrator an order granting interim relief.
(f) A party may, during the proceedings, represent
himself/herself/itself or through a representative, at
such hearing.
(g) The hearing may proceed in the absence of a party
who fails to obtain an adjournment thereof or who,
despite due notice, fails to be present, by
himself/herself/itself or through a representative, at
such hearing.
(h) Only parties, their respective representatives, the
witnesses and the administrative staff of the arbitral
tribunal shall have the right to be present if the parties,
upon being informed of the presence of such person
and the reason for his/her presence, interpose no
objection thereto.
(i) Issues raised during the arbitration proceeding
relating to (a) the jurisdiction of the arbitral tribunal
over one or more of the claims or counter claims, or (b)
the arbitrability of a particular claim or counter claim,
shall be resolved by the arbitral tribunal as threshold
issues, if the parties so request, unless they are
intertwined with factual issues that they cannot be
resolved ahead of the hearing on the merits of the
dispute.
(j) Each witness shall, before giving testimony, be
required to take an oath/ affirmation before the
arbitral tribunal, to tell the whole truth and nothing
but the truth during the hearing.
(k) The arbitral tribunal shall arrange for the
transcription of the recorded testimony of each witness
and require each party to share the cost of recording
and transcription of the testimony of each witness.
(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.
(m) The arbitral tribunal may require the parties to
produce such other documents or provide such
information as in its judgment would be necessary for
it to render a complete, fair and impartial award.
(n) The arbitral tribunal shall receive as evidence all
exhibits submitted by a party properly marked and
identified at the time of submission.
(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.
(p) After a hearing is declared closed, no further
motion or manifestation or submission may be allowed
except for post-hearing briefs and reply briefs that the
parties have agreed to submit within a fixed period
after the hearing is declared closed, or when the
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arbitral tribunal, motu proprio or upon request of a
party, allows the reopening of the hearing.
(q) Decisions on interlocutory matters shall be made
by the sole arbitrator or by the majority of the arbitral
tribunal. The arbitral tribunal may authorized its
chairman to issue or release, on behalf of the arbitral
tribunal, its decision on interlocutory matters.
(r) Except as provide in section 17 (d) of the ADR Act.
No arbitrator shall act as a mediator in a any
proceeding in which he/she is acting as arbitrator even
if requested by the parties; and all negotiations.
(s) Before assuming the duties of his/her office, an
arbitrator must be sworn by any officer authorized by
law to administer an oath or be required to make an
affirmation to faithfully and fairly hear and examine
the matters in controversy and make a just award
according to the best his/her ability and
understanding. A copy of the arbitrator's oath or
affirmation shall be furnished each party to the
arbitration.
(t) Either party may object to the commencement or
continuation of an arbitration proceeding unless the
arbitrator takes an oath or affirmation as required in
this chapter. If the arbitrator shall refuse to take an
oath or affirmation as required by law and this rule,
he/she shall be replaced. The failure to object to the
absence of an oath or affirmation shall be deemed a
waiver of such objection and the proceedings shall
continue in due course and may not later be used as a
ground to invalidate the proceedings.
(u) the arbitral tribunal shall have the power to
administer oaths to, or require affirmation from, all
witnesses directing them to tell the truth, the whole
truth and nothing but the truth in any testimony, oral
or written, which they may give or offer in any
arbitration hearing. The oath or affirmation shall be
required of every witness before his/her testimony,
oral or written, is heard or considered.
(v) the arbitral tribunal shall have the power to
required any person to attend a hearing as a witness. It
shall have the power to subpoena witnesses, to testify
and/or produce documents when the relevancy and
materiality thereof has been shown to the arbitral
tribunal. The arbitral tribunal may also require the
exclusion of any witness during the testimony of any
other witness. Unless the parties otherwise agree, all
the arbitrators in any controversy must attend all the
hearings and hear the evidence of the parties.
Article 5.24 Power of Arbitral Tribunal to Order
Interim Muslim. ( a ) unless otherwise agreed by the
parties, the arbitral tribunal may, at the request of a
party and in accordance with the this Article, 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 of the procedure,
Such interim measures may include, but shall not be
limited, to preliminary injunction directed against a
party, appointment of receivers or detention of
property that is the subject of the dispute in arbitration
or its preservation or inspection.
(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.
(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
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attorney’s fees, paid in obtaining the order’s judicial
enforcement.
(d) The arbitral tribunal shall be have the power at any
time, before rendering the award, without prejudice to
the rights of any party to petition the court to take
measures to safeguard an/or conserve any matter
which is the subject of the dispute in arbitration.
Article 5.25. Default of a Party. Unless otherwise
agreed by the parties, if, without showing sufficient
causes.
(a) the claimant fails to communicate his/her/its
statement of claim in accordance with paragraph (a) of
Article 5.22(Statement of Claim and Defense), the
arbitral tribunal shall terminate the proceedings;
(b) ]the respondent fails to communicate his/her/its
statement of defense in accordance with paragraph (a)
of Article 5.22 (Statements of Claim and Defense), the
arbitral tribunal shall continue the proceedings
without treating such failure in itself as an admission
of the claimant’s allegations;
(c) any party fails to appear at a hearing or to produce
documentary evidence, the arbitral tribunal may
continue the proceedings and make the award based
on the evidence before it.
Article 5.26. Expert Appointed by the Arbitral
Tribunal. (a) Unless otherwise agreed by the parties,
the arbitral tribunal,
(i) may appoint one or more experts to report to it on
specific issues to be determined by the arbitral
tribunal; or
(ii) 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.
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.
Article 5.28 Rules Applicable to the Substance of
Dispute. (a) The arbitral tribunal shall decide the
dispute in accordance with such law as is chosen by the
parties, In the absence of such agreement, Philippine
law shall apply.
(b) The arbitral tribunal may grant any remedy or
relief which it deems 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.
(c) In all cases, the arbitral tribunal shall decide in
accordance with the terms of the contract and shall
take into account the usages of the trade applicable to
the transaction.
Article 5.29. Decision Making by the Arbitral Tribunal.
(a) The arbitration proceedings with more than one
arbitrator, any decision of the arbitral tribunal shall be
made, unless otherwise agreed by the parties, by a
majority of all its members, However questions of
procedure may be decided by the chairman of the
arbitral tribunal, if so authorized by the parties or all
members of the arbitral tribunal.
(b) Unless otherwise agreed upon by the parties, the
arbitral tribunal shall render its written award within
thirty (30) days after the closing of all hearings and/or
submission of the parties’ respective briefs or if the
oral hearings shall have been waived, within thirty(30)
days after the arbitral tribunal shall have declared such
proceedings in lieu of hearing closed. This period may
be further extended by mutual consent of the parties.
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Article 5.30 Settlement. (a) if, during arbitral
proceedings, the parties settle the dispute, the arbitral
tribunal, record the settlement in the form of an
arbitral award on agreed terms, consent award or
award based on compromise.
(b) An award as rendered above shall be made in
accordance with the provisions of Article 5.31 (Form
and Contents of Award) and shall state that it is an
award. Such an award has the same status and effect as
any other award on the merits of the case.
Article 5.31. Form and Contents of Award. (a) The
award shall be made in writing and shall be signed by
the arbitral tribunal. In arbitration proceedings with
more than one arbitrator, the signatures of the
majority of all members of the arbitral tribunal shall
suffice, provided that the reason for any omitted
signature us stated.
(b) The award shall state the reasons upon which is
based, unless the parties have agreed that no reasons
are to be given or the award on agreed terms, consent
award based on compromise under Article 5.30
(Settlement).
(c) The award shall state its date and the placed of
arbitration as determined in accordance with the
paragraph (a) of Article 5.19 (Place of Arbitration). The
award shall be deemed to have made at that place.
(d) After the award is made, a copy signed by the
arbitrators in accordance with the paragraph (a) of this
Article shall be delivered to each party.
(e) The award of the arbitral tribunal need not be
acknowledged, sworn to under oath, or affirmed by the
arbitral tribunal unless so required on writing by the
parties. If despite such requirement, the arbitral
tribunal shall fail to do as required, the parties may,
within thirty days from the receipt of said award,
request the arbitral tribunal to supply the omission.
The failure of the parties to make an objection or make
such request within the said period shall be deemed a
waiver or such requirement and may no longer be
raised as a ground to invalidate the award.
Article 5.32. Termination of Proceedings. (a) The
arbitration proceedings are terminated by the final
award or by an order of the arbitral tribunal in
accordance with paragraph (b) of this Article.
(b) The arbitral tribunal shall issue an order for the
termination of the arbitration proceedings when:
(i) The claimant withdraws his claim, unless the
respondents objects thereto for the purpose of
prosecuting his counterclaims in the same proceedings
of the arbitral tribunal recognizes a legitimate interest
on his part in obtaining a final settlement of the
dispute; or
(ii) The parties agree on the termination of the
proceedings; or
(iii) The arbitral tribunal finds that the continuation of
the proceedings has for any other reason before
unnecessary or impossible; or
(iv) The required deposits are not paid in full in
accordance with paragraph (d) of Article 5.46 (Fees
and Costs).
(c) The mandate of the arbitral tribunal ends with the
termination of the arbitration proceedings, subject to
the provisions of Article 5.33 (Correction and
Interpretation of Award) and Article 5.34 (Application
for Settings Aside in Exclusive Recourse Against the
Arbitral Award).
(d) Except as otherwise provided in the arbitration
agreement, no motion for reconsideration correction
and interpretation of award or additional award shall
be with the arbitral tribunal. The arbitral tribunal, by
releasing its final award, loses jurisdiction over the
dispute and the parties to the arbitral tribunal, by
releasing its final award, loses jurisdiction over the
dispute and the parties to the arbitration. However,
where is shown that the arbitral tribunal failed to
resolved an issue. Submitted to him or determination a
verified motion to complete a final award may be made
within thirty(30) days from its receipt.
(e) Notwithstanding the foregoing, the arbitral tribunal
may for special reason, reserved in the final award in
order a hearing to quantity costs and determine which
party shall bear the costs or apportionment thereof as
may be determined to be a equitable. Pending
determination of this issue, the award shall not be
deemed final for purposes of appeal, vacations,
correction, or any post-award proceedings.
Article 5.33. Correction and Interpretation of Award,
Additional Award. (a) Within thirty (30) days from
receipt of the award, unless another period of time has
been agreed upon by the parties.
(i) A party may, with notice to the other party, the
arbitral tribunal to correct in the awards any errors in
computation, any clerical or typographical errors or
any errors similar nature
(ii) If so agreed by the parties, with notice to the other
party, may request the arbitral tribunal to give an
interpretation of a specific point or part of the award.
If the arbitral tribunal considers the request to be
justified, it shall make the connection or give the
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interpretation within thirty (30) days from receipt of
the request. The interpretation shall form part of the
award.
(b) The arbitral tribunal may correct any errors of the
type referred to in paragraph (a) of this Article on its
own initiative within thirty (30) days of the date of the
award.
(c) Unless otherwise agreed by the parties, a party
may, with notice to the other party, may request within
thirty (30) days of receipt of the award, the arbitral
tribunal to make an additional award as to claims
presented in the arbitral proceedings but omitted from
the award., If the arbitral tribunal considers the
request to be justified, it shall make the additional
award within sixty (60) days.
(d) The arbitral tribunal may extend, if necessary, the
period of time within which it shall make a correction,
interpretation or an additional award under
paragraphs (a) and (c) of this Article.
(e) The provisions of Article 5.31 (Form and Contents
of Award) shall apply to a correction or interpretation
of the award to an additional award.
Article 5.34. Application for Setting Aside an Exclusive
Recourse against Arbitral Award. The court when
asked to set aside an award, may, where appropriate
and so requested by a party, suspend the setting aside
proceedings for a period of time determined by it in
order to give the arbitral tribunal an opportunity to
resume the arbitral proceedings or to take such other
action as in the arbitral tribunal’s opinion will
eliminate the grounds for setting aside an award.
Article 5.35. Grounds to Vacate an Arbitral Award. (a)
The arbitral award may be questioned, vacated or set
aside by the appropriate court in accordance with the
Special ADR Rules only on the following grounds:
(i) The arbitral award was procured by corruption,
fraud or other undue means; or
(ii) There was evident partially or corruption in the
arbitral tribunal or any of its members; or
(iii) 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 the
hearing upon sufficient cause shown or to hear
evidence pertinent and material to the controversy; or
(iv) One or more of the arbitrators was disqualified to
act as such under this Chapter and willfully refrained
from disclosing such disqualification ; or
(v) 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 it was not made.
Any other ground raised to question, vacate or set
aside the arbitral award shall be disregarded by the
court.
(b) Where a petition to vacate or set aside an award is
filed, the petitioner may simultaneously, or the
oppositor may in the alternative, petition the court to
remit the case to the same arbitral tribunal for the
purpose of making a new or revised final and definite
award or to direct a new hearing before the same or
new arbitral tribunal, the members of which shall be
chosen in the manner originally provided in the
arbitration agreement or submission. 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 and to
commence from the date of the court’s order.
(c) Where a party files a petition with the court to
vacate or set aside an award by reason of omission/s
that do not affect the merits of the case and may be
cured or remedied, the adverse party may oppose that
petition and instead request the court to suspend the
vacation or setting aside the proceedings for a period
of time to give the arbitral tribunal an opportunity to
cure or remedy the award or resume the arbitration
proceedings or take such other action as will eliminate
the grounds for vacation or setting aside.
RULE 6 – Recognition and Enforcement of Awards
Article 5.36. Confirmation of Award. The party moving
for an order confirming, modifying, correcting, or
vacating an award, shall, at the time that such motion
is filled with the court for the entry of judgment
thereon, also file the original or verified copy of the
award, the arbitration or settlement agreement, and
such papers as may be required by the Special ADR
Rules.
Article 5.37. Judgment. Upon the grant of an order
confirming, modifying or correcting an award,
judgment may be entered in conformity therewith in
the court where said application is filed. Costs of the
application and the proceedings subsequent thereto
may be awarded by the court In its discretion. If
awarded, the amount thereof must be included in the
judgment. Judgment will be enforced like court
judgments.
Article 5.38. Appeal. A decision of the court
confirming, vacating, setting aside, modifying or
correcting an arbitral award may be appealed to the
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Court of Appeals in accordance with Special ADR
Rules.
The losing party who appeals from the judgment of the
Court confirming an arbitral award shall be required
by the Court of Appeals to post a counter-bond
executed in favor of the prevailing party equal to the
amount of the award in accordance with the Special
ADR Rules.
Article 5.39. Venue and Jurisdiction. Proceedings for
recognition and enforcement of an arbitration
agreement or for vacation or setting aside of an arbitral
award, and any application with a court for arbitration
assistance and supervision, except appeal, shall be
deemed as special proceedings and shall be filed with
the court
(a) where the arbitration proceedings are conducted;
(b) where the asset to be attached or levied upon, or
the act to be enjoined is located;
(c) where any of the parties to the dispute resides or
has its place of business; or
(d) in the National Capital Judicial Region at the
option of the applicant.
Article 5.40. Notice of Proceedings 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 party cannot be served notice at such address, at
such party’s last known address. The notice shall be
sent in at least fifteen (15) days before the date set for
the initial hearing of the application.
Article 5.41. Legal Representation in Domestic
Arbitration. (a) In domestic arbitration conducted in
the Philippines, a party may be represented by any
person of his/her/its choice: Provided, that such
representative, unless admitted to the practice of law
in the Philippines, shall not be authorized to appear as
counsel in any Philippine Court, or any other quasi-
judicial body whether or such appearance is in relation
to the arbitration in which he/she appears.
(b) No arbitrator shall act as mediator in any
proceeding in which he/she is acting as arbitrator and
all negotiations towards settlement of the dispute must
take without the presence of the arbitrators.
Article 5.42. Confidentially of Arbitration Proceedings.
The arbitration proceedings, including the records,
evidence and the arbitral award and other confidential
information, shall be considered privileged and
confidential and shall not be published except –
(1) with consent of the parties; or
(2) for the limited purpose of disclosing to the court
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.
Article 5.43. Death of a Party. Where a party dies after
making a submission or a contact to arbitrate as
prescribed in these Rules, the proceeding may be
begun or continued upon the application of, or notice
to, his/her executor or administrator, or to temporary
administrator of his/her estate. In any such case, the
court may issue an order extending the time within
which notice of a motion to recognize or vacate an
award must be served. Upon recognizing an award,
where a party has died since it was filed or delivered,
the court must enter judgment in the name of the
original party; and the proceedings thereupon are the
same as where a party dies after a verdict.
Article 5.44. Multi-Party Arbitration. (a)When a single
arbitration involves more than two parties, these
Rules, to the extent possible, shall be used subject to
such modifications consistent with Articles 5.17 (Equal
Treatment of Parties) and 5.18 (Determination of
Rules of Procedure) as the arbitral tribunal shall deem
appropriate to address possible complexities of a
multi-party arbitration. (b) When a claimant includes
persons who are not parties to or otherwise bound by
the arbitration agreement , directly or by reference,
between him/her and the respondent as additional
claimants or the additional respondents unless not
later than the date communicating his/her answer to
the request for arbitration, either by motion or by a
special defense in his answer, he objects, on
jurisdictional grounds, to the inclusion of such
additional respondents. The additional respondents
shall be deemed to have consented to their inclusion in
the arbitration unless, not later than the date of
communicating their answer to the request for
arbitration, wither by motion or a special defense in
their answer, they object, on jurisdictional grounds, to
their inclusion.
Article 5.45. Consolidation of Proceedings and
Concurrent Hearings. The parties may agree that-
(a) the arbitration proceedings shall be consolidated
with other arbitration proceedings; or
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(b) that concurrent hearings shall be held, on such
terms as may be agreed.
Unless the parties agree to confer such power on the
arbitral tribunal, the tribunal has no power to order
consolidation of arbitration proceedings or concurrent
hearings.
Article 5.46. Fees and Costs. (a) The fees of the
arbitrators shall be agreed upon by the parties and the
arbitrator/s in writing prior to the arbitration.
In default of agreement of the parties as to the amount
and manner of payment of arbitrator’s fees, the
arbitrator’s fees shall be determined in accordance
with the applicable internal rules of the regular
arbitration institution under whose rules he arbitration
is conducted; or in ad hoc arbitration, the Schedule of
Fees approved by the IBP, If any, or in default thereof,
the Schedule of Fees that may be approved by the
OADR.
(b) In addition to arbitrator’s fees, the parties shall be
responsible for the payment of the administrative fees
of an arbitration institution administering an
arbitration and cost of arbitration. The latter shall
include, as appropriate, the fees of an expert appointed
by the arbitral tribunal, the expenses for conducting a
site inspection, the use of a room where arbitration
proceedings shall be or have been conducted, the
expenses for the recording and transcription of the
arbitration proceedings.
(c) The arbitral tribunal shall fix the costs of
arbitration in its award. The term "costs" include only:
(i) The fees of the arbitral tribunal to be stated
separately as to each arbitrator and to be fixed by the
arbitral tribunal itself in accordance with this Article;
(ii) The travel and other expenses incurred by the
arbitrators;
(iii) The costs of expert advice and of other assistance
required by the arbitral tribunal, such as site
inspection and expenses for the recording and
transcription of the arbitration proceedings;
(iv) The travel and other expenses of witnesses to the
extent such expenses are provided by the arbitral
tribunal;
(v) The costs for legal representation and assistance of
the successful party if such costs were claimed during
the arbitral proceedings, and only to the extent that the
arbitral tribunal determines that the amount of such
costs is reasonable;
(vi) Any fees and expenses of the appointing authority.
(d) The fees of the arbitral tribunal shall be reasonable
in amount, taking into account the amount in dispute,
the complexity of the subject matter, the time spent by
the arbitrators and any other relevant circumstances of
the case.
If an appointing authority has been agreed upon by the
parties and if such appointing authority has issued a
schedule of fees for arbitrators in domestic cases which
it administers, the arbitral tribunal, in fixing its fees
shall take that schedule of fees into account to the
extent that it considers appropriate in the
circumstances of the case.
If such appointing authority has not issued a schedule
of fees for arbitrators in international cases, any party
may, at any time request the appointing authority to
furnish a statement setting forth the basis for
establishing fees which is customarily followed in
international cases in which the authority appoints
arbitrators. If the appointing authority consents to
provide such a statement, the arbitral tribunal, in
fixing its fees shall take such information into account
to the extent that it considers appropriate in the
circumstances of the case.
In cases referred to in paragraph (d) of this Article,
when a party so requests and the appointing authority
consents to perform the function, the arbitral tribunal
shall fix its fees only after consultation with the
appointing authority which may make any comment it
deems appropriate to the arbitral tribunal concerning
the fees.
(e) Except as provided in the next paragraph, the costs
of arbitration shall, in principle, be borne by the
unsuccessful party. However, the arbitral tribunal may
apportion each of such costs between the parties if it
determines that apportionment is reasonable, taking
into account the circumstances of the case.
With respect to the costs of legal representation and
assistance referred to in paragraph (c) (iii) of this
Article, the arbitral tribunal, taking into account the
circumstances of the case, shall be free to determine
which party shall bear such costs or may apportion
such costs between the parties if it determines that
appointment is reasonable.
When the arbitral tribunal issues an order for the
termination of the arbitral proceedings or makes an
award on agreed terms, it shall fix the costs of
arbitration referred to in paragraph (a) of this Article
in the context of that order or award.
(e) Except as otherwise agreed by the parties, no
additional fees may be charged by the arbitral tribunal
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for interpretation or correction or completion of its
award under these Rules.
(f) The arbitral tribunal, on its establishment, may
request each party to deposit an equal amount as an
advance for the costs referred to in paragraphs (i), (ii)
and (iii) of paragraph (c) of this Article.
During the course of the arbitral proceedings, the
arbitral tribunal may request supplementary deposits
from the parties.
If an appointing authority has been agreed upon by the
parties, and when a party so requests and the
appointing authority consents to perform the function,
the arbitral tribunal shall fix the amounts of any
deposits or supplementary deposits only after
consultation with the appointing authority which may
make any comments to the arbitral tribunal which it
deems appropriate concerning the amount of such
deposits and supplementary deposits.
If the required deposits are not paid in full within
thirty (30) days after receipt of the request, the arbitral
tribunal shall so inform the parties in order that one of
them may make the required payment within such a
period or reasonable extension thereof as may be
determined by the arbitral tribunal. If such payment is
not made, the arbitral tribunal may order the
termination of the arbitral proceedings.
After the award has been made, the arbitral tribunal
shall render an accounting to the parties of the
deposits received and return any unexpended balance
to the parties.
CHAPTER 6
ARBITRATION OF CONSTRUCTION DISPUTES
The Construction Industry Arbitration Commission
(CIAC), which has original and exclusive jurisdiction
over arbitration of construction disputes pursuant to
Executive Order No. 1008, s. 1985, otherwise known as
the "Construction Industry Arbitration Law", shall
promulgate the Implementing Rules and Regulations
governing arbitration of construction disputes,
incorporating therein the pertinent provisions of the
ADR Act.
CHAPTER 7
OTHER ADR FORMS
RULE 1 – General Provisions
Article 7.1. Scope of Application and General
Principles. Except as otherwise agreed, this Chapter
shall apply and supply the deficiency in the agreement
of the parties for matters involving the following forms
of ADR:
(a) early neutral evaluation;
(b) neutral evaluation;
(c) mini-trial;
(d) mediation-arbitration;
(e) a combination thereof; or
(f) any other ADR form.
Article 7.2. Applicability of the Rules on Mediation. If
the other ADR form/process is more akin to
arbitration (i.e., the neutral third-person merely assists
the parties in reaching a voluntary agreement),
Chapter 3 governing Mediation shall have suppletory
application to the extent that it is not in conflict with
the agreement of the parties or this Chapter.
Article 7.3. Applicability of the Rules on Arbitration. If
the other ADR form/process is more akin to
arbitration (i.e., the neutral third-person has the power
to make a binding resolution of the dispute), Chapter 5
governing Domestic Arbitration shall have suppletory
application to the extent that it is not in conflict with
the agreement of the parties or this Chapter.
Article 7.4. Referral. If a dispute is already before a
court, either party may, before and during pre-trial, file
a motion for the court to refer the parties to other ADR
forms/processes. However, at any time during court
proceedings, even after pre-trial, the parties may
jointly move for suspension/dismissal of the action
pursuant to Article 2030 of the Civil Code of the
Philippines.
Article 7.5. Submission of Settlement Agreement.
Either party may submit to the court before which the
case is pending any settlement agreement following a
neutral or an early neutral evaluation, mini-trial or
mediation-arbitration.
RULE 2 – Neutral or Early Neutral Evaluation
Article 7.6. Neutral or Early Neutral Evaluation. (a)
The neutral or early neutral evaluation shall be
governed by the rules and procedure agreed upon by
the parties. In the absence of said agreement, this Rule
shall apply.
(b) If the parties cannot agree on, or fail to provide for:
(i) The desired qualification of the neutral third
person;
(ii) The manner of his/her selection;
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(iii) The appointing authority (not IBP) who shall have
the authority to make the appointment of a neutral
third person; or
(iv) If despite agreement on the foregoing and the
lapse of the period of time stipulated for the
appointment, the parties are unable to select a neutral
third person or appointing authority, then, either party
may request the default appointing authority, as
defined under paragraph C1 of Article (Definition of
Terms), to make the appointment taking into
consideration the nature of the dispute and the
experience and expertise of the neutral third person.
(c) The parties shall submit and exchange position
papers containing the issues and statement of the
relevant facts and appending supporting documents
and affidavits of witnesses to assist the neutral third
person in evaluating or assessing the dispute.
(d) The neutral third person may request either party
to address additional issues that he/she may consider
necessary for a complete evaluation/assessment of the
dispute.
(e) The neutral third person may structure the
evaluation process in any manner he/she deems
appropriate. In the course thereof, the neutral third
person may identify areas of agreement, clarify the
issues, define those that are contentious, and
encourage the parties to agree on a definition of issues
and stipulate on facts or admit the genuineness and
due execution of documents.
(f) The neutral third person shall issue a written
evaluation or assessment within thirty (30) days from
the conclusion of the evaluation process. The opinion
shall be non-binding and shall set forth how the
neutral third person would have ruled had the matter
been subject to a binding process. The evaluation or
assessment shall indicate the relative strengths and
weakness of the positions of the parties, the basis for
the evaluation or assessment, and an estimate, when
feasible, of the amount for which a party may be liable
to the other if the dispute were made subject to a
binding process.
(g) There shall be no ex-parte communication between
the neutral third person and any party to dispute
without the consent of all parties.
(h) All papers and written presentations
communicated to the neutral third person, including
any paper prepared by a party to be communicated to
the neutral third person or to the other party as part of
the dispute resolution process, and the neutral third
person’s written non-binding assessment or
evaluation, shall be treated as confidential.
RULE 3 – Mini-Trial
Article 7.7. Mini-Trial. (a) A mini-trial shall be
governed by the rules and procedure agreed upon by
the parties. In the absence of said agreement, this Rule
shall apply.
(b) A mini-trial shall be conducted either as: (i) a
separate dispute resolution process; or (ii) a
continuation of mediation, neutral or early neutral
evaluation or any other ADR process.
(c) The parties may agree that a mini-trial be
conducted with or without the presence and
participation of a neutral third person. If a neutral
third person is agreed upon and chosen, he/she shall
preside over the mini-trial. The parties may agree to
appoint one or more (but equal in number per party)
senior executive/s, on its behalf, to sit as mini-trial
panel members.
(d) The senior executive/s chosen to sit as mini-trial
panel members must be duly authorized to negotiate
and settle the dispute with the other party. The
appointment of a mini-trial panel member/s shall be
communicated to the other party. This appointment
shall constitute a representation to the other party that
the mini-trial panel member/s has/have the authority
to enter into a settlement agreement binding upon the
principal without any further action or ratification by
the latter.
(e) Each party shall submit a brief executive summary
of the dispute in sufficient copies as to provide one
copy to each mini-trial panel member and to the
adverse party. The summary shall identify the specific
factual or legal issue or issues. Each party may attach
to the summary a more exhaustive recital of the facts
of the dispute and the applicable law and
jurisprudence.
(f) At the date time and place agreed upon, the parties
shall appear before the mini-trial panel members. The
lawyer of each party and/or authorized representative
shall present his/her case starting with the claimant
followed by the respondent. The lawyer and/or
representative of each party may thereafter offer
rebuttal or sur-rebuttal arguments.
Unless the parties agree on a shorter or longer period,
the presentation-in-chief shall be made, without
interruption, for one hour and the rebuttal or sur-
rebuttal shall be thirty (30) minutes.
At the end of each presentation, rebuttal or sur-
rebuttal, the mini-trial panel member/s may ask
clarificatory questions from any of the presentors.
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(g) After the mini-trial, the mini-trial panel members
shall negotiate a settlement of the dispute by
themselves.
In cases where a neutral third person is appointed, the
neutral third person shall assist the proceedings shall
be governed by Chapter 3 of Mediation.
RULE 4 – Mediation-Arbitration
Article 7.8. Mediation–Arbitration (a) A Mediation-
Arbitration shall be governed by the rules and
procedure agreed upon by the parties, In the absence
of said agreement, Chapter 5 on Mediation shall first
apply and thereafter, Chapter 5 on Domestic
Arbitration.
(b) No Person shall having been engage and having
acted as mediator of a dispute between the parties,
following a failed mediation, act as arbitrator of the
same dispute, unless the parties, in a written
agreement, expressly authorize the mediator to hear
and decide the case as an arbitrator
(c) The mediator who becomes an arbitrator pursuant
to this Rule shall make an appropriate disclosure to the
parties as if the arbitration proceeding had
commenced and will proceed as a new dispute
resolution process, and shall, before entering upon
his/her duties, executive the appropriate oath or
affirmation of office as arbitrator in accordance with
these Rules.
RULE 5- Costs and Fees
Article 7.9 Costs and Fees. (a) Before entering his/her
duties as ADR Provider , he/she shall agree with the
parties on the cost of the ADR procedure, the fees to be
paid and manner of payment for his her services.
(b) n the absence of such agreement, the fees for the
services of the ADR provider/practitioner shall be
determined as follows:
(i) If the ADR procedure is conducted under the rules
and/or administered by an institution regularly
providing ADR services to the general public, the fees
of the ADR professional shall be determined in
accordance with schedule of fees approved by such
institution, if any;
(ii) In ad hoc ADR, the fees shall be determined in
accordance with the schedule of fees approved by the
OADR;
(iii) In the absence of a schedule of fees approved by
the ADR institution or by the OADR, the fees shall be
determined by the ADR institution or by the OADR, as
the case may be, and complexity of the process, the
amount in dispute and the professional standing of the
ADR professional.
(c) A contingency fee arrangement shall not be
allowed. The amount that may be allowed to an ADR
professional may not be made dependent upon the
success of his/her effort in helping the parties to settle
their dispute.
CHAPTER 8
MISCELLANEOUS PROVISION
Article 8.1. Amendments. These Rules or any portion
hereof may be amended by the Secretary of Justice.
Article 8.2 Separability Clause. If any part, article or
provision of these Rules are declared invalid or
unconstitutional, the other parts hereof not affected
thereby shall remain valid.
Article 8.3 Funding. The heads of department and
agencies concerned, especially the Department of
Justice, insofar as the funding requirements of the
OADR is concerned, shall immediately include in their
annual appropriation the funding necessary to
implement programs and extend services required by
the ADR Act and these Rules.
Article 8.4 Transitory Provisions. Considering the
procedural character of the ADR Act and these Rules,
the provisions of these Rules shall be applicable to all
pending arbitration, mediation or other ADR forms
covered by the ADR Act if the parties agree.
Article. 8.5 Effectivity Clause. These Rules shall take
effect fifteen (15) days after the completion of its
publication in at least two (2) national newspapers of
general circulation.
APPROVED.
December 4, 2009
21. OTHER SC ISSUANCES ON ADR
22. JUDICIAL DISPUTE RESOLUTION
23. Judicial dispute resolution
(JDR)
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 127
In En Banc A.M. No. 04-1-12-SC-PhilJA, August
29, 2006, “Re: PhiLJA Resolution No. 06-22, re:
Revised Guidelines for the Implementation of an
Enhanced Pre-Trial Proceeding under the JURIS
Project, as Amended”, the Philippine Supreme Court
adopted the rules of the new judicial dispute
resolution (JDR) system of the Philippines
(described as an “enhanced pre-trial proceeding”)
under its on-going JURIS Project.
The Court has piloted the new concept in selected trial
courts in the Philippines which are called “JURIS
model courts”.
As an explanatory note, the Court noted that despite
the priority given by Rule 18 of the Rules of Court
(“pre-trial”), as amended, for the amicable settlement
of cases, “most trial judges go through the function of
exploring settlement perfunctorily for various
reasons, including fear of being disqualified if he
goes into the process more intensively”.
In general, the concept is that “mediatable cases” are
referred to Court-Annex Mediation (CAM) for
mediation under accredited mediators in the
Philippine Mediation Center (PMC) and subsequently
referred to Judicial Dispute Resolution (JDR) “for
further mediation by the judges” if it is not resolved
under CAM. If the case is still not settled in JDR, “the
case is transferred to the pairing court to proceed
with trial”.
The judge conducting the JDR is called the JDR
judge instead of pre-trial judge because under the
revised guidelines, pre-trial proper is resumed
after JDR, but this time, to be conducted by the
trial judge instead of the judge who conducted
JDR.
A case may be referred to JDR “even after conclusion
of the pre-trial and during the trial itself”.
The JDR judge “may preside over the trial proceedings
upon joint request of both parties”.
A limited period is imposed for settlement of JDR
cases, i.e., thirty (30) days for first level courts and
sixty (60) days for regional trial courts. These periods
may be extended upon the discretion of the JDR judge.
Where settlement on the civil aspect has been
reached in criminal cases covered by mediation but the
period of payment in accordance with the terms of
settlement exceeds one (1) year, the case may be
archived upon motion of the prosecution with
concurrence of the private complainant and
approval by the judge.
The civil aspect of theft, under Art. 308 of the
Revised Penal Code, is now part of the cases for
referral to mediation.
The concept is that the JDR judge acts as “the
mediator, the conciliator, early neutral evaluator, or
a combination of any of the above”.
As a mediator and conciliator, the judge facilitates
the settlement discussions between parties and tries to
reconcile their differences.
As a neutral evaluator, the judge assesses the
relative strengths and weaknesses of each party's case
and makes a non-binding and impartial evaluation of
the chances of each party's success in the case.
On the basis of his neutral evaluation, the judge
persuades the parties to reconsider their prior
reluctance to settle their case amicably.
Judicial proceedings shall be divided into two stages:
(1) from the filing of a complaint, to the conduct of
CAM and JDR during the pre-trial stage, and (2) pre-
trial proper to trial and judgment.
The judge to whom the case has been originally
raffled shall preside over the first stage. He shall be
called the JDR judge.
The concept is that the parties will be “more
spontaneous once they are assured that the JDR judge
will not be the one to try the case”.
As such, the general rule is that “the JDR Judge
shall not preside over the trial of the same case
when mediation did not succeed”.
In multiple sala courts, if the case is not resolved
during JDR, it shall be raffled to another branch,
where the rest of the judicial proceedings up to
judgment shall be held. The judge for that stage shall
be called the trial judge.
Any incidents or motions filed during the first stage
shall be dealt with by the JDR judge at his discretion.
In single sala courts, the case shall be transferred
for mediation to the nearest court (or pair court, if
any), since “only mediation is involved”.
Whatever the result of the mediation may be, the
case is always returned to the originating court
for appropriate action - either for the approval of
the compromise agreement or for trial, as the
case may be.
In Family Courts, due to the special nature of a family
dispute for which specialized family courts have been
designated, parties may file a joint motion
requesting that the case be tried by said special court
despite the judge thereon having been the JDR
judge.
However, if there is another family court in the same
JURIS site, “the trial judge shall be that of the family
court which did not conduct JDR proceedings”.
In Commercial Courts, the JDR shall be conducted by
the pair judge of the commercial court.
Where JDR does not succeed, “the judge of the
commercial court shall be the trial judge”.
ADR (based on ATTY HIGUIT’S OUTLINE)-CHARMAGNE FERRER’S REVIEWER 128

Cases may be referred to JDR even during the trial A party who appears without the required
stage upon joint motion of the parties. authorization may be similarly sanctioned
If the motion is granted, the JDR shall be conducted If settlement is reached, the parties, with assistance of
by the pairing judge in multiple sala courts, or in their counsel, shall draft the compromise agreement
single sala courts, by the nearest court (or pair for approval of the court by judgment upon a
court, if any). compromise.
Whatever the result of the JDR may be, the case is Where compliance with the compromise agreement is
“always returned to the originating court for forthwith made or the claim is otherwise settled, the
appropriate action - either for the approval of parties shall instead submit a satisfaction of claims
the compromise agreement or for trial, as the or mutual withdrawal of the complaint and
case may be”. counterclaim upon which the Court shall enter an
order dismissing the case.
To safeguard the confidentiality of mediation
proceedings, the JDR judge shall not pass on any
information obtained in the course of conciliation,
early neutral evaluation, or mediation to the trial
judge or to any other person.
All JDR conferences shall be conducted in private.
The JDR judge may, however, “confer in
confidence with the mediator who previously
mediated the case, merely for the purpose of
determining unresolved issues”.
The pilot-test shall apply to the following cases:
(1) All civil cases, settlement of estates, and cases
covered by the Rule on Summary Procedure, except
those which by law may not be compromised;

(2) Cases cognizable by the Lupong Tagapamayapa and

those cases that may be referred to it by the judge
under Section 408. Chapter VII of the Republic Act No.
7160, otherwise known as the 1991 Local Government
Code;
(3) The civil aspect of BP 22 cases;
(4) The civil aspect of quasi-offenses under Title 14 of
the Revised Penal Code; and
(5) The civil aspect of Estafa, Libel, and Theft.
A party who fails to appear for mediation or JDR
conference may be imposed the appropriate sanctions
as provided for in Rule 18 of the Rules of Court and the
relevant issuances of the Supreme Court.
A recommendation to impose sanctions shall be made
to the JDR judge by the mediator before whom the
absence took place, upon the request of the present
party.
If all parties are absent despite due notice, the
mediator shall motu proprio recommend the
imposition of proper sanctions upon all of them,
including dismissal of the case.
Among others, the JDR judge may require the non-
appearing party to reimburse the appearing party
his costs, including attorney's fees for that day,
up to treble the amount incurred payable on or
before the next mediation session.