Current Status and Development

of ADR
in the Philippines

BLESSANDE P. CAMACHO
-student

June 29, 2022

Law 227- Alternative Dispute Resolution

ATTY. MARLOUIS PLANAS

 “Life cannot subsist in society but by reciprocal concessions.”
– Edmund Burke

Introduction
One of the primary venues for resolving conflicts is the Philippine
court system. However, due to increasing number of cases filed and due to a
lack of resources to address the growing number of cases submitted, court
dockets are clogged, making proceedings time-consuming and expensive.
The situation becomes not only harmful to growth and development but also
erodes the social fabric of the nation when disagreements fester into open
and occasionally violent clashes 1(Supreme Court of the Philippines, Action
Plan for Judicial Reform). This finding led to the conclusion that using
alternate dispute resolution methods was not only appropriate but also
required.
In the Philippine context, alternative dispute resolution or ADR refers
to several formal or informal processes for settlement of conflicts, outside of
or in the edge of institutional judicial process. It is another option to the
structured adversarial approach adopted in court litigation. While ADR may
be viewed as an intervention to the court’s burdened dockets, it must be
considered on its own merits as an effective system of resolving disputes. It
is less expensive, more swift and efficient and less or non-adversarial.
The Republic of the Philippines has a strong government policy of
promoting alternative modes of dispute resolution, including mediation and
arbitration, and a government-initiated mandate to include arbitration clauses
in government contracts. With this, commercial arbitration is gaining ground
in the mainstream Philippine dispute resolution arena. In particular, the
construction industry is the sector that commonly uses arbitration, due to the
established presence of the Philippine Construction Industry Arbitration

1
 Disini, DP Jr · (2002). Dispute Resolution Mechanisms in the Philippines.
https://www.ide.go.jp/library/English/Publish/Reports/Als/pdf/18.pdf 

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Commission (CIAC), which was created pursuant to Executive Order No.
1008 signed on 04 February 1985.2

History of ADR in the Philippines

Dispute resolution machinery already existed in the earliest
communities in the Philippines even before the advent of the Spanish and
American colonization. Disputes arising from the daily affairs of the
communities were brought before the elders of such communities in a
conversational fashion for the purpose of threshing out the issues and
resolving them along the principles of justice and fairness.
The incorporation of the aforementioned role in local governmental
systems throughout the Spanish and American administrations made conflict
settlement methods more logical. As the western-style court systems took
over their functions, the originally conversational way of resolving conflicts
gradually became more adversarial. However, the values and traditions that
were the heart of the early dispute-resolving systems were not lost.
This fact is supported by the Arbitration Law's passage in 1953. The
Congress of the Philippines enacted Republic Act (R.A.) No. 876 (the
"Arbitration Act")3. The Arbitration Law permits parties to submit to
arbitration to one or more arbitrators any controversy existing between them
which may be the subject of an action or the stipulation in the contract
requires them to submit to arbitration any controversy arising therefrom. The
Philippines has started to show increasing interest toward the idea of
arbitration. This law's stated purpose was to reinstate non-judicial dispute
settlement in the nation; thus, the term "alternative dispute resolution"
(ADR). The phrase "alternative" was used to underline that arbitration
should only be utilized as a secondary or voluntary option, not as a substitute
for recourse to the normal judicial courts. 4
2
Office of the President, CREATING AN ARBITRATION MACHINERY FOR THE PHILIPPINE
CONSTRUCTION INDUSTRY, Exec. Ord. No. 1008, (Feb. 4, 1985) (Phil.),
https://ciap.dti.gov.ph/sites/default/files/E.O.%201008_0.pdf.
3
Rep Act No 876 (1953)
4
 Disini, DP Jr · (2002). Dispute Resolution Mechanisms in the Philippines.
https://www.ide.go.jp/library/English/Publish/Reports/Als/pdf/18.pdf 

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 Later, on June 10, 1958, the Philippines signed the New York
Convention, which was ratified on July 6, 1967 5, aimed to promote the
development of basic laws on arbitration. The aforementioned Arbitration
Law, on the other hand, is riddled with inconsistencies, for example, it
makes no provision for binding arbitration. It also leaves out the specifics of
the arbitration system and the method for enforcing foreign judgments
arbitration decisions.
In 1978, President Marcos decreed the formation of the Katarungang
Pambaranggay (Community-based justice system, or Barangay Justice
System) by virtue of Presidential Decree 1508. This law provided for the
compulsory use in the barangay, the smallest unit of local government, of
mediation, conciliation and arbitration in certain types of disputes. The
system was later integrated into the Local Government Code, since its
direction and supervision were entrusted to the Department of Interior and
Local Government.6
The Philippines has its own set of arbitration laws, which is also
important to note. Executive Order (E.O.) No. 1008, which has been enacted
in 1985, established the Construction Industry Arbitration Commission
(hereafter referred to as "CIAC"), which has sole jurisdiction over
construction disputes.
In 2004, almost 50 years after the Arbitration Act was passed,
Congress enacted R.A. No. 9285 otherwise known as The "Alternative
Dispute Resolution Act of 2004," or "ADR Act. Republic Act No. 9285 or
the Alternative Dispute Resolution Act of 2004 is the declared policy of the
State to actively promote party autonomy in the resolution of disputes or the
freedom of the parties to make their own arrangements to resolve their
disputes.

5
Cainday, J. (July 2021). Update on the Dispute Resolution and Arbitration System in the
Philippines.
https://oneasia.legal/en/4015
6
Republic of the Philippines, “Republic Act No. 7160 - An Act Providing for a Local Government
Code of 1991,” The LawPhil Project, Arellano Law Foundation, Philippine Laws and
Jurisprudence Databank. [Online]. Available:
https://www.lawphil.net/statutes/repacts/ra1991/ra_7160_1991.html.

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 Towards this end, the State shall encourage and actively promote the
use of ADR as an important means to achieve speedy and impartial justice
and declog court dockets. To achieve this, the State shall provide means for
the use of ADR as an effective tool and alternative procedure for the
resolution of appropriate cases. The ADR Act, which amends and
supplements the Arbitration Act, forms part of the core of the Philippine
arbitration system. These domestic arbitral awards are recognized and
enforced in accordance with Article 23 of the Arbitration Law through the
RTC. If the RTC upholds the arbitral award, it may be enforced in the same
manner as a domestic judgment in the Philippines (Article 40, ADR Act).i
Thereafter, the Supreme Court developed a program called Court
Annexed Mediation (CAM) and the mediation rules were adopted. In 2008
to 2009, the Supreme Court, through Senior Associate Justice Leonardo A.
Quisumbing, initiated a move to adopt procedural rules of court pertaining to
ADR. The procedural rules would come together with The ADR Act of
2004. On September 1, 2009, the Supreme Court adopted the Special Rules
of Court on Alternative Dispute Resolution. The rules defined the procedure
in cases where court intervention is permitted in ADR proceedings and
provided order and uniformity in the way courts handle and resolve issues
and incidents relating to ADR.
Recently in 2019, the Philippines signed the Singapore Convention on
International Settlement Agreements Originating from Mediation (the
"Singapore Convention which establishes a consistent and efficient
framework for international settlement agreements resulting from mediation.
The Convention covers international settlement agreements reached as a
result of commercial mediation. The Singapore Convention aims to make
international trade and business easier by making it easier for disputing
parties to enforce settlement agreements across national borders. The
Philippine government, on the other hand, has yet to ratify the Convention.
At present, the Supreme Court views mediation as an effective means
to resolve pending court cases and preferably to avoid disputes from

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reaching the courts in order to make justice more accessible to the people
and to unclog the dockets of the courts.

Current Status and Development of ADR

Obtaining justice for all parties concerned, whether on a personal or
institutional level, is the only goal of any justice system, regardless of its
form. The prevention of injustices that can lead to changes in behavior in
individuals or possibly the entire community in order to safeguard the
welfare and interests of those affected is another goal of the justice system.
The court, which is equipped with moral principles of fairness and
impartiality, is the primary tool of the legal system. Katarungang
Pambarangay (KP) is the Philippines’ most commonly applied mechanism
of resolving disputes within a community. Hence, the status of KP shall be
the main focus of this study. The use of KP has been increasing over the
years.
On the other hand, in international sphere, a large number of
commercial disputes in the Philippines relating to international business
transactions are currently being resolved through commercial
arbitration. Alternative modes of dispute resolution are expected to become
more popular and extensive in the coming years. This is especially true
considering the continuous promotion of arbitration and other modes of
dispute resolution from the public and private sectors. Another factor is the
court’s slow proceedings, which take many years to reach completion. As a
consequence, big domestic commercial corporations that require a shorter
period of time to resolve their dispute and require the decision of a fair,
independent and impartial tribunal are now starting to choose arbitration
instead of court litigation. These applies not only in construction disputes
but to all civil proceedings referable to arbitration as provided by law.7

7
Marcelo, S. (2015). Arbitration procedures and practice in Philippines: Overview.
Available: https://content.next.westlaw.com/0-620-2681?
__lrTS=20201027073644678&transitionType=Default&contextData=%28sc.Default%29

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Advantages and disadvantages of ADR
In the Philippines, arbitration is preferred over judicial litigation for
the reasons such as confidentiality, smaller time frame to reach an award and
therefore saves time and money. Arbitrators may be chosen by the parties
based on their unique expertise, training, or experience. The way the
procedures are conducted and the rules that govern them are more freely
chosen by the parties. The finality of the award unlike decisions made in
court proceedings, modifications or reversals of arbitral awards are only
permissible under extremely strict and defined circumstances. There is also
assurance of the arbitrator's objectivity, justice, and independence in
handling the cases.
On the other hand, the disadvantages of resolving a dispute through
arbitration in the Philippines may include such as that final judgment of an
arbitrator is difficult to overturn, even if it is erroneous with regard to the
merits, and the cost of arbitration has increased significantly in recent years.
The arbitral tribunal may admit and take into account those pieces of
evidence that are categorically inadmissible under the Rules of Court. More
so, the parties might not fully understand the weight that the tribunal accords
to evidence. 8

Barangay Justice Service System (BJSS)

Community justice in the Philippines takes the form of a village
justice system (Katarungang Pambarangay-KP or Barangay Justice System),
which promotes rapid justice administration at the community level. It is
administered under the decentralization policy to the locality governed by a
local government law called “Republic Act 7160” (1991 Local Government
Code), which empowers local governments to make peace and maintain
social order to support effective law enforcement in protecting human rights
and justice. All kinds of offenses with imprisonment not exceeding one year
or a fine not exceeding 5,000 pesos must undergo the KP mediation process.

8
Ibid.

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9
The village justice system is compulsory whereby all citizens with
designated conflicts must undergo the KP mediation process. If both sides
are unable to reach any agreement, then the case will be handed over to the
police for further action.10
The “Katarungan Pambarangay” or Barangay Justice does not intent to
change the traditional practices of dispute settlement established in the
community. Instead, it institutionalizes these practices by providing more
systematic processes for amicable settlement whose result would become
more acceptable to the disputing parties.11
For the indigenous peoples, there is different alternative conflict
resolution management available for each crime. This alternative conflict
resolution management had been practiced and most IP relied on its
importance. It became a part of their daily lives and their remote world.
They live with it as it passed from remote generation to the present and
probably to coming generations yet born. These different alternatives are
meticulously learned and experienced by the old folks in each village and
became a part of the village life, their traditions and practices. It so ingrained
into their daily life that it became an inseparable part on one’s village life.12

Updates on Barangay Justice Service System

A result of the study taking Tabuk City, Kalinga as the model reveals
that the first level system the Barangay Justice performs better than the
regular court in terms of settling disputes and maintaining peace to the
community13. Because it resolves more than just disputes, it demonstrates
9
Cases subject to KP Law jurisdictions are those whose liability for imprisonment do not exceed
one year, and whose penalty do not exceed P500.00: Please see KP Implementing Rules and
Regulations or R.A. 7309.
10
Glubwila, S., Khruakham, S., & Boonpadung, P. (2021). Community justice as a conflict
management mechanism in Thailand, Indonesia, the Philippines, and Myanmar. Kasetsart
Journal of Social Sciences, 42(3), 688-693.
11
Sam, R. A., Usop, A. M., & Abubakar–Sam, S. (2013). “Barangay Justice Service System
(BJSS) Project as an Alternative Mechanism in Dispute Resolution in Maguindanao, Southern
Philippines: A Content Analysis”. International Journal of Humanities and Social Science, 193-
199.
12
Naganag, E. M. (2019). Conflict resolution management of the indigenous people of upland
Kalinga, Northern Philippines. International Journal of Advanced Research in Management and
Social Studies, 8(5), 299-312.
13
Garcia, M. A. The Three-Dimensional Case Disposition in the Philippine Justice System: An
Interface.

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that the effects of mediation, conciliation, and arbitration are deemed more
effective. However, it also has a rehabilitative impact on the parties. Due to
the parties' willingness to resolve their disagreements amicably and at no
additional expense, resolution is made simple in these systems. Its impact on
the community under these conditions is more comprehensive and
considerate.
Another study concluded that the administration of disputes in the
cases of women is influenced by the time honored principle of their desire
for smooth interpersonal relationship” or “SIR”. The Lupon were able to
assist in clearing up backed-up court dockets, making the form of settlement
efficient. Although it is influenced by women's unwillingness to pursue their
claims due to numerous circumstances like economics, culture, and religion,
the efficiency of the Lupon varies depending on the nature of the case. Age,
social standing, religion, and level of education of women all had an impact
on how quickly conflicts were resolved and how aggressively they pursued
their cases.14
In another study conducted to selected barangays in the Municipality
of Badiangan, Iloilo, respondents said their Lupon Members performed
"Outstanding" in every category, indicating that they were proficient and
successful in carrying out their responsibilities. The results support the
Barangay Justice System's successful implementation, which helps to lessen
the backlog of cases in actual courts.15
Barangay Peace and Order Council are cooperative in the
maintenance of peace and order wherein the council sectors of most
barangays are potential mechanism of public safety.16 The barangay justice
system has the advantage of aiming to find a win-win solution and being

14
Sobradil, M. (2019, August). The Effectiveness of Barangay Pacification Council in Settling
Disputes on the Cases of Women. In International Conference on Public Organization (ICONPO).
15
Dofeliz, J. D., & Dela Peña, R. F. (2022). Level of performance of the Lupon members under
the barangay justice system as perceived by the constituents of the selected barangays in
Municipality of Badiangan, Iloilo, Philippines. Central Philippine University Multidisciplinary
Research Journal, 1(1), 154-169.
16
Habiatan, E. N. (2019). The barangay peace and order council of Cabagan,
Isabela. International Journal of Advanced Research in Management and Social Sciences, 8(10),
415-441.

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speedier and less expensive than the court system.17 It is a system intended to
improve the access to justice to those who would opt not to go through the
traditional, adversarial, and adjudicative litigation in the court and to allow
petty disputes arising from the Barangay level to be immediately resolved. It
has four-fold benefits: to unclog court dockets, achieve speedy disposition of
cases, enhance access to justice, and to involve the community in dispute
resolution. The Katarungang Pambarangay System benefits the parties by
affording them the discretion to make their own arrangements to resolve
their dispute in the Barangay without resorting to filing a case in court.
Thus, the Barangay serves as a government unit that not only involves
executive and legislative functions but also judicial functions. However, one
of the problems incurred includes that several barangay transactions are still
done manually such as filing and processing complaints at Katarungang
Pambarangay, a community-based mechanism for dispute resolution.
Some problems and obstacles in the implementation of community
justice practices in the Philippines include 1) lack of training in mediation
and laws related to the dispute; 2) a lengthy period of 30 days is required for
a dispute resolution process due to large numbers of disputes brought to the
system; and 3) an outdated community mediation law since its enactment in
1991. Community justice practices in the Philippines have faced a persistent
problem in the lack of personnel development in a systematic, continuous,
and recurrent manner. Moreover, there may also be issues concerning the
ethics of those personnel handling conflicts.

Conclusion and recommendations

The standards of ethics, competency and efficiency should equally
apply to all sectoral institutions, whether they be less fortunate or better in
life. Only by acquainting our people with ADR – not in theory but in reality
– can we show them its superiority and that they can be able to assert their

Tadiar, A. F. (2008). Impact of the Barangay Justice System on Decongesting Court Dockets
17

and Broadening Access to Justice: Looking Back and Forward. Phil. LJ, 83, 498.
Arthur P Autea, 'Country Update: The Philippines', (2018), 20, Asian Dispute Review, Issue 4, pp. 179-187

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full rights without going to court and thus incur minimal costs. On the issue
of lack of personnel development, there must be continuing program to
standardizing the service of our ADR institutions so we can engender in our
people trust in this new mechanism. This issue must first be addressed
before mainstreaming ADR so that they can be ready when the public is also
ready to embrace this efficient method of resolving conflict.

ADR is not just a different approach to our present conflict-resolution

paradigm, rather, it is part of our entire institutional machinery designed to
make our delivery of justice efficient and effective. Mainstreaming ADR is
therefore necessary not only to unclog case dockets in our courts and
prosecutorial offices.

More significantly, its mainstreaming compels the idea that in some

classes of cases, justice is served in middle grounds that enable compromise
and peaceful settlement, which would be less expensive and time efficient
for both parties, into the public consciousness. Our courts and offices will be
better able to administer justice if there is a larger public understanding of
ADR.

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i