Abstract

"Justice delayed is Justice denied."— William Ewart Gladstone

It has been almost 70 years now since Republic Act No. 876, or the
Arbitration Law was approved by the Philippine Congress on June 19,
1953. The alternative dispute resolution (ADR) system in the Philippines,
despite being rooted firmly in the Civil Code, and bolstered by Republic
Act No. 9285 or the Alternative Dispute Resolution Act of 2004, was
mostly overlooked as a viable means of settling disputes outside the court
system.

Etched in the highest law of our land (the Constitution) 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. As such, 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.

The purpose of this term paper is to present the current status and
development of ADR in the Philippines. The main highlight of this paper
is the presentation of various National Government Agencies that adopts
ADR system in settling disputes within. This will further lay down the
works of the Office of the Alternative Dispute Resolution (OADR) under
the Department of Justice (DOJ) and its initiatives as well as recent
jurisprudence adopting the Revised Guidelines of Court Annexed
Mediation(CAM) and Judicial Dispute Resolution (JDR) which took
effect on March 2021. Also, this paper presents the current jurisprudence
on the Construction Industry applying the developments of ADR system
and of course, the Katarungang Pambarangay Law.
Introduction

Disputes, whether between natural or juridical persons, have

always been part of the human condition. Settling disputes involving the
rights and interests of two opposing parties in a speedy and judicious
manner has traditionally been the function of the court system. However,
during the twentieth century, the court system of most countries around
the world has become “severely crowded”, particularly in terms of “civil
litigation” or the adjudication of issues involving civil law (Hartley,
2002), such that the need to have a speedy, viable, and credible means of
settling disputes between persons has become a vital concern. This
concern is particularly felt in the Philippines, where, according to
Supreme Court Senior Associate Justice Antonio Carpio, around one in
five pending court cases, or twenty-one percent, are resolved within two
to five years, while thirteen percent take more than five years to finish
(Carpio, 2012). At present, there is a critical need to have alternative
means of resolving legal issues between parties before they are brought to
trial to declog court dockets, and Alternative Dispute Resolution (ADR)
mechanisms are rapidly gaining ground because of their comparative ease
of use and shorter procedures.1

ADR, as it is known today, consists of a variety of mechanisms or

techniques designed to assist opposing parties (i.e., pertaining to disputes
between individuals and groups) in arriving at a mutually beneficial
agreement. These include arbitration, mediation, conciliation, med-arb (a
combination of mediation and arbitration), mini-trial, and early neutral
evaluation. Each of these techniques serves a specific purpose: early
neutral evaluation allows each party to determine the strength of his or
1
Frances Jeanne L. Sarmiento, De La Salle University, “To litigate or to settle: Is
Alternative Dispute Resolution (ADR) the answer?” 2004
her position or claim through the assistance of an impartial evaluator; a
mini-trial is a non-binding proceeding where the parties state their
respective claims and positions before a judge, who then issues an
opinion on the matter to assist the parties in determining the probable
outcome before it is brought to court. Arbitration allows the parties to
appoint an individual or a panel of impartial experts who will render a
decision on their opposing claims. Conciliation directs the parties to
communicate with each other and arrive at a mutually beneficial solution
to their dispute, while mediation provides a neutral setting that will allow
the parties to arrive at a solution that will meet their unique circumstances

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

The relative ease and shorter period of resolving disputes outside

the court system have led to a growing demand for ADR methods to be
adopted.

2
Office of the President, CREATING AN ARBITRATION MACHINERY FOR THE PHILIPPINE
CONSTRUCTION INDUSTRY, Exec. Ord. No. 1008, (Feb. 4, 1985) (Phil.)
Current Status and Development of ADR in the Philippines

1. Office of the Alternative Dispute Resolution (OADR) under the

Department of Justice (DOJ3)

Not known to many, there is an OADR under DOJ that is silently

working and judiciously promoting the ADR system. Let us get to know
first this government agency.

The Office for Alternative Dispute Resolution (OADR) is an attached

agency of the Department of Justice created pursuant to Republic Act
(R.A.) No. 9285 or the Alternative Dispute Resolution (ADR) Act of
2004. It is mandated to promote, develop and expand the use of ADR in
the private and public sectors; assist the government in monitoring,
studying and evaluating the use of ADR by the public and private sectors;
and recommend to Congress needful statutory changes to develop,
strengthen and improve ADR practices in accordance with world
standards.

Its mission is to promote and institutionalize the effective and ethical

use and practice of ADR in the country. Its vision, on one hand, is to
achieve an enlightened society that rises above conflicts and empowers
parties in making arrangements to settle their own disputes that is fair and
just for all. They are committed to promote, develop and expand the use
of ADR in the public and private sectors. As OADR strive to be a world-
class, dynamic policy-making body in promoting the effective and ethical
use of ADR in the country, it commit to:

3
https://www.doj.gov.ph/office-for-alternative-dispute-resolution.html
  Deliver quality services relating to promotion, training,
accreditation and certification, policy and development of ADR use
in the public and private sectors;
 Comply with applicable statutory and regulatory requirements; and
 Continually improve our organization's systems and approaches to
ensure the highest level of satisfaction of all our stakeholders.

For Calendar Year 2021, the following are the highlights of

accomplishments of OADR4 among others, to wit:

1. Online ADR trainings conducted via online platforms due to

pandemic-related risks and constraints. Participants were from the
justice, agriculture, environment, trade, finance, insurance, labor,
housing, education and defense sectors. The KP Course trained the
members of Lupong Tagapamayapa in all six (6) Justice Zones
under the Justice Sector Convergence Program;
2. The OADR also assisted in the delivery of similar courses to the
cities of Valenzuela and Manila as well as the Local Government
Academy. In recognition of OADR’s efforts, the Office was
awarded with the “CapDev Game Changer Award” on 21
December 2021 by the Department of the Interior and Local
Government (DILG) among its other partners;
3. The OADR continued to efficiently implement DOJ Circular No.
49, s. 2012, governing the accreditation of ADR providers and
training standards for ADR practitioners. The Office received and
completed in 2021 the processing of fifty-seven (57) applications
for accreditation within the prescribed periods.

4
https://www.doj.gov.ph/files/oadr/2022/OADR%20Yearend%20Report%202021.pdf
 This shows that the development of ADR in the Philippines is
consistently growing thru the efforts of the OADR. Attached-hereto as
Appendix A are the 2022 Calendar of ADR Orientation Seminars and
Trainings for the reader’s perusal.

2. Mines and Geosciences Bureau (MGB) shifts to new Alternative

Dispute Resolution for mining cases5

This headline of an online article was published in the MGB website

on August 7, 2017.

The Mines and Geosciences Bureau (MGB) adopted a new approach

in resolving mining cases to potentially create a great impact in
increasing access to justice and a speedy resolution of mining cases. The
MGB now uses a two-step Alternative Dispute Resolution (ADR) process
that includes mediation, followed by arbitration. A separate Stand-alone
Rules for the ADR processes shall also be designed, taking into
consideration Section 15 of the current Rules on Pleading, Practice and
Procedure before the Panel of Arbitrators (POA) and the Mines
Adjudication Board (MAB).

The two-step ADR process was the outcome of the five-day seminar-
workshop attended by MGB personnel, as a prelude to craft the ADR
Rules and Guidelines to resolve mining disputes and controversies other
than by adjudication of any magistrate, court or tribunal, in adherence to
settling mining conflicts and disputes amicably, as mandated by Republic
Act No. 9285, otherwise known as the ADR Law.

Pursuant thereto, Executive Order (EO) No. 97 and Department of

Environment and Natural Resources Administrative Order (DAO) No.
5
https://mgb.gov.ph/2015-05-13-02-02-11/mgb-news/562-mgb-shifts-to-new-alternative-dispute-
resolution-for-mining-cases
2005-18 in re: Adoption of Alternative Dispute Resolution (ADR)
Principles and Procedures in the Resolution of Appropriate Environment
and Natural Resources Conflicts, were issued.

This is a clear manifestation that the ADR System is being

incorporated on the mainstream government processes. The DENR thru
the MGB is advancing the use of ADR system to solve disputes arising in
the mining industry for speedy resolution of justice.

3. Philippines: Revised guidelines on court-annexed mediation and

judicial dispute resolution in civil cases take effect on 1 March
20216

This article published online can also be cross-referenced with that of

the Supreme Court issuance under Administrative Matter No. 19-10-20-
SC or the 2020 Guidelines for the Conduct of Court-Annexed Mediation
(CAM) and Judicial Dispute Resolution (JDR) in Civil Cases.

This is also an update as to the status of ADR in court proceedings and

a revolutionary development wherein there are actions to consider, such
as but not limited to the following: (1) given the above developments,
clients who plan to initiate a suit should consider whether their cases will
be the subject of mandatory CAM, as well as the timeline when CAM
will happen (i.e., only after pre-trial); (2) the non-extendible 30 calendar
days for CAM is a welcome development, as it mitigates the usual delays
brought about by this process; (3) clients with pending cases may want to
consider exploring the possibility of requesting that their cases be referred
to CAM and JDR, if settlement is an option; and (4) clients should also
keep in mind that representatives attending CAM or JDR should have the

6
https://globallitigationnews.bakermckenzie.com/2021/06/01/philippines-revised-guidelines-on-court-
annexed-mediation-and-judicial-dispute-resolution-in-civil-cases-take-effect-on-1-march-2021/
authority to settle without need of further approval by or notification to
the principal.

Though this topic has been exhausitvely discussed by our intelligent

and dynamic ADR proffesor Atty. Marlouis Planas in our class, there is
still a need to write it on this term paper as it is also one of the
developemnts of ADR in the Philippines.

4. Supreme Court limits review of the Construction Industry

Arbitration Commission (CIAC) award only to legal questions7

Revised Rules of Procedure Governing Construction Arbitration states

that the CIAC shall have original and exclusive jurisdiction over disputes,
which arose from, or is connected with contracts entered into by parties
involved in construction in the Philippines whether the dispute arose
before or after the completion of the contract, or after the abandonment or
breach thereof. These disputes may involve government or private
contracts.

The disputes referred to in Section 2.1 of Rule 2 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, fabricator, project manager,
design professional, consultant, quantity surveyor, bondsman or issuer of
an insurance policy in a construction project.8

7
https://pdrci.org/supreme-court-limits-review-of-ciac-award-only-to-legal-questions-2020-oct/
8
Section 35, R.A. 9285; bold text amended by CIAC Resolution No. 06-2017
 There are jurisprudence that marks the current status and development
of ADR in the Philippines, specifically on the Construction Industry. To
cite a few, we have the case of Wyeth Philippines, Inc. v. Construction
Industry Arbitration Commission, G.R. No. 22004548 dated June 22,
2020 and the case of Department of Public Works and Highways
(DPWH) v. Italian-Thai Development Public Company, Ltd. (ITD) et al.,
G.R. No. 235853 dated July 13, 2020.

4.1Wyeth Philippines, Inc. v. Construction Industry Arbitration

Commission9

On this case, the Supreme Court stressed that a CIAC arbitral award
may be appealed only on pure questions of law, and its factual findings
should be respected and upheld. To warrant a review, exceptions must
pertain to the tribunal’s conduct and the qualifications of the arbitrator,
and not to its errors of fact and law, misappreciation of evidence, or
conflicting findings of fact. Without a showing of any of the exceptional
circumstances justifying factual review, the dispute is better left to the
CIAC, a quasi-judicial body with the technical competence to resolve
construction disputes.

4.2Department of Public Works and Highways (DPWH) v. Italian-

Thai Development Public Company, Ltd. (ITD) et al10

Here, the Supreme Court affirmed that arbitral awards of the

Construction Industry Arbitration Commission (CIAC) are final and
unappealable except on pure questions of law. In the absence of
exceptional circumstances, the Supreme Court must uphold the integrity
9
G.R. No. 22004548 dated June 22, 2020
10
G.R. No. 235853 dated July 13, 2020.
of the arbitration and ensure that parties do not undermine the process
they voluntarily engaged themselves in.

5. Katarungang Pambarangay under RA 7160 or the Local

Government Code

Community justice in the Philippines takes the form of a village

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 barangay mediation process.
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.11

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
11
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.
more systematic processes for amicable settlement whose result would
become more acceptable to the disputing parties.

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

The Katarungang Pambarangay Law 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

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.
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 ADR system is now reaching the spotlight due to delayed and
clogged court dockets in the Philippines. With the application of pertinent
ADR Laws as exhaustively discussed above and the efforts done by the
OADR together with the DOJ, the ADR system is now on the mainstream
public ready to embrace the effective and efficient method of resolving
conflict. 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.

With this, it becomes apparent that the way forward involves a

three-pronged approach: judicious use of funds, information
dissemination and training, and policy making coupled with effective
implementation. These three strategies can be brought together through
the collaborative efforts of the three branches of government. The power
of the legislative department in enacting the general appropriations act
(GAA) may be harnessed by the executive and judicial branches in two
ways: to seek fund allocations for public awareness and training programs
to popularize ADR, and to install a robust implementation scheme in the
courts and in agencies that utilize ADR as a tool for public service. The
legislature may also enact laws that will further integrate ADR into the
mainstream of business and legal processes to assist the executive
department and the judiciary in their efforts to propagate the advantages
of ADR. These efforts will ultimately redound to the public welfare, and
will be instrumental in nurturing socio-economic growth through the
development of a robust and efficient system of law, order, and justice in
the country.