Professional Documents
Culture Documents
2020
ONLINE AND
PRE-BAR REVIEW
PROGRAM
NOTES IN REMEDIAL LAW
ALTERNATIVE DISPUTE
RESOLUTION
BY
ATTY. GERARDO F. LARA
Bachelor of Laws
San Sebastian College - Recoletos
Managing Partner
TLLM and Associates Law Office
Book Author
Law Professor
Bar Reviewer
MCLE Lecturer
1|P a g e – U N A U T H O R I Z E D R E P R O D U C T I O N O F T H I S R E V I E W M A T E R I A L I S I L L E G A L A N D
T A N T A M O U N T T O I N T E L L E C T U A L P R O P E R T Y R I G H T S I N F R I N G E M E N T
PREPARED BY: ATTY. GERARDO F. LARA
ONLINE REVIEW PROGRAM
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CONTENTS
PART I -
1. General Concepts
2. Domestic Arbitration
3. International Commercial Arbitration
4. Foreign Arbitration
PART II -
PART I
1. GENERAL CONCEPTS
A. Introduction
Definitions
2.a. Conciliation – a neutral third party conveys information and attempts to improve direct
communication between parties. Role of conciliator is more passive than a mediator.
2|P a g e – U N A U T H O R I Z E D R E P R O D U C T I O N O F T H I S R E V I E W M A T E R I A L I S I L L E G A L A N D
T A N T A M O U N T T O I N T E L L E C T U A L P R O P E R T Y R I G H T S I N F R I N G E M E N T
PREPARED BY: ATTY. GERARDO F. LARA
ONLINE REVIEW PROGRAM
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2.b. Mediation – mediator facilitates communication and negotiation, and assists the parties in
reaching a voluntary agreement (settlement).
2.c. Arbitration – voluntary dispute resolution process where one or more arbitrators, appointed
by agreement of the parties (contract) or by submission, resolve a dispute by rendering an award.
2.e. Other ADR Forms – Pursuant to principle of Party Autonomy, parties may opt to use 1)
evaluation of third person, 2) negotiation (Atty Rita Linda V. Jimeno), and 3) others. Other forms
of ADR will follow Mediation procedures, unless combined with Arbitration in which case
Arbitration procedures will govern.
a. Party autonomy – Parties are free to make their own arrangements to resolve their disputes
(RA No. 9285, Ch. 1, Sec. 2)
b. Liberal interpretation in favor of ADR – The court shall have due regard to the policy of law in
favor of arbitration (RA 9285, Ch. 4, Sec. 25); where there in no rule under ADR law, court shall
resolve matter summarily and be guided by the letter and spirit of ADR (AM No. 07-11-08-SC,
Rule 1.13); any doubt should be resolved in favor of arbitration (LM Power Engineering Corp.
vs. Capitol Industrial, GR no. 141833, Mar. 26, 2003)
c. Competence-competence – Arbitral tribunal may initially rule on its own jurisdiction (AM No.
07-11-08-SC, Rule 2.2, Policy on Arbitration)
d. Principle of Separability – Arbitration clause shall be treated as an agreement independent of
the other terms (AM No. 07-11-08-SC, Rule 2.2); Even if the main contract is invalid, the
arbitration clause still remains valid and enforceable (Cargill, Phils., Inc. vs. San Fernando
Regala Trading, January 31, 2011)
e. Confidential Nature of ADR – Information obtained is privileged and confidential (RA No. 9285,
Ch. 2, Sec. 9[a]); includes records, evidence and arbitral award ((RA No. 9285, Ch. 4, Sec. 23)
Except, upon agreement, available to the public, involves crime, prove abuse or neglect, prove
3|P a g e – U N A U T H O R I Z E D R E P R O D U C T I O N O F T H I S R E V I E W M A T E R I A L I S I L L E G A L A N D
T A N T A M O U N T T O I N T E L L E C T U A L P R O P E R T Y R I G H T S I N F R I N G E M E N T
PREPARED BY: ATTY. GERARDO F. LARA
ONLINE REVIEW PROGRAM
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or disprove professional misconduct against mediator or a party ((RA No. 9285, Ch. 2, Sec.
11[a])
2. MEDIATION
1. Mediation – facilitates communication and negotiation, and assists parties in reaching voluntary
agreement (RA No. 9285, Ch. 1, Sec. 3[q])
a. Ad hoc Mediation – Parties agree upon a form of mediation without referring to any
mediation institution (DOJ Circular No. 98, s.2009)
b. Institutional Mediation – Mediation process conducted under the rules of a mediation
institution (Ibid.)
3. Place of Mediation – Parties are free to agree on the place; or most convenient.
Court-Annexed Mediation
1. Conducted under the auspices of the court, after the court has acquired jurisdiction (usu. during pre-
trial)
Court-Referred Mediation
1. Ordered by the court, but conducted according to parties’ agreement, may be a contract or by
submission
3. Happens during or even after pre-trial phase (principle of liberal interpretation in favor of ADR)
2. DOMESTIC ARBITRATION
1. Governing laws – RA No. 876 (1953), RA No. 9285 (2004), UNCITRAL Model Law, Civil
Code (Compromises and Arbitrations)
2. Domestic Arbitration – Arbitration that is not international as defined in Article 1(3) of
the Model Law (RA No. 9285, Ch. 5, Sec. 32)
3. Kinds of Domestic Arbitration – Ad Hoc and Institutional (DOJ Circular 98, s.2009)
4|P a g e – U N A U T H O R I Z E D R E P R O D U C T I O N O F T H I S R E V I E W M A T E R I A L I S I L L E G A L A N D
T A N T A M O U N T T O I N T E L L E C T U A L P R O P E R T Y R I G H T S I N F R I N G E M E N T
PREPARED BY: ATTY. GERARDO F. LARA
ONLINE REVIEW PROGRAM
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Question: Can a capacitated person knowingly arbitrate with an incapacitated person, but later
on repudiate the arbitral award for lack of capacity of the other party?
Answer: No, the objection on the ground of incapacity can be taken only in behalf of the person
so incapacitated. (RA No. 876, Sec. 2) Hence, the capacitated person is estopped from impuning
the validity of the arbitration agreement.
9. Formal Requirements of Arbitration Agreement – In writing and subscribed by the party. The
making of contract or submission for arbitration is deemed consent of parties to the jurisdiction
of the Regional Trial Court of the province or city where parties reside. (RA No. 876, Sec. 4)
Answer: As a rule, a corporate representative who did not personally bind himself to an
arbitration agreement cannot be forced to participate. He is generally not considered a party to
that agreement by reason of separate corporate fiction. However, in cases alleging solidary
liability with the corporation or praying for the piercing of corporate veil by reason of bad faith
or malice on the part of the representative, he should be made to participate in the arbitration
proceedings to determine if the corporation’s separate fiction should be disregarded and to
determine the extent of his liability. (Lanuza vs. BF Corporation, G.R. No. 174938, October 1,
2014)
10. Place of Arbitration – Parties are free to agree on the place of arbitration. Otherwise, the place of
arbitration shall be in Metro Manila, unless the arbitral tribunal decides on different place of
arbitration considering the circumstances of the case and convenience of parties. The arbitral
tribunal may, unless otherwise agreed by parties, meet at any place it considers appropriate for
consultation, hearing witnesses or parties, inspection of goods, property or documents (RA No.
9285, Ch. 4, Sec. 30).
11. Qualifications of Arbitrators –
a. Of legal age
b. Not be related by blood or marriage
c. No financial, fiduciary or other interest
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T A N T A M O U N T T O I N T E L L E C T U A L P R O P E R T Y R I G H T S I N F R I N G E M E N T
PREPARED BY: ATTY. GERARDO F. LARA
ONLINE REVIEW PROGRAM
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d. No personal bias
e. Not act as champion of one party or advocate of his cause. (RA No. 876, Sec. 10)
Nationality or professional qualification is not required, unless parties specify in their arbitration
agreement (AM No. 07-11-08-SC, Part 2, Rule 7, Rule 7.4)
12. Referral to Arbitration – A court before which an action is brought (or pending) in a matter which
is the subject matter of an arbitration agreement shall, if at least one party so requests not later
than the pre-trial conference, or upon the request of both parties thereafter, refer the parties to
arbitration unless the court finds the arbitration agreement null and void, inoperative or
incapable of being performed. (RA No. 9285, Ch. 4, Sec. 24; AM No. 07-11-08-SC, Rule 4.2[A])
13. RULE 4 (AM No. 07-11-08-SC) REFERRAL TO ADR (Under Special Rules of Court on ADR)
1. Who makes the request – Any party to a pending action in violation of the arbitration
agreement
2. When to make request – Where an arbitration agreement exists before (but) the action is
filed, request shall be not later than pre-trial conference. After pre-trial, court will act on the
request for referral with the agreement of all the parties.
3. Contents of request – It shall be in the form of a MOTION, attaching an authentic copy of
arbitration agreement; with notice of hearing and served upon the respondent.
4. Comment/Opposition – Filed 15 days from service of the motion, which show:
a. There is no agreement
b. Agreement is null and void
c. Subject matter not capable of settlement by arbitration
14. Stay of Civil Action – If any suit or proceeding be brought upon an issue arising out of an
arbitration agreement, the court in which such suit or proceeding is pending, upon being
satisfied that it is referable to arbitration, shall stay the action or proceeding until an arbitration
has been had in accordance with the terms of the arbitration agreement: Provided, the applicant
is not in default (RA No. 876, Sec. 7; AM No. 07-11-08-SC, Rule 4.5)
15. Court action under Special Rules of Court on ADR – After hearing, the court shall stay the action
and refer parties to arbitration if it finds prima facie, based on pleading and other documents
submitted by parties, that there is an arbitration agreement and the conflict is capable of
settlement by arbitration. Otherwise, the court shall continue with judicial proceedings (AM No.
07-11-08-SC, Rule 4.5).
16. Meaning of “stay” the action – To stay means, for the court to suspend judicial proceedings and
set the case at a later date.
Question (BAR): The Makati RTC dismissed the case finding that there is an arbitration
agreement between the parties. Is the court’s action correct? What is the remedy of the
aggrieved party?
Answer. No. The court shall not dismiss, but stay the action and refer the case to arbitration
if it finds prima facie that there is an arbitration agreement and the conflict is capable of
settlement by arbitration (AM No. 07-11-08-SC, Rule 4.5). The remedy of the aggrieved party
is to file a motion for reconsideration and, after denial thereof, a petition for certiorari (AM
No. 07-11-08-SC, Rule 4.6).
6|P a g e – U N A U T H O R I Z E D R E P R O D U C T I O N O F T H I S R E V I E W M A T E R I A L I S I L L E G A L A N D
T A N T A M O U N T T O I N T E L L E C T U A L P R O P E R T Y R I G H T S I N F R I N G E M E N T
PREPARED BY: ATTY. GERARDO F. LARA
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17. 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 subject of a motion for reconsideration and/or a petition for certiorari
(AM No. 07-11-08-SC, Rule 4.6).
18. Motion to Confirm Award – Within one month after the award is made, any party may apply to
the court for an order confirming the award, unless the award is vacated, modified or corrected
(RA No. 876, Sec. 23).
19. RULE 11(AM No. 07-11-08-SC): Confirmation, Correction or Vacation of Domestic Arbitral Award
a. Any party to a domestic arbitration may petition the court for ~.
b. When to request:
i. Confirmation – At any time after the lapse of thirty (30) days from receipt by petitioner
of the arbitral award.
ii. Correction/Modification – Not later than thirty (30) days from receipt of the arbitral
award.
iii. Vacation – Not later than thirty (30) days from receipt of the arbitral award (AM No. 07-
11-08-SC, Rule 11.2)
20. Execution of Confirmed Arbitral Award - The Special ADR Rules are silent on procedure for
execution. The Supreme Court held that the court’s power to confirm an arbitral award is deemed
to include the power to order its execution under the doctrine of necessary implication, which
states that every statutory grant of power, right or privilege is deemed to include all incidental
power, right or privilege. (DENR vs. United Planners Consultants, Inc., GR No. 21281, February
23, 2015).
21. Motion to Vacate Award – Grounds;
Award procured by corruption, fraud, undue means
Evident partiality of arbitrators
Misconduct or disqualification of arbitrators
Arbitrator exceeded his powers (RA 876, Sec. 24; AM No. 07-11-08-SC, 11.4)
22. Appeals – An agreement to refer a dispute to arbitration shall mean that the arbitral award shall
be final and binding. Hence a party to an arbitration is precluded from filing an appeal or petition
for certiorari questioning the merits of arbitral award (AM No. 07-11-08-SC, Rule 19.7). The court
can only vacate or set aside the decision of arbitral tribunal upon clear showing that it suffers
from grounds for vacating an arbitral award.
The court shall not set aside or vacate the arbitral award 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 (AM No. 07-11-08-SC, Rule 19.10)
7|P a g e – U N A U T H O R I Z E D R E P R O D U C T I O N O F T H I S R E V I E W M A T E R I A L I S I L L E G A L A N D
T A N T A M O U N T T O I N T E L L E C T U A L P R O P E R T Y R I G H T S I N F R I N G E M E N T
PREPARED BY: ATTY. GERARDO F. LARA
ONLINE REVIEW PROGRAM
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There is no law granting the judiciary authority to review the merits of an arbitral award. (Fruehauf vs.
Technology Electronics Assembly and Management Pacific Corporation, G.R. no. 204197, November
23, 2016)
Question: Why is this called international when the place of arbitration is in the Philippines?
Answer: The international element here refers to the parties having their arbitration in the
Philippines. These parties to the arbitration may be between a domestic person/corporation and a
foreign person/corporation, or between foreign persons/corporations, as long as the place of
arbitration is the Philippines.
Note; Foreign person/corporation here refers to “International Party” which means 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 which has its place of business in the Philippines
(Definitions, RA No. 9285, Ch. 1, Sec. 3 [p]).
7. Referral to Arbitration – A court before which an action is brought (or pending) in a matter which is
the subject matter of an arbitration agreement shall, if at least one party so requests not later than the
pre-trial conference, or upon the request of both parties thereafter, refer the parties to arbitration unless
the court finds the arbitration agreement null and void, inoperative or incapable of being performed.
(RA No. 9285, Ch. 4, Sec. 24)
8|P a g e – U N A U T H O R I Z E D R E P R O D U C T I O N O F T H I S R E V I E W M A T E R I A L I S I L L E G A L A N D
T A N T A M O U N T T O I N T E L L E C T U A L P R O P E R T Y R I G H T S I N F R I N G E M E N T
PREPARED BY: ATTY. GERARDO F. LARA
ONLINE REVIEW PROGRAM
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8. Liberal interpretation in favor of ADR – The court shall have due regard to the policy of law in favor
of arbitration (RA 9285, Ch. 4, Sec. 25); any doubt should be resolved in favor of arbitration (LM Power
Engineering Corp. vs. Capitol Industrial, GR no. 141833, Mar. 26, 2003)
9. Appointing Authority – By agreement of the parties, whether in contract or submission. But in ad hoc
arbitration, default appointment of an arbitrator is made by the IBP President or his duly authorized
representative. (RA No. 9285)
10. Place of Arbitration – Parties are free to agree on the place of arbitration. Otherwise, the place of
arbitration shall be in Metro Manila, unless the arbitral tribunal decides on different place of arbitration
considering the circumstances of the case and convenience of parties. The arbitral tribunal may, unless
otherwise agreed by parties, meet at any place it considers appropriate for consultation, hearing
witnesses or parties, inspection of goods, property or documents (RA No. 9285, Ch. 4, Sec. 30).
11. Language of the Arbitration – Parties are free to agree on the language or languages to be used in the
arbitral proceedings, failing such agreement, the language shall be English in international commercial
arbitration (RA No. 9285, Ch. 4, Sec. 31)
Note: General rules in domestic and international commercial arbitration are the same since RA No.
9285, Ch. 5, Sec. 33, states that Sections 22 to 31 of Chapter 4 apply to domestic arbitration.
5. FOREIGN ARBITRATION
2. Applicable laws - RA No. 9285, Ch. 7, Sec. 42; UNCITRAL Model Law; New York Convention
Question: Can a foreign corporation not licensed to do business in the Philippines sue to enforce a
foreign arbitral award?
9|P a g e – U N A U T H O R I Z E D R E P R O D U C T I O N O F T H I S R E V I E W M A T E R I A L I S I L L E G A L A N D
T A N T A M O U N T T O I N T E L L E C T U A L P R O P E R T Y R I G H T S I N F R I N G E M E N T
PREPARED BY: ATTY. GERARDO F. LARA
ONLINE REVIEW PROGRAM
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Answer: Yes. The ADR of 2004 provides that the party opposing a petition for recognition and
enforcement of the foreign arbitral award may raise only those grounds under Article V of the New York
Convention, and these exclusive grounds do not specify the capacity to sue of the party seeking the
award’s recognition and enforcement. When a party enters into a contract with foreign arbitration
clause and submits to arbitration, it becomes bound by the contract, the arbitration proceedings and its
result, conceding the capacity of the other party to enter into a contract, participate in the arbitration
and cause the implementation of the result (Tuna Processing, Inc. vs. Philippine Kingford, Inc. GR No.
185582, February 29, 2012).
PART II
1. Governing Law – The Supreme Court in an En Banc resolution on September 1, 2009 approved the
Special Rules of Court on Alternative Dispute Resolution, that took effect after publication in three (3)
newspapers of general circulation on October 30, 2009 (AM No. 07-11-08-SC, Introductory Part)
2. Subject Matters –
3. Nature of Proceedings in ADR – Special Proceedings (AM No. 07-11-08-SC, Rule 1.2)
4. Kind of Proceedings in ADR – Summary hearing (AM No. 07-11-08-SC, Rule 1.3)
5. Pleadings Filed in ADR – Petition, except Referral to ADR and Confidentiality/Protective Orders
which are initiated by motion.
6. Verification and Certification – All pleadings must be verified and certified, except Motion to Refer
the Dispute to ADR which must be verified (AM No. 07-11-08-SC, Rule 1.4, 1.5)
7. Prohibited Submissions –
10 | P a g e – U N A U T H O R I Z E D R E P R O D U C T I O N O F T H I S R E V I E W M A T E R I A L I S I L L E G A L A N D
T A N T A M O U N T T O I N T E L L E C T U A L P R O P E R T Y R I G H T S I N F R I N G E M E N T
PREPARED BY: ATTY. GERARDO F. LARA
ONLINE REVIEW PROGRAM
c m a
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i. Motion to dismiss
ii. Motion for bill of particulars
iii. Motion for new trial or reopening
iv. Petition for relief from judgment
v. Motion for extension
vi. Rejoinder to reply
vii. Motion to declare in default
viii. Other pleadings disallowed by Special ADR Rules.
The court shall motu proprio order dilatory pleading/motion expunged from records (AM No. 07-11-
08-SC, Rule 1.6)
7. No Summons Required – The court acquires authority to act on the petition or motion upon proof of
jurisdictional requirements: respondent was furnished copy thereof and notice of hearing (AM No. 07-
11-08-SC, Rule 1.8)
Technical rules on service of summons do not apply to the proceedings under the Special ADR Rules
(AM No. 07-11-08-SC, ibid.)
8. Spirit and Intent of the Special ADR Rules – In case no specific rule is provided under Special ADR
Rules, the court shall resolve the matter summarily and be guided by the spirit and intent of the Special
ADR Rules and the ADR Laws (AM No. 07-11-08-SC, Rule 1.13)
a) Confirmation – At any time after the lapse of thirty (30) days from receipt by petitioner of
the arbitral award.
b) Correction/Modification – Not later than thirty (30) days from receipt of the arbitral award.
c) Vacation – Not later than thirty (30) days from receipt of the arbitral award (AM No. 07-11-
08-SC, Rule 11.2)
3. Venue – Regional Trial Court of the place in which one of the parties is doing business, any of the
parties resides, or where arbitration proceedings were conducted (AM No. 07-11-08-SC, Rule 11.3)
4. Grounds to Vacate -
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T A N T A M O U N T T O I N T E L L E C T U A L P R O P E R T Y R I G H T S I N F R I N G E M E N T
PREPARED BY: ATTY. GERARDO F. LARA
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5. Court Action - Unless a ground to vacate is fully established, the court shall confirm the award.
An arbitral award enjoys 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 opposition, the court shall confirm or vacate the arbitral award. The court
shall not disturb the tribunal’s finding of facts and/or interpretation of law.
RULE 12. Recognition and Enforcement, or Setting Aside of International Commercial Arbitration –
1. Who may request – Any party to international commercial arbitration in the Philippines
2. When to file – For recognition and enforcement, anytime from receipt of the award; For petition to
set aside, may only be filed within three (3) months from receipt by petitioner.
Petition to set aside can no longer be filed after the lapse of three (3) months. Estoppel applies in this
case.
12 | P a g e – U N A U T H O R I Z E D R E P R O D U C T I O N O F T H I S R E V I E W M A T E R I A L I S I L L E G A L A N D
T A N T A M O U N T T O I N T E L L E C T U A L P R O P E R T Y R I G H T S I N F R I N G E M E N T
PREPARED BY: ATTY. GERARDO F. LARA
ONLINE REVIEW PROGRAM
c m a
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5. Governing Law – 1958 New York Convention and Special ADR Rules. But the court, on grounds of
comity and reciprocity, may recognize and enforce a foreign arbitral award in a country not signatory
to the New York Convention as if it were a Convention Award.
6. Court Action – Presumption that a foreign arbitral award was made and released in due course of
arbitration
Court to recognize and enforce a foreign arbitral award, unless a ground to refuse recognition and
enforcement is fully established
In resolving the petition, the court shall either (a) recognize and enforce of (b) refuse to recognize and
enforce the arbitral award.
The court shall not disturb the arbitral tribunal’s finding of facts and/or interpretation of law.
Note: The court has no power to confirm, vacate, set aside, or annul an arbitral award rendered by a
foreign arbitral tribunal. Hence the court can only either 1) recognize and/or enforce or 2) refuse to
recognize and enforce such foreign arbitral award.
2. SPECIALIZED ADR
2. Construction Industry Arbitration Commission (CIAC) (EO No. 1008, Feb. 4, 1985)
4. ADR in the Executive Department (EO No. 523, Mar. 22, 2006)
13 | P a g e – U N A U T H O R I Z E D R E P R O D U C T I O N O F T H I S R E V I E W M A T E R I A L I S I L L E G A L A N D
T A N T A M O U N T T O I N T E L L E C T U A L P R O P E R T Y R I G H T S I N F R I N G E M E N T
PREPARED BY: ATTY. GERARDO F. LARA
ONLINE REVIEW PROGRAM
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Question: Are there distinctions between mediation under RA No. 9285 (ADR Law of 2004) and
Specialized ADR?
Answer: Yes.
RA No. 9285 - civil or commercial contracts; Specialized ADR - special laws in specific contracts or
relations.
RA No. 9285 - voluntary freedom of agreement; Specialized ADR - limited and involuntary
arrangement, jurisdiction of mediator is provided by law
---N O T H I N G F O L L O W S---
14 | P a g e – U N A U T H O R I Z E D R E P R O D U C T I O N O F T H I S R E V I E W M A T E R I A L I S I L L E G A L A N D
T A N T A M O U N T T O I N T E L L E C T U A L P R O P E R T Y R I G H T S I N F R I N G E M E N T
PREPARED BY: ATTY. GERARDO F. LARA
ONLINE REVIEW PROGRAM
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