The Arbitral Tribunal
appeals. That is, once the arbitrators are appointed, their appointment cannot be
The disputing parties are allowed to decide the number of arbitrators they wish to
handle their dispute. Should they be unable to decide, three (3) arbitrators will be
assigned.
A person’s or entity’s nationality should not be a reason why they cannot be selected
as arbitrator, unless agreed upon by both parties.
Disputing parties can decide the procedure of selecting their arbitrators, subject to
the conditions of the IRR.
If they cannot agree:
1. For an arbitration with three arbitrators, each party should appoint one and the
third will be appointed by the two previously selected arbitrators.
2. If one party cannot choose within thirty (30) days after receiving the request to
do so or the two arbitrators cannot agree on the third arbitrator within thirty
(30) days of appointment, the appointing authority will make the necessary
appointments upon request of any party.
3. For an arbitration with a sole arbitrator, if the parties are unable to select an
arbitrator, the appointing authority will make the selection upon request of any
party.
Once an appointment procedure has been selected, any party can request the
appointing authority to make the appointments if:
1. A party fails to follow procedure, or
2. The parties, or two arbitrators, cannot reach the agreement expected of them,
or
3. A third party, including an institution, fails to perform any function entrusted to
it per terms of the agreed procedure
The appointment of arbitrators is not subject for motions for reconsideration nor
contested.
Grounds for Challenge
When a person is informed of their appointment as arbitrator, they must reveal any
and all circumstances that could result in a justifiable doubt to their impartiality or
independence. Should the conflicts of interest arise later in the proceedings, they
should divulge them immediately.
Their appointment can then be challenged if these circumstances arise. Additionally,
the appointment can also be challenged if it is revealed that they do not possess the
qualifications required by the parties according to the appointment agreement.
Challenge Procedure
The parties can agree on the procedure for challenging an arbitrator. If they cannot
agree on the procedure, a party can send a written statement citing the reasons for
the challenge to the arbitral tribunal within fifteen (15) days of becoming aware of
such questionable circumstances.
When presented with a challenge, the challenged arbitrator can decide to withdraw
from their office. Otherwise, the arbitral tribunal will decide on the challenge.
If a challenge is not successful, the challenging party can then request the
appointing authority to decide on the challenge. The request must be made within
thirty (30) days of receiving the notice of rejection. This decision by the appointing
authority is immediately executory and not subject to motions for reconsideration
nor appeals.
While the aforementioned request is pending, the tribunal, including the challenged
member, can continue with the arbitral proceedings and make an award.
Any party may bring a petition under the challenge procedure to a court in
accordance with the Rules of Court or the Special ADR Rules.
Failure or Impossibility to Act
If an arbitrator is unable to perform their duties, their appointment terminates if they
withdraw from the office or if the parties agree to terminate. Otherwise, if there is an
argument regarding this termination, a party may request the appointing authority
to decide regarding the termination. This decision is immediately executory and not
subject to motions for reconsideration nor appeals.
Substitute Arbitrator
If an arbitrator is terminated through any of the above procedures or their personal
decision to withdraw, a substitute will be appointed based on the rules applied to
the arbitrator being replaced.
Conduct of Arbitration
All parties to an arbitration are treated equally. They are also given equal
opportunity to present their case.
The procedure of the arbitration process will be based on the agreement of both
parties. If they cannot agree, the arbitral tribunal will proceed with the arbitration
according to what they deem appropriate.
Similar to a judge at court, the tribunal has the power to determine the admissibility,
relevance, materiality, and weight of all evidence presented.
Venue
The arbitration parties can decide on the setting of their arbitration proceedings. If
they cannot agree, it will be conducted in Metro Manila, unless the arbitral tribunal
decides otherwise considering the circumstances of the case, including the
convenience of the parties.
The arbitral tribunal may also meet anywhere with the relevant participants for
consultation purposes, unless the parties have already agreed not to allow such.
Commencement
Arbitral proceedings start on the date when the request for the proceedings was
made unless the parties agreed otherwise.
Language
Regarding the language, the parties can agree on which ones they prefer. If they
cannot agree, the proceedings will be conducted in English. This will apply to any
written statement, hearing, award, decision, or any other communications during the
proceedings.
If necessary, a translation may be ordered by the tribunal into the language selected.
Presentation by the Parties
The claimant can present their side of the case during the period agreed by the
parties or determined by the arbitral tribunal. They must present the following:
1. the facts supporting their claim
2. issues
3. relief or remedy sought
The respondent, during the same time, will present their defense to each of the
above, unless the parties have a separate agreement regarding the required
elements of the defense.
During their statements, the parties may submit all relevant documents or add
reference to these documents or any other evidence they will submit.
Unless otherwise agreed, the parties may add to their statements during the course
of the proceedings, unless the arbitral tribunal considers it inappropriate.
The arbitral tribunal will decide whether to hold oral hearings for the presentation of
evidence or for oral argument, unless the disputing parties have a contrary
agreement. The tribunal may also decide whether the proceedings will be conducted
on the basis of documents and other materials.
If the parties have agreed that no hearings will be held, the arbitral tribunal may still
conduct them if requested by a party.
The disputing parties will be given sufficient advance notice of any hearing and of
any meeting of the tribunal for the purposes of inspection of goods, other property,
or documents.
All statements presented to the tribunal by one party will be communicated to the
opposing party. Any expert reports or evidentiary document crucial to the decision-
making of the tribunal will be communicated to the disputing parties as well.
Default
A party is considered to have defaulted if, without sufficient cause:
1. The claimant fails to communicate their statement of claim, the tribunal shall
terminate the proceedings.
2. The respondent fails to communicate their statement of defense, the tribunal
will continue with the proceedings, but without treating the lack of defense as
an outright admission of the claimants allegations.
3. Any party fails to appear at a hearing or produce documentary evidence, the
tribunal will continue with the proceedings and make an award on the basis of
the evidence available.
Assistance from Experts
1. Unless the parties have already prohibited it in agreement, if an expert is
required, the arbitral tribunal may:
2. Appoint one or more experts to assist them on specific issues; or
3. Require a party to give the expert all relevant information or grant access to any
relevant evidence for their inspection of said items
The arbitral tribunal or any party may also request for the appearance of said expert
at hearings to testify on the point in issue unless otherwise agreed by the parties.
Court Assistance
Additionally, they may also seek the assistance of the court in taking evidence. The
court may process said evidence according to their rules.
Regarding witnesses, the arbitral tribunal has the following powers:
1. Require any person to attend a hearing as a witness
2. Subpoena witnesses and documents
3. Require the retirement of any witness during the testimony of any other witness
Decision-Making in Arbitration
When the arbitration is conducted by a panel of more than one arbitrator, the
decision will be made based on a majority unless otherwise agreed by the parties.
Settlement
If, during the process of arbitration, the parties manage to settle the dispute, the
tribunal will terminate the proceedings. If requested by the parties and not objected
to by the tribunal, the settlement will be recorded in the form of an arbitral award on
agreed terms.
Such an award has the same status and effects as any other award on the merits of
the case.
Form and Contents of Award
The award must be done in writing and signed by the arbitral tribunal. If there is
more than one arbitrator, the signature of the majority will suffice as long as the
reason for the omission is stated.
It must contain the following: Within thirty (30) days from receipt of the award, unless otherwise agreed by both
parties, a party may request the tribunal to correct the award for errors in
1. The reason on which the award was granted; unless it was previously agreed by computation, clerical or typographical errors, or any similar errors.
the parties that the reasoning will not be given
They may also request the tribunal to provide an interpretation of a specific point in
2. Date and place of arbitration (The award is assumed to have been made at that the award.
place).
In both instances, the opposing party must be notified of these requests.
A signed copy must be delivered to each party.
If the tribunal decides that the request has merit, they must make the correction or
Termination of Proceedings give the interpretation within thirty (30) days from receipt of the request. If an
interpretation was requested and provided, the interpretation will become part of
The arbitration can be terminated based if: the award.

1. A final award has already been granted; or, The tribunal may also correct any errors they find themselves within thirty (30) days
2. The arbitral tribunal orders the termination of the proceedings. from the date of award.

The tribunal may order termination when: If a party finds a claim to have been omitted in the final award, they can make a
request to the tribunal to grant an additional award concerning this omission; unless
1. A claimant withdraws their claim; unless the respondent objects and the tribunal previously agreed otherwise. This must be done within thirty (30) days from the
recognized a legitimate on their part in obtaining a final settlement; receipt of the award and the opposing party must be notified of such a request.

2. The parties agree on the termination; or, The tribunal then has sixty (60) days to give an additional award if they find the
request justified.
3. The tribunal finds that continuation of the proceedings has become
unnecessary or impossible. If necessary, the tribunal may extend the set time limits as aforementioned.

When the arbitration is terminated, the mandate of the tribunal ends as well.

Nevertheless, the tribunal may hold the final award to make way for a hearing to
determine the costs and identify which party will shoulder these costs or set an
equitable division.

CHAPTER 2 - CAM and JDR

Post-Award Proceedings
Court-annexed meditation, judicial dispute resolution, and litigation are some of the
other forms of dispute resolution available in the country.
Court-Annexed Mediation
Court-Annexed mediation (CAM), as mentioned in a previous lesson, is a type of
meditation conducted under the supervision of the court. More specifically, court-
annexed mediation is a voluntary process conducted under the support of the court
by referring parties to the Philippine Mediation Center {PMC) Unit for the
settlement of their dispute, assisted by a mediator accredited by the Supreme Court.
The PMC was created under the Philippine Judicial Academy (PHILJA) through
Supreme Court Resolution A.M. No. 01-10-5-SC-PHILJA dated October 16, 2001.
Cases Covered by CAM
1. All ordinary civil cases, except those that cannot be settled under Article 2035 of
the New Civil Code, and including civil cases covered under the Rule on the
summary procedure.
2. All special civil proceedings, except for those covered by Rules of Court 63, 64,
65, 66, and 71.
3. In intestate proceedings, special proceedings for the settlement of estates
where the dispute concerns claim against the estate or the distribution or
partition of the estate.
4. All cases involving matters relating to support, custody, visitation, property
relations, guardianship of minor children, and other matters can be resolved
through a compromise agreement under the Family Code and other legislation.
5. Cases involving intellectual property and commercial or intra-corporate
disputes.
6. Environmental Cases, subject to the provisions of section 3 of Rule 3 of the
Environmental Procedure Rules (A.M. No. 09-6-8-SC)
Proceedings
The mediator has a maximum of thirty (30) calendar days to conclude the mediation
process without further extensions. The time begins on the date of the case being
referred for CAM.
Settlement
If a settlement is reached during CAM:
1. The parties, with the assistance of their counsel, must draft the compromise
agreement. The mediator will make resolution samples/templates available to
the parties to further guide them in the writing of this agreement.
2. Under the time frame specified in section 12, Part B of AM 19–10– 20 SC, the
PMCU shall send to the referring judge a Mediator’s Report on the outcome of
the mediation proceeding, as well as a copy of the settlement arrangement and
any attachments, if any.
3. The judge must review the Settlement Agreement attached to the Mediator’s
Report, if any, and after their evaluation, they may continue to:
 Approve the agreement and render judgment based on it;
 Disapprove the agreement for being contrary to law, morals, good,
customs, public order, or public policy, or upon a finding, based on a
verified motion by any party, and after hearing, that the mediation
proceeding or the preparation of the settlement agreement had been
attended by fraud, mistake, violence or intimidation; or
 Clarify the intentions of the parties if the court determines that the
agreement or any portion thereof is vague, defective, or
unenforceable, and direct them to amend the same accordingly.
In the circumstances mentioned in paragraphs (b) and (c), the court can decide
whether to refer the case to JDR or proceed to trial instead of disapproving or
amending the agreement.
If there is no settlement, the PMCU staff must send a Mediator’s Report to the court
detailing the mediation’s outcome within the time frame specified
The following circumstances will be considered a failure in CAM:
1. When the parties mediate in good faith but no agreement was reached by them
despite the efforts exerted by the assigned mediator; or
2. When either one or both parties fail to appear after they have started to
negotiate in a previous mediation conference wherein the mediator exerted
efforts to assist the parties in settling their dispute.
Mediator’s Report
The PMCU staff and the assigned mediator would ensure that the Mediator’s Report
is sent to the referring judge on schedule:
1. In case of settlement, after the signing of the compromise agreement;
2. In case any of the parties refuse to mediate, on the date of such refusal;
3. In case of refusal to settle before the end of the mediation period, after the
parties indicate their desire to terminate the mediation proceeding; or
4. In case the parties fail to settle within the mediation period, after the lapse of
the said period.
There is refusal to mediate when one or both parties:
1. Fail to show up for at least two consecutive mediation sessions;
2. Reject or fail to pay mediation fees; or
3. Refuse to engage in the mediation proceedings.
Determination of CAM Judgment
To differentiate them from decisions based on compromised agreements entered
into during JDR, judgments approving the parties’ compromise agreements must
include a statement that they were made by CAM. For documentation purposes,
copies of said judgment must be submitted to PMCU.
Judicial Dispute Resolution
Judicial dispute resolution (JDR) is a procedure in which a judge (referred to as
the JDR Judge) uses conciliation, mediation, or early neutral appraisal to settle a
case before it goes to trial.
Neutral or early neutral appraisal or evaluation is detailed in Article 7.6 Rule 2 of
the IRR of RA 9285. It is 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.
When a referring judge receives a mediator’s report informing them that no
settlement was reached during CAM, they must then decide whether a settlement is
still possible in the hearing set for that reason and, if so, assign the case to the JDR
judge.
In case of a partial settlement and the judge is convinced that settlement is still
possible, the unsettled part of the dispute is referred to a JDR judge.
If JDR fails, the case will be heard and decided by another judge, known as the trial
judge.
Cases Covered by JDR
1. All CAM cases, except for environmental cases, may be referred to JDR after
failure to settle or refusal to mediate in CAM if the judge of the court in which
the case was originally filed believes that settlement is still possible.
2. The cases listed below, which were brought on appeal from the first-level
courts’ exclusive and original jurisdiction, in locations designated as JDR sites if
the RTC judge believes a settlement is still feasible.
 All civil cases and settlement of an estate, testate and intestate;
 All cases of forcible entry and unlawful detainer;
 All civil cases involving title to, or possession of, real property or an interest
therein;
 Habeas corpus cases decided by the first-level court in the absence of any
RTC judge.
Duration of JDR
The proceedings begin as soon as the referral order is issued and must be
completed within a non-extendable period of fifteen (15) calendar days from
obtaining the referral order.
If the parties fail to settle during the first JDR session and the time limit has not yet In case the parties only arrived at a partial settlement:
elapsed, the JDR judge will reschedule the case for another JDR session.
1. The parties, as assisted by their counsels, must submit the terms to the judge
Qualification to Conduct JDR for approval and rendition of judgment.
2. For the unsettled part of the dispute, the case will proceed to trial until
Only judges who have undergone a skills-based training in Judicial Dispute judgement.
Resolution are authorized to conduct JDR proceedings. They must also be stationed
in JDR sites unless the judge is directed by the Supreme Court. Should there be no compromise reached:

Conduct 1. The JDR judge must accomplish the JDR report and return the case to the
judge.
When no settlement is arrived at during CAM, the parties and their counsels must 2. The judge can then move forward with the case accordingly.
appear before the JDR judge on their scheduled session. The JDR judge will act as
mediator, conciliator, and/or neutral evaluator who will actively assist and facilitate
negotiations between the parties to settle their dispute.
Supplementary Information

The tasks of a neutral evaluator are to: Cases that Cannot be Subjected to Compromise Agreement

1. Assess the relative strengths and weaknesses of each party’s case; The following cases cannot be settled via compromise agreement, regardless of
2. Make a non-binding and impartial evaluation of the chances of each party’s whether it is via CAM or JDR:
success in the case; and
3. Guide the parties to a fair and mutually acceptable settlement of their dispute. 1. As previously mentioned, civil cases falling under Article 2035 of the New Civil
Code.
Once a case is settled, the JDR judge must create the JDR Report and return the 2. Petitions for habeas corpus;
case to the judge for appropriate action. 3. Special proceedings for probate of a will;
4. Cases with a pending application for retraining orders/preliminary injunctions.
If a full settlement is reached:
Note: The court shall refer the parties to mediation in cases covered by numbers 1
and 4 where the parties notify the court that they have agreed to attend mediation
1. The parties, assisted by their counsels as needed, must draft a compromise
on certain aspects of the case, such as custody of minor children, property
agreement.
separation, or support pendente lite.
2. Submit the agreement to the judge to verify enforceability.

If a compromise agreement was fulfilled before being sent to the judge: Referral to CAM and JDR

1. Instead of submitting a compromise agreement, a satisfaction of claims or In all other actions or proceedings where compromise is not legally prohibited and a
mutual withdrawal of both parties must be submitted. reasonable probability of settlement exists, one or all of the parties may request the
2. The judge will then issue an order declaring the case terminated. court to refer their dispute to CAM and JDR by oral manifestation or written motion
after the preliminary conference, or at any stage of the proceedings, provided there
are still factual problems to be settled.

Mediator Selection

A Philippine Mediation Center Unit (PMCU) staff will assist the parties in manually
selecting an appropriate mediator from the PMCU’s roster of mediators.

If the parties cannot agreed, the PMCU staff will choose one by lot among the
available mediators at the unit in the presence of the parties.

If no mediator is in attendance at the unit, one will be selected by lot in the presence
of the parties by the PMCU staff from a list of mediators.

CHAPTER 3 - LITIGATION

Litigation

Litigation generally refers to the process of preparing and presenting a case in court.
As a dispute resolution method, this is only used when all other ones have failed.
The main reason that litigation is used as a last resort is that it does not have most 8. Trials are held in public, which means that sensitive information may be
of the advantages that alternative dispute resolution methods have, especially their revealed and put under a spotlight for public scrutiny.
speediness and cost-effectiveness. 9. Ruined relationships are difficult to restore after a litigation process.
10. The entire proceedings can potentially cause emotional distress for everyone
involved due to the formality, strict rules, and the ever present threat of perjury.
Primary Benefits of Litigation 11. Decisions made during litigation has precedential value to other potential
litigants as they become part of common law, which is bad from the perspective
1. The court system is funded by the government. While the individual parties may of the losing party.
have to pay their own counsels and other personally incurred fees, they do not
have to pay the judges. The court also has the power to impose all the costs of
the suit on the losing party.
2. The case will be managed and heard by a professional judge.
3. The court can enforce all its judgements by order.
4. The court has the power to impose injunctions.
5. The litigation process is a formal process thereby encouraging all parties to be
deliberate and articulate in their presentation of their arguments.
6. Decisions made during litigation has precedential value to other potential
litigants as they become part of common law, which is good from the
perspective of the winning party.

Primary Disadvantages of Litigation

1. The expenses for a legal counsel can potentially outweigh the expenses for a
paid third-party.
2. The judge can potentially lack expertise on the subject matter of the case, e.g.
the trial judge might be a criminal law expert, but they drew a case involving a
real property dispute.
3. Quality of judges can also vary.
4. Courts have a heavy workload and a long backlog, thereby potentially
prolonging the process.
5. Since each party must pay for their individual expenses, the party with deeper
pockets can possibly force the other party into submission by outlasting them
through the entire ordeal.
6. The judgment is not final, but subject to appeal.
7. The process of litigation can cause a major disruption to the lives of those
involved.