Professional Documents
Culture Documents
ADR Notes
ADR Notes
INTRODUCTION
Historical Note
• Judicial and legislative trends lean towards the utilization of alternative means and methods
implemented outside the court trial system
• Civil Code of the Philippines
• Took effect on August 30, 1950
• Contains provisions on compromise
• Art 2028 - A compromise is a contract whereby the parties, by making reciprocal
concessions, avoid a litigation or put an end to one already commenced
• Art 2029 - the court shall endeavor to persuade the litigants in a civil case to agree upon
some fair compromise
• Provisions on arbitration
• Art 2042 - the same persons who may enter into a compromise may submit their
controversies to one or more arbitrators for decision
• Art 2043 - the provisions of the preceding Chapter upon compromises shall be applicable to
arbitration
• Art 2044 - any stipulation that the arbitrators's award or decision shall be final, is valid,
without prejudice to articles 2038, 2039, and 2040
• RA 876 - The Arbitration law
• Enacted on June 19, 1953
• Did not revoke and instead supplemented the provisions of the New Civil Code on Arbitration
• Resolution No. 71 - Adhering to the UN “Convention on the Recognition and Enforcement
of Foreign Arbitral Awards of June 10, 1958
• Enacted on May 10, 1965
• Gives reciprocal recognition and allowed enforcement of international arbitration agreement
between the parties of different nationalities within a contracting state
• Signatory to the UN Commission on International Trade Law (New York Convention of
June 21, 1985 which adopted the Model Law on International Commercial Arbitration
• Philippines committed to adhere to the Model Law
Judiciary’s Action
• Judiciary’s response to the problems of delay in the delivery of justice:
• Requirement of conducting pre-trial conferences
• Utilization of the different modes of discovery
• Strict proscription against forum-shopping
• Encouraging the use of alternative dispute resolution through the Philippine Mediation Center
or through JDR
Legislative Action
• Special domestic legislations prescribing arbitration, mediation, and conciliation to help
decongest court dockets:
• PD 442 Labor Code of the Philippines
• NLRC together with its Arbitration Brance has been dispensing arbitration service in cases
involving ULP, termination of employment, conditions of employment, damages arising from
ER-EE relationship, and other labor-related disputes.
• RA 7160 Local Government Code of 1991
• Requires conciliation, mediation or arbitration in the barangay level before the pangkat ng
tagapagkasundo of would-be adverse parties in specified civil and criminal cases before
resort to courts can be had
ADR Notes by: Paolo Ollero
FUNDAMENTALS OF ADR
Alternative Dispute Resolution
• ADR - a system, using means and methods allowed by law and approved by the parties, for the
purpose of resolving or facilitating the resolution of disputes and controversies between them, in
an expeditious and speedy manner, without resorting to court adjudication
• ADR Act of 2004 - Any process or procedure used to resolve a dispute or controversy, other
than by adjudication of a presiding judge of a court or an officer of a government agency in
which a neutral 3rd party participates to assist in the resolution of issues
• State policy:
1. Actively promote party autonomy in the resolution of dispute or the freedom of the parties to
make their own arrangements to resolve their disputes
2. Encourage and actively promote the use of ADR as an important means to achieve speedy
and impartial justice and declog the court dockets
3. Provide means for the use of ADR as an efficient tool and an alternative procedure for the
resolution of appropriate cases
• Principles of ADR:
1. Promotion of party autonomy and self-determination in the resolution of disputes
• Parties are given the freedom to choose the form of ADR they desire to avail of
• They are given the discretion to prescribe the procedure to govern ADR
• Party autonomy extends to the choice of ADR providers or practitioners
2. Recognition of ADR as an efficient tool and an alternative procedure for the resolution of
cases
• Does not do away with the court trial system
• ADR merely provides the parties with an alternative means of settling their disputes in a
manner that is different.
3. Enlisting of private sector participation
• Requires the participation of3rd parties who do not necessarily dispense public service
Objectives of ADR:
1. Speedy and impartial justice
• ADR is a tool for the speedy, inexpensive and amicable settlement of dispute
2. Declogging of court dockets
• Declogging is the ultimate objective of ADR
Features of ADR:
1. ADR is a means used to resolve a dispute or controversy
• Objective is to resolve or facilitate the resolution of the dispute in a speedy, amicable, and
inexpensive manner
• ADR should not be resorted to when the motive is to delay or suspend the proceedings
2. ADR utilizes means and methods allowed by law
3. ADR is contractual in nature
• Contractual in nature because the parties are given the freedom to agree to resolve their
dispute
• Any form of ADR that satisfies the essential requisites of a contract is allowed as long as it is
not contrary to law, morals, good customs, public order or public policy
• Consent:
1. Pre-causal consent - when the parties to a contract stipulate that any dispute that will
arise from the contract shall be resolved by arbitration
2. Present-causal consent - when the parties to an existing controversy voluntarily submit
themselves either to arbitration or mediation
4. ADR avoids court trial
ADR Notes by: Paolo Ollero
5. ADR usually involves the participation of a neutral 3rd party
Sources of ADR:
1. Domestic laws and rules which may either be general or special
1. General ADR laws:
1. Article III, Section 16 of the 1987 Constitution
2. Chapters 1 and 2, Title XIV, Book IV of the Civil Code
3. Arbitration Law
4. ADR Act of 2004 and its IRR
2. Special ADR laws:
1. Local Government Code of 1991
2. Labor Code and its IRR
3. Other similar laws applicable to specific classes of disputes
2. Acts of the Executive branch
1. Rules of ADR for Disputes Between National Government Agencies
2. EO 1008 creating the CIAC as well as the CIAC Revised Rules of Procedure Governing
Construction Arbitration
3. Decisions of the SC
4. International laws
1. UNCITRAL Model Law on International Commercial Arbitration
2. Convention on Recognition and Implementation of Foreign Arbitral Awards
5. General principles of law and equity
Forms of ADR:
1. Arbitration - Arrangement for taking and abiding by the judgment of selected persons in some
disputed manner, instead of carrying it to established tribunals of justice, and is intended to
avoid the formalities, the delay, the expense and vexation of ordinary litigation
• A voluntary dispute resolution process in which one or more arbitrators, appointed in
accordance with the agreement of the parties, or rules promulgated pursuant to the ADR Act,
resolve a dispute by rendering an award
2. Mediation - Voluntary process in which a mediator, selected by the disputing parties, facilitates
communication and negotiation, and assists the parties in reaching a voluntary agreement
regarding a dispute
Arbitration Mediation
An arbitral tribunal or arbitrator evaluates evidence The parties to the controversy are convinced by a
and the merits of the case and renders an arbitral mediator to settle their controversy through a
award based on his appreciation thereof voluntary agreement executed by the parties
themselves called a mediated settlement agreement
Components of ADR
1. Contending parties - who are involved in a dispute or controversy
2. Dispute or controversy - which is susceptible of being subject to ADR
3. Form of ADR - may either be:
1. Arbitration
2. Mediation
3. Conciliation
4. Early Neutral Evaluation
5. Mini-trial
6. Any combination of the foregoing
4. ADR provider or practitioner
1. Provider - institution or person accredited as mediator, conciliator, arbitrator, neutral party
evaluator, or any person exercising similar functions in any ADR systems
ADR Notes by: Paolo Ollero
2. Practitioner - individual acting as mediator, conciliator, arbitrator or neutral evaluator who
is not necessarily accredited as an ADR provider
Basic Concepts:
Concluding Acts or Agreements
1. Arbitration
1. Arbitrary award - partial or final decision by an arbitrator in resolving the issue in a
controversy
2. Mediation
1. Mediated settlement agreement - a contract executed by the mediating parties, with the
assistance of their respective counsel, certified by the mediator, evidencing a successful
mediation
2. Compromise agreement - a contract whereby the parties, by making reciprocal
concessions, avoid litigation or put an end to one already existing
3. Court Annexed Mediation
1. Judgment based on compromise
4. Conciliation
1. Waiver or Quitclaim - a statement renouncing any right or claim involved in a controversy
by one party in favor of the other.
ADR Notes by: Paolo Ollero
Classification of Mediation
1. As to form of ADR
1. Mediation is non-evidentiary or non-merit based - the mediator must refrain from giving
legal or technical advise or otherwise engaging in counseling advocacy, and must abstain
from expressing his personal opinion on the rights and duties of the parties and the merits
of any proposal made.
2. On the basis of the structure of the ADR provider
1. Institutional - when administered by, and conducted under the rules of a mediation
institution
• An agreement to submit a dispute to mediation shall include the following:
• To be bound by the internal mediation and administrative policies of such institution
• To have such rules govern the mediation of the dispute and for the mediator, the parties
and their respective counsels and non-party participants to abide by such rules
2. Ad hoc - other than institutional
Place of Mediation
GR: in the absence of such agreement, the place convenient and appropriate to all parties
XPN: parties are given the freedom to agree on the place of mediation
Stages in Mediation
GR: mediation process consists of the following:
1. Opening statement of the mediator
2. Individual narration by the parties
3. Exchange by the parties
4. Summary of issues
5. Generalization and evaluation of options
6. Closure
XP: parties may choose the procedure that will govern their mediation
Advantages of Mediation
Sec. 8 of ADR Act of 2004:
ADR Notes by: Paolo Ollero
1. Confidentiality in the mediation process
2. Prompt, economical and amicable resolution of disputes
3. The decision-making authority rests in the parties
Waiver of confidentiality
• Protection of confidentiality is susceptible of waiver
• Kinds of waiver:
1. Expressed - when it is contained in a record, or made orally during a proceeding by the
mediator and the mediation parties
2. Implied:
1. By failing to timely object to an objectionable question propounded during a trial, or to a
document being offered in evidence
2. By testifying or presenting a witness to testify on confidential and privileged information
3. Estoppel - when the non-party participant discloses the erstwhile confidential information
1. A person who discloses confidential information is barred from invoking the privilege as
to the remainder of the information necessary to a complete understanding of the
previously disclosed information
2. This principle is rooted on fair play and equity
The mediator
• The role of the mediator is very crucial that his presence and competence must be ensured
• A mediator who refuses to act as such may withdraw or may be compelled to withdraw from
mediation proceedings under any of the following circumstances:
1. If any of the parties requests the mediator to withdraw
2. The mediator does not have the qualifications, training and experience to enable him to
meet the reasonable expectations of the parties
3. The mediator's impartiality is in question
4. The continuation of the process will violate an ethical standard
5. The safety of any one of the parties will be jeopardized
6. The mediator is unable to provide effective service
7. In case of conflict of interest
8. Other instances provided for under the IRR
• Unlike an arbitrator, he cannot rule upon the merits of a claim and render an award there on
except in a mediation-arbitration proceeding
• Duties and Functions
1. Prior to mediation
ADR Notes by: Paolo Ollero
1. Competent
1. A mediator should maintain and continually upgrade his professional competence in
mediation skills;
2. Ensure that his qualifications, training and experience are known to and accepted
by the parties;
3. Serve only when his qualifications, training and experience enable him to meet the
reasonable expectations of the parties and not tO hold himself out or give the
impression that he has qualifications, training and experience that he does not have
4. Upon the request of a mediation party, disclose his qualifications to mediate a
dispute
2. Impartiality - before accepting a mediation, the mediator should:
1. Make an inquiry that is reasonable under the circumstances to determine whether
there are known facts that a reasonable individual would consider likely to affect his
impartiality
2. Disclose any such fact known or learned as soon as practicable
2. During the mediation
1. Confidentiality
2. On consent and self-determination
1. Exert reasonable efforts to ensure that each party understands the nature and
character of the mediation proceedings
2. Each party is free and able to make whatever choices he desires regarding his
participation in the mediation as well as his specific settlement options
3. On promotion of respect and control of abuse of process
1. Encourage mutual respect between the parties
• Mediator's costs and fees
• In an ad hoc mediation, the parties are free to make their own arrangements as to mediation
costs and fees
• In institutional mediation, mediation costs shall include the administrative charges of the
mediation institution, mediator's fees and associated expenses
ARBITRATION IN GENERAL
Concept of Arbitration
• Arbitration - Voluntary dispute resolution process in which one or more arbitrators, appointed in
accordance with the agreement of the parties or rules promulgated pursuant to the ADR Act,
resolve a dispute by rendering an award.
• A completed arbitral proceeding is concluded by an arbitral award constituting the partial or final
decision by an arbitrator in resolving the issue in a controversy.
Kinds of Arbitration
1. In General
1. Compulsory - the process of settlement of [labor] disputes by a government agency which
has the authority to investigate and to make an award which is binding on all parties, and
as a mode of arbitration where the parties are compelled to accept the resolution of their
dispute through arbitration by a 3rd party
• Is not governed by the ADR Act and its IRR
2. Voluntary - involves the reference of a dispute to an impartial body, the members of which
are chosen by the parties themselves, which parties freely consent in advance to abide by
the arbitral award issued after the proceedings where both parties had the opportunity to be
heard
2. Based on the seat of arbitration and the presence of foreign element
1. Domestic - If it is not international in character. Or if:
1. Components of parties' place of business, place of arbitration, place of performance of
a substantial part of the obligation, and place where the subject matter of the dispute is
most closely connected, are all located in the Philippines.
2. International commercial or foreign - If any of the following instances occur:
1. The parties' place of business, which at the time of the conclusion of the arbitration
agreement, is in different states
2. The place of arbitration provided in the arbitration agreement and in which the parties
have their places of business, is outside the Philippines
3. The place where a substantial part of the obligation is to be performed or the place with
which the subject matter of the dispute is most closely connected, and in which the
parties have their places of business, is outside the Philippines
4. The parties have expressly agreed that the subject matter of the arbitration agreement
relates to more than one country
• International arbitration is at the same time commercial if:
1. It covers matters arising from all relationships of a commercial nature, whether
contractual or not, in which case the arbitration is called international commercial
arbitration
1. If seat is with the Philippines (even if the place of arbitration is outside), it is
domestic and the ADR Act and its IRR will apply
2. If seat is outside of the Philippines (even if the place of arbitration is in the
Philippines), it is foreign. The ADR Act and its IRR governs only when the foreign
arbitral award is applied for recognition
Policy on Arbitration
• Korea Technologies Co,, Ltd. v. Lerma
• Being an inexpensive, speedy and amicable method of settling disputes, arbitration is
encouraged by the SC
• Brushing aside a contractual agreement calling for arbitration between the parties would be a
step backward
ADR Notes by: Paolo Ollero
• Koppel, Inc. v. Makati Rotary Club Foundation, Inc.,
• Bona fide arbitration agreements are recognized as valid; and the laws, rules and regulations
do exist protecting and ensuring their enforcement as a matter of state policy.
Objectives of Arbitration
• Provide a speedy and inexpensive method of settling disputes by allowing the parties to avoid
the formalities, delay, expense and aggravation which commonly accompany ordinary litigation,
especially litigation which goes through the hierarchy of courts
Arbitrator
• Arbitrator - the person appointed to render an award, alone or with others, in a dispute that is
the subject of an arbitration agreement
Arbitrator Arbiter
May use his own discretion in the performance of Who is bound by rules of law and equity in rendering
his function an award
• Voluntary arbitrators - by the nature of their functions, act in a quasi-judicial capacity, such that
their decisions are within the scope of judicial review
Arbitration Agreement
• Arbitration Agreement - agreement of the parties to submit to arbitration all or certain disputes
which have arisen or which may arise between them in respect of a defined legal relationship,
whether contractual or not.
• It is a formal contract
• Its validity depends on the validity of the contract being executed
• Formal requisites:
1. Must be in writing
2. Must be subscribed by the parties or their representatives
• It may be included in the container contract in which case, it is referred to as an arbitration
clause or a compromissoire, or may be constituted in separate contract
• Ormoc Sugarcane Planters' Association, Inc. v. CA
• An agreement to arbitrate is a contract
• The relation of the parties is contractual
• The rights and liabilities of the parties are controlled by the law of contracts
• Cargill Philippines Inc v. San Fernando Regala Trading
• A contract is required for arbitration to take place and to be binding
• The provision to submit to arbitration any dispute arising therefrom and the relationship of the
parties is part of the contract and is itself a contract
• Tuna Processing Inc v. Philippine Kingford Inc
• When a party enters into a contract containing a foreign arbitration clause and in fact submits
itself to arbitration, it becomes bound by the contract, by the arbitration and by the results of
the arbitration
Doctrine of Separability
ADR Notes by: Paolo Ollero
INTERNATIONAL COMMERCIAL
ARBITRATION UNDER THE ADR
ACT OF 2004 AND ITS
IMPLEMENTING RULES AND
REGULATIONS
International Commercial Arbitration
• Arbitration is international if:
1. The parties' place of business which at the time of the conclusion of the arbitration
agreement, is in different states;
2. The place of arbitration provided in the arbitration agreement and in which the parties
have their places of business, is outside the Philippines
3. The place where a substantial part of the obligation is to be performed or the place with
which the subject matter of the dispute is most closely connected, and in which the parties
have their place of business, is outside of the Philippines
4. The parties have expressly agreed that the subject matter of the arbitration agreement
relates to more than one country
• Arbitration is commercial if it covers matters arising from all relationships of a commercial
nature, whether contractual or not
• Applicability of ADR Act and the IRR:
• An international commercial arbitration with the Philippines as its seat even if place of
arbitration is outside the Philippines
• On the other hand, an international commercial arbitration whose seat is outside the Ph is a
foreign arbitration even if the place of arbitration is in the Ph.
Rules of interpretations
1. Interpretations of the ADR Act
• The court shall have due regard to the policy of the law favoring arbitration
2. Interpretation of the Model Law
• There must be a uniformity in its interpretation
• Concepts and principles under the Model Law should be understood in the light of their
international usage rather than their ordinary domestic or local usage
3. Interpretation of the IRR
ADR Notes by: Paolo Ollero
• The same policies on the interpretation of the ADR Act and Model Law
• Party autonomy should be promoted
• The freedom of the parties to determine certain issues including the right to authorize a 3rd
party to make that determination
• A reference to an agreement of the parties includes any arbitration rules referred to in that
agreement
• The rules applicable to claims are equally applicable to counterclaims, and those applicable
to defenses are equally applicable to defenses against counterclaims
Confidentiality in ICA
• Same in the case of mediation
• Confidential and shall not be disclosed except:
1. With the consent of the parties
2. For the limited purpose of disclosing to the court relevant documents in cases where resort
to the court is allowed
• The court may issue protective orders to prevent or prohibit the disclosure of documents or
information containing secret processes, developments, research and other information where it
is shown that the applicant shall be materially prejudiced by an unauthorized disclosure thereof.
Language
• The parties to an ICA shall determine the language or languages to be used during the arbitral
proceedings
• The arbitral tribunal may order that any documentary evidence shall be accompanied by a
translation thereof in the language or languages to be used in the proceedings
• In default, English shall be used
Costs in ICA
• Includes:
1. Fees of the AT
2. Travel and other expenses
3. Costs of expert advise
4. Travel and other expenses of witnesses
5. Costs for legal representation and assistance
6. Fees and expenses of appointing authority
• In principle, the costs shall be borne by the unsuccessful party. However, the arbitral tribunal
may apportion the costs if reasonable under the circumstances of the case
DOMESTIC ARBITRATION
Domestic arbitration in general
• Arbitration is domestic if:
• Conducted in the Philippines
• Components of parties' place of business, place of arbitration, place of performance of a
substantial part of the obligation, and place where the subject matter of the dispute is most
closely connected, are all located in the Philippines
• Governed by:
1. Arbitration Law
2. The Model Law
3. The following provisions of the ADR Act on international commercial arbitration:
1. Sec 22
2. Sec 23
3. Sec 24
4. Sec 25
5. Sec 26
6. Sec 27
7. Sec 28
8. Sec 29
9. Sec 30
10. Sec 31
11. Sec 32
12. Sec 33
4. IRR of the ADR Act
1. Sec 32 - distinguished domestic arbitration from international arbitration and declared
that the Arbitration Law remains applicable to domestic arbitration
2. Sec 33 - Adopted certain provisions of the Model Law and the ADR Act on international
commercial arbitration to domestic arbitration
5. All other rules applicable to international commercial arbitration which may be given
suppletory application in the absence of specific applicable provisions
Disputes covered
• Unlike ICA, DA covers both commercial and non-commercial disputes provided they are
susceptible of arbitration and do not fall within the exclusive original arbitral jurisdiction of quasi-
judicial agencies
Due process
• The rule is that administrative agencies excercising quasi-judicial powers shall not be fettered by
the rigid technicalities of procedure, albeit they are, at all times required, to adhere to the basic
concepts of fair play
• In administrative proceedings, the essence of due process is simply an opportunity to be heard,
or an opportunity to explain one's side or opportunity to seek a reconsideration of the action or
ruling complained of.
• This is satisfied if a person is granted and opportunity to seek reconsideration of an action
or ruling
Language
• The parties to an tribunal shall determine the language or languages to be used during the
arbitral proceedings
• The arbitral tribunal may order that any documentary evidence shall be accompanied by a
translation thereof in the language or languages to be used in the proceedings
• In default, English or Filipino shall be used
Confidentiality
• Privilege:
1. Arbitration proceedings
2. Records
3. Evidence
4. Arbitral award
5. Other confidential information
• Exempt:
1. Consent of the parties
2. Limited purpose of disclosing to the court relevant documents where resort to the court is
allowed
Waiver of objection
• Objections to non-compliance with the rules or any requirement under the arbitration agreement
must be raised without undue delay or within the time prescribed therefor, failing which, the right
to object is deemed waived
• A party may be estopped from questioning non-compliance or is deemed to have waived his
objection thereto if he fails to raise the objection without delay or within the time prescribed
therefor
Representation
• A party may appear by himself or be represented or assisted by any person of his choice,
provided that such representative, unless admitted to the practice of law in the Ph, shall not be
authorized to appear as counsel in any Ph court or quasi-judicial body
• A party desiring to be represented by counsel shall notify the other party or parties of such
intention at least 5 days prior to the hearing
Arbitration agreement
• It is a contract
• It must satisfy the essential requisites of a valid contract:
1. Consent
1. Pre-causal consent - when parties agree in a contract to settle by arbitration a
controversy that will arise between them
2. Present causal consent - when the controversy already exists between the parties at
the time of the submission to arbitration
2. Object
3. Price
• must be in writing and subscribed by the party sought to be charged, or by his lawful agent
It
• When the court action is multi-party, and one or more but not all of the parties are parties to an
arbitration agreement, the court shall refer those who are parties to the arbitration agreement to
arbitration, and proceed with the court action as to those who are not bound by such arbitration
agreement
• The court may issue an order directing the inclusion in the arbitration of those parties who are
not bound by the arbitration agreement but who agree to such inclusion provided that those
originally bound by it do not object to their inclusion.
Number of arbitrators
• GR: party autonomy
• In the absence thereof: there shall be 3 arbitrators
• The party appointing an arbitrator may challenge that arbitrator for reasons which the party
became aware of after the appointment was made
• If an arbitrator so appointed discovers the existence of any circumstance that would create a
presumption of bias or would render him a partial arbitrator, he shall immediately disclose such
information to the parties
Arbitral proceedings
• GR: party autonomy
• In absence thereof, default procedure:
1. Statement of claims is required to be submitted within the time agreed upon by the
parties. It includes:
1. Supporting facts
ADR Notes by: Paolo Ollero
2. Points at issue
3. Relief sought
2. Statement of defenses
3. Amendment of claims or defenses. The parties may amend or supplement their claims or
defenses unless the arbitral tribunal considers the amendment inappropriate or dilatory
4. Hearing and written proceedings
1. Ad hoc - the procedure determined by the arbitrator with the agreement of the parties
shall be followed
2. Institutional - rules of procedure of the institutional arbitrator shall be followed which has
been impliedly accepted by the parties on account of the designation of the institutional
arbitral tribunal
• Pre-hearing conference - in order to expedite the arbitral proceedings, the parties are
required to undergo a pre-hearing conference within 30 days from the appointment of the
arbitrator or the constitution of an arbitral tribunal. They shall discuss the ff:
1. Venue of the arbitration
2. Manner of recording the proceedings
3. Periods of communication of the statement of claim, answer, and answer to
counterclaims, and the form and contents thereof
4. Manner of offering evidence
5. Delivery of certain types of communication
6. Issuance of subpoena by the arbitral tribunal
7. Manner of receiving expert testimony
8. Possibility of applying for interim relief
9. Possibility of site or ocular inspection
10. Fees of arbitral tribunal
11. Other relevant matters
• Threshold issue - issues on the jurisdiction of the arbitral tribunal over the claims and
counterclaims, or the arbitrability of the claims or counter-claims, shall be resolved by the
arbitral tribunal as threshold issues if the parties so request
• Hearing dates and postponements
• Default of a party
• If the claimant fails to communicate his statement of claims, the AT shall terminate
the proceedings
• If the respondent fails to communicate his statement of defenses, the AT shall
continue the proceedings without treating such failure in itself as an admission of
the claimant's allegation
• If the party fails to appear at the hearing or produce evidence, he shall be deemed
to have waived them
• Decision on interlocutory matters
• Consolidation or concurrent hearings
• Closure of hearings - after the hearing is closed, no further motion may be allowed
except for post-hearing briefs and reply briefs, unless the AT, motu proprio or upon the
request of a party, allows the re-opening of the hearing
5. Rules on evidence
• Testimonial evidence - witnesses shall be required to take an oath or affirmation to tell the
truth. The parties may also agree in writing to submit their dispute to arbitration other than
by oral hearing
• Documentary evidence - each party shall provide the other with copies of the statements
or documents submitted to the arbitral tribunal
• Subpoena - AT has the power to issue subpoena dues tecum and ad testificandum
• Expert - AT may appoint one or more experts to report to it on specific issues. However, in
DA, it is provided that, upon the agreement of the parties, the finding of the expert
engaged by the AT shall be binding upon them and the AT.
• Court assistance in taking evidence - subpoena, interim or provisional reliefs, protective
orders, orders that may affect 3rd parties, examination of debtors
6. Decision
ADR Notes by: Paolo Ollero
7. Form and content of the award
• Shall be in writing
• Signed by the arbitrator
• State the date of the rendition and the place of arbitration
• If more than one arbitrator, it shall be signed by majority of the AT
• The arbitral award shall state the reason upon which it is based
• It need not be acknowledged or sworn to under oath or affirmed unless required by the
parties
8. Settlement - proceedings will be terminated by the execution of an arbitral award on agreed
terms, consent award or award based on compromise which the parties may request to be
recorded.
9. Termination of proceedings:
1. Withdrawal of the claim unless the respondent objects for the purpose of prosecuting
his counterclaims
2. The agreement of the parties to terminate the proceedings
3. The finding by the AT that the continuation of the proceeding has become unnecessary
or impossible
4. Non-payment of the required deposits in full
Interim measures
• PartIes may seek from the AT interim measures including:
1. Preliminary injunction
2. Appointment of receivers
3. Detention of property and preservation
4. Inspection of property
• Parties may also secure assistance from the courts for the implementation of interim measures
• Procedure:
1. After the AT has been constituted, any party may request for the grant of interim measures
from the arbitrator against the adverse party
1. It may be granted in order to prevent irreparable loss, to provide security for the
performance of an obligation, to produce or preserve evidence, or to compel any other
appropriate act or omission
2. Grant may be conditioned upon the provision of security or any act or omission
specified in the order
3. The order granting or denying the request shall be binding upon the parties
4. A party who refuses to comply with the order shall be liable for damages resulting from
non-compliance
2. Before the constitution of the AT, the interim measures may be requested from the court in
accordance with the Special Rules of Court on ADR
Multi-party arbitration
• The AT is empowered to implement procedural modifications as it shall deem appropriate to
address the complexities of the multi-party arbitration
• The court before which a petition for setting aside a domestic arbitral award is filed has the
prerogative and option to suspend the court proceedings in the ff instances:
1. To give the arbitral tribunal an opportunity to resume the arbitral proceedings or take such
action which will eliminate the grounds for setting aside an award
2. For the purpose of making a new or revised final and definite award or to direct a new
hearing before the same or new arbitral tribunal
3. If the ground for vacating an arbitral award does not affect the merits of the case and may
be cured or remedied, the adverse party may oppose the petition and instead request the
ADR Notes by: Paolo Ollero
court to suspend the vacation or setting aside proceedings to give the arbitral tribunal an
opportunity to cure or remedy the award
Other forms
1. Early neutral evaluation
• Parties and their lawyers are brought together 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
• Availed of early in the pre-trial phase
• Self-determinantion; parties shall govern the conduct of the ENE
• In absence of any agreement, provisions of the IRR on ENE shall apply
• Akin to mediation
• Default appointing authority is the National President of the IBP or his representative
• Parties are required to submit and exchange position papers containing the issues and
statements of the relevant facts and append thereto supporting documents and affidavits of
witnesses
• No ex parte communication
• Neutral 3rd person shall issue a written evaluation or assessment within 30 days from the
conclusion of the evaluation process. His opinion shall not be binding
2. Neutral evaluation
3. Mini-trial
• Structured dispute resolution method in which the merits of a case are argued before a
panel composed of senior decision-makers, with or without the presence of a neutral 3rd
person, before which the parties seek a negotiated settlement
• Panel shall be appointed by the parties equally
• The parties shall submit a brief summary of the dispute, identifying the specific factual or
legal issues, after which they shall appear before the mini-trial panel members before
whom their lawyers shall present their respective cases starting with the claimant. After the
mini-trial, the panel members, with the assistance of the neutral 3rd person, shall negotiate
a settlement of the dispute
• GR: party autonomy
• In absence thereof, the provisions of the IRR on mini-trial shall be applicable
• Akin to mediation
• Unless, the panel of decision-makers, or the neutral 3rd person is given by the parties
the authority to render a binding decision, in which case, the proceedings becomes
akin to domestic arbitration
• Conducted either as:
1. A separate dispute resolution process
2. As a continuation of mediation, neutral or early neutral evaluation or any other ADR
process
4. Mediation-arbitration
• A two step dispute resolution process involving mediation and then followed by arbitration
• GR: party autonomy
ADR Notes by: Paolo Ollero
• In the absence thereof, its proceedings shall be governed by the rules on mediation first,
and thereafter, by the rules on domestic arbitration.
5. Combination thereof
6. Any other ADR form
ADR Notes by: Paolo Ollero
Special proceedings
• Except for #12 (above), the subject matter of SRC procedures are special proceedings
• Jurisdiction over the persons of the parties is acquired by the court upon proof of compliance
with the jurisdictional requirements
Summary proceedings
• Proceedings under Special ADR are generally summary and are conducted by way of
submission of verified pleadings
• The ff pleadings are not allowed and shall not be accepted for filing:
1. Motion to dismiss
2. Motion for bill of particular
ADR Notes by: Paolo Ollero
3. Motion for new trial or for reopening of trial
4. Petition for relief from judgment
5. Motion for extension
• XPN: in cases where an ex parte temporary restraining order of protection has been
issued
6. Rejoinder to reply
7. Motion to declare a party in default
8. Any other pleading specifically disallowed under any provision of the Special ADR
Non-summary proceedings
1. Confirmation, correction or vacation of award in domestic arbitration
2. Recognition and enforcement of an award in an international commercial arbitration
3. Recognition and enforcement of a foreign arbitral award
Jurisdiction
• Lodged by law with the RTC
Venue
1. The place where any of the parties resides or has his place of business
2. The place where the asset or act involved is located
3. The national capital judicial region, at the option of the petitioner
Referral to ADR
• Pertains to the referral of a pending court action to arbitration rather than any other form of ADR
• Applies when:
1. There is already a pending court action
2. There is either a pre-action arbitration agreement or a present-action arbitration agreement
• Pre-action - executed prior to the filing of an action
• The request for referral to arbitration may be made by any one of the parties not
later than the pre-trial conference
• A request made after the pre-trial conference must be with the agreement of both
parties
• Present-action - executed after the filing of the action
• The parties may request the referral to arbitration at any time during the
proceedings
3. One or both parties desire to undergo arbitration
ADR Notes by: Paolo Ollero
• Procedure:
1. Pleading that initiates is a request or a motion because the rules on referral to ADR
contemplate the existence of a pending court action already initiated
• Must contain an authentic copy of the arbitration agreement and must be served upon
the respondent and be set for hearing
2. Comment or opposition must be filed within 15 days from service of the request
• Must show:
• There is no agreement to refer the dispute to arbitration
• The agreement is null and void
• The subject matter of the dispute is not capable of settlement or resolution by
arbitration
3. The court may:
1. Grant the motion if it finds prima facie that there is a valid an enforceable arbitral
agreement
2. Deny it if the court finds otherwise
4. Relief against court action
1. If grant - immediately executory and shall not be subject to a MR, appeal, or certiorari
2. If denied - not subject to appeal but may be the subject of MR and petition for certiorari
• Courts cannot deny based on the ff:
1. Not all of the disputes subject of the civil action may be referred to arbitration
2. Not all of the parties to the civil action are bound by the arbitration agreement and referral
to arbitration would result in multiplicity of suits
3. The issues raised in the civil action could be speedily and efficiently resolved in its entirety
by the court rather than in an arbitration
4. Referral to arbitration does not appear to be the most prudent action
5. The stay of the action would prejudice the rights of the parties to the civil action who are not
bound by the arbitration agreement
• Koppel inc v. Makati Rotary Club Foundation - legal effects of the non-application of the
arbitration clause to a case:
1. The judicial proceedings conducted beyond the point when the dispute should have been
referred to arbitration are rendered invalid
2. The decisions, including those of the appellate courts, must be vacated and set aside
3. The case must be remanded to the court a quo to be suspended at said point
4. The petitioner and respondent must be referred to arbitration
Susceptible of extension for not more than 20 days Non-extendible and becomes functus oficio after the
lapse of 20 days from the service
May be lifted through the posting of a counter-bond Cannot be lifted through a counter-bond
Appointment of Arbitrators
• When it applies:
1. There is a failure to appoint an arbitrator under the following circumstances:
1. Where any of the parties in an institutional arbitration failed or refused to appoint an
arbitrator, or the parties have failed to reach an agreement on the sole arbitrator, or
when the two designated arbitrators have failed to reach an agreement on the 3rd or
presiding arbitrator and the institution under whose rules arbitration is to be conducted
fails or is unable to perform its duty as appointing authority within a reasonable time
from receipt of the request for appointment
2. Where the arbitration is an ad hoc and the parties failed to provide a method for
appointing or replacing an arbitrator, and the IBP failed or refused to act within such
period as may be allowed under the pertinent rules of the IBP
3. Where the parties agreed that their dispute shall be resolved by the 3 arbitrators but no
method of appointing those arbitrators has been agreed upon
2. And any party or the appointed arbitrators request the court to act as the appointing
authority and appoint the arbitrator or 3rd arbitrator as the case may be.
• Procedure:
1. Petition for the appointment of an arbitrator filed with the RTC where:
1. The principal place of business of any of the parties is located
2. If any of the parties are individuals, where those individuals reside
3. In the National Capital Judicial Region, at the option of the petitioner
2. Petition shall state:
1. The general nature of the dispute
2. A description of the procedure for the appointment of the arbitrators, if there is any, and
the agreement containing such procedure
3. Number of arbitrators agreed upon or the absence of such an agreement
4. The special qualifications of the arbitrators
5. The fact that the appointing authority, without justifiable cause, has failed or refused to
act as such within the time prescribed
6. Petitioner is not the cause of the delay or in the failure of appointment
7. Contain an authentic copy of the arbitration agreement
3. The aggrieved party may file a comment or opposition within 15 days from the service of
the petition
4. The court may require each party to submit a list of not less than 3 proposed arbitrators
together with their curriculum vitae
5. Relief against court action
1. Appointing an arbitrator - shall be immediately executory and shall not be the subject
of MR, petition, or certiorari
2. Denying appointment - MR, appeal, or certiorari
The arbitrator who has been validly appointed has Arbitrator is sought to be removed on the ground of
become incapable of performing his functions or has partiality or non-compliance with the qualifications
become unable to do so required of him
ADR Notes by: Paolo Ollero
Confidentiality/Protective Order
• Different from Interim Measure of Protection
• Protective order - judicial enforcement of the confidential nature of information disclosed or
obtained during an ADR proceeding
• When it applies:
1. ADR proceeding is pending
2. A party, counsel or witness disclosed information or was otherwise compelled to disclose
information
3. The disclosure was made. Under circumstances that would create a reasonable
expectation, on behalf of the source, that the information shall be kept confidential
ADR Notes by: Paolo Ollero
4. The source of the information or the party who made the disclosure has the right to prevent
such information from being disclosed
5. The source of the information or the party who made the disclosure has not given his
express consent to any disclosure
6. The applicant would be materially prejudiced by an unauthorized disclosure of the
information obtained, or to be obtained, during the ADR proceeding
• Procedure:
1. Petition:
1. If no pending court proceeding, the initiatory pleading shall be a petition to be filed with
the RTC of the place where the order may be implemented
2. If there is a pending court proceeding, the applicant should file with the court where the
proceeding is pending a motion to enjoin the disclosure or to suppress the confidential
information
• Where the situation is urgent, a timely objection must be raised by a party in the
case who will be aggrieved by the disclosure before the question is answered
2. The petition must state:
1. Information sought to be protected was obtained, or would be obtained, during an ADR
proceeding
2. The applicant would be materially prejudiced by the disclosure of that information
3. The person or persons who are being asked to divulge the confidential information
participated in the ADR proceedings
4. The time, date and place when the ADR proceedings took place
3. The comment or opposition must be filed within 15 days from service of the petition or
motion
4. Court action:
1. Meritorious - issue an order enjoining the persons involved from divulging confidential
information
• Court shall impose proper sanctions to any person who disobeys the order
5. Relief against court action
1. Grant - immediately executory and may not be enjoined while the order is being
questioned before the appellate courts
2. Refusal - may be the subject of a MR or appeal but not certiorari
CONSTRUCTION DISPUTE
ARBITRATION
Construction dispute
• Construction - all on-site works on buildings or altering structures, from land clearance through
completion including excavation, erection and assembly and installation of components and
equipments
• Construction dispute - 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
Costs of arbitration
• GR; determining which party ought to bear the costs:
1. Non-monetary claims, the award shall decide which of the parties shall bear the costs or in
what proportion the costs shall be borne by each
2. Costs ordinarily follows the result of suit, costs shall be allowed to the prevailing party as a
matter of course, but the court shall have the power to adjudge that either party shall pay
the cost of an action