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2014 BAR POINTERS

IN ALTERNATIVE DISPUTE RESOLUTION

(By: Atty. J-Vit B. Capellan)

I. RELEVANT LAWS.

1. NEW CIVIL CODE.

Art. 1308. The contract must bind both contracting parties;

its validity or compliance cannot be left to the will of one of them.

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.

Art. 2030. Every civil action or proceeding shall be

suspended:(1) If willingness to discuss a possible compromise is

expressed by one or both parties; or

(2) If it appears that one of the parties, before the

commencement of the action or proceeding, offered to discuss a possible compromise but the other party refused the offer.

The duration and terms of the suspension of the civil action

or proceeding and similar matters shall be governed by such provisions of the rules of court as the Supreme Court shall

promulgate. Said rules of court shall likewise provide for the

appointment and duties of amicable compounders.

Art. 2042. The same persons who may enter into a

compromise may submit their controversies to one or morearbitrators for decision.

2. PERTINENT SPECIAL LAWS/RULES:

2.1. R.A. No. 876 – THE ARBITRATION LAW

2.2. E.O. No. 1008 – CONSTRUCTION INDUSTRY ARBITRATION LAW2.3. CIAC REVISED RULES OF PROCEDURE GOVERNING CONSTRUCTION

ARBITRATION, AS AMENDED

2.4. R.A. No. 9285 – ALTERNATIVE DISPUTE RESOLUTION ACT OF 2004

2.5. A.M. No. 07-11-08-SC - SPECIAL RULES OF COURT ON ALTERNATIVE

DISPUTE RESOLUTION

2.6. DOJ DEPARTMENT CIRCULAR NO. 98 - IMPLEMENTING RULES AND

REGULATIONS OF THE ALTERNATIVE DISPUTE RESOLUTION ACT OF

2004.

2.7. “NEW YORK CONVENTION” - CONVENTION ON THE RECOGNITIONAND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS adopted by the

UNITED NATIONS on 10 JUNE 1958, ratified by the Philippine Senate under SENATE RESOLUTION No. 71.

2.8. “MODEL LAW” - MODEL LAW ON INTERNATIONAL COMMERCIAL

ARBITRATION, adopted by the UNITED NATIONS COMMISSION ON

INTERNATIONAL TRADE LAW (UNCITRAL) on 21 JUNE 1985.


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II. RELEVANT CONCEPTS/SUBJECTS.

1. WHAT IS AN ALTERNATIVE DISPUTE RESOLUTION?

ADR - means 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 third party participates to assist in the resolution of issues,which includes arbitration, mediation, conciliation, early neutral evaluation, mini-trial, or any combination thereof. (Sec. 3, R.A. No. 9285)

2. WHAT IS COMMERCIAL ARBITRATION?Any trade transaction for the supply or exchange of goods or services; distribution

agreements; construction of works; commercial representation or agency; factoring;

leasing, consulting; engineering; licensing; investment; financing; banking; insurance; joint venture and other forms of industrial or business cooperation; carriage of goods or

passengers by air, sea, rail or road. (Sec. 21, R.A. No. 9285)

3. PRIVATE LITIGATION DISTINGUISHED FROM PUBLIC LITIGATION.

3.1. In Private Litigation:

3.1.1. There is private-party autonomy in the resolution of disputes or thefreedom of the parties to make their own arrangements to resolve their

disputes;

3.1.2. Neutral third party participates to assist in the resolution of issues, whichincludes arbitration, mediation, conciliation, early neutral evaluation,

mini-trial, or any combination thereof;

3.1.3. Parties have the freedom to choose either accredited or non-accredited to

act as arbitrator, mediator, conciliator, neutral party evaluator;

3.1.4. Voluntary dispute resolution;

3.2. In Public Litigation:

3.2.1. Disputes are resolved pursuant to the application or interpretation of lawsand rules of procedure;

3.2.2. Adjudication of a presiding judge of a court or an officer of a government

agency;

3.2.3. Parties do not choose the adjudicator or hearing officer;

3.2.4. Parties are subjected to the operative force (i.e. jurisdiction, compulsory

processes, etc.) of the court or government agency;

4. MODES OF ADR.

4.1. Arbitration

4.2. Mediation

4.3. Conciliation

4.4. Negotiation

4.5. Neutral Early Evaluation/Mini-Trial

5. JUDICIAL DISPUTE RESOLUTION DISTINGUISHED FROM ARBITRATION.

5.1. In JDR:

5.1.1. The framework is based on the processes of

mediation, conciliation or early neutral evaluation which entails thesubmission of a dispute before a "JDR judge" who shall merely "facilitate

settlement" between the parties in conflict or make a "non-binding

evaluation or assessment of the chances of each party's case."

5.1.2. The JDR judge lacks the authority to render aresolution of the dispute that is binding upon the parties in conflict.

5.2. In Arbitration:

5.2.1. The dispute is submitted to an arbitrator, who is a neutral third person or agroup of thereof;


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5.2.2. An Arbitrator or Arbitral Tribunal shall have the authority to render aresolution binding upon the parties.

6. “CHOICE OF LAW” AND “CHOICE OF PROCEDURE”.

6.1. Freedom to Adopt Procedures to Resolve or Settle their Controversies.

6.2. Whenever the parties agree to submit their dispute to mediation by an institution itis deemed to include the agreement to be bound by the institutional rules of such body.

6.3. An agreement to submit a dispute to mediation by any institution shall include an

agreement to be bound by the internal mediation and administrative policies of such institution. Further, an agreement to submit a dispute to mediation under

international mediation rule shall be deemed to include an agreement to have such

rules govern the mediation of the dispute and for the mediator, the parties, their respective counsel, and nonparty participants to abide by such rules.

In case of conflict between the institutional mediation rules and the provisions of

this Act, the latter shall prevail. (Sec. 16)

7. EXCLUSIONS IN ADR.

7.1. Labor disputes covered by Presidential Decree No. 442, otherwise known as the

Labor Code of the Philippines, as amended and its Implementing Rules andRegulations;

7.2. Civil status of persons;

7.3. Validity of a marriage;

7.4. Any ground for legal separation;

7.5. Jurisdiction of courts;

7.6. Future legitime;

7.7. Criminal liability;

7.8. And those which by law cannot be compromised. (Sec. 6, R.A. No. 9285)

8. SOME ADR PROVIDERS.

8.1. Some Institutional Providers:

8.1.1. CIAC (Construction Industry Arbitration Commission)

8.1.2. PDRCI (Phi lippine Dispute Resolution, Inc.)

8.1.3. ICC (International Chamber of Commerce)

8.1.4. SIAC (Singapore International Arbitration Center)

8.1.5. HKIAC (Hong Kong International Arbitration Center)

8.2. Ad Hoc:

8.2.1. Parties have not identified their procedural rules that shall govern their

arbitral proceedings;

8.2.2. Parties determine their own procedural rules as they undergo arbitration;

III. POLICIES (Rule 2.2. Special ADR Rules; Note: KOPPEL CASE).

1. Arbitration agreement is the law between the parties and that they are expected to abide

by it in good faith

2. Courts shall not refuse to refer parties to arbitration for reasons including, but not limited

to, the following:

2.1. The referral tends to oust a court of its jurisdiction;

2.2. The court is in a better position to resolve the dispute subject of arbitration;

2.3. The referral would result in multiplicity of suits;

2.4. The arbitration proceeding has not commenced;

2.5. The place of arbitration is in a foreign country;

2.6. One or more of the issues are legal and one or more of the arbitrators are not

lawyers;

2.7. One or more of the arbitrators are not Philippine nationals; or


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2.8. One or more of the arbitrators are alleged not to possess the required qualificationunder the arbitration agreement or law.

3. Where court intervention is allowed under ADR Laws or the Special ADR Rules, courtsshall not refuse to grant relief for any of the following reasons:

3.1. Prior to the constitution of the arbitral tribunal, the court finds that the principalaction is the subject of an arbitration agreement; or

3.2. The principal action is already pending before an arbitral tribunal.

4. The Special ADR Rules recognize the principle of competence-competence - whichmeans that the arbitral tribunal may initially rule on its own jurisdiction, including any

objections with respect to the existence or validity of the arbitration agreement or any

condition precedent to the filing of a request for arbitration.

5. The Special ADR Rules recognize the principle of separability of the arbitration clause

- which means that said clause shall be treated as an agreement independent of the other

terms of the contract of which it forms part. A decision that the contract is null and voidshall not entail ipso jure the invalidity of the arbitration clause.

6. Judicial restraint. In resolving the petition, the court must exercise judicial restraint inaccordance with the policy set forth in Rule 2.4 deferring to the competence or

jurisdiction of the arbitral tribunal to rule on its competence of jurisdiction.

IV. ARBITRATION AGREEMENT.

1. FORMS:

1.1. Arbitral Agreement or Clause;

1.2. Submission Agreement;

2. ARBITRAL AGREEMENT OR CLAUSE DISTINGUISHED FROM SUBMISSION.

2.1. Arbitral Agreement or Clause ( Pre-causal consent ) – the parties to any contract

agree in such contract to settle by arbitration a controversy thereafter arising

between them.

2.2. Submission Agreement ( Present causal consent ) – no pre-existing arbitration

agreement, but parties subsequently agree to submit to arbitration any controversy

existing between them at the time of the submission and which may be the subject

of an action.

V. ARBITRATION LAW (under R.A. No. 876).

1. PRELLIMINARY PROCEDURE:

1.1. IN CASE OF ARBITRAL AGREEMENT/CLAUSE:

1.1.1. Demand/request for arbitration; (Not applicable in controversies covered

by CIAC)

1.1.2. Statement of the nature of the controversy;

1.1.3. Amount involved, if applicable;

1.1.4. Relief sought;

1.1.5. Attached true copy of the contract providing the arbitration;

1.1.6. Demand shall be served in person or registered mail;

1.1.7. Should the contract provides for the appointment of single arbitrator:

a. Indicate the time and date within which the parties shall agree upon such

arbitrator;

1.1.8. Should the contract provides for the appointment of three arbitrators:a. Indicate the name of the arbitrator appointed;

b. Require the other party within 15 days from notice/receipt to make an

advice in writing the name of the person appointed by the second party;

1.2. The 2 arbitrators appointed must agree on the third arbitrator within 10 days from

the date of such notice;


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1.3. In case of default by the other party in answering the demand, aggrieved partymay file, through a verified petition, with the RTC having jurisdiction of the

parties:

1.3.1. A copy of the demand/request for arbitration;

1.3.2. A statement that an original demand was sent and which set forth:

a. The nature of the action;b. Amount involved, if applicable;

c. Relief sought;

d. Attached true copy of the contract providing for arbitration;

2. SAME PROCEDURE TO BE FOLLOWED IN SUBMISSION AGREEMENTS.

3. HEARING BY COURT IN CASE OF FAILURE, NEGLECT OR REFUSAL TOARBITRATE.

3.1. File an application by way of a verified petition with the RTC for an order

directing that such arbitration to proceed in the manner provided in the agreement;

3.2. Notice to the defaulting party;3.3. RTC shall summarily hear the parties:

3.3.1. If the RTC is satisfied that the making of the agreement or such failure to

comply therewith is not in issue, it shall issue an order directing the partiesto proceed to proceed to arbitration in accordance with the terms of the

agreement;

3.3.2. If the making of the agreement or default be in issue, the RTC shall proceed to summarily hear such issue;

3.4. Should it be found that there is no agreement or no default, the proceeding shall

be dismissed;

3.5. Should it be found that there was written provision for arbitration was made or there is a default in proceeding thereunder, the RTC shall direct the parties to

proceed with the arbitration in accordance with the terms thereof;

4. ARBITRATOR(S).

4.1. QUALIFICATIONS:

4.1.1. Must be of legal age;

4.1.2. In full-enjoyment of his civil rights;

4.1.3. Knows how to read and write;

4.1.4. Not related by blood or marriage within the sixth degree to either party to

the controversy;

4.1.5. No financial, fiduciary or other interest in the controversy or cause to be

decided or in the result of the proceeding, or

4.1.6. Has any personal bias, which might prejudice the right of any party to afair and impartial award;

4.2. No party shall select as an arbitrator any person to act as his champion or toadvocate his cause.

4.3. If, after appointment but before or during hearing, a person appointed to serve as

an arbitrator shall discover any circumstances likely to create a presumption of

bias, or which he believes might disqualify him as an impartial arbitrator, thearbitrator shall immediately disclose such information to the parties. Thereafter

the parties may agree in writing:

4.3.1. to waive the presumptive disqualifying circumstances; or

4.3.2. to declare the office of such arbitrator vacant. Any such vacancyshall be filled in the same manner as the original appointment was

made. (Sec. 10, R.A. No. 876)

5. CHALLENGE OF ARBITRATOR(S).


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5.1. The arbitrators may be challenged only for the reasons mentioned in Sec 10, R.A. No. 876 which may have arisen after the arbitration agreement or were unknown

at the time of arbitration.

The challenge shall be made before them.If they do not yield to the challenge, the challenging party may renew the

challenge before the RTC of the province or city in which the challengedarbitrator, or, any of them, if there be more than one, resides. While thechallenging incident is discussed before the court, the hearing on arbitration

shall be suspended, and it shall be continued immediately after the court has

delivered an order on the challenging incident. (Sec.11, R.A. No. 876)

5.2. GROUNDS FOR CHALLENGE (Under the Model Law)

5.2.1. When the person is approached in connection with a possible appointmentas an arbitrator, he shall disclose any circumstances likely to give rise to

justifiable doubts as to his impartiality or independence. An arbitrator

from the time of his appointment and throughout the arbitral proceedings,

shall without delay disclose any such circumstances to the parties unlessthey have already been informed of them by him.

5.2.2. An arbitrator may be challenged only if circumstances exist that give rise

to justifiable doubts as to his impartiality or independence, or if he doesnot possess qualifications agreed to by the parties. A party may challenge

an arbitrator appointed by him, or in whose appointment he has

participated, only for reasons of which he becomes aware after theappointment has been made.

5.3. CHALLENGE PROCEDURE. (Under the Model Law)

5.3.1. The parties are free to agree on a procedure for challenging an arbitrator,subject to the provisions of paragraph (3) of thia article.

5.3.2. Failing such agreement, a party who intends to challenge an arbitrator

shall, within 15 days after becoming aware of the constitution of thearbitral tribunal or after becoming aware of any circumstance referred to

in article 12.2., send a written statement of the reasons for the challenge to

the arbitral tribunal. Unless the challenged arbitrator withdraws from hisoffice or the other party agrees to the challenge, the arbitral tribunal shall

decide on the challenge.

5.3.3. If a challenge under any procedure agreed upon by the parties or the

procedure of paragraph (2) of this article is not successful, the challenging party may request, within 30 day after having received notice of the

decision rejecting the challenge, the court or other authority specified in

article 6 to decide on the challenge, which decision shall be subject to noappeal; while such a request is pending, the arbitral tribunal, including the

challenge arbitrator, may continue the arbitral proceedings and make an

award.

6. VACATING AN ARBITRAL AWARD.

6.1. GROUNDS:

6.1.1. The award was procured by corruption, fraud, or other undue means; or

6.1.2. That there was evident partiality or corruption in the arbitrators or any of them; or

6.1.3. That the arbitrators were guilty of misconduct in refusing to postpone the

hearing upon sufficient cause shown, or in refusing to hear evidence

pertinent and material to the controversy;

6.1.4. That one or more of the arbitrators was disqualified to act as such under

section 9 of R.A. No. 876, and willfully refrained from disclosing such

disqualifications or of any other misbehavior by which the rights of any party have been materially prejudiced; or


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6.1.5. That the arbitrators exceeded their powers, or so imperfectly executedthem, that a mutual, final and definite award upon the subject matter

submitted to them was not made. (Sec. 24, R.A. No. 876)

7. MODIFYING OR CORRECTING AN ARBITRAL AWARD.

7.1. GROUNDS:

7.1.1. Where there was an evident miscalculation of figures, or an evident

mistake in the description of any person, thing or property referred to in

the award; or

7.1.2. Where the arbitrators have awarded upon a matter not submitted to them,

not affecting the merits of the decision upon the matter submitted; or

7.1.3. Where the award is imperfect in a matter of form not affecting the meritsof the controversy, and if it had been a commissioner's report, the defect

could have been amended or disregarded by the court.

The order may modify and correct the award so as to effect the intent

thereof and promote justice between the parties. (Sec. 25, R.A. 876)

VI. SPECIAL RULES OF COURT ON ALTERNATIVE DISPUTE RESOLUTION

(A.M. No. 07-11-08-SC)

1. All proceedings under the Special Rules on ADR are special proceedings.

2. Proceedings are conducted summarily in certain cases.

3. In cases covered by the Special ADR Rules no summons is issued, a court acquires

authority to act on the petition or motion upon proof of jurisdictional facts, i.e., that therespondent was furnished a copy of the verified petition and the notice of hearing. (Rule1.9.)

3.1. Prior service is jurisdictional and material to satisfy the requirement of due process.

4. SERVICE AND FILING OF PETITIONS IN SUMMARY PROCEEDINGS.

4.1. Before filing in court, service of the verified petition coupled by a notice of hearingunto the respondent through:

4.1.1. Personal service, proven by an affidavit of the server;

4.1.2. Registered mail, shown by the signed courier proof of delivery (postal

registry return cards);4.1.3. Private courier, proven by an affidavit executed by the responsible officer

of the private courier service showing the transmittal; or by the signed

courier proof of delivery.

4.1.4. In case of refusal or failure, by an affidavit of the server stating the facts

and circumstances of refusal or failure to receive. (Rule 1.9.)

4.2. VERIFICATION AND SUBMISSIONS.

4.2.1. Need to be Verified:

a. Any pleading, motion, opposition, comment, defense or claim.

b. Attached legal brief of counsel which state the pertinent facts, legal

arguments in support of a party’s position in the case, applicable lawsand jurisprudence.

c. All initiatory pleadings must contain a certification against forum

shopping.

4.3. PROHIBITED SUBMISSIONS:

4.3.1. Motion to dismiss


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4.3.2. Motion for bill of particulars

4.3.3. Motion for new trial or for reopening of trial

4.3.4. Petition for relief from judgment

4.3.5. Motion for extension, except in cases where an ex-parte temporary order of protection has been issued

4.3.6. Rejoinder to reply4.3.7. Motion to declare a party in default; and

4.3.8. Any other pleading specifically disallowed under any provision of the

Special ADR Rules.

5. SERVICE AND FILING OF PLEADINGS, MOTIONS AND OTHER PAPERS IN

NON-SUMMARY (Regular) PROCEEDINGS.

5.1. Initiatory pleadings filed with the court;

5.2. Court shall cause the service of the initiatory pleading/petition upon the respondent

through:

5.2.1. Personal service;

5.2.2. Registered postal mail;5.2.3. Private courier;

5.2.4. Electronic mail, as agreed upon by parties and approved by the court.

5.3. All subsequent pleadings must be priorly served and then filed with the court.

6. JUDICIAL RELIEF ON THE ISSUE OF EXISTENCE, VALIDITY, OR ENFORCEABILITY OF THE ARBITRATION AGREEMENT (PRELIMINARY

QUESTIONS).

6.1. JUDICIAL BEFORE THE COMENCEMENT OF ARBITRATION.

6.1.1. Service of verified petition upon the respondent.

6.1.2. Filing of verified petition with certification against forum shopping before

the RTC.

6.1.3. Respondent has 15 days from notice to take a comment/ opposition.

6.1.4. RTC must exercise judicial restraint conformably with the policy on

competence-competence principle.

6.1.5. Arbitral proceedings may nevertheless commenced and render an arbitral

award despite pendency of judicial relief.

6.1.6. RTC prima facie determination upholding the existence, validity or

validity of arbitration agreement is not subject to motion for reconsideration, appeal or certiorari.

a. But same issue(s) may still be raised before the arbitral tribunal;

b. Or in a latter action to vacate or set aside the arbitral award.

6.2. JUDICIAL RELIEF AFTER THE COMENCEMENT OF ARBITRATION.

6.2.1. Within 30 days from notice, file a verified petition (with certification

against forum shopping) assailing the ruling of the arbitral tribunal on the preliminary question upholding or declining its jurisdiction.

6.2.2. Respondent has 15 days from notice to take a comment/opposition.

6.2.3. Arbitration proceedings shall continue and render its award thereon.

6.2.4. No court may enjoin the arbitration proceedings pending the petition in

court.

6.3. RELIEFS FROM A COURT ACTION:

6.3.1. Motion for reconsideration;

6.3.2. But not subject to appeal;

6.3.3. A ruling by the court affirming the jurisdiction of the arbitral tribunal shallnot be subject to petition for certiorari (under Rule 65).


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6.3.4. A ruling by the court denying the jurisdiction of the arbitral tribunal may be the subject of petition for certiorari (under Rule 65).

6.4. ABITRAL TRIBUNAL DEFERING TO RESOLVE THE ISSUE OF ITSJURISDICTION.

6.4.1. A ruling by the arbitral tribunal deferring resolution on the issue of its jurisdiction until final award is not subject to a motion for reconsideration,appeal or a petition for certiorari.

6.5. WHEN TO MAKE REQUEST FOR ARBITRATION BEFORE THE RTC.

6.5.1. FORM

a. Motion

b. With notice of hearing

6.5.2. Should there be an existing arbitration agreement:

a. Before pre-trial, by either party;

b. After pre-trial, by way of agreement by the parties;

6.5.3. In case of submission agreement:a. At any stage of the proceedings.

6.6. An order referring the dispute to arbitration shall be immediately executory and shallnot be subject to a motion for reconsideration, appeal or petition for certiorari.

6.7. An order denying the request to refer the dispute to arbitration shall not be subject to

an appeal (because it is interlocutory), but may be the subject of a motion for reconsideration and/or a petition for certiorari.

7. MULTIPLE ACTIONS AND PARTIES.

7.1. Court shall not decline to refer some or all of the parties to arbitration for any of thefollowing reasons:

7.1.1. Not all of the disputes subject of the civil action may be referred to

arbitration;

7.1.2. 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;

7.1.3. The issues raised in the civil action could be speedily and efficientlyresolved in its entirety by the court rather than in arbitration;

7.1.4. Referral to arbitration does not appear to be the most prudent action; or

7.1.5. The stay of the action would prejudice the rights of the parties to the civil

action who are not bound by the arbitration agreement.

7.2. The court may, however, issue an order directing the inclusion in arbitration of those

parties who are not bound by the arbitration agreement but who agree to such

inclusion provided those originally bound by it do not object to their inclusion. (Rule4.7.)

8. INTERIM MEASURES OF PROTECTION.

8.1. When to file petition before the RTC:

8.1.1. Before arbitration is commenced;

8.1.2. After arbitration is commenced, but before the constitution of the arbitral

tribunal;

8.1.3. After the constitution of the arbitral tribunal and at any time during arbitral

proceedings but, at this stage, only to the extent that the arbitral tribunal

has no power to act or is unable to act effectively.

8.2. GROUNDS FOR ITS ALLOWANCE (NON-EXCLUSIVE):

8.2.1. Need to prevent irreparable loss or injury;

8.2.2. Need to provide security for the performance of any obligation;

8.2.3. Need to produce or preserve evidence; or

8.2.4. Need to compel any other appropriate act or omission.


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8.3. TYPES OF INTERIM MEASURES THAT MAY BE GRANTED:

8.3.1. Preliminary injunction;

8.3.2. Preliminary attachment or garnishment;

8.3.3. Appointment of a receiver;

8.3.4. Detention, preservation, delivery or inspection of property; or,8.3.5. Assistance in the enforcement of an interim measure of protection granted by the arbitral tribunal, which the latter cannot enforce effectively.

8.4. INSTANCES WHERE PRIOR NOTICE IS DISPENSED:

8.4.1. Urgent need to either:

a. preserve property; b. prevent the respondent from disposing of, or concealing, the property;c. prevent the relief prayed for from becoming illusory because of prior

notice;

9. APPOINTMENT OF ARBITRATOR.9.1. Relief against court action:

9.1.1. If the court appoints an arbitrator, the order appointing an arbitrator shall

be immediately executory and shall not be the subject of a motion for

reconsideration, appeal or certiorari.

9.1.2. An order of the court denying the petition for appointment of an arbitrator

may be the subject of a motion for reconsideration, appeal or certiorari.

(Rule 6.9.)

10. ASSISTANCE IN TAKING EVIDENCE;

10.1. Any party to an arbitration, whether domestic or foreign, may request the court to

provide assistance in taking evidence. (Rule 9.1.)

10.2. TYPE OF ASSISTANCE:

10.2.1. To comply with a subpoena ad testificandum and/or subpoena ducestecum;

10.2.2. To appear as a witness before an officer for the taking of his deposition

upon oral examination or by written interrogatories;

10.2.3. To allow the physical examination of the condition of persons, or the

inspection of things or premises and, when appropriate, to allow the

recording and/or documentation of condition of persons, things or premises (i.e., photographs, video and other means of

recording/documentation);10.2.4. To allow the examination and copying of documents; and

10.2.5. To perform any similar acts. (Rule 9.5)

10.3. If the evidence sought is not privileged, and is material and relevant, the court

shall grant the assistance in taking evidence requested and shall order petitioner to pay costs attendant to such assistance. (Rule 9.8)

10.4. The order granting assistance in taking evidence shall be immediately executory

and not subject to reconsideration or appeal. (Rule 9.9)

10.5. If the court declines to grant assistance in taking evidence, the petitioner may filea motion for reconsideration or appeal. (Ibid.)

11. CONFIDENTIALITY/PROTECTIVE ORDERS.

11.1. CONFIDENTIAL INFORMATION OBTAINED THROUGH MEDIATION:

11.1.1. Information obtained through mediation shall be privileged and

confidential.


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11.1.2. A party, a mediator, or a non-party participant may refuse to disclose andmay prevent any other person from disclosing a mediation communication.

11.1.3. Confidential Information shall not be subject to discovery and shall be

inadmissible in any adversarial proceeding, whether judicial or quasi- judicial. However , evidence or information that is otherwise admissible or

subject to discovery does not become inadmissible or protected fromdiscovery solely by reason of its use in a mediation.

11.1.4. In such an adversarial proceeding, the following persons involved or

previously involved in a mediation may not be compelled to disclose

confidential information obtained during mediation:a. the parties to the dispute;

b. the mediator or mediators;

c. the counsel for the parties;d. the non-party participants;

e. any persons hired or engaged in connection with the mediation as

secretary, stenographer, clerk or assistant; and

f. any other person who obtains or possesses confidential information byreason of his/her profession.

g. a mediator who is found to have failed to act impartially.

h. a mediator may not be called to testify to provide information gathered inmediation. (Sec. 9)

12. WAIVER OF CONFIDENTIALITY.

12.1. may be waived in a record, or orally during a proceeding by the mediator and the

mediation parties;

12.2. may likewise be waived by a non-party participant if the information is provided

by such non-party participant;

13. EXCEPTIONS TO THE PRIVELEGE.

13.1. There is no privilege against disclosure under Section 9 if mediationcommunication is:

13.1.1. in an agreement evidenced by a record authenticated by all parties to the

agreement;

13.1.2. available to the public or that is made during a session of a mediation

which is open, or is required by law to be open, to the public;

13.1.3. a threat or statement of a plan to inflict bodily injury or commit a crime of

violence;

13.1.4. internationally used to plan a crime, attempt to commit, or commit a crime,

or conceal an ongoing crime or criminal activity;

13.1.5. sought or offered to prove or disprove abuse, neglect, abandonment, or exploitation in a proceeding in which a public agency is protecting the

interest of an individual protected by law; but this exception does not

apply where a child protection matter is referred to mediation by a court or a public agency participates in the child protection mediation;

13.1.6. sought or offered to prove or disprove a claim or complaint of professionalmisconduct or malpractice filed against mediator in a proceeding; or

13.1.7. sought or offered to prove or disprove a claim of complaint of professional

misconduct of malpractice filed against a party, nonparty participant, or representative of a party based on conduct occurring during a mediation.

13.2. There is no privilege under Section 9 if a court or administrative agency, finds,

after a hearing in camera, that the party seeking discovery of the proponent of theevidence has shown:

13.2.1. that the evidence is not otherwise available, that there is a need for the

evidence that substantially outweighs the interest in protectingconfidentiality, and the mediation communication is sought or offered in:

a. a court proceeding involving a crime or felony; or


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b. a proceeding to prove a claim or defense that under the law is sufficient toreform or avoid a liability on a contract arising out of the mediation.

13.3. A mediator may not be compelled to provide evidence of a mediationcommunication or testify in such proceeding.

13.4. If a mediation communication is not privileged under an exception in subsection(a) or (b), only the portion of the communication necessary for the application of

the exception for nondisclosure may be admitted. The admission of particular

evidence for the limited purpose of an exception does not render that evidence, or any other mediation communication, admissible for any other purpose. (Sec. 11)

14. A party, counsel or witness who disclosed or who was compelled to disclose informationrelative to the subject of ADR under circumstances that would create a reasonable

expectation, on behalf of the source, that the information shall be kept confidential has

the right to prevent such information from being further disclosed without the express

written consent of the source or the party who made the disclosure. (Rule 10.1.)

15. In resolving the petition or motion, the courts shall be guided by the following principles

applicable to all ADR proceedings:

15.1. Confidential information shall not be subject to discovery and shall be

inadmissible in any adversarial proceeding, whether judicial or quasi-judicial.

15.2. However, evidence or information that is otherwise admissible or subject todiscovery does not become inadmissible or protected from discovery solely by

reason of its use therein.

15.2.1. For mediation proceedings, the court shall be further guided by the

following principles:a. Information obtained through mediation shall be privileged and

confidential.

b. A party, a mediator, or a nonparty participant may refuse to disclose andmay prevent any other person from disclosing a mediation

communication.

c. In such an adversarial proceeding, the following persons involved or previously involved in a mediation may not be compelled to disclose

confidential information obtained during the mediation:

(1) parties to the dispute;

(2) mediator or mediators;(3) counsel for the parties;

(4) nonparty participants;

(5) any persons hired or engaged in connection with the mediation assecretary, stenographer; clerk or assistant; and

(6) any other person who obtains or possesses confidential information by

reason of his/ her profession.d. The protection of the ADR Laws shall continue to apply even if a

mediator is found to have failed to act impartially.e. A mediator may not be called to testify to provide information gathered in

mediation. A mediator who is wrongfully subpoenaed shall be

reimbursed the full cost of his attorney fees and related expenses. (Rule10.8.)

16. CONFIRMATION, CORRECTION OR VACATION OF AWARD IN DOMESTIC

ARBITRATION.

16.1. PERIODS:

16.1.1. Confirmation. - At any time after the lapse of thirty (30) days from receipt

by the petitioner of the arbitral award, he may petition the court to confirmthat award.


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new or revised award or to direct a new hearing, or in the appropriate case, order thenew hearing before a new arbitral tribunal, the members of which shall be chosen in

the manner provided in the arbitration agreement or submission, or the law. (Rule

11.9.)

17. RECOGNITION AND ENFORCEMENT OR SETTING ASIDE OF AN AWARD ININTERNATIONAL COMMERCIAL ARBITRATION.

17.1. Who may petition for recognition and enforcement or setting aside?

17.1.1. Any party to an international commercial arbitration in the Philippines.

17.2. PERIOD TO FILE PETITION FOR RECOGNITION AND ENFORCEMENT.

17.2.1. Any time from receipt of award.

17.2.2. If, however, a timely petition to set aside an arbitral award is filed, the

opposing party must file therein and in opposition thereto the petition for

recognition and enforcement of the same award within the period for filing

an opposition. (Rule 12.2.)

17.3. PERIOD TO FILE PETITION TO SET ASIDE AN ARBITRAL AWARD.

17.3.1. Within three (3) months from the time the petitioner receives a copythereof.

17.3.2. If a timely request is made with the arbitral tribunal for correction,

interpretation or additional award, the three (3) month period shall becounted from the time the petitioner receives the resolution by the arbitral

tribunal of that request. (Ibid.)

17.4. GROUNDS TO SET ASIDE OR RESIST ENFORCEMENT OF AN ARBITRALAWARD.

17.4.1. A party to the arbitration agreement was under some incapacity, or the

said agreement is not valid under the law to which the parties havesubjected it or, failing any indication thereof, under Philippine law; or

17.4.2. The party making the application to set aside or resist enforcement was not

given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

17.4.3. The award deals with a dispute not contemplated by or not falling within

the terms of the submission to arbitration, or contains decisions on matters

beyond the scope of the submission to arbitration; provided that, if thedecisions on matters submitted to arbitration can be separated from those

not so submitted, only that part of the award which contains decisions on

matters not submitted to arbitration may be set aside or only that part of the award which contains decisions on matters submitted to arbitration

may be enforced; or

17.4.4. The composition of the arbitral tribunal or the arbitral procedure was notin accordance with the agreement of the parties, unless such agreement

was in conflict with a provision of Philippine law from which the partiescannot derogate, or, failing such agreement, was not in accordance with

Philippine law;

17.4.5. The court finds that:a. The subject-matter of the dispute is not capable of settlement by

arbitration under the law of the Philippines; or

b. The recognition or enforcement of the award would be contrary to public

policy. (Rule 12.4.)

18. RECOGNITION AND ENFORCEMENT OF A FOREIGN ARBITRAL AWARD.

18.1. WHO MAY FILE THE PETITION.


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18.1.1. Any party to a foreign arbitration may petition the court to recognize andenforce a foreign arbitral award. (Rule 13.1.)

18.2. PERIOD.

18.2.1. Any time after receipt of a foreign arbitral award before the Regional Trial

Court. (Rule 13.2.)

18.3. VENUE AT THE OPTION OF THE PETITIONER.

18.3.1. Where the assets to be attached or levied upon is located;

18.3.2. Where the act to be enjoined is being performed;

18.3.3. In the principal place of business in the Philippines of any of the parties;

18.3.4. If any of the parties is an individual, where any of those individuals

resides, or

18.3.5. In the National Capital Judicial Region. (Rule 13.3.)

19. GOVERNING LAW AND GROUNDS TO REFUSE RECOGNITION AND

ENFORCEMENT.19.1. Recognition and enforcement of a foreign arbitral award shall be governed by the

1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral

Awards (the "New York Convention") and the Special ADR Rules.

19.2. The court may, upon grounds of comity and reciprocity, recognize and enforce a

foreign arbitral award made in a country that is not a signatory to the New York

Convention as if it were a Convention Award. (Rule 13.4.)

20. GROUNDS FOR REFUSAL TO RECOGNIZE AND ENFORCE FOREIGN

ARBITRAL AWARD.

20.1. A party to the arbitration agreement was under some incapacity; or the saidagreement is not valid under the law to which the parties have subjected it or, failing

any indication thereof, under the law of the country where the award was made; or

20.2. The party making the application was not given proper notice of the appointmentof an arbitrator or of the arbitral proceedings or was otherwise unable to present his

case; or

20.3. The award deals with a dispute not contemplated by or not falling within theterms of the submission to arbitration, or contains decisions on matters beyond the

scope of the submission to arbitration; provided that, if the decisions on matters

submitted to arbitration can be separated from those not so submitted, only that part

of the award which contains decisions on matters not submitted to arbitration may beset aside; or

20.4. The composition of the arbitral tribunal or the arbitral procedure was not in

accordance with the agreement of the parties or, failing such agreement, was not inaccordance with the law of the country where arbitration took place; or

20.5. The award has not yet become binding on the parties or has been set aside or

suspended by a court of the country in which that award was made; or

20.6. The court finds that:

20.6.1. The subject-matter of the dispute is not capable of settlement or resolution by arbitration under Philippine law;

20.6.2. The recognition or enforcement of the award would be contrary to public

policy.

21. DEPOSIT AND ENFORCEMENT OF MEDIATED SETTLEMENT AGREEMENTS.

21.1. WHO DEPOSITS THE MEDIATED SETTLEMENT AGREEMENT?

21.1.1. Any party to a mediation that is not court-annexed may deposit with the

court the written settlement agreement, which resulted from that mediation.

(Rule 15.1.1)

21.2. WHEN IS THE MEDIATED SETTLEMENT AGREEMENT DEPOSITED?


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21.2.1. At any time after an agreement is reached , the written settlementagreement may be deposited. (15.2.)

21.3. VENUE.

21.3.1. Written settlement agreement may be jointly deposited by the parties or by

one party with prior notice to the other party/ies with the Clerk of Court of the RTC:a. Where the principal place of business in the Philippines of any of the

parties is located;

b. If any of the parties is an individual, where any of those individualsresides; or

c. In the National Capital Judicial Region. (Rule 15.3.)

21.4. ENFORCEMENT OF MEDIATED SETTLEMENT AGREEMENT.

21.4.1. Any of the parties to a mediated settlement agreement, which was

deposited with the Clerk of Court of the RTC, may, upon breach thereof,

file a verified petition with the same court to enforce said agreement.(Rule 15.5.)

22. MOTION FOR RECONSIDERATION, APPEAL AND CERTIORARI.

22.1. MOTION FOR RECONSIDERARION WITHIN 15 DAYS BEFORE THE RTC.

22.1.1. WHEN ALLOWED:

a. That the arbitration agreement is inexistent, invalid or unenforceable pursuant to Rule 3.10 (B);

b. Upholding or reversing the arbitral tribunal’s jurisdiction pursuant to Rule

3.19;

c. Denying a request to refer the parties to arbitration;d. Granting or denying a party an interim measure of protection;

e. Denying a petition for the appointment of an arbitrator;

f. Refusing to grant assistance in taking evidence;g. Enjoining or refusing to enjoin a person from divulging confidential

information;

h. Confirming, vacating or correcting a domestic arbitral award;i. Suspending the proceedings to set aside an international commercial

arbitral award and referring the case back to the arbitral tribunal;

j. Setting aside an international commercial arbitral award;

k. Dismissing the petition to set aside an international commercial arbitralaward, even if the court does not recognize and/or enforce the same;

l. Recognizing and/or enforcing, or dismissing a petition to recognize and/or

enforce an international commercial arbitral award;m. Declining a request for assistance in taking evidence;

n. Adjourning or deferring a ruling on a petition to set aside, recognize

and/or enforce an international commercial arbitral award;o. Recognizing and/or enforcing a foreign arbitral award, or refusing

recognition and/or enforcement of the same; and p. Granting or dismissing a petition to enforce a deposited mediated

settlement agreement. (Rule 19.1.)

22.1.2. WHEN NOT ALOWED.

a. No motion for reconsideration shall be allowed from the following rulings

of the RTC:

(1) A prima facie determination upholding the existence, validity or enforceability of an arbitration agreement pursuant to Rule 3.1 (A);

(2) An order referring the dispute to arbitration;

(3) An order appointing an arbitrator;(4) Any ruling on the challenge to the appointment of an arbitrator;


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(5) Any order resolving the issue of the termination of the mandate of anarbitrator; and

(6) An order granting assistance in taking evidence. (Ibid.)

22.2. No second motion for reconsideration is allowed.

23. APPEAL AND CERTIORARI.

23.1. No appeal or certiorari on the merits of an arbitral award - An agreement to refer a

dispute to arbitration shall mean that the arbitral award shall be final and binding.

Consequently, a party to an arbitration is precluded from filing an appeal or a petitionfor certiorari questioning the merits of an arbitral award. (Rule 19.7.)

24. APPEAL FROM RTC TO COURT OF APPEALS.

24.1. MODE OF APPEAL – Petition for review on certiorari under Rule 43

24.2. PERIOD – 15 days from notice of the final order, decision, or motion for

reconsideration.

24.3. GROUNDS:

24.3.1. Granting or denying an interim measure of protection;

24.3.2. Denying a petition for appointment of an arbitrator;

24.3.3. Denying a petition for assistance in taking evidence;

24.3.4. Enjoining or refusing to enjoin a person from divulging confidentialinformation;

24.3.5. Confirming, vacating or correcting/modifying a domestic arbitral award;

24.3.6. Setting aside an international commercial arbitration award;

24.3.7. Dismissing the petition to set aside an international commercial arbitrationaward even if the court does not decide to recognize or enforce such award;

24.3.8. Recognizing and/or enforcing an international commercial arbitration

award;

24.3.9. Dismissing a petition to enforce an international commercial arbitration

award;

24.3.10. Recognizing and/or enforcing a foreign arbitral award;

24.3.11. Refusing recognition and/or enforcement of a foreign arbitral

award;

24.3.12. Granting or dismissing a petition to enforce a deposited mediated

settlement agreement; and

24.3.13. Reversing the ruling of the arbitral tribunal upholding its

jurisdiction. (Rule 19.12.)

25. SPECIAL CIVIL ACTION FOR CERTIORARI (Under RULE 65).

25.1. WHERE – Court of Appeals

25.2. PERIOD - petition must be filed within 15 days from notice of the judgment,order or resolution sought to be annulled or set aside.

25.3. No extension of time to file the petition shall be allowed. (Rule 19.28.)

25.4. GROUNDS:

25.4.1. When the Regional Trial Court, in making a ruling under the Special ADR Rules, has acted:

a. without jurisdiction;

b. in excess of its jurisdiction, or

c. with grave abuse of discretion amounting to lack or excess of jurisdiction,and there is no appeal or any plain, speedy, and adequate remedy in the

ordinary course of law, a party may file a special civil action for certiorari

to annul or set aside a ruling of the Regional Trial Court.


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25.5. A special civil action for certiorari may be filed against the following orders of the court.

25.5.1. Holding that the arbitration agreement is inexistent, invalid or

unenforceable;

25.5.2. Reversing the arbitral tribunal’s preliminary determination upholding its

jurisdiction;25.5.3. Denying the request to refer the dispute to arbitration;

25.5.4. Granting or refusing an interim relief;

25.5.5. Denying a petition for the appointment of an arbitrator;

25.5.6. Confirming, vacating or correcting a domestic arbitral award;

25.5.7. Suspending the proceedings to set aside an international commercial

arbitral award and referring the case back to the arbitral tribunal;

25.5.8. Allowing a party to enforce an international commercial arbitral award pending appeal;

25.5.9. Adjourning or deferring a ruling on whether to set aside, recognize and or

enforce an international commercial arbitral award;

25.5.10. Allowing a party to enforce a foreign arbitral award pendingappeal; and

25.5.11. Denying a petition for assistance in taking evidence. (Rule 19.26.)

26. APPEAL BY CERTIORARI TO THE SUPREME COURT.

26.1. WHERE – Supreme Court

26.2. PERIOD – 15 days from notice of judgment or final order or resolution appealed

from, or of the denial of the petitioner's motion for new trial or reconsideration

filed in due time after notice of the judgment.

26.3. MODE – Verified petition for review on certiorari (under Rule 45)

26.3.1. Purely questions of law (Rule 19.37.)

26.3.2. Discretionary appeal

26.4. GROUNDS:

The following, while neither controlling nor fully measuring the court'sdiscretion, indicate the serious and compelling, and necessarily, restrictive

nature of the grounds that will warrant the exercise of the Supreme Court’s

discretionary powers, when the Court of Appeals:

26.4.1. Failed to apply the applicable standard or test for judicial review prescribed in these Special ADR Rules in arriving at its decision resulting

in substantial prejudice to the aggrieved party;

26.4.2. Erred in upholding a final order or decision despite the lack of jurisdictionof the court that rendered such final order or decision;

26.4.3. Failed to apply any provision, principle, policy or rule contained in these

Special ADR Rules resulting in substantial prejudice to the aggrieved party; and

26.4.4. Committed an error so egregious and harmful to a party as to amount to anundeniable excess of jurisdiction.

The mere fact that the petitioner disagrees with the Court of Appeals’determination of questions of fact, of law or both questions of fact and law,

shall not warrant the exercise of the Supreme Court’s discretionary power.

The error imputed to the Court of Appeals must be grounded upon any of the

above prescribed grounds for review or be closely analogous thereto.A mere general allegation that the Court of Appeals has committed serious

and substantial error or that it has acted with grave abuse of discretion

resulting in substantial prejudice to the petitioner without indicating withspecificity the nature of such error or abuse of discretion and the serious

prejudice suffered by the petitioner on account thereof, shall constitute


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sufficient ground for the Supreme Court to dismiss outright the petition. (Rule19.36)

VII. REMEDIES RE: DOMESTIC ARBITRAL AWARDS:

1. CONSTRUCTION INDUSTRY ARBITRATION COMMISSION (CIAC [E.O. No.

1008])1.1. Original and exclusive jurisdiction over:

1.1.1. disputes arising from, or connected with, contracts entered into by parties

involved in construction in the Philippines, whether the dispute arises:

a. before or after the completion of the contract, or

b. after the abandonment or breach thereof.

1.1.2. Violation of specifications for materials and workmanship;

1.1.3. Violation of the terms of agreement;

1.1.4. Interpretation and/or application of contractual time and delays;

1.1.5. Maintenance and defects;

1.1.6. Payment, default of employer or contractor and changes in contract cost.

1.2. These disputes may involve government or private contracts.1.3. For the Board to acquire jurisdiction, the parties to a dispute must agree to submit

the same to voluntary arbitration.

1.4. Jurisdiction of a court is determined by the law in force at the time of thecommencement of the action.

1.5. Jurisdiction of CIAC is over the dispute, not the contract.

1.6. As long as the parties agree to submit to voluntary arbitration, regardless of whatforum they may choose (ad hoc or institutional), their agreement will fall within

the jurisdiction of the CIAC, such that, even if they specifically choose another

forum, the parties will not be precluded from electing to submit their dispute

before the CIAC because the right has been vested upon each party by law, i.e.,E.O. No 1008. (NIA vs. Court of Appeals, 318 SCRA 255).

1.7. When a contract contains a clause for the submission of a future controversy to

arbitration, it is not necessary for the parties to enter into a submission agreement before the claimant may invoke the jurisdiction of the CIAC.

1.8. ARBITRATOR(S).

1.8.1. A sole arbitrator:

a. Parties, by agreement, nominate him from the list of arbitrators accredited

by the CIAC for appointment and confirmation.

b. If the parties fail to agree as to the arbitrator, the CIAC taking intoconsideration the complexities and intricacies of the dispute/s, has the

option to appoint a single arbitrator or an Arbitral Tribunal.

1.8.2. Three arbitrators:

a. If the CIAC decides to appoint an Arbitral Tribunal, each party maynominate one (1) arbitrator from the list of arbitrators accredited bythe CIAC for appointment and for confirmation.

b. The third arbitrator who is acceptable to both parties confirmed inwriting shall be appointed by the CIAC and shall preside over the

Tribunal. (Sec. 14)

1.9. As soon as a decision, order or award has become final and executory, theArbitral Tribunal or the single arbitrator with the occurrence of the CIAC shall

motu propio, or on motion of any interested party, issue a writ of execution

requiring any sheriff or other proper officer to execute said decision, order or award. (Sec. 20)

2. COURT OF APPEALS.

1.1. 15 days from receipt of notice of the assailed final arbitral award, petition for review under Rule 43, either on questions of fact, of law, or of fact and law.

Ground: errors of arbitral award (judgment). (Sec. 18.2, CIAC Revised Rules of

Procedure Governing Construction Arbitration)


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1.2. 60 days from receipt of notice of the assailed final arbitral award, special civilaction for certiorari or petition for certiorari under Rule 65 (N.B.: Hierarchy of

Courts must be observed, as the remedy is an original and concurrent jurisdiction

with the Supreme Court). Ground: errors of jurisdiction.

2. SUPREME COURT.2.1. 15 days from receipt of notice of the assailed judgment or denial of motion for reconsideration by the Court of Appeals, ordinary appeal of petition for review on

certiorari under Rule 45. Ground: errors of judgment.

2.2. Concurrent jurisdiction with the Court of Appeals on Petition for Certiorari under Rule 65. Hierarchy of courts must be observed. (Note: the petition for certiorari

[writ of certiorari] under Rule 65 is an original action).

3. REMEDIES FROM INTERNATIONAL COMMERCIAL ARBITRATION.

3.1. Petition for confirmation, recognition and enforcement of foreign arbitral award

before the Regional Trial Court;

3.1.1. Attach the original or authenticated copy of the arbitral award or thearbitration agreement.

3.1.2. The award or agreement must be made in any of the official languages

(English), if not the party shall supply a duly certified translation thereof into any of such languages.

3.1.3. The country in which the foreign arbitration award was made must be a

party to the New York Convention.3.1.4. When confirmed by RTC it shall be enforced in the same manner as final

and executory decisions of courts of law of the Philippines.

3.1.5. If the application for rejection or suspension of enforcement of an award

has been made, the RTC may, if it considers it proper, vacate its decisionand may also, on the application of the party claiming recognition or

enforcement of the award, order the party to provide appropriate security.

4. The recognition and enforcement of foreign arbitral awards not covered by the New York

Convention shall be done in accordance with procedural rules to be promulgated by the

Supreme Court. The Court may, grounds of comity and reciprocity, recognize andenforce a nonconvention award as a convention award. (Sec. 43)

5. A foreign arbitral award when confirmed by a court of a foreign country, shall be

recognized and enforced as a foreign arbitral award and not a judgment of a foreigncourt. (Sec. 44)

6. A foreign arbitral award, when confirmed by the RTC, shall be enforced as a foreignarbitral award and not as a judgment of a foreign court.

7. A foreign arbitral award, when confirmed by the RTC, shall be enforced in the samemanner as final and executory decisions of courts of law of the Philippines.

VIII. CASES.

A. Tuna Processing, Inc., vs. Philippine Kingford, Inc., G.R. No. 185582, February

29, 2012.)

1. A foreign corporation not licensed to do business in the Philippines, but which

collects royalties from entities in the Philippines, have legal capacity to sue for therecognition and enforcement of foreign arbitral award in accordance with the

provisions of the Alternative Dispute Resolution Act of 2004 [R.A. No. 9285] .

2. 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


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arbitration and by the result of arbitration, conceding thereby the capacity of theother party to enter into the contract, participate in the arbitration and cause the

implementation of the result. (Ibid.)

3. The New York Convention shall govern the recognition and enforcement of

arbitral awards covered by the said Convention. (Sec. 42, R.A. No. 9285)

4. Also, international commercial arbitration is governed by the Model Law on

International Commercial Arbitration (the “Model Law”) adopted by the United

Nations Commission on International Trade Law (UNCITRAL) on 21 June 1985.

5. Exclusive grounds for opposition in the application for recognition and

enforcement of arbitral award.Article V

1. Recognition and enforcement of the award may be

refused, at the request of the party against whom it is invoked, only

if that party furnishes to the competent authority where therecognition and enforcement is sought, proof that:

(a) The parties to the agreement referred to in article II

were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties

have subjected it or, failing any indication thereon, under the law

of the country where the award was made; or (b) The party against whom the award is invoked was not

given proper notice of the appointment of the arbitrator or of the

arbitration proceedings or was otherwise unable to present his case;

or (c) The award deals with a difference not contemplated by

or not falling within the terms of the submission to arbitration, or it

contains decisions on matters beyond the scope of the submissionto arbitration, provided that, if the decisions on matters submitted

to arbitration can be separated from those not so submitted, that

part of the award which contains decisions on matters submitted toarbitration may be recognized and enforced; or

(d) The composition of the arbitral authority or the arbitral

procedure was not in accordance with the agreement of the parties,

or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or

(e) The award has not yet become binding on the parties, or

has been set aside or suspended by a competent authority of thecountry in which, or under the law of which, that award was made.

2. Recognition and enforcement of an arbitral award may

also be refused if the competent authority in the country whererecognition and enforcement is sought finds that:

(a) The subject matter of the difference is not capable of settlement by arbitration under the law of that country; or

(b) The recognition or enforcement of the award would be

contrary to the public policy of that country. (New York Convention)

B. National Irrigation Administration (NIA), vs. Honorable court of Appeals [4th

Division], Construction Industry Arbitration Commission, and Hydro

Resources Contractors Corporation , G.R. No. 129169. November 17, 1999.

1. The Construction Industry Arbitration Commission (CIAC) has original andexclusive jurisdiction over disputes arising from, or connected with contracts

entered into by parties involved in construction in the Philippines, whether the


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dispute arises before or after the completion of the contract, or after theabandonment or breach thereof.

2. Jurisdiction of a court is determined by the law in force at the time of thecommencement of the action.

3. The disputes may involve government or private contracts.

4. As long as the parties agree to submit to voluntary arbitration, regardless of what

forum they may choose, their agreement will fall within the jurisdiction of theCIAC, such that, even if they specifically choose another forum, the parties will

not be precluded from electing to submit their dispute before the CIAC because

this right has been vested upon each party by law, i.e., E.O. No. 1008.

C. LM Power Engineering Corporation vs. Capitol Industrial Construction

Groups, Inc., G.R. No. 141833, March 26, 2003.

8. Whenever there is an arbitration clause, there is no more need to file request

with the CIAC in order to vest it with jurisdiction to decide a construction

dispute.

9. A prematurely filed complaint before the RTC without prior recourse to

arbitration, the proper procedure to enable the CIAC to decide on the disputeis to request the stay or suspension of such an action, as provided under Sec.

7, R.A. No. 876 (the Arbitration Law).

“Sec. 7. Stay of Civil Action. — If any suit or proceeding be brought upon an issue arising out of an agreement providing for

the arbitration thereof, the court in which such suit or proceeding is

pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration, shall stay the action or

proceeding until an arbitration has been had in accordance with the

terms of the agreement: Provided, That the applicant for the stay isnot in default in proceeding with such arbitration.”

D. JPlus Asia Development Corporation vs. Utility Assurance Corporation, G.R.

No. 199650, June 26, 2013.

1. CIAC arbitral award is final and executory.

2. A CIAC arbitral award need not be confirmed by the RTC to be executory as

provided under E.O. No. 1008.

3. Domestic arbitral award, not falling under CIAC, shall be confirmed by way

of a petition for such an order within 30 days before the RTC. (Sec. 23 inrelation to Sec. 28, Arbitration Law [R.A. No. 876])

4. The judgment in the confirmation of a domestic arbitral award is docketed asif it were rendered in an action. (Ibid.).

5. The judgment in the confirmation of a domestic arbitral award so entered

have the same force and effect in all respects, as, and be subject to all provisions relating to a judgment in an action; and it may be enforced as if it

had been rendered in the court in which it is entered. (Ibid.)

E. Koppel, Inc. vs. Makati Rotary Club Foundation, Inc., G.R. No. 198075,

September 4, 2013.


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1. Doctrine of Separability – Under the doctrine of separability, an arbitration

agreement is considered as independent of the main contract. Being a

separate contract in itself, the arbitration agreement may thus be invokedregardless of the possible nullity or invalidity of the main contract.

2. Even the very party who repudiates or assails the validity of such contractmay invoke the arbitration clause.

3. The operation of the arbitration clause is not at all defeated by the failure of the party to file a formal "request" or application therefor. The filing of a

"request" pursuant to Section 24 of R.A. No. 9285 is not the sole means by

which an arbitration clause may be validly invoked in a pending suit.Section 24 of R.A. No. 9285 reads:

Sec. 24. Referral to Arbitration. — A court before which an

action is brought in a matter which is the subject matter of an

arbitration agreement shall, if at least one party so requests notlater that the pre-trial conference, or upon the request of both

parties thereafter, refer the parties to arbitration unless it finds that

the arbitration agreement is null and void, inoperative or incapableof being performed.

The "request" referred to in the above provision is, in turn, implemented

by Rules 4.1 to 4.3 of A.M. No. 07-11-08-SC or the Special Rules of Court onAlternative Dispute Resolution (Special ADR Rules):

RULE 4: REFERRAL TO ADR

Rule 4.1.Who makes the request. — A party to a pending

action filed in violation of the arbitration agreement, whether contained in an arbitration clause or in a submission agreement,

may request the court to refer the parties to arbitration in

accordance with such agreement.Rule 4.2. When to make request. — (A) Where the

arbitration agreement exists before the action is filed. — The

request for referral shall be made not later than the pre-trialconference. After the pre-trial conference, the court will only act

upon the request for referral if it is made with the agreement of all

parties to the case.

(B) Submission agreement. — If there is no existingarbitration agreement at the time the case is filed but the parties

subsequently enter into an arbitration agreement, they may request

the court to refer their dispute to arbitration at any time during the proceedings.

Rule 4.3. Contents of request. — The request for referral

shall be in the form of a motion, which shall state that the disputeis covered by an arbitration agreement.

Apart from other submissions, the movant shall attach tohis motion an authentic copy of the arbitration agreement.

The request shall contain a notice of hearing addressed to

all parties specifying the date and time when it would be heard.The party making the request shall serve it upon the respondent to

give him the opportunity to file a comment or opposition as

provided in the immediately succeeding Rule before the hearing.

Attention must be paid, however, to the salient wordings of Rule4.1. It reads: "[a] party to a pending action filed in violation of the

arbitration agreement . . . may request the court to refer the parties

to arbitration in accordance with such agreement."In using the word "may" to qualify the act of filing a "request" under Section 24 of

R.A. No. 9285, the Special ADR Rules clearly did not intend to limit the invocation of an


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arbitration agreement in a pending suit solely via such "request." After all, non-compliance with an arbitration agreement is a valid defense to any offending suit and, as

such, may even be raised in an answer as provided in our ordinary rules of procedure.

4. In this case, it is conceded that petitioner was not able to file a separate

"request" of arbitration before the MeTC. However, it is equally concededthat the petitioner, as early as in its Answer with Counterclaim, had alreadyapprised the MeTC of the existence of the arbitration clause in the 2005 Lease

Contract and, more significantly, of its desire to have the same enforced in

this case. This act of petitioner is enough valid invocation of his right toarbitrate.

5. The fact that the parties already underwent through JDR proceedings beforethe RTC, will not make the subsequent conduct of arbitration between the

parties unnecessary or circuitous. The JDR system is substantially different

from arbitration proceedings.

6. JUDICIAL DISPUTE RESOLUTION DISTINGUISHED FROM

ARBITRATION.

The JDR framework is based on the processes of mediation, conciliationor early neutral evaluation which entails the submission of a dispute before a

"JDR judge" who shall merely "facilitate settlement" between the parties in

conflict or make a "non-binding evaluation or assessment of the chances of each party's case." Thus in JDR, the JDR judge lacks the authority to render a

resolution of the dispute that is binding upon the parties in conflict.

In arbitration, on the other hand, the dispute is submitted to an

arbitrator/s — a neutral third person or a group of thereof — who shall have theauthority to render a resolution binding upon the parties.

7. Mere submission of a dispute to JDR proceedings would not necessarily render the subsequent conduct of arbitration a mere surplusage. The failure of the parties

in conflict to reach an amicable settlement before the JDR may, in fact, be

supplemented by their resort to arbitration where a binding resolution to thedispute could finally be achieved.

8. Neither would the summary nature of ejectment cases be a valid reason to

disregard the enforcement of the arbitration clause of the 2005 Lease Contract. Notwithstanding the summary nature of ejectment cases, arbitration still remains

relevant as it aims not only to afford the parties an expeditious method of

resolving their dispute.R.A. No. 9285

Sec. 24. Referral to Arbitration. — A court before which an

action is brought in a matter which is the subject matter of anarbitration agreement shall, if at least one party so requests not

later that the pre-trial conference, or upon the request of both parties thereafter, refer the parties to arbitration unless it finds that

the arbitration agreement is null and void, inoperative or incapable

of being performed. [Emphasis supplied]The violation by the MeTC of the clear directives under R.A. Nos. 876 and

9285 renders invalid all proceedings it undertook in the ejectment case after the

filing by petitioner of its Answer with Counterclaim — the point when the

petitioner and the respondent should have been referred to arbitration.

9. Doctrine of COMPETENCE-COMPETENCE.

Rule 2.4. Policy implementing competence-competence principle. - The arbitral tribunal shall be accorded the first

opportunity or competence to rule on the issue of whether or not it


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has the competence or jurisdiction to decide a dispute submitted toit for decision, including any objection with respect to the

existence or validity of the arbitration agreement. When a court is

asked to rule upon issue/s affecting the competence or jurisdictionof an arbitral tribunal in a dispute brought before it, either before

or after the arbitral tribunal is constituted, the court must exercise judicial restraint and defer to the competence or jurisdiction of thearbitral tribunal by allowing the arbitral tribunal the first

opportunity to rule upon such issues.

Where the court is asked to make a determination of whether the arbitration agreement is null and void, inoperative or

incapable of being performed, under this policy of judicial restraint,

the court must make no more than a prima facie determination of that issue.

Unless the court, pursuant to such prima facie

determination, concludes that the arbitration agreement is null and

void, inoperative or incapable of being performed, the court mustsuspend the action before it and refer the parties to arbitration

pursuant to the arbitration agreement.

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