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Alternative dispute resolution WITH mediation

Prepared by : atty. juliet a. sapling-imperial

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CHAPTER 5 DOMESTIC ARBITRATION

**SEC. 32. Law Governing Domestic Arbitration. - Domestic arbitration shall continue to be governed by Republic Act No. 876, otherwise known as "The Arbitration Law" as amended by this Chapter. The term "domestic arbitration" as used herein shall mean an arbitration that is not international as defined in Article (3) of the Model Law.

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Domestic arbitration shall continue to be governed by Republic Act No. 876, otherwise known as "The Arbitration Law" as amended by this Chapter.

In case of conflict between the provisions of RA 876 and the provisions of Chapter 5 of RA 9285, which will govern or prevail?

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SEC. 33. Applicability to Domestic Arbitration. - Article 8, 10, 11, 12, 13, 14, 18 and 19 and 29 to 32 of the Model Law and Section 22 to 31 of the preceding Chapter 4 shall apply to domestic arbitration.

Art. 8, Model Law. Arbitration & substantive claim before court(1) A court before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so requests not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed.

(2) Where an action referred to in par. (1) of this article has been brought, arbitral proceedings may nevertheless be commenced or continued, and an award may be made, while the issue is pending before the court.**

Art. 10, Model Law, No. of arbitrators

(1) The parties are free to determine the number of arbitrators.

(2) Failing such determination, the number of arbitrators shall be three.**

Art. 11, Model Law. Appointment of arbitratorsQualification: No person shall be precluded by reason of his nationality from acting as an arbitrator, unless otherwise agreed by the parties.Qualifications as required in the arbitration agreement;Independent and impartial;If sole or the third arbitrator, a nationality different from that of the parties**

Procedure of appointment of arbittr(1) by agreement of the parties. Parties are free to agree on the procedure.

(2) No agreement, and there are three arbitrators, each party shall appoint one arbitrator and the two arbitrators shall appoint the third one;**

(3) if the parties fail to make the appointment or if the two arbitrators fail to appoint the third arbitrator, any of the parties may petition the RTC to make the appointment unless the agreement on the appointment procedure provides for other means of appointment.

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(4) in sole arbitration, if parties are unable to agree, a party may petition the RTC for the appointment of one unless the agreement on the appointment procedure provides for other means of securing the appointment.

(5) The decision of the RTC is not subject to appeal.

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Art. 12, Model Law, Grounds for challenge(1) When a person is approached in connection with his possible appointment as 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 unless they have already been informed of them by him;

(2) An arbitrator maybe challenged only if circumstances exists that give rise to justifiable doubts as to his impartiality or independence, or if does not 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 the appointment has been made.**

Art. 12, Grounds for challengeNon-disclosure of matters that would affect his impartiality or independence which includes those that may give rise to conflict of interest; Lack of qualification required of an arbitrator as agreed by the parties in the arbitration agreement.Note: a party may challenged an arbitrator appointed by him or in whose appointment he has participated if he became aware of the ground after the appointment was made. **

Art. 13, Model Law. Challenge Procedure(1) The parties are free to agree on a procedure for challenging an arbitrator, subject to the provisions of par. 3 of this article;

(2) Failing such agreement, a party who intends to challenge an arbitrator shall, within 15 days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of the circumstances referred to in art. 12(2), send a written statement of the reasons for the challenge to the arbitral tribunal. Unless the challenged arbitrator withdraws from his office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge.**

Challenge procedure(3) If a challenge procedure agreed upon by the parties or under the procedure of par. 2 of this article is not successful, the challenging party may request, within 30 days after having received notice of the decision rejecting the challenge, the court or other authority specified in art. 6 to decide the challenge, which decision shall be subject to no appeal; while such a request is pending, the arbitral tribunal, including the challenged arbitrator, may continue the arbitral proceedings and made an award.**

Challenged Procedure. (1) Within 15 days after Constitution of arbitral tribunal or knowledge of existence of grounds for challenge -> written statement of reasons for challenge to the arbitral tribunal -> (a) challenged arbitrator withdraws or other party agrees to the challenge no problem; -> b) challenged arbitrator does not withdraw or other party refutes the challenge -> A. tribunal decides on the challenge**

(2) challenge unsuccessful w/in 30 days from receipt of dcn rejecting the challenge, challenging party petitions the RTC to decide on the challenge

(3) While request is pending, the arbitral tribunal, including the challenged arbitrator may continue the proceedings and render an award;

(4) decision of the court is not subject to appeal.**

Art. 14, ML. Failure or impossibility to act(1) If an arbitrator become de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay, his mandate terminates if he withdraws from his office or if the parties agree on the termination. Otherwise, if a controversy remains concerning any of these grounds, any party may request the court or other authority specified in art. 6 to decide on the termination of the mandate, which decision shall be subject to no appeal.

(2) If, under this art or art 13(2), an arbitrator withdraws from his office or a party agrees to the termination of the mandate of an arbitrator, this does not imply acceptance of the validity of any ground referred to in this art or art(13)(2)**

Termination of office of arbitrator(1) inability or failure to perform his functions with undue delay and he withdraws from his appointment;(2) ground 1 and the parties agree to the termination; - if he withdraws or a party agrees to the termination- does not imply that arbitrator agrees to the ground for termination.(3) arbitrator do not withdraw, petition to court for termination. Dcn not subject to appeal**

Art. 18, Model Law. Equal treatment of parties

The parties shall be treated with equality and each party shall be given a full opportunity of presenting his case.**

Art. 19, Model Law. Determination of rules of procedure(1) Subject to the provisions of this Law, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings.

(2) Failing such agreement, the arbitral tribunal may, subject to the provisions of this Law, conduct the arbitration in such manner as it considers appropriate. The power conferred upon the arbitral tribunal includes the power to determine the admissibility, relevance, materiality and weight of any evidence.**

Art. 29, Model Law. Decision making by panel of arbitratorsIn arbitral proceedings with more than one arbitrator, any decision of the arbitral tribunal shall be made, unless otherwise agreed by the parties, by a majority of all its members. However, questions of procedure maybe decided by a presiding arbitrator, if so authorized by the parties or all members of the arbitral tribunal.**

Art. 30. ML settlement(1) If, during arbitral proceedings, the parties settle the dispute, the arbitral tribunal shall terminate the proceedings and, if requested by the parties and not objected to by the arbitral tribunal, record the settlement in the form of an arbitral award on agreed terms.(2) An award on agreed terms shall be made in accordance with the provisions of art. 31 and shall state that it is an award. Such award has the same status and effect as any other award on the merits of the case.**

Art. 31, ML. Form & Contents of Award(1) The award shall be in writing and shall be signed by the arbitrator or arbitrators. In arbitral proceedings with more than one arbitrator, the signatures of the majority of all members of the arbitral tribunal shall suffice, provided that the reason for any omitted signature is stated.(2) The award shall state the reasons upon which it is based, unless the parties agreed that no reason are to be given or the award is an award on agreed terms under art. 30;(3) The award shall state its date and the place of arbitration as determined in accordance with art. 20(1). The award shall be deemed to have been made at that place.(4) After the award is made, a copy signed by the arbitrators in accordance with par. 1 of this article shall be delivered to each party.**

Art. 32, ML. Termination of proceedings(1) The arbitral proceedings are terminated by final award or by an order of the arbitral tribunal in accordance with par. (2) of this article.(2) The arbitral tribunal shall issue an order for the termination of the arbitral proceedings when:

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termination(a) the claimant withdraws his claim, unless the respondent objects thereto and the arbitral tribunal recognizes a legitimate interest on his part in obtaining a final settlement of the dispute.(b) the parties agree on the termination of the proceedings; the arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible.

(3) The mandate of the arbitral tribunal terminates with the termination of the arbitral proceedings, subject to the provisions of art. 33 (correction/additional award) & 34(4) (determination by the tribunal if the grounds for setting aside the award are valid)

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Sec. 21 to 31, RA 9285

Sec. 21 to 31 is basically the Chapter on International Commercial Arbitration however, these provisions can also be used in Domestic Arbitration for as long as they are applicable.**

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CHAPTER 6 - ARBITRATION OF CONSTRUCTION DISPUTES

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SEC. 34. Arbitration of Construction Disputes: Governing Law. - The arbitration of construction disputes shall be governed by Executive Order No. 1008, otherwise known as the Construction Industry Arbitration Law.

**SEC. 35. Coverage of the Law. - Construction disputes which fall within the original and exclusive jurisdiction of the Construction Industry Arbitration Commission (the "Commission") shall include those between or among parties to, or who are otherwise bound by, an arbitration agreement, directly or by reference whether such parties are project owner, contractor, subcontractor, quantity surveyor, bondsman or issuer of an insurance policy in a construction project.The Commission shall continue to exercise original and exclusive jurisdiction over construction disputes although the arbitration is "commercial" pursuant to Section 21 of this Act.

Sec. 4, E0 1008, CIAL, JurisdictionThe CIAC shall have original and exclusive jurisdiction over disputes arising from, or connected with, contracts entered into by parties involved in construction in the Philippines, whether the dispute arises before or after the completion of the contract, or after the abandonment or breach thereof. These disputes may involve government or private contracts. For the Board to acquire jurisdiction, the parties to a dispute must agree to submit the same to voluntary arbitration.**

Construction dispute or dispute arising out of a construction contract + arbitration clause/agreement -> construction arbitration under CIAL (CIAC)

Construction dispute/dispute arising out of a construction contract but without arbitration clause/agreement -> construction arbitration only if the parties agree in w**

Sec. 4, jurisdictionThe jurisdiction of the CIAC may include but is not limited to violation of specifications for materials and workmanship; violation of the terms of agreement; interpretation and/or application of contractual time and delays; maintenance and defects; payment, default of employer or contractor and challenges in contract cost.**

**SEC. 36. Authority to Act as Mediator or Arbitrator. - By written agreement of the parties to a dispute, an arbitrator may act as mediator and a mediator may act as arbitrator. The parties may also agree in writing that, following a successful mediation, the mediator shall issue the settlement agreement in the form of an arbitral award.

**SEC. 37. Appointment of Foreign Arbitrator. - The Construction Industry Arbitration Commission (CIAC) shall promulgate rules to allow for the appointment of a foreign arbitrator or coarbitrator or chairman of a tribunal a person who has not been previously accredited by CIAC: Provided, That:(a) the dispute is a construction dispute in which one party is an international party(b) the person to be appointed agreed to abide by the arbitration rules and policies of CIAC;(c) he/she is either coarbitrator upon the nomination of the international party; or he/she is the common choice of the two CIAC-accredited arbitrators first appointed one of whom was nominated by the international party; and(d) the foreign arbitrator shall be of different nationality from the international party.

foreign arbitrator or co-arbitrator or chairman of a tribunal not previously accredited by CIAC be appointed Construction dispute + (1 domestic party, 1 international party) + nominated by the international party or common choice of the two arbitrators first appointed one of whom was nominated by the international party + of different nationality from the international party + agreed to abide by the CIAC rules.**

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SEC. 38. Applicability to Construction Arbitration. - The provisions of Sections 17 (d) of Chapter 2, and Section 28 and 29 of this Act shall apply to arbitration of construction disputes covered by this Chapter.

Enforcement of arbitral awardGrant of interim measure of protection

**SEC. 39. Court to Dismiss Case Involving a Construction Dispute. - A regional trial court which a construction dispute is filed shall, upon becoming aware, not later than the pretrial conference, that the parties had entered into an arbitration to be conducted by the CIAC, unless both parties, assisted by their respective counsel, shall submit to the regional trial court a written agreement exclusive for the Court, rather than the CIAC, to resolve the dispute.

** Where the contract provides that a dispute arising out of the contractual relations between the parties be subjected to construction arbitration under the CIAC, and a party files a case in court, the court upon knowlege of such information, must dismiss the case.

Exception: when both parties, assisted by their respective counsel, shall submit to the regional trial court a written agreement exclusive for the Court, rather than the CIAC, to resolve the dispute. (Waiver)

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