(7)

(1)

Notice of arbitration (Rule 3.1): form of a physical letter or

through an email.

Must comply with all the requirements of the rules.

Send a copy to the respondents.

Must contain the following:

a. Contact details of the parties to the arbitration
b. A reference to the arbitration clause or the
separate arbitration agreement
c. A reference to the contract or treaty out of which
the dispute arises
d. A brief statement describing the circumstances
of the dispute and the relief claimed
e. Any comments by the claimant regarding the
applicable law, the language of arbitration, etc.,
if the agreement does not provide it
f.
Demand that the dispute be referred to
arbitration
g. Accompanied by a filling fee.

SICA will set a maximum for the costs (Rule 31).

1) Tribunals fees
2) SIACs administrative fees and expenses
3) Costs of expert advice or other assistance
required: estimated initially by adding 20-20% to
the total of maximum fees.

Alternative methods of calculating Tribunals Fees:

maximum costs of arbitration.

The arbitration may cost significantly less.

Divides this amount into three tranches (30-30-35).

First one is payable immediately.

Tribunal often decides that the losing party will

bear the costs.
(2) Ask for appointment of arbitrator to issue an interim order.

EMERGENCY ARBITRATOR: to give interim measures

of protection.

Example: To prevent encashment of guarantee.

Determination of material breach.

Just in one business day.

Flat fee, and fee of the emergency arbitrator.

Then, schedule for submissions are set, as well as

schedule for hearing.

(8)
(9)
(10)

(11)

(12)

(13)
(14)
(15)
(16)

Challenge of appointment: Rule 11.1 An arbitrator may be

challenged if circumstances will exists if there are doubts in the
impartiality and independence of the arbitrator.

Possibility of bias.

Independence: Previous act.

IBA guidelines:
Deal with jurisdictional issue.
Trial on merits.
Written submissions during the arbitration: principal of party
autonomy.

Statement of Claim (Rule 17):

a. Statement of facts
b. Legal grounds supporting claim
c. Relief claimed (expressed in quantified amount)

Statement of defense: respondents full defense.

Includes any counter-claim similar manner as that of

a State of Claim.

Tribunal has discretion if more submissions are

required.
Oral hearing before the Arbitral Tribunal: to cross-examine his
witnesses.

Parties have wide latitude in determining the

procedures of the hearing

Can opt to do away with hearing by mere

documents.
a. Selection of arguments
b. Cross-examination of witnesses
RE: witnesses notice of the identity of the witnesses, and
the subject matter of their testimonies.

Can be signed statements, sworn affidavits, or any

other form of recording to save time and costs.
Cross-examination of witnesses:
Final arguments: brief summary by both of the parties.
Close the proceedings: conclusion of the submission phase.
Deliberation of the award by the Tribunal.

WHEN IS IT A FOREIGN ARBITRATION?

(1)
(2)
(3)
(4)

When the parties are from different countries

Place of arbitration is different from the parties
The performance of a substantial part of the obligation takes
place outside
When the parties stipulate that it is international

QUESTION OF ENFORCEABILITY: institutional arbitration is more

secured than ad hoc arbitration.

NOT INTERNATIONAL: when it does not fall under the four.

EMERGENCY ARBITRATOR HEARING:

Why did they not go to the domestic arbitration route? When the
arbitration is outside Indian, Indian courts will interpret that they
impliedly agree that they do not have jurisdiction.

(1)
(2)

(3)

(4)

(5)

(6)

Emergency arbitrator drafts and award and submitted to the

SIAC.
The President of the SIAC formally appoints the nominations of
arbitrators.

Can appoint an arbitrator in one of the claimants behalf

in case of failure to appoint by the party.

Right of the partys to appoint their own arbitrator.

SIAC: power to proceed arbitration even if one of the parties
refuse to participate.

An arbitral order is final and binding to the parties, even

if one of the parties refuse to participate.
Respondent will have to reply within 14 days, and must
contain:
1) Stipulations
2) Comments on applicable law
3) Proposal in relation to the nomination of arbitrators
4) File counterclaim
Conflict of interest: appointed arbitrators must be independent
and impartial.

SIAC will ask them to execute an undertaking.

The nominee is not automatically on the partys which

appointed them.

SIA requires its arbitrators to abide by a strict code of

ethics.
Nominate arbitrators TRIBUNAL.

Place of arbitration? Singapore

Grounds for challenging the independence of the arbitrator:
1)
2)

Previous engagement
Family relationship between the appointed arbitrator and
respondent counsel

JURISDICTION: the main contract was procured by bribery higher

standard.
UN Convention on Sales of International Goods
JULY 30, 2016
NY Convention, Washington Convention
When do you advise your client to do arbitration? NY Convention
enforcement of foreign arbitration awards.

If, for instance, you have an award in NY (in the USA), and you
have an award against an American corporation, will it apply?
NO, as the arbitral award is NOT a foreign award.

If the place of arbitration and the place of enforcement

are the same, the NY Convention will not apply.

NOT: look at the place of arbitration.

What if you have an arbitration award in Pyongyang, N. Korea,

and you try to enforce that award in the Philippines?

N. Korea is not a signatory to the NY Convention.

It CANNOT be enforced as there are TWO

RESERVATIONS in the NY Convention:
(1) Reciprocity: limiting it to only fellow signatories.
(2) Commercial

Each country can choose to limit the application of the

treaty, and one country can choose either or both.

For Philippines, BOTH are reserved as the foreign

award was not made in a fellow signatory to the NY
Convention.

SEC. 43, RA 9285: it may be possible that N. Korea

has legislation and in actual practice enforced awards
in the Philippines, out of comity.

There is reciprocity, though not under the NY

Convention.

Rule 13.12, ADR Rules of Court: treating it as

a foreign judgment.

REASON: Rule 39, SEC. 48, Rules of

Court:
1) Jurisdiction
2) Notice
3) Collusion
4) Fraud, or
5) Clear mistake of fact/law1

ART. 5: NY Convention2: may be denied if proved:

1) Incapacity
2) Said agreement is invalid
3) Lack of notice / violation of due process / unable
to present case
4) Lack of jurisdiction
5) Not in accordance with the procedure
6) Set aside: trying to annul (pinapawalang bisa)
the award
7) Contrary to public policy

Nos. 1 to 5: procedural in nature, and not about merits.

Main advantage of arbitration: can be enforced in 150
countries.

Flexibility, neutrality.

RULE 18, SIAC: parties can choose the place /

seat3 of arbitration.

In default: Singapore.

WHY THE SEAT/PLACE IS RELEVANT:

(1) Determines the nationality of the award.
(2) Set aside.
(3) Supporting legal framework: while laws
are applicable.

FINALITY:
RA 876: applicable to domestic arbitration.

In case of a gap, RA 9285 applies.

DOMESTIC ARBITRATION: not a foreign arbitration.

RA 9285: applicable to international commercial arbitration.
o
WHEN INTERNATIONAL: the parties are foreign.
o
Unless MANDATORY LAW cannot be contracted out
of.
EO 1008: Construction Industry Arbitration Commission (CIAC)

If the parties agree to voluntary arbitrate, this is the

default law applicable.

1 You can review a foreign judgment ON THE MERITS, unlike in the

TWO THEORIES BETWEEN ARBITRATION PROCEEDINGS AND

SEAT OF ARBITRATION:
(1)
(2)

one or all of the grounds, the court where the award is being enforced
to still enforce it.

3 Rule 18.2: you need not have meetings in the seat of arbitration; can
be done in any place. The SEAT is not where you have your
hearings.

TRADITIONAL VIEW: there is a link between the arbitration

proceedings
DELOCALIZED VIEW: seat of arbitration is irrelevant; where
you are going to enforce.

DIFFERENT LAWS THAT NEEDS TO BE CONSIDERED WHEN YOU

ARBITRATE:
(1)

(2)

LEX ARBITRI: law of the seat of arbitration.

Consequence: apply the Civil Code, ADR Act of 2004,

RA 876 / EO 1008, ADR Rules of Court, Implementing
Rules of ADR 2004, and jurisprudence.
PROCEDURAL LAWS:

NOTE: for this class, lex arbitri and procedural law are the same.
(3)
(4)

(5)
(6)

LAW OF THE PLACE OF ENFORCEMENT:

SUBSTANTIAL LAWS: the merits.

The rights and obligations of the parties under the law

of the contract.

If the parties can agree by the law of the contract, they

can.

Law of the parties is also relevant on the capacity of the

parties to enter into a contract.

Example: minors are not capacitated to sign

arbitration agreements here in the Philippines.
ARBITRATION RULES:
LAW WHICH GOVERNS THE ARBITRATION AGREEMENT:

The potential choice of law issues include:

1)
2)
3)
4)

NY Convention because there, even if the arbitrator is wrong.

2 Discretionary: may be refused even if the party is able to prove

But can they agree not to voluntary arbitrate to

the CIAC, but to, say, SIAC? Not yet tested by
jurisprudence.

If they do not agree to arbitrate, then they can

immediately go to court for breach of the construction
agreement.
AM No. 07-11-08-SC: Special Rules of Court on Alternative
Dispute
o
Applicable to courts.
Model Law of 1985: appended to RA 8295.

Applicable to the:
a) Parties
b) Arbitrators, and
c) Courts

Default number of arbitrators: THREE (3)

But under the SIAC Rules: ONE (1) unless xxx

That is if the parties CANNOT agree.

What if the parties are

While arbitration is generally between the parties, there are
times when you do need to Court usually, at the
enforcement of the arbitral award.
Supporting legal framework is requires as the rules may not
have mechanisms to address the specific problem.

5)
6)

Which law governs the arbitral procedure?

Which law governs the individual reference to or instance of
arbitration?
Which law governs the arbitration agreement?
Which law governs supervisory, supportive, and enforcement
measures?
Which law governs a partys legal capacity?
Which law governs the parties substantive rights?

Why is there the LAW OF THE CONTRACT and the LAW OF THE
ARBITRATION AGREEMENT?

The arbitration agreement is contained in the contract.

The validity of the arbitration agreement does not depend on
the validity of the contract.

DOCTRINE OF SEPARABILITY: the arbitration agreement is

effectively a separate/second contract, even if contained in the
first contract.
It is legal fiction.
Without it, all you have to do is to nullify the contract.

So most of the disputes will not go to arbitration.

To prevent this situation, the law has created a doctrine

of separability.
WHAT TO LOOK AT:
a. Validity: intrinsic

Example: in the arbitration agreement, all the

arbitrators shall be appointed by one of parties
alone (ART. 2045, Civil Code), as it violates the
principle of equality.
b. Powers of arbitral tribunal
c. Consent of the parties

A, a Filipino national, is the buyer, and B, an American is the seller

of coal, which comes from Indonesia. The coal is to be shipped in
the power plant in Angeles City, Philippines.
-

Check which one has the closest connection with.

NOTE: it is important for the parties to agree on the law of the contract.
In the Philippines, can you agree on another law?
Yes, unless there are mandatory laws.
Under Philippine Law, the law of the contract must have a close
connection to the transaction (CONNECTION TEST).
Take note though that the position in the Philippines is not the
position of many countries.

In England, you can agree to anything.

But the parties MORE LIKELY would choose a third

law, as they would want neutrality.

SEAT V. VENUE:
SEAT OF ARBITRATION
The primary legal jurisdiction to
which
the
arbitration
is
attached. It is the legal location
of an arbitration proceeding.

VENUE OF ARBITRATION
Where you actually have the
physical hearing. It is the
physical
location
of
any
arbitration
hearings
and
meetings.
Law of the venue has no
significance.

2)

LAW OF THE ARBITRATION AGREEMENT:

ISSUES:
1) Validity
2) Consent
3) Powers of the arbitrators/appointment
4) Arbitrability: what disputes are arbitrable? SEC. 6, RA
9285.
EXCEPTIONS:
1) Labor disputes covered by Presidential Decree No.
442, otherwise known as the Labor Code of the
Philippines, as amended and its Implementing Rules
and Regulations;
2) The civil status of persons;
3) The validity of a marriage;
4) Any ground for legal separation;
5) The jurisdiction of courts;
6) Future legitime;
7) Criminal liability; and
8) Those which by law cannot be compromised.
Can you do the reverse and contract it out? Can you contract
out the resolution of a labor dispute to Singapore? YES, the
parties can agree to that.

But remember, MANDATORY LAWS which cannot be

derogated (ART. 5, Civil Code).

LEX ARBITRI: it determines the nationality of the arbitration.

Party
agreement

Rules of
Arbitration
Law

Gives the legal framework for the conduct of arbitration.

You can have a Singapore Arbitration, anywhere in the world, it
doesnt matter, as their rules provide that the parties can
choose their seat of arbitration.
SIGNIFICANCE: need to put the city, so that the arbitrator shall
be geographically familiar with the case.

NOT mandatory, but it is best practice to put the city.

The city, if specified, designates the court which has

jurisdiction over the arbitration.

Designation the place of arbitration, the court

which has supervisory jurisdiction over the
arbitration is designated, as to when interim
reliefs are being asked.

That court can ultimately SET ASIDE the arbitral award.

The award then is null and void.

Delocalization theory: is the set aside in one

place does not mean set aside of another.

They only care of the law where

enforcement is to be made.

Unlike for traditional view.

LAW OF THE CONTRACT: it is important for the parties to agree on

the law of the contract in order to avoid uncertainty.

If they agree for example, Philippine law to apply, you know

where to look.
PROBLEM: sometimes the parties do not agree in the
particular law.

APPROACHES:
1) Apply conflict of laws principle

Parties can agree to something else: like

international law, or lex mercatoria4, ex aequo et
bono, incoterms5, decepage6.

AUGUST 20, 2016

1)

CONSOLIDATION: involves bringing two or more separate

arbitrations together and hearing them as one.

4 The law of merchants, derived from customary rules and practices

established in international trade and commerce. Like the UNDROIT
principles.

5 Abbreviated international commercial terms which describe the

allocation of various responsibilities and liabilities relating to
transportation. Although INCOTERMS have differed over time, modern
references to INCOTERMS are usually understood to be a reference to
the INCOTERMS published by the International Chamber of
Commerce.

6 When different aspects of the contracts are determined by different

laws. It is a conflict of laws where different issues within a case may be
governed by the laws of different states.

2)

3)
4)

5)

JOINDER: an existing party to the arbitration attempts to

bring a third party into the proceedings, and to have that
third party bound by the outcome of the proceedings.
INTERVENTION: it is the third party itself that is seeking to
participate in the arbitration proceedings.
Exceptions that the parties must be signatories of the
agreement: NON-SIGNATORIES:
a.
Incorporation by reference
b. Assignment/Assumption
c. Agency
d. Alter-ego/Group
e. Estoppel
Competence-competence rule:

(2)

(3)

Is an arbitration agreement necessary? YES.

Generally,
EXCEPTION:
1) Bilateral investment treaties.
2) Compulsory arbitration
3) Estoppel: there is notice of arbitration / claim and there
was no denial of non-existence of the agreement.
For arbitration to commence, must there be an arbitration
agreement?

Are arbitration agreements always agreed to BEFORE the dispute?

NO, called SUBMISSION AGREEMENTS.

They are concluded after the dispute arises.

Relatively rare because it is more difficult to agree when the
dispute has already arisen, although they are still possible to
happen.

Must they be in writing? NO, there is movement away from strictly

enforced writing requirement reflects modern realities.

ART. 7, MODEL LAW, Option II: arbitration agreement is an

agreement by 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.
In the Philippines, must it be in writing? YES, SEC. 4, RA 876,
for domestic arbitration.
o
For international arbitration, YES, also, no oral
arbitration agreement (SEC. 19, RA 9285): under the
1985 MODEL LAW, it is still required to be in writing.
o
RA 9285 predates the MODEL LAW OF 2006 and the
Philippines could not have adopted it, as the former
was adopted in 2004.
o
The Model Law is a suggestion by the UNCITRAL, and
can be copied in whole or in part.

In the Philippines, we have the CIAC. Is that an example of compulsory

arbitration? If parties agree to arbitrate, then they can use the CIAC.

What is compulsory about the EO? Parties if they do not have

an arbitration agreement will still have to go to courts.
o
If they have an arbitration agreement, they would have
to go to the CIAC.
COMPULSORY ARBITRATION:

You cannot make it too long.

But the people in the bill of lading are not the
same parties in the charter party.
o
TEST: WON there is an intent to incorporate the
arbitration clause.
ASSIGNMENT: like subrogation, where you step in the shoes
of the other party.
o
As in an insurance company.
AGENCY: issue WON the agent had authority to bind the
principal.
o
The agent signed on behalf of the principal.
o
What laws to look at? Domestic laws.
o
Can you have another law other than the domestic law
of the principal?

Can there be a separate law governing the indorsement

contract and the arbitration agreement? YES.

Because of the doctrine of separability.

ALTER-EGO/GROUP OF COMPANIES DOCTRINE:
o

(4)

ALTER-EGO
One party dominates the affairs
of another party, and it is
appropriate to disregard the two
companies and treat them as a
single entity.

(5)

GROUP OF COMPANIES
When despite being a nonsignatory,
the
corporation
participated in the negotiation
and the performance of the
underlying transaction (there is
some benefit derived).

ESTOPPEL: a party is prevented from denying representations

arising out of words of deeds (conduct) on which another party
has relied to its detriment.
o
When does it come it? Respondent estops itself from
denying the existence of the arbitration agreement.

WHAT DOES AN ARBITRATION CLAUSE LOOK LIKE?

Any dispute arising out of or in connection with this contract,
including any question regarding its existence, validity or
termination, shall be referred to and finally resolved by arbitration in
Singapore in accordance with the Arbitration Rules of the Singapore
International Arbitration Center (SIAC) for the time being in force,
which rules shall be deemed to be incorporated by reference in this
clause.
The Tribunal shall consist of _________* arbitrators.
The language of the arbitration shall be ___________.
This contract is governed by the law of ___________.
* State an odd number. Either state, one or state three.

NON-SIGNATORIES: here there is no signature7.

(1)

INCORPORATION BY REFERENCE: where parties have not

included an arbitration agreement in their own contract, but
merely includes a reference to another document which
contains an arbitration agreement.
o
Most common example: charter party.
o
Bill of lading: consignee, shipper, carrier.

Sometimes, the bill of lading will incorporate the

charter party, which usually contains the
arbitration agreement.

7 It evidences consent, generally.

When is there a DISPUTE? When there is a question of:

(1)
(2)

Liability
Quantum (money; damages)

What if the party admits liability, but not to the quantum, is there a
dispute? YES, as long as you dont agree on one of the two issues,
there is a dispute.

If you admit both, is there a dispute? NONE.

o
Should you go to arbitration?

ARBITRABILITY:
SUBJECTIVE ARBITRABILITY
Whether the parties have
agreed to arbitrate certain
claims or issues.

OBJECTIVE ARBITRABILITY
Only those matters which the
parties can legally bring to
arbitration.
Where to look at that: Sec. 6,
RA 9285.

BUILDING BLOCKS OF AN ARBITRATION CLAUSE:

1)
2)
3)
4)
5)
6)

Submission to arbitration: any dispute arising out of or in

connection with this contract
Seat: in Singapore
Institution and Rules: SIAC.
Number of Arbitrators:
Language
Governing law of the contract:

Determining the law applicable to the substance of the dispute:

(1)
(2)

Law of the substantive contract

Arbitration law of the seat will govern the arbitration agreement
of the parties.

If the parties do not explicitly adopt the law of the arbitration

agreement, in Singapore, the law of the seat is presumptively the law
of the arbitration agreement.

REASON: because the performance of the arbitration

agreement will happen at the seat of arbitration.

AD-HOC ARBITRATION V. INSTITUTIONAL ARBITRATION:

AD-HOC
NOT administered by an
institution.
Cheaper as you do not have to
pay
administrative
fees,
perhaps.

INSTITUTIONAL
Administered by an institution.
More expensive.

In the example, it is administered by an institutional

administration, here, the SIAC.
RECOMMENDED: institutional8.

PATHOLOGICAL CLAUSES: defective clauses.

(1)
(2)
(3)
(4)
(5)
(6)

naming the arbitral institution incorrectly or identifying a nonexistent institution;

empowering one institution to administer another institutions
rules;
referring to an arbitral institution by its location rather than by
its name;
failing to indicate clearly that the award is final and binding;
identifying a specific arbitrator who has died or become unable
to act thereafter; and
drafting terms that are inherently contradictory to other terms in
the arbitration agreement.

COMPETENCE-COMPTENCE RULE: In most jurisdiction, you can

only appeal a positive decision of the jurisdiction of the arbitral tribunal.

8 MAJOR INSTITUTIONS: ICC, LCIA, AAA/ICDR, CIETAC, SIAC,

HKIAC, ICSID out of 500 institutions.