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ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 1

Contents

OF COMMERCE)................................................23
Membership.............................................................
23

I. INTRODUCTION......................................................2
1.1

BRIEF DESCRIPTION OF ADR SYSTEM....2

Alternative Dispute Resolution (ADR).........................2


1.2

Governing bodies.....................................................24
World Council......................................................24
Executive Board...................................................24

BASIC PRINCIPLE OF ADR.........................2

International Secretariat.....................................24

1.3
UNDERSTANDING DISPUTE
RESOLUTION OPTIONS..........................................3

National Committees..........................................24

1.4
Advantages/Benefits and Disadvantages of
Alternative Dispute Resolution.................................5

Dispute Resolution Services....................................24

Finance Committee.............................................24

1.4.1

Benefits of ADR.....................................5

Policy and business practices..................................24

1.4.2

Disadvantages of ADR.........................8

2.2.3
INTERNATIONAL CENTER FOR
SETTLEMENT OF INVESTMENT DISPUTES
(ICSID) (CONVENTION ON THE SETTLEMENT
OF INESTMENT DISPUTE BETWEEN STATES
AND NATIONALS OF OTHER STATES)...........24

1.4.3
BENEFITS OF ALTERNATIVE
DISPUTE RESOLUTION......................................9
1.5
ADR

COMPARISON BETWEEN Litigation AND


10

1.5.1

Litigation (Court Based Adjudication)10

1.5.2

Alternative Dispute Resolution (ADR)


10

1.5.3

Litigation and ADR Contrasted...........11

1.6

LIMITATION OF ADR IN GENERAL.........11

1.7

SUBJECT OF ADR.......................................11

2 INTERNATIONAL ALTERNATIVE DISPUTE


RESOLUTION/ PEACEFUL SETTLEMENT OF
INTERNATIONAL DISPUTE......................................17
2.1 INTRODUCTION TO PUBLIC
INTERNATIONAL LAW AND PRIVATE
INTERNATIONAL LAW..........................................17
Public international law...............................................17
Private international law..............................................17
Conflicts between public international law and
national sovereignty....................................................17
2.1.1 BASIC PRINCIPLES OF
INTERNATIONAL LAW (SOVEREIGNTY,
JURISDICTION, INDEPENDENCE etc.)...........18
2.1.1.1

Sovereignty.................................................18

2.1.1.3

Independence...............................................19

2.1.2 ARTICLE 33 PARAGRAPH 1 OF THE


UN CHARTER.....................................................21
2.1.3 INTERNATIONAL
JUSTICE 21

COURT

OF

2.2 RELEVANT ALTERNATIVE DISPUTE


SETTLEMENT INSTITUTIONS..............................21
2.2.2
INTERNATIONAL COURT OF
ARBITRATION (INTERNATIONAL CHAMBER

2.2.4
UNITED NATIONS COMMISSION
FOR INTERNATIONAL TRADE LAW
(UNICITRAL MODEL LAW ON INTRNATIONAL
COMMERCIAL ARBITRATION-1985)...............26
History.....................................................................26
Membership............................................................26
Conventions.............................................................27
Model laws...............................................................27
CLOUT (Case Law on UNCITRAL Texts)...............27
2.2.5
WORLD TRADE ORGANIZATION
(MARRAKESH AGREEMENT) (DISPUTE
SETTLEMENT UNDERSTANDING)..................27
2.3
ENFORCEMENT AND RECOGNITION OF
AWARDS.................................................................36
Convention on the Recognition and Enforcement of
Foreign Arbitral Awards..............................................36
Contents...................................................................36
Background..............................................................36
Summary of provisions............................................37
Parties to the New York Convention.......................37
United States Issues................................................37
2.4

TYPES OF ADR...........................................38

2.4.1

1. Negotiation......................................38

2.4.2

Assisted negotiation............................38

2.4.3

2. Mediation........................................38

2.4.4

3. Conciliation.....................................38

2.4.5 4. Arbitration.......................................38 Case


presentation or mini-trial...........................41
Independent expert appraisal or early neutral
evaluation.............................................................41

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 2


Litigation..............................................................41
2.4.6
2.4.7
3

5. INQUIRY AND FACT FINDING.....41


6. GOOD OFFICES..............................41

DOMESTIC ARBITRATION................................41
3.1 INTRODUCTION TO DOMESTIC
COMMERCIAL DISPUTE RESOLUTION..............41
3.2 ALTERNATIVE DISPUTE RESOLUTION
ACT OF 2004...........................................................41
Republic Act No. 9285.............................................41
April 2, 2004............................................................41
3.3 REPUBLIC ACT NO. 876 ARBITRATION
LAW OF THE PHILIPPINES..................................50

Some of the senior judiciary in certain jurisdictions (of


which England and Wales is one) are strongly in favor
of the use of mediation to settle disputes.1
A type of dispute resolution that seeks to limit the
costs of litigation by using alternative, often out-ofcourt means, such as arbitration, conciliation and
summary possession proceedings. Alternative dispute
resolutionoptions are voluntary, and often involve a
neutral third party to make decisions.2

1.1 BASIC PRINCIPLE OF ADR

ADR is based on several key principles. First,


consensual processes (participation, scope
and structure) are more likely to result in
outcomes satisfactory to the disputants than a
solution imposed by a court. Inherent in this
principle is the ability of the parties to
structure a process that is tailored to the
situation and to the dispute at hand. There is
ample
experience
demonstrating
that
disputants are more likely to achieve
outcomes that serve all disputants interests
and purposes -- the win/win solution -than solutions imposed by an outside
decision maker.

The second key principle is the involvement


of a third-party neutral whose presence can
improve the dynamics of the dialogue needed
to achieve a settlement and, in environmental
disputes, knowledge and expertise to evaluate
the merits and to help frame options for
solution if so desired by the parties. The third
partys role is to assist in the process, not to
dictate the outcome. This individual is neutral
in the sense of having no stake in the outcome
or in the parties. A third-party neutral has no
authority except as granted under the order
or agreement defining the ADR process.

One of the principal objectives of the ADR


process is to help the parties communicate
with each other civilly, by providing a clear
statement of the interests driving the dispute
and, most importantly, by truly listening to
the other side of the dispute. Parties often
lack a clear idea of what they are fighting for,
much less a good idea of what needs are
driving their opponents.

3.4 A.M. No. 07-11-08-SC


SPECIAL
RULES OF COURT ON ALTERNATIVE DISPUTE
RESOLUTION September 1, 2009.........................55
3.5 DEPARTMENT CIRCULAR NO. 98...........87
3.6 OTHER SC ISSUANCES ON ADR............126
3.7 JUDICIAL DISPUTE RESOLUTION........126
Judicial dispute resolution (JDR).............................126

I. INTRODUCTION
BRIEF DESCRIPTION OF ADR
SYSTEM
Alternative Dispute Resolution
(ADR) also known as external dispute resolution in
some countries, such as Australia includes dispute
resolution processes and techniques that act as a means
for disagreeing parties to come to an agreement short of
litigation. It is a collective term for the ways that parties
can settle disputes, with (or without) the help of a third
party.
Despite historic resistance to ADR by many popular
parties and their advocates, ADR has gained
widespread acceptance among both the general public
and the legal profession in recent years. In fact, some
courts now require some parties to resort to ADR of
some type, usually mediation, before permitting the
parties' cases to be tried (indeed the European
Mediation Directive (2008) expressly contemplates
socalled "compulsory" mediation; attendance that is,
not settlement at mediation).
The rising popularity of ADR can be explained by the
increasing caseload of traditional courts, the perception
that ADR imposes fewer costs than litigation, a
preference for confidentiality, and the desire of some
parties to have greater control over the selection of the
individual or individuals who will decide their dispute.

1
http://en.wikipedia.org/wiki/Alternative_dispute_reso
lution
2
http://www.businessdictionary.com/definition/alterna
tivedispute-resolution.html#ixzz204cSk0Xz

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 3

Finally, ADR processes generally are


confidential except as otherwise agreed by the
parties, with the exception of public policy
disputes that often facilitate in full public
view. Agreements to engage in most ADR
processes typically have a confidentiality
clause. Mediation conducted in Michigan
court proceedings is expressly made
confidential by MCR 2.411(C)(5). As of mid
2010, the confidentiality provisions under
MCR 2.411 are being considered for revision.
SCAO August 2010 Report on MCR 2.411.

VOLUNTARY

When the ADR process is not ordered under


MCR 2.411, the parties must provide for
confidentiality by agreement. Where disputes

GOOD FAITH

are mediated before or during civil litigation,


MRE 408 and FRE 408 make settlement offers
and conduct and statements made in
settlement negotiations (i.e., during the ADR
process), not admissible. These rules, however,
do not require the exclusion of evidence
otherwise discoverable merely because it is
presented in the course of settlement
discussions.

The Michigan mediation rule expressly


provides that a mediator may not disclose
anything that transpired during the
mediation to the trial judge except the date of
completion of the process, who participated
in the mediation, whether settlement was
reached
and
whether
further
ADR
proceedings are contemplated. MCR 2.411(C)
(3). Best practice in drafting the mediation
agreement should provide the express
requirement that the mediator make his or
her report to the court in writing with copies
to the parties, so that the parties can be
assured this rule has been observed. Note that
this rule does not permit the mediator to
report to the trial court whether any party
appeared to be acting in good faith.
Likewise, communications made during ADR
processes convened by a federal court are
protected from disclosure, 28 USC 652(d),
although the scope of the protection is not as
broad as under the Michigan Court Rules. 3

In its August 2005 resolution (Resolution ALJ-185), the


Commission announced five basic principles that are
the foundation of the CPUC ADR program:
3
http://envdeskbook.org/CH19/Ch19ADR.htm#_Toc32
55513

The parties usually must agree to submit their dispute


to mediation or early neutral evaluation. An ALJ,
however, may require parties to attend facilitated
workshops, settlement conferences, or meet with a
neutral to explore the feasibility of mediation.
TIMELINESS
ADR should shorten, not prolong, proceedings. But
even if a negotiated settlement takes longer, the result
may be more beneficial to all.

Those who engage in ADR should do so in an attempt to


reach agreement--not to delay or secure tactical
advantage.
CONFIDENTIALITY

91

Most ADR processes require confidentiality so that the


parties' fundamental interests can be explored.
COMMISSION APPROVAL
The CPUC will expeditiously approve settlements that
are legally sufficient.4

1.2 UNDERSTANDING DISPUTE


RESOLUTION OPTIONS
There are many ways to approach dispute resolution.
The great majority of problems encountered by small
business are resolved through simple discussion and
common sense between the parties and do not
escalate into a dispute.
In virtually all instances, small businesses should at
first attempt to resolve their disputes through direct
discussion and negotiation.
Disputes will occur, however, where there is a lack of
communication, where there are unrealistic
expectations or where there is a grievance that cannot
be resolved through direct discussion.
When a dispute occurs, each party has a choice about
the dispute resolution method that they would like to
pursue. Unfortunately, litigation is usually the norm
and dispute resolution is often approached as a
matter between lawyers and the Courts. There are,
however, a variety of other approaches available
which may save time and money and preserve
business relationships.

4
http://www.cpuc.ca.gov/PUC/ADR/adrprinciples.htm

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 4


Dispute resolution options for small business range
from negotiation-based methods, where the parties
have full control over the outcome (generally known
as 'alternative dispute resolution' - ADR), to
adversarial methods where the parties have less
control over the outcome (such as arbitration and
litigation). Where a negotiated settlement is reached
through ADR, the terms of the settlement, once
agreed and signed by the parties, are legally binding
and can be enforced if necessary.

Non- Behaviour
Adversarial
, Informal
Process

Parties Have

The chart below sets out some of the advantages and


disadvantages of different approaches to dispute
resolution.

May Destroy
DISADVANTAGE
ADVANTAGESMETHOD

Relationsh
ip

Alternativ Parties Does Not


e Dispute
Control
Establish
Resolution
Outcome
Legal
(ADR)

Time - Precedent
Efficient

Cost -
EfficientTo

Not Open
Public

Scrutiny

Confidentia l

Maintains
Business
Relationshi
ps

Appropriat
e For Fraud
Or
Criminal
Matters

Can
Establish a
Legal
Precedent

Not
Appropriate
For Fraud
Or
Criminal

Adversal
Approache
s
litigation
arbitration

Limited
Control
Over The
Outcome
High Cost &
Lengthy
Process

Appropriat
e Where
One Party
Has No
Intention
Of
Complianc
e

Business
s

AN EXPLANATION OF ALTERNATIVE
DISPUTE RESOLUTION METHODS
ASSISTED NEGOTIATION
The parties engage a professional negotiator or
'go-between' to assist parties reach a desired
result. It is usually informal and the negotiator
can either be appointed by one party or both.
In the latter situation he/she is a joint
negotiator. This method is often helpful in
smaller disputes where parties are still talking
to one another and need help to break an
impasse, and where they have identified all the
issues to be negotiated.
MEDIATION
Mediation is a process where an independent
person is used to assist the parties in dispute
to find a mutually acceptable solution. The
mediator will systematically work through the
issues, help identify alternatives, and facilitate
final agreement. The process is nonadversarial
and focuses on the parties' resolving the
dispute themselves using the skills of a
mediator. The key principle of
mediation is that the parties work together to
arrive at an agreement that suits both. This is
in contrast to litigation and arbitration where
a judge or arbitrator imposes a decision
which may be disappointing for one or both
parties.
A mediator is appointed by the parties to help
establish effective communication and by
doing so find a solution which satisfies both
their needs and interests. The informal

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 5


process is speedy and cost effective and caters
for ongoing business relationships.
INTERMEDIATION
Similar to Mediation in concept but more
sophisticated. The neutral third party closely
interacts with the parties in dispute to assess
all relevant material, identify key issues, and
most importantly, helps to design a process
that will lead to resolution of the dispute.
The process involves separate meetings with
the parties at their offices to conduct
extensive reality testing, and analysis of
parties' legal, commercial and financial
positions. The process utilises creative
thinking techniques and is suitable for more
complex, large or sensitive matters.
FACILITATION
The parties appoint a neutral facilitator to
manage the dispute resolution process,
identify issues and apply specialist techniques
to achieve the desired outcome. The
facilitator assists by preparing an agenda,
chairing meetings, distributing relevant
information between the parties and steering
them to reach agreed objectives. The process
is less formal and more flexible than
Mediation. It has wide application and is
often used where there are several parties or
groups involved with differing points of view,
such as creditors or multi-party claimants,
joint
venture
negotiations,
and
environmental and planning disputes.
EXPERT DETERMINATION/RECOMMENDATION
The parties agree to an independent expert to
provide a report on specific aspects of a
dispute by examining relevant documentation
and material. The expert is usually
commissioned to report on technical matters
such as standards, compliance, quality
specifications, quantification of loss or
similar issues. The expert may be asked to
provide
a
recommendation
or
a
determination on the matter depending on
the circumstances.
PARTNERING
Often used for long term contracts or in the
building/construction industries and in joint
venture type projects. A Partnering
agreement or charter is based on the parties'
need to act in good faith and with fair dealing
to one another. The Partnering process
focuses on the definition of mutual objectives,
improved communication, the identification
of likely problems and development of formal
problem solving and dispute resolution
strategies. It is useful, for example, where
there is a need to complete a technical or

building project with a minimum of


disruption and cost and within a tight time
frame.
AN EXPLANATION OF ADVERSARIAL
DISPUTE RESOLUTION METHODS
LITIGATION
Litigation is an adversarial legal process
conducted in a Court of law, in accordance
with strict procedures, where the parties
present legal arguments and evidence to
support their claims before a judge. The judge
applies the relevant law to the evidence,
resulting in a judgement in favour of one of
the parties involved.
ARBITRATION
Arbitration is an adversarial process, agreed
by the parties in dispute, in which each party
presents legal arguments and evidence, in
accordance with formal procedures, to a
mutually agreed arbitrator. The arbitrator
makes a determination in favour of one of the
parties. This determination is usually legally
binding.

1.3 Advantages/Benefits and


Disadvantages of Alternative
Dispute Resolution
The take-up of ADR depends on a combination of three
critical factors. First, the extent to which disputants and
their advisors are aware of ADR. Second, the adequacy
of the supply of ADR services for those that would wish
to take-up ADRservices. Third, the perceived
advantages and disadvantages of ADR.
This section is concerned primarily with the third of
those factors. It notes, however, the low level of
awareness of ADR among disputants, the critical and
influential position of lawyers in determining whether
disputants seek resolution through ADR, and
comments on the extent to which the court system
raises awareness about the potential for ADR as a
dispute resolution pathway.

1.3.1

Benefits of ADR

ADR has been both; increasingly used alongside,


and integrated formally, into legal systems
internationally in order to capitalise on the typical
advantages of ADR over litigation:

Suitability for multi-party disputes

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 6

Flexibility of procedure - the process is


determined and controlled by the parties
the dispute

Lower costs

Less complexity ("less is more")

Parties choice of neutral third party (and


therefore expertise in area of dispute) to
direct negotiations/adjudicate

Likelihood and speed of settlements

Practical solutions tailored to parties


interests and needs (not rights and
wants,as they may perceive them)

Durability of agreements

Confidentiality

The preservation of relationships;


the preservation of reputations.5

ADR Practitioners' Estimates of Disputes


Effectively Settled by ADR(ADR Practitioners
Survey n=139)*
Proportion of Disputes Settled by ADRPractitioners
ADR
Responses
%
0-20 percent of disputes
0
0
21-30 percent of disputes
1
<1
31-40 percent of disputes
0
0
41-50 percent of disputes
4
3
51-60 percentof disputes
9
6
61-70 percent of disputes
5
4
71-80 percent of disputes
28
20
81-90 percent of disputes
32
23
91-100 percent of disputes
60
43

* Six missing cases.


[11]

and

The international literature on ADR identifies five


major outcomes from ADR. They are:

respondents (66 percent) reported that they believed


that more that 80 percent of disputes could be
resolved through ADR. Only 4 percent reported that
they believed that 55 percent or fewer disputes were
amenable to effective resolution through ADR (Table
4.1).

increased settlement
improved satisfaction with the outcome or
manner in which the dispute is resolved
among disputants

reduced time in dispute

reduced costs in relating to the dispute


resolution

increased compliance with agreed solutions.

Among stakeholders there is broad agreement that


dispute resolution throughADR mechanisms can be
beneficial. Nevertheless, there are some significant
variations among stakeholders about the extent and
nature of those benefits for disputants. ADR
practitioners are most enthusiastic about the benefits
of ADRtake-up. Lawyers and disputants tend to be
more qualified with regard to the actual benefits
associated with ADR.
ADR Practitioners' View of ADR Benefits
Participants in the ADR Practitioners Survey were
convinced of the efficacyof ADR techniques in
resolving disputes that were already or could be filed
in the District or High Courts. Two thirds of the
5
http://en.wikipedia.org/wiki/Alternative_dispute_resolution#B
enefits

It was noted in the ADR practitioner focus groups,


however, that not all ADRtechniques generated benefits
in the same way or to the same extent. A strong
distinction was made between mediation and
arbitration. Table 4.2 represents ADRpractitioners'
assessment of the relative potential of arbitration and
mediation in relation to the benefits typically associated
with ADR.
ADR Practitioner Views on the Relative
Potential of Arbitration and Mediation
Arbitration Mediation
Reduced financial costs
Low-Medium Medium-High
Flexible solution
Low
High
Confidentiality
High
High
Ability
to
influence
Low
High
outcome
Disputant control
Medium
High
Disputants satisfaction
Low-High
MediumHigh
Speedy resolution
High
High

ADR practitioners see the real benefits of arbitration


lying in the abilityof the disputants to select an
arbitrator by mutual agreement and the considerable
specialist expertise an arbitrator may bring to the
resolution of a dispute with substantial technical
components. It is for the latter reason that arbitrators
have so frequently been used in technical sectors such
as the building industry.

Lawyers' Perceptions of ADR Benefits

The majority of lawyers believe that disputants seek


ADR resolution ofdisputes in an effort to:

reduce the cost of a dispute


speed resolution, and

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 7

reduce uncertainty around the outcome of


judgment in the court system (Table 4.2).

Lawyers' Perceptions of Disputants' Reasons for


ADR Take-up* (Lawyers Survey)
Perceived

Disputant
Responses

Reason
Want to reduce costs
183
Want speedy resolution
159
Uncertainty of court outcome 142
Preservation
of
ongoing
86
relationship
Desire
for
compromise
82
solution
Desire for more control over
80
process and outcome
Privacy and confidentiality
74
Directed by contract, statute or
61
existing agreement
Desire for creative solution
48
Concerns
about
court
39
procedures [8]

% of Lawyers
(n=196)
93.4
81.1
72.4
43.9
41.8
40.8
37.8
31.1
24.5
19.9

* Multiple response.
Mediation and negotiation are seen as more likely than
arbitration to generate ADR benefits including:

increased opportunities to resolve a dispute in


a way satisfactory to the parties
increased likelihood of the parties complying
with the remedies or solutions generated
through ADR

reductions in time delays

reductions in costs, and

maintenance of confidentiality about both the


dispute, the remedies sought and the
outcomes.

For lawyers, reaping the potential benefits of ADR is


by no means straightforward. For most lawyers the
effectiveness of ADR is contingent on two major
factors. Firstly, the willingness of disputants to
engage in a resolution process, and, secondly, the
experience of the ADR practitioners (Table 4.3).
Lawyers' Perceptions of Determinants of ADR
Efficacy (Lawyers Survey)

Lawyers
Lawyers Lawyers
Working
Working Working Equally in
Primarily Primarily High
Perceived
Districtin
Determinant Total in HighCourt
and
Court
Court
District
(n=74)
(n=64)
Court
(n=58)
Disputant
76.0% 80.8%
78.1%
69.0%
willingness
Experienced
ADR
62.8% 68.5%
60.0%
66.1%
practitioner
Supportive
40.3% 37.5%
40.6%
45.6%
counsel
Judicial
14.8% 21.9%
10.9%
10.7%
support
Ongoing
relationship
14.3% 13.7%
15.6%
14.3%
between
disputants

The quantitative data does indicate some of the


subtleties around this issue, however, in relation to the
importance of judicial and counsel support as factors in
the efficacy of ADR. Overall, 40.3 percent of lawyers
saw counsel support as an important determinant.
Lawyers working in the High Court or equally in the
District Court and High Court were over-represented
among those who saw counsel support as an important
factor. Lawyers working primarily in the District Court
were significantly more likely than lawyers working
primarily in the High Court to see judicial support as an
important factor in the efficacy ofADR.
It is unclear why those differences emerge. The lawyer
survey data suggests that there may be some
relationship between the ADR skills and experience
oflawyers and the extent to which they perceive the
importance of their own role in encouraging effective
ADR. The High Court lawyers are more likely to be
trained in and/or engaged in delivering ADR services
than the lawyers working primarily in the District Court
(Table 4.4).
ADR Training* and ADR Practice Among
Lawyers (Lawyers Survey)
Lawyers
Lawyers Lawyers
Working
Working Working
Equally
in
Primarily inPrimarily in High Court
District
HighCourt
and District
Court (n=74) (n=64)
Court (n=58)
N %
N
%
N
%
Combines legal
practice
10.8
with 8 ADR
Practice
Trained LEADR

17

26.6

12

20.7

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 8


Accreditation 2
Workshop
AMINZ
Associate
or 3
Fellow
Massey
University
Dispute
1
Resolution
Diploma
Dispute
Resolution
1
paper(s) as part
of LLB
On-goingADR
training
4
workshops,
seminars etc

2.7

13

20.3

5.2

many see ADRas a comparatively faster mechanism


for dispute resolution (Table 4.6).

4.1

3.1

10.3

Disputant Views on the Advantages of ADR


Identified by Interviewees (Disputant In-depth
Interviews n=49)*

1.4

0.0

1.7

ADR Advantages

1.4

5.4

1.6

12.5

1.7

6.9

* Multiple response.
In relation to the willingness of the disputants, it was
also noted by manyADR practitioners, lawyers and
the judiciary that although disputants may initially
feel hesitant and uncomfortable about ADR,
disputants in retrospectoften find the experience very
useful. This view is consistent with the findingsof the
disputant research project.

Cheaper resolution
Faster resolution
More control
Informal
process/relaxed/less
stressful
More creative solutions
Other
Preserves relationships

Responses
(n=49)*
30
27
8

%
ofInterviewees
61.2
55.1
16.3

12.2

5
5
3

10.2
10.2
6.1

* Multiple response.

1.3.2 Disadvantages

of ADR

There was widespread support across stakeholders for


the use of ADRtechniques to resolve disputes. ADR was
not always seen as an alternative to resolution through
the courts, however. Moreover, even the most
enthusiastic supporters of ADR - ADR practitioners still
saw some potential disadvantagesfor disputants in
using ADR.

Disputants' Perceptions of ADR Benefits


ADR
In-depth interviews with 60 disputants with civil
cases filed with the court system in the 2000-2002
period revealed that only fourteen used ADR to help
resolve their dispute.
As shows, settlement was achieved in eleven of those
cases throughADR and for a further case ADR
resolved some issues. Eleven of those fourteen
disputants reported that they would use ADR if ADR
was 'suited' to the nature ofthe dispute.
Disputant Views on ADR's Contribution to
Resolution of their Dispute (Disputant
Indepth Interviews n=14)
ADR's Contribution to Resolving the Interviewees
Case
The case settled as a result of ADR
11
ADR did not lead to settlement
2
ADR resolved some issues in the case
1
Total
14

Overall, thirty of the sixty disputant interviewees had


had some experienceof using ADR to resolve a
dispute. A further twenty disputants knew of ADR.
Forty-nine of the sixty disputants involved in indepth interviews felt able to make some comment
about the advantages and disadvantages of ADR. It is
clear that ADR is seen as a less costly approach to
dispute resolution than having the dispute resolved
through a judgment given by the Court. Almost as

Practitioners'
Views
on
the Disadvantages of ADR

Unlike other stakeholders, ADR practitioners tended to


see any disadvantagesof ADR for disputants as being
related primarily to the particular ADR technique used
or the methods by which ADR techniques are
implemented.
It has already been noted that ADR practitioners, like
lawyers and disputants, see arbitration as a less
attractive ADR technique than mediation. It should also
be recognised, however, that even within mediation,
some processes are seen as more likely to achieve all the
benefits claimed for ADRthan others.
ADR practitioners recognise that mediation may
encompass a variety
of
models, ranging from
developing consensual solutions to risk management or
evaluative models for dispute resolution. As Boulle
notes, mediation is:
"a decision-making process in which the parties are
assisted by a third-party, the mediator; the mediator
attempts to improve the process ofdecision-making
and to assist the parties reach an outcome to which
each of them can consent". [9]
Many ADR practitioners believed the full range of
potential benefits, especially those related to increased
user satisfaction with outcomes and compliance with
ADR resolutions, were less likely to be achieved where

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 9


mediation focused on risk assessment, cost-benefit
review, or evaluation of the likelihoodof success in
court rather than consensual solution development.
Many ADR practitioners, both those who combine their
ADR practice with legal practice and those who do not,
expressed considerable concern at techniques directed
primarily at trading-off the probability of success in
court. This was perceived as particularly prevalent in
the Auckland region and was characterised by some
ADR practitioners as a model which allowed disputants
to be 'bullied'. It was a model that some found
antithetical to what they believed to be the core
philosophical values of mediation and the core elements
which led to better quality solutions the empowerment
of
the disputants, and the expectation that
disputants should take responsibility for mutually
generating and committing to consensual solutions.
A trading-off approach in mediation was perceived by
ADR practitioners to be particularly widespread in
disputes around insurance and employment matters.
Some concern was expressed that if that type of
approach became prevalent, or the dominant
perception of mediation, there would be a backlash
against mediation, a hesitancy to take-up mediation
opportunities, and a failure to capture the potential
benefits of mediation such as solution flexibility,
reduction in stress and relationship repair.
Lawyers' Views on the Disadvantagesof ADR
For lawyers concerns about ADR focus on three issues.
Those are whether ADR:

delivers reduced costs and increases


timeliness delivers a sound and fair
outcome, and

generates agreements that can be sustained


and enforced.

Lawyers were directly involved in two of the


stakeholders research projects. Some of the ADR
practitioners were lawyers and some practising
lawyers were participants in the ADR practitioner
research project as well as the lawyers' research
project.
What emerged from the lawyer and ADR practitioner
research projects as well as the disputant research
project was that lawyers have, perhaps more than
anyof the other stakeholder groups, a diversity of
views around the merits and potential problems of
ADR. In particular there is a view among some
lawyers thatADR both delays dispute resolution and
increases costs. Increased cost was seen by lawyers
participating in the lawyers' survey as a particular
limitation ofarbitration. Delay was seen as a
particular problem associated with mediation.

As shows only a minority of lawyers participating in


the lawyers' survey saw significant limitations with
ADR techniques. It is notable that the pattern of
those minority concerns differed in relation to
arbitration and mediation respectively. With regard
to arbitration a substantial minority oflawyers
expressed concern that arbitration increased the costs
of dispute resolution. By comparison, with regard to
mediation the most substantial minority of lawyers
expressed concern that mediation could be used as a
delaying tactic. A smaller but still substantial
minority of lawyers expressed concerns about
mediation's enforceability.
Limitations of
(Lawyers Survey)

Key

Arbitration and Mediation

Limitations of Limitations of
Arbitration
Mediation (n=196)*
(n=196)*

ADRLimitatio
%
n

Response

of

of

Response

Lawyer
Lawyer
s
ss s
Enforceability 17 8.7 54 27.6 Delaying tactics 35 17.9 74 37.8
Increased Costs 80
40.8
35
17.9

* Multiple response.
Only a minority of the lawyers participating in the
lawyers' survey expressed concerns about those issues.
However, the disputants research does reveal how
powerful lawyers' views can be in relation to take-up of
ADR. A small group ofdisputants were explicitly
advised by their lawyer not to take-up ADR on the
grounds that it was too expensive or ADR would be
ineffective. Some disputants assumed that if lawyertolawyer informal discussion had failed to resolve the
dispute then ADR would simply not be an option.
Overall, however, surveyed lawyers tended to be
supportive of ADR. Indeed, among the lawyers
participating in the lawyers' survey around 64.4 percent
accepted the notion that there might be merit in the
court ordering parties to take-up ADR prior to
proceeding with a case. It is notable, however, that only
22.2 percent of the participant lawyers felt court orders
to arbitration were acceptable, compared to 53.7
percent who accepted the notion of the courts ordering
parties to mediation.
Even among lawyers who believed the benefits of ADR
were such as to justify some mechanism by which the
courts could order parties to mediation, there was still a
concern that ADR should not be promoted in a manner
that compromised litigants' access to justice.
Disputants' Views on the Disadvantages of

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 10


ADR

legal system and the judge control every aspect, ADR


is much more flexible.

Although ADR was seen by the disputants participating


in the in-depth interviews as a less costly pathway than
the court system, a small proportion ofthe 49
interviewees who felt they could comment on the merits
of ADR, identified a series of potential drawbacks with
ADR. Those are set out in Table 4.8
Disadvantages
of
ADR
Identified
by
Interviewees (Disputant In-depth Interviews
n=49)*
Key

Disadvantages

of

Responses
Identified
Lackof enforcement
10
Increased costs
9
Delaying tactic
9
Other
7
Compromise of principles
7
ADR practitioner may not have
3
the technical skills required
Need other party to be willing
2
to come to the table
No right of appeal
2

Interviewees
20.4
18.4
18.4
14.3
14.3
6.1
4.1
4.1

* Multiple response.

Confidentiality:
Disputes resolved in court are public and any
judgments awarded are also public. Mediation,
arbitration, and mini trials are all conducted in
private and in strict confidentiality.
Experienced Neutral Panelists:
Our panelists are professional mediators and
arbitrators with training and expertise in dispute
resolution and insurance. Disputing parties are able
to select their panelist from a list of qualified
individuals who are specialized in specific aspects of
insurance. In the court system, binding decisions are
made by judges who may lack expertise in insurance
practices.
Cooperative Approach:
All ADR services take place in a more informal, less
confrontational atmosphere. This is more conducive
to maintaining a positive business relationship
between the two parties. With mediation, specifically,
the result is collaboration between the two parties.

Twelve of 49 disputants stated that they saw only


advantages and no disadvantages associated with
ADR.6

1.3.3 BENEFITS OF ALTERNATIVE


DISPUTE RESOLUTION7
Cost:
One of the largest reasons parties choose to resolve
their disputes outside of the courts is cost. Alternative
dispute resolution usually costs much less than
litigation, allowing smaller financial disputes a
financially viable way to be settled.
Speed:
ADR can be scheduled by the parties and the panelist
as soon as they are able to meet. Compared to the
court process, where waits of 2-3 years are normal,
dispute resolution is as fast as the parties want it to
be.
Control:
The parties control some of the process; selecting
what method of ADR they want to follow, selecting
the panelist for their dispute resolution; the length of
the process; and, in a mediations case, even the
outcome. Opposed to the court system, where the
6
http://www.justice.govt.nz/publications/globalpublicat
ions/a/alternative-dispute-resolution-

general-civil-cases/4-advantagesanddisadvantages-of-adr
7
http://www.ibabc.org/idrsbc/benefits.html

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 11

1.4

COMPARISON
BETWEEN
Litigation AND ADR7

At some point in life, and perhaps several times, you


will be faced with a dispute that needs to be settled
and you must decide just how to reach a solution.
Court based adjudication and ADR are two of the
methods used in settling those disputes; and
distributive and integrative are two types of
bargaining utilized in the ADR processes.

1.4.1 Litigation (Court Based


Adjudication)
Litigation is a lawsuit to be decided in court before
a judge or jury. However, litigation can be
intimidating and risky for the litigants. In addition,
because court proceedings are adversarial, a battle
between lawyers, the truth is not always the end
result. A prominent New York defense attorney and
Criminal Court Judge said in all honesty, I have
nothing to do with justice Justice is not even part
of the equation.
Through the courts and litigation you can obtain
money, put a stop to certain activities, and have
statutes and documents interpreted; but the
outcome is that one person wins and one loses.
Litigation is expensive, sometimes prohibitively,
preventing some from taking their cases into the
courts. Even if one can afford litigation, then you
must face the crowded court docket and be willing
to wait as the lengthy process begins a lengthy
process which keeps disputes broiling and
relationships torn apart.
An additional issue is the fact that the dispute must
be able to be translated into legal issues so some
disputes that seem real may not be able to be
framed into a legal issue that can be decided in
court.
On the plus side, litigation ends in a decision that is
binding and enforceable; and it is appealable.
Adjudication is public and has more safeguards
than many other processes. Secondly, court
decisions are based on precedent and are more
predictable than alternative resolutions which can
be formulated by the neutral party.
In the final analysis, each person deserves their day
in court if that is the method they prefer. However,
regardless of the pros and cons of litigation, one
major consideration in making a decision as to the
resolution method is the importance of the
relationship between the two parties in the dispute.
In litigation most relationships are left unable to be
repaired. If your relationship with the opposing
party is important to you or it is one that must be
7 http://general-law.knoji.com/litigation-vsalternativedispute-resolution-adr/

maintained, it is time to perhaps consider an ADR


process.

1.4.2 Alternative Dispute Resolution


(ADR)
ADR is a series of methods for settling disputes other
than court based adjudication. There are several ADR
processes which can be voluntary or ordered by the
courts. Some states require persons to enter into
arbitration or mediation before their case can be heard
in court. Hoping the case can be settled in this manner,
states do this for economic reasons as well as to assist in
clearing court dockets. In other cases such as
employment and some other contracts, arbitration is
required for settling disputes. In these contractual cases
arbitration decisions are final and cannot be appealed in
court in most instances.
One of the objections to litigation is that it can be
intimidating the powerful against the weak the rich
against the poor. The fact is that some forms of ADR like
arbitration can prove to be just as intimidating.
Methods of negotiation in ADR can be divided into two
basic types: distributive; and, integrative.
Distributive:
Distributive negotiating has a win or lose outcome the
pie only has so many pieces and the more one side gets,
the less the other side has. Most often this type of
bargaining is utilized when there are fixed resources in
dispute such as money or property. Personal
relationships are low on the scale of importance.
Distributive processes are often criticized because they
put emphasis on the parties differences and lead to
destructive actions. To be successful in distributive
negotiating parties must guard their information and try
to get as much information from the opponent as
possible. Hardball is often necessary in distributive
techniques and relationships become second place or are
neglected and ignored.
Even when some cooperative bargaining techniques may
prove beneficial and are put in place, there may be
portions of the negotiations that can only be settled by
dividing the pie or using distributive techniques.
Integrative:
Integrative bargaining is interest based and looks for a
win/win solution. These techniques encourage
cooperative problem solving which addresses all parties
needs and interests. Negotiators here envision a pie with
more unlimited pieces and desire an outcome that will
maintain, rather than destroy, relationships.
At times, even in disputes that involve money, it
becomes clear to neutral parties that they must mend the
relationship before the money issue can be resolved
this means including integrative bargaining.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 12


In order to be successful in integrative negotiations
all the interests on both sides must be identified and
fears must be addressed. The goal is to have both
sides work on a solution that will be beneficial to
both and allow their relationship to remain intact.
While there are many ADR processes, they all
utilize either distributive or integrative strategies; or
a combination of both. These processes cover a wide
spectrum from binding arbitration normally narrow
in scope to reconciliation being a lengthy process
focused on mending relationships between people,
races, religions and even countries.
If the dispute you are involved in has a fixed
quantity to work with and the other party is not a
friend or someone with whom you must maintain a
relationship, then you could chose from court
ordered adjudication, arbitration (binding or nonbinding), mediation (nonbinding); but consider the
time and the expense of court. Consider too, that
ADR can also be expensive and if you chose to go to
court when ADR fails, then you can be faced with
great expense. The process here will be the
distributive type adversarial, demanding
concession, win at all cost.
If, on the other hand, the dispute involves friends
or lasting relationships, you might wish to avoid
court and work to maintain those relationships.
Here the process will be the integrative type
parties are joint problem solvers, focusing on
interests, and working toward a wise decision that is
good for all. You could utilize mediation, a
reconciliation process, restorative justice or
restitution among others.
The deciding factors in your decision of whether to
go to court or utilize one of the many ADR methods
will be the type of dispute, the outcome you desire,
the relationship you have with the opposing party,
and the cost involved in each. Should you decide on
ADR, then you will need to decide whether this will
be a distributive or integrative negotiation.

1.4.3 Litigation and ADR Contrasted8


A crucial distinction between litigation and ADR is
that whilst many legal practitioners engage in ADR
processes, there is no legal or professional
requirement for either the ADR practitioner or for
party representatives at ADR processes to be legally
qualified or to be members of legal professions such
as the bar or the law society. Many of those who
engage in ADR practice are first and foremost
experts in particular fields such as architects,
builders, civil engineers, mariners, scientists and
social
workers,
albeit
with
a
thorough
understanding of ADR processes and some
knowledge and understanding of law. In house legal
8 http://www.nadr.co.uk/background/contrast.php

experts in large corporate organisations can take


part in the entire ADR process without engaging
professional lawyers thus cutting costs further, both
in terms of time lost through communicating with
the professionals and in respect of legal fees and
costs.
It is also the practical knowledge and understanding of
industry and commerce which assures the parties to
ADR processes that the people responsible for settling
their dispute or assisting them to reach a settlement
understand their business and their concerns. It further
assures them that the outcome will not be based purely
on legal technicalities but will take into account
commercial practicalities and technical details which
lawyers may not fully comprehend.

1.5

LIMITATION
GENERAL

OF

ADR

IN

Generally ADR are usually faster, and cheaper than


litigation.. they are also private and informal when also
compared to litigation and it gets both parties involved
in the settlement process and the decisions are not
necessarily final. However ADR does not alway
guarantee an agreed upon decision and with
arbitration the decision is final.9
----SEE DISADVANTAGES----

1.6 SUBJECT OF ADR


Typical ADR Processes :
A process is any procedure agreed to by the parties and
the third party neutral by which the parties will work to
resolve their dispute. Figure 19-1 illustrates the spectrum
of ADR processes. For further discussion see SCAOs
Taxonomy of Alternative Dispute Resolution Processes.
The most common ADR procedures are as follows.
Convening (also called conflict assessment) involves the
use of a neutral third party to help assess the causes of
the conflict, to identify the persons or entities that would
be affected by the outcome of the conflict, and to help
these parties consider the best process (for example,
mediation, consensus-building, or a lawsuit) for them to
deal with the conflict. The convener may also help get
the parties ready for participation in a dispute resolution
process by providing educating the parties on the nature
of the selected process.
Facilitation or Consensus Building is a process used to
help a group of people or parties have constructive
discussions about complex or potentially controversial
issues. The facilitator helps the parties set ground rules
9

http://wiki.answers.com/Q/What_are_the_disadvan
tages_and_advantages_of_Alternative_dispu
te_resolution#ixzz204zUKU00

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 13


for
these
discussions,
promotes
effective
communication, elicits creative options, and keeps the
group focused and on track. Facilitation can be used
even where parties have not yet agreed to attempt to
resolve a conflict.
Mediation is a process in which a neutral third party
(the mediator) assists disputants in reaching a
mutually satisfying settlement of their differences.
Mediation is voluntary, informal, and confidential.
The mediator helps the disputants to communicate
clearly, to listen carefully, and to consider creative
ways for reaching resolution. The mediator makes
no judgments about the people or the conflict
(unless requested under the evaluative model), and
issues no decision. Any agreement that is reached
must satisfy all the disputants. The Michigan Court
Rules define mediation as a process in which a
neutral third party facilitates communication
between parties, assists in identifying issue, and
helps explore solutions to promote a mutually
acceptable settlement. MCR 2.411(A)(2). A
mediator has no authoritative decisionmaking
power. Id.
In Michigan, the terms mediation and facilitation
are often used interchangeably to describe what is
known generally elsewhere as mediation.
Case Evaluation is an ADR process created by MCR
2.403 in which a three-person panel hears
presentations by litigants and provides a written
evaluation of the value of the case. If all of the
parties accept, a final judgment is entered on all
claims asserted in the case in the amount of the
evaluation. If one or both parties reject, the rule
provides for the imposition of sanctions in certain
circumstances. The evaluation is limited to a
monetary amount, so it is not well suited to
resolving disputes seeking any form of injunctive or
other equitable relief. Although case evaluation
panels are usually assigned by the office carrying
out a circuit courts case evaluation program, see
generally MCR 2.404, in more complex disputes the
parties often stipulate to specific panel members
who the disputants believe have expertise in the
subject matter involved in the dispute. This has the
effect of giving the parties more confidence in the
case evaluation award when made. This deviation
from usual procedure should be undertaken after
obtaining an appropriate court order.
Early Neutral Evaluation is an evaluative ADR
process initiated early in a case, often at the
direction of the court, in which the third party, who
has experience or expertise in the subject matter of
the suit, meets with the parties and may receive
presentations, after which the neutral provides the
parties with an evaluation of the likelihood of
success and likely ranges of damages. The
expectation is that an early evaluation from a
knowledgeable, objective expert will prompt the

parties to take a more realistic approach to settling


their dispute. There are many variations on this
process, including use of the process to simplify or
focus issues. In some cases, the neutral may
withhold the evaluation from the parties and
proceed to mediate the conflict, revealing the
evaluation only if the mediation is unsuccessful.
Mini and Summary Jury Trials involve advisory trial
proceedings. In the first case, the dispute is presented to
a third-party neutral. A summary jury trial involves
impaneling an advisory jury to whom the parties make
an abbreviated presentation of their cases. The neutral
or the jury, as the case may be, then deliberates and
renders an advisory verdict. Where the credibility of key
witness is central to a case, such a trial may provide
valuable guidance to counsel about the likely success of
their case.
Arbitration is an adjudicatory process in which a person
or panel, other than a judge, controls pretrial
procedures, takes evidence, and renders an award which
is the equivalent of a verdict. To be enforceable in a court
the award must be entered as a judgment in a court of
competent jurisdiction. MCL 600.5025 There are narrow
grounds for appeal and the parties may agree that no
appeal will be permitted. Although some treatises
discuss non binding arbitration, any nonbinding
process is some form of mediation and that the term
arbitration is best used only for a binding process.
Arbitration offers several advantages over adjudication
by a court. First, the parties can assert more control in
defining the procedure. Second, arbitrations are private
although awards usually are entered as judgments by a
court, making the terms of the outcome public. The
process generally is quicker than court proceedings and
is intended to be, and usually is, less expensive than
litigation.
The American Arbitration Association (AAA) is a major
arbitration service provider but there are many other
service providers. The parties are free to fashion their
own approach to arbitration but, unlike other ADR
processes, the parties cannot withdraw from arbitration
once it has been commenced. Because arbitration is
binding, the parties should be very familiar with the
Michigan Arbitration Act and the Federal Arbitration Act
(discussed in 19.19) before agreeing to arbitration. In
addition, because AAAs arbitration rules are often
incorporated into agreements whether or not the AAA is
the arbitration services provider, parties should be
familiar with these procedures before agreeing to be
bound by them.
Practitioners should review the arbitrators authority to
compel discovery and attendance of witnesses under any
applicable statute and the procedures under which the
arbitration is conducted. For example, the arbitrators
authority is broader under the Federal Arbitration Act
and narrower under the AAAs procedures. The parties
agreement to arbitrate may specify discovery obligations
as a matter of contract.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 14


If arbitration may be subject to international rules,
particular care should be taken because these
procedures may be very different from the
American norm.
Med-Arb is an ADR process in which the parties
agree in advance to commence mediation but to
continue to binding arbitration of any issues not
resolved by mediation. A different neutral generally
is used for the arbitration after the mediation is
completed. This process offers the advantage of
achieving a final resolution if mediation does not
fully settle all matters. It is not often used in
environmental disputes.
Modes of ADR
The most common approaches in Michigan for
environmental disputes are mediation (both
evaluative and facilitative models), third-party
neutral fact finding, and facilitated rule or policy
development.
Most two-party environmental disputes utilize
mediation at some point, whether initiated by the
parties or ordered by the court. Participants usually
include attorneys, party representatives and
experts. Where the facilitative model is employed,
the thirdparty neutral is usually one individual.
Where the parties seek evaluative input, it is not
uncommon to use a three-person panel. In some
cases, the mediation follows the facilitative model
but if the parties do not reach an agreement, the
neutral is asked to provide an evaluation either as a
general advisory number or in the form of an
evaluation to be accepted or rejected by the parties.
In the latter case, the evaluator receives the
acceptance or rejections from each party in
confidence. Only if both sides accept does the
neutral disclose the parties responses. This way, if
only one party accepts, it does not lose any
bargaining position by having its acceptance
disclosed to the other side.
Because many environmental disputes deal with not
just a specific sum certain but often involve
definition of the respective parties duties and
liabilities after the settlement, neutrals in
environmental mediations may play a more active
role than in more typical tort or contract disputes
where the principal dispute is usually money. For
this same reason, environmental mediation may
result in numerous sessions conducted over a
substantial time period.

ADR Techniques or Methods

10

Binding arbitration involves the presentation of a


dispute to an impartial or neutral individual

10 http://www.opm.gov/er/adrguide/section1a.asp

(arbitrator) or panel (arbitration panel) for issuance


of a binding decision. Unless arranged otherwise,
the parties usually have the ability to decide who the
individuals are that serve as arbitrators. In some
cases, the parties may retain a particular arbitrator
(often from a list of arbitrators) to decide a number
of cases or to serve the parties for a specified length
of time (this is common when a panel is involved).
Parties often select a different arbitrator for each
new dispute. A common understanding by the
parties in all cases, however, is that they will be
bound by the opinion of the decision maker rather
than simply be obligated to "consider" an opinion or
recommendation. Under this method, the third
party's decision generally has the force of law but
does not set a legal precedent. It is usually not
reviewable by the courts.
Binding arbitration is a statutorily-mandated feature of
Federal labor management agreements. Consistent with
statute, the parties to such agreements are free to
negotiate the terms and conditions under which
arbitrators are used to resolve disputes, including the
procedures for their selection. Some agreements may
provide for "permanent" arbitrators and some may
provide for arbitration panels.
Conciliation involves building a positive relationship
between the parties to a dispute. A third party or
conciliator (who may or may not be totally neutral to the
interests of the parties) may be used by the parties to
help build such relationships.
A conciliator may assist parties by helping to establish
communication, clarifying misperceptions, dealing with
strong emotions, and building the trust necessary for
cooperative problem-solving. Some of the techniques
used by conciliators include providing for a neutral
meeting place, carrying initial messages between/among
the parties, reality testing regarding perceptions or
misperceptions, and affirming the parties' abilities to
work together. Since a general objective of conciliation is
often to promote openness by the parties (to take the risk
to begin negotiations), this method allows parties to
begin dialogues, get to know each other better, build
positive perceptions, and enhance trust. The conciliation
method is often used in conjunction with other methods
such as facilitation or mediation.
Cooperative problem-solving is one of the most basic
methods of dispute resolution. This informal process
usually does not use the services of a third party and
typically takes place when the concerned parties agree to
resolve a question or issue of mutual concern. It is a
positive effort by the parties to collaborate rather than
compete to resolve a dispute.
Cooperative problem-solving may be the procedure of
first resort when the parties recognize that a problem or
dispute exists and that they may be affected negatively if
the matter is not resolved. It is most commonly used
when a conflict is not highly polarized

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 15


and prior to the parties forming "hard line" positions.
This method is a key element of labor-management
cooperation programs.
Dispute panels use one or more neutral or impartial
individuals who are available to the parties as a
means to clarify misperceptions, fill in information
gaps, or resolve differences over data or facts. The
panel reviews conflicting data or facts and suggests
ways for the parties to reconcile their differences.
These recommendations may be procedural in
nature or they may involve specific substantive
recommendations, depending on the authority of
the panel and the needs or desires of the parties.
Information analyses and suggestions made by the
panel may be used by the parties in other processes
such as negotiations.
This method is generally an informal process and
the parties have considerable latitude about how the
panel is used. It is particularly useful in those
organizations where the panel is non-threatening
and has established a reputation for helping parties
work through and resolve their own disputes short
of using some formal dispute resolution process.
Early neutral evaluation uses a neutral or impartial
third party to provide a non-binding evaluation,
sometimes in writing, which gives the parties to a
dispute an objective perspective on the strengths
and weaknesses of their cases. Under this method,
the parties will usually make informal presentations
to the neutral to highlight the parties' cases or
positions. The process is used in a number of courts
across the country, including U.S. District Courts.
Early neutral evaluation is appropriate when the
dispute involves technical or factual issues that lend
themselves to expert evaluation. It is also used when
the parties disagree significantly about the value of
their cases and when the top decision makers of one
or more of the parties could be better informed
about the real strengths and weaknesses of their
cases. Finally, it is used when the parties are seeking
an alternative to the expensive and time-consuming
process of following discovery procedures.
Facilitation involves the use of techniques to
improve the flow of information in a meeting
between parties to a dispute. The techniques may
also be applied to decision-making meetings where
a specific outcome is desired (e.g., resolution of a
conflict or dispute). The term "facilitator" is often
used interchangeably with the term "mediator," but
a facilitator does not typically become as involved in
the substantive issues as does a mediator. The
facilitator focuses more on the process involved in
resolving a matter.
The facilitator generally works with all of the
meeting's participants at once and provides
procedural directions as to how the group can move

efficiently through the problem-solving steps of the


meeting and arrive at the jointly agreed upon goal.
The facilitator may be a member of one of the
parties to the dispute or may be an external
consultant. Facilitators focus on procedural
assistance and remain impartial to the topics or
issues under discussion.
The method of facilitating is most appropriate when: (1)
the intensity of the parties' emotions about the issues in
dispute are low to moderate; (2) the parties or issues are
not extremely polarized; (3) the parties have enough
trust in each other that they can work together to
develop a mutually acceptable solution; or (4) the parties
are in a common predicament and they need or will
benefit from a jointly-acceptable outcome.
Factfinding is the use of an impartial expert (or group)
selected by the parties, an agency, or by an individual
with the authority to appoint a factfinder in order to
determine what the "facts" are in a dispute. The rationale
behind the efficacy of factfinding is the expectation that
the opinion of a trusted and impartial neutral will carry
weight with the parties. Factfinding was originally used
in the attempt to resolve labor disputes, but variations of
the procedure have been applied to a wide variety of
problems in other areas as well.
Factfinders generally are not permitted to resolve or
decide policy issues. The factfinder may be authorized
only to investigate or evaluate the matter presented and
file a report establishing the facts in the matter. In some
cases, he or she may be authorized to issue either a
situation assessment or a specific non-binding
procedural or substantive recommendation as to how a
dispute might be resolved. In cases where such
recommendations are not accepted, the data (or facts)
will have been collected and organized in a fashion that
will facilitate further negotiations or be available for use
in later adversarial procedures.
Interest-based problem-solving is a technique that
creates effective solutions while improving the
relationship between the parties. The process separates
the person from the problem, explores all interests to
define issues clearly, brainstorms possibilities and
opportunities, and uses some mutually agreed upon
standard to reach a solution. Trust in the process is a
common
theme
in
successful
interest-based
problemsolving.
Interest-based problem-solving is often used in collective
bargaining between labor and management in place of
traditional, position-based bargaining. However, as a
technique, it can be effectively applied in many contexts
where two or more parties are seeking to reach
agreement.
Mediated arbitration, commonly known as "med-arb," is
a variation of the arbitration procedure in which an
impartial or neutral third party is authorized by the
disputing parties to mediate their dispute until such time

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as they reach an impasse. As part of the process, when
impasse is reached, the third party is authorized by the
parties to issue a binding opinion on the cause of the
impasse or the remaining issue(s) in dispute.
In some cases, med-arb utilizes two outside partiesone to mediate the dispute and another to arbitrate
any remaining issues after the mediation process is
completed. This is done to address some parties'
concerns that the process, if handled by one third
party, mixes and confuses procedural assistance (a
characteristic of mediation) with binding decision
making (a characteristic of arbitration). The
concern is that parties might be less likely to
disclose necessary information for a settlement or
are more likely to present extreme arguments
during the mediation stage if they know that the
same third party will ultimately make a decision on
the dispute.
Mediated arbitration is useful in narrowing issues
more quickly than under arbitration alone and helps
parties focus their resources on the truly difficult
issues involved in a dispute in a more efficient and
effective manner.
Mediation is the intervention into a dispute or
negotiation of an acceptable, impartial and neutral
third party who has no decision-making authority.
The objective of this intervention is to assist the
parties in voluntarily reaching an acceptable
resolution of issues in dispute. Mediation is useful
in highly-polarized disputes where the parties have
either been unable to initiate a productive dialogue,
or where the parties have been talking and have
reached a seemingly insurmountable impasse.
A mediator, like a facilitator, makes primarily
procedural suggestions regarding how parties can
reach agreement. Occasionally, a mediator
maysuggest some substantive options as a means of
encouraging the parties to expand the range of
possible resolutions under consideration. A
mediator often works with the parties individually,
in caucuses, to explore acceptable resolution
options or to develop proposals that might move the
parties closer to resolution.
Mediators differ in their degree of directiveness or
control while assisting disputing parties. Some
mediators set the stage for bargaining, make
minimal procedural suggestions, and intervene in
the negotiations only to avoid or overcome a
deadlock. Other mediators are much more involved
in forging the details of a resolution. Regardless of
how directive the mediator is, the mediator
performs the role of catalyst that enables the parties
to initiate progress toward their own resolution of
issues in dispute.
Minitrials involve a structured settlement process in
which each side to a dispute presents abbreviated

summaries of its cases before the major decision


makers for the parties who have authority to settle
the dispute. The summaries contain explicit data
about the legal basis and the merits of a case. The
rationale behind a minitrial is that if the decision
makers are fully informed as to the merits of their
cases and that of the opposing parties, they will be
better prepared to successfully engage in settlement
discussions. The process generally follows more
relaxed rules for discovery and case presentation
than might be found in the court or other
proceeding and usually the parties agree on specific
limited periods of time for presentations and
arguments.
A third party who is often a former judge or individual
versed in the relevant law is the individual who oversees
a minitrial. That individual is responsible for explaining
and maintaining an orderly process of case presentation
and usually makes an advisory ruling regarding a
settlement range, rather than offering a specific solution
for the parties to consider. The parties can use such an
advisory opinion to narrow the range of their discussions
and to focus in on acceptable settlement options-settlement being the ultimate objective of a minitrial.
The minitrial method is a particularly efficient and cost
effective means for settling contract disputes and can be
used in other cases where some or all of the following
characteristics are present: (1) it is important to get facts
and positions before high-level decision makers; (2) the
parties are looking for a substantial level of control over
the resolution of the dispute; (3) some or all of the issues
are of a technical nature; and (4) a trial on the merits of
the case would be very long and/or complex.
Negotiated rulemaking, commonly known as "regneg,"
brings together representatives of various interest
groups and a Federal agency to negotiate the text of a
proposed rule. The method is used before a proposed
rule is published in the Federal Register under the
Administrative Procedures Act (APA). The first step is to
set up a well-balanced group representing the regulated
public, public interest groups, and state and local
governments, and join them with a representative of the
Federal agency in a Federally chartered advisory
committee to negotiate the text of the rule. If the
committee reaches consensus on the rule, then the
Federal agency can use this consensus as a basis for its
proposed rule.
While reg-neg may result in agreement on composition
of a particular rule an agency may wish to propose, when
the rule is proposed it is still subject to public review
under the APA. This is the last step in the process.
Federal agency experience is that the process shortens
considerably the amount of time and reduces the
resources needed to promulgate sensitive, complex, and
far-reaching regulations--often regulations mandated by
statute.

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Settlement conferences involve a pre-trial
conference conducted by a settlement judge or
referee and attended by representatives for the
opposing parties (and sometimes attended by the
parties themselves) in order to reach a mutually
acceptable settlement of the matter in dispute. The
method is used in the judicial system and is a
common practice in some jurisdictions. Courts that
use this method may mandate settlement
conferences in certain circumstances.

persuade the parties involved to accept his or her


recommendations. Generally, an individual not
accepting the proposed solution of the ombudsman
is free to pursue a remedy in other forums for
dispute resolution.
Ombudsmen may be used to handle employee workplace
complaints and disputes or complaints and disputes
from outside of the place of employment, such as those
from customers or clients. Ombudsmen are often able to
identify and track systemic problems and suggest ways
of dealing with those problems.

The role of a settlement judge is similar to that of a


mediator in that he or she assists the parties
procedurally in negotiating an agreement. Such
judges play much stronger authoritative roles than
mediators, since they also provide the parties with
specific substantive and legal information about
what the disposition of the case might be if it were
to go to court. They also provide the parties with
possible settlement ranges that could be considered.

Partnering is used to improve a variety of working


relationships,
primarily
between
the
Federal
Government and contractors, by seeking to prevent
disputes before they occur. The method relies on an
agreement in principle to share the risks involved in
completing a project and to establish and promote a
nurturing environment. This is done through the use of
team-building activities to help define common goals,
improve communication, and foster a problem-solving
attitude among the group of individuals who must work
together throughout a contract's term.

Non-binding arbitration involves presenting a


dispute to an impartial or neutral individual
(arbitrator) or panel (arbitration panel) for issuance
of an advisory or non-binding decision. This
method is generally one of the most common quasijudicial means for resolving disputes and has been
used for a long period of time to resolve
labor/management and commercial disputes.
Under the process, the parties have input into the
selection process, giving them the ability to select an
individual or panel with some expertise and
knowledge of the disputed issues, although this is
not a prerequisite for an individual to function as an
arbitrator. Generally, the individuals chosen are
those known to be impartial, objective, fair, and to
have the ability to evaluate and make judgments
about data or facts. The opinions issued by the third
party in such cases are non-binding; however,
parties do have the flexibility to determine, by
mutual agreement, that an opinion will be binding
in a particular case.

Partnering in the contract setting typically involves an


initial partnering workshop after the contract award and
before the work begins. This is a facilitated workshop
involving the key stakeholders in the project. The
purpose of the workshop is to develop a team approach
to the project. This generally results in a partnership
agreement that includes dispute prevention and
resolution procedures.
Peer review is a problem-solving process where an
employee takes a dispute to a group or panel of fellow
employees and managers for a decision. The decision
may or may not be binding on the employee and/or the
employer, depending on the conditions of the particular
process. If it is not binding on the employee, he or she
would be able to seek relief in traditional forums for
dispute resolution if dissatisfied with the decision under
peer review. The principle objective of the method is to
resolve disputes early before they become formal
complaints or grievances.

Non-binding arbitration is appropriate for use when


some or all of the following characteristics are
present in a dispute: (1) the parties are looking for a
quick resolution to the dispute; (2) the parties
prefer a third party decision maker, but want to
ensure they have a role in selecting the decision
maker; and (3) the parties would like more control
over the decision making process than might be
possible under more formal adjudication of the
dispute.
Ombudsmen are individuals who rely on a number
of techniques to resolve disputes. These techniques
include counseling, mediating, conciliating, and
factfinding. Usually, when an ombudsman receives
a complaint, he or she interviews parties, reviews
files, and makesrecommendations to the disputants.
Typically, ombudsmen do not impose solutions. The
power of the ombudsman lies in his or her ability to

Typically, the panel is made up of employees and


managers who volunteer for this duty and who are
trained in listening, questioning, and problem-solving
skills as well as the specific policies and guidelines of the
panel. Peer review panels may be standing groups of
individuals who are available to address whatever
disputes employees might bring to the panel at any given
time. Other panels may be formed on an ad hoc basis
through some selection process initiated by the
employee, e.g., blind selection of a certain number of
names from a pool of qualified employees and managers.

INTERNATIONAL
ALTERNATIVE

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 18

DISPUTE
RESOLUTION/
PEACEFUL
SETTLEMENT OF
INTERNATIONAL
DISPUTE
2.1 INTRODUCTION TO PUBLIC
INTERNATIONAL LAW AND
PRIVATE INTERNATIONAL
LAW

Public international law,

which
governs the relationship between provinces and
international entities. It includes these legal fields:
treaty law, law of sea, international criminal law, the
laws of war or international humanitarian law and
international human rights law.

Public international law concerns the structure


and conduct of sovereign states; analogous
entities, such as the Holy See; and
intergovernmental organizations. To a lesser
degree, international law also may affect
multinational corporations and individuals, an
impact increasingly evolving beyond domestic
legal interpretation and enforcement. Public
international law has increased in use and
importance vastly over the twentieth century,
due to the increase in global trade,
environmental deterioration on a worldwide
scale, awareness of human rights violations,
rapid and vast increases in international
transportation and a boom in global
communications.
The field of study combines two main branches:
the law of nations (jus gentium) and
international agreements and conventions
(jus inter gentes), which have different
foundations and should not be confused.
Public international law should not be confused
with "private international law", which is
concerned with the resolution of conflict of
laws.

In its most general sense, international law "consists


of rules and principles of general application dealing
with the conduct of states and of intergovernmental
organizations and with their relations inter se, as
well as with some of their relations with persons,
whether natural or juridical.

Private international law, or


conflict of laws, which addresses the questions of (1)
which jurisdiction may hear a case, and (2) the law
concerning which jurisdiction applies to the issues in the
case.11
Conflict of laws (or private international law) is a set of
procedural rules that determines which legal system and
which jurisdiction's applies to a given dispute. The rules
typically apply when a legal dispute has a "foreign"
element such as a contract agreed to by parties located in
different countries, although the "foreign" element also
exists in multi-jurisdictional countries such as the
United Kingdom, the United States, Australia and
Canada.

The term conflict of laws itself originates from situations


where the ultimate outcome of a legal dispute depended
upon which law applied, and the common law courts
manner of resolving the conflict between those laws. In
civil law, lawyers and legal scholars refer to conflict of
laws as private international law. Private international
law has no real connection with public international law,
and is instead a feature of local law which varies from
country to country.
The three branches of conflict of laws are

Jurisdiction whether the forum court has the


power to resolve the dispute at hand
Choice of law the law which is being applied to
resolve the dispute
Foreign judgments the ability to recognize and
enforce a judgment from an external forum
within the jurisdiction of the adjudicating forum

Conflicts between public


international law and national
sovereignty
See also: Monism and dualism in international law

The conflict between international law and national


sovereignty is subject to vigorous debate and dispute in
academia, diplomacy, and politics. Certainly, there is a
growing trend toward judging a state's domestic actions
in the light of international law and standards.
Numerous people now view the nation-state as the
11 http://en.wikipedia.org/wiki/International_law

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primary unit of international affairs, and believe that
only states may choose to voluntarily enter into
commitments under international law, and that they
have the right to follow their own counsel when it comes
to interpretation of their commitments. Certain scholars
and political leaders feel that these modern
developments endanger nation states by taking power
away from state governments and ceding it to
international bodies such as the U.N. and the World
Bank, argue that international law has evolved to a point
where it exists separately from the mere consent of
states, and discern a legislative and judicial process to
international law that parallels such processes within
domestic law. This especially occurs when states violate
or deviate from the expected standards of conduct
adhered to by all civilized nations.
A number of states place emphasis on the principal
of territorial sovereignty, thus seeing states as
having free rein over their internal affairs. Other
states oppose this view. One group of opponents of
this point of view, including many European
nations, maintain that all civilized nations have
certain norms of conduct expected of them,
including the prohibition of genocide, slavery and
the slave trade, wars of aggression, torture, and
piracy, and that violation of these universal norms
represents a crime, not only against the individual
victims, but against humanity as a whole. States and
individuals who subscribe to this view opine that, in
the case of the individual responsible for violation of
international law, he "is become, like the pirate and
the slave trader before him, hostis humani generis,
an enemy of all mankind",[4] and thus subject to
prosecution in a fair trial before any fundamentally
just tribunal, through the exercise of universal
jurisdiction.
Though the European democracies tend to support
broad, universalistic interpretations of international
law, many other democracies have differing views
on international law. Several democracies, including
India, Israel and the United States, take a flexible,
eclectic approach, recognizing aspects of public
international law such as territorial rights as
universal, regarding other aspects as arising from
treaty or custom, and viewing certain aspects as not
being subjects of public international law at all.
Democracies in the developing world, due to their
past colonial histories, often insist on noninterference in their internal affairs, particularly
regarding human rights standards or their peculiar
institutions,
but
often
strongly
support
international law at the bilateral and multilateral
levels, such as in the United Nations, and especially
regarding the use of force, disarmament obligations,
and the terms of the UN Charter.

2.1.1 BASIC PRINCIPLES OF


INTERNATIONAL LAW (SOVEREIGNTY,
JURISDICTION, INDEPENDENCE etc.)

2.1.1.1Sovereignty
is the quality of having supreme, independent authority
over a geographic area, such as a territory. [1] It can be
found in a power to rule and make law that rests on a
political fact for which no purely legal explanation can be
provided. In theoretical terms, the idea of "sovereignty",
historically, from Socrates to Thomas Hobbes, has
always necessitated a moral imperative on the entity
exercising it.
For centuries past, the idea that a state could be
sovereign was always connected to its ability to
guarantee the best interests of its own citizens. Thus, if a
state could not act in the best interests of its own
citizens, it could not be thought of as a sovereign
state.[2]
The concept of sovereignty has been discussed
throughout history, from the time of the Romans
through to the present day. It has changed in its
definition, concept, and application throughout,
especially during the Age of Enlightenment. The current
notion of state sovereignty is often traced back to the
Peace of Westphalia (1648), which, in relation to states,
codified the basic principles:

territorial integrity
border inviolability

supremacy of the state (rather than the Church)

a sovereign is the supreme


authority within its jurisdiction.12

lawmaking

2.1.1.2Universal jurisdiction13
is a principle of international law that allows states to
investigate and prosecute a national of any state found
within their borders who is alleged to have committed
certain international crimes.
This principle is premised upon the idea that crimes
under international law such as war crimes, crimes
against humanity, airplane hijacking and genocide as
well as torture, extrajudicial killings, and forced
disappearances are so serious and reprehensible that any
state may prosecute the offender regardless of
nationality because they are in essence an enemy of
mankind.
In
exercising
universal
jurisdiction,
the
investigating and prosecuting state represents the
interests of the international community as a whole
12 http://en.wikipedia.org/wiki/Sovereignty
13
http://www.judicialmonitor.org/archive_1007/generalp
rincipl es.html

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 20


in enforcing international law and ending impunity
for atrocities and crimes that shock the
consciousness of humanity.
Universal jurisdiction allows a state to prosecute an
individual in its courts where none of the traditional
bases for jurisdiction, i.e. territorial, nationality,
passive personality, or protective, exists. Universal
jurisdiction is usually a type of permissive
jurisdiction, in that it requires a State to establish
domestic laws authorizing the right to exercise
jurisdiction over specified crimes.
The main limitation on the exercise of universal
jurisdiction is head of state immunity, which has
been extended to other certain high-ranking state
ministers. A sitting head of state or high-ranking
minister is immune from prosecution by another
state. This principle was reaffirmed by the
International Court of Justice in the Case
Concerning The Arrest Warrant of 11 April 2000
(Congo v. Belgium). Yerodia Ndombasi, Congos
Foreign Minister, was found to be immune from
prosecution by Belgium. The ICJ, however, in a
concurring opinion, reaffirmed the underlying
principle of universal jurisdiction as being lawful.
Universal jurisdiction or universality principle is a
principle in public international law (as opposed to
private international law) whereby states claim
criminal jurisdiction over persons whose alleged
crimes were committed outside the boundaries of
the prosecuting state, regardless of nationality,
country of residence, or any other relation with the
prosecuting country. The state backs its claim on
the grounds that the crime committed is considered
a crime against all, which any state is authorized to
punish, as it is too serious to tolerate jurisdictional
arbitrage.
The concept of universal jurisdiction is therefore
closely linked to the idea that some international
norms are erga omnes, or owed to the entire world
community, as well as the concept of jus cogens
that certain international law obligations are
binding on all states and cannot be modified by
treaty. [1]
According to critics, the principle justifies a
unilateral act of wanton disregard of the sovereignty
of a nation or the freedom of an individual
concomitant to the pursuit of a vendetta or other
ulterior motives, with the obvious assumption that
the person or state thus disenfranchised is not in a
position to bring retaliation to the state applying
this principle.
The concept received a great deal of prominence
with Belgium's 1993 "law of universal jurisdiction",
which was amended in 2003 in order to reduce its
scope following a case before the International
Court of Justice regarding an arrest warrant issued

under the law, entitled Case Concerning the Arrest


Warrant of 11 April 2000 (Democratic Republic of
the Congo v. Belgium).[2] The creation of the
International Criminal Court (ICC) in 2002 reduced
the perceived need to create universal jurisdiction
laws, although the ICC is not entitled to judge
crimes committed before 2002.
According to Amnesty International, a proponent of
universal jurisdiction, certain crimes pose so serious a
threat to the international community as a whole, that
states have a logical and moral duty to prosecute an
individual responsible for it; no place should be a safe
haven for those who have committed genocide,[3] crimes
against humanity, extrajudicial executions, war crimes,
torture and forced disappearances.[4]
Opponents, such as Henry Kissinger, argue that
universal jurisdiction is a breach on each state's
sovereignty: all states being equal in sovereignty, as
affirmed by the United Nations Charter, "Widespread
agreement that human rights violations and crimes
against humanity must be prosecuted has hindered
active consideration of the proper role of international
courts. Universal jurisdiction risks creating universal
tyranny that of judges."[5][6] According to Kissinger,
as a practical matter, since any number of states could
set up such universal jurisdiction tribunals, the process
could quickly degenerate into politically-driven show
trials to attempt to place a quasi-judicial stamp on a
state's enemies or opponents.
The United Nations Security Council Resolution 1674,
adopted by the United Nations Security Council on April
28, 2006, "Reaffirm[ed] the provisions of paragraphs
138 and 139 of the 2005 World Summit Outcome
Document regarding the responsibility to protect
populations from genocide, war crimes, ethnic cleansing
and crimes against humanity" and commits the Security
Council to action to protect civilians in armed conflict.14

2.1.1.3Independence of the
Judiciary15
In Brief
International law requires that cases presented in
international tribunals and cases presented in domestic
tribunals where international law is applicable be
resolved by tribunals that are independent and that are
composed of independent judges.
In Theory

14 http://en.wikipedia.org/wiki/Universal_jurisdiction
15
http://www.judicialmonitor.org/archive_0506/generalp
rincipl es.html

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Asserting that the above is a principle of
international law may seem strange, because it is
not usually included in the litany of principles of
international law that a student would encounter in
studying international law, or that a professor of
international law would enunciate in his or her
lectures on international law. For example and by
analogy, law students in the United States studying
constitutional law or criminal law would not be
confronted by a professor with cases which discuss,
or texts that espouse, the concept of an independent
judiciary in either the federal court system or the
court systems of the individual states. Perhaps the
reason is because the necessity of an independent
judiciary in a country espousing democracy and the
rule of law is selfevident. Nevertheless it is
important to highlight this principle and resolve any
questions that might be raised as to the validity of it
as a principle in international law.
One might, in an attempt to resolve any doubt or
question about this principle, respond by simply
stating, as indicated above, that international law,
because it is law, presumes or has as its basis the
rule of law. And the rule of law necessarily
incorporates the idea of dispute resolution by
peaceful means, and the further idea of the conduct
or hearing of cases according to recognized
procedures, including recognized tribunals. And
given the necessity of tribunals to resolve disputes
and hear cases, to have any validity those tribunals
must necessarily be independent and made up of
independent judges. Thus one argument would be
simply that the whole idea of international law
requires independent tribunals and independent
judges.
There is, however, another approach that may be
taken in asserting that independent tribunals and
independent judges in the dispute resolution and
casehearing aspects of international law together
form a principle of international law. One definition
of law is that it is simply those principles or rules
that a court would enforce or give effect to in
resolving a case. Thus in cases involving the public
or the government, courts would look to a
constitution, a statute, or a regulation adopted by a
regulatory body. In private disputes, courts would
look to the private law of the parties, such as a
contract or agreement. Using this definition of law,
is the guarantee of an independent judiciary a
principle of international law that would be
recognized and applied by an international
tribunal? For example, if a question arose in the
International Court of Justice, the grandfather of
international courts, whether the guarantee of an
independent judiciary is a recognized principle of
international law, how would the ICJ resolve that
issue?
Actual Support for Principle

The International Court of Justice might look no further


than the statute that created it, the Statute of the
International Court of Justice, adopted by countries in
conjunction with the creation of the United Nations in
1945 (the ICJ is the immediate successor to the
Permanent Court of International Justice, created at the
time of the establishment of the League of Nations
following World War I). Article 2 of that Statute
provides:
The Court shall be composed of a body of independent
judges, elected regardless of their nationality from
among persons of high moral character, who possess the
qualifications required in their respective countries for
appointment to the highest judicial offices, or are
jurisconsults of recognized competence in international
law.
In addition, article 30 requires that the judges who sit on
that court exercise their powers impartially and
conscientiously.
In resolving any doubt, the ICJ might review Article 38
of the Statute, which enunciates sources of law to be
applied by the Court:
The Court, whose function is to decide in accordance
with international law such disputes as are submitted to
it, shall apply:
a. international conventions, whether general orparticular,
establishing rules expressly recognized by the contesting
states;
b. international custom, as evidence of a generalpractice
accepted as law;
c. the general principles
civilizednations;

of

law

recognized

by

d. subject to the provisions of Article 59, judicialdecisions


and the teachings of the most highly qualified publicists
of the various nations, as subsidiary means for the
determination of rules of law.
The Court would then inquire whether any of these
sources of law require an independent judiciary to
resolve international cases or domestic cases with an
ingredient of international law. With respect to
international conventions Article 10 of the Universal
Declaration of Human Rights states:
Everyone is entitled in full equality to a fair and public
hearing by an independent and impartial tribunal, in the
determination of his rights and obligations and of any
criminal charge against him.
In addition part of Article 5 of the European Convention
on Human Rights states:
In the determination of his civil rights and
obligations or of any criminal charge against him,
everyone is entitled to a fair and public hearing

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within a reasonable time by an independent and
impartial tribunal established by law.
One other convention, the International Covenant
on Civil and Political Rights, guarantees in the
determination of any criminal charge or of rights
and obligations at a suit at law, a fair and public
hearing by a competent, independent and impartial
tribunal established by law.
There are undoubtedly other international
conventions that have similar provisions. Thus the
Court could apply these provisions of international
conventions in ruling that an independent judiciary
is a principle of international law.
Moreover, most countries have some kind of
provision in their constitution or in a national
statute that provides for an independent judiciary.
Former Associate Justice of the U.S. Supreme
Court, Sandra Day OConnor, in a speech in 2003
before the Arab Judicial Forum, pointed out that the
constitutions of almost all Arab countries contain
provisions for an independent judiciary. She
specifically mentioned in the speech the
constitutions of Bahrain, Egypt, and Jordan. Other
countries where an independent judiciary is part of
the fabric of the legal system are the United States,
Canada, and Australia. Thus the concept of an
independent judiciary is a general principle of law
recognized by civilized nations.
Other Source Documents
Finally, the concept of an independent judiciary is
included in the teachings of the most highly
qualified publicists of the various nations. The
International Commission of Jurists, one of the
most prestigious bodies of international jurists and
lawyers, in 2004, issued what is known as the Berlin
Declaration on Upholding Human Rights and the
Rule of Law in Combating Terrorism, which
confirmed the idea of an independent judiciary in
the development and implementation of counterterrorism measures. Also a group of chief justices
from various countries, meeting in The Hague in
2001-2002, issued what is known as the Bangalore
Draft Code of Judicial Conduct 2001, Adopted by
the Judicial Group on Strengthening Judicial
Integrity, as revised at the Round Table Meeting of
Chief Justices Held at the Peace Palace, The Hague,
November 25-26, 2002. Value I of that declaration
is independence of the judiciary, and the following
items 1.1-1.4 specifically spell out what is meant by
or contained in that value.
Thus three out of the four sources of international
law that are authorized for use by the International
Court of Justice in its organic statute confirm that
an independent judiciary is a principle of
international law.

2.1.2 ARTICLE 33 PARAGRAPH 1 OF


THE UN CHARTER
The parties to any dispute, the continuance of
which is likely to endanger the maintenance of
international peace and security, shall, first of
all, seek a solution by negotiation, enquiry,
mediation,
conciliation,
arbitration,
judicial settlement, resort to regional
agencies or arrangements, or other
peaceful means of their own choice.

2.1.3 INTERNATIONAL COURT OF


JUSTICE
The International Court of Justice (French: Cour
internationale de Justice; commonly referred to as the
World Court or ICJ) is the primary judicial organ of the
United Nations. It is based in the Peace Palace in The
Hague, Netherlands. Its main functions are to settle legal
disputes submitted to it by states and to provide advisory
opinions on legal questions submitted to it by duly
authorized international organs, agencies, and the UN
General Assembly.
Jurisdiction
As stated in Article 93 of the UN Charter, all 193 UN
members are automatically parties to the Court's statute.
[11] Non-UN members may also become parties to the
Court's statute under the Article 93(2) procedure. For
example, before becoming a UN member state,
Switzerland used this procedure in 1948 to become a
party. And Nauru became a party in 1988. Once a state is
a party to the Court's statute, it is entitled to participate
in cases before the Court. However, being a party to the
statute does not automatically give the Court jurisdiction
over disputes involving those parties. The issue of
jurisdiction is considered in the two types of ICJ cases:
contentious issues and advisory opinions.

2.2 RELEVANT ALTERNATIVE


DISPUTE SETTLEMENT
INSTITUTIONS
2.2.1.1PERMANENT COURT OF
ARBITRATION (HAGUE
CONVENTION OF 1907)
The Permanent Court of Arbitration (PCA), is an
international organization based in The Hague in the
Netherlands.
HISTORY- The court was established in 1899 as one of
the acts of the first Hague Peace Conference, which
makes it the oldest institution for international dispute
resolution.
The creation of the PCA is set out under Articles 20
to 29 of the 1899 Hague Convention for the pacific
settlement of international disputes, which was a

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result of the first Hague Peace Conference. At the
second Hague Peace Conference, the earlier
Convention was revised by the 1907 Convention for
the Pacific Settlement of International Disputes.
Unlike the ICJ, the PCA is not just open to states but
also to other parties. The PCA provides services for
the resolution of disputes involving various
combinations
of
states,
state
entities,
intergovernmental organizations, and private
parties.
PCA courtroom.
The PCA is not a court in the conventional
understanding of that term, but an administrative
organization with the object of having permanent
and readily available means to serve as the registry
for purposes of international arbitration and other
related procedures, including commissions of
enquiry and conciliation.[2] It is a permanent
framework available to assist temporary arbitral
tribunals or commissions. The judges or abitrators
that hear cases are officially called "Members" of the
Court.
The PCA is housed in the Peace Palace in The
Hague, which was built specially for the Court in
1913 with an endowment from Andrew Carnegie.
From 1922 on, the building also housed the
distinctly
separate
Permanent
Court
of
International Justice, which was replaced by the
International Court of Justice in 1946.
In the early 1980s, the PCA helped in setting up the
administrative services of the Iran-United States
Claims Tribunal.
The public at large is usually more familiar with the
International Court of Justice than with the
Permanent Court of Arbitration, partly because of
the closed nature of cases handled by the PCA and
to the low number of cases dealt with between 1946
and 1990. The PCA's caseload has, however,
increased since then. The PCA administers cases
arising out of international
treaties (including bilateral and multilateral
investment treaties), and other agreements to
arbitrate. The cases conducted by the PCA span a
wide range of legal issues, including disputes over
territorial and maritime boundaries, sovereignty,
human rights, international investment (investorstate arbitrations), and matters concerning
international and regional trade.
Hearings are rarely open to the public and
sometimes even the decision itself is kept
confidential at the request of the parties. Many
decisions and related documents are available on
the PCA website.

2.2.1.2Hague Convention of 1907


The Hague Conventions were two international treaties
negotiated at international peace conferences at The
Hague in the Netherlands: The First Hague Conference
in 1899 and the Second Hague Conference in 1907.
Along with the Geneva Conventions, the Hague
Conventions were among the first formal statements of
the laws of war and war crimes in the body of secular
international law. A third conference was planned for
1914 and later rescheduled for 1915, but never took place
due to the start of World War I. The German
international law scholar and neoKantian pacifist
Walther Schcking called the assemblies the
"international union of Hague conferences".[1] and saw
them as a nucleus of an international federation that was
to meet at regular intervals to administer justice and
develop international law procedures for the peaceful
settlement of disputes, asserting "that a definite political
union of the states of the world has been created with the
First and Second Conferences." The various agencies
created by the Conferences, like the Permanent Court of
Arbitration, "are agents or organs of the union."
A major effort in both the conferences was to create a
binding international court for compulsory arbitration to
settle international disputes, which was considered
necessary to replace the institution of war. This effort,
however, failed to realize success either in 1899 or in
1907. The First Conference was generally a success and
was focused on disarmament efforts. The Second
Conference failed to create a binding international court
for compulsory arbitration but did enlarge the
machinery for voluntary arbitration, and established
conventions regulating the collection of debts, rules of
war, and the rights and obligations of neutrals. Along
with disarmament and obligatory arbitration, both
conferences included negotiations concerning the laws of
war and war crimes. Many of the rules laid down at the
Hague Conventions were violated in the First World
War. The German invasion of Belgium, for instance, was
a violation of Hague III (1907), which states that
hostilities must not commence without explicit warning
Most of the great powers, including the United States,
Britain, Russia, France, China, and Persia, favored a
binding international arbitration, but the condition was
that the vote should be unanimous, and a few countries,
led by Germany, vetoed the idea.
The second conference, in 1907, was generally a
failure, with few major decisions. However, the meeting
of major powers did prefigure later 20thcentury
attempts at international cooperation.
The second conference was called at the suggestion of
President Theodore Roosevelt in 1904, but postponed
because of the war between Russia and Japan. The
Second Peace Conference was held from June 15 to
October 18, 1907, to expand upon the original Hague
Convention, modifying some parts and adding others,

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 24


with an increased focus on naval warfare. The British
tried to secure limitation of armaments, but were
defeated by the other powers, led by Germany, which
feared a British attempt to stop the growth of the
German fleet. Germany also rejected proposals for
compulsory arbitration. However, the conference did
enlarge the machinery for voluntary arbitration, and
established conventions regulating the collection of
debts, rules of war, and the rights and obligations of
neutrals.
The Final Agreement was signed on October 18,
1907, and entered into force on January 26, 1910. It
consisted of thirteen sections, of which twelve were
ratified and entered into force:

I: The Pacific Settlement of International


Disputes
II: The Limitation of Employment of Force
for
Recovery of Contract Debts

III: The Opening of Hostilities

IV: The Laws and Customs of War on Land

o includes the Annex on The


Qualifications
of
Belligerents,
Chapter II: Prisoners of War

Declaration II: on the obligatory arbitration

The Brazilian delegation was led by the statesman


Ruy Barbosa, whose contribution was essential for
the defense of the principle of legal equality of
nations.[7] The British delegation included the 11th
Lord Reay (Donald James Mackay), Sir Ernest
Satow and Eyre Crowe. The Russian delegation was
led by Fyodor Martens.The Uruguayan delegation
was led by Jos Batlle y Ordez, great defender of
the compulsory arbitration by creating the idea of
an International Court of Arbitration, and an
alliance of nations to force the arbitration.
Korea made a futile effort to take part in the conference,
in an incident known as the Hague Secret Emissary
Affair. King Gojong dispatched Yi Jun, Yi Sang-Seol and
Yi Wi-Jong as envoys to the second peace conference, to
argue that Eulsa Treaty was unjust and ask for help from
the international society to recover Koreas diplomatic
sovereignty. An American missionary, Homer Hulbert,
also travelled to The Hague to argue against the treaty.
All four men were denied entry16

2.2.2 INTERNATIONAL COURT OF


ARBITRATION (INTERNATIONAL
CHAMBER OF COMMERCE)

V: The Rights and Duties of Neutral Powers


and Persons in Case of War on Land

VI: The Status of Enemy Merchant Ships at


the Outbreak of Hostilities

VII: The Conversion of Merchant Ships into


War-Ships

VIII: The Laying of Automatic Submarine


Contact Mines

IX: Bombardment by Naval Forces in Time


of War

X: Adaptation to Maritime War of the


Principles of the Geneva Convention

XI: Certain Restrictions with Regard to the


Exercise of the Right of Capture in Naval
War

XII: The Creation of an International Prize


Court [Not Ratified][5]

A world network of national committees keeps the ICC


International Secretariat in Paris informed about
national and regional business priorities. More than
2,000 experts drawn from ICCs member companies
feed their knowledge and experience into crafting the
ICC stance on specific business issues.

XIII: The Rights and Duties of Neutral


Powers in Naval War

The UN, the World Trade Organization, and many other


intergovernmental bodies, both international and

Two

declarations

were

signed

as

well:

There are an increasing number of cases being brought


before the International Court of Arbitration. There have
been more than 500 cases a year handled by the
International Court of Arbitration since 1999.
The International Chamber of Commerce (ICC) is
the largest, most representative business organization in
the world.[citation needed] Its hundreds of thousands of
member companies in over 130 countries have interests
spanning every sector of private enterprise.

Declaration I: extending Declaration II from the


1899 Conference to other types of aircraft[6]

The International Court of Arbitration is an


institution for the resolution of international commercial
disputes. The International Court of Arbitration is part
of the International Chamber of Commerce.

16
http://en.wikipedia.org/wiki/Hague_Conventions_of_1
899_an d_1907

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 25


regional, are kept in touch with the views of
international business through ICC.

The ICC International Secretariat, based in Paris, is


the operational arm of ICC. It develops and carries
out ICCs work programme, feeding business views
into intergovernmental organizations on issues that
directly
affect
business
operations.
The
International Secretariat is led by the Secretary
General, who is appointed by the World Council.

History
The International Chamber of Commerce was founded in
1919 to serve world business by promoting trade and
investment, open markets for goods and services, and
the free flow of capital. The organization's international
secretariat was established in Paris and the ICC's
International Court of Arbitration was created in 1923.
ICC's first Chairman was 20th c. French Minister of
Finance Etienne Clmentel. ICC's current Chairman
is Gerard Worms[1]. Harold McGraw III[2] is
ViceChairman and Victor K. Fung[3] is Honorary
Chairman. In January 2011, Jean-Guy Carrier [4] was
elected Secretary General of ICC by the ICC World
Council.
Membership
There are two ways to become a member of ICC[5]:
1.

Through affiliation
committeeor group.

with

an

ICC

national

2. By
direct
membership
with
the
ICC
InternationalSecretariat
when
a
national
committee/group has not yet been established in
your country/territory.
Governing bodies
World Council
ICC' s supreme governing body is the World
Council, consisting of representatives of national
committees. The World Council elects ICCs highest
officers, including the Chairman and the ViceChairman, each of whom serves a two-year term.
The Chairman, ViceChairman and the Honorary
Chairman (the immediate past Chairman) provide
the
organization
with
highlevel
world
leadership.They play an important role in ICC
section.

National Committees
In 90 of the worlds nations, members have
established formal ICC structures called national
committees. In countries where there is no national
committee, companies and organizations such as
chambers
of
commerce
and
professional
associations can become direct members.
Finance Committee
The Finance Committee advises the Executive Board on
all financial matters. On behalf of the Executive Board, it
prepares the budget and regularly reports to the board.
It reviews the financial implications of ICC activities and
supervises the flow of revenues and expenses of the
organization.
Dispute Resolution Services
ICC International Court of Arbitration has received
15,000 cases since its inception in 1923. [28] Over the past
decade, the Court's workload has considerably expanded.
The Court's membership has also grown and now covers
86 countries. With representatives in North America,
Latin and Central America, Africa and the Middle East
and Asia, the ICC Court has significantly increased its
training activities on all continents and in all major
languages used in international trade.
ICC Dispute Resolution Services exist in many forms:

Executive Board
Strategic direction for ICC is provided by its
Executive Board, consisting of up to 30 business
leaders and exofficio members. It is elected by the
World Council on the recommendation of the
Chairmanship. Meeting three times a year, the
Executive Board oversees the establishment of ICCs
strategic priorities and the implementation of its
policies.
International Secretariat

Amicable dispute resolution offers a framework


for the settlement of disputes with the assistance
of a neutral. Parties choose the settlement
technique, such as negotiation or a mini-trial.
Dispute boards are independent bodies designed
to help resolve disagreements arising during the
course of a contract.

Expertise is a way of finding the right person to


make an independent assessment on any subject
relevant to business operations.

DOCDEX provides expert decisions to resolve


disputes related to documentary credits,
collections
and
demand
guarantees,
incorporating ICC banking rules.

Policy and business practices

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 26


ICC policies, rules and standards are prepared by
specialized working bodies. Normal procedure requires
policy statements first to be adopted by a commission, in
consultation with national committees, and then
approved by the Executive Board, before they can be
regarded as official and public ICC positions.
Commissions examine major policy issues of interest to
world business. Each national committee (NC) or group
may appoint delegates to represent it at meetings.
Officers are appointed by the Chairman and Secretary
General in consultation with NCs. Meetings of
commissions are normally held twice a year.
Task forces are constituted under the various
commissions for a limited period to undertake specific
projects and report back to their parent commission.
Some task forces may include representatives of more
than one commission.

2.2.3 INTERNATIONAL CENTER FOR


SETTLEMENT OF INVESTMENT
DISPUTES (ICSID) (CONVENTION
ON THE SETTLEMENT OF
INESTMENT DISPUTE BETWEEN
STATES AND NATIONALS OF
OTHER STATES)
The International Centre for Settlement of
Investment Disputes (ICSID), an institution of the
World Bank Group based in Washington, D.C.,
United States, was established in 1966 pursuant to
the Convention on the Settlement of Investment
Disputes between States and Nationals of Other
States (the ICSID Convention or Washington
Convention). As of May 2011, 157 countries had
signed the ICSID Convention.
ICSID has an Administrative Council, chaired by
the World Bank's President, and a Secretariat. It
provides facilities for the conciliation and
arbitration of investment disputes between member
countries and individual investors.
During the first decade of the 21st century, with the
proliferation of bilateral investment treaties (BITs),
most of which refer present and future investment
disputes to the ICSID, the caseload of the ICSID
substantially increased. As of 30 March 2007,
ICSID had registered 263 cases, more than 30 of
which were pending against Argentina, most
resulting from Argentine government actions
precipitated by Argentina's economic crisis. ICSID
caseload may be reduced by announcements from
Nicaragua and Venezuela that they intend to
withdraw from the
ICSID.[1][2]
Establishment

On a number of occasions in the past, the World


Bank as an institution and the President of the Bank
in his personal capacity have assisted in mediation
or conciliation of investment disputes between
governments and private foreign investors. The
creation of the International Centre for Settlement
of Investment Disputes (ICSID) in 1966 was in part
intended to relieve the President and the staff of the
burden of becoming involved in such disputes. But
the Bank's overriding consideration in creating
ICSID was the belief that an institution specially
designed to facilitate the settlement of investment
disputes between governments and foreign
investors could help to promote increased flows of
international investment.
ICSID was established under the Convention on the
Settlement of Investment Disputes between States and
Nationals of Other States which came into force on
October 14, 1966. ICSID has an Administrative Council
and a Secretariat. The Administrative Council is chaired
by the World Bank's President and consists of one
representative of each State which has ratified the
Convention. Annual meetings of the Council are held in
conjunction with the joint Bank/Fund annual meetings.
ICSID is an autonomous international organization.
However, it has close links with the World Bank. All of
ICSID's members are also members of the Bank. Unless
a government makes a contrary designation, its
Governor for the Bank sits ex officio on ICSID's
Administrative Council. The expenses of the ICSID
Secretariat are financed out of the Bank's budget,
although the costs of individual proceedings are borne by
the parties involved.[3]
Membership
Members of the ICSID are 156 of the UN members and
Kosovo.
Signed, but not ratified, have Belize, Canada, Dominican
Republic, Ethiopia, Guinea-Bissau, Kyrgyzstan, Namibia,
Russia, Sao Tome and Principe, Thailand
Former members are Bolivia, Ecuador, and soon to be
Venezuela.[4]
Other non-members are Andorra, Angola, Antigua and
Barbuda, Bhutan, Brazil, Cook Islands, Cuba, Djibouti,
Dominica, Equatorial Guinea, Eritrea, India, Iran, Iraq,
Kiribati, Laos, Liechtenstein, Libya, Maldives, Marshall
Islands, Mexico, Monaco, Montenegro, Myanmar,
Nauru, Niue, North Korea, Palau, Poland, San Marino,
South Africa, Suriname, Tajikistan, Tuvalu, Vanuatu,
Vatican City, Vietnam, and the rest of states with limited
recognition.
Activities
Pursuant to the Convention, ICSID provides facilities for
the conciliation and arbitration of disputes between

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 27


member countries and investors who qualify as nationals
of other member countries. Recourse to ICSID
conciliation and arbitration is entirely voluntary.
However, once the parties have consented to arbitration
under the ICSID Convention, neither can unilaterally
withdraw its consent.[5] Moreover, all ICSID
Contracting States, whether or not parties to the dispute,
are required by the Convention to recognize and enforce
ICSID arbitral awards.
Besides this original role, the Centre has since 1978 had a
set of Additional Facility Rules authorizing the ICSID
Secretariat to administer certain types of proceedings
between States and foreign nationals which fall outside
the scope of the Convention. These include conciliation
and arbitration proceedings where either the State party
or the home State of the foreign national is not a
member of ICSID. Additional Facility conciliation and
arbitration are also available for cases where the dispute
is not an investment dispute provided it relates to a
transaction which has "features that distinguishes it
from an ordinary commercial transaction." The
Additional Facility Rules further allow ICSID to
administer a type of proceedings not provided for in the
Convention, namely fact-finding proceedings to which
any State and foreign national may have recourse if they
wish to institute an inquiry "to examine and report on
facts."

A third activity of ICSID in the field of the


settlement of disputes has consisted in the
Secretary-General of ICSID accepting to act as the
appointing authority of arbitrators for ad hoc (i.e.,
non-institutional) arbitration proceedings. This is
most commonly done in the context of
arrangements for arbitration under the Arbitration
Rules of the United Nations Commission on
International Trade Law (UNCITRAL), which are
specially designed for ad hoc proceedings.

Provisions on ICSID arbitration are commonly


found
in
investment
contracts
between
governments of member countries and investors
from other member countries. Advance consents by
governments to submit investment disputes to
ICSID arbitration can also be found in about twenty
investment laws and in over 900 bilateral
investment treaties. Arbitration under the auspices
of ICSID is similarly one of the main mechanisms
for the settlement of investment disputes under four
recent multilateral trade and investment treaties
(the North American Free Trade Agreement, the
Energy Charter Treaty, the Cartagena Free Trade
Agreement and the Colonia Investment Protocol of
Mercosur).
In addition to these activities, ICSID also carries on
advisory and research activities, publishing

Investment Laws of the World and of Investment


Treaties, and collaborates with other World Bank
Group units. Since April 1986, the Centre has
published a semi-annual law journal entitled ICSID
Review: Foreign Investment Law Journal.
ICSID proceedings do not necessarily take place in
Washington, D.C. Other possible locations include
the Permanent Court of Arbitration at The Hague,
the Regional Arbitration Centres of the AsianAfrican Legal Consultative Committee at Cairo and
Kuala Lumpur, the Australian Centre for
International
Commercial
Arbitration
at
Melbourne, the Australian Commercial Disputes
Centre at Sydney, the Singapore International
Arbitration Centre, the GCC Commercial
Arbitration Centre at Bahrain and the Frankfurt
International Arbitration Center of German Institution
of Arbitration (DIS) and the Frankfurt Chamber of
Commerce and Industry.17

2.2.4 UNITED NATIONS COMMISSION


FOR INTERNATIONAL TRADE LAW
(UNICITRAL MODEL LAW ON
INTRNATIONAL COMMERCIAL
ARBITRATION-1985)
International commercial law is the body of law that
governs international sale transactions. A transaction
will qualify to be international if elements of more than
one country are involved.
Since World War II international trade has grown
extensively, seeing the increasing importance of
international commercial law. It plays a vital role in
world development, particularly through the integration
of world markets.
Lex mercatoria refers to that part of international
commercial law which is unwritten, including customary
commercial law; customary rules of evidence and
procedure; and general principles of commercial law
The United Nations Commission on International
Trade Law (UNCITRAL) was established by the United
Nations General Assembly by its Resolution 2205 (XXI)
of 17 December 1966 "to promote the progressive
harmonization and unification of international trade
law".
UNCITRAL carries out its work at annual sessions held
alternately in New York City and Vienna.
History
When world trade began to expand dramatically in the
1960s, national governments began to realize the need
17
http://en.wikipedia.org/wiki/International_Centre_for
_Settle ment_of_Investment_Disputes

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 28


for a global set of standards and rules to harmonize
national and regional regulations, which until then
governed international trade.

customs and practice, in collaboration,


where appropriate, with the organizations
operating in this field.

Membership
UNCITRAL's original membership comprised 29 states,
and was expanded to 36 in 1973, and again to 60 in
2002. Member states of UNCITRAL are representing
different legal traditions and levels of economic
development, as well as different geographic regions.
States includes 14 African states, 14 Asian states, 8
Eastern European states, 10 Latin American and
Caribbean states, and 14 Western European states.
The Commission member States are elected by the
General Assembly. Membership is structured so as to be
representative of the world's various geographic regions
and its principal economic and legal systems. Members
of the commission are elected for terms of six years, the
terms of half the members expiring every three years. As
of 21 June 2010, the members of UNCITRAL, and the
years when their memberships expire, are:
The methods of work are organized at three levels.
The first level is UNCITRAL itself (The
Commission), which holds an annual plenary
session. The second level is the intergovernmental
working groups (which is developing the topics on
UNCITRAL's work program. Texts designed to
simplify trade transactions and reduce associated
costs are developed by working groups comprising
all member States of UNCITRAL, which meet once
or twice per year. Non-member States and
interested international and regional organizations
are also invited and can actively contribute to the
work since decisions are taken by consensus, not by
vote. Draft texts completed by these working groups
are submitted to UNCITRAL for finalization and
adoption at its annual session. The International
Trade Law Division of the United Nations Office of
Legal Affairs provides substantive secretariat
services to UNCITRAL, such as conducting research
and preparing studies and drafts. This is the third
level, which assists the other two in the preparation
and conduct of their work.

Coordinating the work of organizations


active and encouraging cooperation among
them.
Promoting wider participation in existing
international conventions and wider
acceptance of existing model and uniform
laws.
Preparing or promoting the adoption of new
international conventions, model laws and
uniform
laws
and
promoting
the
codification and wider acceptance of
international trade terms, provisions,

Promoting ways and means of ensuring a


uniform interpretation and application of
international conventions and uniform laws
in the field of the law of international trade.

Collecting and disseminating information


on national legislation and modern legal
developments, including case law, in the
field of the law of international trade.

Establishing and maintaining a close


collaboration with the UN Conference on
Trade and development.

Maintaining liaison with other UN organs


and specialized agencies concerned with
international trade.

Conventions
The Convention is an agreement among participating
states establishing obligations binding upon those States
that ratify or accede to it. A convention is designed to
unify law by establishing binding legal obligations To
become a party to a convention, States are required
formally to deposit a binding instrument of ratification
or accession with the depositary. The entry into force of a
convention is usually dependent upon the deposit of a
minimum number of instruments of ratification.
UNCITRAL conventions:

the Convention on the Limitation Period in the


International Sale of Goods (1974) (text)
the United Nations Convention on the
Carriage of Goods by Sea (1978)

the United Nations Convention on Contracts for


the International Sale of Goods (1980)

the United Nations Convention on


International
Bills
of
Exchange
International Promissory Notes (1988)

Uncitral is:

and

the United Nations Convention on the Liability


of Operators of Transport Terminals in
International Trade (1991)

the United Nations Convention on


Independent Guarantees and Stand-by Letters of
Credit (1995)

the United Nations Convention on the


Assignment of Receivables in International
Trade (2001)

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 29

the United Nations Convention on the Use of


Electronic Communications in International
Contracts (2005)

the United Nations Convention on Contracts for


the International Carriage of Goods Wholly or
Partly by Sea (2008)

International

Commercial

2.2.5 WORLD TRADE ORGANIZATION


(MARRAKESH AGREEMENT)
(DISPUTE SETTLEMENT
UNDERSTANDING)
The Parties to this Agreement,

Model laws
A model law is a legislative text that is recommended to
States for enactment as part of their national law. Model
laws are generally finalized and adapted by UNCITRAL,
at its annual session, while conventions requires the
convening of a diplomatic conference.
UNCITRAL Model Law on International
Commercial Arbitration (1985) (text)
Model Law on International Credit
Transfers (1992)
UNCITRAL Model Law on Procurement of
Goods, Construction and Services (1994)
UNCITRAL Model Law on Electronic
Commerce (1996)

Model Law on Cross-border Insolvency


(1997)

UNCITRAL Model Law on Electronic


Signatures (2001)

UNCITRAL Model Law on International


Commercial Conciliation (2002)

Model Legislative Provisions on Privately


Financed Infrastructure Projects (2003)

UNCITRAL also drafted the:

UNCITRAL Arbitration Rules (1976) (text)


revised rules will be effective August 15,
2010; pre-released, July 12, 2010
UNCITRAL Conciliation Rules (1980)

UNCITRAL Arbitration Rules (1982)

UNCITRAL Notes on Organizing Arbitral


Proceedings (1996)

Model
Law
on
Arbitration (1985).

CLOUT (Case Law on UNCITRAL Texts)


The Case Law on UNCITRAL Texts system is a
collection of court decisions and arbitral awards
interpreting UNCITRAL texts.
CLOUT includes case abstracts in the six United
Nations languages on the United Nations
Convention on Contracts for the International Sale
of Goods (CISG) (Vienna, 1980) and the UNCITRAL

Recognizing that their relations in the field of trade


and economic endeavour should be conducted with
a view to raising standards of living, ensuring full
employment and a large and steadily growing
volume of real income and effective demand, and
expanding the production of and trade in goods and
services, while allowing for the optimal use of the
worlds resources in accordance with the objective
of sustainable development, seeking both to protect
and preserve the environment and to enhance the
means for doing so in a manner consistent with
their respective needs and concerns at different
levels of economic development,
Recognizing further that there is need for positive
efforts designed to ensure that developing countries,
and especially the least developed among them,
secure a share in the growth in international trade
commensurate with the needs of their economic
development,

Being desirous of contributing to these objectives by


entering into reciprocal and mutually advantageous
arrangements directed to the substantial reduction of
tariffs and other barriers to trade and to the elimination
of discriminatory treatment in
international trade relations,
Resolved, therefore, to develop an integrated, more
viable and durable multilateral trading system
encompassing the General Agreement on Tariffs and
Trade, the results of past trade liberalization efforts, and
all of the results of the Uruguay Round of
Multilateral Trade Negotiations,
Determined to preserve the basic principles and to
further the objectives underlying this multilateral
trading system,
Agree as follows:
Article I back to top
Establishment of the Organization
The World Trade Organization (hereinafter referred to as
the WTO) is hereby established.
Article II back to top
Scope of the WTO

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 30

1. The
WTO
shall
provide
the
common
institutionalframework for the conduct of trade relations
among its Members in matters related to the agreements
and associated legal instruments included in the
Annexes to this Agreement.

2. The
agreements
and
associated
legal
instrumentsincluded in Annexes 1, 2 and 3 (hereinafter
referred to as Multilateral Trade Agreements) are
integral parts of this Agreement, binding on all
Members.

5.

Article IV back to top


Structure of the WTO
1.

3. The
agreements
and
associated
legal
instrumentsincluded in Annex 4 (hereinafter referred to
as Plurilateral Trade Agreements) are also part of this
Agreement for those Members that have accepted them,
and are binding on those Members. The Plurilateral
Trade Agreements do not create either obligations or
rights for Members that have not accepted them.

4. The General Agreement on Tariffs and Trade1994 as


specified in Annex 1A (hereinafter referred to as GATT
1994) is legally distinct from the General Agreement on
Tariffs and Trade, dated 30 October 1947, annexed to the
Final Act Adopted at the Conclusion of the Second
Session of the Preparatory Committee of the United
Nations Conference on Trade and Employment, as
subsequently
rectified,
amended
or
modified
(hereinafter referred to as GATT 1947).

1.

Article III back to top


Functions of the WTO
The
WTO
shall
facilitate
the
implementation,administration and operation, and
further the objectives, of this Agreement and of the
Multilateral Trade Agreements, and shall also
provide the framework for the implementation,
administration and operation of the Plurilateral
Trade Agreements.

2. The WTO shall provide the forum fornegotiations


among its Members concerning their multilateral
trade relations in matters dealt with under the
agreements in the Annexes to this Agreement. The
WTO may also provide a forum for further
negotiations among its Members concerning their
multilateral trade relations, and a framework for the
implementation of the results of such negotiations,
as may be decided by the Ministerial Conference.
3. The WTO shall administer the Understanding
onRules and Procedures Governing the Settlement
of Disputes (hereinafter referred to as the Dispute
Settlement Understanding or DSU) in Annex 2 to
this Agreement.
4. The WTO shall administer the Trade PolicyReview
Mechanism (hereinafter referred to as the TPRM)
provided for in Annex 3 to this Agreement.

With a view to achieving greater coherence inglobal


economic policy-making, the WTO shall cooperate,
as appropriate, with the International Monetary
Fund and with the International Bank for
Reconstruction and Development and its affiliated
agencies.

There shall be a Ministerial Conferencecomposed


of representatives of all the Members, which shall
meet at least once every two years. The Ministerial
Conference shall carry out the functions of the
WTO and take actions necessary to this effect. The
Ministerial Conference shall have the authority to
take decisions on all matters under any of the
Multilateral Trade Agreements, if so requested by
a Member, in accordance with the specific
requirements for decisionmaking in this
Agreement and in the relevant Multilateral Trade
Agreement.

2. There shall be a General Council composed


ofrepresentatives of all the Members, which shall
meet as appropriate. In the intervals between
meetings of the Ministerial Conference, its
functions shall be conducted by the General
Council. The General
Council shall also carry out the functions assigned to it
by this Agreement. The General Council shall establish
its rules of procedure and approve the rules of procedure
for the Committees provided for in paragraph 7.
3. The General Council shall convene asappropriate
to discharge the responsibilities of the Dispute
Settlement Body provided for in the Dispute
Settlement
Understanding.
The
Dispute
Settlement Body may have its own chairman and
shall establish such rules of procedure as it deems
necessary
for
the
fulfilment
of
those
responsibilities.
4. The General Council shall convene asappropriate
to discharge the responsibilities of the Trade
Policy Review Body provided for in the TPRM.
The Trade Policy Review Body may have its own
chairman and shall establish such rules of
procedure as it deems necessary for the fulfilment
of those responsibilities.
5.

There shall be a Council for Trade in Goods,


aCouncil for Trade in Services and a Council for
TradeRelated Aspects of Intellectual Property
Rights (hereinafter referred to as the Council for
TRIPS), which shall operate under the general
guidance of the General Council. The Council for
Trade in Goods shall oversee the functioning of
the Multilateral Trade Agreements in Annex 1A.
The Council for Trade in Services shall oversee the
functioning of the General Agreement on Trade in

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 31


Services (hereinafter referred to as GATS). The
Council for TRIPS shall oversee the functioning of
the Agreement on Trade-Related Aspects of
Intellectual Property Rights (hereinafter referred
to as the Agreement on TRIPS). These Councils
shall carry out the functions assigned to them by
their respective agreements and by the General
Council. They shall establish their respective rules
of procedure subject to the approval of the
General Council. Membership in these Councils
shall be open to representatives of all Members.
These Councils shall meet as necessary to carry
out their functions.
6. The Council for Trade in Goods, the Council for
Trade in Services and the Council for TRIPS shall
establish subsidiary bodies as required. These subsidiary
bodies shall establish their respective rules of procedure
subject to the approval of their respective Councils.
7.

The Ministerial Conference shall establish


aCommittee on Trade and Development, a
Committee on Balance-of-Payments Restrictions
and a Committee on Budget, Finance and
Administration, which shall carry out the
functions assigned to them by this Agreement and
by the Multilateral Trade Agreements, and any
additional functions assigned to them by the
General Council, and may establish such
additional Committees with such functions as it
may deem appropriate. As part of its functions,
the Committee on Trade and Development shall
periodically review the special provisions in the
Multilateral Trade Agreements in favour of the
least-developed country Members and report to
the General Council for appropriate action.
Membership in these Committees shall be open to
representatives of all Members.

8. The
bodies
provided
for
under
the
PlurilateralTrade Agreements shall carry out the
functions assigned to them under those
Agreements and shall operate within the
institutional framework of the WTO. These bodies
shall keep the General Council informed of their
activities on a regular basis.

Article V back to top


Relations with Other Organizations
1.

The
General
Council
shall
make
appropriatearrangements for effective cooperation
with other intergovernmental organizations that
have responsibilities related to those of the WTO.

2. The
General
Council
may
make
appropriatearrangements for consultation and
cooperation with non-governmental organizations
concerned with matters related to those of the WTO.

Article VI back to top


The Secretariat
1.

There shall be a Secretariat of the WTO(hereinafter


referred to as the Secretariat) headed by a
Director-General.

2. The
Ministerial
Conference
shall
appoint
theDirector-General and adopt regulations setting
out the powers, duties, conditions of service and
term of office of the Director-General.
3. The Director-General shall appoint the membersof
the staff of the Secretariat and determine their
duties and conditions of service in accordance with
regulations adopted by the Ministerial Conference.
4. The responsibilities of the Director-General andof
the staff of the Secretariat shall be exclusively
international in character. In the discharge of their
duties, the Director-General and the staff of the
Secretariat shall not seek or accept instructions
from any government or any other authority
external to the WTO. They shall refrain from any
action which might adversely reflect on their
position as international officials. The Members of
the WTO shall respect the international character of
the responsibilities of the Director-General and of
the staff of the Secretariat and shall not seek to
influence them in the discharge of their duties.

Article VII back to top


Budget and Contributions
1. The Director-General shall present to theCommittee on
Budget, Finance and Administration the annual budget
estimate and financial statement of the WTO. The
Committee on Budget, Finance and Administration shall
review the annual budget estimate and the financial
statement presented by the Director-General and make
recommendations thereon to the General Council. The
annual budget estimate shall be subject to approval by
the General Council.
2. The Committee on Budget, Finance andAdministration
shall propose to the General Council financial
regulations which shall include provisions setting out:
(a) the scale of contributions apportioning the
expenses of the WTO among its Members; and

(b) the measures to be taken in respect of


Membersin arrears.
The financial regulations shall be based, as far as
practicable, on the regulations and practices of GATT
1947.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 32

3. The General Council shall adopt the financialregulations


and the annual budget estimate by a twothirds majority
comprising more than half of the Members of the WTO.

4. Each Member shall promptly contribute to theWTO its


share in the expenses of the WTO in accordance with the
financial regulations adopted by the General Council.

Article VIII back to top


Status of the WTO
1.

The WTO shall have legal personality, and shallbe


accorded by each of its Members such legal capacity
as may be necessary for the exercise of its functions.

2. The WTO shall be accorded by each of itsMembers


such privileges and immunities as are necessary for
the exercise of its functions.
3. The officials of the WTO and the representativesof
the Members shall similarly be accorded by each of
its Members such privileges and immunities as are
necessary for the independent exercise of their
functions in connection with the WTO.
4. The privileges and immunities to be accorded bya
Member to the WTO, its officials, and the
representatives of its Members shall be similar to
the privileges and immunities stipulated in the
Convention on the Privileges and Immunities of the
Specialized Agencies, approved by the General
Assembly of the United Nations on 21 November
1947.
5.

The WTO may conclude a headquartersagreement.

Article IX back to top


Decision-Making
1.

The WTO shall continue the practice of


decisionmaking by consensus followed under GATT
1947(1). Except as otherwise provided, where a
decision cannot be arrived at by consensus, the
matter at issue shall be decided by voting. At
meetings of the Ministerial Conference and the
General Council, each Member of the WTO shall
have one vote. Where the European Communities
exercise their right to vote, they shall have a number
of votes equal to the number of their member
States(2)which are Members of the WTO. Decisions
of the Ministerial Conference and the General
Council shall be taken by a majority of the votes
cast, unless otherwise provided in this Agreement or
in the relevant Multilateral Trade Agreement(3).

2. The Ministerial Conference and the GeneralCouncil


shall have the exclusive authority to adopt
interpretations of this Agreement and of the

Multilateral Trade Agreements. In the case of an


interpretation of a Multilateral Trade Agreement in
Annex 1, they shall exercise their authority on the
basis of a recommendation by the Council
overseeing the functioning of that Agreement. The
decision to adopt an interpretation shall be taken by
a three-fourths majority of the Members. This
paragraph shall not be used in a manner that would
undermine the amendment provisions in Article X.
3. In
exceptional
circumstances,
the
MinisterialConference may decide to waive an
obligation imposed on a Member by this Agreement
or any of the Multilateral Trade Agreements,
provided that any such decision shall be taken by
three fourths (4) of the Members unless otherwise
provided for in this paragraph.
(a) A request for a waiver concerning thisAgreement shall be
submitted to the Ministerial Conference for
consideration pursuant to the practice of decisionmaking by consensus. The Ministerial Conference shall
establish a time-period, which shall not exceed 90 days,
to consider the request. If consensus is not reached
during the time-period, any decision to grant a waiver
shall be taken by three fourths4 of the Members.

(b) A request for a waiver concerning theMultilateral Trade


Agreements in Annexes 1A or 1B or 1C and their annexes
shall be submitted initially to the Council for Trade in
Goods, the Council for Trade in Services or the Council
for TRIPS, respectively, for consideration during a timeperiod which shall not exceed 90 days. At the end of the
time-period, the relevant Council shall submit a report to
the Ministerial Conference.
4. A decision by the Ministerial Conferencegranting a
waiver shall state the exceptional circumstances
justifying the decision, the terms and conditions
governing the application of the waiver, and the date on
which the waiver shall terminate. Any waiver granted for
a period of more than one year shall be reviewed by the
Ministerial Conference not later than one year after it is
granted, and thereafter annually until the waiver
terminates. In each review, the Ministerial Conference
shall examine whether the exceptional circumstances
justifying the waiver still exist and whether the terms
and conditions attached to the waiver have been met.
The Ministerial Conference, on the basis of the annual
review, may extend, modify or terminate the waiver.
5. Decisions
under
a
Plurilateral
Trade
Agreement,including any decisions on interpretations
and waivers, shall be governed by the provisions of that
Agreement.

Article X back to top


Amendments

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 33

1. Any Member of the WTO may initiate a proposalto


amend the provisions of this Agreement or the
Multilateral Trade Agreements in Annex 1 by submitting
such proposal to the Ministerial Conference. The
Councils listed in paragraph 5 of Article IV may also
submit to the Ministerial Conference proposals to amend
the provisions of the corresponding Multilateral Trade
Agreements in Annex 1 the functioning of which they
oversee. Unless the Ministerial Conference decides on a
longer period, for a period of 90 days after the proposal
has been tabled formally at the Ministerial Conference
any decision by the Ministerial Conference to submit the
proposed amendment to the Members for acceptance
shall be taken by consensus. Unless the provisions of
paragraphs 2, 5 or 6 apply, that decision shall specify
whether the provisions of paragraphs 3 or 4 shall apply.
If consensus is reached, the Ministerial Conference shall
forthwith submit the proposed amendment to the
Members for acceptance. If consensus is not reached at a
meeting of the Ministerial Conference within the
established period, the Ministerial Conference shall
decide by a two-thirds majority of the Members whether
to submit the proposed amendment to the Members for
acceptance. Except as provided in paragraphs 2, 5 and 6,
the provisions of paragraph 3 shall apply to the proposed
amendment, unless the Ministerial Conference decides
by a three-fourths majority of the Members that the
provisions of paragraph 4 shall apply.

5. Except as provided in paragraph 2 above,amendments to


Parts I, II and III of GATS and the respective annexes
shall take effect for the Members that have accepted
them upon acceptance by two thirds of the Members and
thereafter for each Member upon acceptance by it. The
Ministerial Conference may decide by a three-fourths
majority of the Members that any amendment made
effective under the preceding provision is of such a
nature that any Member which has not accepted it within
a period specified by the Ministerial Conference in each
case shall be free to withdraw from the WTO or to
remain a Member with the consent of the Ministerial
Conference. Amendments to Parts IV, V and VI of GATS
and the respective annexes shall take effect for all
Members upon acceptance by two thirds of the
Members.

2. Amendments to the provisions of this Article andto the


provisions of the following Articles shall take effect only
upon acceptance by all Members:

8. Any Member of the WTO may initiate a proposalto


amend the provisions of the Multilateral Trade
Agreements in Annexes 2 and 3 by submitting such
proposal to the Ministerial Conference. The decision to
approve amendments to the Multilateral Trade
Agreement in Annex 2 shall be made by consensus and
these amendments shall take effect for all Members
upon approval by the Ministerial Conference. Decisions
to approve amendments to the Multilateral
Trade Agreement in Annex 3 shall take effect for all
Members upon approval by the Ministerial
Conference.

Article IX of this Agreement;


Articles I and II of GATT 1994;
Article II:1 of GATS;
Article 4 of the Agreement on TRIPS.

3. Amendments to provisions of this Agreement, orof the


Multilateral Trade Agreements in Annexes 1A and 1C,
other than those listed in paragraphs 2 and 6, of a nature
that would alter the rights and obligations of the
Members, shall take effect for the Members that have
accepted them upon acceptance by two thirds of the
Members and thereafter for each other Member upon
acceptance by it. The Ministerial Conference may decide
by a three-fourths majority of the Members that any
amendment made effective under this paragraph is of
such a nature that any Member which has not accepted it
within a period specified by the Ministerial Conference
in each case shall be free to withdraw from the WTO or
to remain a Member with the consent of the Ministerial
Conference.

4. Amendments to provisions of this Agreement orof the


Multilateral Trade Agreements in Annexes 1A and 1C,
other than those listed in paragraphs 2 and 6, of a nature
that would not alter the rights and obligations of the
Members, shall take effect for all Members upon
acceptance by two thirds of the Members.

6. Notwithstanding the other provisions of thisArticle,


amendments to the Agreement on TRIPS meeting the
requirements of paragraph 2 of Article 71 thereof may be
adopted by the Ministerial Conference without further
formal acceptance process.
7. Any Member accepting an amendment to thisAgreement
or to a Multilateral Trade Agreement in Annex 1 shall
deposit an instrument of acceptance with the DirectorGeneral of the WTO within the period of acceptance
specified by the Ministerial Conference.

9. The Ministerial Conference, upon the request ofthe


Members parties to a trade agreement, may decide
exclusively by consensus to add that agreement to Annex
4. The Ministerial Conference, upon the request of the
Members parties to a Plurilateral Trade Agreement, may
decide to delete that Agreement from Annex 4.
10. Amendments to a Plurilateral Trade Agreementshall be
governed by the provisions of that Agreement.

Article XI back to top


Original Membership
1.

The contracting parties to GATT 1947 as of thedate


of entry into force of this Agreement, and the
European Communities, which accept this
Agreement and the Multilateral Trade Agreements

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 34


and for which Schedules of Concessions and
Commitments are annexed to GATT 1994 and for
which Schedules of Specific Commitments are
annexed to GATS shall become original Members of
the WTO.

2. The least-developed countries recognized as suchby


the United Nations will only be required to
undertake commitments and concessions to the
extent consistent with their individual development,
financial and trade needs or their administrative
and institutional capabilities.

Article XII back to top


Accession
1.

Any State or separate customs territorypossessing


full autonomy in the conduct of its external
commercial relations and of the other matters
provided for in this Agreement and the Multilateral
Trade Agreements may accede to this Agreement,
on terms to be agreed between it and the WTO.
Such accession shall apply to this Agreement and
the Multilateral Trade Agreements annexed thereto.

2. Decisions on accession shall be taken by


theMinisterial
Conference.
The
Ministerial
Conference shall approve the agreement on the
terms of accession by a two-thirds majority of the
Members of the WTO.
3. Accession to a Plurilateral Trade Agreement shallbe
governed by the provisions of that Agreement.

Article XIII back to top


Non-Application of Multilateral Trade Agreements
between Particular Members

the terms of
Conference.

accession

by

the

Ministerial

4. The
Ministerial
Conference
may
review
theoperation of this Article in particular cases at the
request of any Member and make appropriate
recommendations.

5.

Non-application of a Plurilateral TradeAgreement


between parties to that Agreement shall be
governed by the provisions of that Agreement.

Article XIV back to top


Acceptance, Entry into Force and Deposit
1. This Agreement shall be open for acceptance,
bysignature or otherwise, by contracting parties to GATT
1947, and the European Communities, which are eligible
to become original Members of the WTO in accordance
with Article XI of this Agreement. Such acceptance shall
apply to this Agreement and the Multilateral Trade
Agreements annexed hereto. This Agreement and the
Multilateral Trade Agreements annexed hereto shall
enter into force on the date determined by Ministers in
accordance with paragraph 3 of the Final Act Embodying
the Results of the Uruguay Round of Multilateral Trade
Negotiations and shall remain open for acceptance for a
period of two years following that date unless the
Ministers decide otherwise. An acceptance following the
entry into force of this Agreement shall enter into force
on the 30th day following the date of such acceptance.
2. A Member which accepts this Agreement after itsentry
into force shall implement those concessions and
obligations in the Multilateral Trade Agreements that are
to be implemented over a period of time starting with the
entry into force of this Agreement as if it had accepted
this Agreement on the date of its entry into force.

2. Paragraph
1
may
be
invoked
between
originalMembers of the WTO which were
contracting parties to GATT 1947 only where Article
XXXV of that Agreement had been invoked earlier
and was effective as between those contracting
parties at the time of entry into force for them of
this Agreement.

3. Until the entry into force of this Agreement, thetext of


this Agreement and the Multilateral Trade Agreements
shall be deposited with the DirectorGeneral to the
CONTRACTING PARTIES to GATT 1947. The DirectorGeneral shall promptly furnish a certified true copy of
this Agreement and the Multilateral Trade Agreements,
and a notification of each acceptance thereof, to each
government and the European Communities having
accepted this
Agreement. This Agreement and the Multilateral Trade
Agreements, and any amendments thereto, shall, upon
the entry into force of this Agreement, be deposited with
the Director-General of the WTO.

3. Paragraph 1 shall apply between a Member


andanother Member which has acceded under
Article XII only if the Member not consenting to the
application has so notified the Ministerial
Conference before the approval of the agreement on

4. The acceptance and entry into force of aPlurilateral


Trade Agreement shall be governed by the provisions of
that Agreement. Such Agreements shall be deposited
with the Director-General to the CONTRACTING
PARTIES to GATT 1947. Upon the entry into force of this

1.

This
Agreement
and
the
Multilateral
TradeAgreements in Annexes 1 and 2 shall not apply
as between any Member and any other Member if
either of the Members, at the time either becomes a
Member, does not consent to such application.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 35


Agreement, such Agreements shall be deposited with the
Director-General of the
WTO.
Article XV
Withdrawal
1.

back

to

top

Any
Member
may
withdraw
from
this
Agreement.Such withdrawal shall apply both to this
Agreement and the Multilateral Trade Agreements
and shall take effect upon the expiration of six
months from the date on which written notice of
withdrawal is received by the Director-General of
the WTO.

2. Withdrawal
from
a
Plurilateral
Trade
Agreementshall be governed by the provisions of
that Agreement.

Article XVI back to top


Miscellaneous Provisions
1.

Except as otherwise provided under thisAgreement


or the Multilateral Trade Agreements, the WTO
shall be guided by the decisions, procedures and
customary
practices
followed
by
the
CONTRACTING PARTIES to GATT 1947 and the
bodies established in the framework of GATT 1947.

2. To the extent practicable, the Secretariat of


GATT1947 shall become the Secretariat of the WTO,
and the Director-General to the CONTRACTING
PARTIES to GATT 1947, until such time as the
Ministerial Conference has appointed a DirectorGeneral in accordance with paragraph 2 of Article
VI of this Agreement, shall serve as DirectorGeneral of the WTO.
3. In the event of a conflict between a provision ofthis
Agreement and a provision of any of the Multilateral
Trade Agreements, the provision of this Agreement
shall prevail to the extent of the conflict.

6. This
Agreement
shall
be
registered
in
accordancewith the provisions of Article 102 of the
Charter of the United Nations.
DONE at Marrakesh this fifteenth day of April one
thousand nine hundred and ninety-four, in a single
copy, in the English, French and Spanish languages,
each text being authentic.
Explanatory Notes: back to top
The terms country or countries as used in this
Agreement and the Multilateral Trade Agreements are to
be understood to include any separate customs territory
Member of the WTO.
In the case of a separate customs territory Member of the
WTO, where an expression in this Agreement and the
Multilateral Trade Agreements is qualified by the term
national, such expression shall be read as pertaining to
that customs territory, unless otherwise specified.
Dispute settlement is regarded by the World Trade
Organization (WTO) as the central pillar of the
multilateral trading system, and as the organization's
"unique contribution to the stability of the global
economy".[1] A dispute arises when one member country
adopts a trade policy measure or takes some action that
one or more fellow members considers to a breach of
WTO agreements or to be a failure to live up to
obligations. By joining the WTO, member countries have
agreed that if they believe fellow members are in
violation of trade rules, they will use the multilateral
system of settling disputes instead of taking action
unilaterally this entails abiding by agreed procedures
(Dispute Settlement Understanding) and respecting
judgments, primarily of the Dispute Settlement Body
(DSB), the WTO organ responsible for adjudication of
disputes.[2]
A
former
WTO
Director-General
characterized the WTO dispute settlement system as "the
most active international
adjudicative mechanism in the world today."[3]
Dispute Settlement Understanding

4. Each Member shall ensure the conformity of


itslaws, regulations and administrative procedures
with its obligations as provided in the annexed
Agreements.

Prompt compliance with recommendations or rulings of


the DSB is essential in order to ensure effective
resolution of disputes to the benefit of all Members.

5.

World Trade Organization, Article 21.1 of the DSU

No reservations may be made in respect of


anyprovision of this Agreement. Reservations in
respect of any of the provisions of the Multilateral
Trade Agreements may only be made to the extent
provided for in those Agreements. Reservations in
respect of a provision of a Plurilateral Trade
Agreement shall be governed by the provisions of
that Agreement.

In 1994, the WTO members agreed on the


Understanding on Rules and Procedures Governing the
Settlement of Disputes or Dispute Settlement
Understanding (DSU) (annexed to the "Final Act" signed
in Marrakesh in 1994).[4] Pursuant to the rules detailed
in the DSU, member states can engage in consultations
to resolve trade disputes pertaining to a "covered
agreement" or, if unsuccessful, have a WTO panel hear
the case.[5] The priority, however, is to settle disputes,

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 36


through consultations if possible. By January 2008, only
about 136 of the nearly 369 cases had reached the full
panel process.[2]

Duration of a Dispute Settlement procedure


These approximate periods for each stage of a
dispute settlement procedure are target figures
The agreement is flexible. In addition, the countries
can settle their dispute themselves
at any stage.
Totals are also approximate.
60 days
Consultations, mediation, etc.
45 days
Panel set up and panellists appointed
6 months
Final panel report to parties
3 weeks
Final panel report to WTO members
60 days
Dispute Settlement Body adopts report (if no
appeal)
Total = 1 year (without appeal)
6090 days
Appeals report
30 days
Dispute Settlement Body adopts appeals report
Total = 1 year 3 months (with appeal)
Source:Understanding the WTO: Settling Disputes
- A unique contribution
The operation of the WTO dispute settlement
process involves the parties and third parties to a
case and may also involve the DSB panels, the
Appellate Body, the WTO Secretariat, arbitrators,
independent experts, and several specialized
institutions.[6] The General Council discharges its
responsibilities under the DSU through the Dispute
Settlement Body (DSB).[7] Like the General
Council, the DSB is composed of representatives of
all WTO Members. The DSB is responsible for
administering the DSU, i.e. for overseeing the entire
dispute settlement process. It also has the authority
to establish panels, adopt panel and Appellate Body
reports, maintain surveillance of implementation of
rulings and recommendations, and authorize the
suspension of obligations under the covered
agreements.[8] The DSB meets as often as
necessary to adhere to the timeframes provided for
in the DSU.[9]
[edit] From complaint to final report
If a member state considers that a measure adopted
by another member state has deprived it of a benefit
accruing to it under one of the covered agreements,
it may call for consultations with the other member

state. [10] If consultations fail to resolve the dispute


within 60 days after receipt of the request for
consultations, the complainant state may request
the establishment of a Panel. It is not possible for
the respondent state to prevent or delay the
establishment of a Panel, unless the DSB by
consensus decides otherwise.[11] The panel,
normally consisting of three members appointed ad
hoc by the Secretariat, sits to receive written and
oral submissions of the parties, on the basis of
which it is expected to make findings and
conclusions for presentation to the DSB. The
proceedings are confidential, and even when private
parties are directly concerned, they are not
permitted to attend or make submissions separate
from those of the state in question.[12] Disputes can
also arise under
Non-violation nullification of benefits claims.[13]
The final version of the panel's report is distributed first
to the parties; two weeks later it is circulated to all the
members of the WTO. In sharp contrast with other
systems, the report is required to be adopted at a
meeting of the DSB within 60 days of its circulation,
unless the DSB by consensus decides not to adopt the
report or a party to the dispute gives notice of its
intention to appeal.[14] A party may appeal a panel
report to the standing Appellate Body, but only on issues
of law and legal interpretations developed by the panel.
Each appeal is heard by three members of the permanent
seven-member Appellate Body set up by the Dispute
Settlement Body and broadly representing the range of
WTO membership. Members of the Appellate Body have
four-year terms. They must be individuals with
recognized standing in the field of law and international
trade, not affiliated with any government. The Appellate
Body may uphold, modify or reverse the panel's legal
findings and conclusions. Normally appeals should not
last more than 60 days, with an absolute maximum of 90
days.[15] The possibility for appeal makes the WTO
dispute resolution system unique among the judicial
processes of dispute settlement in general public
international law.[16]
Members may express their views on the report of the
Appellate Body, but they cannot derail it. The DSU states
unequivocally that an Appellate Body report shall be
adopted by the DSB and unconditionally accepted by the
parties, unless the DSB decides by consensus within
thirty days of its circulation not to adopt the report.[17]
Unless otherwise agreed by the parties to the dispute, the
period from establishment of the panel to consideration
of the report by the DSB shall as a general rule not
exceed nine months if there is no appeal, and twelve
months if there is an appeal.
[18]
[edit] Compliance
The DSU addresses the question of compliance and
retaliation. Within thirty days of the adoption of the

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 37


report, the member concerned is to inform the DSB of its
intentions in respect of implementation of the
recommendations and rulings. If the member explains
that it is impracticable to comply immediately with the
recommendations and rulings, it is to have a "reasonable
period of time" in which to comply. If no agreement is
reached about the reasonable period for compliance, that
issue is to be the subject of binding arbitration; the
arbitrator is to be appointed by agreement of the parties.
If there is a disagreement as to the satisfactory nature of
the measures adopted by the respondent state to comply
with the report, that disagreement is to be decided by a
panel, if possible the same panel that heard the original
dispute, but apparently without the possibility of appeal
from its decision. The DSU provides that even if the
respondent asserts that it has complied with the
recommendation in a report, and even if the
complainant party or the panel accepts that assertion,
the DSB is supposed to keep the implementation of the
recommendations
under surveillance.[19]
[edit] Compensation and retaliation
If all else fails, two more possibilities are set out in
the
DSU:
If a member fails within the "reasonable period" to
carry out the recommendations and rulings, it may
negotiate with the complaining state for a mutually
acceptable compensation. Compensation is not
defined, but may be expected to consist of the grant
of a concession by the respondent state on a product
or service of interest to the complainant state.[20]
If no agreement on compensation is reached within
twenty days of the expiry of the "reasonable period",
the prevailing state may request authorization from
the DSB to suspend application to the member
concerned of concessions or other obligations under
the covered agreements.[20] The DSU makes clear
that retaliation is not favored, and sets the criteria
for retaliation.[21] In contrast to prior GATT
practice, authorization to suspend concessions in
this context is semi-automatic, in that the DSB
"shall grant the authorization [...] within thirty days
of the expiry of the reasonable period", unless it
decides by consensus to reject the request.[22] Any
suspension or concession or other obligation is to be
temporary. If the respondent state objects to the
level of suspension proposed or to the consistency
of the proposed suspension with the DSU
principles, still another arbitration is provided for, if
possible by the original panel members or by an
arbitrator or arbitrators appointed by the
DirectorGeneral, to be completed within sixty days
from
expiration of the reasonable period.[22]
While such "retaliatory measures" are a strong
mechanism when applied by economically powerful
countries like the United States or the European

Union, when applied by economically weak


countries against stronger ones, they can often be
ignored.[23] This has been the case, for example,
with the March 2005 Appellate Body ruling in case
DS 267,[24] which declared US cotton subsidies
illegal.[citation needed] Whether or not the
complainant has taken a measure of retaliation,
surveillance by the DSB is to continue, to see
whether the recommendations of the panel or the
Appellate Body have been implemented.[25]
[edit] Developing countries
Like most of the agreements adopted in the Uruguay
Round, the DSU contains several provisions directed to
developing countries.[26] The Understanding states that
members should give "special attention" to the problems
and interests of developing country members.[27]
Further, if one party to a dispute is a developing country,
that party is entitled to have at least one panelist who
comes from a developing country.[28] If a complaint is
brought against a developing country, the time for
consultations (before a panel is convened) may be
extended, and if the dispute goes to a panel, the
deadlines for the developing country to make its
submissions may be relaxed.[29] Also, the Secretariat is
authorized to make a qualified legal expert available to
any developing country on request. Formal complaints
against least developed countries are discouraged, and if
consultations fail, the Director-General and the
Chairman of the DSB stand ready to offer their good
offices before a formal request for a panel is made.[30]
As to substance, the DSU provides that the report of
panels shall "explicitly indicate" how account has been
taken of the "differential and more favorable treatment"
provisions of the agreement under which the complaint
is brought. Whether or not a developing country is a
party to a particular proceeding, "particular attention" is
to be paid to the interests of the developing countries in
the course of implementing recommendations and
rulings of panels.[31] In order to assist developing
countries in overcoming their limited expertise in WTO
law and assist them in managing complex trade disputes,
an Advisory Centre on WTO Law was established in
2001. The aim is to level the playing field for these
countries and customs territories in the WTO system by
enabling them to have a full understanding of their
rights and obligations under the WTO Agreement

2.3

ENFORCEMENT
AND
RECOGNITION OF AWARDS

Convention
on
the
Recognition
and
Enforcement of Foreign Arbitral Awards

From Wikipedia, the free encyclopedia


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ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 38


New York Convention

International arbitration is an increasingly popular


alternative dispute resolution for
commercial transactions. The primary
advantage of international arbitration over court
litigation is enforceability: an international
arbitration award is enforceable in most countries
in the world. Other advantages of international
arbitration include the ability to select a neutral
forum to resolve disputes, that arbitration awards
are final and not ordinarily subject to appeal, the
ability to choose flexible procedures for the
arbitration, and confidentiality.

Convention on the Recognition and Enforcement of means of


Foreign Arbitral Awards
crossborder
Signed

June 10, 1958

Location

US

Effective

7 June1959

Condition

3 ratifications

Signatories

24

Parties

146

Depositaries

Secretary-General of the United Nations


Chinese, English, French, Russian and
Spanish

Languages

at

The Convention on the Recognition and


Enforcement of Foreign Arbitral Awards,
also known as the New York Convention, was
adopted by a United Nations diplomatic conference
on 10 June 1958 and entered into force on 7 June
1959. The Convention requires courts of contracting
states to give effect to private agreements to
arbitrate and to recognize and enforce arbitration
awards made in other contracting states. Widely
considered the foundational instrument for
international arbitration, it applies to arbitrations
which are not considered as domestic awards in the
state where recognition and enforcement is sought.
Though other international conventions apply to the
cross-border enforcement of arbitration awards, the
New York Convention is by far the most important.
Contents
[hide]

1 Background
2 Summary of provisions
3 Parties to the New York Convention
4 States which are Not Party to the New York Convention
5 United States Issues 6 External links

7 References
Background
In 1953, the International Chamber of Commerce
(ICC) produced the first draft Convention on the
Recognition and Enforcement of International
Arbitral Awards to the United Nations Economic
and Social Council. With slight modifications, the
Council submitted the convention to the
International Conference in the Spring of 1958. The
Conference was chaired by Willem Schurmann, the
Dutch Permanent Representative to the United
Nations and Oscar Schachter, a leading figure in
international law who later taught at Columbia Law
School and the Columbia School of International
and Public Affairs, and served as the President of
the American Society of International Law.

Once a dispute between parties is settled, the winning


party needs to collect the award or judgment. Unless the
assets of the losing party are located in the country
where the court judgment was rendered, the winning
party needs to obtain a court judgment in the
jurisdiction where the other party resides or where its
assets are located. Unless there is a treaty on recognition
of court judgments between the country where the
judgment is rendered and the country where the winning
party seeks to collect, the winning party will be unable to
use the court judgment to collect.
Countries which have adopted the New York Convention
have agreed to recognize and enforce international
arbitration awards. As of July 23, 2011, there are 146
signatories which have adopted the New York
Convention: 144 of the 193 United Nations Member
States, the Cook Islands (a New Zealand dependent
territory), and the Holy See have adopted the New York
Convention.[1] 49 U.N. Member States have not yet
adopted the New York Convention. A number of British
dependent territories have not yet had the Convention
extended to them by Order in Council.
Summary of provisions
Under the Convention, an arbitration award issued in
any other state can generally be freely enforced in any
other contracting state (save that some contracting states
may elect to enforce only awards from other contracting
states - the "reciprocity" reservation), only subject to
certain, limited defenses. These defenses are:
1.

a party to the arbitration agreement was, under


the law applicable to him, under some
incapacity;
2. the arbitration agreement was not valid under its
governing law;
3. a party was not given proper notice of the
appointment of the arbitrator or of the
arbitration proceedings, or was otherwise unable
to present its case;
4. the award deals with an issue not contemplated
by or not falling within the terms of the
submission to arbitration, or contains matters
beyond the scope of the arbitration (subject to
the proviso that an award which contains
decisions on such matters may be enforced to the
extent that it contains decisions on matters

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 39

5.

submitted to arbitration which can be separated


from those matters not so submitted);
the composition of the arbitral tribunal was not
in accordance with the agreement of the parties
or, failing such agreement, with the law

U.S. 253, 314 (1829). See also Valentine v. U.S. ex


rel. Neidecker, 57 S.Ct. 100, 103 (1936); Medellin v.
Dretke, 125 S.Ct. 2088, 2103 (2005); SanchezLlamas v. Oregon, 126 S.Ct. 2669, 2695 (2006).
Thus, over a course of 181 years, the United States
Supreme Court has repeatedly held that a selfexecuting treaty is an act of the Legislature (i.e., act
of Congress).

of the place where the hearing took place


(the "lex loci arbitri");
6. the award has not yet become binding upon the
parties, or has been set aside or suspended by a
competent authority, either in the country where
the arbitration took place, or pursuant to the law
of the arbitration agreement;
7. the subject matter of the award was not capable
of resolution by arbitration; or
8. enforcement would be contrary to "public
policy".

2.4 TYPES OF ADR


2.4.1

Negotiation involves conferring with another with a


view to agreement. There are no formal rules to
governing how negotiations should be conducted,
although there are culturally acceptable approaches.
Negotiation is much more than persuasion. Although
you can try to persuade a difficult person to see it your
way, you are merely discussing or arguing your way
through a problem unless you can vary the terms and
commit resources.

Parties to the New York Convention


As of May 2012, 146 of the 193 United Nations
Member States have adopted the New York
Convention. The Convention has also been ratified
by Holy See and the Cook Islands. About fifty of the
U.N. Member States have not adopted the
Convention. In addition, Taiwan has not adopted
the Convention and a number of British Overseas
Territories have not had the Convention extended to
them by Order in Council. British Overseas
Territories to which the New York
Convention has not yet been extended by Order in
Council are: Anguilla, British Virgin Islands,
Falkland Islands, Turks and Caicos Islands,
Montserrat, Saint Helena (including Ascension and
Tristan da Cunha). The British Virgin Islands have
implemented the New York Convention into
domestic law (Arbitration Ordinance 1976),
although Britain has never issued an Order in
Council legally extending the New York Convention
to the British Virgin Islands.
United States Issues
Under American law, the recognition of foreign
arbitral awards is governed by chapter 2 of the
Federal Arbitration Act, which incorporate the New
York Convention.[2]

However, the New York Convention on the


Recognition and Enforcement of Foreign
Arbitral Awards (the "Convention") does not
preempt state law. In Foster v. Neilson, the
Supreme Court held Our constitution declares a
treaty to be the law of the land. It is, consequently,
to be regarded in courts of justice as equivalent to
an act of the Legislature, whenever it operates of
itself without the aid of any legislative provision.
Foster v. Neilson, 27

1. Negotiation

2.4.2

Assisted negotiation

Here the parties are assisted in their negotiations by a


third party who coaches or represents them in the
negotiations without a formalised structure. Lawyers,
accountants, trusted friends or other technical or
professional advisers are often called upon to fulfil this
role.
2.4.3

2. Mediation

In mediation, a neutral third party mediator facilitates


the negotiation of a solution by the parties involved.
LEADR NZ mainly deals with mediation. Explore our
mediation section for full details.

2.4.4 3. Conciliation

This is used to refer to a number of different


processes. The most common are:
where a third party acts as a conduit, transmitting offers
of settlement between the parties but taking a much less
active role in the negotiation than a mediator, or
the processes used in agencies that administer legislative
rights, in which case participation may be mandatory
and the conciliator may be obliged to ensure that the
solution reached adheres to the relevant legislation.
2.4.5

4. Arbitration

Arbitration involves submitting a dispute to an arbitrator


who hears arguments from the parties then resolves the
conflict by making a decision (usually binding) called an
award. The courts can enforce the award. There are
varying degree of formality in how evidence is presented
during arbitration. This approach provides greater
flexibility and more party control than the formal court
system. It is also usually private and confidential.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 40


Arbitration, a form of alternative dispute resolution
(ADR), is a legal technique for the resolution of disputes
outside the courts, where the parties to a dispute refer it
to one or more persons (the
"arbitrators", "arbiters" or "arbitral tribunal"), by whose
decision (the "award") they agree to be bound. It is a
resolution technique in which a third party reviews the
evidence in the case and imposes a decision that is
legally binding for both sides and enforceable.[1] Other
forms of ADR include mediation[2] (a form of settlement
negotiation facilitated by a neutral third party) and nonbinding resolution by experts. Arbitration is often used for
the resolution of commercial disputes, particularly in the
context of international commercial transactions. The
use of arbitration is also frequently employed in
consumer and employment matters, where arbitration
may be mandated by the terms of employment or
commercial contracts.
Arbitration can be either voluntary or mandatory
(although mandatory arbitration can only come from
a statute or from a contract that is voluntarily
entered into, where the parties agree to hold all
existing or future disputes to arbitration, without
necessarily knowing, specifically, what disputes will
ever occur) and can be either binding or nonbinding. Non-binding arbitration is similar to
mediation in that a decision can not be imposed on
the parties. However, the principal distinction is that
whereas a mediator will try to help the parties find a
middle ground on which to compromise, the (nonbinding) arbitrator remains totally removed from the
settlement process and will only give a
determination of liability and, if appropriate, an
indication of the quantum of damages payable. By
one definition arbitration is binding and so nonbinding arbitration is technically not arbitration.
Arbitration is a proceeding in which a dispute is
resolved by an impartial adjudicator whose decision
the parties to the dispute have agreed, or legislation
has decreed, will be final and binding. There are
limited rights of review and appeal of arbitration
awards. Arbitration is not the same as:
judicial proceedings, although in some jurisdictions,
court proceedings are sometimes referred as
arbitrations[3] alternative dispute
resolution (or ADR)
Parties often seek to resolve their disputes through
arbitration because of a number of perceived
potential advantages over judicial proceedings:
when the subject matter of the dispute is highly
technical, arbitrators with an appropriate degree of
expertise can be appointed (as one cannot "choose
the judge" in litigation)[5] arbitration is often
faster than litigation in court )[6]

arbitration can be cheaper and more flexible for


businesses[citation needed]
arbitral proceedings and an arbitral award are
generally non-public, and can be made
confidential[7]
in arbitral proceedings the language of arbitration
may be chosen, whereas in judicial proceedings the
official language of the country of the competent
court will be automatically applied
because of the provisions of the New York Convention
1958, arbitration awards are generally easier to enforce
in other nations than court judgments
in most legal systems there are very limited avenues for
appeal of an arbitral award, which is sometimes an
advantage because it limits the duration of the dispute
and any associated liability
Some of the disadvantages include:
arbitration may become highly complex[citation needed]
arbitration may be subject to pressures from powerful
law firms representing the stronger and wealthier
party[citation needed]
arbitration agreements are sometimes contained in
ancillary agreements, or in small print in other
agreements, and consumers and employees often do
not know in advance that they have agreed to mandatory
binding pre-dispute arbitration by purchasing a product
or taking a job
if the arbitration is mandatory and binding, the parties
waive their rights to access the courts and to have a
judge or jury decide the case
in some arbitration agreements, the parties are required
to pay for the arbitrators, which adds an additional layer
of legal cost that can be prohibitive, especially in small
consumer disputes[citation needed]
in some arbitration agreements and systems, the
recovery of attorneys' fees is unavailable, making it
difficult or impossible for consumers or employees to get
legal representation[citation needed]; however most
arbitration codes and agreements provide for the same
relief that could be granted in court
if the arbitrator or the arbitration forum depends on the
corporation for repeat business, there may be an
inherent incentive to rule against the consumer or
employee
there are very limited avenues for appeal, which means
that an erroneous decision cannot be easily overturned

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 41


although usually thought to be speedier, when there are
multiple arbitrators on the panel, juggling their schedules
for hearing dates in long cases can lead to delays
in some legal systems, arbitrary awards have fewer
enforcement options than judgments; although in the
United States arbitration awards are enforced in the
same manner as court judgments and have the same
effect
arbitrators are generally unable to enforce
interlocutory measures against a party, making it
easier for a party to take steps to avoid
enforcement of member or a small group of
members in arbitration due to increasing legal fees,
without explaining to the members the adverse
consequences of an
unfavorable ruling
rule of applicable law is not necessarily binding on
the arbitrators, although they cannot disregard the
law[citation needed]
discovery may be more limited in arbitration or
entirely nonexistent
the potential to generate billings by attorneys may
be less than pursuing the dispute through trial
unlike court judgments, arbitration awards
themselves are not directly enforceable. A party
seeking to enforce an arbitration award must resort
to judicial remedies, called an action to "confirm" an
award
although grounds for attacking an arbitration award
in court are limited, efforts to confirm the award can
be
fiercely
fought[citation
needed],
thus
necessitating huge legal expenses that negate the
perceived economic incentive to arbitrate the
dispute in the first place.
[edit] Arbitrability
By their nature, the subject matter of some
disputes is not capable of arbitration. In general,
two groups of legal procedures cannot be subjected
to arbitration:
Procedures which necessarily lead to a
determination which the parties to the dispute may
not enter into an agreement upon:[8] Some court
procedures lead to judgments which bind all
members of the general public, or public authorities
in their capacity as such, or third parties, or which
are being conducted in the public interest. For
example, until the 1980s, antitrust matters were not
arbitrable in the United States.[9] Matters relating to
crimes, status and family law are generally not
considered to be arbitrable, as the power of the
parties to enter into an agreement upon these
matters is at least restricted. However, most other
disputes that involve private rights between two

parties can be resolved using arbitration. In some


disputes, parts of claims may be arbitrable and
other parts not. For example, in a dispute over
patent infringement, a determination of whether a
patent has been infringed could be adjudicated
upon by an arbitration tribunal, but the validity of a
patent could not: As patents are subject to a system
of public registration, an arbitral panel would have
no power to order the relevant body to rectify any
patent registration based upon its determination.
Some legal orders exclude or restrict the possibility
of arbitration for reasons of the protection of weaker
members of the public, e.g. consumers. Examples:
German law excludes disputes over the rental of
living space from any form of arbitration[10], while
arbitration agreements with consumers are only
considered valid if they are signed by either party,
[11] and if the signed document does not bear any
other content than the arbitration agreement.[12]
Arbitration agreement
See also: Arbitration clause
In theory, arbitration is a consensual process; a party
cannot be forced to arbitrate a dispute unless he agrees
to do so. In practice, however, many fine-print arbitration
agreements are inserted in situations in which
consumers and employees have no bargaining power.
Moreover, arbitration clauses are frequently placed
within sealed users' manuals within products, within
lengthy click-through agreements on websites, and in
other contexts in which meaningful consent is not
realistic. Such agreements are generally divided into two
types:
agreements which provide that, if a dispute should arise,
it will be resolved by arbitration. These will generally be
normal contracts, but they contain an arbitration clause
agreements which are signed after a dispute has arisen,
agreeing that the dispute should be resolved by
arbitration (sometimes called a "submission agreement")
The former is the far more prevalent type of arbitration
agreement. Sometimes, legal significance attaches to
the type of arbitration agreement. For example, in certain
Commonwealth countries, it is possible to provide that
each party should bear their own costs in a conventional
arbitration clause, but not in a submission agreement.
In keeping with the informality of the arbitration process,
the law is generally keen to uphold the validity of
arbitration clauses even when they lack the normal
formal language associated with legal contracts. Clauses
which have been upheld include:
"arbitration in London - English law to apply"[13]
"suitable arbitration clause"[14]
"arbitration, if any, by ICC Rules in London"[15]

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 42


The courts have also upheld clauses which specify
resolution of disputes other than in accordance with a
specific legal system. These include provision indicating:

The Geneva Convention of 1927

that the arbitrators "must not necessarily judge


according to the strict law but as a general rule ought
chiefly to consider the principles of practical
business"[16]

The Washington Convention of 1965


(governing settlement of international
investment disputes)

The European Convention of 1961

The UNCITRAL Model Law (providing a


model for a national law of arbitration)

"internationally accepted principles of law governing


contractual relations"[17]

The UNCITRAL Arbitration Rules


(providing a set of rules for an ad hoc
arbitration)
Agreements to refer disputes to arbitration generally
have a special status in the eyes of the law. For
example, in disputes on a contract, a common
defence is to plead the contract is void and thus
any claim based upon it fails. It follows that if a
party successfully claims that a contract is void,
then each clause contained within the contract,
including the arbitration clause, would be void.
However, in most countries, the courts have
accepted that:
1.a contract can only be declared void by a court or
other tribunal; and
2.if the contract (valid or otherwise) contains an
arbitration clause, then the proper forum to
determine whether the contract is void or not, is the
arbitration tribunal.[18]
Arguably, either position is potentially unfair; if a
person is made to sign a contract under duress,
and the contract contains an arbitration clause
highly favourable to the other party, the dispute may
still referred to that arbitration tribunal.[citation
needed] Conversely a court may be persuaded that
the arbitration agreement itself is void having been
signed under duress. However, most courts will be
reluctant to interfere with the general rule which
does allow for commercial expediency; any other
solution (where one first had to go to court to
decide whether one had to go to arbitration) would
be self defeating.
Sources of law---- States regulate arbitration
through a variety of laws. The main body of law
applicable to arbitration is normally contained either
in the national Private International Law Act (as is
the case in Switzerland) or in a separate law on
arbitration (as is the case in England). In addition to
this, a number of national procedural laws may also
contain provisions relating to arbitration.
By far the most important international instrument
on arbitration law[citation needed] is the 1958 New
York Convention on Recognition and Enforcement
of Foreign Arbitral Awards. Some other relevant
international instruments are:
The Geneva Protocol of 1923

Case presentation or mini-trial


This is where in-house representatives present brief
summaries of the parties cases to senior executives of
both parties with authority to settle the dispute, in a
structured information exchange. The senior executives
then negotiate a solution, taking into account the
information presented to them. Sometimes an
independent third party will chair the presentation.
Independent expert appraisal or early neutral
evaluation
This is where the parties appoint an independent expert
to investigate and provide an opinion on the issues in
dispute, either as a basis for solution or simply to clarify
the issues. In some cases, the parties agree to be bound
by the opinion, which is often submitted to them in draft
form before being finalised. The process may then
become a type of mediation on the draft opinion, putting
responsibility for a solution back into the hands of the
parties.
Litigation
This is the system in which the courts impose a binding
decision on the parties. It is formal, with strict rules of
evidence, and adversarial. The legal framing, analysis
and argument, together with the adversarial nature of
the process, means that the system has little scope for
reconciling or accommodating the parties' interests. It
also produces 'winners and losers'.

2.4.6 5. INQUIRY AND FACT FINDING

2.4.7 6. GOOD OFFICES

3 DOMESTIC ARBITRATION
3.1 INTRODUCTION TO
DOMESTIC COMMERCIAL

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 43

DISPUTE RESOLUTION

3.2 ALTERNATIVE DISPUTE


RESOLUTION ACT OF 2004
Republic Act No. 9285
April 2, 2004
AN ACT TO INSTITUTIONALIZE THE USE OF AN
ALTERNATIVE DISPUTE RESOLUTION SYSTEM IN
THE PHILIPPINES AND TO ESTABLISH THE OFFICE
FOR ALTERNATIVE DISPUTE
RESOLUTION, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of
Representatives of the Philippines in Congress
assembled:
CHAPTER 1 - GENERAL PROVISIONS
SECTION 1. Title. - This act shall be known as the
"Alternative Dispute Resolution Act of 2004."
SEC. 2. Declaration of Policy. - it is hereby declared
the policy of the State to actively promote party
autonomy in the resolution of disputes or the
freedom of the party to make their own
arrangements to resolve their disputes. Towards
this end, the State shall encourage and actively
promote the use of Alternative Dispute Resolution
(ADR) as an important means to achieve speedy and
impartial justice and declog court dockets. As such,
the State shall provide means for the use of ADR as
an efficient tool and an alternative procedure for the
resolution of appropriate cases. Likewise, the State
shall enlist active private sector participation in the
settlement of disputes through ADR. This Act shall
be without prejudice to the adoption by the
Supreme Court of any ADR system, such as
mediation, conciliation, arbitration, or any
combination thereof as a means of achieving speedy
and efficient means of resolving cases pending
before all courts in the Philippines which shall be
governed by such rules as the Supreme Court may
approve from time to time.
SEC. 3. Definition of Terms. - For purposes of this
Act, the term:
(a) "Alternative Dispute Resolution System" means
anyprocess 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, as defined in this Act, 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;
(b) "ADR
Provider"
means
institutions
or
personsaccredited
as
mediator,
conciliator,
arbitrator, neutral evaluator, or any person
exercising similar functions in any Alternative
Dispute Resolution system. This is without
prejudice to the rights of the parties to choose
nonaccredited individuals to act as mediator,
conciliator, arbitrator, or neutral evaluator of their
dispute.
Whenever reffered to in this Act, the term "ADR
practitioners" shall refer to individuals acting as
mediator, conciliator, arbitrator or neutral
evaluator;
(c) "Authenticate" means to sign, execute or adopt
asymbol, or encrypt a record in whole or in part,
intended to identity the authenticating party and to
adopt, accept or establish the authenticity of a
record or term;
(d) "Arbitration"
means
a
voluntary
dispute
resolutionprocess in which one or more arbitrators,
appointed in accordance with the agreement of the
parties, or rules promulgated pursuant to this Act,
resolve a dispute by rendering an award;
(e) "Arbitrator" means the person appointed to
renderan award, alone or with others, in a dispute
that is the subject of an arbitration agreement;
(f) "Award" means any partial or final decision by
anarbitrator in resolving the issue in a controversy;
(g) "Commercial
Arbitration"
An
arbitration
is"commercial if it covers matter arising from all
relationships of a commercial nature, whether
contractual or not;
(h) "Confidential
information"
means
any
information,relative to the subject of mediation or
arbitration, expressly intended by the source not to
be disclosed, or obtained under circumstances that
would create a reasonable expectation on behalf of
the source that the information shall not be
disclosed. It shall include (1) communication, oral
or written, made in a dispute resolution
proceedings, including any memoranda, notes or
work product of the neutral party or non-party
participant, as defined in this Act; (2) an oral or
written statement made or which occurs during
mediation or for purposes of considering,
conducting, participating, initiating, continuing of
reconvening mediation or retaining a mediator; and
(3) pleadings, motions manifestations, witness
statements, reports filed or submitted in an
arbitration or for expert evaluation;

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(i) "Convention Award" means a foreign arbitral
awardmade in a Convention State;
(j) "Convention State" means a State that is a
memberof the New York Convention;
(k) "Court" as referred to in Article 6 of the Model
Lawshall mean a Regional Trial Court;
(l) "Court-Annexed
Mediation"
means
any
mediationprocess conducted under the auspices of
the court, after such court has acquired jurisdiction
of the dispute;
(m) "Court-Referred
Mediation"
means
mediationordered by a court to be conducted in
accordance with the Agreement of the Parties when
as action is prematurely commenced in violation of
such agreement;
(n) "Early Neutral Evaluation" means an ADR
processwherein parties and their lawyers are
brought together early in a pre-trial phase to
present summaries of their cases and receive a
nonbinding assessment by an experienced, neutral
person, with expertise in the subject in the
substance of the dispute;
(o) "Government
Agency"
means
any
governmententity, office or officer, other than a
court, that is vested by law with quasi-judicial
power to resolve or adjudicate dispute involving the
government, its agencies and instrumentalities, or
private persons;

(p) "International Party" shall mean an entity


whoseplace of business is outside the Philippines. It
shall not include a domestic subsidiary of such
international party or a coventurer in a joint
venture with a party which has its place of business
in the Philippines.
The term foreigner arbitrator shall mean a person
who is not a national of the Philippines.
(q) "Mediation" means a voluntary process in which
amediator, selected by the disputing parties,
facilitates communication and negotiation, and
assist the parties in reaching a voluntary agreement
regarding a dispute.
(r) "Mediator"
means
conductsmediation;

person

who

(s) "Mediation Party" means a person who


participatesin a mediation and whose consent is
necessary to resolve the dispute;

(t) "Mediation-Arbitration"
or
Med-Arb is
a
stepdispute resolution process involving both
mediation and arbitration;
(u) "Mini-Trial"
means
a
structured
dispute
resolutionmethod in which the merits of a case are
argued before a panel comprising senior decision
makers with or without the presence of a neutral
third person after which the parties seek a
negotiated settlement;
(v) "Model Law" means the Model Law on
International Commercial Arbitration adopted by
the United Nations Commission on International
Trade Law on 21 June 1985;
(w) "New York Convention" means the United
NationsConvention on the Recognition and
Enforcement of Foreign Arbitral Awards approved
in 1958 and ratified by the Philippine Senate under
Senate Resolution No. 71;
(x) "Non-Convention Award" means a foreign
arbitralaward made in a State which is not a
Convention State;
(y) "Non-Convention State" means a State that is not
amember of the New York Convention.
(z) "Non-Party Participant" means a person, other
thana party or mediator, who participates in a
mediation proceeding as a witness, resource person
or expert;
(aa)"Proceeding" means a judicial, administrative,
orother adjudicative process, including related
prehearing motions, conferences and discovery;
(ab) "Record" means an information written on
atangible medium or stored in an electronic or
other similar medium, retrievable form; and
(ac)"Roster" means a list of persons qualified toprovide
ADR services as neutrals or to serve as arbitrators.
SEC. 4. Electronic Signatures in Global and ECommerce
Act. - The provisions of the Electronic Signatures in
Global and E-Commerce Act, and its implementing
Rules and Regulations shall apply to proceeding
contemplated in this Act.
SEC. 5. Liability of ADR Provider and Practitioner. The
ADR providers and practitioners shall have the same
civil liability for the Acts done in the performance of then
duties as that of public officers as provided in Section 38
(1), Chapter 9, Book of the Administrative Code of 1987.
SEC. 6. Exception to the Application of this Act. - The
provisions of this Act shall not apply to resolution or
settlement of the following: (a) labor disputes covered by

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Presidential Decree No. 442, otherwise known as the
Labor Code of the Philippines, as amended and its
Implementing Rules and Regulations; (b) the civil status
of persons; (c) the validity of a marriage; (d) any ground
for legal separation; (e) the jurisdiction of courts; (f)
future legitime; (g) criminal liability; and (h) those
which by law cannot be compromised.
CHAPTER 2 - MEDIATION

(e) The protections of this Act shall continue to


applyeven of a mediator is found to have failed to
act impartially.
(f) a mediator may not be called to testify to
provideinformation gathered in mediation. A
mediator who is wrongfully subpoenaed shall be
reimbursed the full cost of his attorney's fees and
related expenses.

SEC. 7. Scope. - The provisions of this Chapter shall


cover voluntary mediation, whether ad hoc or
institutional, other than court-annexed. The term
"mediation' shall include conciliation.

SEC. 10. Waiver of Confidentiality. - A privilege


arising from the confidentiality of information may
be waived in a record, or orally during a proceeding
by the mediator and the mediation parties.

SEC. 8. Application and Interpretation. - In applying


construing the provisions of this Chapter, consideration
must be given to the need to promote candor or parties
and mediators through confidentiality of the mediation
process, the policy of fostering prompt, economical, and
amicable resolution of disputes in accordance with the
principles of integrity of determination by the parties,
and the policy that the decision-making authority in the
mediation process rests with the parties.

A privilege arising from the confidentiality of


information may likewise be waived by a nonparty
participant if the information is provided by such
nonparty participant.

SEC. 9. Confidentiality of Information. Information


obtained
through
mediation
proceedings shall be subject to the following
principles and guidelines:
(a) Information obtained through mediation shall
beprivileged and confidential.
(b) A party, a mediator, or a nonparty participant
mayrefuse to disclose and may prevent any other
person from disclosing a mediation communication.
(c) Confidential Information shall not be subject
todiscovery and shall be inadmissible if any
adversarial proceeding, whether judicial or quasijudicial, However, evidence or information that is
otherwise admissible or subject to discovery does
not become inadmissible or protected from
discovery solely by reason of its use in a mediation.
(d) In such an adversarial proceeding, the
followingpersons involved or previously involved in
a mediation may not be compelled to disclose
confidential
information
obtained
during
mediation: (1) the parties to the dispute; (2) the
mediator or mediators; (3) the counsel for the
parties; (4) the nonparty participants; (5) any
persons hired or engaged in connection with the
mediation as secretary, stenographer, clerk or
assistant; and (6) any other person who obtains or
possesses confidential information by reason of
his/her profession.

A person who discloses confidential information shall be


precluded from asserting the privilege under Section 9 of
this Chapter to bar disclosure of the rest of the
information necessary to a complete understanding of
the previously disclosed information. If a person suffers
loss or damages in a judicial proceeding against the
person who made the disclosure.
A person who discloses or makes a representation about
a mediation is preclude from asserting the privilege
under Section 9, to the extent that the communication
prejudices another person in the proceeding and it is
necessary for the person prejudiced to respond to the
representation of disclosure.
SEC. 11. Exceptions to Privilege. (a) There is no privilege against disclosure under Section
9 if mediation communication is:
(1) in an agreement evidenced by a record
authenticated by all parties to the agreement;
(2) available to the public or that is made during
asession of a mediation which is open, or is
required by law to be open, to the public;
(3) a threat or statement of a plan to inflict bodilyinjury
or commit a crime of violence;
(4) internationally used to plan a crime, attempt
tocommit, or commit a crime, or conceal an
ongoing crime or criminal activity;
(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

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court or a public agency participates in the child
protection mediation;

(a) Before accepting a mediation, an individual who


is requested to serve as a mediator shall:

(6) sought or offered to prove or disprove a claim


orcomplaint of professional misconduct or
malpractice filed against mediator in a proceeding;
or

(1) make an inquiry that is reasonable under


thecircumstances to determinate whether there are
any known facts that a reasonable individual would
consider likely to affect the impartiality of the
mediator, including a financial or personal interest
in the outcome of the mediation and any existing or
past relationship with a party or foreseeable
participant in the mediation; and

(7) sought or offered to prove or disprove a claim


ofcomplaint of professional misconduct of
malpractice filed against a party, nonparty
participant, or representative of a party based on
conduct occurring during a mediation.
(b) 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 the
evidence has shown that the evidence is not otherwise
available, that there is a need for the evidence that
substantially outweighs the interest in protecting
confidentiality, and the mediation communication is
sought or offered in:

(2) disclosure to the mediation parties any such


factknown or learned as soon as is practical before
accepting a mediation.
(b) If a mediation learns any fact described in
paragraph (a) (1) of this section after accepting a
mediation, the mediator shall disclose it as soon as
practicable.

(1) a court proceeding involving a crime or felony; or

At the request of a mediation party, an individual who is


requested to serve as mediator shall disclose his/her
qualifications to mediate a dispute.

(2) a proceeding to prove a claim or defense that


underthe law is sufficient to reform or avoid a
liability on a contract arising out of the
mediation.

This Act does not require that a mediator shall have


special qualifications by background or profession unless
the special qualifications of a mediator are required in
the mediation agreement or by the mediation parties.

(c) A mediator may not be compelled to


provideevidence of a mediation communication or
testify in such proceeding.

SEC. 14. Participation in Mediation. - Except as


otherwise provided in this Act, a party may designate a
lawyer or any other person to provide assistance in the
mediation. A lawyer of this right shall be made in writing
by the party waiving it. A waiver of participation or legal
representation may be rescinded at any time.

(d) If
a
mediation
communication
is
not
privilegedunder 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. 12. Prohibited Mediator Reports. - A mediator
may not make a report, assessment, evaluation,
recommendation, finding, or other communication
regarding a mediation to a court or agency or other
authority that make a ruling on a dispute that is the
subject of a mediation, except:
(a) Where the mediation occurred or has terminated,or
where a settlement was reached.
(b) As permitted to be disclosed under Section 13 ofthis
Chapter.
SEC. 13. Mediator's Disclosure and Conflict of
Interest. - The mediation shall be guided by the
following operative principles:

SEC. 15. Place of Mediation. - The parties are free to


agree on the place of mediation. Failing such agreement,
the place of mediation shall be any place convenient and
appropriate to all parties.
SEC. 16. Effect of Agreement to Submit Dispute to
Mediation Under Institutional Rules. - 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.

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SEC. 17. Enforcement of Mediated Settlement
Agreement. - The mediation shall be guided by the
following operative principles:
(a) A
settlement
agreement
following
successfulmediation shall be prepared by the parties
with the assistance of their respective counsel, if
any, and by the mediator.
The parties and their respective counsels shall endeavor
to make the terms and condition thereof complete and
make adequate provisions for the contingency of breach
to avoid conflicting interpretations of the agreement.
(b) The parties and their respective counsels, if
any,shall sign the settlement agreement. The
mediator shall certify that he/she explained the
contents of the settlement agreement to the parties
in a language known to them.
(c) If the parties so desire, they may deposit
suchsettlement agreement with the appropriate
Clerk of a Regional Trial Court of the place where
one of the parties resides. Where there is a need to
enforce the settlement agreement, a petition may be
filed by any of the parties with the same court, in
which case, the court shall proceed summarily to
hear the petition, in accordance with such rules of
procedure as may be promulgated by the Supreme
Court.
(d) The parties may agree in the settlement
agreementthat the mediator shall become a sole
arbitrator for the dispute and shall treat the
settlement agreement as an arbitral award which
shall be subject to enforcement under Republic Act
No. 876, otherwise known as the Arbitration Law,
notwithstanding the provisions of Executive Order
No. 1008 for mediated dispute outside of the CIAC.
CHAPTER 3 - OTHER ADR FORMS
SEC. 18. Referral of Dispute to other ADR Forms. The parties may agree to refer one or more or all
issues arising in a dispute or during its pendency to
other forms of ADR such as but not limited to (a)
the evaluation of a third person or (b) a mini-trial,
(c) mediation-arbitration, or a combination thereof.
For purposes of this Act, the use of other ADR forms
shall be governed by Chapter 2 of this Act except
where it is combined with arbitration in which case
it shall likewise be governed by Chapter 5 of this
Act.
CHAPTER 4 - INTERNATIONAL COMMERCIAL
ARBITRATION
SEC. 19. Adoption of the
International
Commercial

Model Law
Arbitration.

on
-

International commercial arbitration shall be


governed by the Model Law on International
Commercial Arbitration (the "Model Law") adopted
by the United Nations Commission on International
Trade Law on June 21, 1985 (United Nations
Document A/40/17) and recommended approved
on December 11, 1985, copy of which is hereto
attached as Appendix "A".
SEC. 20. Interpretation of Model Law. - In
interpreting the Model Law, regard shall be had to
its international origin and to the need for
uniformity in its interpretation and resort may be
made to the travaux preparatories and the report of
the Secretary General of the United Nations
Commission on International Trade Law dated
March 25, 1985 entitled,
"International Commercial Arbitration: Analytical
Commentary on Draft Trade identified by reference
number A/CN. 9/264."
SEC. 21. Commercial Arbitration. - An arbitration is
"commercial" if it covers matters arising from all
relationships of a commercial nature, whether
contractual or not. Relationships of a transactions: 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. 22. Legal Representation in International
Arbitration. - In international arbitration conducted in
the Philippines, a party may be presented by any person
of his choice. Provided, that such representative, unless
admitted to the practice of law in the Philippines, shall
not be authorized to appear as counsel in any Philippine
court, or any other quasijudicial body whether or not
such appearance is in relation to the arbitration in which
he appears.
SEC. 23. Confidential of Arbitration Proceedings. - The
arbitration proceedings, including the records, evidence
and the arbitral award, shall be considered confidential
and shall not be published except (1) with the consent of
the parties, or (2) for the limited purpose of disclosing to
the court of relevant documents in cases where resort to
the court is allowed herein. Provided, however, that the
court in which the action or the appeal is pending may
issue a protective order to prevent or prohibit disclosure
of documents or information containing secret
processes,
developments,
research
and
other
information where it is shown that the applicant shall be
materially prejudiced by an authorized disclosure
thereof.
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

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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.

(1) Any party may request that provision relief


begranted against the adverse party:
(2) Such relief may be granted:
(i) to prevent irreparable loss or injury:

SEC. 25. Interpretation of the Act. - In interpreting the


Act, the court shall have due regard to the policy of the
law in favor of arbitration. Where action is commenced
by or against multiple parties, one or more of whom are
parties who are bound by the arbitration agreement
although the civil action may continue as to those who
are not bound by such arbitration agreement.
SEC. 26. Meaning of "Appointing Authority.".
"Appointing Authority" as used in the Model Law
shall mean the person or institution named in the
arbitration agreement as the appointing authority;
or the regular arbitration arbitration institution
under whose rules the arbitration is agreed to be
conducted. Where the parties have agreed to submit
their dispute to institutional arbitration rules, and
unless they have agreed to a different procedure,
they shall be deemed to have agreed to procedure
under such arbitration rules for the selection and
appointment of arbitrators. In ad hoc arbitration,
the default appointment of an arbitrator shall be
made by the National President of the Integrated
Bar of the Philippines (IBP) or his duly authorized
representative.
SEC. 27. What Functions May be Performed by
Appointing Authority. - The functions referred to in
Articles 11(3), 11(4), 13(3) and 14(1) of the Model
Law shall be performed by the Appointing
Authority, unless the latter shall fail or refuse to act
within thirty (30) days from receipt of the request in
which case the applicant may renew the application
with the Court. SEC. 28. Grant of Interim Measure
of Protection. (a) It is not incompatible with an arbitrationagreement
for a party to request, before constitution of the
tribunal, from a Court an interim measure of
protection and for the Court to grant such measure.
After constitution of the arbitral tribunal and during
arbitral proceedings, a request for an interim
measure of protection or modification thereof, may
be made with the arbitral tribunal or to the extent
that the arbitral tribunal has no power to act or is
unable to act effectively, the request may be made
with the Court. The arbitral tribunal is deemed
constituted when the sole arbitrator or the third
arbitrator who has been nominated, has accepted
the nomination and written communication of said
nomination and acceptance has been received by
the party making request.
(b) The following rules on interim or provisional
reliefshall be observed:

(ii) to provide security for the performance of


anyobligation;
(iii) to produce or preserve any evidence; or
(iv) to compel any other appropriate act or
omission.
(3) The order granting provisional relief may
beconditioned upon the provision of security or any
act or omission specified in the order.
(4) Interim or provisional relief is requested by
writtenapplication transmitted by reasonable means
to the Court or arbitral tribunal as the case may be
and the party against whom the relief is sought,
describing in appropriate detail the precise relief, the
party against whom the relief is requested, the
grounds for the relief, and evidence supporting the
request.
(5) The order shall be binding upon the parties.
(6) Either party may apply with the Court forassistance
in Implementing or enforcing an interim measure
ordered by an arbitral tribunal.
(7) A party who does not comply with the order shallbe
liable for all damages resulting from noncompliance,
including all expenses, and reasonable attorney's
fees, paid in obtaining the order's judicial
enforcement.
SEC. 29. Further Authority for Arbitrator to Grant
Interim Measure of Protection. - Unless otherwise
agreed by the parties, the arbitral tribunal may, at the
request of a party, order any party to take such interim
measures of protection as the arbitral tribunal may
consider necessary in respect of the subject matter of the
dispute following the rules in Section 28, paragraph 2.
Such interim measures may include but shall not be
limited to preliminary injuction directed against a party,
appointment of receivers or detention, preservation,
inspection of property that is the subject of the dispute in
arbitration. Either party may apply with the Court for
assistance in implementing or enforcing an interim
measures ordered by an arbitral tribunal.
SEC. 30. Place of Arbitration. - The parties are free to
agree on the place of arbitration. Failing such agreement,
the place of arbitration shall be in Metro Manila, unless
the arbitral tribunal, having regard to the circumstances

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of the case, including the convenience of the parties shall
decide on a different place of arbitration.
The arbitral tribunal may, unless otherwise agreed by the
parties, meet at any place it considers appropriate for
consultation among its members, for hearing witnesses,
experts, or the parties, or for inspection of goods, other
property or documents.
SEC. 31. Language of the Arbitration. - The parties
are free to agree on the language or languages to be
used in the arbitral proceedings. Failing such
agreement, the language to be used shall be English
in international arbitration, and English or Filipino
for domestic arbitration, unless the arbitral tribunal
shall determine a different or another language or
languages to be used in the proceedings. This
agreement or determination, unless otherwise
specified therein, shall apply to any written
statement by a party, any hearing and any award,
decision or other communication by the arbitral
tribunal.
The arbitral tribunal may order that any
documentary evidence shall be accompanied by a
translation into the language or languages agreed
upon by the parties or determined in accordance
with paragraph 1 of this section.

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. 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 oneparty is
an international party
(b) the person to be appointed agreed to abide by
thearbitration rules and policies of CIAC;

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.

(c) he/she is either coarbitrator upon the nominationof 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 differentnationality
from the international party.

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.

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.

CHAPTER 6 - ARBITRATION OF CONSTRUCTION


DISPUTES

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.

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 Constitution 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,

CHAPTER 7 - JUDICIAL REVIEW OF ARBITRAL


AWARDS
A. DOMESTIC AWARDS

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 50


SEC. 40. Confirmation of Award. - The confirmation of a
domestic arbitral award shall be governed by Section 23
of R.A. 876.
A domestic arbitral award when confirmed shall be
enforced in the same manner as final and executory
decisions of the Regional Trial Court.

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 and enforce a nonconvention
award as a convention award.

The confirmation of a domestic award shall be made


by the regional trial court in accordance with the
Rules of Procedure to be promulgated by the
Supreme Court.

SEC. 44. Foreign Arbitral Award Not Foreign Judgment.


- 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 foreign
court.

A CIAC arbitral award need not be confirmed by the


regional trial court to be executory as provided
under E.O. No. 1008.

A foreign arbitral award, when confirmed by the regional


trial court, shall be enforced as a foreign arbitral award
and not as a judgment of a foreign court.

SEC. 41. Vacation Award. - A party to a domestic


arbitration may question the arbitral award with the
appropriate regional trial court in accordance with
the rules of procedure to be promulgated by the
Supreme Court only on those grounds enumerated
in Section 25 of Republic Act No. 876. Any other
ground raised against a domestic arbitral award
shall be disregarded by the regional trial court.

A foreign arbitral award, when confirmed by the regional


trial court, shall be enforced in the same manner as final
and executory decisions of courts of law of the
Philippines.

B. FOREIGN ARBITRAL AWARDS


SEC. 42. Application of the New York Convention.
The New York Convention shall govern the
recognition and enforcement of arbitral awards
covered by the said Convention.
The recognition and enforcement of such arbitral
awards shall be filled with regional trial court in
accordance with the rules of procedure to be
promulgated by the Supreme Court. Said procedural
rules shall provide that the party relying on the
award or applying for its enforcement shall file with
the court the original or authenticated copy of the
award and the arbitration agreement. If the award
or agreement is not made in any of the official
languages, the party shall supply a duly certified
translation thereof into any of such languages.
The applicant shall establish that the country in
which foreign arbitration award was made is a party
to the New York Convention.
If the application for rejection or suspension of
enforcement of an award has been made, the
regional trial court may, if it considers it proper,
vacate its decision and may also, on the application
of the party claiming recognition or enforcement of
the award, order the party to provide appropriate
security.
SEC. 43. Recognition and Enforcement of Foreign
Arbitral Awards Not Covered by the New York
Convention. - The recognition and enforcement of

SEC. 45. Rejection of a Foreign Arbitral Award. - A party


to a foreign arbitration proceeding may oppose an
application for recognition and enforcement of the
arbitral award in accordance with the procedural rules to
be promulgated by the Supreme Court only on those
grounds enumerated under Article V of the New York
Convention. Any other ground raised shall be
disregarded by the regional trial court.
SEC. 46. Appeal from Court Decisions on Arbitral
Awards. - A decision of the regional trial court
confirming, vacating, setting aside, modifying or
correcting an arbitral award may be appealed to the
Court of Appeals in accordance with the rules of
procedure to be promulgated by the Supreme Court.
The losing party who appeals from the judgment of the
court confirming an arbitral award shall required by the
appealant court to post counterbond executed in favor of
the prevailing party equal to the amount of the award in
accordance with the rules to be promulgated by the
Supreme Court.
SEC. 47. Venue and Jurisdiction. - Proceedings for
recognition and enforcement of an arbitration
agreement or for vacation, setting aside, correction or
modification of an arbitral award, and any application
with a court for arbitration assistance and supervision
shall be deemed as special proceedings and shall be filled
with the regional trial court (i) where arbitration
proceedings are conducted; (ii) where the asset to be
attached or levied upon, or the act to be enjoined is
located; (iii) where any of the parties to the dispute
resides or has his place of business; or (iv) in the
National Judicial Capital Region, at the option of the
applicant.
SEC. 48. Notice of Proceeding to Parties. - In a special
proceeding for recognition and enforcement of an

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 51


arbitral award, the Court shall send notice to the parties
at their address of record in the arbitration, or if any
party cannot be served notice at such address, at such
party's last known address. The notice shall be sent at
least fifteen (15) days before the date set for the initial
hearing of the application.
CHAPTER 8 - MISCELLANEOUS PROVISIONS
SEC. 49. Office for Alternative Dispute Resolution.
There is hereby established the Office for
Alternative Dispute Resolution as an attached
agency to the Department of Justice (DOJ) which
shall have a Secretariat to be headed by an executive
director. The executive director shall be appointed
by the President of the Philippines.
The objective of the office are:
(a) to promote, develop and expand the use of ADR
in the private and public sectors; and
To assist the government to monitor, study and
evaluate the use by the public and the private sector
of ADR, and recommend to Congress needful
statutory changes to develop. Strengthen and
improve ADR practices in accordance with world
standards.
SEC. 50. Powers and Functions of the Office for
Alternative Dispute Resolution. - The Office for
Alternative Dispute Resolution shall have the
following powers and functions:
(a) To formulate standards for the training of the
ADRpractitioners and service providers;
(b) To certify that such ADR practitioners and
ADRservice providers have undergone the
professional training provided by the office;
(c) To
coordinate
the
development,
implementation,monitoring, and evaluation of
government ADR programs;
(d) To charge fees for their services; and

implementation of this Act. The


composed of representatives from:

committee,

(a) the Department of Justice;


(b) the Department of Trade and Industry;
(c) the
Department
LocalGovernment;

of

the

Interior

and

(d) the president of the Integrated Bar of thePhilippines;


(e) A representative from the arbitration profession;and
(f) A representative from the mediation profession;and
(g) A representative from the ADR organizations
shall within three (3) months after convening, submit the
IRR to the Joint Congressional Oversight Committee for
review and approval. The Oversight Committee shall be
composed of the chairman of the Senate Committee on
Justice and Human Rights, chairman of the House
Committee on Justice, and one (1) member each from
the majority and minority of both Houses.
The Joint Oversight Committee shall become functus
officio upon approval of the IRR.
SEC. 53. Applicability of the Katarungan
Pambarangay. - This Act shall not be interpreted to
repeal, amend or modify the jurisdiction of the
Katarungan Pambarangay under Republic Act No. 7160,
otherwise known as the Local Government Code of 1991.
SEC. 54. Repealing Clause. - All laws, decrees, executive
orders, rules and regulations which are inconsistent with
the provisions of this Act are hereby repealed, amended
or modified accordingly.
SEC. 55. Separability Clause. - If for any reason or
reasons, any portion or provision of this Act shall be held
unconstitutional or invalid, all other parts or provisions
not affected shall thereby continue to remain in full force
and effect.

(e) To perform such acts as may be necessary to


carryinto effect the provisions of this Act.

SEC. 56. Effectivity. - This act shall take effect fifteen


days (15) after its publication in at least two (2) national
newspapers of general circulation.

SEC. 51. Appropriations. - The amount necessary to


carry out the provisions of this Act shall be included
in the General Appropriations Act of the year
following its enactment into law and thereafter.

3.3 REPUBLIC ACT NO. 876


ARBITRATION
LAW
OF
THE PHILIPPINES

SEC. 52. Implementing Rules and Regulations


(IRR). Within one (1) month after the approval of
this Act, the secretary of justice shall convene a
committee that shall formulate the appropriate
rules and regulations necessary for the

AN ACT TO AUTHORIZE THE MAKING OF


ARBITRATION
AND
SUBMISSION
AGREEMENTS, TO PROVIDE FOR THE
APPOINTMENT OF ARBITRATORS AND THE

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 52


PROCEDURE FOR ARBITRATION IN CIVIL
CONTROVERSIES, AND FOR OTHER PURPOSES

Section 5. Preliminary procedure. - An arbitration shall


be instituted by:

Section 1. Short Title. - This Act shall be known as


"The Arbitration Law."

(a) In the case of a contract to arbitrate futurecontroversies


by the service by either party upon the other of a demand
for arbitration in accordance with the contract. Such
demand shall be set forth the nature of the controversy,
the amount involved, if any, and the relief sought,
together with a true copy of the contract providing for
arbitration. The demand shall be served upon any party
either in person or by registered mail. In the event that
the contract between the parties provides for the
appointment of a single arbitrator, the demand shall be
set forth a specific time within which the parties shall
agree upon such arbitrator. If the contract between the
parties provides for the appointment of three arbitrators,
one to be selected by each party, the demand shall name
the arbitrator appointed by the party making the
demand; and shall require that the party upon whom the
demand is made shall within fifteen days after receipt
thereof advise in writing the party making such demand
of the name of the person appointed by the second party;
such notice shall require that the two arbitrators so
appointed must agree upon the third arbitrator within
ten days from the date of such notice.

Section 2. Persons and matters subject to


arbitration. Two or more persons or parties may
submit to the arbitration of one or more arbitrators
any controversy existing between them at the time
of the submission and which may be the subject of
an action, or the parties to any contract may in such
contract agree to settle by arbitration a controversy
thereafter arising between them. Such submission
or contract shall be valid, enforceable and
irrevocable, save upon such grounds as exist at law
for the revocation of any contract.
Such submission or contract may include question
arising out of valuations, appraisals or other
controversies which may be collateral, incidental,
precedent or subsequent to any issue between the
parties.
A controversy cannot be arbitrated where one of the
parties to the controversy is an infant, or a person
judicially declared to be incompetent, unless the
appropriate court having jurisdiction approve a
petition for permission to submit such controversy
to arbitration made by the general guardian or
guardian ad litem of the infant or of the
incompetent.
But where a person capable of entering into a
submission or contract has knowingly entered into
the same with a person incapable of so doing, the
objection on the ground of incapacity can be taken
only in behalf of the person so incapacitated.
Section 3. Controversies or cases not subject to the
provisions of this Act. - This Act shall not apply to
controversies and to cases which are subject to the
jurisdiction of the Court of Industrial Relations or
which have been submitted to it as provided by
Commonwealth Act Numbered One hundred and
three, as amended.
Section 4. Form of arbitration agreement. - A
contract to arbitrate a controversy thereafter arising
between the parties, as well as a submission to
arbitrate an existing controversy shall be in writing
and subscribed by the party sought to be charged, or
by his lawful agent.
The making of a contract or submission for arbitration
described in section two hereof, providing for arbitration
of any controversy, shall be deemed a consent of the
parties to the jurisdiction of the Court of First Instance
of the province or city where any of the parties resides, to
enforce such contract or submission.

(b) In the event that one party defaults in answeringthe


demand, the aggrieved party may file with the Clerk of
the Court of First Instance having jurisdiction over the
parties, a copy of the demand for arbitration under the
contract to arbitrate, with a notice that the original
demand was sent by registered mail or delivered in
person to the party against whom the claim is asserted.
Such demand shall set forth the nature of the
controversy, the amount involved, if any, and the relief
sought, and shall be accompanied by a true copy of the
contract providing for arbitration.
(c) In the case of the submission of an existingcontroversy
by the filing with the Clerk of the Court of First Instance
having jurisdiction, of the submission agreement, setting
forth the nature of the controversy, and the amount
involved, if any. Such submission may be filed by any
party and shall be duly executed by both parties.
(d) In the event that one party neglects, fails or refusesto
arbitrate under a submission agreement, the aggrieved
party shall follow the procedure prescribed in
subparagraphs (a) and (b) of this section.
Section 6. Hearing by court. - A party aggrieved by
the failure, neglect or refusal of another to perform
under an agreement in writing providing for
arbitration may petition the court for an order
directing that such arbitration proceed in the
manner provided for in such agreement. Five days
notice in writing of the hearing of such application
shall be served either personally or by registered
mail upon the party in default. The court shall hear
the parties, and upon being satisfied that the
making of the agreement or such failure to comply

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 53


therewith is not in issue, shall make an order
directing the parties to proceed to arbitration in
accordance with the terms of the agreement. If the
making of the agreement or default be in issue the
court shall proceed to summarily hear such issue. If
the finding be that no agreement in writing
providing for arbitration was made, or that there is
no default in the proceeding thereunder, the
proceeding shall be dismissed. If the finding be that
a written provision for arbitration was made and
there is a default in proceeding thereunder, an order
shall be made summarily directing the parties to
proceed with the arbitration in accordance with the
terms thereof.

(e) The court shall, in its discretion appoint one orthree


arbitrators, according to the importance of the
controversy involved in any of the preceding cases in
which the agreement is silent as to the number of
arbitrators.

The court shall decide all motions, petitions or


applications filed under the provisions of this Act,
within ten days after such motions, petitions, or
applications have been heard by it.

Section 9. Appointment of additional arbitrators. Where


a submission or contract provides that two or more
arbitrators therein designated or to be thereafter
appointed by the parties, may select or appoint a person
as an additional arbitrator, the selection or appointment
must be in writing. Such additional arbitrator must sit
with the original arbitrators upon the hearing.

Section 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 is not in default in proceeding
with such arbitration.
Section 8. Appointment of arbitrators. - If, in the
contract for arbitration or in the submission
described in section two, provision is made for a
method of naming or appointing an arbitrator or
arbitrators, such method shall be followed; but if no
method be provided therein the Court of First
Instance shall designate an arbitrator or arbitrators.
The Court of First Instance shall appoint an
arbitrator or arbitrators, as the case may be, in the
following instances:

(a) If the parties to the contract or submission areunable to


agree upon a single arbitrator; or

(b) If an arbitrator appointed by the parties isunwilling or


unable to serve, and his successor has not been
appointed in the manner in which he was appointed; or

(c) If either party to the contract fails or refuses toname his


arbitrator within fifteen days after receipt of the demand
for arbitration; or

(d) If the arbitrators appointed by each party to thecontract,


or appointed by one party to the contract and by the
proper Court, shall fail to agree upon or to select the
third arbitrator.

(f) Arbitrators appointed under this section shall


eitheraccept or decline their appointments within seven
days of the receipt of their appointments. In case of
declination or the failure of an arbitrator or arbitrators
to duly accept their appointments the parties or the
court, as the case may be, shall proceed to appoint a
substitute or substitutes for the arbitrator or arbitrators
who decline or failed to accept his or their appointments.

Section 10. Qualifications of arbitrators. - Any person


appointed to serve as an arbitrator must be of legal age,
in full-enjoyment of his civil rights and know how to read
and write. No person appointed to served as an
arbitrator shall be related by blood or marriage within
the sixth degree to either party to the controversy. No
person shall serve as an arbitrator in any proceeding if
he has or has had financial, fiduciary or other interest in
the controversy or cause to be decided or in the result of
the proceeding, or has any personal bias, which might
prejudice the right of any party to a fair and impartial
award.
No party shall select as an arbitrator any person to act as
his champion or to advocate his cause.
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, the
arbitrator shall immediately disclose such
information to the parties. Thereafter the parties
may agree in writing:
(a) to waive the presumptive disqualifying
circumstances; or
(b) to declare the office of such arbitrator vacant.
Anysuch vacancy shall be filled in the same
manner as the original appointment was
made.
Section 11. Challenge of arbitrators. - The arbitrators
may be challenged only for the reasons mentioned
in the preceding section which may have arisen after

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 54


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 Court of
First Instance of the province or city in which the
challenged arbitrator, or, any of them, if there be
more than one, resides. While the challenging
incident is discussed before the court, the hearing or
arbitration shall be suspended, and it shall be
continued immediately after the court has delivered
an order on the challenging incident.
Section 12. Procedure by arbitrators. - Subject to the
terms of the submission or contract, if any are
specified therein, are arbitrators selected as
prescribed herein must, within five days after
appointment if the parties to the controversy reside
within the same city or province, or within fifteen
days after appointment if the parties reside in
different provinces, set a time and place for the
hearing of the matters submitted to them, and must
cause notice thereof to be given to each of the
parties. The hearing can be postponed or adjourned
by the arbitrators only by agreement of the parties;
otherwise, adjournment may be ordered by the
arbitrators upon their own motion only at the
hearing and for good and sufficient cause. No
adjournment shall extend the hearing beyond the
day fixed in the submission or contract for
rendering the award, unless the time so fixed is
extended by the written agreement of the parties to
the submission or contract or their attorneys, or
unless the parties have continued with the
arbitration without objection to such adjournment.
The hearing may proceed in the absence of any
party who, after due notice, fails to be present at
such hearing or fails to obtain an adjournment
thereof. An award shall not be made solely on the
default of a party. The arbitrators shall require the
other party to submit such evidence as they may
require for making an award.
No one other than a party to said arbitration, or a person
in the regular employ of such party duly authorized in
writing by said party, or a practicing attorney-at-law,
shall be permitted by the arbitrators to represent before
him or them any party to the arbitration. Any party
desiring to be represented by counsel shall notify the
other party or parties of such intention at least five days
prior to the hearing.
The arbitrators shall arrange for the taking of a
stenographic record of the testimony when such a record
is requested by one or more parties, and when payment
of the cost thereof is assumed by such party or parties.

Persons having a direct interest in the controversy which


is the subject of arbitration shall have the right to attend
any hearing; but the attendance of any other person shall
be at the discretion of the arbitrators.
Section 13. Oath of arbitrators. - Before hearing any
testimony, arbitrators must be sworn, by any officer
authorized by law to administer an oath, faithfully and
fairly to hear and examine the matters in controversy
and to make a just award according to the best of their
ability and understanding. Arbitrators shall have the
power to administer the oaths to all witnesses requiring
them to tell the whole truth and nothing but the truth in
any testimony which they may give in any arbitration
hearing. This oath shall be required of every witness
before any of his testimony is heard.
Section 14. Subpoena and subpoena duces tecum.
Arbitrators shall have the power to require any person to
attend a hearing as a witness. They shall have the power
to subpoena witnesses and documents when the
relevancy of the testimony and the materiality thereof
has been demonstrated to the arbitrators. Arbitrators
may also require the retirement of any witness during
the testimony of any other witness. All of the arbitrators
appointed in any controversy must attend all the
hearings in that matter and hear all the allegations and
proofs of the parties; but an award by the majority of
them is valid unless the concurrence of all of them is
expressly required in the submission or contract to
arbitrate. The arbitrator or arbitrators shall have the
power at any time, before rendering the award, without
prejudice to the rights of any party to petition the court
to take measures to safeguard and/or conserve any
matter which is the subject of the dispute in arbitration.
Section 15. Hearing by arbitrators. - Arbitrators may, at
the commencement of the hearing, ask both parties for
brief statements of the issues in controversy and/or an
agreed statement of facts. Thereafter the parties may
offer such evidence as they desire, and shall produce
such additional evidence as the arbitrators shall require
or deem necessary to an understanding and
determination of the dispute. The arbitrators shall be the
sole judge of the relevancy and materiality of the
evidence offered or produced, and shall not be bound to
conform to the Rules of Court pertaining to evidence.
Arbitrators shall receive as exhibits in evidence any
document which the parties may wish to submit and the
exhibits shall be properly identified at the time of
submission. All exhibits shall remain in the custody of
the Clerk of Court during the course of the arbitration
and shall be returned to the parties at the time the award
is made. The arbitrators may make an ocular inspection
of any matter or premises which are in dispute, but such
inspection shall be made only in the presence of all
parties to the arbitration, unless any party who shall
have received notice thereof fails to appear, in which
event such inspection shall be made in the absence of
such party.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 55


Section 16. Briefs. - At the close of the hearings, the
arbitrators shall specifically inquire of all parties
whether they have any further proof or witnesses to
present; upon the receipt of a negative reply from all
parties, the arbitrators shall declare the hearing
closed unless the parties have signified an intention
to file briefs. Then the hearing shall be closed by the
arbitrations after the receipt of briefs and/or reply
briefs. Definite time limit for the filing of such briefs
must be fixed by the arbitrators at the close of the
hearing. Briefs may filed by the parties within
fifteen days after the close of the oral hearings; the
reply briefs, if any, shall be filed within five days
following such fifteen-day period.

their award may grant any remedy or relief which they


deem just and equitable and within the scope of the
agreement of the parties, which shall include, but not be
limited to, the specific performance of a contract.
In the event that the parties to an arbitration have,
during the course of such arbitration, settled their
dispute, they may request of the arbitrators that such
settlement be embodied in an award which shall be
signed by the arbitrators. No arbitrator shall act as a
mediator in any proceeding in which he is acting as
arbitrator; and all negotiations towards settlement of the
dispute must take place without the presence of the
arbitrators.

Section 17. Reopening of hearing. - The hearing may


be reopened by the arbitrators on their own motion
or upon the request of any party, upon good cause,
shown at any time before the award is rendered.
When hearings are thus reopened the effective date
for the closing of the hearings shall be the date of
the closing of the reopened hearing.

The arbitrators shall have the power to decide only those


matters which have been submitted to them. The terms
of the award shall be confined to such disputes.

Section 18. Proceeding in lieu of hearing. - The


parties to a submission or contract to arbitrate may,
by written agreement, submit their dispute to
arbitration by other than oral hearing. The parties
may submit an agreed statement of facts. They may
also submit their respective contentions to the duly
appointed arbitrators in writing; this shall include a
statement of facts, together with all documentary
proof. Parties may also submit a written argument.
Each party shall provide all other parties to the
dispute with a copy of all statements and documents
submitted to the arbitrators. Each party shall have
an opportunity to reply in writing to any other
party's statements and proofs; but if such party fails
to do so within seven days after receipt of such
statements and proofs, he shall be deemed to have
waived his right to reply. Upon the delivery to the
arbitrators of all statements and documents,
together with any reply statements, the arbitrators
shall declare the proceedings in lieu of hearing
closed.

Section 21. Fees of arbitration. - The fees of the


arbitrators shall be fifty pesos per day unless the parties
agree otherwise in writing prior to the arbitration.

Section 19. Time for rendering award. - Unless the


parties shall have stipulated by written agreement the
time within which the arbitrators must render their
award, the written award of the arbitrators shall be
rendered within thirty days after the closing of the
hearings or if the oral hearings shall have been waived,
within thirty days after the arbitrators shall have
declared such proceedings in lieu of hearing closed. This
period may be extended by mutual consent of the
parties.alf-itc
Section 20. Form and contents of award. - The award
must be made in writing and signed and acknowledged
by a majority of the arbitrators, if more than one; and by
the sole arbitrator, if there is only one. Each party shall
be furnished with a copy of the award. The arbitrators in

The arbitrators shall have the power to assess in their


award the expenses of any party against another party,
when such assessment shall be deemed necessary.

Section 22. Arbitration deemed a special proceeding.


Arbitration under a contract or submission shall be
deemed a special proceeding, of which the court
specified in the contract or submission, or if none be
specified, the Court of First Instance for the province or
city in which one of the parties resides or is doing
business, or in which the arbitration was held, shall have
jurisdiction. Any application to the court, or a judge
thereof, hereunder shall be made in manner provided for
the making and hearing of motions, except as otherwise
herein expressly provided.
Section 23. Confirmation of award. - At any time
within one month after the award is made, any
party to the controversy which was arbitrated may
apply to the court having jurisdiction, as provided in
section twenty-eight, for an order confirming the
award; and thereupon the court must grant such
order unless the award is vacated, modified or
corrected, as prescribed herein. Notice of such
motion must be served upon the adverse party or
his attorney as prescribed by law for the service of
such notice upon an attorney in action in the same
court.
Section 24. Grounds for vacating award. - In any
one of the following cases, the court must make an
order vacating the award upon the petition of any
party to the controversy when such party proves
affirmatively that in the arbitration proceedings:
(a) The award was procured by corruption, fraud,
orother undue means; or

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 56


(b) That there was evident partiality or corruption inthe
arbitrators or any of them; or
(c) That the arbitrators were guilty of misconduct
inrefusing to postpone the hearing upon sufficient
cause shown, or in refusing to hear evidence
pertinent and material to the controversy; that one
or more of the arbitrators was disqualified to act as
such under section nine hereof, and wilfully
refrained from disclosing such disqualifications or
of any other misbehavior by which the rights of any
party have been materially prejudiced; or
(d) That the arbitrators exceeded their powers, or
soimperfectly executed them, that a mutual, final
and definite award upon the subject matter
submitted to them was not made.
Where an award is vacated, the court, in its
discretion, may direct a new hearing either before
the same arbitrators or before a new arbitrator or
arbitrators to be chosen in the manner provided in
the submission or contract for the selection of the
original arbitrator or arbitrators, and any provision
limiting the time in which the arbitrators may make
a decision shall be deemed applicable to the new
arbitration and to commence from the date of the
court's order.
Where the court vacates an award, costs, not exceeding
fifty pesos and disbursements may be awarded to the
prevailing party and the payment thereof may be
enforced in like manner as the payment of costs upon the
motion in an action.

correct the award must be served upon the adverse party


or his counsel within thirty days after award is filed or
delivered, as prescribed by law for the service upon an
attorney in an action.
Section 27. Judgment. - Upon the granting of an order
confirming, modifying or correcting an award, judgment
may be entered in conformity therewith in the court
wherein said application was filed. Costs of the
application and the proceedings subsequent thereto may
be awarded by the court in its discretion. If awarded, the
amount thereof must be included in the judgment.
Section 28. Papers to accompany motion to confirm,
modify, correct, or vacate award. - The party moving for
an order confirming, modifying, correcting, or vacating
an award, shall at the time that such motion is filed with
the court for the entry of judgment thereon also file the
following papers with the Clerk of Court;
(a) The submission, or contract to arbitrate;
theappointment of the arbitrator or arbitrators; and
each written extension of the time, if any, within
which to make the award.
(b) A verified of the award.
(c) Each notice, affidavit, or other paper used upon
theapplication to confirm, modify, correct or vacate
such award, and a copy of each of the court upon
such application.
The judgment shall be docketed as if it were
rendered in an action.

Section 25. Grounds for modifying or correcting award. In any one of the following cases, the court must make
an order modifying or correcting the award, upon the
application of any party to the controversy which was
arbitrated:

The judgment so entered shall have the same force


and effect in all respects, as, and be subject to all the
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.

(a) Where there was an evident miscalculation offigures, or


an evident mistake in the description of any person,
thing or property referred to in the award; or

Section 29. Appeals. - An appeal may be taken from


an order made in a proceeding under this Act, or
from a judgment entered upon an award through
certiorari proceedings, but such appeals shall be
limited to questions of law. The proceedings upon
such an appeal, including the judgment thereon
shall be governed by the Rules of Court in so far as
they are applicable.

(b) Where the arbitrators have awarded upon a matternot


submitted to them, not affecting the merits of the
decision upon the matter submitted; or

(c) Where the award is imperfect in a matter of formnot


affecting the merits of 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.
Section 26. Motion to vacate, modify or correct award:
when made. - Notice of a motion to vacate, modify or

Section 30. Death of party. - Where a party dies


after making a submission or a contract to arbitrate
as prescribed in this Act, the proceedings may be
begun or continued upon the application of, or
notice to, his executor or administrator, or
temporary administrator of his estate. In any such
case, the court may issue an order extending the
time within which notice of a motion to confirm,
vacate, modify or correct an award must be served.
Upon confirming an award, where a party has died

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 57


since it was filed or delivered, the court must enter
judgment in the name of the original party; and the
proceedings thereupon are the same as where a
party dies after a verdict.
Section 31. Repealing clause. - The provisions of
chapters one and two, Title XIV, of the Civil Code
shall remain in force. All other laws and parts of
laws inconsistent with this Act are hereby repealed.
If any provision of this Act shall be held invalid the
remainder that shall not be affected thereby.
Section 32. Effectivity. - This Act shall take effect six
months after its approval.

3.4 A.M. No. 07-11-08-SC


SPECIAL
RULES
OF
COURT ON ALTERNATIVE
DISPUTE
RESOLUTION

September 1,

2009

f.

Termination of Mandate of Arbitrator;

g.

Assistance in Taking Evidence;

h. Confirmation, Correction or Vacation of Award in


Domestic Arbitration;
i. Recognition and Enforcement or Setting Aside of an
Award in International Commercial Arbitration;
j. Recognition and Enforcement of a Foreign Arbitral
Award;
k. Confidentiality/Protective Orders; and
l.

Deposit
and
Enforcement
SettlementAgreements.

of

Rule 1.2. Nature of the proceedings.-All proceedings


under the Special ADR Rules are special proceedings.
Rule 1.3. Summary proceedings in certain cases.-The
proceedings in the following instances are summary in
nature and shall be governed by this provision:

Acting on the recommendation of the Chairperson


of the Sub-Committee on the Rules on Alternative
Dispute Resolution submitting for this Courts
consideration and approval the proposed Special
Rules of Court on Alternative Dispute Resolution,
the Court Resolved to APPROVE the same.

a.

This Rule shall take effect on October 30, 2009 following


its publication in three (3) newspapers of general
circulation.

c.

SPECIAL RULES OF COURT ON ALTERNATIVE


DISPUTE RESOLUTION

e.

Challenge to Appointment of Arbitrator;

f.

Termination of Mandate of Arbitrator;

g.

Assistance in Taking Evidence;

PART I
GENERAL PROVISIONS AND POLICIES

Judicial Relief Involving the Issue of


Existence,Validity or Enforceability of the
Arbitration
Agreement;

b. Referral to ADR;
Interim Measures of Protection;

d. Appointment of Arbitrator;

RULE 1: GENERAL PROVISIONS

h. Confidentiality/Protective Orders; and

Rule 1.1. Subject matter and governing rules.-The Special


Rules of Court on Alternative Dispute Resolution (the
"Special ADR Rules") shall apply to and govern the
following cases:

i.

a. Relief on the issue of Existence, Validity, or


Enforceability of the Arbitration Agreement;
b. Referral to Alternative Dispute Resolution ("ADR");
c.

Interim Measures of Protection;

d. Appointment of Arbitrator;
e.

Challenge to Appointment of Arbitrator;

Mediated

Deposit
and
Enforcement
SettlementAgreements.

of

Mediated

(A) Service
and
filing
of
petition
in
summaryproceedings.-The petitioner shall serve,
either by personal service or courier, a copy of the
petition upon the respondent before the filing
thereof. Proof of service shall be attached to the
petition filed in court.
For personal service, proof of service of the petition
consists of the affidavit of the person who effected
service, stating the time, place and manner of the
service on the respondent. For service by courier,
proof of service consists of the signed courier proof
of delivery. If service is refused or has failed, the

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 58


affidavit or delivery receipt must state the
circumstances of the attempted service and refusal
or failure thereof.
(B) Notice.-Except for cases involving Referral to
ADRand Confidentiality/Protective Orders made
through motions, the court shall, if it finds the
petition sufficient in form and substance, send
notice to the parties directing them to appear at a
particular time and date for the hearing thereof
which shall be set no later than five (5) days from
the lapse of the period for filing the opposition or
comment. The notice to the respondent shall
contain a statement allowing him to file a comment
or opposition to the petition within fifteen (15) days
from receipt of the notice.

there is such other pending action or claim, a complete


statement of the present status thereof; and (c) if he
should thereafter learn that the same or similar action or
claim has been filed or is pending, he shall report that
fact within five (5) days therefrom to the court wherein
his aforementioned petition or motion has been filed.
A Certification Against Forum Shopping shall be
appended to all initiatory pleadings except a Motion to
Refer the Dispute to Alternative Dispute Resolution.
Rule 1.6. Prohibited submissions. - The following
pleadings, motions, or petitions shall not be allowed in
the cases governed by the Special ADR Rules and shall
not be accepted for filing by the Clerk of Court:
a.

The motion filed pursuant to the rules on Referral to


ADR or Confidentiality/Protective Orders shall be
set for hearing by the movant and contain a notice
of hearing that complies with the requirements
under Rule 15 of the Rules of Court on motions.
(C) Summary hearing. - In all cases, as far
aspracticable, the summary hearing shall be
conducted in one (1) day and only for purposes of
clarifying facts.
Except in cases involving Referral to ADR or
Confidentiality/Protective
Orders
made
through
motions, it shall be the court that sets the petition for
hearing within five (5) days from the lapse of the period
for filing the opposition or comment.
(D) Resolution. - The court shall resolve the
matterwithin a period of thirty (30) days from the
day of the hearing.
Rule 1.4. Verification and submissions. -Any pleading,
motion, opposition, comment, defense or claim filed
under the Special ADR Rules by the proper party shall be
supported by verified statements that the affiant has
read the same and that the factual allegations therein are
true and correct of his own personal knowledge or based
on authentic records and shall contain as annexes the
supporting documents.
The annexes to the pleading, motion, opposition,
comment, defense or claim filed by the proper party may
include a legal brief, duly verified by the lawyer
submitting it, stating the pertinent facts, the applicable
law and jurisprudence to justify the necessity for the
court to rule upon the issue raised.
Rule 1.5. Certification Against Forum Shopping. - A
Certification Against Forum Shopping is one made
under oath made by the petitioner or movant: (a) that he
has not theretofore commenced any action or filed any
claim involving the same issues in any court, tribunal or
quasi-judicial agency and, to the best of his knowledge,
no such other action or claim is pending therein; (b) if

Motion to dismiss;

b. Motion for bill of particulars;


c.

Motion for new trial or for reopening of trial;

d. Petition for relief from judgment;


e.

Motion for extension, except in cases where an


ex-parte temporary order of protection has been
issued;

f.

Rejoinder to reply;

g.

Motion to declare a party in default; and

h. Any other pleading specifically disallowed under


anyprovision of the Special ADR Rules.
The court shall motu proprio order a
pleading/motion that it has determined to be
dilatory in nature be expunged from the records.
Rule 1.7. Computation of time. - In computing any
period of time prescribed or allowed by the Special
ADR Rules, or by order of the court, or by any
applicable statute, the day of the act or event from
which the designated period of time begins to run is
to be excluded and the date of performance
included. If the last day of the period, as thus
computed, falls on a Saturday, a Sunday, or a legal
holiday in the place where the court sits, the time
shall not run until the next working day.
Should an act be done which effectively interrupts
the running of the period, the allowable period after
such interruption shall start to run on the day after
notice of the cessation of the cause thereof.
The day of the act that caused the interruption shall
be excluded from the computation of the period.
Rule 1.8. Service and filing of pleadings, motions
and other papers in non-summary proceedings. -

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 59


The initiatory pleadings shall be filed directly with
the court. The court will then cause the initiatory
pleading to be served upon the respondent by
personal service or courier. Where an action is
already pending, pleadings, motions and other
papers shall be filed and/or served by the concerned
party by personal service or courier. Where courier
services are not available, resort to registered mail is
allowed.
(A) Proof of filing. - The filing of a pleading shall
beproved by its existence in the record of the case. If
it is not in the record, but is claimed to have been
filed personally, the filing shall be proved by the
written or stamped acknowledgment of its filing by
the clerk of court on a copy of the same; if filed by
courier, by the proof of delivery from the courier
company.

the petition and notice of hearing in the proceedings


contemplated in the first paragraph of Rule 1.3 (B), or
the motion in proceedings contemplated in the second
paragraph of Rule 1.3 (B), the method of service resorted
to must be such as to reasonably ensure receipt thereof
by the respondent to satisfy the requirement of due
process.
Rule 1.10. Contents of petition/motion. - The initiatory
pleading in the form of a verified petition or motion, in
the appropriate case where court proceedings have
already commenced, shall include the names of the
parties, their addresses, the necessary allegations
supporting the petition and the relief(s) sought.
Rule 1.11. Definition. - The following terms shall have the
following meanings:
a.

(B) Proof of service. - Proof of personal service


shallconsist of a written admission by the party
served, or the official return of the server, or the
affidavit of the party serving, containing a full
statement of the date, place and manner of service.
If the service is by courier, proof thereof shall
consist of an affidavit of the proper person, stating
facts showing that the document was deposited with
the courier company in a sealed envelope, plainly
addressed to the party at his office, if known,
otherwise at his residence, with postage fully prepaid, and with instructions to the courier to
immediately provide proof of delivery.
(C) Filing and service by electronic means and
proofthereof. - Filing and service of pleadings by
electronic transmission may be allowed by
agreement of the parties approved by the court. If
the filing or service of a pleading or motion was
done by electronic transmission, proof of filing and
service shall be made in accordance with the Rules
on Electronic Evidence.
Rule 1.9. No summons. - In cases covered by the Special
ADR Rules, a court acquires authority to act on the
petition or motion upon proof of jurisdictional facts, i.e.,
that the respondent was furnished a copy of the petition
and the notice of hearing.

(A) Proof of service. - A proof of service of the petitionand


notice of hearing upon respondent shall be made in
writing by the server and shall set forth the manner,
place and date of service.

(B) Burden of proof. - The burden of showing that acopy of


the petition and the notice of hearing were served on the
respondent rests on the petitioner.
The technical rules on service of summons do not apply
to the proceedings under the Special ADR Rules. In
instances where the respondent, whether a natural or a
juridical person, was not personally served with a copy of

"ADR Laws" refers to the whole body of ADR laws


inthe Philippines.

b. "Appointing Authority" shall mean the person


orinstitution named in the arbitration agreement as
the appointing authority; or the regular arbitration
institution under whose rule the arbitration is
agreed to be conducted. Where the parties have
agreed to submit their dispute to institutional
arbitration rules, and unless they have agreed to a
different procedure, they shall be deemed to have
agreed to procedure under such arbitration rules for
the selection and appointment of arbitrators. In ad
hoc arbitration, the default appointment of
arbitrators shall be made by the National President
of the Integrated Bar of the Philippines or his duly
authorized representative.
c.

"Authenticate" means to sign, execute or use


asymbol, or encrypt a record in whole or in part,
intended to identify the authenticating party and to
adopt, accept or establish the authenticity of a
record or term.

d. "Foreign Arbitral Award" is one made in a


countryother than the Philippines.
e.

"Legal Brief" is a written legal argument


submittedto a court, outlining the facts derived
from the factual statements in the witnesss
statements of fact and citing the legal authorities
relied upon by a party in a case submitted in
connection with petitions, counterpetitions (i.e.,
petitions to vacate or to set aside and/or to
correct/modify in opposition to petitions to confirm
or to recognize and enforce, or petitions to confirm
or to recognize and enforce in opposition to
petitions to vacate or set aside and/or
correct/modify), motions, evidentiary issues and
other matters that arise during the course of a case.
The legal brief shall state the applicable law and the
relevant jurisprudence and the legal arguments in
support of a partys position in the case.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 60


f.

"Verification" shall mean a certification under


oathby a party or a person who has authority to act
for a party that he has read the pleading/motion,
and that he certifies to the truth of the facts stated
therein on the basis of his own personal knowledge
or authentic documents in his possession. When
made by a lawyer, verification shall mean a
statement under oath by a lawyer signing a
pleading/motion for delivery to the Court or to the
parties that he personally prepared the
pleading/motion, that there is sufficient factual
basis for the statements of fact stated therein, that
there is sufficient basis in the facts and the law to
support the prayer for relief therein, and that the
pleading/motion is filed in good faith and is not
interposed for delay.

Rule 1.12. Applicability of Part II on Specific Court


Relief. - Part II of the Special ADR Rules on Specific
Court Relief, insofar as it refers to arbitration, shall
also be applicable to other forms of ADR.
Rule 1.13. Spirit and intent of the Special ADR Rules.
In situations where no specific rule is provided under the
Special ADR Rules, the court shall resolve such matter
summarily and be guided by the spirit and intent of the
Special ADR Rules and the ADR Laws.
RULE 2: STATEMENT OF POLICIES
Rule 2.1. General policies. - It is the policy of the State to
actively promote the use of various modes of ADR and to
respect party autonomy or the freedom of the parties to
make their own arrangements in the resolution of
disputes with the greatest cooperation of and the least
intervention from the courts. To this end, the objectives
of the Special ADR Rules are to encourage and promote
the use of ADR, particularly arbitration and mediation,
as an important means to achieve speedy and efficient
resolution of disputes, impartial justice, curb a litigious
culture and to de-clog court dockets.
The court shall exercise the power of judicial review as
provided by these Special ADR Rules. Courts shall
intervene only in the cases allowed by law or these
Special ADR Rules.
Rule 2.2. Policy on arbitration.- (A) Where the parties
have agreed to submit their dispute to arbitration, courts
shall refer the parties to arbitration pursuant to Republic
Act No. 9285 bearing in mind that such arbitration
agreement is the law between the parties and that they
are expected to abide by it in good faith. Further, the
courts shall not refuse to refer parties to arbitration for
reasons including, but not limited to, the following:
a.

The referral tends to oust a court of its jurisdiction;

b. The court is in a better position to resolve thedispute


subject of arbitration;
c.

The referral would result in multiplicity of suits;

d. The arbitration proceeding has not commenced;


e.

The place of arbitration is in a foreign country;

f.One or more of the issues are legal and one or moreof the
arbitrators are not lawyers;
g.

One or more of
Philippinenationals; or

the

arbitrators

are

not

h. One or more of the arbitrators are alleged not


topossess the required qualification under the
arbitration agreement or law.
(B) Where court intervention is allowed under ADR
Laws or the Special ADR Rules, courts shall not
refuse to grant relief, as provided herein, for any of
the following reasons:
a.

Prior to the constitution of the arbitral tribunal,


thecourt finds that the principal action is the subject
of an arbitration agreement; or

b. The principal action is already pending before


anarbitral tribunal.
The Special ADR Rules recognize the principle of
competence-competence, which means 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.
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 void shall not entail ipso jure the invalidity
of the arbitration clause.
Rule 2.3. Rules governing arbitral proceedings. The parties are free to agree on the procedure to be
followed in the conduct of arbitral proceedings.
Failing such agreement, the arbitral tribunal may
conduct arbitration in the manner it considers
appropriate.
Rule
2.4.
Policy
implementing
competencecompetence principle. - The arbitral
tribunal shall be accorded the first opportunity or
competence to rule on the issue of whether or not it
has the competence or jurisdiction to decide a
dispute submitted to it for decision, including any

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 61


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
jurisdiction of 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 the arbitral 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 must suspend the
action before it and refer the parties to arbitration
pursuant to the arbitration agreement.
Rule 2.5. Policy on mediation. - The Special ADR Rules
do not apply to Court-Annexed Mediation, which shall
be governed by issuances of the Supreme Court.
Where the parties have agreed to submit their dispute to
mediation, a court before which that dispute was
brought shall suspend the proceedings and direct the
parties to submit their dispute to private mediation. If
the parties subsequently agree, however, they may opt to
have their dispute settled through Court-Annexed
Mediation.
Rule 2.6. Policy on Arbitration-Mediation or MediationArbitration. - No arbitrator shall act as a mediator in any
proceeding in which he is acting as arbitrator; and all
negotiations towards settlement of the dispute must take
place without the presence of that arbitrator. Conversely,
no mediator shall act as arbitrator in any proceeding in
which he acted as mediator.
Rule 2.7. Conversion of a settlement agreement to an
arbitral award. - Where the parties to mediation have
agreed in the written settlement agreement that the
mediator shall become the sole arbitrator for the dispute
or that the settlement agreement shall become an
arbitral award, the sole arbitrator shall issue the
settlement agreement as an arbitral award, which shall
be subject to enforcement under the law.
PART II
SPECIFIC COURT RELIEF
RULE 3: JUDICIAL RELIEF INVOLVING THE ISSUE
OF EXISTENCE, VALIDITY AND ENFORCEABILITY
OF THE ARBITRATION AGREEMENT

Rule 3.1. When judicial relief is available. - The judicial


relief provided in Rule 3, whether resorted to before or
after commencement of arbitration, shall apply only
when the place of arbitration is in the Philippines.
A. Judicial Relief before Commencement of Arbitration
Rule 3.2. Who may file petition. - Any party to an
arbitration agreement may petition the appropriate
court to determine any question concerning the
existence, validity and enforceability of such arbitration
agreement serving a copy thereof on the respondent in
accordance with Rule 1.4 (A).
Rule 3.3. When the petition may be filed. - The petition
for judicial determination of the existence, validity
and/or enforceability of an arbitration agreement may
be filed at any time prior to the commencement of
arbitration.
Despite the pendency of the petition provided
herein, arbitral proceedings may nevertheless be
commenced and continue to the rendition of an
award, while the issue is pending before the court.
Rule 3.4. Venue. - A petition questioning the
existence, validity and enforceability of an
arbitration agreement may be filed before the
Regional Trial Court of the place where any of the
petitioners or respondents has his principal place of
business or residence.
Rule 3.5. Grounds. - A petition may be granted only
if it is shown that the arbitration agreement is,
under the applicable law, invalid, void,
unenforceable or inexistent.
Rule 3.6. Contents of petition. - The verified petition
shall state the following:
a.

The facts showing that the persons named


aspetitioner or respondent have legal capacity to
sue or be sued;

b. The nature and substance of the dispute between


theparties;
c.

The grounds and the circumstances relied upon


bythe petitioner to establish his position; and

d. The relief/s sought.


Apart from other submissions, the petitioner must
attach to the petition an authentic copy of the
arbitration agreement.
Rule
3.7.
Comment/Opposition.-The
comment/opposition of the respondent must be
filed within fifteen (15) days from service of the
petition.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 62


Rule 3.8. Court action. - In resolving the petition,
the court must exercise judicial restraint in
accordance with the policy set forth in Rule 2.4,
deferring to the competence or jurisdiction of the
arbitral tribunal to rule on its competence or
jurisdiction.
Rule 3.9. No forum shopping. - A petition for
judicial relief under this Rule may not be
commenced when the existence, validity or
enforceability of an arbitration agreement has been
raised as one of the issues in a prior action before
the same or another court.
Rule 3.10. Application for interim relief. - If the
petitioner also applies for an interim measure of
protection, he must also comply with the
requirements of the Special ADR Rules for the
application for an interim measure of protection.
Rule 3.11. Relief against court action. - Where there is a
prima facie determination upholding the arbitration
agreement.-A prima facie determination by the court
upholding the existence, validity or enforceability of an
arbitration agreement shall not be subject to a motion
for reconsideration, appeal or certiorari.
Such prima facie determination will not, however,
prejudice the right of any party to raise the issue of the
existence, validity and enforceability of the arbitration
agreement before the arbitral tribunal or the court in an
action to vacate or set aside the arbitral award. In the
latter case, the courts review of the arbitral tribunals
ruling upholding the existence, validity or enforceability
of the arbitration agreement shall no longer be limited to
a mere prima facie determination of such issue or issues
as prescribed in this Rule, but shall be a full review of
such issue or issues with due regard, however, to the
standard for review for arbitral awards prescribed in
these Special ADR Rules.
B. Judicial Relief after Arbitration Commences
Rule 3.12. Who may file petition. - Any party to
arbitration may petition the appropriate court for
judicial relief from the ruling of the arbitral tribunal on a
preliminary question upholding or declining its
jurisdiction. Should the ruling of the arbitral tribunal
declining its jurisdiction be reversed by the court, the
parties shall be free to replace the arbitrators or any one
of them in accordance with the rules that were applicable
for the appointment of arbitrator sought to be replaced.
Rule 3.13. When petition may be filed. - The petition may
be filed within thirty (30) days after having received
notice of that ruling by the arbitral tribunal.
Rule 3.14. Venue. - The petition may be filed before the
Regional Trial Court of the place where arbitration is
taking place, or where any of the petitioners or

respondents has his principal place of business or


residence.
Rule 3.15. Grounds. - The petition may be granted when
the court finds that the arbitration agreement is invalid,
inexistent or unenforceable as a result of which the
arbitral tribunal has no jurisdiction to resolve the
dispute.
Rule 3.16. Contents of petition. - The petition shall state
the following:
a.

The facts showing that the person named


aspetitioner or respondent has legal capacity to
sue or be sued;

b. The nature and substance of the dispute between


theparties;
c.

The grounds and the circumstances relied upon


bythe petitioner; and

d. The relief/s sought.


In addition to the submissions, the petitioner shall
attach to the petition a copy of the request for
arbitration and the ruling of the arbitral tribunal.
The arbitrators shall be impleaded as nominal
parties to the case and shall be notified of the
progress of the case.
Rule
3.17.
Comment/Opposition.
The comment/opposition must be filed within
fifteen (15) days from service of the petition.
Rule 3.18. Court action. - (A) Period for resolving
the petition.- The court shall render judgment on
the basis of the pleadings filed and the evidence, if
any, submitted by the parties, within thirty (30)
days from the time the petition is submitted for
resolution.
(B) No injunction of arbitration proceedings. - Thecourt
shall not enjoin the arbitration proceedings during
the pendency of the petition.
Judicial recourse to the court shall not prevent the
arbitral tribunal from continuing the proceedings
and rendering its award.
(C) When dismissal of petition is appropriate. Thecourt shall dismiss the petition if it fails to
comply with Rule 3.16 above; or if upon
consideration of the grounds alleged and the legal
briefs submitted by the parties, the petition does not
appear to be prima facie meritorious.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 63


Rule 3.19. Relief against court action. - The
aggrieved party may file a motion for
reconsideration of the order of the court. The
decision of the court shall, however, not be subject
to appeal. The ruling of the court affirming the
arbitral tribunals jurisdiction shall not be subject to
a petition for certiorari. The ruling of the court that
the arbitral tribunal has no jurisdiction may be the
subject of a petition for certiorari.
Rule 3.20. Where no petition is allowed. - Where the
arbitral tribunal defers its ruling on preliminary
question regarding its jurisdiction until its final
award, the aggrieved party cannot seek judicial
relief to question the deferral and must await the
final arbitral award before seeking appropriate
judicial recourse.

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 dispute is covered by an arbitration agreement.
Apart from other submissions, the movant shall attach to
his 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.

A ruling by the arbitral tribunal deferring resolution on


the issue of its jurisdiction until final award, shall not be
subject to a motion for reconsideration, appeal or a
petition for certiorari.

Rule
4.4.
Comment/Opposition.
The
comment/opposition must be filed within fifteen
(15) days from service of the petition. The
comment/opposition should show that: (a) there is
no agreement to refer the dispute to arbitration;
and/or (b) the agreement is null and void; and/or
(c) the subject-matter of the dispute is not capable
of settlement or resolution by arbitration in
accordance with Section 6 of the ADR Act.

Rule 3.21. Rendition of arbitral award before court


decision on petition from arbitral tribunals preliminary
ruling on jurisdiction. - If the arbitral tribunal renders a
final arbitral award and the Court has not rendered a
decision on the petition from the arbitral tribunals
preliminary ruling affirming its jurisdiction, that petition
shall become ipso facto moot and academic and shall be
dismissed by the Regional Trial Court. The dismissal
shall be without prejudice to the right of the aggrieved
party to raise the same issue in a timely petition to
vacate or set aside the award.

Rule 4.5. Court action. - After hearing, the court


shall stay the action and, considering the statement
of policy embodied in Rule 2.4, above, refer the
parties to arbitration if it finds prima facie, based on
the pleadings and supporting documents submitted
by the parties, that there is an arbitration agreement
and that the subject-matter of the dispute is capable
of settlement or resolution by arbitration in
accordance with Section 6 of the ADR Act.
Otherwise, the court shall continue with the judicial
proceedings.

Rule 3.22. Arbitral tribunal a nominal party. - The


arbitral tribunal is only a nominal party. The court shall
not require the arbitral tribunal to submit any pleadings
or written submissions but may consider the same
should the latter participate in the proceedings, but only
as nominal parties thereto.
RULE 4: REFERRAL TO ADR

Rule 4.6. No reconsideration, appeal or certiorari. An order referring the dispute to arbitration shall be
immediately executory and shall not be subject to a
motion for reconsideration, appeal or petition for
certiorari.

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.

An order denying the request to refer the dispute to


arbitration shall not be subject to an appeal, but
may be the subject of a motion for reconsideration
and/or a petition for certiorari.

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-trial conference. 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.

Rule 4.7. Multiple actions and parties. - The court


shall not decline to refer some or all of the parties to
arbitration for any of the following reasons:
a.

(B) Submission agreement. - If there is no existing


arbitration agreement at the time the case is filed but the
parties subsequently enter into an arbitration

Not all of the disputes subject of the civil action


maybe referred to arbitration;

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 64


b. Not all of the parties to the civil action are bound
bythe arbitration agreement and referral to
arbitration would result in multiplicity of suits;

measure of protection, indicate the nature of the reasons


that the court shall consider in granting the relief:
a.

c.

The issues raised in the civil action could be


speedilyand efficiently resolved in its entirety by the
court rather than in arbitration;

d. Referral to arbitration does not appear to be


themost prudent action; or
e.

The stay of the action would prejudice the rights


ofthe parties to the civil action who are not bound
by the arbitration agreement.

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.
Rule 4.8. Arbitration to proceed.- Despite the pendency
of the action referred to in Rule 4.1, above, arbitral
proceedings may nevertheless be commenced or
continued, and an award may be made, while the action
is pending before the court.
RULE 5: INTERIM MEASURES OF PROTECTION

b. The need to provide security for the performance


ofany obligation;
c.

Rule 5.3. Venue. - A petition for an interim measure of


protection may be filed with the Regional Trial Court,
which has jurisdiction over any of the following places:

The need to produce or preserve evidence; or

d. The need to compel any other appropriate act


oromission.
Rule 5.5. Contents of the petition. - The verified
petition must state the following:
a.

The fact that there is an arbitration agreement;

b. The fact that the arbitral tribunal has not


beenconstituted, or if constituted, is unable to act
or would be unable to act effectively;
c.

A detailed description
reliefsought;

of

the

appropriate

d. The grounds relied on for the allowance of


thepetition
Apart from other submissions, the petitioner must
attach to his petition an authentic copy of the
arbitration agreement.

Rule 5.1. Who may ask for interim measures of


protection. - A party to an arbitration agreement may
petition the court for interim measures of protection.
Rule 5.2. When to petition. - A petition for an interim
measure of protection may be made (a) before
arbitration is commenced, (b) after arbitration is
commenced, but before the constitution of the arbitral
tribunal, or (c) 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.

The need to prevent irreparable loss or injury;

Rule 5.6. Type of interim measure of protection that


a court may grant.- The following, among others,
are the interim measures of protection that a court
may grant:
a.

Preliminary injunction directed against a party


toarbitration;

b. Preliminary
attachment
against
property
orgarnishment of funds in the custody of a bank
or a third person;
c.

Appointment of a receiver;

a. Where the principal place of business of any of theparties


to arbitration is located;

d. Detention, preservation, delivery or inspection


ofproperty; or,

b. Where any of the parties who are individualsresides;

e.

c. Where any of the acts sought to be enjoined arebeing


performed, threatened to be performed or not being
performed; or

d. Where the real property subject of arbitration, or


aportion thereof is situated.
Rule 5.4. Grounds. - The following grounds, while not
limiting the reasons for the court to grant an interim

Assistance in the enforcement of an interim


measureof protection granted by the arbitral
tribunal, which the latter cannot enforce
effectively.
Rule 5.7. Dispensing with prior notice in certain
cases. - Prior notice to the other party may be
dispensed with when the petitioner alleges in the
petition that there is an urgent need to either (a)
preserve property, (b) prevent the respondent from
disposing of, or concealing, the property, or (c)

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 65


prevent the relief prayed for from becoming illusory
because of prior notice, and the court finds that the
reason/s given by the petitioner are meritorious.

After notice and hearing, the court may either grant


or deny the petition for an interim measure of
protection. The order granting or denying any
application for interim measure of protection in aid
of arbitration must indicate that it is issued without
prejudice to subsequent grant, modification,
amendment, revision or revocation by an arbitral
tribunal.

Rule
5.8.
Comment/Opposition.
The
comment/opposition must be filed within fifteen (15)
days from service of the petition. The opposition or
comment should state the reasons why the interim
measure of protection should not be granted.

Rule 5.10. Relief against court action. - If


respondent was given an opportunity to be heard on
a petition for an interim measure of protection, any
order by the court shall be immediately executory,
but may be the subject of a motion for
reconsideration and/or appeal or, if warranted, a
petition for certiorari.

Rule 5.9. Court action. - After hearing the petition, the


court shall balance the relative interests of the parties
and inconveniences that may be caused, and on that
basis resolve the matter within thirty (30) days from (a)
submission of the opposition, or (b) upon lapse of the
period to file the same, or (c) from termination of the
hearing that the court may set only if there is a need for
clarification or further argument.
If the other parties fail to file their opposition on or
before the day of the hearing, the court shall motu
proprio render judgment only on the basis of the
allegations in the petition that are substantiated by
supporting documents and limited to what is prayed for
therein.
In cases where, based solely on the petition, the court
finds that there is an urgent need to either (a) preserve
property, (b) prevent the respondent from disposing of,
or concealing, the property, or (c) prevent the relief
prayed for from becoming illusory because of prior
notice, it shall issue an immediately executory temporary
order of protection and require the petitioner, within five
(5) days from receipt of that order, to post a bond to
answer for any damage that respondent may suffer as a
result of its order. The exparte temporary order of
protection shall be valid only for a period of twenty (20)
days from the service on the party required to comply
with the order. Within that period, the court shall:

a. Furnish the respondent a copy of the petition and anotice


requiring him to comment thereon on or before the day
the petition will be heard; and

b. Notify the parties that the petition shall be heard ona day
specified in the notice, which must not be beyond the
twenty (20) day period of the effectivity of the exparte
order.
The respondent has the option of having the temporary
order of protection lifted by posting an appropriate
counter-bond as determined by the court.
If the respondent requests the court for an extension of
the period to file his opposition or comment or to reset
the hearing to a later date, and such request is granted,
the court shall extend the period of validity of the
exparte temporary order of protection for no more than
twenty days from expiration of the original period.

Rule 5.11. Duty of the court to refer back. - The court


shall not deny an application for assistance in
implementing or enforcing an interim measure of
protection ordered by an arbitral tribunal on any or
all of the following grounds:
a.

The arbitral tribunal granted the interim relief


exparte; or

b. The party opposing the application found


newmaterial evidence, which the arbitral tribunal
had not considered in granting in the application,
and which, if considered, may produce a different
result; or
c.

The measure of protection ordered by the


arbitraltribunal amends, revokes, modifies or is
inconsistent with an earlier measure of protection
issued by the court.
If it finds that there is sufficient merit in the
opposition to the application based on letter (b)
above, the court shall refer the matter back to the
arbitral tribunal for appropriate determination.
Rule 5.12. Security. - The order granting an interim
measure of protection may be conditioned upon the
provision of security, performance of an act, or
omission thereof, specified in the order.
The Court may not change or increase or decrease
the security ordered by the arbitral tribunal.
Rule 5.13. Modification, amendment, revision or
revocation of courts previously issued interim
measure of protection. - Any court order granting or
denying interim measure/s of protection is issued
without
prejudice
to
subsequent
grant,
modification, amendment, revision or revocation by
the arbitral tribunal as may be warranted.
An interim measure of protection issued by the
arbitral tribunal shall, upon its issuance be deemed

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 66


to have ipso jure modified, amended, revised or
revoked an interim measure of protection
previously issued by the court to the extent that it is
inconsistent with the subsequent interim measure
of protection issued by the arbitral tribunal.
Rule 5.14. Conflict or inconsistency between interim
measure of protection issued by the court and by the
arbitral tribunal. - Any question involving a conflict or
inconsistency between an interim measure of protection
issued by the court and by the arbitral tribunal shall be
immediately referred by the court to the arbitral tribunal
which shall have the authority to decide such question.
Rule 5.15. Court to defer action on petition for an interim
measure of protection when informed of constitution of
the arbitral tribunal. - The court shall defer action on any
pending petition for an interim measure of protection
filed by a party to an arbitration agreement arising from
or in connection with a dispute thereunder upon being
informed that an arbitral tribunal has been constituted
pursuant to such agreement. The court may act upon
such petition only if it is established by the petitioner
that the arbitral tribunal has no power to act on any such
interim measure of protection or is unable to act thereon
effectively.

within thirty (30) days from receipt of such request for


appointment;
c. Where the parties agreed that their dispute shall
beresolved by three arbitrators but no method of
appointing those arbitrators has been agreed upon, each
party shall appoint one arbitrator and the two arbitrators
thus appointed shall appoint a third arbitrator. If a party
fails to appoint his arbitrator within thirty (30) days of
receipt of a request to do so from the other party, or if
the two arbitrators fail to agree on the third arbitrator
within a reasonable time from their appointment, the
appointment shall be made by the Appointing Authority.
If the latter fails or refuses to act or appoint an arbitrator
within a reasonable time from receipt of the request to
do so, any party or the appointed arbitrator/s may
request the court to appoint an arbitrator or the third
arbitrator as the case may be.
Rule 6.2. Who may request for appointment. - Any
party to an arbitration may request the court to act
as an Appointing Authority in the instances
specified in Rule 6.1 above.
Rule 6.3. Venue. - The petition for appointment of
arbitrator may be filed, at the option of the
petitioner, in the Regional Trial Court (a) where the
principal place of business of any of the parties is
located, (b) if any of the parties are individuals,
where those individuals reside, or (c) in the
National Capital Region.

Rule 5.16. Court assistance should arbitral tribunal be


unable to effectively enforce interim measure of
protection. - The court shall assist in the enforcement of
an interim measure of protection issued by the arbitral
tribunal which it is unable to effectively enforce.

Rule 6.4. Contents of the petition. -The petition


shall state the following:

RULE 6: APPOINTMENT OF ARBITRATORS


Rule 6.1. When the court may act as Appointing
Authority. - The court shall act as Appointing Authority
only in the following instances:

a. Where any of the parties in an institutionalarbitration


failed or refused to appoint an arbitrator or when the
parties have failed to reach an agreement on the sole
arbitrator (in an arbitration before a sole arbitrator) or
when the two designated arbitrators have failed to reach
an agreement on the third or presiding arbitrator (in an
arbitration before a panel of three arbitrators), and the
institution under whose rules arbitration is to be
conducted fails or is unable to perform its duty as
appointing authority within a reasonable time from
receipt of the request for appointment;

b. In all instances where arbitration is ad hoc and


theparties failed to provide a method for appointing or
replacing an arbitrator, or substitute arbitrator, or the
method agreed upon is ineffective, and the National
President of the Integrated Bar of the Philippines (IBP)
or his duly authorized representative fails or refuses to
act within such period as may be allowed under the
pertinent rules of the IBP or within such period as may
be agreed upon by the parties, or in the absence thereof,

a.

The general nature of the dispute;

b. If the parties agreed on an appointment


procedure, adescription of that procedure with
reference to the agreement where such may be
found;
c.

The number of arbitrators agreed upon or


theabsence of any agreement as to the number of
arbitrators;

d. The special qualifications that the arbitrator/s


mustpossess, if any, that were agreed upon by the
parties;
e.

The fact that the Appointing Authority,


withoutjustifiable cause, has failed or refused to
act as such within the time prescribed or in the
absence thereof, within a reasonable time, from
the date a request is made; and

f.

The petitioner is not the cause of the delay in,


orfailure of, the appointment of the arbitrator.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 67


Apart from other submissions, the petitioner must attach
to the petition (a) an authentic copy of the arbitration
agreement, and (b) proof that the Appointing Authority
has been notified of the filing of the petition for
appointment with the court.

may be allowed under the applicable rule or in the


absence thereof, within thirty (30) days from receipt
of the request, that the aggrieved party may renew
the challenge in court.
Rule 7.3. Venue. - The challenge shall be filed with
the Regional Trial Court (a) where the principal
place of business of any of the parties is located, (b)
if any of the parties are individuals, where those
individuals reside, or (c) in the National Capital
Region.

Rule
6.5.
Comment/Opposition.
The
comment/opposition must be filed within fifteen (15)
days from service of the petition.
Rule 6.6. Submission of list of arbitrators. - The court
may, at its option, also require each party to submit a list
of not less than three (3) proposed arbitrators together
with their curriculum vitae.

Rule 7.4. Grounds. - An arbitrator may be


challenged on any of the grounds for challenge
provided for in
Republic Act No. 9285 and its implementing rules,
Republic Act No. 876 or the Model Law. The
nationality or professional qualification of an
arbitrator is not a ground to challenge an arbitrator
unless the parties have specified in their arbitration
agreement a nationality and/or professional
qualification for appointment as arbitrator.

Rule 6.7. Court action. - After hearing, if the court finds


merit in the petition, it shall appoint an arbitrator;
otherwise, it shall dismiss the petition.
In making the appointment, the court shall have regard
to such considerations as are likely to secure the
appointment of an independent and impartial arbitrator.
At any time after the petition is filed and before the court
makes an appointment, it shall also dismiss the petition
upon being informed that the Appointing Authority has
already made the appointment.
Rule 6.8. Forum shopping prohibited. - When there is a
pending petition in another court to declare the
arbitration agreement inexistent, invalid, unenforceable,
on account of which the respondent failed or refused to
participate in the selection and appointment of a sole
arbitrator or to appoint a partynominated arbitrator, the
petition filed under this rule shall be dismissed.
Rule 6.9. Relief against court action. - 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. An order of the court denying the petition for
appointment of an arbitrator may, however, be the
subject of a motion for reconsideration, appeal or
certiorari.
RULE 7: CHALLENGE
ARBITRATOR

TO

APPOINTMENT

OF

Rule 7.1. Who may challenge. - Any of the parties to an


arbitration may challenge an arbitrator.
Rule 7.2. When challenge may be raised in court.
When an arbitrator is challenged before the arbitral
tribunal under the procedure agreed upon by the
parties or under the procedure provided for in
Article 13 (2) of the Model Law and the challenge is
not successful, the aggrieved party may request the
Appointing Authority to rule on the challenge, and it
is only when such Appointing Authority fails or
refuses to act on the challenge within such period as

Rule 7.5. Contents of the petition. - The petition


shall state the following:
a.

The name/s of the arbitrator/s challenged


andhis/their address;

b. The grounds for the challenge;


c.

The facts showing that the ground for the


challengehas been expressly or impliedly rejected
by the challenged arbitrator/s; and

d. The facts showing that the Appointing


Authorityfailed or refused to act on the challenge.
The court shall dismiss the petition motu proprio
unless it is clearly alleged therein that the
Appointing Authority charged with deciding the
challenge, after the resolution of the arbitral
tribunal rejecting the challenge is raised or
contested before such Appointing Authority, failed
or refused to act on the challenge within thirty (30)
days from receipt of the request or within such
longer period as may apply or as may have been
agreed upon by the parties.
Rule 7.6. Comment/Opposition. - The challenged
arbitrator or other parties may file a comment or
opposition within fifteen (15) days from service of
the petition.
Rule 7.7. Court action. - After hearing, the court shall
remove the challenged arbitrator if it finds merit in the
petition; otherwise, it shall dismiss the petition.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 68


The court shall allow the challenged arbitrator who
subsequently agrees to accept the challenge to withdraw
as arbitrator.
The court shall accept the challenge and remove the
arbitrator in the following cases:

a. The party or parties who named and appointed


thechallenged arbitrator agree to the challenge and
withdraw the appointment.

determining the amount of the award to the challenged


arbitrator, shall receive evidence of expenses to be
reimbursed, which may consist of air tickets, hotel bills
and expenses, and inland transportation. The court shall
direct the challenging party to pay the amount of the
award to the court for the account of the challenged
arbitrator, in default of which the court may issue a writ
of execution to enforce the award.
RULE 8: TERMINATION OF THE MANDATE OF
ARBITRATOR

b. The other arbitrators in the arbitral tribunal agree tothe


removal of the challenged arbitrator; and

Rule 8.1. Who may request termination and on what


grounds.- Any of the parties to an arbitration may
request for the termination of the mandate of an
arbitrator where an arbitrator becomes de jure or de
facto unable to perform his function or for other
reasons fails to act without undue delay and that
arbitrator, upon request of any party, fails or refuses
to withdraw from his office.

c. The challenged arbitrator fails or refuses to submithis


comment on the petition or the brief of legal arguments
as directed by the court, or in such comment or legal
brief, he fails to object to his removal following the
challenge.
The court shall decide the challenge on the basis of
evidence submitted by the parties.

Rule 8.2. When to request. - If an arbitrator refuses


to withdraw from his office, and subsequently, the
Appointing Authority fails or refuses to decide on
the termination of the mandate of that arbitrator
within such period as may be allowed under the
applicable rule or, in the absence thereof, within
thirty (30) days from the time the request is brought
before him, any party may file with the court a
petition to terminate the mandate of that arbitrator.

The court will decide the challenge on the basis of the


evidence submitted by the parties in the following
instances:

a. The other arbitrators in the arbitral tribunal agree tothe


removal of the challenged arbitrator; and

b. If the challenged arbitrator fails or refuses to submithis


comment on the petition or the brief of legal arguments
as directed by the court, or in such comment or brief of
legal arguments, he fails to object to his removal
following the challenge.

Rule 8.3. Venue. - A petition to terminate the


mandate of an arbitrator may, at that petitioners
option, be filed with the Regional Trial Court (a)
where the principal place of business of any of the
parties is located, (b) where any of the parties who
are individuals resides, or (c) in the National Capital
Region.

Rule 7.8. No motion for reconsideration, appeal or


certiorari. - Any order of the court resolving the petition
shall be immediately executory and shall not be the
subject of a motion for reconsideration, appeal, or
certiorari.
Rule 7.9. Reimbursement of expenses and reasonable
compensation to challenged arbitrator. - Unless the bad
faith of the challenged arbitrator is established with
reasonable certainty by concealing or failing to disclose a
ground for his disqualification, the challenged arbitrator
shall be entitled to reimbursement of all reasonable
expenses he may have incurred in attending to the
arbitration and to a reasonable compensation for his
work on the arbitration. Such expenses include, but shall
not be limited to, transportation and hotel expenses, if
any. A reasonable compensation shall be paid to the
challenged arbitrator on the basis of the length of time
he has devoted to the arbitration and taking into
consideration his stature and reputation as an arbitrator.
The request for reimbursement of expenses and for
payment of a reasonable compensation shall be filed in
the same case and in the court where the petition to
replace the challenged arbitrator was filed. The court, in

Rule 8.4. Contents of the petition. - The petition


shall state the following:
a.

The name of the arbitrator whose mandate is


soughtto be terminated;

b. The ground/s for termination;


c.

The fact that one or all of the parties had


requestedthe arbitrator to withdraw but he failed
or refused to do so;

d. The fact that one or all of the parties requested


theAppointing Authority to act on the request for
the termination of the mandate of the arbitrator
and failure or inability of the Appointing
Authority to act within thirty (30) days from the
request of a party or parties or within such period
as may have been agreed upon by the parties or
allowed under the applicable rule.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 69


The petitioner shall further allege that one or all of the
parties had requested the arbitrator to withdraw but he
failed or refused to do so.

b. To appear as a witness before an officer for


thetaking of his deposition upon oral examination
or by written interrogatories;

Rule
8.5.
Comment/Opposition.
The
comment/opposition must be filed within fifteen (15)
days from service of the petition.

c.

Rule 8.6. Court action. - After hearing, if the court finds


merit in the petition, it shall terminate the mandate of
the arbitrator who refuses to withdraw from his office;
otherwise, it shall dismiss the petition.

d. To allow the examination


ofdocuments; and

Rule 8.7. No motion for reconsideration or appeal. Any


order of the court resolving the petition shall be
immediately executory and shall not be subject of a
motion for reconsideration, appeal or petition for
certiorari.
Rule 8.8. Appointment of substitute arbitrator. Where
the mandate of an arbitrator is terminated, or he
withdraws from office for any other reason, or because of
his mandate is revoked by agreement of the parties or is
terminated for any other reason, a substitute arbitrator
shall be appointed according to the rules that were
applicable to the appointment of the arbitrator being
replaced.
RULE 9: ASSISTANCE IN TAKING EVIDENCE
Rule 9.1. Who may request assistance. - Any party to an
arbitration, whether domestic or foreign, may request
the court to provide assistance in taking evidence.
Rule 9.2. When assistance may be sought. - Assistance
may be sought at any time during the course of the
arbitral proceedings when the need arises.
Rule 9.3. Venue. - A petition for assistance in taking
evidence may, at the option of the petitioner, be filed
with Regional Trial Court where (a) arbitration
proceedings are taking place, (b) the witnesses reside or
may be found, or (c) where the evidence may be found.
Rule 9.4. Ground. - The court may grant or execute
the request for assistance in taking evidence within
its competence and according to the rules of
evidence.
Rule 9.5. Type of assistance. - A party requiring
assistance in the taking of evidence may petition the
court to direct any person, including a
representative of a corporation, association,
partnership or other entity (other than a party to the
ADR proceedings or its officers) found in the
Philippines, for any of the following:
a.

To comply with a subpoena ad testificandum


and/orsubpoena duces tecum;

To allow the physical examination of the


condition ofpersons, 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);

e.

and

copying

To perform any similar acts.


Rule 9.6. Contents of the petition. - The petition
must state the following:

a.

The
fact
that
there
is
an
ongoing
arbitrationproceeding even if such proceeding could
not continue due to some legal impediments;

b. The arbitral tribunal ordered the taking of


evidenceor the party desires to present evidence to
the arbitral tribunal;
c.

Materiality or relevance of the evidence to be


taken;and

d. The
names
and
addresses
of
the
intendedwitness/es, place where the evidence may
be found, the place where the premises to be
inspected are located or the place where the acts
required are to be done.
Rule
9.7.
Comment/Opposition.
The comment/opposition must be filed within
fifteen (15) days from service of the petition.
Rule 9.8. Court action. - 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 9.9. Relief against court action. - The order granting
assistance in taking evidence shall be immediately
executory and not subject to reconsideration or appeal. If
the court declines to grant assistance in taking evidence,
the petitioner may file a motion for reconsideration or
appeal.
Rule 9.10. Perpetuation of testimony before the arbitral
tribunal is constituted. - At anytime before arbitration is
commenced or before the arbitral tribunal is constituted,
any person who desires to perpetuate his testimony or

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 70


that of another person may do so in accordance with
Rule 24 of the Rules of Court.

d. The time, date and


proceedingstook place.

place

when

the

ADR

Rule 9.11. Consequence of disobedience. - The court may


impose the appropriate sanction on any person who
disobeys its order to testify when required or perform
any act required of him.

Apart from the other submissions, the movant must


set the motion for hearing and contain a notice of
hearing in accordance with Rule 15 of the Rules of
Court.

RULE

Rule 10.6. Notice. - Notice of a request for a


protective order made through a motion shall be
made to the opposing parties in accordance with
Rule 15 of the Rules of Court.

10:
CONFIDENTIALITY/PROTECTIVE ORDERS

Rule 10.1. Who may request confidentiality. - A party,


counsel or witness who disclosed or who was compelled
to disclose information relative 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 10.2. When request made. - A party may request a
protective order at anytime there is a need to enforce the
confidentiality of the information obtained, or to be
obtained, in ADR proceedings.
Rule 10.3. Venue. - A petition for a protective order may
be filed with the Regional Trial Court where that order
would be implemented.
If there is a pending court proceeding in which the
information obtained in an ADR proceeding is required
to be divulged or is being divulged, the party seeking to
enforce the confidentiality of the information may file a
motion with the court where the proceedings are
pending to enjoin the confidential information from
being divulged or to suppress confidential information.
Rule 10.4. Grounds. - A protective order may be granted
only if it is shown that the applicant would be materially
prejudiced by an unauthorized disclosure of the
information obtained, or to be obtained, during an ADR
proceeding.
Rule 10.5. Contents of the motion or petition. - The
petition or motion must state the following:
a.

That the information sought to be protected


wasobtained, or would be obtained, during an ADR
proceeding;

b. The applicant would be materially prejudiced by


thedisclosure of that information;
c.

The person or persons who are being asked


todivulge the confidential information participated
in an
ADR proceedings; and

Rule
10.7.
Comment/Opposition.
The
comment/opposition must be filed within fifteen
(15) days from service of the petition. The
opposition or comment may be accompanied by
written proof that (a) the information is not
confidential, (b) the information was not obtained
during an ADR proceeding, (c) there was a waiver of
confidentiality, or (d) the petitioner/movant is
precluded from asserting confidentiality.
Rule 10.8. Court action. - If the court finds the
petition or motion meritorious, it shall issue an
order enjoining a person or persons from divulging
confidential information.
In resolving the petition or motion, the courts shall
be guided by the following principles applicable to
all ADR proceedings: 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 from
discovery solely by reason of its use therein.
For mediation proceedings, the court shall be
further guided by the following principles:
a. Information obtained through
beprivileged and confidential.

mediation

shall

b. A party, a mediator, or a nonparty participant mayrefuse


to disclose and may prevent any other person from
disclosing a mediation communication.
c. In such an adversarial proceeding, the followingpersons
involved or previously involved in a mediation may not
be compelled to disclose confidential information
obtained during the mediation: (1) the parties to the
dispute; (2) the mediator or mediators; (3) the counsel
for the parties: (4) the nonparty participants; (5) any
persons hired or engaged in connection with the
mediation as secretary, stenographer; clerk or assistant;
and (6) any other person who obtains or possesses
confidential information by reason of his/ her
profession.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 71

d. The protection of the ADR Laws shall continue toapply


even if a mediator is found to have failed to act
impartially.

e. A mediator may not be called to testify to


provideinformation gathered in mediation. A mediator
who is wrongfully subpoenaed shall be reimbursed the
full cost of his attorney fees and related expenses.
Rule 10.9. Relief against court action. - The order
enjoining a person or persons from divulging
confidential information shall be immediately executory
and may not be enjoined while the order is being
questioned with the appellate courts.
If the court declines to enjoin a person or persons from
divulging confidential information, the petitioner may
file a motion for reconsideration or appeal.
Rule 10.10. Consequence of disobedience. - Any person
who disobeys the order of the court to cease from
divulging confidential information shall be imposed the
proper sanction by the court.
RULE 11: CONFIRMATION, CORRECTION
VACATION OF AWARD IN DOMESTIC
ARBITRATION

OR

Rule 11.1. Who may request confirmation, correction or


vacation. - Any party to a domestic arbitration may
petition the court to confirm, correct or vacate a
domestic arbitral award.
Rule 11.2. When to request confirmation,
correction/modification or vacation. -

to vacate the arbitral award for having been filed


beyond the reglementary period shall not result in
the dismissal of the petition for the confirmation of
such arbitral award.
(F) The filing of a petition to confirm an arbitral
awardshall not authorize the filing of a belated
petition to vacate or set aside such award in
opposition thereto.
(G) A petition to correct an arbitral award may
beincluded as part of a petition to confirm the
arbitral award or as a petition to confirm that
award.
Rule 11.3. Venue. - The petition for confirmation,
correction/modification or vacation of a domestic
arbitral award may be filed with Regional Trial
Court having jurisdiction over the place in which
one of the parties is doing business, where any of
the parties reside or where arbitration proceedings
were conducted.
Rule 11.4. Grounds. - (A) To vacate an arbitral
award. The arbitral award may be vacated on the
following grounds:
a. The arbitral award was procured through
corruption, fraud or other undue means;
b. There was evident partiality or corruption in
thearbitral tribunal or any of its members;
c.

(A) 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 confirm
that award.
(B) Correction/Modification. - Not later than thirty(30)
days from receipt of the arbitral award, a party may
petition the court to correct/modify that award.
(C) Vacation. - Not later than thirty (30) days
fromreceipt of the arbitral award, a party may
petition the court to vacate that award.
(D) A petition to vacate the arbitral award may be
filed,in opposition to a petition to confirm the
arbitral award, not later than thirty (30) days from
receipt of the award by the petitioner. A petition to
vacate the arbitral award filed beyond the
reglementary period shall be dismissed.
(E) A petition to confirm the arbitral award may befiled,
in opposition to a petition to vacate the arbitral
award, at any time after the petition to vacate such
arbitral award is filed. The dismissal of the petition

The arbitral tribunal was guilty of misconduct


or anyform of misbehavior that has materially
prejudiced the rights of any party such as
refusing to postpone a hearing upon sufficient
cause shown or to hear evidence pertinent and
material to the controversy;

d. One or more of the arbitrators was disqualified


toact as such under the law and willfully
refrained from disclosing such disqualification;
or
e.

The arbitral tribunal exceeded its powers, or


soimperfectly executed them, such that a
complete, final and definite award upon the
subject matter submitted to them was not
made.

The award may also be vacated on any or all of the


following grounds:
a. The arbitration agreement did not exist, or is invalidfor
any ground for the revocation of a contract or is
otherwise unenforceable; or
b. A party to arbitration is a minor or a personjudicially
declared to be incompetent.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 72


The petition to vacate an arbitral award on the ground
that the party to arbitration is a minor or a person
judicially declared to be incompetent shall be filed only
on behalf of the minor or incompetent and shall allege
that (a) the other party to arbitration had knowingly
entered into a submission or agreement with such minor
or incompetent, or (b) the submission to arbitration was
made by a guardian or guardian ad litem who was not
authorized to do so by a competent court.

seeking to confirm said award may only apply for


that relief through a petition to confirm the same
award in opposition to the petition to vacate or
correct/modify the award. A petition to confirm or
correct/modify an arbitral award filed as separate
proceeding in another court or in a different case
before the same court shall be dismissed, upon
appropriate motion, as a violation of the rule
against forum shopping.

In deciding the petition to vacate the arbitral award, the


court shall disregard any other ground than those
enumerated above.

As an alternative to the dismissal of a second


petition
for
confirmation,
vacation
or
correction/modification of an arbitral award filed in
violation of the non-forum shopping rule, the court
or courts concerned may allow the consolidation of
the two proceedings in one court and in one case.

(B) To correct/modify an arbitral award. - The Court


may correct/modify or order the arbitral tribunal to
correct/modify the arbitral award in the following cases:

Where the petition to confirm the award and


petition to vacate or correct/modify were
simultaneously filed by the parties in the same court
or in different courts in the Philippines, upon
motion of either party, the court may order the
consolidation of the two cases before either court.

a. Where there was an evident miscalculation of figuresor


an evident mistake in the description of any person,
thing or property referred to in the award;

b. Where the arbitrators have awarded upon a matternot


submitted to them, not affecting the merits of the
decision upon the matter submitted;

In all instances, the petition must be verified by a


person who has knowledge of the jurisdictional
facts.

c. Where the arbitrators have omitted to resolve anissue


submitted to them for resolution; or

Rule 11.6. Contents of petition. - The petition must


state the following:

d. Where the award is imperfect in a matter of formnot


affecting the merits of the controversy, and if it had been
a commissioners report, the defect could have been
amended or disregarded by the Court.

a.

The addresses of the parties and any change


thereof;

b. The jurisdictional issues raised by a party


duringarbitration proceedings;

Rule 11.5. Form of petition. - An application to vacate an


arbitral award shall be in the form of a petition to vacate
or as a petition to vacate in opposition to a petition to
confirm the same award.

c.

An application to correct/modify an arbitral award


may be included in a petition to confirm an arbitral
award or in a petition to vacate in opposition to
confirm the same award.

The grounds relied upon by the parties in


seekingthe vacation of the arbitral award whether
the petition is a petition for the vacation or setting
aside of the arbitral award or a petition in
opposition to a petition to confirm the award; and

d. A statement of the date of receipt of the


arbitralaward and the circumstances under which
it was received by the petitioner.

When a petition to confirm an arbitral award is


pending before a court, the party seeking to vacate
or correct/modify said award may only apply for
those reliefs through a petition to vacate or
correct/modify the award in opposition to the
petition to confirm the award provided that such
petition to vacate or correct/modify is filed within
thirty (30) days from his receipt of the award. A
petition to vacate or correct/modify an arbitral
award filed in another court or in a separate case
before the same court shall be dismissed, upon
appropriate motion, as a violation of the rule
against forum-shopping.

a.

When a petition to vacate or correct/modify an


arbitral award is pending before a court, the party

d. An authentic copy or authentic


theappointment of an arbitral tribunal.

Apart from other submissions, the petitioner must attach


to the petition the following:
An authentic copy of the arbitration agreement;

b. An authentic copy of the arbitral award;


c.

A certification against forum shopping executed bythe


applicant in accordance with Section 5 of Rule 7 of the
Rules of Court; and
copies

of

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 73


Rule 11.7. Notice. - Upon finding that the petition filed
under this Rule is sufficient both in form and in
substance, the Court shall cause notice and a copy of the
petition to be delivered to the respondent allowing him
to file a comment or opposition thereto within fifteen
(15) days from receipt of the petition. In lieu of an
opposition, the respondent may file a petition in
opposition to the petition.
The petitioner may within fifteen (15) days from receipt
of the petition in opposition thereto file a reply.
Rule 11.8. Hearing. - If the Court finds from the petition
or petition in opposition thereto that there are issues of
fact, it shall require the parties, within a period of not
more than fifteen (15) days from receipt of the order, to
simultaneously submit the affidavits of all of their
witnesses and reply affidavits within ten (10) days from
receipt of the affidavits to be replied to. There shall be
attached to the affidavits or reply affidavits documents
relied upon in support of the statements of fact in such
affidavits or reply affidavits.
If the petition or the petition in opposition thereto is one
for vacation of an arbitral award, the interested party in
arbitration may oppose the petition or the petition in
opposition thereto for the reason that the grounds cited
in the petition or the petition in opposition thereto,
assuming them to be true, do not affect the merits of the
case and may be cured or remedied. Moreover, the
interested party may request the court to suspend the
proceedings for vacation for a period of time and to
direct the arbitral tribunal to reopen and conduct a new
hearing and take such other action as will eliminate the
grounds for vacation of the award. The opposition shall
be supported by a brief of legal arguments to show the
existence of a sufficient legal basis for the opposition.
If the ground of the petition to vacate an arbitral
award is that the arbitration agreement did not
exist, is invalid or otherwise unenforceable, and an
earlier petition for judicial relief under Rule 3 had
been filed, a copy of such petition and of the
decision or final order of the court shall be attached
thereto. But if the ground was raised before the
arbitral tribunal in a motion to dismiss filed not
later than the submission of its answer, and the
arbitral tribunal ruled in favor of its own
jurisdiction as a preliminary question which was
appealed by a party to the Regional Trial Court, a
copy of the order, ruling or preliminary award or
decision of the arbitral tribunal, the appeal
therefrom to the Court and the order or decision of
the Court shall all be attached to the petition.
If the ground of the petition is that the petitioner is
an infant or a person judicially declared to be
incompetent, there shall be attached to the petition
certified copies of documents showing such fact. In
addition, the petitioner shall show that even if the
submission or arbitration agreement was entered

into by a guardian or guardian ad litem, the latter


was not authorized by a competent court to sign
such the submission or arbitration agreement.
If on the basis of the petition, the opposition, the
affidavits and reply affidavits of the parties, the
court finds that there is a need to conduct an oral
hearing, the court shall set the case for hearing. This
case shall have preference over other cases before
the court, except criminal cases. During the hearing,
the affidavits of witnesses shall take the place of
their direct testimonies and they shall immediately
be subject to cross-examination thereon. The Court
shall have full control over the proceedings in order
to ensure that the case is heard without undue
delay.
Rule 11.9. Court action. - Unless a ground to vacate
an arbitral award under Rule 11.5 above is fully
established, the court shall confirm the award.
An arbitral award shall enjoy the presumption that
it was made and released in due course of
arbitration and is subject to confirmation by the
court
In resolving the petition or petition in opposition
thereto in accordance with these Special ADR Rules,
the court shall either confirm or vacate the arbitral
award. The court shall not disturb the arbitral
tribunals
determination
of
facts
and/or
interpretation of law.
In a petition to vacate an award or in petition to vacate
an award in opposition to a petition to confirm the
award, the petitioner may simultaneously apply with the
Court to refer the case back to the same arbitral tribunal
for the purpose of making a new or revised award or to
direct a new hearing, or in the appropriate case, order
the new 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. In the latter case, any provision limiting the time
in which the arbitral tribunal may make a decision shall
be deemed applicable to the new arbitral tribunal.
In referring the case back to the arbitral tribunal or to a
new arbitral tribunal pursuant to Rule 24 of Republic Act
No. 876, the court may not direct it to revise its award in
a particular way, or to revise its findings of fact or
conclusions of law or otherwise encroach upon the
independence of an arbitral tribunal in the making of a
final award.
RULE 12: RECOGNITION AND ENFORCEMENT OR
SETTING
ASIDE
OF
AN
INTERNATIONALCOMMERCIAL
ARBITRATION AWARD

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 74


Rule 12.1. Who may request recognition and
enforcement or setting aside. - Any party to an
international commercial arbitration in the Philippines
may petition the proper court to recognize and enforce
or set aside an arbitral award.

(ii). 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

Rule 12.2. When to file petition. - (A) Petition to


recognize and enforce. - The petition for enforcement
and recognition of an arbitral award may be filed
anytime from receipt of the award. 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.

(iii). 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 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 be set aside or only
that part of the award which contains decisions on
matters submitted to arbitration may be enforced;
or

(B) Petition to set aside. - The petition to set aside an


arbitral award may only be filed within three (3) months
from the time the petitioner receives a copy thereof. If a
timely request is made with the arbitral tribunal for
correction, interpretation or additional award, the three
(3) month period shall be counted from the time the
petitioner receives the resolution by the arbitral tribunal
of that request.
A petition to set aside can no longer be filed after the
lapse of the three (3) month period. The dismissal of a
petition to set aside an arbitral award for being
timebarred shall not automatically result in the approval
of the petition filed therein and in opposition thereto for
recognition and enforcement of the same award.
Failure to file a petition to set aside shall preclude a
party from raising grounds to resist enforcement of
the award.
Rule 12.3. Venue. - A petition to recognize and
enforce or set aside an arbitral award may, at the
option of the petitioner, be filed with the Regional
Trial Court: (a) where arbitration proceedings were
conducted; (b) where any of the assets to be
attached or levied upon is located; (c) where the act
to be enjoined will be or is being performed; (d)
where any of the parties to arbitration resides or has
its place of business; or (e) in the National Capital
Judicial Region.
Rule 12.4. Grounds to set aside or resist
enforcement. The court may set aside or refuse the
enforcement of the arbitral award only if:
a. The party making the application furnishes proof
that:
(i). A party to the arbitration agreement was under
some incapacity, or the said agreement is not valid
under the law to which the parties have subjected it
or, failing any indication thereof, under Philippine
law; or

(iv). The composition of the arbitral tribunal or the


arbitral procedure was not in accordance with the
agreement of the parties, unless such agreement
was in conflict with a provision of Philippine law
from which the parties cannot derogate, or, failing
such agreement, was not in accordance with
Philippine law;
b. The court finds that:
(i). The subject-matter of the dispute is not capable
of settlement by arbitration under the law of the
Philippines; or
(ii). The recognition or enforcement of the award would
be contrary to public policy.
In deciding the petition, the Court shall disregard any
other ground to set aside or enforce the arbitral award
other than those enumerated above.
The petition to set-aside or a pleading resisting the
enforcement of an arbitral award on the ground that a
party was a minor or an incompetent shall be filed only
on behalf of the minor or incompetent and shall allege
that (a) the other party to arbitration had knowingly
entered into a submission or agreement with such minor
or incompetent, or (b) the submission to arbitration was
made by a guardian or guardian ad litem who was not
authorized to do so by a competent court.
Rule 12.5. Exclusive recourse against arbitral award.
Recourse to a court against an arbitral award shall be
made only through a petition to set aside the arbitral
award and on grounds prescribed by the law that
governs international commercial arbitration. Any other
recourse from the arbitral award, such as by appeal or
petition for review or petition for certiorari or otherwise,
shall be dismissed by the court.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 75


Rule 12.6. Form. - The application to recognize and
enforce or set aside an arbitral award, whether made
through a petition to recognize and enforce or to set
aside or as a petition to set aside the award in opposition
thereto, or through a petition to set aside or petition to
recognize and enforce in opposition thereto, shall be
verified by a person who has personal knowledge of the
facts stated therein.
When a petition to recognize and enforce an arbitral
award is pending, the application to set it aside, if not yet
time-barred, shall be made through a petition to set
aside the same award in the same proceedings.
When a timely petition to set aside an arbitral award is
filed, the opposing party may file a petition for
recognition and enforcement of the same award in
opposition thereto.
Rule 12.7. Contents of petition. - (A) Petition to recognize
and enforce. - The petition to recognize and enforce or
petition to set aside in opposition thereto, or petition to
set aside or petition to recognize and enforce in
opposition thereto, shall state the following:
a.

The addresses of record, or any change thereof,


ofthe parties to arbitration;

b. A statement that the arbitration agreement


orsubmission exists;
c.

The names of the arbitrators and proof of


theirappointment;

d. A statement that an arbitral award was issued


andwhen the petitioner received it; and
e.

The relief sought.


Apart from other submissions, the petitioner shall
attach to the petition the following:

a.

An authentic copy of the arbitration agreement;

b. An authentic copy of the arbitral award;


c.

A
verification
and
certification
against
forumshopping executed by the applicant in
accordance with
Sections 4 and 5 of Rule 7 of the Rules of Court; and

d. An authentic copy or authentic copies of


theappointment of an arbitral tribunal.
(B) Petition to set aside. - The petition to set aside
or petition to set aside in opposition to a petition to
recognize and enforce an arbitral award in
international commercial arbitration shall have the
same contents as a petition to recognize and enforce
or petition to recognize and enforce in opposition to

a petition to set aside an arbitral award. In addition,


the said petitions should state the grounds relied
upon to set it aside.
Further, if the ground of the petition to set aside is
that the petitioner is a minor or found incompetent
by a court, there shall be attached to the petition
certified copies of documents showing such fact. In
addition, the petitioner shall show that even if the
submission or arbitration agreement was entered
into by a guardian or guardian ad litem, the latter
was not authorized by a competent court to sign
such the submission or arbitration agreement.
In either case, if another court was previously
requested to resolve and/or has resolved, on appeal,
the arbitral tribunals preliminary determination in
favor of its own jurisdiction, the petitioner shall
apprise the court before which the petition to
recognize and enforce or set aside is pending of the
status of the appeal or its resolution.
Rule 12.8. Notice. - Upon finding that the petition
filed under this Rule is sufficient both in form and
in substance, the court shall cause notice and a copy
of the petition to be delivered to the respondent
directing him to file an opposition thereto within
fifteen (15) days from receipt of the petition. In lieu
of an opposition, the respondent may file a petition
to set aside in opposition to a petition to recognize
and enforce, or a petition to recognize and enforce
in opposition to a petition to set aside.
The petitioner may within fifteen (15) days from receipt
of the petition to set aside in opposition to a petition to
recognize and enforce, or from receipt of the petition to
recognize and enforce in opposition to a petition to set
aside, file a reply.
Rule 12.9. Submission of documents. - If the court finds
that the issue between the parties is mainly one of law,
the parties may be required to submit briefs of legal
arguments, not more than fifteen (15) days from receipt
of the order, sufficiently discussing the legal issues and
the legal basis for the relief prayed for by each of them.
If the court finds from the petition or petition in
opposition thereto that there are issues of fact relating to
the ground(s) relied upon for the court to set aside, it
shall require the parties within a period of not more than
fifteen (15) days from receipt of the order simultaneously
to submit the affidavits of all of their witnesses and reply
affidavits within ten (10) days from receipt of the
affidavits to be replied to. There shall be attached to the
affidavits or reply affidavits, all documents relied upon
in support of the statements of fact in such affidavits or
reply affidavits.
Rule 12.10. Hearing. - If on the basis of the petition, the
opposition, the affidavits and reply affidavits of the
parties, the court finds that there is a need to conduct an

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 76


oral hearing, the court shall set the case for hearing. This
case shall have preference over other cases before the
court, except criminal cases. During the hearing, the
affidavits of witnesses shall take the place of their direct
testimonies and they shall immediately be subject to
cross-examination thereon. The court shall have full
control over the proceedings in order to ensure that the
case is heard without undue delay.
Rule 12.11. Suspension of proceedings to set aside. The
court when asked to set aside an arbitral award may,
where appropriate and upon request by a party, suspend
the proceedings for a period of time determined by it to
give the arbitral tribunal an opportunity to resume the
arbitral proceedings or to take such other action as in the
arbitral tribunals opinion will eliminate the grounds for
setting aside. The court, in referring the case back to the
arbitral tribunal may not direct it to revise its award in a
particular way, or to revise its findings of fact or
conclusions of law or otherwise encroach upon the
independence of an arbitral tribunal in the making of a
final award.
The court when asked to set aside an arbitral award may
also, when the preliminary ruling of an arbitral tribunal
affirming its jurisdiction to act on the matter before it
had been appealed by the party aggrieved by such
preliminary ruling to the court, suspend the proceedings
to set aside to await the ruling of the court on such
pending appeal or, in the alternative, consolidate the
proceedings to set aside with the earlier appeal.
Rule 12.12. Presumption in favor of confirmation. It is presumed that an arbitral award was made and
released in due course and is subject to enforcement
by the court, unless the adverse party is able to
establish a ground for setting aside or not enforcing
an arbitral award.
Rule 12.13. Judgment of the court. - Unless a ground
to set aside an arbitral award under Rule 12.4 above
is fully established, the court shall dismiss the
petition. If, in the same proceedings, there is a
petition to recognize and enforce the arbitral award
filed in opposition to the petition to set aside, the
court shall recognize and enforce the award.
In resolving the petition or petition in opposition
thereto in accordance with the Special ADR Rules,
the court shall either set aside or enforce the arbitral
award. The court shall not disturb the arbitral
tribunals
determination
of
facts
and/or
interpretation of law.
Rule 12.14. Costs. - Unless otherwise agreed upon by
the parties in writing, at the time the case is
submitted to the court for decision, the party
praying for recognition and enforcement or setting
aside of an arbitral award shall submit a statement
under oath confirming the costs he has incurred
only in the proceedings for such recognition and

enforcement or setting aside. The costs shall include


the attorneys fees the party has paid or is
committed to pay to his counsel of record.
The prevailing party shall be entitled to an award of
costs, which shall include reasonable attorneys fees
of the prevailing party against the unsuccessful
party. The court shall determine the reasonableness
of the claim for attorneys fees.
RULE 13: RECOGNITION AND ENFORCEMENT
OF A FOREIGN ARBITRAL AWARD
Rule 13.1. Who may request recognition and
enforcement. - Any party to a foreign arbitration
may petition the court to recognize and enforce a
foreign arbitral award.
Rule 13.2. When to petition. - At any time after
receipt of a foreign arbitral award, any party to
arbitration may petition the proper Regional Trial
Court to recognize and enforce such award.
Rule 13.3. Venue. - The petition to recognize and enforce
a foreign arbitral award shall be filed, at the option of the
petitioner, with the Regional Trial Court (a) where the
assets to be attached or levied upon is located, (b) where
the act to be enjoined is being performed, (c) in the
principal place of business in the Philippines of any of
the parties, (d) if any of the parties is an individual,
where any of those individuals resides, or (e) in the
National Capital Judicial Region.
Rule 13.4. Governing law and grounds to refuse
recognition and enforcement. - The 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 this Rule. 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.
A Philippine court shall not set aside a foreign arbitral
award but may refuse it recognition and enforcement on
any or all of the following grounds:
a. The party making the application to refuse recognition
and enforcement of the award furnishes proof that:
(i). A party to the arbitration agreement was under some
incapacity; or the said agreement 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
(ii). The party making the application was not given
proper notice of the appointment of an arbitrator or of

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 77


the arbitral proceedings or was otherwise unable to
present his case; or
(iii). 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
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 be set aside; or
(iv). 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 in accordance with the law of the country where
arbitration took place; or
(v). 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
b. The court finds that:
(i). The subject-matter of the dispute is not capable
of settlement or resolution by arbitration under
Philippine law; or
(ii). The recognition or enforcement of the award
would be contrary to public policy.
The court shall disregard any ground for opposing
the recognition and enforcement of a foreign
arbitral award other than those enumerated above.
Rule 13.5. Contents of petition. - The petition shall
state the following:
a.

The addresses of the parties to arbitration;

b. In the absence of any indication in the award,


thecountry where the arbitral award was made
and whether such country is a signatory to the
New York
Convention; and
c.

The relief sought.


Apart from other submissions, the petition shall
have attached to it the following:

a.

An authentic copy of the arbitration agreement;


and

b. An authentic copy of the arbitral award.


If the foreign arbitral award or agreement to
arbitrate or submission is not made in English, the
petitioner shall also attach to the petition a

translation of these documents into English. The


translation shall be certified by an official or sworn
translator or by a diplomatic or consular agent.
Rule 13.6. Notice and opposition. - Upon finding
that the petition filed under this Rule is sufficient
both in form and in substance, the court shall cause
notice and a copy of the petition to be delivered to
the respondent allowing him to file an opposition
thereto within thirty (30) days from receipt of the
notice and petition.
Rule 13.7. Opposition. - The opposition shall be
verified by a person who has personal knowledge of
the facts stated therein.
Rule 13.8. Submissions. - If the court finds that the issue
between the parties is mainly one of law, the parties may
be required to submit briefs of legal arguments, not
more than thirty (30) days from receipt of the order,
sufficiently discussing the legal issues and the legal bases
for the relief prayed for by each other.
If, from a review of the petition or opposition, there are
issues of fact relating to the ground/s relied upon for the
court to refuse enforcement, the court shall, motu
proprio or upon request of any party, require the parties
to simultaneously submit the affidavits of all of their
witnesses within a period of not less than fifteen (15)
days nor more than thirty (30) days from receipt of the
order. The court may, upon the request of any party,
allow the submission of reply affidavits within a period
of not less than fifteen (15) days nor more than thirty
(30) days from receipt of the order granting said request.
There shall be attached to the affidavits or reply
affidavits all documents relied upon in support of the
statements of fact in such affidavits or reply affidavits.
Rule 13.9. Hearing. - The court shall set the case for
hearing if on the basis of the foregoing submissions there
is a need to do so. The court shall give due priority to
hearings on petitions under this Rule. During the
hearing, the affidavits of witnesses shall take the place of
their direct testimonies and they shall immediately be
subject to cross-examination. The court shall have full
control over the proceedings in order to ensure that the
case is heard without undue delay.
Rule 13.10. Adjournment/deferment of decision on
enforcement of award. - The court before which a
petition to recognize and enforce a foreign arbitral award
is pending, may adjourn or defer rendering a decision
thereon if, in the meantime, an application for the
setting aside or suspension of the award has been made
with a competent authority in the country where the
award was made. Upon application of the petitioner, the
court may also require the other party to give suitable
security.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 78


Rule 13.11. Court action. - It is presumed that a foreign
arbitral award was made and released in due course of
arbitration and is subject to enforcement by the court.

Regional Trial Court (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 individuals resides; or (c) in the
National Capital Judicial Region.

The court shall recognize and enforce a foreign arbitral


award unless a ground to refuse recognition or
enforcement of the foreign arbitral award under this rule
is fully established.

Rule 15.4. Registry Book. - The Clerk of Court of


each Regional Trial Court shall keep a Registry Book
that shall chronologically list or enroll all the
mediated settlement agreements/settlement awards
that are deposited with the court as well as the
names and address of the parties thereto and the
date of enrollment and shall issue a Certificate of
Deposit to the party that made the deposit.

The decision of the court recognizing and enforcing a


foreign arbitral award is immediately executory.
In resolving the petition for recognition and
enforcement of a foreign arbitral award in
accordance with these Special ADR Rules, the court
shall either [a] recognize and/or enforce or [b]
refuse to recognize and enforce the arbitral award.
The court shall not disturb the arbitral tribunals
determination of facts and/or interpretation of law.
Rule 13.12. Recognition and enforcement of
nonconvention award. - The court shall, only upon
grounds provided by these Special ADR Rules,
recognize and enforce a foreign arbitral award made
in a country not a signatory to the New York
Convention when such country extends comity and
reciprocity to awards made in the Philippines. If
that country does not extend comity and reciprocity
to awards made in the Philippines, the court may
nevertheless treat such award as a foreign judgment
enforceable as such under Rule 39, Section 48, of
the Rules of Court.

Rule 15.5. Enforcement of mediated settlement


agreement. - Any of the parties to a mediated settlement
agreement, which was deposited with the Clerk of Court
of the Regional Trial Court, may, upon breach thereof,
file a verified petition with the same court to enforce said
agreement.
Rule 15.6. Contents of petition. - The verified petition
shall:
a.

Name and designate, as petitioner or respondent,


allparties to the mediated settlement agreement and
those who may be affected by it;

b. State the following:


(i). The addresses of the petitioner and respondents; and

PART III
PROVISIONS SPECIFIC TO MEDIATION

(ii). The ultimate facts that would show that the adverse
party has defaulted to perform its obligation under said
agreement; and

RULE 14: GENERAL PROVISIONS


c.
Rule 14.1. Application of the rules on arbitration.
Whenever applicable and appropriate, the pertinent
rules on arbitration shall be applied in proceedings
before the court relative to a dispute subject to
mediation.
RULE 15: DEPOSIT AND ENFORCEMENT OF
MEDIATED SETTLEMENT AGREEMENTS
Rule 15.1. Who makes a deposit. - 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 15.2. When deposit is made. - At any time after
an agreement is reached, the written settlement
agreement may be deposited.
Rule 15.3. Venue. - The written settlement
agreement may be jointly deposited by the parties
or deposited by one party with prior notice to the
other party/ies with the Clerk of Court of the

Have attached to it the following:


(i). An authentic copy of the mediated settlement
agreement; and
(ii). Certificate of Deposit showing that the mediated
settlement agreement was deposited with the Clerk of
Court.
Rule 15.7. Opposition. - The adverse party may file an
opposition, within fifteen (15) days from receipt of notice
or service of the petition, by submitting written proof of
compliance with the mediated settlement agreement or
such other affirmative or negative defenses it may have.
Rule 15.8. Court action. - After a summary hearing, if the
court finds that the agreement is a valid mediated
settlement agreement, that there is no merit in any of the
affirmative or negative defenses raised, and the
respondent has breached that agreement, in whole or in
part, the court shall order the enforcement thereof;
otherwise, it shall dismiss the petition.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 79


PART IV
PROVISIONS SPECIFIC TO CONSTRUCTION
ARBITRATION

Rule 17.4. Hearing. - The court shall hear the


motion only once and for the purpose of clarifying
relevant factual and legal issues.

RULE 16: GENERAL PROVISIONS

Rule 17.5. Court action. - If the other parties fail to


file their opposition on or before the day of the
hearing, the court shall motu proprio resolve the
motion only on the basis of the facts alleged in the
motion.

Rule 16.1. Application of the rules on arbitration.


Whenever applicable and appropriate, the rules on
arbitration shall be applied in proceedings before the
court relative to a dispute subject to construction
arbitration.
RULE 17: REFERRAL TO CIAC
Rule 17.1. Dismissal of action. - A Regional Trial
Court before which a construction dispute is filed
shall, upon becoming aware that the parties have
entered into an arbitration agreement, motu
proprio or upon motion made not later than the
pre-trial, dismiss the case and refer the parties to
arbitration to be conducted by the
Construction Industry Arbitration Commission
(CIAC), unless all parties to arbitration, assisted by
their respective counsel, submit to the court a
written agreement making the court, rather than the
CIAC, the body that would exclusively resolve the
dispute.
Rule 17.2. Form and contents of motion. - The
request for dismissal of the civil action and referral
to arbitration shall be through a verified motion
that shall (a) contain a statement showing that the
dispute is a construction dispute; and (b) be
accompanied by proof of the existence of the
arbitration agreement.
If the arbitration agreement or other document
evidencing the existence of that agreement is
already part of the record, those documents need
not be submitted to the court provided that the
movant has cited in the motion particular
references to the records where those documents
may be found.
The motion shall also contain a notice of hearing
addressed to all parties and shall specify the date
and time when the motion will be heard, which
must not be later than fifteen (15) days after the
filing of the motion. The movant shall ensure
receipt by all parties of the motion at least three
days before the date of the hearing.
Rule 17.3. Opposition. - Upon receipt of the motion
to refer the dispute to arbitration by CIAC, the other
party may file an opposition to the motion on or
before the day such motion is to be heard. The
opposition shall clearly set forth the reasons why
the court should not dismiss the case.

After hearing, the court shall dismiss the civil action


and refer the parties to arbitration if it finds, based
on the pleadings and supporting documents
submitted by the parties, that there is a valid and
enforceable arbitration agreement involving a
construction dispute. Otherwise, the court shall
proceed to hear the case.
All doubts shall be resolved in favor of the existence of a
construction dispute and the arbitration agreement.
Rule 17.6. Referral immediately executory. - An order
dismissing the case and referring the dispute to
arbitration by CIAC shall be immediately executory.
Rule 17.7. Multiple actions and parties. - The court shall
not decline to dismiss the civil action and make a referral
to arbitration by CIAC for any of the following reasons:
a. Not all of the disputes subject of the civil action maybe
referred to arbitration;
b. Not all of the parties to the civil action are bound bythe
arbitration agreement and referral to arbitration would
result in multiplicity of suits;
c. The issues raised in the civil action could be speedilyand
efficiently resolved in its entirety by the Court rather
than in arbitration;
d. Referral to arbitration does not appear to be themost
prudent action; or
e. Dismissal of the civil action would prejudice therights of
the parties to the civil action who are not bound by the
arbitration agreement.
The court may, however, issue an order directing the
inclusion in arbitration of those parties who are bound
by the arbitration agreement directly or by reference
thereto pursuant to Section 34 of Republic Act No. 9285.
Furthermore, the court shall issue an order directing the
case to proceed with respect to the parties not bound by
the arbitration agreement.
Rule 17.8. Referral - If the parties manifest that they
have agreed to submit all or part of their dispute pending
with the court to arbitration by CIAC, the court shall
refer them to CIAC for arbitration.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 80


PART V
PROVISIONS SPECIFIC TO OTHER FORMS OF ADR

Rule 19.1. Motion for reconsideration, when


allowed. A party may ask the Regional Trial to
reconsider its ruling on the following:

RULE 18: GENERAL PROVISIONS


a.
Rule 18.1. Applicability of rules to other forms of
ADR. - This rule governs the procedure for matters
brought before the court involving the following
forms of ADR:
a.

b. Upholding
or
reversing
the
tribunalsjurisdiction pursuant to Rule 3.19;

arbitral

c.Denying a request to refer the parties to arbitration;

Early neutral evaluation;

d. Granting or denying a party an interim measure


ofprotection;

b. Neutral evaluation;
c.

That the arbitration agreement is inexistent, invalidor


unenforceable pursuant to Rule 3.10 (B);

Mini-trial;
e.Denying a petition for the appointment of anarbitrator;

d. Mediation-arbitration;
f. Refusing to grant assistance in taking evidence;
e.

A combination thereof; or

f.

Any other ADR form.

g.

Enjoining or refusing to enjoin a person fromdivulging


confidential information;

Rule 18.2. Applicability of the rules on mediation. If the other ADR form/process is more akin to
mediation (i.e., the neutral third party merely
assists the parties in reaching a voluntary
agreement), the herein rules on mediation shall
apply.

h. Confirming, vacating or correcting a domesticarbitral


award;

Rule 18.3. Applicability of rules on arbitration.-If


the other ADR form/process is more akin to
arbitration (i.e., the neutral third party has the
power to make a binding resolution of the dispute),
the herein rules on arbitration shall apply.

j. Setting aside an international commercial arbitralaward;

Rule 18.4. Referral. - If a dispute is already before a


court, either party may before and during pre-trial,
file a motion for the court to refer the parties to
other ADR forms/processes. At any time during
court proceedings, even after pre-trial, the parties
may jointly move for suspension of the action
pursuant to Article 2030 of the Civil Code of the
Philippines where the possibility of compromise is
shown.

l. Recognizing and/or enforcing, or dismissing apetition to


recognize and/or enforce an international commercial
arbitral award;

Rule 18.5. Submission of settlement agreement.


Either party may submit to the court, before which
the case is pending, any settlement agreement
following a neutral or an early neutral evaluation,
mini-trial or mediation-arbitration.

o. Recognizing and/or enforcing a foreign arbitralaward,


or refusing recognition and/or enforcement of the
same; and

PART VI
MOTION FOR RECONSIDERATION,
AND CERTIORARI

APPEAL

RULE 19: MOTION FOR RECONSIDERATION,


APPEAL AND CERTIORARI
A. MOTION FOR RECONSIDERATION

i. Suspending the proceedings to set aside aninternational


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

k. Dismissing the petition to set


aside an
internationalcommercial arbitral award, even if the
court does not recognize and/or enforce the same;

m. Declining a request for assistance in takingevidence;


n. Adjourning or deferring a ruling on a petition to
setaside, recognize and/or enforce an international
commercial arbitral award;

p. Granting or dismissing a petition to enforce adeposited


mediated settlement agreement.
No motion for reconsideration shall be allowed from the
following rulings of the Regional Trial Court:
a.

A prima facie determination upholding


theexistence, validity or enforceability of an
arbitration agreement pursuant to Rule 3.1 (A);

b. An order referring the dispute to arbitration;

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 81


c.

An order appointing an arbitrator;

d. Any ruling on the challenge to the appointment of


anarbitrator;
e.

Any order resolving the issue of the termination


ofthe mandate of an arbitrator; and

f.

An order granting assistance in taking evidence.


Rule 19.2. When to move for reconsideration. - A
motion for reconsideration may be filed with the
Regional Trial Court within a non-extendible period
of fifteen (15) days from receipt of the questioned
ruling or order.
Rule 19.3. Contents and notice. - The motion shall
be made in writing stating the ground or grounds
therefor and shall be filed with the court and served
upon the other party or parties.
Rule 19.4. Opposition or comment. - Upon receipt of
the motion for reconsideration, the other party or
parties shall have a non-extendible period of fifteen
(15) days to file his opposition or comment.
Rule 19.5. Resolution of motion. - A motion for
reconsideration shall be resolved within thirty (30)
days from receipt of the opposition or comment or
upon the expiration of the period to file such
opposition or comment.
Rule 19.6. No second motion for reconsideration. No party shall be allowed a second motion for
reconsideration.
B. GENERAL PROVISIONS ON APPEAL AND
CERTIORARI
Rule 19.7. 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 petition for certiorari questioning the merits of an
arbitral award.
Rule 19.8. Subject matter and governing rules. - The
remedy of an appeal through a petition for review or
the remedy of a special civil action of certiorari from
a decision of the Regional Trial Court made under
the Special ADR Rules shall be allowed in the
instances, and instituted only in the manner,
provided under this Rule.
Rule 19.9. Prohibited alternative remedies. - Where
the remedies of appeal and certiorari are specifically
made available to a party under the Special ADR
Rules, recourse to one remedy shall preclude
recourse to the other.

Rule 19.10. Rule on judicial review on arbitration in the


Philippines. - As a general rule, the court can only vacate
or set aside the decision of an arbitral tribunal upon a
clear showing that the award suffers from any of the
infirmities or grounds for vacating an arbitral award
under Section 24 of Republic Act No. 876 or under Rule
34 of the Model Law in a domestic arbitration, or for
setting aside an award in an international arbitration
under Article 34 of the Model Law, or for such other
grounds provided under these Special Rules.
If the Regional Trial Court is asked to set aside an
arbitral award in a domestic or international arbitration
on any ground other than those provided in the Special
ADR Rules, the court shall entertain such ground for the
setting aside or non-recognition of the arbitral award
only if the same amounts to a violation of public policy.
The court shall not set aside or vacate the award of the
arbitral tribunal merely on the ground that the arbitral
tribunal committed errors of fact, or of law, or of fact and
law, as the court cannot substitute its judgment for that
of the arbitral tribunal.
Rule 19.11. Rule on judicial review of foreign arbitral
award. - The court can deny recognition and
enforcement of a foreign arbitral award only upon the
grounds provided in Article V of the New York
Convention, but shall have no power to vacate or set
aside a foreign arbitral award.
C. APPEALS TO THE COURT OF APPEALS
Rule 19.12. Appeal to the Court of Appeals. - An appeal to
the Court of Appeals through a petition for review under
this Special Rule shall only be allowed from the following
final orders of the Regional Trial Court:
a.

Granting or
ofprotection;

denying

an

interim

measure

b. Denying a petition for appointment of an


arbitrator;
c.

Denying a petition for assistance in taking


evidence;

d. Enjoining or refusing to enjoin a person


fromdivulging confidential information;
e.

Confirming, vacating or correcting/modifying


adomestic arbitral award;

f.

Setting aside an
arbitrationaward;

g.

Dismissing the petition to set aside an


internationalcommercial arbitration award even
if the court does not decide to recognize or
enforce such award;

international

commercial

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 82


h. Recognizing
and/or
enforcing
internationalcommercial arbitration award;

an

i.

Dismissing
a
petition
to
enforce
internationalcommercial arbitration award;

an

j.

Recognizing and/or
arbitralaward;

enforcing

foreign

k. Refusing recognition and/or enforcement of


aforeign arbitral award;
l.

Granting or dismissing a petition to enforce


adeposited mediated settlement agreement; and

m. Reversing
the
ruling
of
the
tribunalupholding its jurisdiction.

arbitral

Rule 19.13. Where to appeal. - An appeal under this


Rule shall be taken to the Court of Appeals within
the period and in the manner herein provided.
Rule 19.14. When to appeal. - The petition for review
shall be filed within fifteen (15) days from notice of
the decision of the Regional Trial Court or the
denial
of
the
petitioners
motion
for
reconsideration.
Rule 19.15. How appeal taken. - Appeal shall be
taken by filing a verified petition for review in seven
(7) legible copies with the Court of Appeals, with
proof of service of a copy thereof on the adverse
party and on the Regional Trial Court. The original
copy of the petition intended for the Court of
Appeals shall be marked original by the petitioner.
Upon the filing of the petition and unless otherwise
prescribed by the Court of Appeals, the petitioner
shall pay to the clerk of court of the Court of
Appeals docketing fees and other lawful fees of
P3,500.00 and deposit the sum of P500.00 for
costs.
Exemption from payment of docket and other lawful
fees and the deposit for costs may be granted by the
Court of Appeals upon a verified motion setting
forth valid grounds therefor. If the Court of Appeals
denies the motion, the petitioner shall pay the
docketing and other lawful fees and deposit for
costs within fifteen days from the notice of the
denial.
Rule 19.16. Contents of the Petition. - The petition
for review shall (a) state the full names of the
parties to the case, without impleading the court or
agencies either as petitioners or respondent, (b)
contain a concise statement of the facts and issues
involved and the grounds relied upon for the review,
(c) be accompanied by a clearly legible duplicate
original or a certified true copy of the decision or

resolution of the Regional Trial Court appealed


from, together with certified true copies of such
material portions of the record referred to therein
and other supporting papers, and (d) contain a
sworn certification against forum shopping as
provided in the Rules of Court. The petition shall
state the specific material dates showing that it was
filed within the period fixed herein.
Rule 19.17. Effect of failure to comply with requirements.
- The court shall dismiss the petition if it fails to comply
with the foregoing requirements regarding the payment
of the docket and other lawful fees, the deposit for costs,
proof of service of the petition, the contents and the
documents, which should accompany the petition.
Rule 19.18. Action on the petition. - The Court of Appeals
may require the respondent to file a comment on the
petition, not a motion to dismiss, within ten (10) days
from notice, or dismiss the petition if it finds, upon
consideration of the grounds alleged and the legal briefs
submitted by the parties, that the petition does not
appear to be prima facie meritorious.
Rule 19.19. Contents of Comment. - The comment shall
be filed within ten (10) days from notice in seven (7)
legible copies and accompanied by clearly legible
certified true copies of such material portions of the
record referred to therein together with other supporting
papers. The comment shall (a) point out insufficiencies
or inaccuracies in petitioners statement of facts and
issues, and (b) state the reasons why the petition should
be denied or dismissed. A copy thereof shall be served on
the petitioner, and proof of such service shall be filed
with the Court of Appeals.
Rule 19.20. Due course. - If upon the filing of a comment
or such other pleading or documents as may be required
or allowed by the Court of Appeals or upon the
expiration of the period for the filing thereof, and on the
basis of the petition or the records, the Court of Appeals
finds prima facie that the Regional Trial Court has
committed an error that would warrant reversal or
modification of the judgment, final order, or resolution
sought to be reviewed, it may give due course to the
petition; otherwise, it shall dismiss the same.
Rule 19.21. Transmittal of records. - Within fifteen (15)
days from notice that the petition has been given due
course, the Court of Appeals may require the court or
agency concerned to transmit the original or a legible
certified true copy of the entire record of the proceeding
under review. The record to be transmitted may be
abridged by agreement of all parties to the proceeding.
The Court of Appeals may require or permit subsequent
correction of or addition to the record.
Rule 19.22. Effect of appeal. - The appeal shall not
stay the award, judgment, final order or resolution
sought to be reviewed unless the Court of Appeals

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 83


directs otherwise upon such terms as it may deem
just.

A special civil action for certiorari may be filed against


the following orders of the court.

Rule 19.23. Submission for decision. - If the petition


is given due course, the Court of Appeals may set
the case for oral argument or require the parties to
submit memoranda within a period of fifteen (15)
days from notice. The case shall be deemed
submitted for decision upon the filing of the last
pleading or memorandum required by the Court of
Appeals.

a.

The Court of Appeals shall render judgment within


sixty (60) days from the time the case is submitted
for decision.

d. Granting or refusing an interim relief;

Rule 19.24. Subject of appeal restricted in certain


instance. - If the decision of the Regional Trial Court
refusing to recognize and/or enforce, vacating
and/or setting aside an arbitral award is premised
on a finding of fact, the Court of Appeals may
inquire only into such fact to determine the
existence or non-existence of the specific ground
under the arbitration laws of the Philippines relied
upon by the Regional Trial Court to refuse to
recognize and/or enforce, vacate and/or set aside an
award. Any such inquiry into a question of fact shall
not be resorted to for the purpose of substituting the
courts judgment for that of the arbitral tribunal as
regards the latters ruling on the merits of the
controversy.
Rule 19.25. Party appealing decision of court
confirming arbitral award required to post bond. The Court of Appeals shall within fifteen (15) days
from receipt of the petition require the party
appealing from the decision or a final order of the
Regional Trial Court, either confirming or enforcing
an arbitral award, or denying a petition to set aside
or vacate the arbitral award to post a bond executed
in favor of the prevailing party equal to the amount
of the award.
Failure of the petitioner to post such bond shall be a
ground for the Court of Appeals to dismiss the
petition.

D.

SPECIAL

CIVIL

ACTION

FOR

CERTIORARI
Rule 19.26. Certiorari to the Court of Appeals. When the Regional Trial Court, in making a ruling
under the Special ADR Rules, has acted without or
in excess of its jurisdiction, or 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.

Holding that the arbitration


inexistent,invalid or unenforceable;

agreement

is

b. Reversing
the
arbitral
tribunals
preliminarydetermination upholding its jurisdiction;
c. Denying the request to refer the dispute to
arbitration;

e.

Denying a petition
anarbitrator;

for

the

f.

Confirming, vacating or correcting a domesticarbitral


award;

g.

Suspending the proceedings to set aside


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

h. Allowing
a
party
to
internationalcommercial arbitral
appeal;

appointment

of

enforce
an
award pending

i.

Adjourning or deferring a ruling on whether to


setaside, recognize and or enforce an international
commercial arbitral award;

j.

Allowing a party to enforce a foreign arbitral


awardpending appeal; and

k. Denying a petition for assistance in taking evidence.


Rule 19.27. Form. - The petition shall be accompanied by
a certified true copy of the questioned judgment, order
or resolution of the Regional Trial Court, copies of all
pleadings and documents relevant and pertinent thereto,
and a sworn certification of non-forum shopping as
provided in the Rules of Court.
Upon the filing of the petition and unless otherwise
prescribed by the Court of Appeals, the petitioner shall
pay to the clerk of court of the Court of Appeals
docketing fees and other lawful fees of P3,500.00 and
deposit the sum of P500.00 for costs. Exemption from
payment of docket and other lawful fees and the deposit
for costs may be granted by the Court of Appeals upon a
verified motion setting forth valid grounds therefor. If
the Court of Appeals denies the motion, the petitioner
shall pay the docketing and other lawful fees and deposit
for costs within fifteen days from the notice of the denial.
Rule 19.28. When to file petition. - The petition
must be filed with the Court of Appeals within
fifteen (15) days from notice of the judgment, order
or resolution sought to be annulled or set aside. No

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 84


extension of time to file the petition shall be
allowed.
Rule 19.29. Arbitral tribunal a nominal party in the
petition. - The arbitral tribunal shall only be a
nominal party in the petition for certiorari. As
nominal party, the arbitral tribunal shall not be
required to submit any pleadings or written
submissions to the court. The arbitral tribunal or an
arbitrator may, however, submit such pleadings or
written submissions if the same serves the interest
of justice.
In petitions relating to the recognition and
enforcement of a foreign arbitral award, the arbitral
tribunal shall not be included even as a nominal
party. However, the tribunal may be notified of the
proceedings and furnished with court processes.
Rule 19.30. Court to dismiss petition. - The court
shall dismiss the petition if it fails to comply with
Rules 19.27 and 19.28 above, or upon consideration
of the ground alleged and the legal briefs submitted
by the parties, the petition does not appear to be
prima facie meritorious.

Rule 19.35. Service and enforcement of order or


judgment. - A certified copy of the judgment rendered in
accordance with the last preceding section shall be
served upon the Regional Trial Court concerned in such
manner as the Court of Appeals may direct, and
disobedience thereto shall be punished as contempt.
E. APPEAL BY CERTIORARI TO THE SUPREME
COURT
Rule 19.36. Review discretionary. - A review by the
Supreme Court is not a matter of right, but of sound
judicial discretion, which will be granted only for serious
and compelling reasons resulting in grave prejudice to
the aggrieved party. The following, while neither
controlling nor fully measuring the court's discretion,
indicate the serious and compelling, and necessarily,
restrictive nature of the grounds that will warrant the
exercise of the Supreme Courts discretionary powers,
when the Court of Appeals:
a. Failed to apply the applicable standard or test forjudicial
review prescribed in these Special ADR Rules in arriving
at its decision resulting in substantial prejudice to the
aggrieved party;

Rule 19.31. Order to comment. - If the petition is


sufficient in form and substance to justify such
process, the Court of Appeals shall immediately
issue an order requiring the respondent or
respondents to comment on the petition within a
non-extendible period of fifteen (15) days from
receipt of a copy thereof. Such order shall be served
on the respondents in such manner as the court may
direct, together with a copy of the petition and any
annexes thereto.

b. Erred in upholding a final order or decision despitethe


lack of jurisdiction of the court that rendered such final
order or decision;

Rule 19.32. Arbitration may continue despite


petition for certiorari. - A petition for certiorari to
the court from the action of the appointing
authority or the arbitral tribunal allowed under this
Rule shall not prevent the arbitral tribunal from
continuing the proceedings and rendering its award.
Should the arbitral tribunal continue with the
proceedings, the arbitral proceedings and any
award rendered therein will be subject to the final
outcome of the pending petition for certiorari.

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 Courts 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.

Rule 19.33. Prohibition against injunctions. - The


Court of Appeals shall not, during the pendency of
the proceedings before it, prohibit or enjoin the
commencement of arbitration, the constitution of
the arbitral tribunal, or the continuation of
arbitration.
Rule 19.34. Proceedings after comment is filed. After the comment is filed, or the time for the filing
thereof has expired, the court shall render judgment
granting the relief prayed for or to which the
petitioner is entitled, or denying the same, within a
non-extendible period of fifteen (15) days.

c. Failed to apply any provision, principle, policy orrule


contained in these Special ADR Rules resulting in
substantial prejudice to the aggrieved party; and
d. Committed an error so egregious and harmful to aparty
as to amount to an undeniable excess of jurisdiction.

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
with specificity the nature of such error or abuse of
discretion and the serious prejudice suffered by the
petitioner on account thereof, shall constitute sufficient
ground for the Supreme Court to dismiss outright the
petition.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 85


Rule 19.37. Filing of petition with Supreme Court. A party desiring to appeal by certiorari from a
judgment or final order or resolution of the Court of
Appeals issued pursuant to these Special ADR Rules
may file with the Supreme Court a verified petition
for review on certiorari. The petition shall raise only
questions of law, which must be distinctly set forth.
Rule 19.38. Time for filing; extension. - The petition
shall be filed within fifteen (15) days from notice of
the 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.
On motion duly filed and served, with full payment
of the docket and other lawful fees and the deposit
for costs before the expiration of the reglementary
period, the Supreme Court may for justifiable
reasons grant an extension of thirty (30) days only
within which to file the petition.
Rule 19.39. Docket and other lawful fees; proof of
service of petition. - Unless he has theretofore done
so or unless the Supreme Court orders otherwise,
the petitioner shall pay docket and other lawful fees
to the clerk of court of the Supreme Court of
P3,500.00 and deposit the amount of P500.00 for
costs at the time of the filing of the petition. Proof of
service of a copy thereof on the lower court
concerned and on the adverse party shall be
submitted together with the petition.
Rule 19.40. Contents of petition. - The petition shall
be filed in eighteen (18) copies, with the original
copy intended for the court being indicated as such
by the petitioner, and shall (a) state the full name of
the appealing party as the petitioner and the
adverse party as respondent, without impleading
the lower courts or judges thereof either as
petitioners or respondents; (b) indicate the material
dates showing when notice of the judgment or final
order or resolution subject thereof was received,
when a motion for new trial or reconsideration, if
any, was filed and when notice of the denial thereof
was received; (c) set forth concisely a statement of
the matters involved, and the reasons or arguments
relied on for the allowance of the petition; (d) be
accompanied by a clearly legible duplicate original,
or a certified true copy of the judgment or final
order or resolution certified by the clerk of court of
the court a quo and the requisite number of plain
copies thereof, and such material portions of the
record as would support the petition; and (e)
contain a sworn certification against forum
shopping.
Rule 19.41. Dismissal or denial of petition. - The failure
of the petitioner to comply with any of the foregoing
requirements regarding the payment of the docket and
other lawful fees, deposit for costs, proof of service of the

petition, and the contents of and the documents which


should accompany the petition shall be sufficient ground
for the dismissal thereof.
The Supreme Court may on its own initiative deny the
petition on the ground that the appeal is without merit,
or is prosecuted manifestly for delay, or that the
questions raised therein are too insubstantial to require
consideration.
Rule 19.42. Due course; elevation of records. - If the
petition is given due course, the Supreme Court may
require the elevation of the complete record of the case
or specified parts thereof within fifteen (15) days from
notice.
PART VII
FINAL PROVISIONS
RULE 20: FILING AND DEPOSIT FEES
Rule 20.1. Filing fee in petitions or counter-petitions to
confirm or enforce, vacate or set aside arbitral award or
for the enforcement of a mediated settlement agreement.
- The filing fee for filing a petition to confirm or enforce,
vacate or set aside an arbitral award in a domestic
arbitration or in an international commercial
arbitration, or enforce a mediated settlement agreement
shall be as follows:
PhP 10,000.00 - if the award does not exceed PhP
1,000,000.00
PhP 20,000.00 - if the award does not exceed PhP
20,000,000.00
PhP 30,000.00 - if the award does not exceed PhP
50,000,000.00
PhP 40,000.00 - if the award does not exceed PhP
100,000,000.00
PhP 50,000.00
100,000,000.00

if

the

award

exceeds

PhP

The minimal filing fee payable in "all other actions not


involving property" shall be paid by the petitioner
seeking to enforce foreign arbitral awards under the New
York Convention in the Philippines.
Rule 20.2. Filing fee for action to enforce as a
counterpetition. - A petition to enforce an arbitral award
in a domestic arbitration or in an international
commercial arbitration submitted as a petition to
enforce and/or recognize an award in opposition to a
timely petition to vacate or set aside the arbitral award
shall require the payment of the filing fees prescribed in
Rule 20.1 above.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 86


Rule 20.3. Deposit fee for mediated settlement
agreements. - Any party to a mediated settlement
agreement who deposits it with the clerk of court
shall pay a deposit fee of P500.00.

shall include the reasonable attorneys fees of the


prevailing party against the unsuccessful party. The
court shall determine the reasonableness of the claim for
attorneys fees.

Rule 20.4. Filing fee for other proceedings. - The


filing fee for the filing of any other proceedings,
including applications for interim relief, as
authorized under these Special Rules not covered
under any of the foregoing provisions, shall be
P10,000.00.

Rule 21.5. Bill of Costs. - Unless otherwise agreed upon


by the parties in writing, at the time the case is
submitted to the court for decision, the party praying for
recognition and enforcement or for setting aside an
arbitral award shall submit a statement under oath
confirming the costs he has incurred only in the
proceedings for such recognition and enforcement or
setting-aside. The costs shall include attorneys fees the
party has paid or is committed to pay to his counsel of
record.

RULE 21: COSTS


Rule 21.1. Costs. - The costs of the ADR proceedings
shall be borne by the parties equally unless
otherwise agreed upon or directed by the arbitrator
or arbitral tribunal.
Rule 21.2. On the dismissal of a petition against a
ruling of the arbitral tribunal on a preliminary
question upholding its jurisdiction. - If the Regional
Trial Court dismisses the petition against the ruling
of the arbitral tribunal on a preliminary question
upholding its jurisdiction, it shall also order the
petitioner to pay the respondent all reasonable costs
and expenses incurred in opposing the petition.
"Costs" shall include reasonable attorneys fees. The
court shall award costs upon application of the
respondent after the petition is denied and the court
finds, based on proof submitted by respondent, that
the amount of costs incurred is reasonable.
Rule 21.3. On recognition and enforcement of a
foreign arbitral award. - At the time the case is
submitted to the court for decision, the party
praying for recognition and enforcement of a
foreign arbitral award shall submit a statement
under oath confirming the costs he has incurred
only in the proceedings in the Philippines for such
recognition and enforcement or setting-aside. The
costs shall include attorneys fees the party has paid
or is committed to pay to his counsel of record.

The prevailing party shall be entitled to an award of


costs, which shall include reasonable attorneys fees of
the prevailing party against the unsuccessful party. The
court shall determine the reasonableness of the claim for
attorneys fees.
Rule 21.6. Governments exemption from payment of
fees. - The Republic of the Philippines, its agencies and
instrumentalities are exempt from paying legal fees
provided in these Special ADR Rules. Local governments
and government controlled corporation with or with or
without independent charters are not exempt from
paying such fees.
RULE 22: APPLICABILITY OF THE RULES OF COURT
Rule 22.1. Applicability of Rules of Court. - The
provisions of the Rules of Court that are applicable to the
proceedings enumerated in Rule 1.1 of these Special ADR
Rules have either been included and incorporated in
these Special ADR Rules or specifically referred to
herein.
In connection with the above proceedings, the Rules of
Evidence shall be liberally construed to achieve the
objectives of the Special ADR Rules.
RULE 23: SEPARABILITY

The prevailing party shall be entitled to an award of


costs which shall include the reasonable attorneys
fees of the prevailing party against the unsuccessful
party. The court shall determine the reasonableness
of the claim for attorneys fees.
Rule 21.4. Costs. - At the time the case is submitted
to the court for decision, the party praying for
confirmation or vacation of an arbitral award shall
submit a statement under oath confirming the costs
he has incurred only in the proceedings for
confirmation or vacation of an arbitral award. The
costs shall include the attorneys fees the party has
paid or is committed to pay to his counsel of record.
The prevailing party shall be entitled to an award of costs
with respect to the proceedings before the court, which

Rule 23.1. Separability Clause. - If, for any reason, any


part of the Special ADR Rules shall be held
unconstitutional or invalid, other Rules or provisions
hereof which are not affected thereby, shall continue to
be in full force and effect.
RULE 24: TRANSITORY PROVISIONS
Rule 24.1. Transitory Provision. - Considering its
procedural character, the Special ADR Rules shall
be applicable to all pending arbitration, mediation
or other ADR forms covered by the ADR Act, unless
the parties agree otherwise. The Special ADR Rules,
however, may not prejudice or impair vested rights
in accordance with law.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 87


RULE 25: ONLINE DISPUTE RESOLUTION
Rule 25.1. Applicability of the Special ADR Rules to
Online Dispute Resolution. - Whenever applicable
and appropriate, the Special ADR Rules shall
govern the procedure for matters brought before the
court involving Online Dispute Resolution.
Rule 25.2. Scope of Online Dispute Resolution.
Online Dispute Resolution shall refer to all
electronic forms of ADR including the use of the
internet and other web or computed based
technologies for facilitating ADR.
RULE 26: EFFECTIVITY
Rule 26.1. Effectivity. - The Special ADR Rules shall
take effect fifteen (15) days after its complete
publication in two (2) newspapers of general
circulation.

RULE A: GUIDELINES FOR THE RESOLUTION


OF ISSUES RELATED TO ARBITRATION OF
LOANS SECURED BY COLLATERAL
Rule A.1. Applicability of an arbitration agreement
in a contract of loan applies to the accessory
contract securing the loan. - An arbitration
agreement in a contract of loan extends to and
covers the accessory contract securing the loan such
as a pledge or a mortgage executed by the borrower
in favor of the lender under that contract of loan.
Rule A.2. Foreclosure of pledge or extra-judicial
foreclosure of mortgage not precluded by
arbitration. The commencement of the arbitral
proceeding under the contract of loan containing an
arbitration agreement shall not preclude the lender
from availing himself of the right to obtain
satisfaction of the loan under the accessory contract
by foreclosure of the thing pledged or by extrajudicial foreclosure of the collateral under the real
estate mortgage in accordance with Act No. 3135.
The lender may likewise institute foreclosure
proceedings against the collateral securing the loan
prior to the commencement of the arbitral
proceeding.
By agreeing to refer any dispute under the contract of
loan to arbitration, the lender who is secured by an
accessory contract of real estate mortgage shall be
deemed to have waived his right to obtain satisfaction of
the loan by judicial foreclosure.
Rule A.3. Remedy of the borrower against an action
taken by the lender against the collateral before the
constitution of the arbitral tribunal. - The borrower
providing security for the payment of his loan who is

aggrieved by the action taken by the lender against the


collateral securing the loan may, if such action against
the collateral is taken before the arbitral tribunal is
constituted, apply with the appropriate court for interim
relief against any such action of the lender. Such interim
relief may be obtained only in a special proceeding for
that purpose, against the action taken by the lender
against the collateral, pending the constitution of the
arbitral tribunal. Any determination made by the court
in that special proceeding pertaining to the merits of the
controversy, including the right of the lender to proceed
against the collateral, shall be only provisional in nature.
After the arbitral tribunal is constituted, the court shall
stay its proceedings and defer to the jurisdiction of the
arbitral tribunal over the entire controversy including
any question regarding the right of the lender to proceed
against the collateral.

Rule A.4. Remedy of borrower against action taken by


the lender against the collateral after the arbitral
tribunal has been constituted. - After the arbitral
tribunal is constituted, the borrower providing security
for the payment of his loan who is aggrieved by the
action taken by the lender against the collateral securing
the loan may apply to the arbitral tribunal for relief,
including a claim for damages, against such action of the
lender. An application to the court may also be made by
the borrower against any action taken by the lender
against the collateral securing the loan but only if the
arbitral tribunal cannot act effectively to prevent an
irreparable injury to the rights of such borrower during
the pendency of the arbitral proceeding.
An arbitration agreement in a contract of loan precludes
the borrower therein providing security for the loan from
filing and/or proceeding with any action in court to
prevent the lender from foreclosing the pledge or extrajudicially foreclosing the mortgage. If any such action is
filed in court, the lender shall have the right provided in
the Special ADR Rules to have such action stayed on
account of the arbitration agreement.
Rule A.5. Relief that may be granted by the arbitral
tribunal. - The arbitral tribunal, in aid of the arbitral
proceeding before it, may upon submission of
adequate security, suspend or enjoin the lender
from proceeding against the collateral securing the
loan pending final determination by the arbitral
tribunal of the dispute brought to it for decision
under such contract of loan.
The arbitral tribunal shall have the authority to
resolve the issue of the validity of the foreclosure of
the thing pledged or of the extrajudicial foreclosure
of the collateral under the real estate mortgage if the
same has not yet been foreclosed or confirm the
validity of such foreclosure if made before the
rendition of the arbitral award and had not been
enjoined.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 88


Rule A.6. Arbitration involving a third-party
provider of security. - An arbitration agreement
contained in a contract of loan between the lender
and the borrower extends to and covers an
accessory contract securing the loan, such as a
pledge, mortgage, guaranty or suretyship, executed
by a person other than the borrower only if such
third-party securing the loan has agreed in the
accessory contract, either directly or by reference, to
be bound by such arbitration agreement.
Unless otherwise expressly agreed upon by the
thirdparty securing the loan, his agreement to be
bound by the arbitration agreement in the contract
of loan shall pertain to disputes arising from or in
connection with the relationship between the lender
and the borrower as well as the relationship
between the lender and such third-party including
the right of the lender to proceed against the
collateral securing the loan, but shall exclude
disputes pertaining to the relationship exclusively
between the borrower and the provider of security
such as that involving a claim by the provider of
security for indemnification against the borrower.
In this multi-party arbitration among the lender, the
borrower and the third party securing the loan, the
parties may agree to submit to arbitration before a
sole arbitrator or a panel of three arbitrators to be
appointed either by an Appointing Authority
designated by the parties in the arbitration
agreement or by a default Appointing Authority
under the law.
In default of an agreement on the manner of
appointing arbitrators or of constituting the arbitral
tribunal in such multi-party arbitration, the dispute
shall be resolved by a panel of three arbitrators to be
designated by the Appointing Authority under the
law. But even in default of an agreement on the
manner of appointing an arbitrator or constituting
an arbitral tribunal in a multi-party arbitration, if
the borrower and the third party securing the loan
agree to designate a common arbitrator, arbitration
shall be decided by a panel of three arbitrators: one
to be designated by the lender; the other to be
designated jointly by the borrower and the provider
of security who have agreed to designate the same
arbitrator; and a third arbitrator who shall serve as
the chairperson of the arbitral panel to be
designated by the two party-designated arbitrators.

3.5 DEPARTMENT CIRCULAR NO.


98 IMPLEMENTING
RULES AND
REGULATIONS OF THE ALTERNATIVE
DISPUTE
RESOLUTION ACT OF 2004.

Whereas, pursuant to Section 52 of Republic Act No.


9285, otherwise known as the "Alternative Dispute
Resolution Act of 2004" (ADR Act"), the Secretary of
Justice is directed to convene a Committee for the
formulation of the appropriate rules and regulations
necessary for the implementation of the ADR Act;
Whereas,
the
committee
was
composed
of
representatives from the Department of Justice, the
Department of Trade and Industry, the Department of
the Interior and Local Government, the President of the
Integrated Bar of the Philippines, a representative from
the ADR organizations.
Wherefore, the following rules and regulations are
hereby adopted as the Implementing Rules and
Regulations of Republic Act no.9285.
IMPLEMENTING RULES AND REGULATIONS OF
THE ALTERNATIVE DISPUTE RESOLUTION ACT
OF 2004 (R.A No. 9285)
Pursuant to Section 52 of republic Act No. 9285,
otherwise known as the alternative Dispute Resolution
Act of 2004" ("ADR Act"), the following Rules and
Regulations (these "Rules") are hereby promulgated to
implement the provisions of the ADR Act:
Chapter 1
GENERAL PROVISIONS
RULE 1 Policy and Application
Article 1.1 Purpose. These Rules are promulgated to
prescribe the procedures and guidelines for the
implementation of the ADR Act.
Article 1.2 Declaration of policy. It is the policy of the
State:
(a) To promote party autonomy in the resolution
ofdisputes or the freedom of the parties to make
their own arrangements to resolve their disputes;
(b) To encourage and actively promote the use
ofAlternative Dispute Resolution ("ADR") as an
important means to achieve speedy and impartial
justice and declog court dockets;
(c) To provide means for the use of ADR as an
efficienttool and an alternative procedure for the
resolution of appropriate cases; and
(d) To enlist active private sector participation in
thesettlement of disputes through ADR
Article 1.3 Exception to the Application of the ADR
Act. The provisions of the ADR Act shall not apply
to the resolution or settlement of the following:

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 89


(a) labor disputes covered by Presidential Decree
No.442, otherwise known as the "Labor Code of
the Philippines, as a amended", and its
Implementing
Rules and Regulations;
(b) the civil status of persons;

(d) any ground for legal separation;


(e) the jurisdiction of courts;
(f) future legitimate;
(g) criminal liability;
by

3. Arbitration means a voluntary dispute resolutionprocess


in which one or more arbitrators, appointed in
accordance with the agreement of the parties or these
Rules, resolve a dispute by rendering an award.
4. Arbitration Agreement means agreement by theparties 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.
An arbitration agreement may be in the form of an
arbitration clause in a contract or in the form of a
separate agreement.

(c) the validity of marriage;

(h) those disputes which


becompromised; and

neutral evaluation, mini-trial or any combination


thereof.

law

cannot

(i) disputes referred to court-annexed mediation.


Article 1.4. Electronic Signature and E-Commerce
Act. The provisions of the Electronic Signature and
ECommerce Act, and its implementing Rules and
Regulations
shall
apply
to
proceedings
contemplated in the ADR Act.
Article 1.5. Liability of ADR Providers/Practitioners.
The ADR provides /practitioners shall have the
same civil liability for acts done in the performance
of their official duties as that of public officers as
provided in Section 38 (1), Chapter 9, Book 1 of the
Administrative Code of 1987, upon a clear showing
of bad faith, malice or gross negligence.
RULE 2- Definition of Terms
Article 1.6 Definition of Terms. For purposes of these
Rules, the terms shall be defined as follows:
A. Terms Applicable to All Chapters

1. ADR
Provider
means
the
Institutions
or
personsaccredited as mediators, conciliators, arbitrators,
neutral evaluators or any person exercising similar
functions in any Alternative dispute resolution system.
This is without prejudice to the rights of the parties to
choose non-accredited individuals to act as mediator,
conciliator, arbitrator or neutral evaluator of their
dispute.

2. Alternative
Dispute
Resolution
System
means
anyprocess or procedures 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, as
defined in the ADR Act, in which neutral third person
participates to assist in the resolution of issues,
Including arbitration, mediation, conciliation, early

5. Authenticate means to sign, execute, adopt a symbolor


encrypt a record or establish the authenticity of a record
or term.
6. Award means any partial or final decision by anarbitrator
in resolving the issue or controversy.
7. Confidential Information means any information,relative
to the subject of mediation or arbitration, expressly
intended by the source not to disclosed, or obtained
under circumstances that would create reasonable
expectation on behalf of the source that the information
shall not be disclosed. It shall include:
(a) communication, oral or written, made in a
disputeresolution
proceeding,
including
any
memoranda, notes or work product of the neutral party
or non-party participant;
(b) an oral or written statement made or which occursduring
mediation or for purposes of considering, conducting,
participating, initiating, continuing or reconvening
mediation or retaining a mediator; and
(c) pleadings, motions, manifestations, witnessstatements,
reports filed or submitted in arbitration or for expert
evaluation.
8. Counsel means a lawyer duly admitted to
thepractice of law in the Philippines and in good
standing who represents a party in any ADR
process.
9. Court means Regional Trial Court Except insofar
asotherwise defined under Model Law.
10. Government
Agency
means
any
governmentalentity, office or officer, other than a
court that is vested by law with quasi-judicial power
or the power to resolve or adjudicate disputes
involving the government, its agencies and
instrumentalities or private persons.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 90


11. Model
Law
means
the
Model
on
InternationalCommercial Arbitration adopted by
the United Nations Commission on International
Trade Law on 21 June 1985.

C. Terms Applicable to the Chapter on International


Commercial Arbitration
1.

12. Proceedings means judicial, administrative or


otheradjudicative process, including related prehearing or post hearing motions, conferences and
discovery.
13. Record means information written on a
tangiblemedium or stored in an electronic or other
similar medium, retrievable in a perceivable form.
14. Roster means a list of persons qualified to
provideADR services as neutrals or to serve as
arbitrators.
15. Special ADR Rules means the Special Rules ofCourt
on Alternative Dispute Resolution issued by the
Supreme Court on September 1, 2009.
B. Terms and Applicable to the Chapter Mediation
1.

Ad hoc Mediation means any mediation other


thaninstitutional or court-annexed.

2. Institutional Mediation means any mediationprocess


conducted under the rules of a mediation institution.
3. Court-Annexed
Mediation
means
mediation
processconducted under the auspices of the court and
in accordance with Supreme Court approved
guidelines, after such court has acquired jurisdiction
of the dispute.
4. Court-Referred
Mediation
means
mediation
orderedby a court to be conducted in accordance with
the agreement of the parties when an action is
prematurely commenced in violation of such
agreement.

2. Arbitral Tribunal (under the Model Law) means


asole arbitrator or a panel of arbitrators.
3. Arbitration means any arbitration whether or
notadministered by a permanent arbitration
institution.
4. Commercial Arbitration means an arbitration
thatcovers matters arising from all relationships of a
commercial nature, whether contractual or not.
Relationships of a commercial nature include, but
are not limited to, the following commercial
transactions: 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.
5.

5.

Certified Mediator means a mediator certified by


theOffice for ADR as having successfully completed its
regular professional training program.

6. Mediation means a voluntary process in which


amediator, selected by the disputing party voluntary
agreement regarding a dispute.
7.

Mediation Party means a person who participates ina


mediation and whose consent is necessary to resolve
the dispute.

Appointing Authority as used in the Model Law


shallmean the person or institution named in the
arbitration agreement as the appointing authority;
or the regular arbitration institution under whose
rules the arbitration is agreed to be conducted.
Where the parties have agreed to submit their
dispute to institutional arbitration rules and unless
they have agreed to a different procedure, they shall
be deemed to have agreed to the procedure under
such arbitration rules for the selection and
appointment of arbitrators. In ad hoc arbitration,
the default appointment of an arbitrator shall be
made by the National President of the Integrated
Bar of the Philippines (IBP) or his /her duly
authorized representative.

Convention Award means a foreign arbitral award


ina Convention State.

6. Convention State means a state that is a member


ofthe New York Convention.
7.

Court (under the Model Law) means a body or


organof the judicial system of the Philippines (i.e.,
the Regional Trial Court, Court of Appeals and
Supreme Court).

8. International
Arbitration
arbitrationwhere:

means

an

8. Mediator means a person who conducts mediation.


9. Non-Party Participant means a person, other than
aparty or mediator, who participates in a mediation
proceeding as a witness, resource person or expert.

(a) the parties to an arbitration agreement have, at


thetime of the conclusion of that agreement, their
places of business in different states; or

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 91


(b) one of the following places is situated outside
thePhilippines in which the parties have their places
of business:

Appointed in accordance with the agreement of the


parties or these Rules, resolve a dispute by rendering
an award.

(i) the place of arbitration if determined in, orpursuant


to , the arbitration agreement;

5.

Arbitral Tribunal means a sole arbitrator or a


panel,board or committee of arbitrators.

(ii) any place where a substantial part of theobligations


of the commercial relationship is to be performed or
the place with the subject matter of the dispute is
most closely connected; or

6. Claimant means a person/s with a claim


againstanother and who commence/s arbitration
against the latter.
7.

(c) the parties have expressly agreed that the subject


matter of the arbitration agreement relates to more
than one country.
For this purpose:
(a) if a party has more than one place of business,
theplace of business is that which has the closest
relationship to the arbitration agreement;
(b) if a party does not have a place of business,reference
is to be made to his/her habitual residence.
9. New York Convention means the United
NationsConvention of the Recognition and
Enforcement of Foreign Arbitral Awards approved
in 1958 and ratified by the Philippine Senate under
Senate Resolution No.71.
10. Non-Convention
Award
means
a
foreign
arbitralward made in a state, which is not a
Convention State.
11. Non-Convention State means a state that is not
amember of the New York Convention.
D. Terms Applicable to the Chapter on Domestic
Arbitration
1.

Ad hoc Arbitration means arbitration administeredby


an arbitrator and/or the parties themselves. An
arbitration administered by an institution shall be
regarded as ad hoc arbitration if such institution is not
a permanent or regular arbitration institution in the
Philippines.

Court means, unless otherwise specified in theseRules,


a Regional Trial Court.

8. Day means calendar day.


9. Domestic Arbitration means arbitration that is
notinternational as defined in Article 1(3) of the Mode
Law.
10. Institutional
Arbitration
means
arbitrationadministered by an entity, which is
registered as a domestic corporation with the
Securities and Exchange Commission (SEC) and
engaged in. among others, arbitration of disputes in
the Philippines on a regular and permanent basis.
11. Request for Appointment means the letter-requestto
the appointing authority of either or both parties for
the appointment of arbitrator/s or of the two
arbitrators first appointed by the parties for the
appointment of the third member of an arbitral
tribunal.
12. Representative is a person duly authorized inwriting
by a party to a dispute, who could be a counsel, a
person in his/her employ or any other person of
his/her choice, duly authorized to represent said party
in the arbitration proceedings.
13. Respondent means the person/s against whom
theclaimant commence/s arbitration.
14. Written communication means the pleading,motion,
manifestation, notice, order, award and any other
document or paper submitted or filed with the arbitral
tribunal or delivered to a party.
E. Terms Applicable to the Chapter on Other ADR
Forms

2. Appointing Authority in Ad Hoc Arbitration means,in


the absence of an agreement, the National President of
the IBP or his/her duly authorized representative.
1.
3. Appointing Authority Guidelines means the set ofrules
approved or adopted by an appointing authority for
the making of a Request for Appointment, Challenge,
termination of the Mandate of Arbitrator/s and for
taking action thereon.
4. Arbitration
means
a
voluntary
dispute
resolutionprocess in which one or more arbitrators,

Early Neutral Evaluation means an ADR


processwherein parties and their lawyers are
brought together early in the pre-trial phase to
present summaries of their cases and to receive a
non-binding assessment by an experienced neutral
person, with expertise in the subject matter or
substance of the dispute.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 92


2. Mediation-Arbitration or Med-Arb is a twostepdispute resolution process involving mediation
and then followed by arbitration.
3. Mini-trial
means
a
structured
dispute
resolutionmethod in which the merits of a case are
argued before a panel comprising of senior
decision-makers, with or without the presence of a
neutral third person, before which the parties seek a
negotiated settlement.
CHAPTER 2
THE OFFICE
RESOLUTION

FOR

ALTERNATIVE

(g) To accept donations, grants and other assistancefrom


local and foreign sources; and
(h) To exercise such other powers as may be necessaryand
proper to carry into effect the provisions of the ADR Act.
Article 2.3. Functions of the OADR. The OADR shall
have the following functions;
(a) To promote, develop and expand the use of ADR inthe
private and public sectors through information,
education and communication;

DISPUTE

RULE 1- Office for Alternative Dispute Resolution


(OADR)
Article 2.1. Establishment of the Office for
Alternative Dispute Resolution. There is hereby
established the OADR as an agency attached to the
Department of Justice. It shall have a Secretariat
and shall be headed by an Executive Director, who
shall be appointed by the President of the
Philippines, taking into consideration the
recommendation of the Secretary of Justice.
Article 2.2. Powers of the OADR. The OADR shall
have the following powers;
(a) To act as appointing authority of mediators
andarbitrators when the parties agree in writing
that it shall be empowered to do so;
(b) To conduct seminars, symposia, conferences
andother public fora and publish proceedings of
said activities and relevant materials/information
that would promote, develop and expand the use of
ADR; (c) To establish an ADR library or resource
center where ADR laws, rules and regulation,
jurisprudence, books, articles and other information
about ADR in the Philippines and elsewhere may be
stored and accessed;

(d) To
establish
training
programs
for
ADRproviders/practitioners, both in the public and
private sectors; and to undertake periodic and
continuing training programs for arbitration and
mediation and charge fees on participants. It may do so
in conjunction with or in cooperation with the IBP,
private ADR organizations, and local and foreign
government offices and agencies and international
organizations;

(e) To certify those who have successfully completedthe


regular professional training programs provided by the
OADR;

(f) To charge for services rendered such as, amongothers,


for training and certifications of ADR providers;

(b) To monitor, study and evaluate the use of ADR bythe


private and public sectors for purposes of, among others,
policy formulation;
(c) To recommend to Congress needful statutorychanges to
develop, strengthen and improve ADR practices in
accordance with international professional standards;
(d) To make studies on and provide linkages for
thedevelopment, implementation, monitoring and
evaluation of government and private ADR programs
and secure information about their respective
administrative rules/procedures, problems
encountered and how they were resolved;
(e) To compile and publish a list or roster of
ADRproviders/practitioners, who have undergone
training by the OADR, or by such training
providers/institutions recognized or certified by the
OADR as performing functions in any ADR system.
The list or roster shall include the addresses, contact
numbers, e-mail addresses, ADR service/s rendered
(e.g. arbitration, mediation) and experience in ADR
of the ADR providers/practitioners;
(f) To compile a list or roster of foreign or internationalADR
providers/practitioners. The list or roster shall include
the addresses, contact numbers, e-mail addresses, ADR
service/s rendered (e.g. arbitration, mediation) and
experience in ADR of the ADR
providers/practitioners; and
(g) To perform such other functions as may beassigned to it.
Article 2.4. Divisions of the OADR. The OADR shall
have the following staff and service divisions,
among others:
(a) Secretariat shall provide necessary support
anddischarge such other functions and duties as
may be directed by the Executive Director.
(b) Public information and Promotion Division
shallbe charged with the dissemination of
information, the promotion of the importance and
public acceptance of mediation, conciliation,

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 93


arbitration or any combination thereof and other
ADR forms as a means of achieving speedy and
efficient means of resolving all disputes and to help
in the promotion, development and expansion of
the use of ADR.
(c) Training Division shall be charged with
theformulation of effective standards for the
training of ADR practitioners; conduct of training in
accordance with such standards; issuance of
certifications of training to ADR practitioners and
ADR service providers who have undergone the
professional training provided by the OADR; and
the
coordination
of
the
development,
implementation, monitoring and evaluation of
government and private sector ADR programs.
(d) Records and Library Division shall be
chargedwith the establishment and maintenance of
a central repository of ADR laws, rules and
regulations, jurisprudence, books, articles, and
other information about ADR in the Philippines and
elsewhere.

These Rules shall also apply to all cases pending before


an administrative or quasi-judicial agency that are
subsequently agreed upon by the parties to be referred to
mediation.
Article 3.2. Statement of Policy. In applying and
construing the provisions of these Rules, consideration
must be given to the need to promote candor of parties
and mediators through confidentiality of the mediation
process, the policy of fostering prompt, economical and
amicable resolution of disputes in accordance with
principles of integrity of determination by the parties
and the policy that the decision-making authority in the
mediation process rests with the parties.
A party may petition a court before which an action is
prematurely brought in a matter which is the subject of a
mediation agreement, if at least one party so requests,
not later than the pre-trial conference or upon the
request of both parties thereafter, to refer the parties to
mediation in accordance with the agreement of the
parties.
RULE 2- Selection of a Mediator

RULE 2 The Advisory Council


Article 2.5. Composition of the Advisory Council.
There is also created an Advisory Council composed
of a representative from each of the following:

Article 3.3. Freedom to Select mediator. The parties have


the freedom to select mediator. The parties may request
the OADR to provide them with a list or roster or the
resumes of its certified mediators. The OADR may be
requested to inform the mediator of his/her selection.

(a) Mediation profession;


(b) Arbitration profession;
(c) ADR organizations;
(d) IBP; and
(e) Academe.
The members of the Council, who shall be appointed by
the Secretary of Justice upon the recommendation of the
OADR Executive Director, shall choose a Chairman from
among themselves.
Article 2.6. Role of the Advisory Council. The Advisory
Council shall advise the Executive Director on policy,
operational and other relevant matters. The Council
shall meet regularly, at least once every two (2) months,
or upon call by the Executive Director.

Article 3.4. Replacement of Mediator. If the


mediator selected is unable to act as such for any
reason, the parties may, upon being informed of
such fact, select another mediator.
Article 3.5. Refusal or Withdrawal of Mediator. A
mediator may refuse from acting as such, withdraw
or may be compelled to withdraw from mediator
proceedings under the following circumstances:
(a) If any of the parties so requests the mediator
towithdraw;
(b) The
mediator
does
not
have
the
qualifications,training and experience to enable
him/her to meet the reasonable expectations of
the parties;
(c) Where the mediator's impartially is in question;

CHAPTER 3
MEDIATION

(d) If continuation of the process would violate


anyethical standards;

RULE 1 General Provisions

(e) If the safety of any of the parties would


bejeopardized;

Article 3.1. Scope of Application. These Rules apply to


voluntary mediation, whether ad hoc or institutional,
other than court-annexed mediation and only in default
of an agreement of the parties on the applicable rules.

(f) If the mediator


effectiveservices;

is

unable

to

provide

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 94


(g) In case of conflict of interest; and
(h) In any of the following instances, if the mediator
issatisfied that:
(i) one or more of the parties is/are not acting in
goodfaith;
(ii) the parties' agreement would be illegal or involvethe
commission of a crime;
(iii) continuing the dispute resolution would give riseto
an appearance of impropriety;
(iv) continuing with the process would causesignificant
harm to a non-participating person or to the public;
or
(v) continuing discussion would not be in the
bestinterest of the parties, their minor children or
the dispute resolution process.
RULE 3 Ethical Conduct of a Mediator
Article 3.6 Competence. It is not required that a
mediator shall have special qualifications by
background or profession unless the special
qualifications of a mediator shall :

(a) maintain the continually upgrade his/herprofessional


competence in mediation skills;

(b) ensure
that
his/her
qualifications,
training
andexperience are known to and accepted by the parties;
and

(c) serve only when his/her qualifications, training


andexperience enable him/her to meet the reasonable
expectations of the parties and shall not hold
himself/herself out or give the impression that he/she
does not have.
Upon the request of a mediation party, an individual who
is requested to serve as mediator shall disclose his/her
qualifications to mediate a dispute.
Article 3.7 Impartially. A mediator shall maintain
impartiality.
(a) Before accepting a mediation, an individual who is
requested to serve as a mediator shall:

(i) make an inquiry that is reasonable under


thecircumstances to determine whether there are known
facts that a reasonable individual would consider likely
to affect the impartiality of the mediator, including a
financial or personal interest in the outcome of the
mediation and any existing or past relationship with a
party of foreseeable participant in the mediation; and

(ii) disclose to the mediation parties any such factknown or


learned as soon as practical before accepting a
mediation.
(b) If a mediator learns any fact described in paragraph
(a) of this Article after accepting a mediation, the
mediator shall disclose it as soon as practicable to the
mediation parties.
Article 3.8. Confidentiality. A mediator shall keep in
utmost confidence all confidential information obtained
in the course of the mediation process.
A mediator shall discuss issues of confidentiality and the
extent of confidentiality provided in any private sessions
or caucuses that the mediator holds with a party.
Article 3.9. Consent and Self-Determination. (a) A
mediator shall make reasonable efforts to ensure that
each party understands the nature and character of the
mediation proceeding including private caucuses, the
issues, the available options, the alternatives to
nonsettlement, and that each party is free and able to
make whatever choices he/she desires regarding
participation in mediation generally and regarding
specific settlement options.
If a mediator believes that a party, who is not
represented by counsel, is unable to understand, or
fully participate, the mediation proceedings for any
reason, a mediator may either:
(i) limit the scope of the mediation proceedings in
amanner consistent with the party's ability to
participate, and/or recommend that the party
obtain appropriate assistance in order to
continue with the process; or
(ii) terminate the mediation proceedings.
(b) A mediator shall recognize and put in mind that
the primary responsibility of resolving a dispute and
the shaping of a voluntary and uncoerced settlement
rests with the parties.
Article 3.10. Separation of Mediation from
Counseling and Legal Advice. (a) Except in
evaluative mediation or when the parties so request,
a mediator shall:
(i) refrain from giving legal or technical advice
andotherwise engaging in counseling or advocacy;
and
(ii) abstain from expressing his/her personal opinionon
the rights and duties of the parties and the merits of
any proposal made.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 95


(b) Where appropriate and where either or both
parties are not represented by counsel, a mediator
shall;

other lawyer in working together toward the common


goal of helping their clients resolve their differences to
their mutual advantage.

(i) recommend
that
the
parties
seek
outsideprofessional advice to help them make
informed decision and to understand the
implication of any proposal; and

(b) The lawyer shall encourage and assist his/her clientto


actively participate in positive discussions and cooperate
in crafting an agreement to resolve their dispute.

(ii) suggest that the parties seek independent


legaland/or technical advice before a settlement
agreement is signed.
(c) without the consent of al parties, and for a
reasonable time under the particular circumstance,
a mediator who also practices another profession
shall not establish a professional relationship in that
other profession with one of the parties, or any
person or entity, in a substantially and factually
related matter.
Article 3.11. Charging of Fees. (a) A mediator shall
fully disclose and explain to the parties the basis of
cost, fees and charges.

(b) The mediator who withdraws from the mediationshall


return to the parties any unearned fee and unused
deposit.

(c) A mediator shall not enter into a fee agreement,which is


contingent upon the results of the mediation or the
amount of the settlement.
Article 3.12 Promotion of Respect and Control of Abuse
of Process. The mediatorcle 3.12 Promotion of Respect
and Control of Abuse of Process. of the settle mentcost
ablish a professional relationship I shall encourage
mutual respect between the parties, and shall take
reasonable steps, subject to the principle of selfdetermination, to limit abuses of the mediation process.
Article 3.13. Solicitation or Acceptance of any Gift. No
mediator or any member of a mediators immediate
family or his/her agent shall request, solicit, receive or
accept any gift or any type of compensation other than
the agreed fee and expenses in connection with any
matter coming before the mediator.
RULE 4 Role of Parties and their Counsels
Article 3.14. Designation of Counsel or Any Person to
Assist Mediation. Except as otherwise provided by the
ADR Act or by these Rules, a party may designate a
lawyer or any other person to provide assistance in the
mediation. A waiver of this right shall be made in writing
by the party waiving it. A waiver of participation or legal
representation may be rescinded at any time.
Article 3.15. Role of Counsel. (a) The lawyer shall view
his/her role in the mediation as a collaborator with the

(c) The lawyer must assist his/her client tocomprehend and


appreciate the mediation process and its benefits, as well
as the clients greater personal responsibility for the
success of mediation in resolving the dispute.
(d) In preparing for participation in mediation, thelawyer
shall confer and discuss with his/her client the following:
(i) The mediation process as essentially a
negotiationbetween the parties assisted by their
respective lawyers, and facilitated by a mediator,
stressing it its difference from litigation, its
advantages and benefits, the clients heightened
role in mediation and responsibility for its
success and explaining the role of the lawyer in
mediation proceedings,
(ii) The substance of the upcoming mediation such
as;
(aa)The substantive issues involved in the dispute
andtheir prioritization in terms of importance to
his/her clients real interests and needs.
(ab) The study of other partys position in relation
tothe issues with a view to understanding the
underlying interests, fears, concerns and needs;
(ac)The information or facts to be gathered or
soughtfrom the other side or to be exchanged that
are necessary for informed decision-making;
(ad) The possible options for settlement but
stressingthe need to be open-minded about other
possibilities; and
(ae)The best, worst and most likely alternative to anonnegotiated settlement.
Article 3.16. Other Matters which the Counsel shall
do to Assist Mediation. The lawyer;
(a) shall give support to the mediator so that
his/herclient will fully understand the rules and
processes of mediation;
(b) shall impress upon his/her client the importance
ofspeaking for himself/herself and taking
responsibility for making decisions during the
negotiations within the mediation process.;

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 96


(c) may ask for a recess in order to give advice
orsuggestions to his/her client in private, if he/she
perceives that his/her client is unable to bargain
effectively;
(d) shall assist his/her client and the mediator put
inwriting the terms of the settlement agreement
that the parties have entered into. That lawyers
shall see to it that the terms of the settlement
agreement are not contrary to law, morals, good
customs, public order or public policy.
RULE 5 Conduct of Mediation
Article 3.17. Articles to be Considered in the
Conduct of Mediation. (a) The mediator shall not
make untruthful or exaggerated claims about the
dispute resolution process, its costs and benefits, its
outcome or the mediators qualifications and
abilities during the entire mediation process.

(b) The mediator shall held the parties reach asatisfactory


resolution to their dispute but has no authority to
impose a settlement on the parties.

(c) The parties shall personally appear for mediationand


may be assisted by a lawyer. A party maybe represented
by an agent who must have full authority to negotiate
and settle the dispute.

(d) The mediation process shall, in general, consists ofthe


following stages:
(i) opening statement of the mediator
(ii) individual narration by the parties;
(iii) exchange by the parties;
(iv) summary of issues;
(v) generation and evaluation of options; and
(vi) closure
(e) The mediation proceeding shall be held in
private.Person, other than the parties, their
representatives and mediator, may attend only with
the consent of all the parties,
(f) the mediation shall be closed:
(i) by the execution of a settlement agreement by
theparties;
(ii) by the withdrawal of any party from mediation; and
(iii) by the written declaration of the mediator that
anyfurther effort at mediation would not be helpful

RULE 6 Place of Mediation


Article 3.18. Agreement of Parties on the Place of
Mediation. The parties are free to agree on the place of
mediation. Failing such agreement, the place of
mediation shall be any place convenient and appropriate
to all parties.
RULE 7 Effect of Agreement to Submit Dispute to
Mediation Under Institutional Rules
Article 3.19 Agreement to Submit a Dispute to Mediation
by an Institution. An agreement to submit a dispute to
mediation by an 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
institutional mediation rules 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 counsels and non-party participants to abide
by such rules.
RULE 8 Enforcement of Mediated Settlement
Agreement
Article 3.20. Operative Principles to Guide
Mediation. The mediation shall be guided by the
following operative principles:
(a) A
settlement
agreement
following
successfulmediation shall be prepared by the parties
with the assistance of their respective counsels. If
any, and by the mediator. The parties and their
respective counsels shall endeavor to make the
terms and condition of the settlement agreement
complete and to make adequate provision for the
contingency of breach to avoid conflicting
interpretations of the agreement.
(b) The parties and their respective counsels, if
any,shall sign the settlement agreement. The
mediator shall certify that he/she explained the
contents of the settlement agreement to the parties
in a language known to them.
(c) If the parties agree, the settlement agreement
maybe jointly deposited by the parties or deposited
by one party with prior notice to the other party/ties
with the Clerk of Court of the Regional Trial Court
(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
individuals resides; or (c) in the National Capital
Judicial Region. Where there is a need to enforce
the settlement agreement, a petition may be filed by
any of the parties with the same court in which case,
the court shall proceed summarily to hear the
petition, in accordance with the Special ADR Rules.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 97


(d) The parties may agree in the settlement
agreementthat the mediator shall become a sole
arbitrator for the dispute and shall treat the
settlement agreement as an arbitral award which
shall be subject to enforcement under Republic Act
No. 876, otherwise know as "The Arbitration Law",
notwithstanding the provisions of Executive Order
No. 1008, s. 1985, other wise known as the
"Construction Industry Arbitration Law" for
mediated disputes outside the Construction
Industry Arbitration Commission.
RULE 9 Confidentiality of Information
Article 3.21. Confidentiality of Information.
Information
obtained
through
mediation
proceedings shall be subject to the following
principles and guidelines:

(a) Information obtained through


beprivileged and confidential

mediation

shall

(b) A party, mediator, or non-party participant mayrefuse to


disclose and may prevent any other person from
disclosing a confidential information.

(c) Confidential information shall not be subject todiscovery


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
from discovery solely by reason of its use in a mediation.

(d) In such an adversarial proceeding, the followingpersons


involved or previously involved in a mediation may not
be compelled to disclosed confidential information
obtained during the mediation:

A mediator who is wrongfully subpoenaed shall be


reimbursed the full cost of his/her attorneys fees and
related expenses.
Article 3.22. Waiver of Confidentiality. (a) A privilege
arising from the confidentiality of information may be
waived in a record or orally during a proceeding by the
mediator and the mediation parties.
(b) With the consent of the mediation parties,
aprivilege arising from the confidentiality of
information may likewise be waived by a non-party
participant if the information is provided by such
nonparty participant.
(c) A
person
who
discloses
confidential
informationshall be precluded from asserting the
privilege under Article 3.21 (Confidentiality of
Information) to bar disclosure of the rest of the
information necessary to a complete understanding
of the previously disclosed information. If a person
suffers loss or damage as a result of the disclosure of
the confidential information, he/she shall be
entitled to damages in a judicial proceeding against
the person who made the disclosure.
(d) A
person
who
discloses
or
makes
a
representationabout a mediation is precluded from
asserting the privilege mentioned in Article 3.21 to
the extent that the communication prejudices
another person in the proceeding and it is necessary
for the person prejudiced to respond to the
representation or disclosure.
Article 3.23. Exceptions to the Privilege of
Confidentiality of information. (a) There is no
privilege against disclosure under Article 3.21 in the
following instances:

(i) the parties to the dispute;


(ii) the mediator or mediators;
(iii) the counsel for the parties;
(iv) the non-party participants
(v) any person hired or engaged in connection with
themediation as secretary, stenographer, clerk or
assistant; and
(vi) any
other
person
who
obtains
or
possessesconfidential information by reason of
his/her profession.

(e) The protections of the ADR Act shall continue toapply


even if a mediator is found to have failed to act
impartially.

(f) A mediator may not be called to testify to


provideconfidential information gathered in mediation.

(i) in an agreement evidenced by a record


authenticated by all parties to the agreement;
(ii) available to the public or made during a session
of amediation which is open, or is required by
law to be open, to the public;
(iii) a threat or statement of a plan to inflict
bodilyinjury or commit a crime of violence;
(iv) intentionally used to plan a crime, attempt
tocommit, or commit a crime, or conceal an
ongoing crime or criminal activity.
(v) 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 where a

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 98


public agency participates
protection mediation;

in

the

child

thereof, the schedule of cost and fees to be approved by


the OADR shall be followed.

(vi) sought or offered to prove or disapprove a


claim orcomplaint of professional misconduct
or malpractice filed against a party, non-party
participant, or representative of a party based
on conduct occurring during a mediation.

Article 3.26. Fees and Cost of Institutional Mediation. (a)


In institutional mediation, mediation cost shall include
the administrative charges of the mediation institution
under which the parties have agreed to be bound,
mediators fees and associated expenses, if any. In
default of agreement of the parties as to the amount and
manner of payment of mediations cost and fees, the
same shall be determined in accordance with the
applicable internal rules of the mediation service
providers under whose rules the mediation is conducted.

(b) If a court or administrative agency finds, after a


hearing in camera, that the party seeking discovery
of the proponent of the evidence has shown that the
evidence is not otherwise available, that there is a
need for the evidence that substantially outweighs
the interest in protecting confidentially, and the
mediation communication is sought or offered in:
(i) a court proceeding involving a crime or felony; or

(b) A mediation service provider may determine


such mediation fee as is reasonable taking into
consideration the following factors, among others:
(i) the complexity of the case;

(ii) a proceeding to prove a claim or defense that


underthe law is sufficient to reform or avoid a liability
on a contract arising out of the mediation.

(c) A mediator may not be compelled to provideevidence of a


mediation communication or testify in such proceeding.

(d) If a mediation communication is not privilegedunder an


exception in sub-section (a) or (b) hereof, only the
portion of the communication necessary for the
application of the exception for non-disclosure may be
admitted. The admission of a particular evidence for the
limited purpose of an exception does not render that
evidence, or any other mediation communication,
admissible for any other purpose.
Article 3.24. Non-Reporting or Communication by
Mediator. A mediator may not make a report,
assessment, evaluation, recommendation, finding or
other communication regarding a mediation to a court or
agency or other authority that may make a ruling on a
dispute that is the subject of a mediation, except:

(a) to state that the mediation occurred or hasterminated, or


where a settlement was reached; or

(b) as permitted to be disclosed under Article 3.23


(Exception to the Privilege of Confidentiality of
Information).
The parties may, by an agreement in writing, stipulate
that the settlement agreement shall be sealed and not
disclosed to any third party including the court. Such
stipulation, however, shall not apply to a proceeding to
enforce or set aside the settlement agreement. RULE 10
Fees and Cost of Mediation
Article 3.25. Fees and Cost of Ad hoc Mediation. In ad
hoc mediation, the parties are free to make their own
arrangement as to mediation cost and fees. In default

(ii) the number of hours spent in mediation; and


(iii) the training,
mediators.

experience

and

stature

of

CHAPTER 4
INTERNATIONAL COMMERCIAL ARBITRATION
RULE 1 General Provisions
Article 4.1. Scope of Application. (a) This Chapter
applies to international commercial arbitration,
subject to any agreement in force between the
Philippines and other state or states.
(b) This Chapter applies only if the place or seat
ofarbitration is the Philippines and in default of any
agreement of the parties on the applicable rules.
(c) This Chapter shall not affect any other law of
thePhilippines by virtue of which certain disputes
may not be submitted to arbitration or may be
submitted to arbitration only according to
provisions other than those of the ADR Act.
Article 4.2. Rules of Interpretation. (a) International
commercial arbitration shall be governed by the
Model
Law
on
International
Commercial
Arbitration.
(b) In interpreting this Chapter, regard shall be had tothe
international origin of the Model Law and to the need for
uniformity in its interpretation. Resort may be made to
the travaux preparatoires and the Report of the
Secretary-General of the United Nations Commission on
International Trade Law dated March 1985 entitled,
"International Commercial Arbitration: Analytical
Commentary on Draft Text identified by reference
number A/CN. 9/264".

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 99

(c) Moreover, in interpreting this Chapter, the courtshall


have due regard to the policy of the law in favor of
arbitration and the policy of the Philippines to actively
promote party autonomy in the resolution of disputes or
the freedom of the parties to make their own
arrangement to resolve their dispute.

(d) Where a provision of this Chapter, except the


Rulesapplicable to the substance of the dispute, leaves
the parties free to determine a certain issue, such
freedom includes the right of the parties to authorize a
third party, including an institution, to make that
determination.

(e) Where a provision of this Chapter refers to the factthat


the parties have agreed or that they may agree or in any
other way refers to an agreement of the parties, such
agreement includes any arbitration rules referred to in
that agreement.

(f) Where a provision of this Chapter, other than


inparagraph (a) of Article 4.25 (Default of a Party) and
paragraphs (b) (i) of Article 4.32 (Termination of
Proceedings), refers to a claim, it also applies to a
counter-claim, and where it refers to a defense, it also
applies to a defense to such counter-claim.
Article 4.3. Receipt of Written Communications. (a)
Unless otherwise agreed by the parties:

(i) any written communication is deemed to have


beenreceived if it is delivered to the addressee personally

or at his/her place of business, habitual residence or


mailing address; if none of these can be found after
making a reasonable inquiry, a written communication is
deemed to have been received if it is sent to the
addressees last known place of business, habitual
residence or mailing address by registered letter or any
other means which provides a record of the attempt to
deliver it;
(ii) the communication is deemed to have beenreceived on
the day it is so delivered.
(b) The provisions of this Article do not apply to
communications in court proceedings, which shall be
governed by the Rules of Court.
Article 4.4. Waiver of Right to Object. Any party who
knows that any provision of this Chapter from which the
parties may derogate or any requirement under the
arbitration agreement has not been complied with and
yet proceeds with the arbitration without stating the
objections for such non-compliance without undue delay
or if a time limit is provided therefor, within such period
of time, shall be deemed to have waived the right to
object.
Article 4.5. Extent of Court Intervention. In matters
governed by this Chapter, no court shall intervene except
where so provided in the ADR Act. Resort to Philippine
courts for matters within the scope of the ADR Act shall
be governed by the Special ADR Rules.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 100


Article 4.6. Court or Other Authority for Certain
Functions of Arbitration Assistance and Supervision.
(a) The functions referred to in paragraphs (c) and (d) of
Article 4.11 (Appointment of Arbitrators) and
paragraph (c) of Article 4.13 (Challenge Procedure)
and paragraph (a) of Article 4.14 (Failure or
Impossibility to Act) shall be performed by the
appointing authority as defined in Article 1.6 C1,
unless the latter shall fail or refuse to act within thirty
(30) days from receipt of the request in which case the
applicant may renew the application with the court.
The appointment of an arbitrator is not subject to
appeal or motion for reconsideration.
(b) The functions referred to in paragraph (c) of
Article4.16 (c) (Competence of Arbitral Tribunal to
Rule on its Jurisdiction), second paragraph of Article
4.34 (Application for Setting Aside an Exclusive
Recourse Against Arbitral Award), Article 4.35
(Recognition and Enforcement), Article 4.38 (Venue
and Jurisdiction), shall be performed by the
appropriate Regional Trial Court.
(c) A Court may not refuse to grant, implement orenforce
a petition for an interim measure, including those
provided for in Article 4.9 (Arbitration Agreement and
Interim Measures by Court), Article 4. 11
(Appointment of Arbitrators), Article 4.13 (Challenge
Procedure), Article 4,27 (Court Assistance in Taking
Evidence), on the sole ground that the Petition is
merely an ancillary relief and the principal action is
pending with the arbitral tribunal.
RULE 2- Arbitration Agreement
Article 4.7 Definition and Form of Arbitration
Agreement. The Arbitration agreement, as defined in
Articles 1.6 A4, shall be in writing. An agreement is in
writing if it is contained in a document signed by the
parties or in an exchange of letters, telex, telegrams or
other means of telecommunication which provide a
record of the agreement, or in an exchange of
statements of claim and defense in which the existence
of an agreement, or in an exchange of statements of
claim and defense in which the existence of an
agreement is alleged by one party and not denied by
another. The reference in a contract to a document
containing an arbitration clause constitutes an
arbitration agreement provided that the contracts is
writing and the reference is such as to make that
clause part of the contract.
Article 4.8 Arbitration Agreement and Substantive
Claim Before Court. (a) A court before which an action
is brought in a matter which is the subject of an
arbitration agreement shall, if at least one party so
requests 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.

(b) Where an action referred to in the previousparagraph


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.
(c) Where the action is commenced by or againstmultiple
parties, one or more of whom are parties to an
arbitration agreement, the court shall refer to
arbitration those parties who are bound by the
arbitration agreement although the civil action may
continue as to those who are not bound by such
arbitration agreement.
Article 4.9 Arbitration Agreement and Interim
Measures by Court. (a) It is not incompatible with an
arbitration agreement for a party to request from a
court, before the constitution of the arbitral tribunal or
during arbitral proceedings, an interim measure of
protection and for a court to grant such measure.
(b) To the extent that the arbitral tribunal has no
power to act or is unable to act effectively, a request
for interim measure of protection, or modification
thereof as provided for, and in the manner indicated in
, Article 4.17 (Power of Tribunal to Order Interim
Measures ), may be made with the court.
The rules of interim or provisional relief provided for
in paragraph ( c ) of Article 4.17 of these Rules shall be
observed.
A party may bring a petition under this Article before
the court in accordance with the Rules of Court or the
Special ADR Rules.
RULE 3 Composition of Arbitral Tribunal
Article 4.10 Number of Arbitrators. The parties are
free to determine the number of arbitrators Failing
such determination, the number of arbitrators shall be
three (3).
Article 4.11. Appointment of Arbitrators. (a) No person
shall be produced by reason of his/her nationality
from acting as an arbitrator, unless otherwise agreed
by the parties.
(b) The parties are free to agree on a procedure
ofappointing the arbitrator or arbitrators, subject
to provisions of paragraphs (d) and (e) of this
Article.
(c) Failing such agreement:
(i) in an arbitration with three (3 ) arbitrators, eachparty
shall appoint one arbitrator, and the two (2)
arbitrators thus appointed shall appoint the third
arbitrator; if any party fails to appoint the arbitrator
within thirty (30) days of receipt of a request to do so

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 101


from the other party, or if the two (2) arbitrators fail to
agree on the third arbitrator within thirty days (30)
days of their appointment shall be made, upon request
of a party, by the appointing authority;
(ii) in an arbitration with a sole arbitrator, if theparties are
unable to agree on the arbitrator, he/she shall be
appointed, upon request of a party, by the appointing
authority.
(d) Where, under an appointment procedure agreed
upon the parties,
(i) a party fails to act as required under suchprocedure, or
(ii) the parties , or two arbitrators, are unable to reachan
agreement expected of them under such procedure, or
(iii)a third party, including an institution, fails toperform
any function entrusted to it under such procedure,
Any party may request the appointing authority to take
the necessary measure to appoint an arbitrator, unless
the agreement on the appointment procedure provides
other means for securing the appointment.
(e) A decision on a matter entrusted by paragraphs (c)
and (d) of this to the appointing authority shall be
immediate executory and not be subject to a motion
for reconsideration or appeal. The appointing
authority shall have in appointing an arbitrator, due
regard to any qualifications required of the arbitrator
by the agreement of the parties and to such
considerations as are likely to secure the appointment
of an independent and impartial arbitrator and, in the
case of a sole or third arbitrator , shall take into
account as well the advisability of appointing an
arbitrator of a nationality other than the Rules of
Court of the Special ADR Rules.
Article 4.12 Grounds for Challenge. (a) When a person
is approached in connection with his/her possible
appointment as an arbitrator, he/she impartiality or
independence. An arbitrator, from the time of his/her
appointment and throughout the arbitral proceedings
shall, without delay, disclose any such circumstance to
the parties unless they have already been informed of
them him/her.
(b) An arbitrator may be challenged only if
circumstances exist that give rise to justifiable doubts
as to his/her impartiality or independence, or if
he/she does not possess qualifications agreed to by the
parties. A party may challenge an arbitrator appointed
by him/her, or in whose appointment he/she has
participated, only for reasons of which he/she
becomes aware after the appointment has been made.

Article 4.13. Challenge Procedure. (a) The parties are


free to agree on a procedure for challenging an
arbitrator, subject to the provisions of this Article.
(b) Failing such agreement, a party who intends
tochallenge an arbitrator shall, within fifteen (15) days
after becoming aware of the constitution of the arbitral
tribunal or after becoming aware of any circumstances
referred to in paragraph (b) of Article 4.12 (Grounds
for Challenge,) send a written statement of the reasons
for the challenge to the arbitral tribunal. Unless the
challenged arbitrator withdraws from his/her office or
the other party agrees to the challenged arbitrator
withdraws from his/her office or the party agrees to
the challenge, the arbitral tribunal shall decide on the
challenge.
(c) If a challenge under any procedure agreed upon bythe
parties or under the procedure of paragraph (b) of this
Article is not successful, the challenging party may
request the appointing authority, within thirty (30)
days after having received notice of the decision
rejecting the challenge, to decide on the challenge,
which decision shall be immediately executory and not
subject to motion for reconsideration or appeal. While
such a request is pending, the arbitral tribunal,
including the challenged arbitrator, may continue the
arbitral proceedings and make an award.
A party may bring a petition under this Article before
the court in accordance with the Rules of Court or the
Special ADR Rules.
Article 4.14. Failure or Impossibility to Act. (a) If an
arbitrator becomes de jure or de facto unable to
perform his/her functions or for other reasons fails to
act without undue delay, his/her mandate terminates
if he/she withdraws from his/her office or if the
parties agree on the termination. Otherwise, if the
controversy remains concerning any of these grounds,
any party may request the appointing authority to
decide on the termination of the mandate, which
decision shall be immediately executory and not
subject for motion for reconsideration or appeal.
(b) If, under this Article or paragraph (b) of Article
4.13 (Challenge Procedure), an arbitrator withdraws
from his/her office or a party agrees for termination of
the mandate of an arbitrator, this does not imply
acceptance of the validity of any ground referred to in
this Article or in paragraph (b) of Article 4.12
(Grounds for Challenge).
Article 4.15. Appointment of Substitute Arbitrator.
Where the mandate of an arbitrator terminates under
Articles 4.13 (Challenge Procedure) and 4.14 (Failure
or Impossibility to Act) or because of his/her
withdrawal from office for any other reason or because
of the revocation of his/her mandate, a substitute
arbitrator shall be appointed according to the rules

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 102


that were applicable to the appointment of the
arbitrator being replaced.
RULE 4 Jurisdiction of Arbitral Tribunal
Article 4.16. Competence of Arbitral Tribunal to Rule
on its Jurisdiction. (a) The arbitral tribunal may 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
the request for arbitration. For that purpose, an
arbitration clause, which forms part of a contract shall
be treated as an agreement independent of the other
terms of the contract. A decision by the arbitral
tribunal that the contract is null and void shall not
entail ipso jure the invalidity of the arbitration clause.
(b) A plea that the arbitral tribunal does not
havejurisdiction shall be raised not later than the
submission of the statement of defense (I.e., in an
Answer or Motion to Dismiss). A party is not
precluded from raising such plea by the fact that
he/she has appointed, or participated in the
appointment of, an arbitrator. A plea that the arbitral
tribunal is exceeding the scope of its authority shall be
raised as soon as the matter alleged to be beyond the
scope of its authority is raised during the arbitral
proceedings. The arbitral tribunal may, in either case,
admit a later plea if it considers the delay justified.
(c) The arbitral tribunal may rule on a plea referred toin
paragraph (b) of this Article either as a preliminary
question or in an award on the merits. If the arbitral
tribunal rules as a preliminary question that it has
jurisdiction, any party may request, within thirty (30)
days after having received notice of that ruling, the
Regional Trial Court to decide the matter, which
decision shall be immediately executory and not
subject to motion for reconsideration or appeal. While
such a request is pending, the arbitral tribunal may
contribute the arbitral proceedings and make an
award.
Article 4.17. Power of Arbitral Tribunal to Order
Interim Measures. (a) Unless otherwise agreed by the
parties, the arbitral tribunal may, at the request of the
party, order any party to take such interim measures
of protection as the arbitral tribunal may consider
necessary in respect of the subject to matter of the
dispute following paragraph (c) of this Article. Such
interim measures may include, but shall not be limited
to, preliminary injunction directed against a party,
appointment of receivers, or detention, preservation,
inspection of property that is the subject of the dispute
in arbitration.
(b) After constitution of the arbitral tribunal, andduring
arbitral proceeding, a request for interim measures of
protection, or modification thereof shall be made with
the arbitral tribunal. The arbitral tribunal is deemed
constituted when the sole arbitrator or the third

arbitrator, who has been nominated, has accepted the


nomination and written communication of said
nomination and acceptance has been received by the
party making the request.
(c) The following rules on interim or provisional
reliefshall be observed:
(i) Any party may request that the
orprovisional relief shall be observed:

interim

(ii) Such relief may be granted:


(aa)To prevent irreparable loss or injury;
(ab)
To provide security for the performance of
anobligation;
(ac)To produce or preserve evidence
(ad) To compel
oromissions.

any

other

appropriate

acts

(iii)The order granting provisional relief may


beconditioned upon the provision of security or any
act or omission specified in order.
(iv) Interim or provisional relief is requested bywritten
application transmitted by reasonable means to the
arbitral tribunal and the party against whom relief is
sought, describing in appropriate details of the precise
relief, the party against whom the relief is requested,
the ground for the relief, and the evidence, supporting
the request.
(v) The order granting or denying an application forthe
interim relief shall be binding upon the parties.
(vi) Either party may apply with the court forassistance in
implementing or enforcing an interim measure
ordered by an arbitral tribunal.
(vii)
A party who does not comply with the order
shallbe liable for all damages, resulting from
noncompliance, including all expenses, and
reasonable attorney's fees, paid in obtaining the
order's judicial enforcement.
RULE 5 Conduct of Arbitral Proceedings
Article 4.18. Equal Treatment of Parties. The parties
shall be treated with equality and each shall be given a
full opportunity of presenting his/her case.
Article 4.19. Determination of the Rules of Procedure.
(a) Subject to the provisions of this Chapter, the
parties are free to agree on the procedure to be
followed by the arbitral tribunal in conducting the
proceedings.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 103


(b) Falling such agreement, the arbitral tribunal
may,subject to this Chapter, conduct the arbitration in
such manner as it considers appropriate. Unless the
arbitral tribunal considers it inappropriate, the
UNCITRAL Arbitration Rules adopted by the
UNCITRAL on 28 April 1976 and the UN General
Assemble on 15 December 1976 shall apply subject to
the following clarification: All references to the
"Secretary-General of the Permanent Court of
Arbitration at the Hague" shall be deemed to refer to
the appointing authority.
(c) The
power
conferred
upon
the
arbitral
tribunalincludes the power to determine the
admissibility, relevance, materiality and weight of any
evidence.
Article 4.20. Place of Arbitration. (a) The parties are
free to agree on the place of arbitration. Failing such
agreement, the place of arbitration shall be in Metro
Manila unless the arbitral tribunal, having regard to
the circumstances of the case, including the
convenience of the parties, shall decide on a different
place of arbitration.
(b) Notwithstanding the rule stated in paragraph (a) of
this provision, the arbitral tribunal may, unless
otherwise agreed by the parties, meet at any place it
considers appropriate for consultation among its
members, for hearing witnesses, experts or the parties,
or for inspection of goods, other property or
documents.
Article 4.21. Commencement of Arbitral Proceedings.
Unless otherwise agreed by the parties, the arbitral
proceedings in respect of a particular dispute
commence on the date on which a request for that
dispute to be referred to arbitration is received by the
respondent.
Article 4.22. Language. (a) The parties are free to agree
on the language or languages to be used in the arbitral
proceedings. Failing such agreement, the language to
be used shall be English. This agreement, unless
otherwise specified therein, shall apply to any written
statement by a party, any hearing and any award,
decision or other communication by the arbitral
tribunal.
(b) The arbitral tribunal may order that any
documentary evidence shall be accompanied by a
translation into the language or languages agreed
upon by the parties or determined by the arbitral
tribunal in accordance with paragraph (a) of this
Article.
Article 4.23 Statements of Claim and Defense. (a)
Within the period of time agreed by the parties or
determined by the arbitral tribunal, the claimant shall
state the facts supporting his/her/its claim, the points

at issue and the relief or remedy sought, and the


respondent shall state his/her/its defense in respect of
these particulars, unless the parties have otherwise
agreed as to the required elements of such statements.
The parties may submit with their statements, all
documents they consider to be relevant or may add a
reference to the documents or other evidence they will
submit.
(b) Unless otherwise agreed by the parties, either party
may amend or supplement his/her claim or defense
during the course of the arbitral proceedings, unless
the arbitral tribunal considers it inappropriate to allow
such amendment having regard to the delay in making
it.
Article 4.24 Hearing and Written Proceedings. (a)
Subject to any contrary agreement by the parties, the
arbitral tribunal shall decide whether to hold oral
hearings for the presentation of evidence or for oral
argument, or whether the proceedings shall be
conducted on the basis of documents and other
materials. However, unless the parties have agreed
that no hearings at an appropriate stage of the
proceedings, if so requested by a party.
(b) The parties shall be given sufficient advance noticeof
any hearing and of any meeting of the arbitral tribunal
for the purposes of inspection goods, other property or
documents.
(c) All
statements,
documents
or
other
informationsupplied to the arbitral by one party shall
be communicated to the other party. Also, an expert
report or evidentiary document on which the arbitral
tribunal may rely in making its decision shall be
communicated to the parties.
Article 4.25 Default of a Party. Unless otherwise
agreed by the parties, if, without, showing sufficient
cause,
(a) the claimant fails to communicate his statement
ofclaim in accordance with paragraph (a) Article 4.23
(Statement of Claim and Defense), the arbitral
tribunal shall terminate the proceedings;
(b) the
respondent
fails
to
communicate
his/her/itsstatement of defense in accordance with
paragraph (a) Article 4.23 (Statement of Claim and
Defense), the arbitral tribunal shall continue the
proceedings without treating such failure in itself as an
admission of the claimants allegations.
(c) any partys fails to appear at a hearing or to
producedocumentary evidence, the arbitral tribunal
may continue the proceedings and make the award on
the evidence before it.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 104


Article 4.26. Expert Appointed by the Arbitral
Tribunal. Unless otherwise agreed by the parties, the
arbitral tribunal,
(a) may appoint one or more experts to report to it
onspecific issues to be determined by the arbitral
tribunal; or
(b) may require a party to give the expert any
relevantinformation or to produce, or to provide
access to, any relevant documents, goods or other
property for his/her inspection.
Unless otherwise agreed by the parties, if a party so
requests or if the arbitral tribunal considers it
necessary, the expert shall, after delivery of his/her
written or oral report, participate in a hearing where
the parties have the opportunity to put questions to
him and to present expert witnesses in order to testify
on the points at issue.
Article 4.27. Court Assistance in Taking Evidence. The
arbitral tribunal or a party with the approval of the
arbitral tribunal may request from a court of the
Philippines assistance in taking evidence. The court
may execute the request within its competence and
according to its rules on taking evidence.
The arbitral tribunal shall have the power to require
any person to attend a hearing as a witness. The
arbitral tribunal shall have the power to subpoena
witnesses and documents when the relevancy of the
testimony and the materiality thereof has been
demonstrated to it. The arbitral tribunal may also
require the retirement of any witness during the
testimony of any other witness.
A party may bring a petition under this Section before
the court in accordance with the Rules of Court or the
Special ADR Rules.
Article 4.28. Rules Applicable to the Substance of
Dispute. (a) The arbitral tribunal shall decide the
dispute in accordance with such rules of law as are
chosen by the parties as applicable to the substance of
the dispute. Any designation of the law or legal system
of a given state shall be construed, unless otherwise
expressed, as directly referring to the substantive law
of that state and not its conflict of laws rules.
(b) Failing any designation by the parties, the
arbitraltribunal shall apply the law determined by the
conflict of laws rules, which it considers applicable.
(c) The arbitral tribunal shall decide ex aequo et bonoor as
amiable compositeur only if the parties have expressly
authorized it to do so.
(d) In all cases, the arbitral tribunal shall decide
inaccordance with the terms of the contract and shall

take into account the usages of the trade applicable to


the transaction.
Article 4.29. Decision-Making by Panel of Arbitrators.
In arbitral proceedings with more than one arbitrator,
any decision of the arbitral tribunal shall be made,
unless otherwise agreed by other parties, by a majority
of all its members. However, questions of procedure
may be decided by a presiding arbitrator , if so
authorized by the parties or all members of the arbitral
tribunal.
Article 4.30. Settlement. 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.
An award on agreed terms shall be made in
accordance with the provisions of Article 4.31 (Form
and Contents of Award), and shall state that it is an
award. Such an award has the same status and effect
as any other award on the merits of the case.
Article 4.31. Form and Contents of Award. (a) The
award shall be made 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.
(b) The award shall state the reasons upon which it
isbased, unless the parties have agreed that no reasons
are to be given or the award is an award on agreed
terms under paragraph (a) of Article 4.20 (Place of
Arbitration).
(c) The award shall state its date and the place
ofarbitration as determined in accordance with
paragraph (a) of this Article. The award shall be
deemed to have been made at that place.
(d) After the award is made, a copy signed by
thearbitrators in accordance with paragraph (a) of this
Article shall be delivered. to each party.
Article 4.32. Termination of Proceedings. (a) The
arbitral proceedings are terminated by the final award
or by an order of the arbitral tribunal in accordance
with paragraph (b) of this Article. (b) The arbitral
tribunal shall issue an order for the termination of the
arbitral proceedings when:
(i) The claimant withdraws his/her/its claim, unlessthe
respondent objects thereto and the arbitral tribunal
recognized a legitimate interest on his/her/its part in
obtaining a final settlement of the dispute;

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 105


(ii) The parties agree the termination of theproceedings;
(iii)The arbitral tribunal finds that the continuation ofthe
proceedings has for any other reason become
unnecessary or impossible.
(c) The mandate of the arbitral tribunal ends
withtermination of the arbitral proceedings subject to
the provisions of Articles 4.33 (Correction and
Interpretation of Award, Additional Award) and
paragraph (d) of Articles 4.34 (Application for Setting
Aside an Exclusive Recourse against Arbitral Award).
(d) Notwithstanding the foregoing, the arbitraltribunal
may, for special reasons, reserve in the final award or
order, a hearing to quantity costs and determine which
party shall bear the costs or the division thereof as
may be determined to be equitable. Pending
determination of this issue, the award shall not be
deemed final for purposes of appeal ,vacation,
correction, or any post-award proceedings.

correction interpretation or an additional award under


paragraphs (a) and (b) of this Article.
(f) The provisions of Article 4.31 (Form and Contentsof
Award) shall apply to a correction or interpretation of
the award or to an additional award.
Article 4.34. Aplication for Setting Aside an Exclusive
Recourse against Arbitral Award.
(a) Recourse to a court against an arbitral award maybe
made only by application for setting aside in
accordance with second and third paragraphs of this
Article.
(b) An arbitral award may be
RegionalTrial Court only If:

set

aside

by

the

(i) the party making the application furnishes proof


that:

Article 4.33. Correction and Interpretation of Award,


Additional Award. (a) Within thirty (30) days from
receipt of the award, unless another period of time has
been agreed upon by the parties:

(aa)a party to the arbitration agreement was undersome


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
Philippines; or

(i) A party may, with notice to the other party, requestthe


arbitral tribunal to correct in the award any errors in
computation, any clerical or typographical errors or
any errors of similar nature;

(ab)
the party making the application was not
givenproper notice of the appointment of an arbitrator
or of the arbitral proceedings or was otherwise unable
to present his case; or

(ii) A party may, it so agreed by the parties and withnotice


to the other party, request the arbitral tribunal to give
an interpretation of a specific point or part of the
award.

(ac)the award deals with a dispute not contemplatedby or


not failing within the terms 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 the part of the award which contains
decisions on matters not submitted to arbitration may
be set aside; or

(b) If the arbitral tribunal considers the request to


bejustified, It shall make the correction or give the
interpretation within thirty (30) days from receipt of
the request. The interpretation shall form part of the
award.
(c) The arbitral tribunal may correct any error of thetype
referred to in paragraph (a) of this Article on its own
initiative within thirty (30) day from the date of the
award
(d) Unless otherwise agreed by the parties, a partymay,
with notice to the other party, request, within thirty
(30) days receipt of the award, the arbitral tribunal to
make an additional award as to claims presented in
the arbitral proceedings but omitted from the award.
If the arbitral tribunal considers the request to be
justified, it shall make the additional award within
sixty (60) days
(e) The arbitral tribunal may extend, if necessary,
theperiod of time within which it shall make a

(ad)
the composition of the arbitral tribunal or
thearbitral procedure was not in accordance with the
agreement of the parties, unless such agreement was
in conflict with a provision of ADR Act from which the
parties cannot derogate, or, falling such agreement,
was not in accordance with ADR Act; or
(ii) the Court finds that:
(aa)the subject-matter of the dispute is not capable
ofsettlement by arbitration under the law of the
Philippines; or
(ab)
the award is in conflict with the public policy
ofthe Philippines.
(c) An application for setting aside may not be madeafter
three months have elapsed from the date on which the

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 106


party making that application had received the award
or, If a request had been made under Article 4.33
(Correction and Interpretation of Award, Additional
Award) from the date on which that request has been
disposed of by the Arbitral tribunal
(d) The court, when asked to set aside an award,
may,where appropriate and so requested by a party,
suspend the setting aside proceedings for a period of
time determined by it in order to give the arbitral
tribunal an opportunity resume the arbitral
proceedings or take such other action as in the arbitral
tribunal's opinion will eliminate the grounds for
setting aside.
(e) A party may bring a petition under this Articlebefore
the court in accordance with the Special ADR Rules.

(e) A foreign arbitral award when confirmed by


theRegional Trial Court, shall be enforced in the same
manner as final and executory decisions of courts of
law of the Philippines.
(f) If the Regional Trial Court has recognized thearbitral
award but an application for rejection and/or)
suspension of enforcement of that award is
subsequently made, the Regional Trial Court may, if it
considers the application to be proper, vacate or
suspend the decision to enforce that award and may
also, on the application of the party claiming
recognition or enforcement of that award, order the
other party seeking rejection or suspension to provide
appropriate security.
Article 4.36. Grounds for Refusing Recognition or
Enforcement.

RULE 6 Recognition and Enforcement of Awards


A CONVENTION AWARD.
Article 4.35. Recognition and Enforcement. (a) A
foreign arbitral award shall be recognized as binding
and, upon petition in writing to the regional trial
Court, shall be enforced subject to the provisions of
this Article and of Article 4.36 (Grounds for Refusing
Recognition or Enforcement).
(b) The petition for recognition and enforcement of
such arbitral awards shall be filled with the Regional
trial Court In accordance with Special ADR Rules.
(i) Convention Award - The New York Convention
shallgovern the recognition and enforcement of
arbitral awards covered by said Convention. The
petitioner shall establish that the country in which the
foreign arbitration award was made is a party to the
New York Convention
(ii) Non-Convention
Award

The
recognition
andenforcement 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, on grounds of
comity and reciprocity, recognize and enforce a
nonconvention award as a convention award.
(c) The party relying on an award or applying for
itsenforcement shall file with the Regional Trial Court
the original or duly authenticated copy of the award
and the original arbitration agreement or a duly
authenticated copy thereof. If the award or agreement
is not made in an official language of the Philippines,
the party shall supply a duly certified translation
thereof into such language.
(d) A foreign arbitral award when confirmed by a courtof a
foreign country, shall be recognized and enforced as a
foreign arbitral award and not as a judgment of a
foreign court.

Recognition or enforcement of an arbitral award,


made in a state, which is a party to the New York
Convention, may be refused, at the request of the party
against whom it is provoked, only if the party
furnishes to the Regional Trial Court proof that:
(a) The parties to the arbitration agreement are, underthe
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 wasnot
given proper notice of the appointment of an
arbitrator or of the arbitral proceedings or was
otherwise in able to present his case; or
(c) the award deals with dispute not contemplated byor
not failing within the terms of the submission to
arbitration, or it 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, that part of the award which contains
decisions on matters submitted to arbitration may be
recognized and enforced; or
(d) the composition of the arbitral tribunal or thearbitral
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 too place; or
(e) the award has not become binding on the parties orhas
been set aside or suspended by a court of the country
in which, or under the law of which, that award was
made.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 107


Recognition and enforcement of an arbitral award may
also be refused if the Regional Trial Court where
recognition and enforcement is sought finds that:
(a) the subject-matter of the dispute is not capable
ofsettlement by arbitration under the law of
Philippines; or
(b) the recognition or enforcement of the award wouldbe
contrary to the public policy of the Philippines.
A party to a foreign arbitration proceeding may oppose
an application for recognition and enforcement of the
arbitral award in accordance with the Special ADR
Rules only on the grounds enumerated under
paragraph (a) and (c) of Article 4.35 (Recognition and
Enforcement). Any other ground raised shall be
disregarded by the Regional Trial Court.
B. NON-CONVENTION AWARD.
(a) A foreign arbitral award rendered in a state whichis
not a party to the New York Convention will be
recognized upon proof of the existence of comity and
reciprocity and may be treated as a convention award.
If not so treated and if no comity or reciprocity exists,
the non-convention award cannot be recognized
and/or enforced but may be deemed as presumptive
evidence of a right as between the parties in
accordance with Section 48 of the Rules of Court.
(b) If the Regional Trial Court has recognized thearbitral
award but a petition for suspension of enforcement of
that award is subsequently made, the Regional Trial
Court may, if it considers the petition to be proper,
suspend the proceedings to enforce the award, and
may also, on the application of the party claiming
recognition or enforcement of that award, order the
other party seeking suspension to provide appropriate
security.
(c) If the petition for recognition or enforcement of
thearbitral award is filed by a party and a counterpetition for the rejection of the arbitral award is filed
by the other party, the Regional Trial Court may, if it
considers the counter-petition to be proper but the
objections thereto may be rectified or cured, remit the
award to the arbitral tribunal for appropriate action
and in the meantime suspend the recognition and
enforcement proceedings and may also on the
application
of
the
petitioner
order
the
counterpetitioner to provide appropriate security.
Article 4.37. Appeal from Court Decision on Arbitral
Awards. A decision of the Regional Trial Court
recognizing, enforcing, vacating or setting aside an
arbitral award may be appealed to the Court of
Appeals in accordance with the rules of procedure to
be promulgated by the Supreme Court.

The losing party who appeals from the judgment of the


court recognizing and enforcing an arbitral award
shall be required by the Court of Appeals to post a
counterbond executed if favor of the prevailing party
equal to the amount of the award in accordance with
the Special ADR Rules.
Any stipulation by the parties that the arbitral
tribunals award or decision shall be final, and
therefore not appealable, is valid. Such stipulation
carries with it a waiver of the right to appeal from an
arbitral award but without prejudice to judicial review
by way of certiorari under Rule 65 of the Rules of
Court.
Article 4.38. Venue and Jurisdiction. Proceedings for
recognition and enforcement of an arbitration
agreement or for vacation or setting aside of an
arbitral award, and any application with a court for
arbitration assistance and supervision, except appeal,
shall be deemed as special proceedings and shall be
filed with the Regional Trial Court where:
(a) the arbitration proceedings are conducted;
(b) where the asset to be attached or levied upon, orthe
act to be enjoined is located;
(c) where any of the parties to the dispute resides
orhas its place of business; or
(d) in the National Capital Judicial Region at theoption
of the applicant.
Article 4.39. Notice of Proceedings to Parties. In a
special proceeding for recognition and enforcement of
an arbitral award, the court shall send notice to the
parties at their address of record in the arbitration, or
if any party cannot be served notice at such address, at
such partys last known address. The notice shall be
sent at least fifteen (15) days before the date set for the
initial hearing of the application.
Article 4.40. Legal Representation in International
Commercial Arbitration. In international commercial
arbitration conducted in the Philippines, a party may
be represented by any person of his/her choice:
Provided, that such representative, unless admitted to
the practice of law in the Philippines, shall not be
authorized to appear as counsel in any Philippine
court or any other quasi-judicial body whether or not
such appearance is in relation to the arbitration in
which he/she appears.
Article 4.41. Confidentially of Arbitration Proceedings.
The arbitration proceedings, including the records,
evidence and the arbitral award, shall be considered
confidential and shall not be poolside except:
(a) with the consent of the parties; or

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 108


(b) for the limited purpose of disclosing to the
courtrelevant documents in cases where resort to
the court is allowed herein.
Provided, however, that the court in which the action
or the appeal is pending may issue a protective order
to prevent or prohibit disclosure of documents or
information
containing
secret
processes,
developments, research and other information where
it is shown that the applicant shall be materially
prejudiced by an authorized disclosure thereof.
Article 4.42. Summary nature of proceedings before
the court. A petition for recognition and enforcement
of awards brought before the court shall be heard and
dealt with summarily in accordance with the Special
ADR Rules.
Article 4.43. Death of a Party. Where a party dies after
making a submission or a contract to arbitrate as
prescribed in these Rules, the proceedings may be
begun or continued upon the application of, or notice
to, his/her executor or administrator, or temporary
administrator of his/her estate. In any such case, the
court may issue an order extending the time within
which notice of a motion to recognize or vacate an
award must be served. Upon recognizing an award,
where a party has died since it was filed or delivered,
the court must enter judgement in the name of the
original party; and the proceedings thereupon are the
same as where a party dies after a verdict.
Article 4.44. Multi-Party Arbitration. When a single
arbitration involves more than two parties, the
foregoing rules, to the extent possible, shall be used,
subject to such modifications consistent with this
Chapter as the arbitral tribunal shall deem appropriate
to address possible complexities of a multi-party
arbitration.
Article 4.45. Consolidation of Proceedings and
Concurrent Hearings. The parties and the arbitral
tribunal may agree
(a) that the arbitration proceedings shall beconsolidated
with other arbitration proceedings; or
(b) that concurrent hearings shall be held, on suchterms
as may be agreed.
Unless the parties agree to confer such power on the
arbitral tribunal, the tribunal has no power to order
consolidation of arbitration proceedings or concurrent
hearings.
Article 4.46. Costs. (a) The arbitral tribunal shall fix
the costs of arbitration in its award. The term "costs"
include only:

(i) The fees of the arbitral tribunal to be statedseparately


as to each arbitrator and to be fixed by the tribunal
itself in accordance with the paragraph (b) of this
Article;
(ii) The travel and
thearbitrators;

other

expenses

incurred

(iii)The costs of expert advice and of


assistancerequired by the arbitral tribunal;

by

other

(iv) The travel and other expenses of witnesses to theextent


such expenses are approved by the arbitral tribunal;
(v) The costs for legal representation and assistance ofthe
successful party if such costs were claimed during the
arbitral proceedings, and only to the extent that the
arbitral tribunal determines that the amount of such
costs is reasonable;
(v1) Any fees and expenses of the appointing authority.
(b) The fees of the arbitral tribunal shall be reasonablein
amount, taking into account the amount in dispute,
the complexity of the subject matter, the time spent by
the arbitrators and any other relevant circumstances
of the case.
If an appointing authority has been agreed upon by the
parties and if such authority has issued a schedule of
fees for arbitrators in international cases which it
administers, the arbitral tribunal in fixing its fees shall
take that schedule of fees into account to the extent
that it considers appropriate in the circumstances of
the case.
If such appointing authority has not issued a schedule
of fees for arbitrators in international cases, any party
may, at any time request the appointing authority to
furnish a statement setting forth the basis for
establishing fees which is customarily followed in
international cases in which the authority appoints
arbitrators. If the appointing authority consents to
provide such a statement, the arbitral tribunal, in
fixing its fees, shall take such information into account
to the extent that it considers appropriate in the
circumstances of the case.
(c) In cases referred to in the second and third
subparagraphs of paragraph (b) of this Article, when a
party so requests and the appointing authority
consents to perform the function, the arbitral tribunal
shall fix its fees only after consultation with the
appointing authority which may make any comment it
deems appropriate to the arbitral tribunal concerning
the fees.
(d) Except as provided in the next sub-paragraph ofthis
paragraph, the costs of arbitration shall, in principle,
be borne by the unsuccessful party. However, the

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 109


arbitral tribunal may apportion each of such costs
between the parties if it determines that
apportionment is reasonable, taking into account the
circumstances of the case.

as "The Arbitration Law", as amended by the ADR Act.


Articles 8, 10, 11, 12, 13, 14, 18 and 19 and 29 to 32 of
the Model Law and Sections 22 to 31 of the ADR Act
are specifically applicable to domestic arbitration.

With respect to the costs of legal representation and


assistance referred to in paragraph (c) of paragraph
(a) (iii) of this Article, the arbitral tribunal, taking into
account the circumstances of the case, shall be free to
determine which party shall bear such costs or may
apportion such costs between the parties if it
determines that appointment is reasonable.

In the absence of a specific applicable provision, all


other rules applicable to international commercial
arbitration may be applied in a suppletory manner to
domestic arbitration.

When the arbitral tribunal issues an order for the


termination of the arbitral proceedings or makes an
award on agreed terms, it shall fix the costs of
arbitration referred to in paragraphs (b), (c) and (d) of
this Article in the context of that order or award.
(e) The arbitral tribunal, on its establishment, mayrequest
each party to deposit an equal amount as an advance
for the costs referred to in paragraphs (i), (ii) and (iii)
of paragraph (a) of this Article.
During the course of the arbitral proceedings, the
arbitral tribunal may request supplementary deposits
from the parties.
If an appointing authority has been agreed upon by the
parties and when a party so requests and the
appointing authority consents to perform the function,
the arbitral tribunal shall fix the amounts of any
deposits or supplementary deposits only after
consultation with the appointing authority which may
make any comments to the arbitral tribunal which it
deems appropriate concerning the amount of such
deposits and supplementary deposits.

(b) This
Chapter
shall
apply
to
domestic
arbitrationwhether the dispute is commercial, as
defined in Section 21 of the ADR Act, or noncommercial, by an arbitrator who is a private
individual appointed by the parties to hear and resolve
their dispute by rendering an award; Provided that,
although a construction dispute may be commercial, it
shall continue to be governed by E.O. No. 1008, s.1985
and the rules promulgated by the Construction
Industry Arbitration Commission.
(c) Two or more persons or parties may submit
toarbitration by one or more arbitrators any
controversy existing between them at the time of the
submission and which may be the subject of an action;
or the parties to any contract may in such contract
agree to settle by arbitration a controversy thereafter
arising between them. Such submission or contract
shall be valid, enforceable and irrevocable, save upon
such grounds as exist at law for the revocation of any
contract.
Such submission or contract may include questions
arising out of valuations, appraisals or other
controversies which may be collateral, incidental,
precedent or subsequent to any dispute between the
parties.

If the required deposits are not paid in full within


thirty (30) days after receipt of the request, the
arbitral tribunal shall so inform the parties in order
that the required payment may be made. If such
payment is not made, the arbitral tribunal may order
the suspension or termination of the arbitral
proceedings.

A controversy cannot be arbitrated where one of the


parties to the controversy is an infant, or a person
judicially declared to be incompetent, unless the
appropriate court having jurisdiction approved a
petition for permission to submit such controversy to
arbitration made by the general guardian or guardian
ad litem of the infant or of the incompetent.

After the award has been made, the arbitral tribunal


shall render an accounting to the parties of the
deposits received and return any unexpended balance
to the parties.

But where a person capable of entering into a


submission or contract has knowingly entered into the
same with a person incapable of so doing, the
objection on the ground of incapacity can be taken
only in behalf of the person so incapacitated.

CHAPTER 5
DOMESTIC ARBITRATION
RULE 1 General Provisions
Article 5.1. Scope of Application. (a) Domestic
arbitration, which is not international as defined in
paragraph C8 of Article 1.6 shall continue to be
governed by Republic Act No. 876, otherwise known

Article 5.2. Delivery and Receipt of Written


Communications. (a) Except as otherwise agreed by
the parties, a written communication from one party
to the other or to the arbitrator or to an arbitration
institution or from the arbitrator or arbitration
institution to the parties shall be delivered to the
addressee personally, by registered mail or by courier
service. Such communication shall be deemed to have
been received on the date it is delivered at the

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 110


addressees address of record, place of business,
residence or last known address. The communication,
as appropriate, shall be delivered to each party to the
arbitration and to each arbitrator, and, in institutional
arbitration, one copy to the administering institution.
(b) During the arbitration proceedings, the arbitratormay
order a mode of delivery and a rule for receipt of
written communications different from that provided
in paragraph (a) of this Article.
(c) If a party is represented by counsel or arepresentative,
written communications for that party shall be
delivered to the address of record of such counsel or
representative.
(d) Except as the parties may agree or the arbitratormay
direct otherwise, a written communication may be
delivered by electronic mail or facsimile transmission
or by such other means that will provide a record of
the sending and receipt thereof at the recipients
mailbox (electronic inbox). Such communication shall
be deemed to have been received on the same date of
its transmittal and receipt in the mailbox (electronic
inbox).
Article 5.3. Waiver of Right to Object. (a) A party shall
be deemed to have waived his right to object to
noncompliance with any non-mandatory provision of
these Rules (from which the parties may derogate) or
any requirement under the arbitration agreement
when: (i) he/she/it knows of such non-compliance;
and
(ii) proceeds with the arbitration without stating
his/her/its objections to such non-compliance without
undue delay or if a time-limit is provided therefor,
within such period of time.
(b) If an act is required or allowed to be done under
this Chapter, unless the applicable rule or the
agreement of the parties provides a different period
for the act to be done, it shall be done within a period
of thirty (30) days from the date when such act could
have been done with legal effect.
Article 5.4. Extent of Court Intervention. In matters
governed by this Chapter, no court shall intervene
except in accordance with the Special ADR Rules.
Article 5.5. Court or Other Authority for Certain
Functions of Arbitration Assistance and Supervision.
The functions referred to in paragraphs (c) and (d) of
Article 5.10 (Appointment of Arbitrators), paragraph
(a) of Article 5.11 (Grounds for Challenge), and
paragraph (a) of Article 5.13 (Failure or Impossibility
to Act), shall be performed by the appointing
authority, unless the latter shall fail or refuse to act
within thirty (30) days from receipt of the request in

which case, the applicant may renew the application


with the court. RULE 2 Arbitration Agreement
Article 5.6. Form of Arbitration Agreement. An
arbitration agreement shall be in writing. An
agreement is in writing if it is contained in a document
signed by the parties or in an exchange of letters, telex,
telegrams or other means of telecommunication which
provide a record of the agreement, or in an exchange
of statements of claim and defense in which the
existence of an agreement is alleged by one party and
not denied by the other. The reference in a contract to
a document containing an arbitration clause
constitutes an arbitration agreement provided that the
contract is in writing and the reference is such as to
make that clause part of the contract.
Article 5.7. Arbitration Agreement and Substantive
Claim Before Court. (a) A party to an action may
request the court before which it is pending to stay the
action and to refer the dispute to arbitration in
accordance with their arbitration agreement not later
than the pre-trial conference. Thereafter, both parties
may make a similar request with the court. The parties
shall be referred to arbitration unless the court finds
that the arbitration agreement is null and void,
inoperative or incapable of being performed.
(b) Where an action referred to in paragraph (a) of
thisArticle 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.
(c) Where the action is commenced by or againstmultiple
parties, one or more of whom are parties to an
arbitration agreement, the court shall refer to
arbitration those parties who are bound by the
arbitration agreement although the civil action may
continue as to those who are not bound by such
arbitration agreement.
Article 5.8. Arbitration Agreement and Interim
Measures by Court. (a) It is not incompatible with an
arbitration agreement for a party to request from a
court, before the constitution of the arbitral tribunal or
during arbitral proceedings, an interim measure of
protection and for a court to grant such measure.
(b) After the constitution of the arbitral tribunal
andduring arbitral proceedings, a request for an
interim measure of protection, or modification
thereof, may be made with the arbitral tribunal or to
the extent that the arbitral tribunal has no power to
act or is unable to act effectively, the request may be
made with the court.
(c) The following rules on interim or provisional
reliefshall be observed:

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 111


(i) Any party may request that interim or
provisionalrelief be granted against the adverse
party.
(ii) Such relief may be granted:
(aa)To prevent irreparable loss or injury;
(ab) To provide security for the performance of
anobligation;
(ac)To produce or preserve evidence; or
(ad) To compel any other appropriate act or
omissions.
(iii)The order granting provisional relief may
beconditioned upon the provision of security or any
act or omission specified in the order.
(iv) Interim or provisional relief is requested bywritten
application transmitted by reasonable means to the
arbitral tribunal and the party against whom relief is
sought, describing in appropriate detail of the precise
relief, the party against whom the relief is requested,
the ground for the relief, and the evidence supporting
the request.
(v) The order either grating or denying an applicationfor
interim relief shall be binding upon the parties.
(vi) Either party may apply with the court forassistance in
implementing or enforcing an interim measure
ordered by an arbitral tribunal.
(vii)
A party who does not comply with the order
shallbe liable for all damages, resulting from
noncompliance, including all expenses, and
reasonable attorneys fees, paid in obtaining the
orders judicial enforcement.
(d) Unless otherwise agreed by the parties, the arbitral
tribunal may, at the request of a party, order any party
to take such interim measures of protection as the
arbitral tribunal may consider necessary in respect of
the subject matter of the dispute following the Rules in
this Article. Such interim measures may include but
shall not be limited to preliminary injunction directed
against a party, appointment of receivers or detention,
preservation, inspection of property that is the subject
of the dispute in arbitration. Either party may apply
with the court for assistance in implementing or
enforcing an interim measure ordered by an arbitral
tribunal.

determination, the number of arbitrators shall be


three (3).
Article 5.10. Appointment of Arbitrators. (a) Any
person appointed to serve as an arbitrator must be of
legal age, in full enjoyment of his/her civil rights and
knows how to read and write. No person appointed to
serve as an arbitrator shall be related by blood or
marriage within the sixth degree to either party to the
controversy. No person shall serve as an arbitrator in
any proceeding if he/she has or has had financial,
fiduciary or other interest in the controversy or cause
to be decided or in the result of the proceeding, or has
any personal bias, which might prejudice the right of
any party to a fair and impartial award.
No party shall select as an arbitrator any person to act
as his/her champion or to advocate his/her cause.
(b) The parties are free to agree on a procedure
ofappointing the arbitrator or arbitrators. If, in the
contract for arbitration or in the submission, a
provision is made for a method of appointing an
arbitrator or arbitrators, such method shall be
followed.
(c) Failing such agreement,
(i) in an arbitration with three (3) arbitrators, eachparty
shall appoint one (1) arbitrator, and the two (2)
arbitrators thus appointed shall appoint the third
arbitrator; if a party fails to appoint the arbitrator
within thirty (30) days of receipt of a request to do so
from the other party, or if the two arbitrators fail to
agree on the third arbitrator within thirty (30) days of
their appointment, the appointment shall be made,
upon request of a party, by the appointing authority;
(ii) in an arbitration with a sole arbitrator, if theparties are
unable to agree on the arbitrator, he/she shall be
appointed, upon request of a party, by the appointing
authority.
(d) Where, under an appointment procedure agreed
upon by the parties,
(i) a party fails to act or appoint an arbitrator asrequired
under such procedure, or
(ii) the parties, or two (2) arbitrators, are unable toappoint
an arbitrator or reach an agreement expected of them
under such procedure, or

RULE 3. Composition of Arbitral Tribunal

(iii)a third party, including an institution, fails toappoint


an arbitrator or to perform any function entrusted to it
under such procedure, or

Article 5.9. Number of Arbitrators. The parties are free


to determine the number of arbitrators. Failing such

(iv) The multiple claimants or the multiplerespondents


is/are unable to appoint its/their respective arbitrator,

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 112


any party may request the appointing authority to
appoint an arbitrator.
In making the appointment, the appointing authority
shall summon the parties and their respective counsel
to appear before said authority on the date, time and
place set by it, for the purpose of selecting and
appointing a sole arbitrator. If a sole arbitrator is not
appointed in such meeting, or the meeting does not
take place because of the absence of either or both
parties despite due notice, the appointing authority
shall appoint the sole arbitrator.
(e) If the default appointment of an arbitrator isobjected
to by a party on whose behalf the default appointment
is to be made, and the defaulting party requests the
appointing authority for additional time to appoint
his/her arbitrator, the appointing authority, having
regard to the circumstances, may give the requesting
party not more than thirty (30) days to make the
appointment.
If the objection of a party is based on the ground that
the party did not fail to choose and appoint an
arbitrator for the arbitral tribunal, there shall be
attached to the objection the appointment of an
arbitrator together with the latters acceptance thereof
and curriculum vitae. Otherwise, the appointing
authority shall appoint the arbitrator for that party.
(f) In
making
a
default
appointment,
the
appointingauthority shall have regard to such
considerations as are likely to secure the appointment
of an independent and impartial arbitrator. In order to
achieve speedy and impartial justice and to moderate
the cost of arbitration, in choosing an arbitrator, the
appointing authority shall give preference to a
qualified person who has a place of residence or
business in the same general locality as the agreed
venue of the arbitration and who is likely to accept the
arbitrators fees agreed upon by the parties, or as fixed
in accordance either with the internal guidelines or the
Schedule of Fees approved by the administering
institution or by the appointing authority.
(g) The appointing authority shall give notice inwriting to
the parties of the appointment made or its inability to
comply with the Request for Appointment and the
reasons why it is unable to do so, in which later case,
the procedure described under Article 5.5 (Court or
Other Authority for Certain Functions of arbitration
Assistance and Supervision) shall apply.
(h) A decision on a matter entrusted by this Article tothe
appointing authority shall be immediately executory
and not subject to appeal or motion for
reconsideration. The appointing authority shall be
deemed to have been given by the parties discretionary
authority in making the appointment but in doing so,
the appointing authority shall have due regard to any
qualification or disqualification of an arbitrator/s

under paragraph (a) of Article 5.10 (Appointment of


Arbitrators) as well as any qualifications required of
the arbitrator/s by the agreement of the parties and to
such considerations as are likely to secure the
appointment of an independent and impartial
arbitrator.
(i) The chairman of the arbitral tribunal shall beselected
in accordance with the agreement of the parties
and/or the rules agreed upon or, in default thereof, by
the arbitrators appointed.
(j) Any clause giving one of the agreement, if
otherwisevalid, shall be construed as permitting the
appointment of one (1) arbitrator by all claimants and
one (1) arbitrator by all respondents. The third
arbitrator shall be appointed as provided above.
If all the claimants or all the respondents cannot
decide among themselves on an arbitrator, the
appointment shall be made for them by the appointing
authority.
(k) The appointing authority may adopt Guidelines forthe
making of a Request for Appointment.
(l) Except as otherwise provided in the Guidelines ofthe
appointing authority, if any, a Request for
Appointment shall include, as applicable, the
following:
(i) the demand for arbitration;
(ii) the name/s and curricula
appointedarbitrator/s;

vitae

of

the

(iii) the acceptance of his/her/its appointment of


theappointed arbitrator/s;
(iv) any
qualification
or
disqualification
of
thearbitrator as provided in the arbitration
agreement;
(v) an executive summary of the dispute which
shouldindicate the nature of the dispute and the
parties thereto;
(vi) principal office and officers of a corporate party;
(vii)
the person/s
theparty/ies; and

appearing

as

counsel

for

(viii) information about arbitrators fees where


there isan agreement between the parties with
respect thereto.
In institutional arbitration, the request shall include
such further information or particulars as the
administering institution shall require.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 113


(m)A copy of the Request for Appointment shall
bedelivered to the adverse party. Proof of such delivery
shall be included in, and shall form part of, the
Request for Appointment filed with the appointing
authority.
(n) A party upon whom a copy of the Request
forAppointment is communicated may, within seven
(7) days of its receipt, file with the appointing
authority his/her/its objection/s to the Request or ask
for an extension of time, not exceeding thirty (30) days
from receipt of the request, to appoint an arbitrator or
act in accordance with the procedure agreed upon or
provided by these Rules.

(b) An arbitrator may be challenged only if:


(i) circumstances exist that give rise to justifiabledoubts
as to his/her impartiality or independence;
(ii) he/she does not possess qualifications as providedfor
in this Chapter or those agreed to by the parties;
(iii)he/she is disqualified to act as arbitration underthese
Rules;
(iv) he refuses to respond to questions by a partyregarding
the nature and extent of his professional dealings with
a party or its counsel.

Within the aforementioned periods, the party seeking


the extension shall provide the appointing authority
and the adverse party with a copy of the appointment
of his/her arbitrator, the latters curriculum vitae, and
the latters acceptance of the appointment. In the
event that the said party fails to appoint an arbitrator
within said period, the appointing authority shall
make the default appointment.

(c) 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/she believes might
disqualify him/her as an impartial arbitrator, the
arbitrator shall immediately disclose such information
to the parties. Thereafter, the parties may agree in
writing:

(o) An arbitrator, in accepting an appointment,


shallinclude, in his/her acceptance letter, a statement
that:

(i) to waive the presumptive disqualifyingcircumstances;


or

(i) he/she agrees to comply with the applicable law,


thearbitration rules agreed upon by the parties, or in
default thereof, these Rules, and the Code of Ethics for
Arbitrators in Domestic Arbitration, if any;
(ii) he/she accepts as compensation the arbitratorsfees
agreed upon by the parties or as determined in
accordance with the rules agreed upon by the parties,
or in default thereof, these Rules; and
(iii)he agrees to devote as much time and attention tothe
arbitration as the circumstances may require in order
to achieve the objective of a speedy, effective and fair
resolution of the dispute.
Article 5.11. Grounds for Challenge. (a) When a person
is approached in connection with his/her possible
appointment as an arbitrator, he/she shall disclose
any circumstance likely to give rise to justifiable
doubts as to his/her impartiality, independence,
qualifications and disqualifications. An arbitrator,
from the time of his/her 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/her.
A person, who is appointed as an arbitrator
notwithstanding the disclosure made in accordance
with this Article, shall reduce the disclosure to writing
and provide a copy of such written disclosure to all
parties in the arbitration.

(ii) to declare the office of such arbitrator vacant. Anysuch


vacancy shall be filed in the same manner the original
appointment was made.
(d) After initial disclosure is made and in the course ofthe
arbitration proceedings, when the arbitrator discovers
circumstances that are likely to create a presumption
of bias, he/she shall immediately disclose those
circumstances to the parties. A written disclosure is
not required where it is made during the arbitration
and it appears in a written record of the arbitration
proceedings.
(e) An arbitrator who has or has had financial
orprofessional dealings with a party to the arbitration
or to the counsel of either party shall disclose in
writing such fact to the parties, and shall, in good
faith, promptly respond to questions from a party
regarding the nature, extent and age of such financial
or professional dealings.
Article 5.12. Challenge Procedure. (a) The parties are
free to agree on a procedure for challenging an
arbitrator, subject to the provisions of paragraph (c) of
this Article.
(b) Failing such agreement, a party who intends
tochallenge an arbitrator shall, within fifteen (15) days
after becoming aware of the constitution of the arbitral
tribunal or after becoming aware of any circumstance
referred to in paragraph (b) of Article 5.11 (Grounds
for Challenge), send a written statement of the reasons
for the challenge to the arbitral tribunal. Unless the

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 114


challenged arbitrator withdraws from his/her office or
the other party agrees to the challenge, the arbitral
tribunal shall decide on the challenge.
(c) If a challenge under any procedure agreed upon bythe
parties or under the procedure of paragraph (b) of this
Article in not successful, the challenging party may
request the appointing authority, within thirty (30)
days after having received notice of the decision
rejecting the challenge, to decide on the challenge,
which decision shall be immediately executory and not
subject to appeal or motion for reconsideration. While
such a request is pending, the arbitral tribunal,
including the challenged arbitrator, may continue the
arbitral proceedings and make an award.
(d) If a request for inhibition is made, it shall bedeemed as
a challenge.
(e) A party may challenge an arbitrator appointed
byhim/her/it, or in whose appointment he/she/it has
participated, only for reasons of which he/she/it
becomes aware after the appointment has been made.
(f) The challenge shall be in writing and it shall
statespecific facts that provide the basis for the ground
relied upon for the challenge. A challenge shall be
made within fifteen (15) days from knowledge by a
party of the existence of a ground for a challenge or
within fifteen (15) days from the rejection by an
arbitrator of a partys request for his/her inhibition.
(g) Within fifteen (15) days of receipt of the challenge,the
challenged arbitrator shall decide whether he/she
shall accept the challenge or reject it. If he/she accepts
the challenge, he/she shall voluntarily withdraw as
arbitrator. If he/she rejects it, he/she shall
communicate, within the same period of time, his/her
rejection of the challenge and state the facts and
arguments relied upon for such rejection.
(h) An arbitrator who does not accept the challengeshall
be given an opportunity to be heard.
(i) Notwithstanding the rejection of the challenge bythe
arbitrator, the parties may, within the same fifteen
(15) day period, agree to the challenge.
(j) In default of an agreement of the parties to agree onthe
challenge thereby replacing the arbitrator, the arbitral
tribunal shall decide on the challenge within thirty
(30) days from receipt of the challenge.
(k) If the challenge procedure as agreed upon by
theparties or as provided in this Article is not
successful, or a party or the arbitral tribunal shall
decline to act, the challenging party may request the
appointing authority in writing to decide on the
challenge within thirty (30) days after having received
notice of the decision rejecting the challenge. The

appointing authority shall decide on the challenge


within fifteen
(15) days from receipt of the request. If the appointing
authority shall fail to act on the challenge within thirty
(30) days from the date of its receipt or within such
further time as it may fix, with notice to the parties,
the requesting party may renew the request with the
court.
The request made under this Article shall include the
challenge, the reply or explanation of the challenged
arbitrator and relevant communication, if any, from
either party, or from the arbitral tribunal.
(n) Every communication required or agreement made
under this Article in respect of a challenge shall be
delivered, as appropriate, to the challenged arbitrator,
to the parties, to the remaining members of the
arbitral tribunal and to the institution administering
the arbitration, if any.
(m) A challenged arbitrator shall be replaced if:
(i) he/she withdraws as arbitrator, or
(ii) the parties agree in writing to declare the office
ofarbitrator vacant, or
(iii) the arbitral tribunal decides the challenge
anddeclares the office of the challenged arbitrator
vacant, or
(iv) the appointing authority decides the challenge
anddeclares the office of the challenged arbitrator
vacant, or
(v) in default of the appointing authority, the
courtdecides the challenge and declares the office of
the challenged arbitrator vacant.
(n) The decision of the parties, the arbitral tribunal,the
appointing authority, or in proper cases, the court, to
accept or reject a challenge is not subject to appeal or
motion for reconsideration.
(o) Until a decision is made to replace the arbitratorunder
this Article, the arbitration proceeding shall continue
notwithstanding the challenge, and the challenged
arbitrator shall continue to participate therein as an
arbitrator. However, if the challenge incident is raised
before the court, because the parties, the arbitral
tribunal or appointing authority failed or refused to
act within the period provided in paragraphs (j) and
(k) of this Article, the arbitration proceeding shall be
suspended until after the court shall have decided the
incident. The arbitration shall be continued
immediately after the court has delivered an order on
the challenging incident. If the court agrees that the

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 115


challenged arbitrator shall be replaced, the parties
shall immediately replace the arbitrator concerned.
(p) The appointment of a substitute arbitrator shall
bemade pursuant to the procedure applicable to the
appointment of the arbitrator being replaced.
Article 5.13. Failure or Impossibility to Act. (a) If an
arbitrator becomes de jure or de facto unable to
perform his/her functions or for other reasons fails to
act without undue delay, his/her mandate terminates
if he/she withdraws from his/her office or if the
parties agree on the termination. Otherwise, if a
controversy remains concerning any of these grounds,
any party may request the appointing authority to
decide on the termination of the mandate, which
decision shall be immediately executory and not
subject to appeal or motion for reconsideration.
(b) If, under this Article or Article 5.12 (Challenge
Procedure), an arbitrator withdraws from his/her
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 Article 5.12.
Article 5.14. Appointment of Substitute Arbitrator.
Where the mandate of an arbitrator terminates under
Articles 5.12 (Challenge Procedure) or 5.13 (Failure or
Impossibility) or because of his withdrawal from office
for any other reason or because of the revocation of his
mandate by agreement of the parties or in any other
case of termination of his/her mandate, a substitute
arbitrator shall be appointed according to the rules
applicable to the arbitrator being replaced.
RULE 4 Jurisdiction of Arbitral Tribunal
Article 5.15 Competence of Arbitral Tribunal to Rule
on its Jurisdiction. (a) When a demand for arbitration
made by a party to a dispute is objected to by the
adverse party, the arbitral tribunal shall, in the first
instance, resolve the objection when made on any of
the following grounds:
(i) the
arbitration
agreement
is
in
existent,
void,unenforceable or not binding upon a person for
any reason, including the fact that the adverse party is
not privy to said agreement; or
(ii) the dispute is not arbitrable or is outside the scopeof
the arbitration agreement; or
(iii)the
dispute
is
under
the
original
and
exclusivejurisdiction of a court or quasi-judicial body,
(b) If a party raises any of the grounds for objection,the
same shall not preclude the appointment of the
arbitrator/s as such issue is for the arbitral tribunal to
decide.

The participation of a party in the selection and


appointment of an arbitrator and the filling of
appropriate pleadings before the arbitral tribunal to
question its jurisdiction shall not be construed as a
submission to the jurisdiction of the arbitral tribunal
or of a waiver of his/her/its right to assert such
grounds to challenge the jurisdiction of the arbitral
tribunal or the validity of the resulting award.
(c) The respondent in the arbitration may invoke anysuch
grounds to question before the court the existence,
validity, or enforceability of the arbitration agreement,
or the propriety of the arbitration, or the jurisdiction
of the arbitrator and invoke the pendency of such
action as ground for suspension of the arbitration
proceeding. The arbitral tribunal, having regard to the
circumstances of the case, and the need for the early
and expeditious settlement of the dispute, in light of
the facts and arguments raised to question its
jurisdiction, may decide either to suspend the
arbitration until the court has made a decision on the
issue or continue with arbitration.
(d) If a dispute is, under an arbitration agreement, tobe
submitted to arbitration, but before arbitration is
commenced or while it is pending, a party files an
action before the court which embodies or includes as
a cause of action the dispute that is to be submitted to
arbitration the filling of such action shall not prevent
the commencement of the arbitration or the
continuation of the arbitration until the award is
issued.
Article 5.16 Power of Arbitral Tribunal to Order
Interim Measures. (a) Unless otherwise agreed by the
parties, the arbitral tribunal may, at the request of a
party, order any party to take such interim measures
of protection as the arbitral tribunal may consider
necessary in respect of the subject matter of the
dispute following the rules in this Article. Such interim
measures may include, but shall not be limited to
preliminary injunction directed against a party,
appointment of receivers or detention preservation,
inspection of property that is the subject of the dispute
in arbitration.
(b) After the constitution of the arbitral tribunal,
andduring arbitral proceedings, a request for interim
measures of protection, or modification thereof, shall
be made with the arbitral tribunal. The arbitral
tribunal is deemed constituted when the sole
arbitrator or the third arbitrator, who has been
nominated, has accepted the nomination and written
communication of said nomination and acceptance
has been received by the party making the request.
(c) The following rules on interim or provisional
reliefshall be observed:

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 116


(i) Any party may request that the provisional
orinterim relief be granted against the adverse
party.
(ii) Such relief may be granted:
(aa)To prevent irreparable loss or injury;
(ab) To provide security for the performance of
anobligation;
(ac)To produce or preserve evidence; or
(ad) To compel any other appropriate act or
omissions.
(iii)The order granting provisional relief may
beconditioned upon the provision of security or any
act or omission specified in the order.
(iv) Interim or provisional relief is requested bywritten
application transmitted by reasonable means to the
arbitral tribunal and the party against whom relief is
sought, describing in appropriate detail the precise
relief, the party against whom the relief is requested,
the ground for the relief and the evidence supporting
the request.
(v) The order either granting or denying an applicationfor
interim relief shall be binding upon the parties.
(vi) Either party may apply with the court forassistance in
implementing or enforcing an interim measure
ordered by an arbitral tribunal.
(vii)
A party who does not comply with the order
shallbe liable for all damages, resulting from
noncompliance, including all expenses, and
reasonable attorneys fee paid in obtaining the orders
judicial enforcement.
RULE 5 Conduct of Arbitral Proceedings
Article 5.17. Equal Treatment of Parties. The parties
shall be treated with equally and each party shall be
given a full opportunity of presenting his/her/its case.
Article 5.18 Determination of Rules of Procedure. (a)
Subjected to the provisions of these Rules, the parties
are free to agree on the procedure to be followed by
the arbitral tribunal in conducting the proceedings.
(b) Failing such agreement, the arbitral tribunal may
subject to the provision of the ADR Act, conduct the
arbitration in such manner as it considers appropriate.
The power conferred upon the arbitral tribunal
includes the power to determine admissibility,
relevance, materially and weight of evidence.

Article 5.19 Place of Arbitration. (a) The parties are


free to agree on the place of arbitration. Failing such
agreement, the place of arbitration shall be in Metro
Manila unless the arbitral tribunal, having regard to
the circumstances of the case, including the
convenience of the parties, shall decide on a different
place of arbitration.
(b) The arbitral tribunal may, unless otherwise agreed
by the parties, meet at any place it considers
appropriate for consultation among its members, for
hearing witnesses, experts or the parties, or for
inspection of goods, other property or documents.
Article 5.20 Commencement of Arbitral Proceedings
(a) Where there is a prior arbitration agreement
between the parties, arbitration is deemed
commenced as follows:
(i) In
institutional
arbitration
is
commenced
inaccordance with the arbitration rules of the
institution agreed upon by the parties.
(ii) In ad hoc arbitration, arbitration is commenced bythe
claimant upon delivering to the respondent a demand
for arbitration. A demand may be in any form stating:
(aa)the name, address and description of each of
theparties;
(ab)
a description of the nature and circumstances
ofthe dispute giving rise to the claim;
(ac)a statement of the relief sought, including theamount
of the claim;
(ad)
the relevant agreements, if any, including
thearbitration agreement, a copy of which shall be
attached; and
(ae)appointment
toappoint.

of

arbitrators

and

or

demand

(b) If
the
arbitration
agreement
provides
for
theappointment of a sole arbitrator, the demand shall
include an invitation of the claimant to the respondent
to meet and agree upon such arbitrator, the place,
time and date stated therein which shall not be less
than thirty (30) days from receipt of the demand.
(c) If
the
arbitration
agreement
provides
for
theestablishment of an arbitral tribunal of three (3)
arbitrators, the demand shall name the arbitrator
appointed by the claimant. It shall include the
curriculum vitae of the arbitrator appointed by the
claimant and the latters acceptance of the
appointment.
(d) Where
there
is
no
prior
arbitration
agreement,arbitration may be initiated by one party

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 117


through a demand upon the other to submit their
dispute to arbitration. Arbitration shall be deemed
commenced upon the agreement by the other party to
submit the dispute to arbitration.
(e) The demand shall required the respondent to
namehis/her/its/ arbitrator within a period which
shall not be less than fifteen (15) days from receipt of
the demand. This period may be extended by
agreement of the parties. Within said period, the
respondent shall give a written notice to the claimant
of the appointment of the respondents arbitrator and
attach to the notice the arbitrators curriculum vitae
and the latters acceptance of the appointment.
Article 5.21 Language (a) The parties are free to agree
on the language or languages to be used in the arbitral
proceedings. Failing such agreement, the language to
be used shall be English or Filipino. The language/s
agreed, unless otherwise specified therein, shall be in
all hearings and all written statements, orders or other
communication by the parties and the arbitral
tribunal.
(b) The arbitral tribunal may order that any
documentary evidence shall be accompanied by a
translation into the language or languages agreed
upon by the parties in accordance with paragraph (a)
of this Article.
Article 5.22 Statement of Claim and Defense (a)
Within the period of time agreed by the parties or
determined by the arbitral tribunal, the claimant shall
state the facts supporting his/her/its claim, the points
at issue and the relief or remedy sought, and the
respondent shall state his/her defense in respect of
these particulars, unless the parties may have
otherwise agreed as to the required elements of such
statements. The parties may submit with their
statements all documents they consider to be relevant
or may add a reference to the documents or other
evidence they will submit.
(b) Unless otherwise agreed by the parties, either party
may amend or supplement his/her/its claim or
defense during the course of the arbitral proceedings,
unless the arbitral tribunal considers it inappropriate
to allow such amendments having regard to the delay
in making it.
Article 5.23 Hearing and Written Proceedings (a) In ad
hoc arbitration, the procedure determined by the
arbitrator, with the agreement of the parties, shall be
followed. In institutional arbitration, the applicable
rules of procedure of the arbitration institution shall
be followed. In default of agreement of the parties, the
arbitration procedure shall be as provided in this
Chapter.

(b) Within thirty (30) days from the appointment of


the arbitrator or the constitution of an arbitral
tribunal, the arbitral tribunal shall call the parties and
their respective counsels to a pre-hearing conference
to discuss the following matters:
(i) The venue or place/s where the arbitration
proceeding may be conducted in an office space, a
business center, a function room or any suitable place
agreed upon by the parties and the arbitral tribunal,
which may vary per session/hearing/conference; (ii)
The manner of recording the proceedings;
(iii)The periods for the communication of thestatement of
claims with or without counterclaims, and answer to
the counterclaim/s and the form and contents of such
pleadings.
(iv) The definition of the issues submitted to thearbitral
tribunal for determination and the summary of the
claims and counterclaims of the parties;
(v) The manner by which evidence may be offered if
anoral hearing is required, the submission of sworn
written statements in lieu of oral testimony, the
crossexamination and further examination of
witnesses;
(vi) The delivery of certain types of communicationssuch
as pleadings, terms of reference, order granting
interim relief, final award and the like that, if made by
electronic or similar means, shall require further
confirmation in the form of a hard copy or hard copies
delivered personally or by registered post.
(vii)
The issuance of subpoena or subpoena
ducestecum by the arbitral tribunal to compel the
production of evidence if either party shall or is likely
to request it;
(viii)
The manner by which expert testimony will
bereceived if a party will or is likely to request the
arbitral tribunal to appoint one or more experts, and
in such case, the period for the submission to the
arbitrator by the requesting party of the proposed
terms of reference for the expert, the fees to be paid,
the manner of payment to the expert and the deposit
by the parties or the requesting party of such amount
necessary to cover all expenses associated with the
referral of such issues to the expert before the expert is
appointed;
(ix) The possibility of either party applying for an
ordergranting interim relief either with arbitral
tribunal or with the court, and, in such case, the
nature of the relief to be applied for;
(x) The possibility of a site or ocular inspection,
thepurpose of such inspection, and in such case, the

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 118


date, place and time of the inspection and the manner
of conducting it, and the sharing and deposit of any
associated fees and expenses;
(xi) The amount to be paid to the arbitral tribunal asfees
and the associated costs, charges and expenses of
arbitration and the manner and timing of such
payments; and
(xii)
Such other relevant matters as the parties and
thearbitral tribunal may consider necessary to provide
for a speedy and efficient arbitration of the dispute.
(c) To the extent possible, the arbitral tribunal and
theparties shall agree upon any such matters and in
default of agreement, the arbitral tribunal shall have
the discretion and authority to make the decision,
although in making decision, regard shall be given to
the views expressed by both parties.
(d) The arbitral tribunal shall, in consultation with
theparties, fix the date/s and the time of hearing,
regard being given to the desirability of conducting
and concluding an arbitration without undue delay.
(e) The hearing set shall not be postponed except withthe
conformity of the arbitrator and the parties and only
for a good and sufficient cause. The arbitral tribunal
may deny a request to postpone or to cancel a
scheduled hearing on the ground that a party has
requested or is intending to request from the court or
from the arbitrator an order granting interim relief.
(f) A
party
may,
during
representhimself/herself/itself
representative, at such hearing.

the
or

proceedings,
through
a

(g) The hearing may proceed in the absence of a partywho


fails to obtain an adjournment thereof or who, despite
due notice, fails to be present, by himself/herself/itself
or through a representative, at such hearing.
(h) Only parties, their respective representatives,
thewitnesses and the administrative staff of the
arbitral tribunal shall have the right to be present if
the parties, upon being informed of the presence of
such person and the reason for his/her presence,
interpose no objection thereto.
(i) Issues raised during the arbitration proceedingrelating
to (a) the jurisdiction of the arbitral tribunal over one
or more of the claims or counter claims, or (b) the
arbitrability of a particular claim or counter claim,
shall be resolved by the arbitral tribunal as threshold
issues, if the parties so request, unless they are
intertwined with factual issues that they cannot be
resolved ahead of the hearing on the merits of the
dispute.

(j) Each witness shall, before giving testimony,


berequired to take an oath/ affirmation before the
arbitral tribunal, to tell the whole truth and nothing
but the truth during the hearing.
(k) The arbitral tribunal shall arrange for thetranscription
of the recorded testimony of each witness and require
each party to share the cost of recording and
transcription of the testimony of each witness.
(l) Each party shall provide the other party with a copyof
each statement or document submitted to the arbitral
tribunal and shall have an opportunity to reply in
writing to the other party's statements and proofs.
(m)The arbitral tribunal may require the parties toproduce
such other documents or provide such information as
in its judgment would be necessary for it to render a
complete, fair and impartial award.
(n) The arbitral tribunal shall receive as evidence
allexhibits submitted by a party properly marked and
identified at the time of submission.
(o) At the close of the hearing, the arbitral tribunalshall
specifically inquire of all parties whether they have
further proof or witnesses to present; upon receiving a
negative reply, the arbitral tribunal shall declare the
hearing closed.
(p) After a hearing is declared closed, no furthermotion or
manifestation or submission may be allowed except
for post-hearing briefs and reply briefs that the parties
have agreed to submit within a fixed period after the
hearing is declared closed, or when the arbitral
tribunal, motu proprio or upon request of a party,
allows the reopening of the hearing.
(q) Decisions on interlocutory matters shall be madeby the
sole arbitrator or by the majority of the arbitral
tribunal. The arbitral tribunal may authorized its
chairman to issue or release, on behalf of the arbitral
tribunal, its decision on interlocutory matters.
(r) Except as provide in section 17 (d) of the ADR Act.No
arbitrator shall act as a mediator in a any proceeding
in which he/she is acting as arbitrator even if
requested by the parties; and all negotiations.
(s) Before assuming the duties of his/her office,
anarbitrator must be sworn by any officer authorized
by law to administer an oath or be required to make an
affirmation to faithfully and fairly hear and examine
the matters in controversy and make a just award
according to the best his/her ability and
understanding. A copy of the arbitrator's oath or
affirmation shall be furnished each party to the
arbitration.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 119


(t) Either party may object to the commencement
orcontinuation of an arbitration proceeding unless the
arbitrator takes an oath or affirmation as required in
this chapter. If the arbitrator shall refuse to take an
oath or affirmation as required by law and this rule,
he/she shall be replaced. The failure to object to the
absence of an oath or affirmation shall be deemed a
waiver of such objection and the proceedings shall
continue in due course and may not later be used as a
ground to invalidate the proceedings.
(u) the arbitral tribunal shall have the power toadminister
oaths to, or require affirmation from, all witnesses
directing them to tell the truth, the whole truth and
nothing but the truth in any testimony, oral or written,
which they may give or offer in any arbitration
hearing. The oath or affirmation shall be required of
every witness before his/her testimony, oral or
written, is heard or considered.
(v) the arbitral tribunal shall have the power torequired
any person to attend a hearing as a witness. It shall
have the power to subpoena witnesses, to testify
and/or produce documents when the relevancy and
materiality thereof has been shown to the arbitral
tribunal. The arbitral tribunal may also require the
exclusion of any witness during the testimony of any
other witness. Unless the parties otherwise agree, all
the arbitrators in any controversy must attend all the
hearings and hear the evidence of the parties.
Article 5.24 Power of Arbitral Tribunal to Order
Interim Muslim. ( a ) unless otherwise agreed by the
parties, the arbitral tribunal may, at the request of a
party and in accordance with the this Article, order
any party to take such interim measures of protection
as the arbitral tribunal may consider necessary in
respect of the subject matter of the dispute of the
procedure, Such interim measures may include, but
shall not be limited, to preliminary injunction directed
against a party, appointment of receivers or detention
of property that is the subject of the dispute in
arbitration or its preservation or inspection.
(b) After the constitution of the arbitral tribunal,
andduring the arbitration proceedings, a request for
interim measures of protection, or modification
thereof, may be made with the arbitral tribunal. The
arbitral tribunal is deemed constituted when the sole
arbitrator or the third arbitrator, who has been
nominated, has accepted the nomination and written
communication of said nomination and acceptance
has been received by the party making the request.
(c) The following rules on interim or provisional
reliefshall be observed:
(i) Any party may request that provisional or
interimrelief be granted against the adverse party.
(ii) Such relief may be granted:

(aa)To prevent irreparable loss or injury;


(ab) To provide security for the performance of
anobligation;
(ac)To produce or preserve evidence; or
(ad) To compel any other appropriate act or
omissions.
(iii)The order granting provisional relief may
beconditioned upon the provision of security or any
act or omission specified in the order.
(iv) Interim
provisional
relief
is
requested
by
writtenapplication transmitted by reasonable means
to the arbitral tribunal and the party against whom
relief is sought, describing in appropriate detail of the
precise relief, the party against whom relief is
requested the ground for the relief, and the evidence
supporting the request.
(v) The order either granting or denying an applicationfor
interim relief shall be binding upon the parties.
(vi) Either party may apply with the court forassistance in
implementing or enforcing an interim measure
ordered by an arbitral tribunal.
(vii)
A party who does not comply with the order
shallbe liable for all damages, resulting from
noncompliance, including all expenses, and
reasonably attorneys fees, paid in obtaining the
orders judicial enforcement.
(d) The arbitral tribunal shall be have the power at any
time, before rendering the award, without prejudice to
the rights of any party to petition the court to take
measures to safeguard an/or conserve any matter
which is the subject of the dispute in arbitration.
Article 5.25. Default of a Party. Unless otherwise
agreed by the parties, if, without showing sufficient
causes.
(a) the
claimant
fails
to
communicate
his/her/itsstatement of claim in accordance with
paragraph (a) of Article 5.22(Statement of Claim and
Defense), the arbitral tribunal shall terminate the
proceedings;
(b) ]the
respondent
fails
to
communicate
his/her/itsstatement of defense in accordance with
paragraph (a) of Article 5.22 (Statements of Claim and
Defense), the arbitral tribunal shall continue the
proceedings without treating such failure in itself as an
admission of the claimants allegations;
(c) any party fails to appear at a hearing or to
producedocumentary evidence, the arbitral tribunal

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 120


may continue the proceedings and make the award
based on the evidence before it.
Article 5.26. Expert Appointed by the Arbitral
Tribunal. (a) Unless otherwise agreed by the parties,
the arbitral tribunal,
(i) may appoint one or more experts to report to it
onspecific issues to be determined by the arbitral
tribunal; or
(ii) may require a party to give the expert any
relevantinformation or to produce, or to provide
access to, any relevant documents, goods or other
property for his/her inspection.
(b) Unless otherwise agreed by the parties, if a party
sorequest or if the arbitral tribunal considers it
necessary, the expert shall, after delivery of his/her
written or oral report, participate in a hearing where
the parties have the opportunity to put questions to
him/her and to present expert witnesses in order to
testify on the points at issue.
(c) upon agreement of the parties, the finding of theexpert
engaged by the arbitral tribunal on the matter/s
referred to him shall be binding upon the parties and
the arbitral tribunal.
Article 5.27. Court Assistance in Taking Evidence and
Other Matters. (a) The arbitral tribunal or a party,
with the approval of the arbitral tribunal may request
from a court, assistance in taking evidence such as the
issuance of subpoena ad testificandum and subpoena
duces tecum, deposition taking, site or ocular
inspection, and physical examination of properties.
The court may grant the request within its competence
and according to its rules on taking evidence.
(b) The arbitral tribunal or a party to the dispute
interested in enforcing an order of the arbitral tribunal
may request from a competent court, assistance in
enforcing orders of the arbitral tribunal, including but
not limited, to the following:
(i) Interim or provision relief;
(ii) Protective orders with respect to confidentiality;
(iii) Orders of the arbitral tribunal pertaining to
thesubject matter of the dispute that may affect
third persons and/or their properties; and/or
(iv) Examination of debtors.
Article 5.28 Rules Applicable to the Substance of
Dispute. (a) The arbitral tribunal shall decide the
dispute in accordance with such law as is chosen by
the parties, In the absence of such agreement,
Philippine law shall apply.

(b) The arbitral tribunal may grant any remedy orrelief


which it deems just and equitable and within the scope
of the agreement of the parties, which shall include,
but not be limited to, the specific performance of a
contract.
(c) In all cases, the arbitral tribunal shall decide
inaccordance with the terms of the contract and shall
take into account the usages of the trade applicable to
the transaction.
Article 5.29. Decision Making by the Arbitral Tribunal.
(a) The arbitration 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 may be decided by the chairman of the
arbitral tribunal, if so authorized by the parties or all
members of the arbitral tribunal.
(b) Unless otherwise agreed upon by the parties, the
arbitral tribunal shall render its written award within
thirty (30) days after the closing of all hearings and/or
submission of the parties respective briefs or if the
oral hearings shall have been waived, within thirty(30)
days after the arbitral tribunal shall have declared
such proceedings in lieu of hearing closed. This period
may be further extended by mutual consent of the
parties.
Article 5.30 Settlement. (a) if, during arbitral
proceedings, the parties settle the dispute, the arbitral
tribunal, record the settlement in the form of an
arbitral award on agreed terms, consent award or
award based on compromise.
(b) An award as rendered above shall be made in
accordance with the provisions of Article 5.31 (Form
and Contents of Award) and shall state that it is an
award. Such an award has the same status and effect
as any other award on the merits of the case.
Article 5.31. Form and Contents of Award. (a) The
award shall be made in writing and shall be signed by
the arbitral tribunal. In arbitration 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 us stated.
(b) The award shall state the reasons upon which isbased,
unless the parties have agreed that no reasons are to
be given or the award on agreed terms, consent award
based on compromise under Article 5.30 (Settlement).
(c) The award shall state its date and the placed
ofarbitration as determined in accordance with the
paragraph (a) of Article 5.19 (Place of Arbitration).
The award shall be deemed to have made at that place.

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 121


(d) After the award is made, a copy signed by
thearbitrators in accordance with the paragraph (a) of
this Article shall be delivered to each party.
(e) The award of the arbitral tribunal need not
beacknowledged, sworn to under oath, or affirmed by
the arbitral tribunal unless so required on writing by
the parties. If despite such requirement, the arbitral
tribunal shall fail to do as required, the parties may,
within thirty days from the receipt of said award,
request the arbitral tribunal to supply the omission.
The failure of the parties to make an objection or make
such request within the said period shall be deemed a
waiver or such requirement and may no longer be
raised as a ground to invalidate the award.
Article 5.32. Termination of Proceedings. (a) The
arbitration proceedings are terminated by the final
award or by an order of the arbitral tribunal in
accordance with paragraph (b) of this Article.
(b) The arbitral tribunal shall issue an order for the
termination of the arbitration proceedings when:
(i) The claimant withdraws his claim, unless
therespondents objects thereto for the purpose of
prosecuting his counterclaims in the same proceedings
of the arbitral tribunal recognizes a legitimate interest
on his part in obtaining a final settlement of the
dispute; or

award may be made within thirty(30) days from its


receipt.
(e) Notwithstanding
the
foregoing,
the
arbitral
tribunalmay for special reason, reserved in the final
award in order a hearing to quantity costs and
determine which party shall bear the costs or
apportionment thereof as may be determined to be a
equitable. Pending determination of this issue, the
award shall not be deemed final for purposes of
appeal, vacations, correction, or any post-award
proceedings.
Article 5.33. Correction and Interpretation of Award,
Additional Award. (a) Within thirty (30) days from
receipt of the award, unless another period of time has
been agreed upon by the parties.
(i) A party may, with notice to the other party, thearbitral
tribunal to correct in the awards any errors in
computation, any clerical or typographical errors or
any errors similar nature
(ii) If so agreed by the parties, with notice to the
otherparty, may request the arbitral tribunal to give an
interpretation of a specific point or part of the award.

of

If the arbitral tribunal considers the request to be


justified, it shall make the connection or give the
interpretation within thirty (30) days from receipt of
the request. The interpretation shall form part of the
award.

(iii)The arbitral tribunal finds that the continuation ofthe


proceedings has for any other reason before
unnecessary or impossible; or

(b) The arbitral tribunal may correct any errors of thetype


referred to in paragraph (a) of this Article on its own
initiative within thirty (30) days of the date of the
award.

(ii) The parties agree


theproceedings; or

on

the

termination

(iv) The required deposits are not paid in full inaccordance


with paragraph (d) of Article 5.46 (Fees and Costs).
(c) The mandate of the arbitral tribunal ends with
thetermination of the arbitration proceedings, subject
to the provisions of Article 5.33 (Correction and
Interpretation of Award) and Article 5.34 (Application
for Settings Aside in Exclusive Recourse Against the
Arbitral Award).
(d) Except
as
otherwise
provided
in
the
arbitrationagreement, no motion for reconsideration
correction and interpretation of award or additional
award shall be with the arbitral tribunal. The arbitral
tribunal, by releasing its final award, loses jurisdiction
over the dispute and the parties to the arbitral
tribunal, by releasing its final award, loses jurisdiction
over the dispute and the parties to the arbitration.
However, where is shown that the arbitral tribunal
failed to resolved an issue. Submitted to him or
determination a verified motion to complete a final

(c) Unless otherwise agreed by the parties, a partymay,


with notice to the other party, may request within
thirty (30) days of receipt of the award, the arbitral
tribunal to make an additional award as to claims
presented in the arbitral proceedings but omitted from
the award., If the arbitral tribunal considers the
request to be justified, it shall make the additional
award within sixty (60) days.
(d) The arbitral tribunal may extend, if necessary,
theperiod of time within which it shall make a
correction, interpretation or an additional award
under paragraphs (a) and (c) of this Article.
(e) The provisions of Article 5.31 (Form and Contentsof
Award) shall apply to a correction or interpretation of
the award to an additional award.
Article 5.34. Application for Setting Aside an Exclusive
Recourse against Arbitral Award. The court when
asked to set aside an award, may, where appropriate
and so requested by a party, suspend the setting aside

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 122


proceedings for a period of time determined by it in
order to give the arbitral tribunal an opportunity to
resume the arbitral proceedings or to take such other
action as in the arbitral tribunals opinion will
eliminate the grounds for setting aside an award.
Article 5.35. Grounds to Vacate an Arbitral Award. (a)
The arbitral award may be questioned, vacated or set
aside by the appropriate court in accordance with the
Special ADR Rules only on the following grounds:
(i) The arbitral award was procured by corruption,fraud
or other undue means; or
(ii) There was evident partially or corruption in thearbitral
tribunal or any of its members; or
(iii)The arbitral tribunal was guilty of misconduct orany
form of misbehavior that has materially prejudiced the
rights of any party such as refusing to postpone the
hearing upon sufficient cause shown or to hear
evidence pertinent and material to the controversy; or
(iv) One or more of the arbitrators was disqualified toact as
such under this Chapter and willfully refrained from
disclosing such disqualification ; or
(v) The arbitral tribunal exceeded its powers, or
soimperfectly executed them, such that a complete,
final and definite award upon the subject matter
submitted to it was not made.
Any other ground raised to question, vacate or set
aside the arbitral award shall be disregarded by the
court.
(b) Where a petition to vacate or set aside an award isfiled,
the petitioner may simultaneously, or the oppositor
may in the alternative, petition the court to remit the
case to the same arbitral tribunal for the purpose of
making a new or revised final and definite award or to
direct a new hearing before the same or new arbitral
tribunal, the members of which shall be chosen in the
manner originally provided in the arbitration
agreement or submission. In the latter case, any
provision limiting the time In which the arbitral
tribunal may make a decision shall be deemed
applicable to the new arbitral tribunal and to
commence from the date of the courts order.
(c) Where a party files a petition with the court tovacate or
set aside an award by reason of omission/s that do not
affect the merits of the case and may be cured or
remedied, the adverse party may oppose that petition
and instead request the court to suspend the vacation
or setting aside the proceedings for a period of time to
give the arbitral tribunal an opportunity to cure or
remedy the award or resume the arbitration
proceedings or take such other action as will eliminate
the grounds for vacation or setting aside.

RULE 6 Recognition and Enforcement of Awards


Article 5.36. Confirmation of Award. The party moving
for an order confirming, modifying, correcting, or
vacating an award, shall, at the time that such motion
is filled with the court for the entry of judgment
thereon, also file the original or verified copy of the
award, the arbitration or settlement agreement, and
such papers as may be required by the Special ADR
Rules.
Article 5.37. Judgment. Upon the grant of an order
confirming, modifying or correcting an award,
judgment may be entered in conformity therewith in
the court where said application is filed. Costs of the
application and the proceedings subsequent thereto
may be awarded by the court In its discretion. If
awarded, the amount thereof must be included in the
judgment. Judgment will be enforced like court
judgments.
Article 5.38. Appeal. A decision of the court
confirming, vacating, setting aside, modifying or
correcting an arbitral award may be appealed to the
Court of Appeals in accordance with Special ADR
Rules.
The losing party who appeals from the judgment of the
Court confirming an arbitral award shall be required
by the Court of Appeals to post a counter-bond
executed in favor of the prevailing party equal to the
amount of the award in accordance with the Special
ADR Rules.
Article 5.39. Venue and Jurisdiction. Proceedings for
recognition and enforcement of an arbitration
agreement or for vacation or setting aside of an
arbitral award, and any application with a court for
arbitration assistance and supervision, except appeal,
shall be deemed as special proceedings and shall be
filed with the court
(a) where the arbitration proceedings are conducted;
(b) where the asset to be attached or levied upon, orthe
act to be enjoined is located;
(c) where any of the parties to the dispute resides
orhas its place of business; or
(d) in the National Capital Judicial Region at theoption
of the applicant.
Article 5.40. Notice of Proceedings to Parties. In a
special proceeding for recognition and enforcement of
an arbitral award, the court shall send notice to the
parties at their address of record in the arbitration, or
if any party cannot be served notice at such address, at
such partys last known address. The notice shall be

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 123


sent in at least fifteen (15) days before the date set for
the initial hearing of the application.
Article 5.41. Legal Representation in Domestic
Arbitration. (a) In domestic arbitration conducted in
the Philippines, a party may be represented by any
person of his/her/its choice: Provided, that such
representative, unless admitted to the practice of law
in the Philippines, shall not be authorized to appear as
counsel in any Philippine Court, or any other
quasijudicial body whether or such appearance is in
relation to the arbitration in which he/she appears.
(b) No arbitrator shall act as mediator in any
proceeding in which he/she is acting as arbitrator and
all negotiations towards settlement of the dispute
must take without the presence of the arbitrators.
Article 5.42. Confidentially of Arbitration Proceedings.
The arbitration proceedings, including the records,
evidence and the arbitral award and other confidential
information, shall be considered privileged and
confidential and shall not be published except

persons who are not parties to or otherwise bound by


the arbitration agreement , directly or by reference,
between him/her and the respondent as additional
claimants or the additional respondents unless not
later than the date communicating his/her answer to
the request for arbitration, either by motion or by a
special defense in his answer, he objects, on
jurisdictional grounds, to the inclusion of such
additional respondents. The additional respondents
shall be deemed to have consented to their inclusion in
the arbitration unless, not later than the date of
communicating their answer to the request for
arbitration, wither by motion or a special defense in
their answer, they object, on jurisdictional grounds, to
their inclusion.
Article 5.45. Consolidation of Proceedings and
Concurrent Hearings. The parties may agree that(a) the arbitration proceedings shall be consolidatedwith
other arbitration proceedings; or
(b) that concurrent hearings shall be held, on suchterms
as may be agreed.

(1) with consent of the parties; or


(2) for the limited purpose of disclosing to the
courtrelevant documents in cases where resort to
the court is allowed herein:
Provided, however, that the court in which the action
or the appeal is pending may issue a protective order
to prevent or prohibit disclosure of documents or
information
containing
secret
processes,
developments, research and other information where
it is shown that the applicant shall be materially
prejudiced by an authorized disclosure thereof.
Article 5.43. Death of a Party. Where a party dies after
making a submission or a contact to arbitrate as
prescribed in these Rules, the proceeding may be
begun or continued upon the application of, or notice
to, his/her executor or administrator, or to temporary
administrator of his/her estate. In any such case, the
court may issue an order extending the time within
which notice of a motion to recognize or vacate an
award must be served. Upon recognizing an award,
where a party has died since it was filed or delivered,
the court must enter judgment in the name of the
original party; and the proceedings thereupon are the
same as where a party dies after a verdict.
Article 5.44. Multi-Party Arbitration. (a)When a single
arbitration involves more than two parties, these
Rules, to the extent possible, shall be used subject to
such modifications consistent with Articles 5.17 (Equal
Treatment of Parties) and 5.18 (Determination of
Rules of Procedure) as the arbitral tribunal shall deem
appropriate to address possible complexities of a
multi-party arbitration. (b) When a claimant includes

Unless the parties agree to confer such power on the


arbitral tribunal, the tribunal has no power to order
consolidation of arbitration proceedings or concurrent
hearings.
Article 5.46. Fees and Costs. (a) The fees of the
arbitrators shall be agreed upon by the parties and the
arbitrator/s in writing prior to the arbitration.
In default of agreement of the parties as to the amount
and manner of payment of arbitrators fees, the
arbitrators fees shall be determined in accordance
with the applicable internal rules of the regular
arbitration institution under whose rules he
arbitration is conducted; or in ad hoc arbitration, the
Schedule of Fees approved by the IBP, If any, or in
default thereof, the Schedule of Fees that may be
approved by the OADR.
(b) In addition to arbitrators fees, the parties shall
beresponsible for the payment of the administrative
fees of an arbitration institution administering an
arbitration and cost of arbitration. The latter shall
include, as appropriate, the fees of an expert
appointed by the arbitral tribunal, the expenses for
conducting a site inspection, the use of a room where
arbitration proceedings shall be or have been
conducted, the expenses for the recording and
transcription of the arbitration proceedings.
(c) The arbitral tribunal shall fix the costs ofarbitration in
its award. The term "costs" include only:

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 124


(i) The fees of the arbitral tribunal to be statedseparately
as to each arbitrator and to be fixed by the arbitral
tribunal itself in accordance with this Article;
(ii) The travel and
thearbitrators;

other

expenses

incurred

by

(iii)The costs of expert advice and of other


assistancerequired by the arbitral tribunal, such as site
inspection and expenses for the recording and
transcription of the arbitration proceedings;
(iv) The travel and other expenses of witnesses to theextent
such expenses are provided by the arbitral tribunal;
(v) The costs for legal representation and assistance ofthe
successful party if such costs were claimed during the
arbitral proceedings, and only to the extent that the
arbitral tribunal determines that the amount of such
costs is reasonable;
(vi) Any fees and expenses of the appointing authority.(d)
The fees of the arbitral tribunal shall be reasonable in
amount, taking into account the amount in dispute,
the complexity of the subject matter, the time spent by
the arbitrators and any other relevant circumstances
of the case.
If an appointing authority has been agreed upon by the
parties and if such appointing authority has issued a
schedule of fees for arbitrators in domestic cases
which it administers, the arbitral tribunal, in fixing its
fees shall take that schedule of fees into account to the
extent that it considers appropriate in the
circumstances of the case.
If such appointing authority has not issued a schedule
of fees for arbitrators in international cases, any party
may, at any time request the appointing authority to
furnish a statement setting forth the basis for
establishing fees which is customarily followed in
international cases in which the authority appoints
arbitrators. If the appointing authority consents to
provide such a statement, the arbitral tribunal, in
fixing its fees shall take such information into account
to the extent that it considers appropriate in the
circumstances of the case.
In cases referred to in paragraph (d) of this Article,
when a party so requests and the appointing authority
consents to perform the function, the arbitral tribunal
shall fix its fees only after consultation with the
appointing authority which may make any comment it
deems appropriate to the arbitral tribunal concerning
the fees.
(e) Except as provided in the next paragraph, the costs
of arbitration shall, in principle, be borne by the
unsuccessful party. However, the arbitral tribunal may
apportion each of such costs between the parties if it

determines that apportionment is reasonable, taking


into account the circumstances of the case.
With respect to the costs of legal representation and
assistance referred to in paragraph (c) (iii) of this
Article, the arbitral tribunal, taking into account the
circumstances of the case, shall be free to determine
which party shall bear such costs or may apportion
such costs between the parties if it determines that
appointment is reasonable.
When the arbitral tribunal issues an order for the
termination of the arbitral proceedings or makes an
award on agreed terms, it shall fix the costs of
arbitration referred to in paragraph (a) of this Article
in the context of that order or award.
(e) Except as otherwise agreed by the parties,
noadditional fees may be charged by the arbitral
tribunal for interpretation or correction or completion
of its award under these Rules.
(f) The arbitral tribunal, on its establishment, mayrequest
each party to deposit an equal amount as an advance
for the costs referred to in paragraphs (i), (ii) and (iii)
of paragraph (c) of this Article.
During the course of the arbitral proceedings, the
arbitral tribunal may request supplementary deposits
from the parties.
If an appointing authority has been agreed upon by the
parties, and when a party so requests and the
appointing authority consents to perform the function,
the arbitral tribunal shall fix the amounts of any
deposits or supplementary deposits only after
consultation with the appointing authority which may
make any comments to the arbitral tribunal which it
deems appropriate concerning the amount of such
deposits and supplementary deposits.
If the required deposits are not paid in full within
thirty (30) days after receipt of the request, the
arbitral tribunal shall so inform the parties in order
that one of them may make the required payment
within such a period or reasonable extension thereof
as may be determined by the arbitral tribunal. If such
payment is not made, the arbitral tribunal may order
the termination of the arbitral proceedings.
After the award has been made, the arbitral tribunal
shall render an accounting to the parties of the
deposits received and return any unexpended balance
to the parties.
CHAPTER 6
ARBITRATION OF CONSTRUCTION DISPUTES
The Construction Industry Arbitration Commission
(CIAC), which has original and exclusive jurisdiction

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 125


over arbitration of construction disputes pursuant to
Executive Order No. 1008, s. 1985, otherwise known
as the "Construction Industry Arbitration Law", shall
promulgate the Implementing Rules and Regulations
governing arbitration of construction disputes,
incorporating therein the pertinent provisions of the
ADR Act.

neutral or an early neutral evaluation, mini-trial or


mediation-arbitration.
RULE 2 Neutral or Early Neutral Evaluation

CHAPTER 7
OTHER ADR FORMS

Article 7.6. Neutral or Early Neutral Evaluation. (a)


The neutral or early neutral evaluation shall be
governed by the rules and procedure agreed upon by
the parties. In the absence of said agreement, this Rule
shall apply.

RULE 1 General Provisions

(b) If the parties cannot agree on, or fail to provide for:

Article 7.1. Scope of Application and General


Principles. Except as otherwise agreed, this Chapter
shall apply and supply the deficiency in the agreement
of the parties for matters involving the following forms
of ADR:

(i) The desired


thirdperson;

(a) early neutral evaluation;

qualification

of

the

neutral

(ii) The manner of his/her selection;


(iii) The appointing authority (not IBP) who shall
havethe authority to make the appointment of a
neutral third person; or

(b) neutral evaluation;


(c) mini-trial;
(d) mediation-arbitration;
(e) a combination thereof; or
(f) any other ADR form.
Article 7.2. Applicability of the Rules on Mediation. If
the other ADR form/process is more akin to
arbitration (i.e., the neutral third-person merely
assists the parties in reaching a voluntary agreement),
Chapter 3 governing Mediation shall have suppletory
application to the extent that it is not in conflict with
the agreement of the parties or this Chapter.
Article 7.3. Applicability of the Rules on Arbitration. If
the other ADR form/process is more akin to
arbitration (i.e., the neutral third-person has the
power to make a binding resolution of the dispute),
Chapter 5 governing Domestic Arbitration shall have
suppletory application to the extent that it is not in
conflict with the agreement of the parties or this
Chapter.
Article 7.4. Referral. If a dispute is already before a
court, either party may, before and during pre-trial,
file a motion for the court to refer the parties to other
ADR forms/processes. However, at any time during
court proceedings, even after pre-trial, the parties may
jointly move for suspension/dismissal of the action
pursuant to Article 2030 of the Civil Code of the
Philippines.
Article 7.5. Submission of Settlement Agreement.
Either party may submit to the court before which the
case is pending any settlement agreement following a

(iv) If despite agreement on the foregoing and thelapse


of the period of time stipulated for the
appointment, the parties are unable to select a
neutral third person or appointing authority, then,
either party may request the default appointing
authority, as defined under paragraph C1 of Article
(Definition of Terms), to make the appointment
taking into consideration the nature of the dispute
and the experience and expertise of the neutral
third person.
(c) The parties shall submit and exchange positionpapers
containing the issues and statement of the relevant
facts and appending supporting documents and
affidavits of witnesses to assist the neutral third
person in evaluating or assessing the dispute.
(d) The neutral third person may request either partyto
address additional issues that he/she may consider
necessary for a complete evaluation/assessment of the
dispute.
(e) The neutral third person may structure theevaluation
process in any manner he/she deems appropriate. In
the course thereof, the neutral third person may
identify areas of agreement, clarify the issues, define
those that are contentious, and encourage the parties
to agree on a definition of issues and stipulate on facts
or admit the genuineness and due execution of
documents.
(f) The
neutral
third
person
shall
issue
a
writtenevaluation or assessment within thirty (30)
days from the conclusion of the evaluation process.
The opinion shall be non-binding and shall set forth
how the neutral third person would have ruled had the
matter been subject to a binding process. The
evaluation or assessment shall indicate the relative

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 126


strengths and weakness of the positions of the parties,
the basis for the evaluation or assessment, and an
estimate, when feasible, of the amount for which a
party may be liable to the other if the dispute were
made subject to a binding process.

members. The lawyer of each party and/or authorized


representative shall present his/her case starting with
the claimant followed by the respondent. The lawyer
and/or representative of each party may thereafter
offer rebuttal or sur-rebuttal arguments.

(g) There shall be no ex-parte communication betweenthe


neutral third person and any party to dispute without
the consent of all parties.

Unless the parties agree on a shorter or longer period,


the presentation-in-chief shall be made, without
interruption, for one hour and the rebuttal or
surrebuttal shall be thirty (30) minutes.

(h) All papers and written presentationscommunicated to


the neutral third person, including any paper prepared
by a party to be communicated to the neutral third
person or to the other party as part of the dispute
resolution process, and the neutral third persons
written non-binding assessment or evaluation, shall be
treated as confidential.
RULE 3 Mini-Trial
Article 7.7. Mini-Trial. (a) A mini-trial shall be
governed by the rules and procedure agreed upon by
the parties. In the absence of said agreement, this Rule
shall apply.

At the end of each presentation, rebuttal or


surrebuttal, the mini-trial panel member/s may ask
clarificatory questions from any of the presentors.
(g) After the mini-trial, the mini-trial panel membersshall
negotiate a settlement of the dispute by themselves.
In cases where a neutral third person is appointed, the
neutral third person shall assist the proceedings shall
be governed by Chapter 3 of Mediation.
RULE 4 Mediation-Arbitration

(b) A mini-trial shall be conducted either as: (i) aseparate


dispute resolution process; or (ii) a continuation of
mediation, neutral or early neutral evaluation or any
other ADR process.

Article
7.8.
MediationArbitration
(a)
A
MediationArbitration shall be governed by the rules
and procedure agreed upon by the parties, In the
absence of said agreement, Chapter 5 on Mediation
shall first apply and thereafter, Chapter 5 on Domestic
Arbitration.

(c) The parties may agree that a mini-trial beconducted


with or without the presence and participation of a
neutral third person. If a neutral third person is
agreed upon and chosen, he/she shall preside over the
mini-trial. The parties may agree to appoint one or
more (but equal in number per party) senior
executive/s, on its behalf, to sit as mini-trial panel
members.

(b) No Person shall having been engage and havingacted


as mediator of a dispute between the parties, following
a failed mediation, act as arbitrator of the same
dispute, unless the parties, in a written agreement,
expressly authorize the mediator to hear and decide
the case as an arbitrator

(d) The senior executive/s chosen to sit as mini-trialpanel


members must be duly authorized to negotiate and
settle the dispute with the other party. The
appointment of a mini-trial panel member/s shall be
communicated to the other party. This appointment
shall constitute a representation to the other party that
the mini-trial panel member/s has/have the authority
to enter into a settlement agreement binding upon the
principal without any further action or ratification by
the latter.
(e) Each party shall submit a brief executive summaryof
the dispute in sufficient copies as to provide one copy
to each mini-trial panel member and to the adverse
party. The summary shall identify the specific factual
or legal issue or issues. Each party may attach to the
summary a more exhaustive recital of the facts of the
dispute and the applicable law and jurisprudence.
(f) At the date time and place agreed upon, the
partiesshall appear before the mini-trial panel

(c) The mediator who becomes an arbitrator pursuantto


this Rule shall make an appropriate disclosure to the
parties as if the arbitration proceeding had
commenced and will proceed as a new dispute
resolution process, and shall, before entering upon
his/her duties, executive the appropriate oath or
affirmation of office as arbitrator in accordance with
these Rules.
RULE 5- Costs and Fees
Article 7.9 Costs and Fees. (a) Before entering his/her
duties as ADR Provider , he/she shall agree with the
parties on the cost of the ADR procedure, the fees to
be paid and manner of payment for his her services.
(b) n the absence of such agreement, the fees for the
services of the ADR provider/practitioner shall be
determined as follows:
(i) If the ADR procedure is conducted under the
rulesand/or administered by an institution regularly

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 127


providing ADR services to the general public, the fees
of the ADR professional shall be determined in
accordance with schedule of fees approved by such
institution, if any;
(ii) In ad hoc ADR, the fees shall be determined
inaccordance with the schedule of fees approved by
the
OADR;
(iii)In the absence of a schedule of fees approved bythe
ADR institution or by the OADR, the fees shall be
determined by the ADR institution or by the OADR, as
the case may be, and complexity of the process, the
amount in dispute and the professional standing of the
ADR professional.
(c) A contingency fee arrangement shall not be
allowed. The amount that may be allowed to an ADR
professional may not be made dependent upon the
success of his/her effort in helping the parties to settle
their dispute.
CHAPTER 8
MISCELLANEOUS PROVISION
Article 8.1. Amendments. These Rules or any portion
hereof may be amended by the Secretary of Justice.
Article 8.2 Separability Clause. If any part, article or
provision of these Rules are declared invalid or
unconstitutional, the other parts hereof not affected
thereby shall remain valid.
Article 8.3 Funding. The heads of department and
agencies concerned, especially the Department of
Justice, insofar as the funding requirements of the
OADR is concerned, shall immediately include in their
annual appropriation the funding necessary to
implement programs and extend services required by
the ADR Act and these Rules.
Article 8.4 Transitory Provisions. Considering the
procedural character of the ADR Act and these Rules,
the provisions of these Rules shall be applicable to all
pending arbitration, mediation or other ADR forms
covered by the ADR Act if the parties agree.

Article. 8.5 Effectivity Clause. These Rules shall take


effect fifteen (15) days after the completion of its
publication in at least two (2) national newspapers of
general circulation.
APPROVED.
December 4, 2009

3.6 OTHER SC ISSUANCES ON


ADR
3.7
JUDICIAL
DISPUTE
RESOLUTION

Judicial dispute resolution


(JDR)
In En Banc A.M. No. 04-1-12-SC-PhilJA, August
29, 2006, Re: PhiLJA Resolution No. 06-22, re:
Revised Guidelines for the Implementation of an
Enhanced Pre-Trial Proceeding under the JURIS
Project, as Amended, the Philippine Supreme Court
adopted the rules of the new judicial dispute
resolution (JDR) system of the Philippines
(described as an enhanced pre-trial proceeding)
under its on-going JURIS Project.
The Court has piloted the new concept in selected trial
courts in the Philippines which are called JURIS
model courts.
As an explanatory note, the Court noted that despite
the priority given by Rule 18 of the Rules of Court
(pre-trial), as amended, for the amicable settlement
of cases, most trial judges go through the function of
exploring settlement perfunctorily for various
reasons, including fear of being disqualified if he
goes into the process more intensively.
In general, the concept is that mediatable cases are
referred to Court-Annex Mediation (CAM) for
mediation under accredited mediators in the
Philippine Mediation Center (PMC) and subsequently
referred to Judicial Dispute Resolution (JDR) for
further mediation by the judges if it is not resolved
under CAM. If the case is still not settled in JDR, the
case is transferred to the pairing court to proceed
with trial.
The judge conducting the JDR is called the JDR
judge instead of pre-trial judge because under the
revised guidelines, pre-trial proper is resumed
after JDR, but this time, to be conducted by the
trial judge instead of the judge who conducted
JDR.
A case may be referred to JDR even after conclusion
of the pre-trial and during the trial itself.
The JDR judge may preside over the trial proceedings
upon joint request of both parties.
A limited period is imposed for settlement of JDR
cases, i.e., thirty (30) days for first level courts and

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 128


sixty (60) days for regional trial courts. These periods
may be extended upon the discretion of the JDR judge.
Where settlement on the civil aspect has been
reached in criminal cases covered by mediation but
the period of payment in accordance with the terms
of settlement exceeds one (1) year, the case may be
archived upon motion of the prosecution with
concurrence of the private complainant and
approval by the judge.
The civil aspect of theft, under Art. 308 of the
Revised Penal Code, is now part of the cases for
referral to mediation.
The concept is that the JDR judge acts as the
mediator, the conciliator, early neutral evaluator, or
a combination of any of the above.
As a mediator and conciliator, the judge facilitates
the settlement discussions between parties and tries to
reconcile their differences.
As a neutral evaluator, the judge assesses the
relative strengths and weaknesses of each party's case
and makes a non-binding and impartial evaluation of
the chances of each party's success in the case.

In single sala courts, the case shall be transferred


for mediation to the nearest court (or pair court, if
any), since only mediation is involved.
Whatever the result of the mediation may be, the
case is always returned to the originating court
for appropriate action - either for the approval of
the compromise agreement or for trial, as the
case may be.
In Family Courts, due to the special nature of a family
dispute for which specialized family courts have been
designated, parties may file a joint motion
requesting that the case be tried by said special court
despite the judge thereon having been the JDR
judge.
However, if there is another family court in the same
JURIS site, the trial judge shall be that of the family
court which did not conduct JDR proceedings.

In Commercial Courts, the JDR shall be conducted by


the pair judge of the commercial court.
Where JDR does not succeed, the judge of the
commercial court shall be the trial judge.

On the basis of his neutral evaluation, the judge


persuades the parties to reconsider their prior
reluctance to settle their case amicably.

Cases may be referred to JDR even during the trial


stage upon joint motion of the parties.

Judicial proceedings shall be divided into two stages:


(1) from the filing of a complaint, to the conduct of
CAM and JDR during the pre-trial stage, and (2)
pretrial proper to trial and judgment.

If the motion is granted, the JDR shall be conducted


by the pairing judge in multiple sala courts, or in
single sala courts, by the nearest court (or pair
court, if any).

The judge to whom the case has been originally


raffled shall preside over the first stage. He shall be
called the JDR judge.

Whatever the result of the JDR may be, the case is


always returned to the originating court for
appropriate action - either for the approval of
the compromise agreement or for trial, as the
case may be.

The concept is that the parties will be more


spontaneous once they are assured that the JDR judge
will not be the one to try the case.
As such, the general rule is that the JDR Judge
shall not preside over the trial of the same case
when mediation did not succeed.
In multiple sala courts, if the case is not resolved
during JDR, it shall be raffled to another branch,
where the rest of the judicial proceedings up to
judgment shall be held. The judge for that stage shall
be called the trial judge.
Any incidents or motions filed during the first stage
shall be dealt with by the JDR judge at his discretion.

To safeguard the confidentiality of mediation


proceedings, the JDR judge shall not pass on any
information obtained in the course of conciliation,
early neutral evaluation, or mediation to the trial
judge or to any other person.
All JDR conferences shall be conducted in private.
The JDR judge may, however, confer in
confidence with the mediator who previously
mediated the case, merely for the purpose of
determining unresolved issues.
The pilot-test shall apply to the following cases:
(1) All civil cases, settlement of estates, and
casescovered by the Rule on Summary Procedure,

ADR (based on ATTY HIGUITS OUTLINE)-CHARMAGNE FERRERS REVIEWER 129


except those
compromised;

which

by

law

may

not

be

(2) Cases cognizable by the Lupong Tagapamayapa


andthose cases that may be referred to it by the
judge under Section 408. Chapter VII of the
Republic Act No. 7160, otherwise known as the
1991 Local Government
Code;

If all parties are absent despite due notice, the


mediator shall motu proprio recommend the
imposition of proper sanctions upon all of them,
including dismissal of the case.
Among others, the JDR judge may require the
nonappearing party to reimburse the appearing
party his costs, including attorney's fees for
that day, up to treble the amount incurred
payable on or before the next mediation session.

(3) The civil aspect of BP 22 cases;


(4) The civil aspect of quasi-offenses under Title 14
ofthe Revised Penal Code; and
(5) The civil aspect of Estafa, Libel, and Theft.
A party who fails to appear for mediation or JDR
conference may be imposed the appropriate sanctions
as provided for in Rule 18 of the Rules of Court and
the relevant issuances of the Supreme Court.
A recommendation to impose sanctions shall be made
to the JDR judge by the mediator before whom the
absence took place, upon the request of the present
party.

A party who appears


without the required
authorization may be similarly sanctioned
If settlement is reached, the parties, with assistance of
their counsel, shall draft the compromise agreement
for approval of the court by judgment upon a
compromise.
Where compliance with the compromise agreement is
forthwith made or the claim is otherwise settled, the
parties shall instead submit a satisfaction of claims
or mutual withdrawal of the complaint and
counterclaim upon which the Court shall enter an
order dismissing the case.