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ALTERNATIVE DISPUTE RESOLUTION

ARBITRATION IN THE PHILIPPINES

CHAPTER I. INTRODUCTION

DEFINITION OF ALTERNATIVE DIPUTE RESOLUTION

Note: according to the Supreme Court:

Alternative Dispute resolution methods or ADRs provide solutions that are less time consuming, less tedious, less
confrontational and more productive of goodwill and lasting relationships (Case: LM Power Engineering 339 SCRA 562)

"Alternative Dispute Resolution System" means any process or procedure used to resolve a dispute or controversy, other
than by adjudication of a presiding judge of a court or an officer of a government agency, 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; (RA 9285, Section 3(a))

FORMS OF ALTERNATIVE DISPUTE RESOLUTION

1. MEDIATION - (q) "Mediation" means a voluntary process in which a mediator, selected by the disputing parties, facilitates
communication and negotiation, and assist the parties in reaching a voluntary agreement regarding a dispute.
2. "EARLY NEUTRAL EVALUATION OR EVALUATION OF A THIRD PERSON" means an ADR process wherein 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;
3. "MINI-TRIAL" means a structured dispute resolution method 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;
4. MEDIATION-ARBITRATIONThis is a two-step dispute resolution process involving both mediation and arbitration
5. JUDICIAL DISPUTE RESOLUTION --

ULTIMATE GOAL OF ADR (IRR OF ADR LAW OF 2004)

Article 1.2. Declaration of Policy. It is the policy of the State:


(a) To promote party autonomy in the resolution of disputes or the freedom of the parties to make their own
arrangements to resolve their disputes; (empower parties or the disputants in the manner of resolving their
disputes)
(b) To encourage and actively promote the use of Alternative Dispute Resolution (ADR) as an important means to
achieve speedy and impartial justice and to declog court dockets;
(c) To provide means for the use of ADR as an efficient tool and an alternative procedure for the resolution of
appropriate cases; and
(d) To enlist active private sector participation in the settlement of disputes through ADR.

Comment: ARBITRATION IS FAR BETTER THAN LITIGATION


Q: what are the drawbacks of court litigation?
A: the drawbacks are the following:
1. Cost of litigation
2. Delay
3. Animosity and lack of confidentiality
4. Question of acceptability of an adverse decision by the losing party.
ARBITRATION V. LITIGATION
PERCEIVED BENEFITS

ASPECTS LITIGATION ARBITRATION

Court decisions are, as a general Most arbitral awards are not subject
FINALITY rule, subject to various appeals to appeal. They may be challenged
before the court only on very limited
grounds. In any case, most court
espouse a pro-arbitration bias
Usually difficult. A court judgment will YES. Through various international
INTERNATIONAL be recognized in another country conventions and especially the New
RECOGNITION/ENFORCEABILITY generally by application of a bilateral York Convention, signed by some
IN FOREIGN JURISDICTIONS treaty or by virtue of rather strict 120 countries including the
rules. Philippines, a foreign arbitral award
is typically easier to enforce than a
foreign judgment.
Although national judges may be Parties can place themselves on an
NEUTRALITY impartial, they apply the language equal footing with regard to: the
and procedural rules of their country place of arbitration (in a neutral
and are often of the same nationality country); the language used; the
as one of the parties thereby giving procedural rules; the nationality of
rise to the perceived home court arbitrators and legal representation.
advantage.
Not all judges are specialized. For Parties may select highly specialized
SPECIALIZED COMPETENCE AND example, in patent, banking disputes, arbitrators of their choice, provided
PERSONAL FOLLOW-UP technical expertise is necessary. The they are independent. Usually, the
duration of the litigation may lead arbitrators will follow the case from
several judges hearing one case. the first day to the last.
National courts are strictly bound by Most arbitral rules allow for party
PARTY PARTICIPATION their national rules of Procedure. participation, and thus greater
Thus, procedures are dictated by the flexibility, in defining the arbitral
rules of litigation. procedures.
Procedures may be delayed and Arbitration is faster than litigation
SPEED lengthy. Party may get entangled in a especially where the right to appeal
prolonged and costly series of is not unrestricted.
appeals.
Court hearings as well as the Arbitration hearings are not public
judgments are public. Moreover, and only the parties receive copies of
under Philippine law, rules and the award, which is a great
regulation, all documents, pleadings advantage where trade secrets and
PRIVACY/CONFIDENTIALITY and pieces of evidence submitted in inventions are at stake. In addition,
courts are a matter of public record most arbitration laws provide for
and as a general rule, accessible to strict confidentiality of arbitration
the public. proceedings. Underlying provisions
in a contract containing secrecy
provisions should hold for the
arbitration procedure.
In the absence of an agreement of The dispute will be resolved in one
PREDICTABILITY the parties limiting the forum for place and not by a race to judgment
litigation party-litigants may obtain in the courts of 2 nations.
judgments in their respective national
courts, which may or may not be
consistent with one another.
Prolonged litigation and extensive Arbitration proceedings normally do
COSTS (to some extent) discovery processes drive up the not involve extensive discovery
costs of litigation. processes and trial settings. Thus,
costs are reduced somewhat.

DISADVANTAGES OF ARBITRATION

a. The absence of any precedents that would guide the arbitrator or the mediator since cases brought before them are through
the agreements of the parties and hence,
b. They are not bound by any previous rulings.

In other words, it is a case to case basis.

HISTORICAL ANTECEDENT OF ARBITRATION

1. SPANISH CIVIL CODE OF 1889


- it is provided that parties are empowered to submit their dispute for an arbitral decision
- case: CONDOBA V. CONDE 2 PR 445 it speaks about arbitration and the enforceability of the arbitration clause
2. CIVIL CODE OF 1950
- It is under article 2024 of Civil Code of 1950 which recognizes the validity of an arbitration clause which provides that an
arbitral award is final
3. ARBITRATION LAW (RA 876)
4. EXECUTIVE ORDER 1008 (Construction Industry Arbitration Law)
5. ADR ACT OF 2004 (RA 9285)

SALIENT FEATURES OF RA 9285

1. It prescribes rules on mediation;


2. It incorporates as part of the law, the model law on international Commercial Arbitration adopted by the United National
Commission on International Trade Law;
3. It makes the Model law applicable to international commercial arbitration and strengthening it thru specific provisions of RA
9285;
4. It strengthens domestic arbitration by making specific provisions of the Model law and RA 9285 pertaining to international
commercial arbitration;
5. It designates an appointing authority with the power to designate an arbitrator for the parties in default situations;
6. Provides a broad and uniform scope of interim or provisional relief in international commercial arbitration and domestic
arbitration;
7. Sets the basic principles in the enforcement of foreign arbitral award, whether or not they fall within the coverage of the New
York Convention.

DIFFERENT KINDS OF ARBITRATION UNDER RA 9285

1. Domestic arbitration
2. International commercial arbitration (governed by Chapter 4)
3. Individual Arbitration
4. Institutional arbitration
5. Arbitration of Construction Disputes
6. Court-referred Arbitration (provided under Section 24 of RA 9285)

DEFINITION OF ARBITRATION

"Arbitration" means a voluntary dispute resolution process (it is one of the ADRs) 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; (RA 9285, Section 3 (d))

Arbitration is from the Latin term arbitrario.

Its essential concept is that a decision is rendered by a private judge who is a neutral 3rd party who utilizes the same method
of adjudication; it is also adversarial but it is only heard before an arbitrator. It is a shift from a public judging to a private
judging.

DISTINCTIONS BETWEEN A JUDGE AND ARBITRATOR

ASPECTS JUDGE ARBITRATOR


APPOINTMENT He is appointed by the government; Appointed by the parties to the
he is a government official arbitration
TERM OF OFFICE Judge holds office up to 70 years old Holds office up to the termination of
the case
SALARY Government is the one who pays his (not all) salaries of the arbitrator
salary comes from the fees given by both
parties

EXCEPTIONS TO THE APPLICATION OF THE ADR LAW (Section 6, RA 9285)

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 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.

COVERAGE OF ADR LAW (RA 9285)

DOMESTIC ARBITRAL AWARDS

RA 9285 covers 2 general types of arbitration taking place in the Philippines


1. Domestic Arbitration and
2. International commercial arbitration

Both refer to DOMESTIC ARBITRAL AWARDS. These are those rendered in domestic arbitration or international
commercial arbitration which are Philippine arbitral wards since they are the result of arbitral proceedings that
are held in the Philippines (the seat of arbitration is in Philippines)

FOREIGN ARBITRAL AWARDS

In contrast to FOREIGN ARBITRAL AWARDSthese are awards rendered abroad in arbitration proceedings that
take place outside of the Philippines (the seat of arbitration is a foreign state).

These foreign arbitral awards may be:


1. Convention award or if that foreign state is a signatory to the New York Convention for the Enforcement
of Foreign Arbitral Awards, the arbitral award is a Convention award. The action for recognition and
enforcement of the awards shall be filed with the RTC. (RA 9285)
2. Non-convention awardif a non-convention award, on grounds of comity and reciprocity with states not
signatory to the Convention, may be enforced in the Philippines as a convention award (section 43, RA
9285)

PERTINENT LAWS

1. RA 9285 (the ADR Law) and the Model Law, which governs international commercial arbitration and partially to domestic
arbitration;
2. RA 876 (The Arbitration law, approved on June 19, 1953) to the extent that it is not superseded by RA 9285 and the Model
Law;
3. EO 1008, effective February 4, 1985;
4. Articles 2042-2046 (Arbitration), in relation to Articles 2028-2041 (Compromises) Civil Code;
5. Pertinent provisions of the Labor Code of the Philippines, rules and regulations relating to resolution of grievances arising from
interpretation and implementation of the CBA;
6. Provisions on arbitration in the Clearing House Rules and regulations of the PCHC and its Arbitration Rules of Procedure;
7. Doctrines or law principles dealing with arbitration established by the Supreme Court;
8. Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention of 1958) adhered to by the
Philippines in 1965; and
9. World Bank Convention creating the International Center for the Settlement of Investment Disputes.

AREAS OF OPERATION

a. LABOR MAANGEMENT DISPUTES (check list)


a. voluntary arbitration,
b. compulsory arbitration and
c. preventive arbitration
b. CONSTRUCTION CONTRACTS
c. CHECK CLEARING DISPUTES

AREA OF OPERATION #1:


LABOR MANAGEMENT DISPUTES
VOLUNTARY ARBITRATION

PROVISIONS

Art. 260. Grievance machinery and voluntary arbitration. The parties to a Collective Bargaining Agreement shall include
therein provisions that will ensure the mutual observance of its terms and conditions. They shall establish a machinery for the
adjustment and resolution of grievances arising from the interpretation or implementation of their Collective Bargaining
Agreement and those arising from the interpretation or enforcement of company personnel policies.

All grievances submitted to the grievance machinery which are not settled within seven (7) calendar days from the date of its
submission shall automatically be referred to voluntary arbitration prescribed in the Collective Bargaining Agreement.

For this purpose, parties to a Collective Bargaining Agreement shall name and designate in advance a Voluntary Arbitrator or
panel of Voluntary Arbitrators, or include in the agreement a procedure for the selection of such Voluntary Arbitrator or panel of
Voluntary Arbitrators, preferably from the listing of qualified Voluntary Arbitrators duly accredited by the Board. In case the
parties fail to select a Voluntary Arbitrator or panel of Voluntary Arbitrators, the Board shall designate the Voluntary Arbitrator
or panel of Voluntary Arbitrators, as may be necessary, pursuant to the selection procedure agreed upon in the Collective
Bargaining Agreement, which shall act with the same force and effect as if the Arbitrator or panel of Arbitrators has been
selected by the parties as described above.
Art. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. The Voluntary Arbitrator or panel of
Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved grievances arising from
the interpretation or implementation of the Collective Bargaining Agreement and those arising from the interpretation or
enforcement of company personnel policies referred to in the immediately preceding article. Accordingly, violations of a
Collective Bargaining Agreement, except those which are gross in character, shall no longer be treated as unfair labor practice
and shall be resolved as grievances under the Collective Bargaining Agreement. These violations used to be under the
jurisdiction of labor arbiter and tribunals but now, they are to be resolved under the CBA. For purposes of this article, gross
violations of Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic
provisions of such agreement.

The Commission, its Regional Offices and the Regional Directors of the Department of Labor and Employment shall not
entertain disputes, grievances or matters under the exclusive and original jurisdiction of the Voluntary Arbitrator or panel of
Voluntary Arbitrators and shall immediately dispose and refer the same to the Grievance Machinery or Voluntary Arbitration
provided in the Collective Bargaining Agreement

Aside from their specific jurisdiction, under

Art. 262. Jurisdiction over other labor disputes. The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement
of the parties, shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks.
Including disputes mentioned in 217 over which Labor arbiter has original and exclusive jurisdiction.

Thus, both management and labor may by mutual agreement, as in their CBA, vest voluntary arbitrators with
jurisdiction over cases that without such agreement would fall within the original and exclusive jurisdiction of the
labor arbiters pursuant to Article 217 of the Labor Code, such as UNFAIR LABOR PRACTICES AND
TERMINATION DISPUTES. (see cases)

CASES
The SC held in these cases that even if the case is not under the exclusive jurisdiction of the VA under Article 217, but if the
parties agree to submit the issue to arbitration, the same will be valid and the agreement will prevail.

SAN JOSE V. NLRC

SC laid down the following rules:


1. The jurisdiction of the Labor Arbiter and Voluntary Arbitrator or Panel of Voluntary Arbitrators over the cases
enumerated in Articles 217, 261 and 262, can possibly include money claims in one form or another.
2. Parenthetically, the original and exclusive jurisdiction of the Labor Arbiter under Article 217 (c), for money claims is
limited only to those arising from statutes or contracts other than a Collective Bargaining Agreement. The Voluntary
Arbitrator or Panel of Voluntary Arbitrators will have original and exclusive jurisdiction over money claims arising
from the interpretation or implementation of the Collective Bargaining Agreement and, those arising from the
interpretation or enforcement of company personnel policies, under Article 261.
3. Voluntary Arbitrators or Panel of Voluntary Arbitrators, however, can exercise jurisdiction over any and all disputes
between an employer and a union and/or individual worker as provided for in Article 262 which include disputes
mentioned in article 217 of the Labor code over which the Labor Arbiter has original and exclusive jurisdiction as
MAY BE AGREED UPON BY BOTH LABOR AND MANAGEMENT

SAN MIGUEL V. NLRC

SC held that a proviso in a CBA stating that wages, hours of work, conditions of employment and/or employer-employee
relations shall be settled by arbitration is not sufficient to remove termination disputes and ULP disputes from the
jurisdiction of LA and transfer them to VA.

The CBA must state in unequivocal language that the parties conform to the submission of termination disputes
and unfair labor practices to voluntary arbitration.

VIVERO V. CA
G.R. No. 138938. October 24, 2000

RA 9285 does not apply to the resolution or settlement of labor disputes covered by the Labor code

In San Miguel Corp. v. National Labor Relations Commission this Court held that the phrase "all other labor disputes"
may include termination disputes provided that the agreement between the Union and the Company states "in unequivocal
language that [the parties] conform to the submission of termination disputes and unfair labor practices to voluntary
arbitration." Ergo, it is not sufficient to merely say that parties to the CBA agree on the principle that "all disputes" should first
be submitted to a Voluntary Arbitrator. There is a need for an express stipulation in the CBA that illegal termination disputes
should be resolved by a Voluntary Arbitrator or Panel of Voluntary Arbitrators, since the same fall within a special class of
disputes that are generally within the exclusive original jurisdiction of Labor Arbiters by express provision of law. Absent such
express stipulation, the phrase "all disputes" should be construed as limited to the areas of conflict traditionally within the
jurisdiction of Voluntary Arbitrators, i.e., disputes relating to contract-interpretation, contract-implementation, or interpretation
or enforcement of company personnel policies. Illegal termination disputes - not falling within any of these categories - should
then be considered as a special area of interest governed by a specific provision of law.

In this case, however, while the parties did agree to make termination disputes the proper subject of voluntary arbitration,
such submission remains discretionary upon the parties. A perusal of the CBA provisions shows that Sec. 6, Art. XII
(Grievance Procedure) of the CBA is the general agreement of the parties to refer grievances, disputes or misunderstandings
to a grievance committee, and henceforth, to a voluntary arbitration committee.

APALISOK V. RADIO PHILIPPINE NETWORK


[G. R. No. 138094. May 29, 2003]
The parties, by mutual agreement, may refer a termination or ID dispute after it has arisen to the VA for resolution. They can
likewise, by mutual agreement, as in the CBA to refer termination or illegal dismissal dispute before it has arisen to the VA
and not to the Labor Arbiter.

QUESTION: what is the remedy of the employer if the labor Arbiter refuses to dismiss an illegal dismissal case filed by
employee against the employer under the explicit terms of their CBA should be referred to voluntary arbitration?
ANSWER: Employer should file a motion to dismiss for lack of jurisdiction and in the event of an adverse decision by the Labor Arbiter,
raise the issue before the NLRC on appeal of the main case.

LUDO AND LUYM CORP V. SAORNIDO

Parties executed a submission agreement submitting as a sole issue to be decided by the VA the date of regularization of the
workers. The VA, not only decide the issue submitted to him for resolution but likewise awarded the workers their monetary
benefits.

HELD: The Voluntary arbitrator had the necessary power to make a final settlement since arbitration is the final resort for the
adjudication of disputes.

(Be sure to make the difference of Ludo case and the case of Asset Privatization v. CA)

QUESTION: can the arbitrators in this case resolve issues not submitted to them for arbitration? This case was decided earlier
than the case of Ludo and Luym Corp.

ASSET PRIVATIZATION V. CA

In this case, the arbitrators CANNOT resolve issues beyond the scope of the submission of agreement. However, in the later
case of Ludo, it was said that the VA had the necessary power to make a final settlement since arbitration is the final resort for
the adjudication of disputes.

QUESTION: What is the effect of ADR law on the provisions of the Labor Code on Voluntary Arbitration?
ANSWER: the provisions of the ADR law of 2004 DID NOT AMEND the provisions of the labor code on grievance machinery and
procedure and on arbitration. In fact, the ADR law expressly excluded Labor relations dispute from its application (section 6, RA 9285)

SUMMARY:
Where a labor dispute is clearly within the jurisdiction of the VA as when the parties have agreed to refer such matter for VA and the
case is filed before the LA who refuses to dismiss the case despite his lack of jurisdiction, the party contesting the LAs jurisdiction
CANNOT file a petition for certiorari before the NLRC. The conservative remedy in this regard is for the aggrieved party to:
1. Raise the issue of lack of jurisdiction in the preliminary conference and its position paper;
2. Await the decision of the LA on the merits of the case and
3. In the event of an adverse ruling on this issue, appeal the decision and raise the lack of jurisdiction in its appeal to the NLRC.

WHERE A LABOR DISPUTE IS CLEARLY WITHIN THE JURISDICTION OF:

A. COMPULSORY ARBITRATION

Basis: Article 263 (g) of the Labor Code:


When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry
indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over
the dispute and decide it or certify the same to the Commission for compulsory arbitration.

B. PREVENTIVE MEDIATION

Basis: Article 263 and Rule 22 of the Omnibus Rules implementing the Labor code.

The remedy of Preventive mediation can be availed through the NCMB (national Conciliation and Mediation
board)
Case: SAN MIGUEL V. NLRC 403 S 418 among the procedural requirements for a valid strike is the filing
of a NOTICE OF STRIKE with the NCMB. This notice requirement, the absence of which, makes the strike
illegal; that is, for encouraging voluntary settlement of disputes.

C. EMPLOYMENT DISPUTES IN PRIVATE SCHOOLS

Basis: BP 232 or The Education Act of 1982

AREA OF OPERATION #2:


CONSTRUCTION CONTRACTS
Pertinent Law: EO NO. 1008; section 35 RA 9285 Chapter 6, section 17 RA 92855, section 39 of RA 9285

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, 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.

EO 1008, Sec. 4. Jurisdiction. The CIAC shall have original and exclusive jurisdiction over disputes arising from, or
connected with, contracts entered into by parties involved in construction in the Philippines, whether the dispute
arises before or after the completion of the contract, or after the abandonment or breach thereof. These disputes may
involve government or private contracts. For the Board to acquire jurisdiction, the parties to a dispute must agree to submit the
same to voluntary arbitration.
The jurisdiction of the CIAC may include but is not limited to violation of specifications for materials and workmanship; violation
of the terms of agreement; interpretation and/or application of contractual time and delays; maintenance and defects; payment,
default of employer or contractor and changes in contract cost.

Excluded from the coverage of this law are disputes arising from employer-employee relationships which shall continue to be
covered by the Labor Code of the Philippines.

Question; can construction disputes be settled through other modes of settling disputes? Aside from arbitration?
Remember, it is a contract.
Answer: YES. It can be settled through other modes of settling disputes. The same can be settled through MEDIATION.
(Basis: section 17 (d) RA 9285)

QUESTION: Is the jurisdiction of the CIAC involve only private contracts and private entities.
Answer: NO, it can also involve the government. (Basis: section 4, EO 1008)

TAKE NOTE: If the parties to a construction contract that is to be performed in the Philippines PI enter into an arbitration
agreement, all disputes arising from or connected to will be resolved through or before the CIAC, that is expressly provided
under section 39 of RA 9285. Basta ang seat of arbitration is in the PHILIPPINES.

Q: what is the condition before the CIAC can take or can acquire jurisdiction over a construction dispute? What is the
condition sine qua on for the CIA to acquire jurisdiction over the same?
A: For the Board to acquire jurisdiction, the parties to a dispute must agree to submit the same to voluntary arbitration. Such
agreement may come in the form of submission agreement or an arbitration clause.

Q: what is the distinction between a submission agreement and an arbitration clause?


A: submission agreement or submission to arbitrate is an agreement referring a present dispute to arbitration whereas an
arbitration clause referring FUTURE disputes to arbitration.

Under RA 9285, SECTION 35 paragraph 1-this expands the original and exclusive jurisdiction of the CIAC to
include disputes arising under the construction contract not only between or among parties to, or who are otherwise
bound by, an arbitration agreement, directly or by reference whether such parties are project owner, contractor,
subcontractor, quantity surveyor, bondsman or issuer of an insurance policy in a construction project.

Q: What are the CONSTRUCTION ISSUES/DISPUTES that may be submitted to the CIAC for arbitration?
A: The jurisdiction of the CIAC may include but is not limited to:
1. Violation of specifications for materials and workmanship; (not included in maams summary)
2. violation of the terms of agreement;
3. interpretation and/or application of contractual provisions, amount of damages and penalties, commencement time and
delays;
4. maintenance and defects;
5. payment, default of employer or contractor and
6. Changes in contract cost. (section 4, EO 1008)

The accredited arbitrators before the CIAC are either lawyers or non-lawyers. These arbitrators include lawyers,
architects and engineers.

SECTION 17 (d) RA 9285 recognizes that: parties to a dispute arising from contracts for construction in the
Philippines, whether or not they have previously agreed to settle their dispute through or by arbitration, may
nevertheless settle their dispute thru MEDIATION.

HOW? (d) The parties may agree in the settlement agreement that 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.

(Insert comment on LA transcript page 8)

The general rule under section 39 of RA 9285 is for the court to dismiss the case involving ua construction dispute, unless, the
parties shall submit, assisted by their respective counsel the same to the RTC, a written agreement for the RTC to hear and
decide the dispute instead of the Commission.

This was the ruling of the SC in the case of

CHINA JANG ENERGY CORP V. ROSAL INFRASTUCTURE BUILDERS and NIA V. CA.

In this case of CHINA CHANG, a dispute arose between parties to ac construction contract under which they agreed to refer
their case to arbitration before the international chamber commerce. When a dispute arose between Rosal and China, Rosal
here filed complaint to the CIAC. China here questioned because they have an agreement that the same must be heard first
before the international chamber of commerce.

HELD: What the law merely requires for a particular construction contract to fall within the jurisdiction of CIAC is for the parties
to agree to submit the same to voluntary arbitration. Unlike in the original version of Section 1, as applied in the Tesco case,
the law does not mention that the parties should agree to submit disputes arising from their agreement specifically to the CIAC
for the latter to acquire jurisdiction over such disputes. Rather, it is plain and clear that as long as the parties agree to submit
to voluntary arbitration, regardless of what forum they may choose, their agreement will fall within the jurisdiction of the CIAC,
such that, even if they specially choose another forum, the parties will not be precluded from electing to submit their dispute
before the CIAC because this right has been vested upon each party by law, i.e., E.O. No. 1008.

SUMMARY: THE SC SHOULD RECONSIDER ITS RULIGN IN CHINA CHIANG. There is no justification for giving
any party to a construction contract the right to compel the other party to arbitrate before the CIAC when their
agreement calls for arbitration before another forum such as International Chamber of commerce. Any such right or
compulsion, removes the element of mutuality in arbitration agreements. Arbitration is a creation of contract between
parties who wish to have their differences settled in the specific manner they have agreed upon. Hence, if the parties
agree on forum other than the CIAC, this agreement should be uphold parties should be given the fullest freedom to
choose ht forum for settling their differences.

Case: NATIONAL IRRIGATION ADMINISTRATION V. CA same ruling as china Chang

SAME ruling. (Insert notes from old transcription)


Principle under China and National irrigation: as long as a construction contract contains an arbitration clause, any party
thereto has the right to compel the other to arbitration before the CIASC, even if the other party objects to the CIACs
jurisdiction because their arbitration agreement calls for arbitration before another forum.
Rule: basta pag construction dispute, CIAC xa. If the complaint was filed in the RTC, the case must be DISMISSED.

Notes from old transcript:


So under E.O. 1008 ang jurisdiction to arbitrate construction disputes is before CIAC. Now, under R.A. 9285, it is provided
that even if the case is properly within the jurisdiction of the CIAC, the parties may nevertheless by written agreement ask
the RTC to decide the case rather than refer it to CIAC or dismiss it.

So which will prevail? Because you can see under R.A. 9285 it recognizes the mutuality of contracts (parties agree) pero
under E.O. 1008 it is said that exclusive jurisdiction kapag construction contract.

So remember this principle: Jurisdiction is conferred by law. Dili pwede na ang parties ang magbana-bana.

Q: How will we reconcile the two provisions?


A: The general rule is that CIAC has jurisdiction over all construction dispute and any agreement to arbitrate a
construction dispute before a forum other than the CIAC is rendered ineffective. This was the ruling of the SC in the case
of China Chang Jiang Energy Corp. vs Rosal Infrastructure Builders Gr. No. 125706, September 30, 1996 and
National Irrigation Administration vs. CA 318 SCRA 255 same ruling as China Chang

Case: China Jiang Energy Corp. vs. Rosal Infrastructure Builders

Summary: The SC should reconsider its ruling in China Jiang. There is no justification for giving any party to a
construction contract the right to compel the other party to arbitrate before the CIAC when their agreement calls for
arbitration before another forum such as International Chamber of Commerce. Any such right or compulsion,
removes the element of mutuality in arbitration agreements. Arbitration is a creation of contract between parties who
wish to have their differences settled in the specific manner they have agreed upon. Hence, if the parties agree on
forum other than the CIAC, this agreement should be upheld. Parties should be given the fullest freedom to choose
the forum for setting their differences.

Unless the construction dispute is filed in RTC and before the pre-trial stage of parties to the arbitration assisted by their
counsels submit to the court a written agreement made in the court or the body that would exclusively resolve the
disputes. This exception is provided under R.A. 9285 and further explained by the special rules on ADR (the copy Maam
gave) or A.M. 07-...issued by the SC. So you have to connect. That is the interpretation. Pwede siya sa RTC but the
agreement must be made before the pre-trial stage. Why? Because after the pre-trial stage, the judge will issue a pre-trial
order and the pre-trial order will govern the trial stage. So cut-off na yung rights ng mga parties.

TN: Case of China and National Irrigation, yan silang dalawa, general rule.
TN: Of the exception under R.A. 9285 and further stated in the A.M. of the SC.

Principle under China and National Irrigation: As long as a construction contract contains an arbitration clause,
any party thereto has the right to compel the other to arbitration before the CIAC, even if the other party objects to the
CIACs jurisdiction because their arbitration agreement calls for arbitration before another forum.

It is also provided that R.A. 9285, it treats any arbitration involving dispute arising under a contract for construction in the
Philippines as a domestic arbitration subject to the jurisdiction of the CIAC even if one of the parties is a foreign entity
or in the language of the law, an international party. In large construction projects, the contractor may be a foreign entity.

QUESTION: for example a construction contract was entered into in the Philippines but involved a party who is a foreign
entity. There is a construction dispute. Will the CIAC take over or acquire jurisdiction over the dispute?
A: YES. CIAC will still have jurisdiction even if 1 of the parties to a construction contract is a foreign entity or an international party.

RA 9285 treats any arbitration involving dispute arising under a contract for construction in the Philippines as a domestic
arbitration subject to the jurisdiction of the CIAC even if one of the parties is a foreign entity or in the language of the law, an
international party. In large construction projects, the contractor may be a foreign entity.

Under the Model law, this is regarded as an international arbitration:


1. Where the parties have a place of business in different states (or contending parties have different nationalities)
or
2. Where the place or if arbitration is determined in or pursuant to the arbitration agreement is not in the State
where the parties have their places of business. However, this is treated by RA 9285 as domestic arbitration
subject to the jurisdiction of the CIAC.

An arbitral award need not be confirmed by the courts for it to be executory. (EO 1008)
What is your remedy then? As soon as a decision ordering to award has become F/E, the arbitral tribunal or single arbitrator
with concurrence of the CIAC shall motu proprio or on motion of any interest party issue a writ of execution.
Arbitral awards are FINAL and also NOT APPEALABLE except on question of law facts of mixed question of law and facts
before the CA. (rule 43, section 1)
One of the peculiarities of the proceedings before the CIAC as distinguished from proceedings before the regular courts is that
it is the parties who are notified of the text of the CIAC decision and not the counsel of record of the parties (PHILIPPINE
COMMERCIAL INTERNATIONAL BANK V. CA 404 S 442)
Arbitration before the commission is held in private and pleadings there are strictly confidential. The arbitral awards are not
published except that the CIAC itself publishes a bulletin that includes abstracts of cases it has decided.
o Case: Metro Construction v. Chatham Properties 365 S 697
o Case: Hi-Precision Steel v. Lim Kim Steel builders 228 S 397

What is the effect of the ADR law on EO 1008?


Ra 9285 did not repeal the construction arbitration law!
(METRO CONSTRUCTION V. CHATHAM and HI-PRECISION STEEL V. LIM KIM)

AREA OPERATION #3:


CHECK CLEARING DISPUTES
This is an institutional arbitration and it is the ARBICOM who is the body that hears these kinds of disputes.
PCHC was organized ON May 19, 1977 principally to provide a means of clearing checks and other items pursuant Section
102, the New Central Bank Act, RA7653
Membership in the PCHC is open to banking institutions authorized to operate by the BSP.
The Clearing House Rules and Regulations (CHRR) lays down the basic understanding and agreement by and amount
participants to the clearing operations of the PCHC.
PROCEDURE:
1. Any dispute or controversy between 2 or more clearing participants involving any check or item cleared thru the PCHC
shall be submitted to the Arbitration committee (ARBICOM) thru a written complaint of any participant in the controversy.
2. Five copies of complaint shall be filed with the ARBICOM copy furnished respondent who shall have 30 non-extendible
days to file answer.
3. Upon filing of complaint by a member, the PCHC shall create an ARBICOM consisting of 4 members, 3 of whom are
th
incumbent or retired Senior Officers of participating banks not involved in the dispute and a 4 member who shall be an
attorney-at-law with at least 5 years of experience as a bank lawyer without any previous of present relation with any of
the participating banks involved and who shall only have advisory function without any right to vote. (CHRR, Section 36.3,
par. 1)
4. The presence of at least the Chairman of the ARBICOM or any other member shall be sufficient to constitute a quorum for
the purpose of conducting any conferences or hearings or trials before the ARBICOM but the vote of any 2 members of
the ARBICOM shall be necessary to render and promulgate any order, resolution, award or decision of the case
presented for arbitration except that in cases involving a principal amount of 300K or less, the arbitration proceedings
shall be heard by a sole arbitrator and his vote shall be sufficient to render and promulgate any order, resolution, award or
decision in the case.
5. If a formal hearing is required, the sole arbitrator or ARBICOM shall ask clarificatory questions of the witnesses.
6. The hearing shall not last more than 30 days after which the parties shall have a non-extendible period of 30 days to file
their respective memoranda.
7. The decision of the sole arbitrator or ARBICOM shall be made within 45 days from submission of the parties respective
memoranda.
8. If a formal hearing is not required, the sole arbitrator or ARBICOM may either decide the case on the basis of the
affidavits and documents submitted by the parties at the preliminary conference.
9. The case shall be decided within 45 days from preliminary conference or submission of parties memoranda.
10. Within a non-extendible period of 15 days after receipt of the decision, a party not satisfied with the decision may file an
MR and the other party may also file its opposition within 15 days.
11. After lapse of the 15 day period, the motion shall be resolved by majority vote of the PCHC board.
12. The decision made by the sole arbitrator or ARBICOM or resolution of the MR, shall be EXECUTORY WITHOUT THE
NECESSITY OF JUDICIAL CONFIRMATION OF THE AWARD.
13. Such executory decision shall be sufficient basis for the automatic debit of the amount awarded therein from the clearing
account of the losing party and the crediting thereof to the clearing account of the prevailing party even if the losing party
files a petition for review (appeal) on questions of law before the RTC in the National Capital Judicial Region where the
Head Office of any of the parties is located.

ISSUES RAISED IN CASES THAT HAVE REACHED THE ARBICOM OF THE PCHC
1. Forged indorsement of checks
2. Return of checks beyond 24 hour reglementary period
3. Unlawful negotiation of cashiers checks
4. Materially altered checks
5. Return of cashiers checks due to forged indorsements
6. Spurious demand drafts and cashiers checks.

Case: Banco de Oro v. Equitable Banking Corporation 157 S 188


Case: associated Bank v. CA 233 S 137

CHAPTER II
ARBITRATION AS A CONTRACT
QUESTIONS:
1. What are the essential elements of a contract? Consent, object and consideration. Without these elements, there is no
contract to speak of.
2. It is said that Arbitration is deemed as a contract because there is a meeting of the minds between the parties to submit their
any or all of their disputes to arbitration, thus the very agreement is the contract itself. Why arbitration agreement is deemed a
separate agreement from the main contract? Take note that the arbitration agreement itself is deemed a contract. Why is that
so? It is because of the principle of SEPARABILITY OF THE ARBITRATION CLAUSE which means that the said clause shall
be treated as an agreement independent of the term s of the contract of which it forms part. Thus, a decision that a contract is
null and void shall not entail ipso jure the invalidity of the arbitration clause.
3. What is the importance of arbitration clause in contracts? It is for CONVENIENCE.

Basically, there are 2 types of arbitration we have here in the Philippines.

1. KINDS OF ARBITRATON

a. Domestic arbitration Section 32, RA 9285; governed by sections 22 to 31 of Chapter 4 and Section 32 and 33 of
Chapter 5
b. International Commercial Arbitrationinvolves dispute arising from a commercial relationship that possesses any
of the characteristics that make it international under articles 1 (3) of the Model Law; governed by UNCITRAL Model
Law (ADR Law, Section 190, ADR Law Chapter 4 Sections 19-31, ADR Law, Chapter 7 Sections 42-45 and 47-48)

Comparison of Domestic Arbitration and International Commercial Arbitration:


Both take place and give rise to awards rendered in the Philippines
Both arbitrations give rise to domestic or Philippine Arbitral awards

Contrast between Domestic Arbitration and International Commercial Arbitration


As to definitionan arbitration that is not international where the proceedings are held and where the award
is rendered or the seat of arbitration is in the Philippines; the latter is an arbitration where the proceedings
are held and the award is rendered in the Philippines but involves a dispute arising from a commercial
relationship that possesses any of the characteristics that make it international.
Distinct rules for the enforcement of arbitral awards under RA 9285

WHEN IS ARBITRATION INTERNATIONAL? (Article 1 (3) of the Model Law)


a. If the parties to an arbitration agreement have, at the time of the conclusion of that agreement, their place of
business in different States; or
b. Where either the place of arbitration as determined under that agreement or the place where a substantial part of
the obligations of the commercial relationship is to be performed or with which the subject matter of the dispute is
most closely connected, is situated outside of the State where the parties have their places of business; or
c. The parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one
country.

WHEN IS ARBITRATION COMMERCIAL UNDER SECTON 21 OF RA 9285? If it involves matters arising from all
relationships of a commercial nature, whether contractual or not. These commercial relationships include, but are not limited
to the following:
a. Any trade transaction for the supply or exchange of goods or services;
b. Distribution agreements;
c. Construction of works;
d. Commercial representation or agency;
e. Factoring;
f. Leasing;
g. Consulting;
h. Engineering;
i. Investment;
j. Financing;
k. Banking;
l. Insurance;
m. Joint venture and other forms of industrial or business cooperation;
n. Carriage of goods by air, sea, rail or road.

WHEN IS ARBITRATION AD HOC? Where the parties to the arbitration choose to adopt whatever rules of procedure they
may deem appropriate without having their arbitration conducted under the auspices of any arbitration body.

In contrast to an Institutional Arbitration...

WHEN IS ARBITRATION INSTITUTIONAL? One which contemplates arbitration under the auspices of a body, whether
domestic or international, under which the arbitration proceedings are conducted.

So for example, if the arbitration is to be conducted before the CIAC (ung mga construction disputes) or mga labor disputes
before the NCMB, un sila ang mga institutional arbitration.

Question: So what is the rule if the international arbitration is to be conducted in the Philippines? Remember: the SAME
RULE APPLIES with regard to DOMESTIC ARBITRATION.

RULE IF INTERNATIONAL ARBITRATION IS CONDUCTED IN THE PHILIPPIINES Validity of the arbitration agreement is
to be determined under the law agreed upon by the parties to the agreement.

TAKE NOTE: the said law which governs the arbitration agreement NEED NOT BE THE SAME with the law governing the
main contract!

In the absence of the law agreed upon, the validity of arbitration agreement is to be determined under the Philippine Law
(Article 34 (2) (a) (i))

2. FORM AND CONTENT

Q: WHAT ARE THE CONDITIONS FOR THE ARBITRATION TO PROCEED?


A: the conditions for arbitration to proceed are as follows: there must be:
i. A valid and enforceable arbitration agreement in the contract for future disputes (in other words, that is the
arbitration clause)
ii. There must be a submission agreement for the arbitration of a present dispute or
iii. A submission to arbitration.

Submission Agreement where the parties to an arbitration agreement refer to arbitration an existing controversy
between them.
Arbitration Clause parties refer to arbitration any dispute that may later on arise between them;
Arbitration agreement= submission agreement or arbitration clause

Case: Heirs of Augusto Salas v. Laperal Realty 329 S 610


Mutuality of Contracts, Civil code article 1308

Q: What is that FREEDOM OF CONTRACT PRINCIPLE?


A: under the general principles of OBLICON, this is otherwise known as autonomy of parties to a contract where the
parties to a contract are free to establish such stipulations, clause, terms, conditions as they may deem convenient
provided that they are not contrary to law, morals, good customs, public order or public policy.

Q: what is the ruling of the SC in the case of HEIRS OF AUGUSTO SALAS V. LAPERAL REALTY (329 SCRA
610)
A: A submission to arbitration is a contract; as such, the Agreement containing the stipulation on arbitration binds the
parties thereto, their assigns and heirs. That is otherwise known as Mutuality of contracts principle which means that
the essential equality of the contracting parties that the contract must bind contracting parties, its validity or
compliance cannot be left to the will of one of them. Thus, under the principle of mutuality of contracts, both
contracting parties, not just one of them, have the right to compel the other to refer the dispute to arbitration. If the
right to refer their dispute to arbitration is given only to one of the contracting parties, the agreement to arbitrate is
VOID for lack of mutuality.

Relate the said principle of mutuality to Rule 2.2 of the 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 the dispute 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 more of the arbitrators are not lawyers;
g. One or more of the arbitrators are not Philippine nationals; or
h. One or more of the arbitrators are alleged not to possess the required qualification under the arbitration
agreement or law.

Q: Does an arbitration agreement required to be in a particular form?


A: under the law, it must be in WRITING. Before, it should be in writing and must be subscribed by parties thereto.
(BF CONSTRUCTION V. CA) but now, the law only requires that said arbitration agreement be in WRITING.

Form as required under Model law Article 7 (2)? must be in WRITING and SUBSCRIBED BY THE PARTIES
THERETO (BF Construction v. CA, 288 S 267)

Q: So does it mean that an Arbitration Agreement CANNOT be entered into verbally?


A: YES. It must be in writing and under the Rules on Evidence, it must abide by the rules on Parole Evidence. IT
SHOULD BE IN WRITING!

The Model Law only requires that the arbitration agreement be in writing. An agreement satisfies this requirement:
o The arbitration agreement may be made thru an exchange of letter or thru fax or by reference to general
printed conditions which contain an arbitration clause that are actually appended to the contract or by a
mere statement of incorporation in a contract of the terms of another document like charter party
o Case: BF Construction v. CA 288 S 267
o Case: Dauden-Hernaez v. de los Angeles 27 S 1276

The AGREEMENT TO ARBITRATE may be:


1. Express when a party signs an agreement containing an arbitration clause or enters into a
submission agreement
2. Implied when a party enter into an agreement that incorporates by reference an arbitration
agreement.

Example of arbitration clause:


Any dispute, controversy or claim arising out of or in connection with this contract, its interpretation, or the
existence, breach, termination or invalidity thereof, shall be finally settled by arbitration in___, Philippines, in
accordance with the (ICC or UNCITRAL rules) presently in force at the time of this contract, which Rules are
deemed to be incorporated herein by reference.

3. PARTIES TO AN ARBITRATION AGREEMENT

CAPACITY TO CONTRACTdetermined by the law on contracts;


iv. Capacity to contract of the State and its Instrumentalities state may resort to arbitration to settle its
disputes with Private parties (case: Gascon v. Arroyo)

Rule: subject to sections 57 to 65 of the Administrative code of 1987


v. PARTIESonly binds the parties thereto as well as their assigns and heirs (Case: Heirs of Augusto Salas v.
Laperal Realty)

1st principle: CAPACITY TO CONTRACT IS TO BE DETERMINED


BY THE LAW ON CONTRACTS

Q: what is JURIDICAL CAPACITY?


A: Juridical capacity is the fitness to be subject of legal relations.

Q: What is CAPACITY TO ACT?


A: capacity to act is the power to do act with legal effect or that which produces legal effect.

Q: what may be restricted? Juridical capacity or capacity to act?


A: CAPACITY TO ACT. What are the restrictions? I.e. Minority, insanity, imbecility or if the person is under civil
interdiction.

NOTE: in relation to an arbitration agreement, remember it is a contract, so the general principles of OBLICON will
still apply.

CAPACITY TO CONTRACT:
1. Of a Filipino nationalthe same is determined by the law on contracts
2. Of a foreigner national-- it is to be determined by the laws of the country or his nationality (Article 50 of
the Civil Code)

Q: What if one of the parties is an infant or a minor? Does this mean that a controversy cannot be arbitrated?
A: The general rule is that it CANNOT BE ARBITRATED; (Exception) UNLESS the court having jurisdiction approve
a petition for permission to submit such controversy to arbitration which is made by his guardian.
nd
2 principle: THE CAPACITY TO CONTRACT OF THE STATE AND
ITS INSTRUMENTALITIES

GASCON V. ARROYOthe state may resort to arbitration to settle its disputes with private parties but it is subject to
sections 57-65 of the Admin Code of 1987.

SALAS V. LAPERAL Earlier, we said that there is that principle which is known as the RELATIVITY OF
CONTRACT which means that the contract only binds the parties, their assigns and heirs (Salas v. Laperal)

RULING: In this case, SC said that rescission under 1380 of civil code is not a ground to annul the Arbitration
agreement but rather a matter that is to be resolved thru arbitration. Under the facts of the case, the issue of
rescission cannot be settled through AA because 3rd parties are involved who are not bound by the AA. Such parties
must be impleaded in the suit of the Salas heirs to cancel the LRC sales of lots to the lot buyers. Thus, the complaint
of the Salas heirs can only be fully and completely settled thru an ordinary civil action involving such lot buyers who
are ultimately the real parties in interest.
QUESTION: we have mentioned that a contract only binds the parties, their assigns and heirs. For example, a
civil case is filed in court which involves multiple parties. Some of the parties to the case agreed to arbitrate
while others did not agree to arbitrate. What will happen?

Answer: SECTION 25, RA 9285 (cases involving multiple parties) under the said rule, if 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.

That is is relation to rule 4.7 of the Special ADR rules.

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. Not all of the disputes subject of the civil action may be referred to arbitration;
b. Not all of the parties to the civil action are bound by the arbitration agreement and referral to
arbitration would result in multiplicity of suits;
c. The issues raised in the civil action could be speedily and efficiently resolved in its entirety by the court
rather than in arbitration;
d. Referral to arbitration does not appear to be the most prudent action; or
e. The stay of the action would prejudice the rights 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 not
bound by the arbitration agreement but who agree to such inclusion provided those originally bound by
it do not object to their inclusion.

SECTION 35, RA 9285 (construction contracts to be performed in the Philippines)


Case: Del Monte v. CA 351 S 373 VS. Toyota Motor Philippines v. CA 216 S 236

DEL MONTE V. CAThe agreement to arbitrate maybe affected by subsequent events that ay prevent
the non-application of the AA if other parties who are not privity to or bound by the AA and who must be
included in the suit so that a complete resolution of the dispute is possible. The court further ruled that
the case cannot be speedily and efficiently resolved in its entirety if both arbitration and trial were to be
simultaneously conducted or if trial were to be suspended pending arbitration.

Q: So what will come first? Arbitration or court action?


A: ARBITRATION. Arbitration precludes court action

Q: If arbitration precludes court action, is there any judicial relief prior commencement of arbitration? Wala
ka na ba talagang remedy or arbitration talaga muna tayo before court action?
A: There can be a judicial relief prior commencement of arbitration .under the law; you can file a petition to
question the existence, validity or enforceability of the arbitration agreement. Ang action jan is to PETIITON FOR
JUDICIAL DETERMINATION OF THE EXISTENCE, VALIDITY or ENFORCEABILITY OF THE ABITRATION
AGREEMENT. It can be filed by any party to an agreement and notwithstanding the pendency of the petition,
arbitration proceeding may nevertheless commence and continue up to the rendition of an award. So there can be a
judicial relief prior commencement of arbitration proceedings. The finding by the court of the said action is merely
PRIMA FACIE and will not prejudice the right of any party to raise the issue of existence, validity and enforceability of
the AA before the arbitral tribunal.

Case: Agan v. Philippine International Ai Terminals 402 S 612

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 as petitioner or respondent have legal capacity to sue or be
sued;
b. The nature and substance of the dispute between the parties;
c. The grounds and the circumstances relied upon by the 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.

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.

4. SUBJECT MATTER OF ARBITRAITON


What cannot be arbitrated:
i. Civil status of persons
ii. Validity of a marriage or a legal separation
iii. Any ground for legal separation
iv. Jurisdiction of courts
v. Criminal liability
vi. Those which by law cannot be compromised
vii. Section 6, RA 9285

3rd principle: COURTS CANNOT CREATE CONTRACTS


COURTS CANNOT CREATE CONTRACTSCase: ESCANO V. CA , 100 S 197
i. Article 1315 of the Civil Code , parties to a contract are bound not only to the fulfillment of what has been
expressly stipulated between them but also to all the consequences which according to their nature may in
keeping with good faith, usage and law

The area of agreement between the parties must extend to all points that the parties consider essential
otherwise, there is no contract to speak of. Thus, in relation to that, such submission or contract to arbitrate
may include questions arising out of the valuations, appraisals or other controversies which may be
collateral, incidental, precedent or subsequent to the issues between the parties (remember the previous
cases on labor. If the cases are submitted to VA, the VA can rule on an issue even if not raised before him
so that it can put an end to a controversy. So it is the same principle.)

SCOPE OF AUTHROITY
i. International commercial arbitration arbitral tribunal has the power to rule on its own jurisdiction,
including any objections with respect to the existence or validity of the arbitration agreement.
ii. Domestic arbitrationan arbitrator has plenary jurisdiction and authority not only to interpret the
agreement to arbitrate but also the scope of his own authority
1. Case: Sime Darby v. Magsalin 180S177

PRINCIPLE OF SEPARABILITY
i. GENERAL PREMISE: Arbitral agreement is independent from the main contract (Model Law, Article 16
(1); applies in international commercial arbitration; the same is also found under the Special ADR rules Rule
2.2 (b):

(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, the court finds that the principal action is the subject
of an arbitration agreement; or
b. The principal action is already pending before an arbitral 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.

ii. Does the principle of separability apply to domestic arbitration? YES. The rule or principle of
separability also applies to domestic arbitration. What is the basis? See below!

Basis of separability:
1. Civil code prescribes a presumption of divisibility or separability in the provisions in a contract
2. Principle of separability is found in section 2 and 6 of the arbitration law.

SECTION 2an arbitration agreement shall be valid, enforceable and irrevocable save upon such
grounds at law as exist as a ground for the revocation of contracts

SECTION 6a party who is aggrieved by the failure, neglect or the refusal of the other contracting
party to comply with their arbitration agreement can invoke the aid to compel arbitration.
FRAUDULENT INDUCEMENT TO CONTRACT

i. Is this subject to arbitration? YES. It is subject to arbitration. But you can also resort to judicial relief prior
commencement of arbitration on the ground that you were fraudulently induced to enter in to an AA.

What is your basis then if nag-court action ka kaagad?


Answer: SECTION 3 of the Special ADR rules? You can file a petition before the court to question the
existence, validity or the enforceability of the AA.

EFFECT: Take note that when you say you were fraudulently induced, there are VICES OF CONSENT
which makes the contract VOIDABLE subject to ratification.

REVIEW: In fraudulent inducement to contract it is said that, there is nothing that could bar the arbitral
tribunal from ruling upon the issue of fraudulent inducement in the creation of the contract that embodies the
arbitration clause. The fact that a party desires to annul the contract for being voidable because the consent
is vitiated due to fraud will not remove the fraudulent inducement from the ambit of the arbitration clause or
the authority of the arbitral tribunal to rule upon it. In other word, fraudulent inducement to contract is subject
to arbitration.

Question: can you resort to court action prior commencement of arbitration proceedings on the
ground that you were fraudulently induced to enter into an arbitration agreement?
Answer: YES. See rule 3 of the Special ADR Rules.

NOTE:
1. International commercial arbitrationModel Law, Article 16 (1) empowers the arbitral tribunal to
decide any objection with respect to the existence or validity of the arbitration agreement.
2. Domestic arbitrationthe issue of fraudulent inducement is subject to arbitration if the language
of the arbitration clause is broad enough such as when it provides for arbitration of claims or
disputes arising out of, from or relating to this contract.

Q: How do you aver fraud in your petition?


A: under section 5, rule 8 of the Revised Rules of Court in all averments of fraud, the circumstances
constituting fraud must be stated with particularity.

Rule 8 Sec 5 Fraud, mistake, condition of the mind. In all averments of fraud or mistake, the
circumstances constituting fraud or mistake must be stated with particularity. Malice, intent,
knowledge or other condition of the mind of a person may be averred generally.

5. TIMELINESS AND WAIVER

The general premise is that the arbitration agreement must be invoked in a TIMELY MANNER to preclude court action.

What are the rules? We have to distinguish whether its ICA or DA.

RULES
i. INTERNATIONAL COMMERCIAL ARBITRATIONarbitration agreement must be invoked to preclude
st
court action not later than when submitting the 1 statement on the substance of the dispute [Model
Law, article 8(1)]

Question: What do you mean by first statement on the substance of the dispute?
Answer: If it is international commercial arbitration, the latest time to raise arbitration in order to preclude
court action is when the defendant files his answer.

Review the rules of court.

Question: What is an answer?


Answer: it is a pleading in which the defending party sets forth his defenses. (Rule 6, section 4 of the Rules
of court)

Just remember that in ICA, it should be released at the time when the defendant files his answer.

What is the rule if its a domestic arbitration?

ii. DOMESTIC ARBITRATION; Under RA 9285, Section 24must invoke arbitration not later than the pre-trial
conference;
iii. May be invoked even prior to filing answerby filing a motion to dismiss the suit on the ground that the court
lacks jurisdiction over the dispute (if a dispute is subject to arbitration, the court in which the case is filed has
no jurisdiction to entertain the suit)

RULE IN DOMESTIC ARBITRAITON: In case of a contract to arbitrate future controversies, by the service,
by either party upon the other of a demand for arbitration in accordance with the contract. In case of the
submission of an existing controversy, by the filing with the court having jurisdiction of the submission
agreement. In both cases, it must be invoked not later than the pre-trial conference.

In one case, it may also be invoked EVEN PRIOR TO THE FILING OF AN ANSWER. How? By filing a
MOTION TO DISMISS THE suit on the ground that the court lacks jurisdiction over the dispute.

Question: What is the effect of failure to raise arbitration or failure to plead in his motion to dismiss
the suit or in his affirmative defenses in his answer?
Answer: It is DEEMED WAIVED. As provided under, Rule 9 section 1: Defenses and objections not
pleaded. Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed
waived. However, when it appears from the pleadings or the evidence on record that the court has no
jurisdiction over the subject matter, that there is another action pending between the same parties for the
same cause, or that the action is barred by a prior judgment or by statute of limitations, the court shall
dismiss the claim.

Again the failure of the defendant to raise objection is crucial to dismiss whereas an affirmative defense in
his answer constitutes waiver in arbitration
FACTORS CONSIDERED when a party deemed to have waived his right to require arbitration:
i. Whether the partys action are inconsistent with the right to arbitrate;
ii. Whether the litigation machinery has been substantially invoked;
iii. Whether a party either requested arbitration enforcement close to the trial date or delayed for a long period
before asking for a stay of the suit;
iv. Whether defendant seeking arbitration filed a counterclaim asking for a stay of the proceedings;
v. Whether important intervening steps, such as resort to discovery procedure not otherwise available in
arbitration have been taken;
vi. Whether delay affected, misled or prejudiced the opposing party;
vii. When parties In fact litigate in a court of law a dispute that is subject to arbitration;
Case: Far East International Import v. Nankai Kogyo 6 S 725 having waived recourse
through arbitration, the losing party cannot thereafter question the jurisdiction of the court

6. OPERATION AND EFFECT


GENERAL RULE: An arbitration agreement invoked in a timely manner precludes court action;

Question: what is the principle behind this rule or policy?


Answer: this is based on the rule that the arbitration agreement is the law between the parties and they are expected
to abide by it in good faith. (Rule 2.2 of the Special ADR Rules)

Question: again, the general premise is that the AA is the law between the parties and they are expected to
abide by it in good faith. However, what if a case is filed in court in contravention of the agreement to
arbitrate, what are your remedies?
Answer:
i. File MOTION TO SUSPEND court Proceedings
ii. File MOTION TO DISMISS
iii. File MOTION FOR REFERRAL TO ADR (Rule 4 of the Special ADR rules)

Take note: ALL PROCEEDINGS UNDER THE SPECIAL ADR RULES ARE SUMMARY.

RULE 4: REFERRAL TO ADR

Rule 4.1. Who makes the request. - A party to a pending action filed in violation of the arbitration agreement,
whether contained in an arbitration clause or in a submission agreement, may request the court to refer the parties to
arbitration in accordance with such agreement.

Rule 4.2. When to make request.

(A) Where the arbitration agreement exists before the action is filed. - The request for referral shall be made not
later than the pre-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.

(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 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.

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 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 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.

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 4.7. 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. Not all of the disputes subject of the civil action may be referred to arbitration;
b. Not all of the parties to the civil action are bound by the arbitration agreement and referral to arbitration
would result in multiplicity of suits;
c. The issues raised in the civil action could be speedily and efficiently resolved in its entirety by the court
rather than in arbitration;
d. Referral to arbitration does not appear to be the most prudent action; or
e. The stay of the action would prejudice the rights 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 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.

RULES:
i. If a dispute or an action, subject of arbitration , is instituted in a court of law, the court is not at liberty to
disregard the arbitration agreement and allow the action to proceed; The correct procedure is for the court to
suspend the case, not to dismiss it and require the parties to proceed to arbitration in accordance with their
agreement (case: Chung Fu industry v. CA)

ii. It is erroneous for the court to issue a final order dismissing the case; rather, the court should merely
suspend the case. among the reasons for merely suspending, and not dismissing the case, is that the
parties may later on go back to the court where the case was pending to have the award confirmed by the
said court (Asset Privatization Trust v. CA)

Question: What are your remedies if the court erroneously denied your motion to dismiss or motion
to suspend court proceedings contrary to the agreement to arbitrate?
Answer: the party invoking the arbitration clause may file the necessary petition for CERTIORARI or
PROHIBITION.

GENERAL PREMISE: an arbitration agreement invoked in a timely manner precludes court action.

Question: does this principle mean that the court is automatically precluded from taking cognizance of the
case?
Answer: it is the duty of the court to determine WON the controversy is subject to arbitration. It is only after
determining that the controversy is subject to arbitration that the court should suspend court proceedings
and direct the parties to refer the case to arbitration.

The rule is that even if the court takes cognizance of the said case the court only makes a PRIMA FACIE
determination upholding the existence, validity and enforceability of the arbitration agreement.

Question: what if the court determine that it is not subject to arbitration, what will happen?
Answer: if the court determines that is ti not subject to arbitration or that the AA is void, inexistent or
unenforceable, then the court may proceed to hear and decide the case.

VIP: THE MERE EXISTENCE OF AN ARBITRATION AGREEMENT DOES NTO PER SE PRECLEUDE A COURT
FROM TAKING COGNIZANCE OF A CASE EVEN IF DEFENDANT CLAIMS THAT RECOURSE MUST FIRST BE
THROUGH ARBITRATION

7. THE RULE OF LIBERALITY


In resolving the issue whether the controversy is indeed subject to arbitration, the scope of the arbitration agreement
must be interpreted liberally so that any doubt concerning the scope of arbitrable issues is to be resolved in favor of
arbitration
Reason for the rule: Courts should liberally construe arbitration clauses to encourage alternative dispute resolution.
So long as a clause is susceptible of an interpretation that covers the asserted dispute, an order to arbitrate should
be granted since any doubt should be resolved in favor of arbitration (LM Power Engineering Corp V. Capitol
Industry)

The arbitration agreement in the Subcontract Agreement provided that:

6. The parties hereto agree that any dispute or conflict as regards to interpretation and implementation of this
Agreement which cannot be settled between respondent and petitioner amicably shall be settled by means of
arbitration.

RULING: The SC ruled in favor of Capitol holding that the dispute was subject to arbitration. The dispute arose due to
the parties incongruent positions on whether certain provisions of their Agreement could be applied to the facts, and
that it involved, technical discrepancies that are better left to an arbitral body that has expertise in those areas. The
agreement of the parties to refer any dispute or conflict as regards to interpretation and implementation under their
contract to arbitration, includes within its scope discrepancies as to the amount of advances and billable
accomplishments, the application of the provision on termination and the consequent set-off of expenses.

8. REFERRAL TO ARBITRATION
RULES: If an action is commenced before a court on a matter that is the subject matter of an arbitration agreement,
the court should NOT dismiss the action but simply SUSPEND it, to await the final outcome in the arbitration for
possible confirmation and enforcement of the award before the court.
VIP: The trial court DOES NOT LOSE JURISDICTION OVER THE CASE even if it should later be finally determined
that the controversy is subject to arbitration.

9. PROVISIONAL REMEDIES

RULES: the court in the exercise of its general jurisdiction is not prohibited from issuing a provisional remedy while at
the same time ordering the parties to submit their dispute to arbitration;
Case: Home bankers Savings v. Ca a party to a pending arbitration has the right, without violin the rule on forum
shopping to institute an action to obtain a writ of preliminary attachment from the court to preserve the property which
is the subject matter of the arbitration.

RATIONALE: If a party has a right to obtain a provisional remedy from the court while the arbitration is on-going, that
party, should also have the right to seek such appropriate provisional remedy from a court hat is deciding the issue
whether or not to refer the parties to arbitration, and to obtain such provisional remedy from that court when it ordered
that the proceedings before it be held in abeyance to enable the parties to arbitrate their dispute.

Section 28 (b) (2), RA 9285, a party in both international commercial arbitration and domestic arbitration is entitled to
provisional relief in the following cases:
i. To prevent irreparable loss or injury;
ii. To provide security for the performance of an obligation;
iii. To produce or preserve any evidence;
iv. To compel any other appropriate act or omission;

Question: when can you file before the court a petition for the issuance of provisional remedies in relation to an
arbitration agreement?
Answer: Under Rule 5.2:

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.

Note: INTERIM MEASURES OF PROTECTION are SUMMARY PROCEEDINGS.

RULE 5: INTERIM MEASURES OF PROTECTION

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.

Question: where will it be filed?


Answer: 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:

a. Where the principal place of business of any of the parties to arbitration is located;
b. Where any of the parties who are individuals resides;
c. Where any of the acts sought to be enjoined are being performed, threatened to be performed or not being
performed; or
d. Where the real property subject of arbitration, or a portion thereof is situated.

Rule 5.4. Grounds. - The following grounds, while not limiting the reasons for the court to grant an interim measure of
protection, indicate the nature of the reasons that the court shall consider in granting the relief:
a. The need to prevent irreparable loss or injury;
b. The need to provide security for the performance of any obligation;
c. The need to produce or preserve evidence; or
d. The need to compel any other appropriate act or omission.

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 been constituted, or if constituted, is unable to act or would be
unable to act effectively;
c. A detailed description of the appropriate relief sought;
d. The grounds relied on for the allowance of the petition

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

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 to arbitration;
b. Preliminary attachment against property or garnishment of funds in the custody of a bank or a third person;
c. Appointment of a receiver;
d. Detention, preservation, delivery or inspection of property; or,
e. Assistance in the enforcement of an interim measure of protection granted by the arbitral tribunal, which the
latter cannot enforce effectively.
f. A temporary order of protection.

Question: what is a temporary order of protection?


Answer: rule 5.9:
Xxxxxx
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 ex-parte 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 a notice 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 on a day specified in the notice, which must not
be beyond the twenty (20) day period of the effectivity of the ex-parte 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.

ATTY: This TOP is similar or akin to the 72-hour TRO.


Who issues that 72-hour TRO? Only by the executive judge and it is issued ex-parte. Within 24 hours after
its issuance, it will be raffled to a regular court and there is a summary hearing to be conducted. Defendant
is given opportunity to answer is the said 72-hour TRO may be extended to 20 days to include that 72 hours
already.

Be sure to distinguish the ex-parte TOP, ex-parte 72-hour TRO and the Temporary Protection Order.

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) 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.

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 5.9. 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 ex-parte 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 a notice 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 on a day specified in the notice, which must not
be beyond the twenty (20) day period of the effectivity of the ex-parte 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 ex-parte temporary order of protection for no more than twenty days from expiration of the original
period.

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 5.10. 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 5.11. 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 ex parte; or
b. The party opposing the application found new material 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 arbitral tribunal 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 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 measures 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.

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.
CHAPTER III
ARBITRATORS AND THE ARBITRAL TRIBUNAL

PRINCIPLE OF KOMPETENZ-KOMPETENZ

NOTE: If you are asked about the principle of Kompetenz-kompetenz, you define the principle, but if you are asked about the
policy of the law about Kompetenz-Kompetenz, you cite Rule 2.4 of the Special ADR Rules.

Under the special rules, these are classified as special proceedings, it means that there is an initiatory pleading. It is required
that there should be an initiatory pleading and that initiatory pleading is known as petition. Again, all action under the Special
ADR rules are classified as special proceeding, it means that an initiatory pleading is a petition.

WHAT IS THE PRINCIPLE OF KOMPETENZ-KOMPETENZ?


Ans: The first opportunity to rule on the issue of whether a tribunal has jurisdiction over the dispute must be given to the tribunal itself.
Thus the law required a court to exercise judicial restraint and defer to the tribunal in this issue. That is why when you file a judicial
determination of the validity or enforceability of the arbitration agreement, the court will only give a prima facie determination by the
basis of this Kompetenz-Kompetenz Principle.

WHAT IS THEN THE POLICY or the RULE ON KOMPETENZ-KOMPETENZ?

Rule 2.4. Policy implementing competence-competence principle. - The arbitral tribunal shall be accorded the first opportunity
or competence to rule on the issue of whether or not it has the competence or jurisdiction to decide a dispute submitted to it for
decision, including any objection with respect to the existence or validity of the arbitration agreement.xxxxx

Stated differently, the first opportunity to rule on the issue of jurisdiction whether the tribunal has jurisdiction over the said dispute must
be given to the tribunal itself. Accordingly, the rule requires the court, to exercise judicial restraint and refer to the tribunal on this issue.

If a court exercises jurisdiction over the said issue, it can only make a PRIMA FACIE DETERMINATION!

The law says, 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.

Under the last paragraph, 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.

Does the provision of the rules of court apply to arbitration proceeding?

Ans: 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 in order to achieve
the objective of the Special ADR Rules. In other words, the rules of court is not necessary to have a suppletory character but it is
already incorporated under the Special ADR Rule.

Question: Who appoints an arbitrator?


Answer: The parties may agree as stipulated in their agreement

When is the appointment made? Before the commencement of the arbitration proceedings

1. THE ARBITRATOR
a. Qualifications:
i. Of legal age;
ii. In full enjoyment of his civil rights and
iii. Must know how to read and write

b. Disqualifications: (section 10, Arbitration Law, letters a-d) (Article 12, Model Law, letters e-f for international
commercial arbitration)
th
i. Is related by blood or marriage within the 6 degree to either parties to controversy
ii. Has or had any financial or fiduciary or other interest in the controversy or cause to be decided or in the
result of the proceedings;
iii. Has any personal bias, which might prejudice the right of any party to a fair and impartial award;
iv. Is the appointing partys champion or advocate;
v. justifiable doubts as to an arbitrators impartiality;
vi. If he does not possess the qualifications agreed upon by the parties.

In both international and domestic arbitration, it is not necessary that the arbitrator has any special training or experience or be
admitted to the State Bar. It is not necessary that the arbitrator be a lawyer.

Are foreigners allowed to act as arbitrators? IT DEPENDS upon the agreement of the parties
- If its an international commercial arbitration,
- If domestic, there is no bias against foreigners.

What if the arbitration agreement, the parties failed to provide the method of replacing an arbitrator? What is your
remedy?
- Challenge the qualifications of an arbitrator before:
1. The arbitral tribunal or
2. If the challenge is not successful, you can raise the same before the APPOINTING AUTHROITY if the aggrieved
party requests or
3. Raise the same before he court only if the appointing authority fails or refuses to act on the said challenge.

When may the court act as appointing authority? Only under the circumstances provided in rule 6:

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 institutional arbitration 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 the parties 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, within thirty (30) days from receipt of such
request for appointment;
c. Where the parties agreed that their dispute shall be resolved 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.

Question: WHO IS AN APPOINTING AUTHORITY?


Answer: SEE rule 1. 11

Appointing Authority shall mean the person or institution 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.

Functions of the appointing authority


- He undertakes the procedure in the appointment and challenge of the arbitrator in case the arbitrator
named in the arbitration agreement failed to perform his functions
- If you cannot challenge the qualifications or disqualifications of the arbitrator, and pursue the remedies
allowed by law, the appointing authority is the one who undertakes such procedure.

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 6.4. Contents of the petition. -The petition shall state the following:
a. The general nature of the dispute;
b. If the parties agreed on an appointment procedure, a description of that procedure with reference to the
agreement where such may be found;
c. The number of arbitrators agreed upon or the absence of any agreement as to the number of arbitrators;
d. The special qualifications that the arbitrator/s must possess, if any, that were agreed upon by the parties;
e. The fact that the Appointing Authority, without justifiable 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, or failure of, the appointment of the arbitrator.
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.
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 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 party-nominated 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.

Can you challenge the appointment of arbitrator before the corut? YES. See rule 7.

4. CHALLENGE AND DISQUALIFICATION


a. Article 13, Model Lawin both domestic and international arbitration, gives the parties the freedom to
decide on the procedure for challenging an arbitrator;
b. Absent the agreement, a party who intends to challenge an arbitrator is required to send a written statement
of the reasons for the challenge to the arbitral tribunal;
c. If challenge not successful, request the appointing authority to decide on the challenge (section 26, RA
9285)
RULE 7: CHALLENGE TO APPOINTMENT OF ARBITRATOR

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 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 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 7.5. Contents of the petition. - The petition shall state the following:
a. The name/s of the arbitrator/s challenged and his/their address;
b. The grounds for the challenge;
c. The facts showing that the ground for the challenge has been expressly or impliedly
rejected by the challenged arbitrator/s; and
d. The facts showing that the Appointing Authority failed 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.

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 the challenged arbitrator agree to the
challenge and withdraw the appointment.
b. The other arbitrators in the arbitral tribunal agree to the removal of the challenged
arbitrator; and
c. The challenged arbitrator fails or refuses to submit his 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.
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 to the removal of the challenged
arbitrator; and
b. If the challenged arbitrator fails or refuses to submit his 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 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 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.

5. EQUAL RIGHT TO DESIGNATE


a. Parties are entitled to choose an equal number of arbitrators
b. Limitation: article 2045, civil code: any stipulation giving one of the parties the power to choose more
arbitrators than the other is null and void.
c. Case: Magellan Capital Management v. Zosa
Question: How many arbitrators can the parties appoint?
Answer: as a General rule, the parties are free to stipulate and determine the number of arbitrators. However, In
case they fail to stipulate, they can appoint 3 arbitrators so that in case of voting, they can ultimately come up with a
decision.

Additional arbitrators may also be appointed by the parties but the same must be made in WRITING.

A substitute arbitrator can also be appointed by the parties.

6. THERE IS NO LIABILITY FOR WRONG DECISIONS OF THE ARBITRATORS

a. There is no law prescribing the liability of the arbitrators

Question: If there is said to be no liability for wrong decisions of the arbitrators, but if any, is there any
liability that may be committed by an arbitrator?
Answer: YES. That is if the arbitrator fails to perform the duties required of him, he will incur CONTRACTUAL
LIABILITY to the parties in the sense that this acceptance of the appointment implicitly carries with it the
undertaking to discharge his duties to them in good faith.

RULE: The rule that the judges should act with competence, impartiality, probity and independence likewise
applies to arbitrators.

b. The rule applicable to judges should, by analogy, be applicable to arbitrators since they act in quasi-judicial
capacity and in fact deemed instrumentality of the government (case: Luzon Development tank v.
Association of Luzon Development Bank Employees)

Question: CAN THE ARBITRATOR BE MADE LIABLE FOR JUDICIAL ERROR?


YES. Case of SANTOS V. ORLINO
The fundamental propositions governing responsibility for judicial error were more recently summarized in
"In Re: Joaquin T. Borromeo," 241 SCRA 405-467 (1995). There, this Court stressed inter alia that given the
nature of the judicial function and the power vested by the Constitution in the Supreme Court and the lower
courts established by law, administrative or criminal complaints are neither alternative not cumulative to judicial
remedies where such are available, and must wait on the result thereof. Existing doctrine is that judges are not
liable to respond in a civil action for damages, and are not otherwise administratively responsible for what they
may do in the exercise of their judicial functions when acting within their legal powers and jurisdiction. Certain it
is that a judge may not be held administratively accountable for every erroneous order or decision he
renders. To hold otherwise would be to render judicial office untenable, for no one called upon to try the facts or
interpret the law in the process of administering justice can be infallible in this judgment. The error must be gross
or patent, deliberate and malicious, or incurred with evident bad faith

The imputed error in this case not being in the premises gross, and the record being bereft of any
persuasive showing of deliberate or malicious intent on the part of respondent Judge to cause prejudice to any
party, the instant administrative proceeding against the latter must be given short shrift for what of basis.

7. WHEN THE ARBITRAL TRIBUNAL IS DEEMED CONSTITUTED?


rd
a. Answer: the arbitral tribunal is deemed constituted when the sole arbitrator or the 3 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.

NOTE: ARBITRAL TRIBUNAL MEANS SOLE ARBITRATOR OR PANEL OF ARBITRATORS

CHAPTER IV
THE ARBITRATION PROCEEDING
In the conduct of arbitration proceeding the parties are treated with equality and each party is given the full opportunity of defending its
case. This is the fundamental requirement of due process.

In relation in the case of arbitration, it is said that in default of the place to be chosen by the arbitral tribunal, the place chosen by the
said tribunal that will be the place for arbitration. (see below)

1. PLACE OF ARBITRATION
The general rule is that the place of arbitration is the place so designated by the parties to the arbitration.
If the parties in an international arbitration have not designated a place where the arbitration may take place, the
arbitral tribunal may determine the place of the arbitration having regard to the circumstance of the place including
the convenience of the parties. This is in pursuant to the Modal law, Art. 20 (1)

The arbitral tribunal may meet at any place if considered appropriate for consultation among its members for hearing
of witnesses, experts or the parties for the inspection of goods, other property or document.
The place chosen by the arbitral tribunal must have some relevance to the contract and should not impose any undue
hardship upon one party or any party to the contract especially in the terms of the attending of hearings of parties or
the witnesses.

2. COMMENCEMENT OF THE ARBITRAL PROCEEDING


When does the arbitration proceeding commence?
Ans: The arbitration proceeding commences on the day on which a request for that dispute to be referred to
arbitration if received by the respondents.

How about language to be used during the arbitration proceeding?


Ans: GR is that the parties are free to agree on the language to be used in the arbitral proceeding. In default of such
agreement the arbitral tribunal shall determine the language to be used in the proceeding.

3. LAW OF PROCEDURE
It is said that in both domestic and international commercial arbitration, the parties may agree on the application of
rules of procedure that will govern the arbitration other than those set forth under the Philippine law. However, it
should be noted that the choice of the Philippines as the choice or the seat of arbitration means that the arbitration
itself is subject to the Philippine law as the lex arbitri or the lex loci arbitrii. So this recognizes the first principle that
parties may agree on the rules of procedure that will govern. This recognizes the principle of AUTONOMY OF
CONTRACT principle.
Although they are free to adopt the rule of procedure in the AP, the choice is subject to certain limitations or
qualifications. Such limitation or qualification ensures that the basic requirements of due process is conserved.

What are the limitations or qualifications under the Model law?


Answer:
a. Procedure for appointing arbitrators is subject to the provisions concerning the appointing authority and
specifying the instances when the appointing authority may designate an arbitrator;
b. The procedure for challenging an arbitrator is subject to the provisions authorizing the appointing authority
to decide an unsuccessful challenge to an arbitrator;
c. Those pertaining to the forma and content of the award;
d. Those pertaining to the correction or interpretation of an award or making an additional award;
e. Those pertaining to the procedure for setting aside an award and the grounds for setting aside the award;
f. Those pertaining to the procedure for refusing enforcement of the award and the grounds for not enforcing
the award.

Question: What if the parties failed to agree on what procedure will govern the conduct of the AA?
Answer: failing such agreement, the arbitral tribunal may conduct arbitration in the manner it considered appropriate.

What does due process mean?


Due Process in relation to arbitration proceeding:
a) The parties are given a chance to be heard and submit the evidence;
b) The tribunal must consider the evidence presented;
c) The tribunal must have something to support its decision;
d) The evidence that support the decision must be substantial;
e) The decision should be rendered based in the evidence presented or must be contained in the record of
the proceeding;
f) The decision must be rendered in such a manner that the parties knows the issued involved and the
reason for the decision rendered.
Case in point (ANG TIBAY V. CA)

Take note of Rule 3 of the special ADR RULES.

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. It applies to both
domestic and international commercial arbitration.

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. (The grounds are exclusive!)

Rule 3.6. Contents of petition.The verified petition shall state the following:
a. The facts showing that the persons named as petitioner or respondent have legal capacity to sue or be
sued;
b. The nature and substance of the dispute between the parties;
c. The grounds and the circumstances relied upon by the 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.

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.

Question: Why is that so?


Answer: this is because of the POLICY OF JUDICIAL RESTRAINT which means that there should be least
intervention from the court; besides the policy of the law is to favor arbitration.
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

Question: WHAT IS THE SUBJECT OF THIS REMEDY?


Answer: the ruling of the arbitral tribunal upholding or declining its jurisdiction

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 as petitioner or respondent has legal capacity to sue or be
sued;
b. The nature and substance of the dispute between the parties;
c. The grounds and the circumstances relied upon by the 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.

(Take note!!)

(B) No injunction of arbitration proceedings. - The court 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. - The court 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.

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.

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 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 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.
A. HEARINGS BEFORE THE ARBITRATORS

IF INTERNATIONAL COMMERCIAL ARBITRATION:


General Rule is that there should be a hearing. Hearing is conducted.
Exception: the arbitral tribunal may or may not hold a hearing for the presentation of evidence or for
oral arguments.
Exception to the exception unless the parties have agreed that no hearing shall be held. They will
just submit their testimonies on paper or through affidavits only.

If DOMESTIC ARBITRAITON
Ans: Under Art. 12 and 15 of Arbitration law:

At the commencement of the hearing, the arbitral tribunal may 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. 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. If the parties decide to file their brief then the hearing shall be closed
by the arbitrators after the receipt of briefs and/or reply briefs of the parties.

Principles to remember:
Before the proceeding, the arbitrators take their oath. They have the power to administer oaths of
all witnesses. This oath shall be required of any witness before their testimony is heard (section 13
of the Arbitration law)

Arbitrators are required to be present and to attend all the hearings and hear all the allegations of
the parties.

Arbitrators have the power to issue subpoena in order to compel witnesses to attend the hearings
(section 14 of Arbitration law)

Case in point: HOMEBANKERS V. CA (GR 115412, November 15, 1999)

Section 14 of Republic Act 876, otherwise known as the Arbitration Law, allows any party to the
arbitration proceeding to petition the court to take measures to safeguard and/or conserve any
matter which is the subject of the dispute in arbitration, thus:
Sec. 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. (emphasis supplied)

Petitioner's exposition of the foregoing provision deserves scant consideration. Section 14 simply
grants an arbitrator the power to issue subpoena and subpoena duces tecum at any time before
rendering the award. The exercise of such power is without prejudice to the right of a party to file a
petition in court to safeguard any matter which is the subject of the dispute in arbitration. In the
case at bar, private respondent filed an action for a sum of money with prayer for a writ of
preliminary attachment. Undoubtedly, such action involved the same subject matter as that in
arbitration, i.e., the sum of P25, 200,000.00 which was allegedly deprived from private respondent
in what is known in banking as a "kiting scheme." However, the civil action was not a simple case
of a money claim since private respondent has included a prayer for a writ of preliminary
attachment, which is sanctioned by section 14 of the Arbitration Law.

Question: Why can they issue subpoena? Because they exercise quasi-judicial functions.

B. ROLE OF ARBITRATORS

o An arbitrator should be impartial because it functions as a judge because it is a quasi-judicial officer, he must
be competent, independent, he must be a person of probity and impartiality.
o When you say that an arbitrator should be impartial, it does not mean that an arbitrator is not allowed to take
an active role in the proceeding before them. Like a judge an arbitrator can ask clarificatory questions.
o Arbitrators receive exhibit in evidence any document.

o The Arbitrator is the sole judge of the relevancy and materiality of the evidence offered. He is not bound by
the rules of court.

BARBERS V. LAGUIO (351 S 606)

Anent the charge that respondent judge displayed bias and partiality during the trial when he asked
numerous clarificatory questions, we note that the participation of respondent judge in the conduct of the trial
was not by itself condemnable. He could not be expected to remain an impassive and remote presence
during the proceedings, prohibited from asking questions when proper and necessary, yet all these were
done without necessarily transgressing the boundaries of impartiality decreed by judicial ethics. The mere
fact that the presiding judge asked clarificatory questions during the trial does not make him a biased
judge.[26]He must be accorded a reasonable leeway in asking questions to witnesses as may be essential to
[27]
elicit relevant facts and to bring out the truth. Differently stated, questions to clarify points and to elicit
additional relevant evidence are not improper. The judge being the arbiter may properly intervene in the
presentation of evidence to expedite and prevent unnecessary waste of time.

COMMETN: so the arbitrator can ask clarificatory questions during the conduct of the AP.
C. PROCEEDINGS WITHOUT HEARINGS

International commercial Arbitrationparties may agree that proceedings shall be conducted only n the basis of
documents and other materials without need of hearing
Domestic arbitrationparties by mutual agreement submit their dispute to arbitration other than by oral hearing.

How is this done?


a) Parties may submit an agreed statement of facts;
b) Parties may submit their respective contention to the duly appointed arbitrator;
c) Parties may also submit their written arguments.

3. RELEVANCY AND MATERIALITY OF EVIDENCE


Under the Arbitration Law, the arbitral tribunal shall be the sole judge of the relevancy and materiality of evidence
offered or produced before them (arbitration law, section 15)
The arbitral tribunal is not bound to conform to the rule of court. This found under Section 15 of Arbitration Law.

4. EXPERTS AS WITNESSES
In international commercial arbitrationunless the parties have agreed otherwise, the arbitral tribunal may appoint
experts to resort to it on specific issues that the arbitral tribunal may deem appropriate
In Domestic arbitrationexperts may be appointed by the arbitral tribunal even if RA 9285 has not made Article 26 of
the Model Law apply to domestic arbitration.

see article 26
Article 26 - Expert appointed by arbitral tribunal:
1. Unless otherwise agreed by the parties, the arbitral tribunal:
a. may appoint one or more experts to report to it on specific issues to be determined
by the arbitral tribunal;
b. may require a party to give the expert any relevant information or to produce, or to
provide access to, any relevant documents, goods or other property for his
inspection.

2. 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 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.

Comment: expert witnesses pwede mag-testify before the arbitral tribunal.

5. PROVISIONAL REMEDIES
The arbitral tribunal has the power, at any time before rendering an award, without prejudice to the right of any party
to petition the court to take measures necessary to safeguard or conserve any matter subject matter of the
dispute.(arbitration law, section 23)
Specifically, after constitution of the arbitral tribunal and during the AP, a party may make such request before the
arbitral tribunal except3 when the AT has no authority or is unable to act effectively.
How about if it is international commercial arbitration? Under Article 17 of the Modal Law, it is said that the
arbitral tribunal at the request of any party, can order any party to take any interim measure of protection in respect of
the subject matter of the dispute.

How may a person apply for interim measures of protection?


Answer: Under Section 5.1 of Special ADR Rules, A party to an arbitration agreement may petition the court for interim
measures of protection.

So magkaiba, in other words, you can ask the arbitral tribunal for the issuance of a provisional remedy; and likewise you can
also file a petition before the court for the issuance of any provisional remedies. So, take note the kinds of provisional
remedies that can be issued by the court. Magkaiba yun doon sa pwedeng iissue ng arbitral tribunal.

Principle: the Arbitral Tribunal can grant provisional remedies or you can file for provisional remedies before the court for the
issuance of the same. This is pursuant to rule 5 of the Special ADR rules.

What if the Arbitral Tribunal granted a provisional remedy and the party against whom said provisional remedy is
issued disregards or disobeys such provisional order of the court, what is your remedy? The offended party must apply
with the court for an assistance to implement such measure. This is found in Section 28 (b) and Section 29 of RA 9285. Take
note of the relationship between the arbitral tribunal and the court. Both bodies can issue a provisional order.

Under RA 9285, Section 28 (b) (2), arbitral tribunal has a power to issue provisional reliefs against the adverse party in order
to:
(i) prevent irreparable loss or injury:
(ii) provide security for the performance of any obligation;
(iii) produce or preserve any evidence; or
(iv) compel any other appropriate act or omission.

Further 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. Such interim measures may include but
shall not be limited to:
(1) preliminary injunction directed against a party,
(2) appointment of receivers; or
(3) order the detention, preservation, inspection of property (section 29)

Note:
Under RA 9285, the arbitral tribunal does not possess coercive power unlike that of the arbitration law and the
Model Law. In other words, arbitral tribunal can grant provisional remedies

Section 28 (b) (5) of the ADR law clearly states that the order granting interim relief shall be binding upon the parties.

Is this provisional remedy available against third person or non-party?


Ans: No, because under Section 28 (b) of the ADR law, it specifically provides that the interim relief may be granted
only against the adverse party.
6. ARBITRATION AS PRACTICE OF LAW
An individual who is not a member of the Philippine Bar may represent any party in both international and domestic
arbitration.
Section 22, RA 9285 in international commercial arbitration conducted in the Philippines, a party may be represented
by any person of his choice
If the representative is not a member of the Bar, is not authorized to appear as counsel in any Philippine court or any
quasi-judicial body, whether or not such appearance is in relation to the arbitration in which he appears (section 33,
RA 9285)

7. NO DEFAULT AWARDS
Can the other party to an arbitration agreement be declared in default? YES.
How about rendering a Default Arbitral Award? NO. In both international commercial arbitration and domestic
arbitration, default awards are not allowed unless otherwise agreed by the parties. There can be no default award in
arbitration proceedings but a party thereto can be declared in default!

Why is there no default award? Under the law, it is said that an award shall not be made solely on the default of a
party. It is specifically provided under the law that an award shall not be made solely on the default of the party. The
arbitrator shall require the party to submit such evidence as may be required n

However, a party may be declared in default. How? Under article 25 of the Model law:

Unless otherwise agreed by the parties, if, without showing sufficient cause:
1. the claimant fails to communicate his statement of claim, the arbitral tribunal shall terminate the
proceedings;
2. the respondent fails to communicate his statement of defense or fails to file his answer, the arbitral
tribunal shall continue the proceedings without treating such failure in itself as an admission of the
claimants allegations;
3. any party fails to appear at a hearing or to produce documentary evidence, the arbitral tribunal may
continue the proceedings and make the award on the evidence before it.

That is why there is no default award.

SUMMARY
1. Interlocutory orders granting interim relief and/or other measures of protection are not enforceable under the New York
Convention as these are not final awards of the tribunal. Thus, generally limited to place of issuance of injunction.
2. Arbitral interim relief may be tailored to particular circumstances of the case provided its effect is limited to the parties of the
dispute and to the subject matter of the arbitration.
3. As in most procedural rules for provisional remedies in the Philippines, the burden of proving the factual bases for the grant of
the interim relief and other measures of protection is on the APPLICANT.
4. Under the UNCITRAL MODEL LAW, interim relief and or other measures of protection may be granted by the Arbitral Tribunal
ex-parte.
5. After the Tribunal has been constituted, both the courts and the tribunal have the authority to grant interim relief. However, in
such cases, the arbitral Tribunal should have the primary competence and the parties should be allowed to go to court only in
those cases where, for whatever reasons, the tribunal is not in a position to grant the relief sought within the required time
frame.

CHAPTER V. THE ARBITRAL AWARD


1st principle: the arbitral tribunal can render separate or partial final awards

1. SEPARATE OR PARTIAL FINAL AWARDS


Why? Both the Model Law and the Arbitration law do not provide wither arbitral tribunals may render separate
awards. But there is no reason for not recognizing that arbitral tribunals have the authority to render separate awards
when such are appropriate.

What is the basis? Rule 36, section 5, rules of court applies BY ANALOGY:
SEC. 5. Separate judgments. When more than one claim for relief is presented in an action, the court, at
any stage, upon a determination of the issues material to a particular claim and all counterclaims arising out
of the transaction or occurrence which is the subject matter of the claim, may render a separate judgment
disposing of such claim. The judgment shall terminate the action with respect to the claim so disposed of
and the action shall proceed as to the remaining claims. In case a separate judgment is rendered, the court
by order may stay its enforcement until the rendition of a subsequent judgment or judgments and may
prescribe such conditions as may be necessary to secure the benefit thereof to the party in whose favor the
judgment is rendered

When you say separate awards, these are analogous to judgments that are partial but final in nature. Why?
Because they put an end to a particular matter. (Tamboan V. CA)

However, there is a caveat. (see below)

CAVEAT: Although tribunals may render separate awards, this prerogative should be used carefully and sparingly to
achieve the objective of arbitration of promoting a speedy and expeditious resolution of the entire controversy, not
just an aspect of it.

2. SCOPE OF RELIEF/CONTENTS OF AN AWARD


The arbitral tribunal may grant any remedy or relief that they deem just and equitable and within the scope of the
agreement of the parties, which shall include, but not limited to, the specific performance of a contract (section 20,
Arbitration law)

The principle is that:


As long as the award derives its essence from the contract and is based on a passably plausible interpretation of the
contracts.
Any limitation upon the remedial power of an arbitrator must either be explicitly contained or clearly incorporated by
reference in the arbitration clause.
Arbitrators may award punitive damages.

Question: how about monetary damages? Can the arbitrators award the same?
Answer: YES. If there is no such limitation as to its award, then the arbitrator may do so.
Can attorneys fees as damages be awarded by the tribunal?
Answer: NO. Attorneys fees as damages should not be awarded because the arbitrator should not require the losing
party to reimburse the winning party legal expenses and other damages and further, such an award demands a
factual, legal, or equitable justification before the same may be given.

3. ARBITRAL TRIBUNAL CAN ONLY AWARD WITHIN THE AGREED SCOPE


Thus, an arbitrator can only decide on those matters that have been submitted to them (section 20, Arbitration Law,
applies by analogy to international commercial arbitration)
Case in point: Asset Privatization Trust v. CA) --Arbitrators cannot resolve issues beyond the scope of the e
submission agreement. The parties to such an agreement are bound by the arbitrators award only to the extent and
in the manner prescribed by the contract and only if the award are rendered in conformity thereon.
The scope of the arbitrators authority should be interpreted broadly if arbitration is to serve its purpose.
Parties may specify in their terms of reference what matters or issues to refer to the arbitrator for determination.

4. FORM OF AN ARBITRAL AWARD


Under the arbitration law, Section 20 provides that the award must be IN WRITING, SIGNED AND ACKNOWLEGED
by a majority of the arbitrators.
Under the model law, article 31 provides that:
1. 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.
2. The award shall state the reasons upon which it is based, unless the parties have agreed that no
reasons are to be given or the award is an award on agreed terms under article 30.
3. The award shall state its date and the place of arbitration as determined in accordance with article
20(1). The award shall be deemed to have been made at that place.
4. After the award is made, a copy signed by the arbitrators in accordance with paragraph (1) of this article
shall be delivered to each party.

10. TIME TO RENDER


In international commercial arbitration no time frame as arbitral tribunal is given considerable leeway, unless the
parties provide a period within which the tribunal must render its award.
Domestic arbitrationarbitral tribunal must render its award with the period of time prescribed by the parties, absent
any agreement, within 30 days after closing of hearings.

11. Form of AWARD AND STATEMETN FO FACTS AND LAW


Under article 31 of the Model Law, which also applies to domestic arbitration, the parties may agree that the arbitral
tribunal need not state the reasons for its award.
Case: GROGUN V. NAPOCOR 411 S 357An award that is not verified by the sole arbitrator, or by a majority of
the arbitrators, as required under Section 20 of the Arbitration Law is invalid.

QUESTION: ano bang kaibahan ng award rendered kapag international arbitration and domestic arbitration?
So, under the law, if it is international commercial arbitration sabi pwede siya hindi na kailangan i-acknowledge ng
mga arbitrators. Unlike in domestic arbitration, it is said that it should be acknowledged by the majority of the
arbitrators.

QUESTION: under RA 9285, should the arbitral award be subscribed or verified before the notary public?
The answer there is NO. It is not necessary. Hindi kailangan i-acknowledge yung decision or award. Arbitrators need
not acknowledge nor verify the award. Ok, what is the case? Grogun inc. vs Napocor 411 scra 357 sabi ng Supreme
Court, an award that is not verified by the two arbitrators or by majority of the arbitrators as required under Sec. 20 of
the Arbitration Law is invalid. Now, upon the passage of RA 9285 diba. Diba under 9285 it is already dispensed with
pwede na siyang hindi verified.

The ruling in Grogun case. It would not apply to arbitral awards rendered after the effectivity of RA 9285. Take note,
in both domestic and commercial arbitration. Now, hindi na kailangan i-verify yung award.

12. CONSTITUTIONALITY OF THE LAW


It is said that arbitrators may decide legal issues that have constitutional implications.
But take note deemed to have exceeded their authority if they address the constitutional validity of a statute.

13. LAW ON THE MERITS


We discussed about the procedural aspect of the law, the procedural aspect ng arbitration. Under the procedural law
it is said that the parties are free to choose the laws on procedure which shall govern the arbitration. Again in
domestic arbitration or international commercial arbitration the parties may decide the rule of procedure governing the
arbitration. The only limitation is imposed is that the arbitration proceeding in both domestic and international
commercial to follow the due process requirement. So yun lang ang limitation.

Question: How about the substantive law that will govern the arbitration? Siyempre in every dispute meron
talagang applicable law on the matter. For example, interpretation of contracts, what is the rule on the matter?

INTERNATIONAL COMMERCIAL ARBITRATION--Section 28 of the Model provides:


1. the arbitrators may make a decision on the substance of the issue based on the agreed law of the parties.

Provision: the substance of the dispute in international commercial arbitration shall be decided in
accordance with such rules of law as are chosen by the parties as applicable to the substance of th dispute

2. the agreed law of the parties refers to the substantive law of a state. Take note, this refers to
substantive law of the state and not to its conflict rules.

Provision: the designation by the parties of the applicable law or legal system of a given State shall, unless
otherwise specified by them, directly refer to the substantive law of that State and not to its conflict of laws
rules.

3. in the absence of designation, the arbitral tribunal will decide and shall apply the national law determined by
the conflict of laws rules.

Provision: under the Model Law, the arbitral tribunal shall decide ex aequo et bono as amiable compositeur
only if the parties expressly authorize them to do so
4. under numbers 1,2,3 the arbitral tribunal shall decide based on the terms of the contract and shall take
into account the usages of trade applicable in the action.

Again,
1) it is based on the agreed law of the parties.
2) it refers to substantive law of the state and not to its conflict rule.
3) in the absence of designation the arbitral tribunal shall apply the national law determined by the conflict of
laws rule
4) under 1,2, and 3 the arbitral the arbitral tribunal shall decide based on the terms of the contract taking into
account the usages of trade applicable in the court action.

So in other words, if it is international commercial arbitration the rule there or principle is, it grants the parties the
freedom to choose the applicable law. In international commercial arbitration, it does not matter if the parties are both
foreigners as long as the place of arbitration is in the Philippines. If both parties of international arbitration sabihin
natin o sige the dispute basehan nito example the imperial law example lang yan, ok lang yan diba because it allows
the parties to choose the applicable substantive law. So those are the rules. Depende yan if it is domestic arbitration
or international commercial arbitration.

The foregoing rules in international commercial arbitration is provided under Article 28 of the Model Law. The
principle there is that it recognizes that the agreement of the parties as agreed by the parties is crucial in resolving
any dispute arising in the contract.

So, the parties are given now leeway to choose what law will apply to the dispute. It will be respected unless:
a. It is contrary to the public policy of the Philippines
b. It is contrary to the universally accepted principles of morality;
c. It is penal in character
d. It is purely fiscal or administrative in character
e. It would work undeniable injustice to the citizens or residents of the Philippines or
f. It would work against the vital interest or national security of the Philippines.

DOMESTIC ARBITRATION--Under domestic arbitration, arbitrators may grant any remedy or relief they deem just
and equitable. (section 20 of the arbitration law)
Can an arbitrator decide an issue or issues on the basis of equity? YES. In the absence of any agreement or
statutory limitation: he may do justice as he sees it, applying his own sense of law and equity to the facts as he finds
them to be making an award reflecting the spirit rather than the letter of the agreement, even though the award
exceeds the remedy requested by the parties

14. COMPROMISE
Question: what if for example while undergoing arbitration proceedings nag settle yung parties. Diba pwede
yun mangyari. What will happen? What kind of award will the arbitral tribunal render? Answer: it is an ARBITRAL
AWARD ON AGREED TERMS; the arbitral tribunal shall award a SETTLEMENT in the form of an arbitral award on
agreed terms. It contemplates a situation when parties amicably settle during the proceedings.
What happens? Under article 30 of the Model Law, the arbitral tribunal shall terminate the proceedings and record
the settlement in the form of arbitral award on agreed terms. Such an award has the same status and effect as any
other award on the merits of the case. (article 30 (2), Model Law)

15. CORRECTION, MODIFICATION AND INTERPRETATION


Question: Is a correction before the arbitral tribunal allowed before the said body? It depends.
i. If it is on the international commercial arbitration, under article 33 of the model law , it provides that, errors
in computation, any clerical or typographical errors or any errors of similar nature can be made but with
prior notice to the other party.
ii. If is a correction in domestic arbitration, Under RA 9285, correction is not allowed in domestic arbitration.
The case there is Imperial Textile Mills vs Sampang 219 scra 615 The SC said that the reason for not
allowing the arbitral tribunal is, it loses authority or jurisdiction the moment it renders a decision.

So, corrections and modification in arbitral award is only award in international commercial arbitration kapag
domestic arbitration bawal. Correction of an award is allowed if it is rendered in international commercial
arbitration but the correction daw is only limited to clerical or typographical error. But if it is an award in
domestic arbitration, correction of that award before the tribunal is not allowed.
Question: if so, then what is your remedy if you want a part of the award to be corrected? Your remedy is
JUDICIAL through filing a petition to vacate the award.

How about additional awards? Additional award allowed in international commercial arbitration (article 33, Model
Law), with notice to the other party, a party may request the Arbitral Tribunal to give an interpretation of a specific
point or part of the award

16. FINALITY OF AWARD


If it is domestic arbitrationby deduction, section 26of the arbitration law, upon lapse of 30 days after the award is
delivered to the parties or their lawyers if they are represented by counsel.
If it is international commercial arbitration--after 3 months from receipt of the award.

Question: So when does an arbitration proceeding terminate?


1. An arbitration proceeding is terminated by a final order
2. The arbitration proceeding is terminated upon issuance of an award by the arbitral tribunal terminating the
proceeding on the following grounds:
a. When the claimant withdraws his claims
b. The parties agree on the termination of the proceeding
c. The arbitral tribunal finds that the continuation of the proceeding has for any reason become
unnecessary or impossible

17. CONFIDENTIALITY OF AWARD


We learned that everything that is disclosed during mediation proceeding cannot be used for any purpose. Diba, in
any proceeding. How about yung mga papers and documents used during the arbitration proceeding can that be
presented in court? The answer is that arbitral proceedings are held in private and all pleadings are treated
confidential.
Arbitral awards are not published unless of course if the parties agreed.

Under 9285, when we say confidentiality, it includes the records of th case, evidence and the arbitral award; it shall
be considered of confidential and are not published EXCEPT:
a. when the parties agree or
b. only for the limited purpose of disclosing to the court of relevant documents and
c. Such disclosure is needed to be made in connection with an action or pending appeal before ht said court.

Provision:
In case an arbitral award is appealed or contested in court, a party to the arbitral proceedings is
authorized under RA 9285 to disclose to the court relevant documents pertaining to the arbitration.
But the court where the appeal or other proceeding is pending may issue protective orders 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 (section 23, RA 9285)

In other words, everything related to the proceedings are strictly confidential. But when it is shown that the applicant
will be adversely affected by said disclosure, the court in which the action is pending or pending appeal, may issue
PROTECTIVE ORDRES. That is sanctioned under rule 10 of the special ADR rules.

RULE 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 any time 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 was obtained, or would be obtained, during an ADR
proceeding;
b. The applicant would be materially prejudiced by the disclosure of that information;
c. The person or persons who are being asked to divulge the confidential information participated in an ADR
proceedings; and
d. The time, date and place when the ADR proceedings took place.

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 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.

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 mediation shall be privileged and confidential.
b. A party, a mediator, or a nonparty participant may refuse to disclose and may prevent any other person
from disclosing a mediation communication.
c. In such an adversarial proceeding, the following persons involved or previously involved in a mediation
may not be compelled to disclose confidential information obtained during the mediation: (1) 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.
d. The protection of the ADR Laws shall continue to apply even if a mediator is found to have failed to act
impartially.
e. A mediator may not be called to testify to provide information gathered in mediation. A mediator who is
wrongfully subpoenaed shall be reimbursed the full cost of his attorney fees and related expenses.

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.
CHAPTER VI
RECOURSE AGAINST FINAL AWARDS
1. AWARDS IN DOMESTIC ARBITRATON
General rule: the arbitration agreement may provide that the arbitrators award shall be final, non-appealable and
executory.
Basis: Article 2044 of the Civil codeany stipulation that the arbitrators award or decision shall be final is valid,
without prejudice to Articles 2038, 2039 and 2040.
What is the only limitation? Decisions of arbitrators are subject to judicial review and may be annulled or rescinded
if the conditions prescribed in articles 2038, 2039, 2040 and sections 24 and 25 of the Arbitration Law apply
If it is a domestic arbitration, an award that is rendered by the Arbitral Tribunal becomes final after lapse of 30 days
after the award is delivered to a party. If the party to a domestic arbitration wishes to have the award set aside or
modified he cannot do that before the Arbitral tribunal because remember, the arbitral tribunal loses its jurisdiction the
moment it issues the decision.

So what is your remedy? File a petition before the RTC for correcting or vacating of the award (rule 11)
Review:
a. Remedy: file a motion to vacate award before the RTC having jurisdiction over the arbitration within 30 days
from receipt of the arbitral award
b. Section 25: Grounds for CORRECTING an award (remedy: file petition/motion for correction/modification of
arbitral award)
c. Section 24: Grounds for VACATING an award (remedy: file a petition/motion to vacate domestic arbitral
award filed with the RTC)

NOTE: When to request for correction, modification or vacation


o If it is DA, under section 25 of the Arbitration law, it provides for grounds for correcting an award. Unlike in
section 24, it provides grounds for VACATING an award
o Correcting an award refers to trivial matters compared to those in section 24 which provides for grounds for
vacating an award. It involves or goes into the very merits or substance of the arbitral award.

GROUDNS FOR CORRECTING AN AWARD (Rule 11.4)


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:
a. Where there was an evident miscalculation of figures or an evident mistake in the description of any person,
thing or property referred to in the award;
b. Where the arbitrators have awarded upon a matter not submitted to them, not affecting the merits of the
decision upon the matter submitted;
c. Where the arbitrators have omitted to resolve an issue submitted to them for resolution; or
d. Where the award is imperfect in a matter of form not 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.

GROUNDS TO VACATE
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 the arbitral tribunal or any of its members;
c. The arbitral tribunal was guilty of misconduct or any form 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 to act as such under the law and willfully refrained from
disclosing such disqualification; or
e. The arbitral tribunal exceeded its powers, or so imperfectly 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:
i. The arbitration agreement did not exist, or is invalid for any ground for the revocation of a contract or is
otherwise unenforceable; or
ii. A party to arbitration is a minor or a person judicially declared to be incompetent.

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.
In deciding the petition to vacate the arbitral award, the court shall disregard any other ground than those enumerated
above.

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 11.5. 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.

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.

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.

When a petition to vacate or correct/modify an arbitral award is pending before a court, the party 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.

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.

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.
In all instances, the petition must be verified by a person who has knowledge of the jurisdictional facts.

Rule 11.6. Contents of petition. - The petition must state the following:
a. The addresses of the parties and any change thereof;
b. The jurisdictional issues raised by a party during arbitration proceedings;
c. The grounds relied upon by the parties in seeking the 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 arbitral award and the circumstances under which it was received
by the petitioner.

Apart from other submissions, the petitioner must attach to the petition the following:
a. An authentic copy of the arbitration agreement;
b. An authentic copy of the arbitral award;
c. A certification against forum shopping executed by the applicant in accordance with Section 5 of Rule 7 of
the Rules of Court; and
d. An authentic copy or authentic copies of the appointment of an arbitral tribunal.

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.

IMPORTANT THINGS TO REMEMBER:


Petition must be VERIFIED
Authentic copy of the arbitral ward must be attached
Certification against forum shopping
Authentic copy of the appointment of the arbitral tribunal.

The grounds enumerated under section 24 are more serious and more substantial. The grounds involve the integrity of
the award itself.
So, again the grounds for vacating an award refer to the integrity of the award itself. In contrast, under section 25 of the
Arbitration Law. Section 25 of the Arbitration Law provides for the grounds for correcting an award. Iba yung grounds for
vacating an award, iba yung grounds for correcting an award. So, under Section 25, correcting lang daw an award. So
when you say you want the award to be corrected, these do not involve the merits of the arbitral award. So, magkaiba ha.
Section 24, the vacating refers to substantial issues, the integrity of the award itself in contrast to section 25 which do not
involve the merits of the arbitral award.

When do you file the said petition either to vacate an award or to correct an award? Under the law, you file that not
later than 30 days. Take note, not later than 30 days from receipt of the arbitral award.

So ang jurisdiction is to be filed before the RTC. Ok? So RTC of the place having jurisdiction over the place in which one
of the parties is doing business, where any of the parties reside or where arbitration proceedings are conducted. That is
under Rule 11.3.
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 11.9. 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.

(Comment: if it is a domestic arbitration and you file a petition to vacate the award, the court will either VACAT E or
CONFIRM)

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.

(THIS REFERS TO DOMESTIC ARBITRAITON)

QUSETION: what if your ground to vacate an award is that because the arbitral tribunal committed errors of or
errors of law, will the court entertain your petition? NO. The court sill not substitute its judgment for that of the arbitral
tribunal. (rule 11.9) 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

EFFECTS OF RAISING GROUNDS OTHER THAN THOSE ENUMERATED BY LAW

K, next. My next question is that, weve said that if we want an award to be vacated or if we want an award to be
corrected, there are specific grounds under the law. Now, my question is, what if, for example, you filed a petition to
vacate or to set aside an award already final before the RTC and then, you raise, a ground other than those enumerated
under section 24. Hindi siya mentioned. At the point of view of the RTC, will the RTC entertain your petition or should it be
dismissed?

Differently stated: in a suit to vacate an arbitral award in a domestic arbitration, should the court disregard the
more serious grounds enumerated under section 24 of the Arbitration Law in light of section 41 of RA 9285 which
states that any ground other than those specified in section 25 of the Arbitration Law be disregarded by the
court?

Answer: notwithstanding section 41 of RA 9285, the court should take cognizance of the grounds enumerated in section
24 of the Arbitration Law in any proceeding to vacate or set aside an award in a domestic arbitration since it violates the
aggrieved partys right to due process.

Any arbitration conducted in the Philippines, whether international or domestic arbitration, is subject to the overriding
public policy that the rights of any party to due process, which means, at the very least, the right to have a fair trial before
an impartial tribunal, must be respected.

EFFECTS OF JUDGMENTS OF THE RTCT VACATING/MODIFYING/CORRECT AN AWARD:

Next, di ba we file a petition to vacate an award or to correct an award with the RTC. So my question is, what is the effect
of an order issued by the court in the said petition? What is the effect of the judgment of the RTC either vacating or
correcting the award? K, the effect there is K. Three effects. So the effect of the judgment of the RTC vacating or
modifying or correcting the award, it is deemed as an order made in a proceeding under Section 29 of the Arbitration
Law.

So what are those effects?

1. IT SHALL BE DOCKETED AS IF IT WERE RENDERED IN AN ACTION;


2. IT SHALL HAVE THE SAME FORCE AND EFFECT OF A JUDGMENT IN AN ACTION;
3. IT MAY BE ENFORCED AS IF IT HAD BEEN RENDERED IN A COURT IN WHICH IT IS ENTERED. you can
file for a motion for execution.

Ok now, as regards the first effect. Sabi natin, ang first effect is it shall be docketed as if it were rendered in an action.
Anong ibig sabihin ng docketed by the said RTC? Kasi, like in practice, for example, pag may nag-file ng kaso, may
tinatawag kaming case number. For example, Civil Case No. 123. And then sa court, we have that docket book, kung
baga lahat ng proceedings na nangyari doon, isusulat kamay yan siya sa docker book. So kung baga ang effect ng
judgment ng RTC vacating or confirming or modifying an award is that it shall be docketed as if it were rendered in an
action. Para siyang original action na gi-file sa court. So that is the first effect.

The third effect, it is said that it may be enforced as if it had been rendered in a court in which it is entered. So, anong
ibig sabihin non? Ang ibig sabihin non is it is subject to execution. So if you want to execute that, you file a Motion for
Execution before the said RTC. So take note ha of the effects of the judgment of an RTC confirming or vacating or
modifying or correcting the award.

The judgment of the RTC in a domestic arbitration either confirming the award or vacating or modifying or correcting the
award is an order or decision entered upon an award which is also deemed an order made in a proceeding under
section 29 of this act.

2 types of orders contemplated under section 29, Arbitration Law:


a. A judgment entered upon an awardjudgment confirming, vacating, correcting or modifying the arbitral
award;
b. Order made in a proceeding under the Actincludes any order other than the first type of order which
finally determines a specific aspect of part of the controversy.

Example: order compelling a respondent to proceed with arbitration. If the party fails or refuses to proceed
with arbitration, the other party can file a suit before the RTC to compel the respondent to proceed with
arbitration. If respondent fails to appeal, the order becomes final and executory.

QUESTION: WHAT IS NOW THE REMEDY AGAINST THE ORDER OF THE COURT EITHER VACATING,
CORRECTING OR MODIFYING A DOMESTIC ARBITRAL AWARD?
ANSWER: the remedy there is for you to first file a Motion for Reconsideration before the RTC within 15 days from receipt
of the order. After that, you can file your appeal before the CA or file a petition for Certiorari. Remember that the motion
for reconsideration is filed within 15 days from the notice of the decision of the RTC. This is found under Rule 19.2 of the
Special ADR Rules.

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.

Can you file an appeal and certiorari at the same time? NO.
If after resolving your MR, party may file either an appeal or certiorari. Note that, Where the remedies of appeal or
certiorari are specially made available for the parties under the special ADR rules, recourse to one precludes the other.
The remedies of certiorari and appeal are only ALTERNATIVE.

Appeal by petition for review under Rule 45 to the SC on pure questions of law.
If interlocutory, the remedy is certiorari under Rule 65 before the CA, if th order has been rendered thru grave abuse of
discretion.

WHAT IS THE EFFECT OF AN APPEAL? If you file an appeal, what will happen to the decision rendered by the RTC?
The effect of the appeal is that it shall not stay the award or the resolution sought to be reviewed unless the Court of
Appeals directs otherwise. So, take note of that ha. It shall not stay the award or the resolution sought to be reviewed
unless the Court of Appeals directs otherwise.

2. AWARDS IN INTERNATIONAL COMMERCIAL ARBITRATION


REMEDY: within 3 months after receipt of award, a party may apply to the court for setting aside the award (model
law, article 34 (3))

RULE 12: RECOGNITION AND ENFORCEMENT OR SETTING ASIDE OF AN


INTERNATIONALCOMMERCIAL ARBITRATION AWARD

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.

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.

(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 time-barred 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.

Comment: Now, when you file this petition, if it is an award in international commercial arbitration,
you file that within 3 months. Take note. File that within 3 months from the time the petitioner
receives a copy of the said award. Again, file that within 3 months from the time the petitioner
receives a copy of the award.

If a timely request is made before the arbitral tribunal, the 3 months is to be counted from the time
the petitioner receives a resolution of the arbitral tribunal. Bakit sabi niya, if a timely request is
made before the arbitral tribunal? Because nga you can file a petition to correct your award before
the arbitral tribunal before it becomes final. Take note ha. So it is to be counted within 3 months
from the time the petitioner receives the resolution of the arbitral tribunal. Take note.

A petition to set aside can no longer be filed after lapse of 3 months. Magiging time-barred na yan
siya. So you are given 3 months to file your petition before the RTC. So take note of that.

Remember: Unlike in domestic arbitration, ang gagawin lang ng RTC is either to VACATE or
confirm. Here, if the petition to vacate or correct is issued, it shall NOT automatically result in the
recognition or 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.

Take note of the grounds to set aside or resist the enforcement under rule 12.4
(Important!) 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
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
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
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;

(VIP!) 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.

So bawal ang petition for review, certiorari or appeal, unlike sa domestic arbitral award.

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, of the parties to arbitration;
b. A statement that the arbitration agreement or submission exists;
c. The names of the arbitrators and proof of their appointment;
d. A statement that an arbitral award was issued and when 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 forum shopping 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 the appointment 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 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.

(read) 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.

NOTES FROM OLD TRANSCRIPT:


Next, what is the remedy against the decision of the RTC in an action to set aside an award in international
commercial arbitration? The remedy in domestic arbitration as well as in international commercial arbitration, so MR
within 15 days and then another 15 days para sa appeal before the Court of Appeals. Ano ang mode of appeal before
the CA? What is the mode of appeal? That is by a petition for review. Mode of appeal is by a petition for review.

Ang standards of review sa decision ng arbitral tribunal by the court limited lang. Limited lang talaga. Because? Why?
The grounds there are exclusive, as to the nature of the action to review, there are specific grounds to vacate an
award and the grounds to correct an award. Why? The reason there is that arbitration is merely an alternative to the
court system of resolving disputes. Thats why ang standards of review by the court is purely limited. K? The limited
or restricted mode of review is likewise enunciated in the case of Carpio vs Sulu Resources Development
Corporation (387 SCRA 138). Likewise, this has been enunciated in the case of National Steel Corporation vs.
RTC (304 SCRA 595).

K. My next question is, are the remedies of appeal as well as certiorari under the special ADR law, are these
cumulative? Pwede ba pagsabayin ang appeal and certiorari or alternative lang ito sila? Take note, sabi, under
Arbitration Law as well as the Model Law, if you avail of appeal, this will preclude certiorari. So, hindi pwede ha. So
either mag-appeal ka lang, hindi na yang certiorari. Later na yung certiorari. Why? This is based on the premise that
the main remedy of appeal proscribes the special civil action of certiorari. K. So take note of that.

February 1, 2013

Well have two exams, 40% each. Plano ko to waive the 20% sa recit but I will require you to attend the court visit baka first week of
March. Ating final exam is about mediation and JDR.

So my lecture tonight will be very short. It will be regarding Enforcement of Philippine Arbitral Awards. So type of exam for our first
exam on Feb 6 3-5pm, more on application. Actually nasa lecture lahat. If you listen to my lecture and you read the law, you wont have
a problem anymore.

First, regarding enforcement of arbitral awards.

CHAPTER VII
ENFORCEMENT OF ARBITRAL AWARDS
First Principle: All awards rendered by an arbitrator or arbitral tribunal require confirmation by the court to be enforceable. Anong basis
nun? That is based on law.
OR
Second Principle: The parties may voluntarily implement the award after it is rendered. What is the basis? The basis is the arbitration
agreement of the parties.

Q: Next, what kind of award is subject to judicial confirmation?


A: Only final awards.

Q: Next, when is an arbitral award final?


A: for purposes of addressing finality of an award, it can be grouped into two categories:
First Group: The first category refers to cases suggesting that an award to be final must be confirmed by the court. In other words,
these are the awards na confirmed final awards.
Second Group: it is based on the arbitration agreement of the parties and their intention that the award will be final and binding. This
second group is called unconfirmed final award.
So two groups, the confirmed final award and unconfirmed final award.

So when we speak of confirmed final award, what is this confirmed final award?
So under the law and pursuant to your special ADR Rules, it shall be made by the court. You have to file a verified petition before the
RTC.

So what kind of award requires judicial confirmation? Awards rendered in domestic arbitration and International commercial
arbitration.

So if it is domestic arbitration, when do we file the petition for confirmation? We should file that after lapse of 30 days from
receipt by the petitioner of the arbitral award by filing a verified petition. So after lapse of thirty days from receipt of the award.

Take note, under the law, there is a presumption that the arbitral award shall enjoy the presumption that it was made and released in
due course of arbitration, subject to confirmation by the court. Take note that the court shall not disturb the arbitral tribunals
determination of facts and/or interpretation of law unless there is a ground to vacate or the grounds to vacate are established, the court
shall confirm the award. In other words, it is the automatic duty of the court to confirm the award.

How about if its international commercial arbitration, when do you file petition for confirmation? Within the 3 month period from
receipt of the award because after the lapse of the 3month period, the award is already final. The same parin, it is a VERIFIED petition.
Under t law, unless the ground to set aside is fully established, the court shall dismiss the petition. Only if in the same proceedings,
which is the proceeding to vacate, there is a petition to recognize any course, shall the court recognize and enforce the award. So diba
magkaiba. If its domestic arbitration, you file a petition to vacate and then sabi ng court, walang ground to vacate, the court will confirm.
But if its international commercial arbitration, if you file a petition to vacate, and then the court finds that there is no ground, hindi xa
automatic. In other words, if it is international commercial arbitration, the court is not duty bound to automatically confirm the award.
Yung ang difference.

Take note: once the award is judicially confirmed by the court, what happens? The award shall be enforced in the same manner as a
final and executory decision of the RTC. Meaning, it has the same effect as a court judgment. After that, what will happen? After it is
confirmed by the court, what will happen? The court may now issue a writ of execution to enforce the confirmed award.

How about the losing party? What is his remedy? The losing party may counter petition to vacate the award subject of the
confirmation proceedings.

So the 1st group refers to the confirmed final award.

What is the 2nd group?


The 2nd group refers to the UNCONFIRMED final award. When you say unconfirmed final award, when is it deemed final? Bakit xa
unconfirmed? Because hindi xa nagdaan ng judicial confirmation. As a review, if it is domestic arbitration, after lapse of 30 days from
receipt, the award is deemed final. If it is international commercial arbitration, upon lapse of 3 months, final na yung award. So after
lapse of those period, if the parties agree na its already deemed final, then that is considered as a unconfirmed final award or if the
parties agree to a different period, pwede shorter period that after the tribunal renders decision, they agree na it will be immediately
final, pwede din yun. So it depends upon the agreement of the parties. Kaya it is considered as an unconfirmed final award.

What is the reason behind? Bakit allowed ang unconfirmed final award? Diba the general premise is that all awards rendered by an
arbitrator or arbitral tribunal requires confirmation by the court to be enforceable, anu reason dun sa confirmed final award? The reason
behind is that the right to submit disputes to arbitration is CONTRACTUAL and when both parties consent to an enforceable contract,
each party is bound by its terms.

JUDICIAL REVIEW IN ARBITRATION


Based on your readings, Im sure youve encountered that theres only LIMITED JUDICIAL REVIEW.

Whats the reason behind? Why is it limited? Why limited ang court intervention? The policy of the law is to FAVOR ARBITRATION.
With just a limited judicial review needed to maintain the arbitrations essential virtue of resolving disputes in a straight way.
So that is essentially our last topic for tonight.

Regarding Special ADR Rules of Court. I will include special ADR specially the rules we discussed.

SPECIAL ADR RULES OF COURT

Whats the purpose of the Special ADR Rules (SARC)?


The SC said that the SARC is intended to govern the procedure to be followed by the courts whenever judicial intervention is sought in
ADR proceedings in the specific cases where it is allowed.

What are the EXCLUSIONS of the SARC?


1. The SARC do not apply to COURT ANNEXED MEDIATION.
2. The SARC do not apply to the resolution or settlement of LABOR DISPUTES under the Labor Code.

What are the conditions for arbitration to proceed?


1. There should be a valid and enforceable arbitration agreement in the contract for future disputes.
2. A submission agreement for arbitration of present dispute.

What are the special FEATURES of the SARC?


1. It has intrinsic valuethe intrinsic value is PEOPLE EMPOWERMENT. That is promoted by both the ADR law and SARC by
declaring as a policy of the state to respect party autonomy or the freedom of the parties to make their own arrangements in
the resolution of their disputes.
2. Its INSTRUMENTAL VALUE this recognizes that ADR, particularly arbitration and mediation are important means to
achieve speedy and efficient resolution of disputes, impartial justice, curve a litigious culture and to de-clog court dockets.
3. Under the special ADR rule, it recognizes that CONSTRUCTION DISPUTES shall be governed by E0 No. 1008 and its
arbitration rules. construction disputes filed in court shall be automatically dismissed and referred to CIAC arbitration.
4. All actions under the SARC are classified as special proceedings. So if its spec pro, the initiatory pleading is a
PETITION.
5. Under the special ADR rule, a large number of judicial interventions are by summary proceedings. What does that
mean? Summary proceedings mean that there should be a PERSONAL SERVICE and filing of petition by a courier service. If
it is summary procedure, there is a HEARING but hearing is conducted in 1 day only for the purpose of clarifying facts and the
court is required to resolve the matter within a period of 30 days from the day of the hearing. So summary hearing, 1 day
hearing and then after that, the case is deemed submitted for decision and the court has 30 days to resolve the case.
st
6. Arbitration rule on COMPETENCE-COMPETENCEunder the special ADR rule, what is that? Under the principle the 1
opportunity to rule on the issue as to whether the tribunal has jurisdiction over a dispute must be given to the tribunal itself.
Thus, the rule requires a court to exercise judicial restraint and defer to the tribunal on this issue.
7. Under the SARC, appeal to the SC is only discretionary. Why discretionary xa? The reason for this restriction is to shorten
the period of judicial review of arbitration awards. That discretionary review of the SC is under RULE 19.36. A review by the
SC is not a matter of right but of sound judicial discretion which will only be granted for serious and compelling reasons
resulting in grave prejudice to the aggrieved party.

So thats the coverage of your exam.

Prepare for an objective and essay exam. More on the application.

GOOD LUCK!

Study of law is part of a larger culture. You can get a law degree and make a good living, but it is best that you do that having
studied the discipline for its own inherent merit, because you love studying

Material prepared by: RESCI ANGELLI RIZADA