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Alternative Dispute Resolution the Philippines as due to such factors as the misuse of the due process and
the abuse of legal technicalities; the intervention of political pressure in
court cases; the sheer weight of court litigations arising from development
Effective Tool in Settlement of Business Disputes and growth; the dilatory tactics of lawyers; and neglect and laxity on the
part of judges.
(Excerpts of the lecture delivered during the Chamber-to-Chamber II-
Dialogues with the Business Sector and Integration of Mediation in We add to the list the matter of court vacancies which Associate Justice
Business on 29 March 2005 at the Xavier Sports and Country Club, Artemio Panganiban of the Supreme Court acknowledged in a speech
Cagayan de Oro City). delivered during the 2005 anniversary celebration of Bantay Katarungan to
be the major cause of court delay. There are no less than 739 vacancies
out of 2,153 judicial positions in the Philippines. This means that more than
by: Justice Myrna Dimaranan Vidal
one third of the judicial courts are vacant, or a vacancy rate of 34.3%.
I. HISTORICAL BACKGROUND
III. LEGAL BASIS OF ALTERNATIVE DISPUTE RESOLUTION
Arbitration is defined by ADR Law as a voluntary dispute resolution process One of the oldest forms of dispute resolution is arbitration which may be
in which one or more arbitrators, appointed in accordance with the classified as either international or domestic. International arbitration is
agreement of the parties resolve a dispute by rendering an award. It is the governed by the Model Law on International Commercial Arbitration per
reference by mutual agreement or consent of the parties of a controversy Section 19 of the ADR Law, while domestic arbitration shall continue to be
or dispute to selected persons for an informal hearing and extra-judicial governed by RA 876, as amended by the ADR Law. A highly specialized
determination and resolution. The hearing is usually held in private and the form of domestic dispute resolution involving construction disputes is
decision of the persons selected will be a substitute for a court judgment. governed by the Construction Industry Arbitration Law, EO No. 1008. This
This avoids the formalities, delay and expenses of ordinary litigation. falls within the exclusive jurisdiction of the Construction Industry
Arbitration Commission (CIAC).
B. Mediation
VI. MEDIATION
Mediation is a dispute resolution procedure in which an impartial third
party, mutually chosen by the parties, acts as the referee to help the A more popular form of alternative dispute resolution is mediation. The
contending parties settle their dispute. The mediator, unlike the arbitrator, ADR Law mentions two kinds of mediation: court-annexed mediation and
has no authority to make the parties reach an agreement. He serves as a court-referred mediation.
clarifier and facilitator without dictating settlement. The term mediation
used under ADR Law includes conciliation.
Court-annexed mediation is defined under ADR Law as any mediation
process conducted under the auspices of the court, after such court has
C. Mini-trial acquired jurisdiction of the dispute. It is mandatory, being part of pre-trial.
On the other hand, court-referred mediation is mediation ordered by a
court to be conducted in accordance with an agreement of the parties when
Mini-trial is defined under the ADR Law as a dispute resolution method in
an action is prematurely commenced in violation of such agreement.
which the merits of a case are argued before a panel created by agreement
of the parties comprising senior decision makers with or without the
presence of a neutral third person after which the parties seek a negotiated The distinction between court-annexed mediation and court-referred
settlement. mediation is important. The provisions of the ADR Law do not apply to
court-annexed mediation. They cover voluntary mediation only, not court-
annexed mediation or mandatory mediation. Under this law, there must a
D. Early neutral evaluation
binding agreement of the parties to mediate their dispute. This usually
results when the parties insert a clause in their contract requiring a prior
Early neutral evaluation is an alternative dispute resolution process resort to mediation before the dispute may be brought to arbitration or
whereby parties and their lawyers are brought together early in a pre-trial filed in court.
phase to present summaries of their cases and receive a non-binding
assessment by an experienced, neutral person with expertise in the subject
VII. WAYS OF ENFORCEMENT OF SETTLEMENT AGREEMENTS IN
of the dispute.
MEDIATION UNDER ADR LAW (other than Court-Annexed)
C. Conference The mediator will hold a conference with all the parties
involved in the case and will make serious attempts to settle the matter
quickly.