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Philippine Institute of
Arbitrators
COMPREHENDING ARBITRATIONS:
CLEARING-UP THE CONFUSION
by

MARIO E. VALDERRAMA
AB, LLB, FCIArb, FHKIArb, FPIArb
CIArb Approved Tutor
Resident Representative to the Regional Sub-Committee
The Chartered Institute of Arbitrators
East Asia Branch

Contact Details
Tel No 367 4001; Telefax 362 1867
Mobile 0917 411 4594
E-mail <marval.law@gmail.com>
THE CONFUSION: ARBITRATION AND
STATUTE BASED ARBITRATIONS
There are several processes called
arbitration in the Philippines.
Classes:

a. Arbitration (traditional/agreement
based)

b. Statute based arbitrations
CLEARING-UP THE CONFUSION
CONCEPT OF ARBITRATION (AGREEMENT
BASED)
Arbitration is a device whereby the
settlement of a question, which is of
interest for two or more persons, is
entrusted to one or more other persons
the arbitrator or arbitrators- who derive
their powers from a private agreement,
not from the authorities of a State, and
who are to proceed and decide the case on
the basis of such an agreement
Fouchard, Gaillard, Goldman on
International Commercial Arbitration para
7 citing several authors.
CLEARING-UP THE CONFUSION

In contrast, in statute based
arbitrations the arbitrator or
arbitrators derive their powers
from the authorities of a State.




CLEARING THE CONFUSION:
STATUTE BASED ARBITRATIONS

Sub Classification

Optional - needs stipulation to arbitrate,
e.g. CIAC and voluntary labor
arbitrations

Imposed does not require agreement
to arbitrate, e.g. consumer and
compulsory labor arbitrations
CLEARING-UP THE CONFUSION:
AGREEMENT BASED ARBITRATION
Contractual; synonymous with the concept
of party autonomy in the resolution of
disputes
Tribunal an instrumentality of the parties
Award is product of private dispute
resolution processes, hence the need for
judicial recognition of confirmation
Principle of finality of awards is based on
contract & core component of the process
Validity issues: award treated just like a
contractual stipulation
ARBITRATION
Contractual Nature

Arbitration is a creature of contract,
not of law. It is based on the contract
principle of party autonomy or the
will of the parties, expressed as the
freedom to contract.
ARBITRATION
Tribunal an Instrumentality of the Parties
In arbitration the parties create their own
tribunal. They appoint their judges, craft
the procedure; agree on several categories
of choice. As creators they own the
tribunal; as owners and creators they can
shape the tribunal to what they want it to
be. As owners and creators they pay the
expenses of the tribunal that they created.
The arbitrators are akin to temporary
employees whose job description is to
resolve the dispute between the parties.
ARBITRATION
Award a Product of Dispute Resolution
Process; Need for
Confirmation/Recognition

A vacated award x x x was an
international award which was not
integrated in the legal system of that
State x x x (Hilmarton v OTV, 1994 BULL
CIV. A, No. 104, Court de Cassation,
March 23, 1994. From Carbonneu).


ARBITRATION
Principle of Finality of Award is
Contractual
x x x arbitrators are judges chosen by the
parties to decide the matters submitted to
. them, finally and without appeal x x x
(Burchell v Marsh, 58 U.S.. 344, 15 L.Ed.
96 (1854).

The essence of the arbitration process is
that an arbitral award shall put the dispute
to rest x x x. Arbitral finality is a core
component of the parties agreement to
submit to arbitration. Thus, an arbitration
decision is final and conclusive because
the parties have agreed that it be so x x
x. (Stasz v Schwab).
ARBITRATION
Validity Issues: Award is Treated Just Like
a Contractual Stipulation

An award is ignored or vacated if bad;
recognized or confirmed and enforced if
good; subject to the principle of
separability.

An added saving grace is referral back to
the Tribunal which was introduced by
arbitration laws.
STATUTE BASED
ARBITRATIONS
Established by statute
Hybrid processes
Freedom of parties to select arbitrators
and craft procedure heavily curtailed
Tribunal an instrumentality of
Government
Resultant award deemed integrated into
the legal system
No agreement exists that the award is
final, hence a merits review is available
STATUTE BASED ARBITRATIONS
Created by statute:
There is hereby established in the
CIAP a body to be known as the
Construction Industry Arbitration
Commission (E.O. 1008 Section 3).
STATUTE BASED ARBITRATIONS
Hybrid Processes

A perusal of the procedures will show a
combination of the precepts of agreement
based arbitration and litigation.
STATUTE BASED ARBITRATIONS
Curtailment of freedom to choose
arbitrators:

Generally, only CIAC accredited arbitrators
may be appointed in CIAC panels.
STATUTE BASED ARBITRATIONS
Curtailment of freedom to craft procedure:
The Arbitral Tribunal shall at all times adopt the
most expeditious procedure for the introduction
and reception of evidence, and SHALL HAVE
COMPLETE CONTROL OVER THE PROCEEDINGS,
but in any case shall afford full and equal
opportunity to all parties to present relevant
evidence (CIAC Rules Sec. 13.4).
STATUTE BASED ARBITRATIONS
Tribunal an instrumentality of the
Government

Obviously, as CIAC was created by
statute.
STATUTE BASED ARBITRATIONS
Resultant award integrated into the legal
system

No need for confirmation for
enforceability.
STATUTE BASED ARBITRATIONS
Award subject to appeal

Rule 43 Section 1. Scope. This Rule shall
apply to appeals from awards x x x.
Among these agencies are the x x x
Construction Industry Arbitration
Commission.

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Philippine Institute of Arbitrators
c/o Atty. Mario E. Valderrama
Tel. No. (632) 367 4001
Telefax (632) 362 1867
E-mail: marval.law@gmail.com