GANGO, KM | EH302 | ADR

expertise in the subject in the substance of the

dispute.
ATTY. CESISTA
"Mediation" means a voluntary process in which a
INTRODUCTORY CONCEPTS IN ARBITRATION
mediator, selected by the disputing parties, facilitates
communication and negotiation, and assists the
A. CONCEPT OF ARBITRATION
parties in reaching a voluntary agreement regarding a
dispute.
RA 9285
(Alternative Dispute Resolution Act of 2004)
"Mini-trial" means a structured dispute resolution
method in which the merits of a case are argued
Institutionalized the use of an alternative dispute
before a panel comprising senior decision makers
resolution system, which serves to promote the
with or without the presence of a neutral third person
speedy and impartial administration of justice and
after which the parties seek a negotiated settlement.
unclog the court dockets. It shall be without prejudice
to the adoption of the Supreme Court of any ADR
REVISED PROCEDURAL GUIDELINES IN THE
system such as mediation, conciliation, arbitration or
CONDUCT OF VOLUNTARY ARBITRATION
any combination thereof.
PROCEEDINGS (DoT)
SECTION 3 (DoT)
RULE 2
"Alternative Dispute Resolution System" means any
“Voluntary Arbitration” — refers to the mode of
process or procedure used to resolve a dispute or
settling labor-management disputes by which the
controversy, other than by adjudication of a presiding
parties select a competent, trained and impartial
judge of a court or an officer of a government agency,
third person who shall decide on the merits of the
as defined in this Act, in which a neutral third party
case and whose decision is final AND executory.’
participates to assist in the resolution of issues, which
includes arbitration, mediation, conciliation, early
PERMANENT ARBITRATOR — THE VOLUNTARY
neutral evaluation, mini-trial, or any combination
ARBITRATOR SPECIFICALLY NAMED OR DESIGNATED
thereof
IN THE COLLECTIVE BARGAINING AGREEMENT BY THE
PARTIES AS THEIR VOLUNTARY ARBITRATOR.
"Arbitration" means a voluntary dispute resolution
process in which one or more arbitrators, appointed
AD-HOC ARBITRATOR — THE VOLUNTARY
in accordance with the agreement of the parties, or
ARBITRATOR CHOSEN BY THE PARTIES IN
rules promulgated pursuant to this Act, resolve a
ACCORDANCE WITH THE ESTABLISHED PROCEDURES
dispute by rendering an award (award – final decision
IN THE CBA OR THE ONE APPOINTED BY THE BOARD
of arbitrator).
IN CASE THERE IS FAILURE IN THE SELECTION OR IN
CASE EITHER OF THE PARTIES TO THE CBA REFUSES TO
"Court-Annexed Mediation" means any mediation
SUBMIT TO VOLUNTARY ARBITRATION.
process conducted under the auspices of the court,
after such court has acquired jurisdiction of the
“Grievance Procedure” — refers to the system of
dispute.
grievance settlement as provided FOR in the
collective bargaining agreement. It usually consists of
"Court-Referred Mediation" means mediation
successive steps starting at the level of complainant
ordered by a court to be conducted in accordance
and his immediate supervisor and ending, when
with the Agreement of the Parties when an action is
necessary, at VOLUNTARY ARBITRATION.
prematurely commenced in violation of such
agreement.

"Early Neutral Evaluation" means an ADR process B. EARLY POINTS-OF-VIEW

wherein parties and their lawyers are brought
together early in a pre-trial phase to present
summaries of their cases and receive a non- binding
assessment by an experienced, neutral person, with

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ALLEN V. PROVINCE OF TAYABAS Such a condition is a valid one in law, and unless it be
first complied with, no action can be brought.
The Province of Tayabas and Arthur Allen (contractor)
entered into a contract whereby the contractor
agreed to construct five reinforced concrete bridges. VEGA V. SAN CARLOS MILLING CO.
Four of the bridges were accepted by the govt and
paid for. The dispute arose as to the 5th bridge where The case is essentially about the recovery of 32, 959
the Province of Tayabas refused to pay its lacking kilos of centrifugal sugar, or its value plus the
balance because the plaintiff had deviated from the payment of damages. The Court of First Instance of
specifications and because the work was defective. Occidental Negros rules in favor of Vega. The
defendant company appealed from this judgment
Allen brought an action against the Province of and alleged that the lower court erred in having held
Tayabas. One of the contentions of the appellant is itself with jurisdiction to take cognizance of the cause.
that the certificate by the district engineer and the
Director of Public Works must be obtained before suit The contract stipulated that the parties must submit
can be brought on a contract; Appellee’s reply is that to arbitration.
neither the law nor the contract requires the
submission to arbitration of disputes between the It is an admitted fact that the differences which arose
govt and the contractor. between the parties have not been submitted to the
arbitration provided for. Defendant contends that as
Act 1401 as amended by Act 1752 and The such such stipulations on arbitration are valid, they
Administrative Code of 1917 gives a district engineer constitute a condition precedent to which plaintiff
supervision over all contracts connected with public should have resorted before applying to the courts.
works which exceed the estimated cost of P500.
The defendant is right in contending that such
The contract itself contains this clause: “The covenants on arbitration are valid, BUT THEY ARE NOT
contractor shall comply with all existing or future FOR THAT REASON A BAR TO JUDICIAL ACTION
laws, the municipal or provincial building ordinances BECAUSE OF THE WAY THEY ARE EXPRESSED. It
and regulations… xx” cannot be held that the parties proposed to establish
Both the law and the contract provide in mandatory the arbitration as a condition precedent to judicial
language for a certificate of acceptance by the action, because these clauses quoted do not create
Director of Public Works before any payment shall be such a condition.
made on any public work for the govt.
The expression “subject to the provisions as to
Appellee speaks of the provisions of the law and the arbitration” does not declare such to be a condition
portions of the contract in questions as possible precedent. It does not read “subject to the
constituting an arbitration agreement. We deem arbitration” but “subject to the provisions as to
these provisions to be more correctly labeled a arbitration”. No provisions state such.
condition precedent to the contractor’s right to
obtain payment which is for the govt to satisfy. The contracting parties may covenant to submit to
Nevertheless, considered species of arbitration, it was arbitration whatever controversy may arise from the
a convenient and proper method, duly agreed upon contract, but such a covenant does not deprive the
between the parties, to determine questions that courts of jurisdiction to take cognizance of a cause
would necessarily arise in the performance of the arising therefrom, even though before the difference
contract. was not first submitted to arbitration, unless it has
been expressly stipulated, or is necessarily inferred
Unless the agreement is such as absolutely to close from the text of the contract that before any action is
the doors of the courts against the parties which instituted, the case must be submitted to arbitration
agreement would be void, courts will look with favor as a condition precedent to bringing the action.
upon such amicable arrangements and will only
interfere to anticipate or nullify the actions of the
arbitrator.

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CHUNG FU INDUSTRIES V. CA - Nowadays, absent an agreement of the

parties to resolve their disputes via a
Chung Fu and private respondent Roblecor forged a particular mode, it is the regular courts that
construction agreement whereby the latter remain the fora to resolve such matters
committed to construct the former’s factory complex. HOWEVER, the parties may opt for recourse
In the event of disputes arising from the performance to third parties, exercising their basic
of subject contract, it was stipulated therein that the freedom to “establish such stipulations,
issues shall be submitted for resolution before a clauses, terms and conditions as they may
single arbitrator chosen by both parties. deem convenient, provided they are not
contrary to law, morals, good customs,
Roblecor failed to complete the work. It filed a public order or public policy” (1306).
petition for Compulsory Arbitration with prayer for - A clause in a contract providing that all
TRO before the RTC pursuant to the arbitration clause matters in dispute between the parties shall
in the construction agreement. be referred to arbitrators and to them alone
is contrary to public policy and cannot oust
Arbitrator Asuncion ordered petitioners to the courts of jurisdiction.
immediately pay Roblecor. He further declared the
award as final and unappealable, pursuant to the Under present law, may the parties who agree to
Arbitration Agreement precluding judicial review of submit their disputes to arbitration further provide
the award. Chung Fu moved to remand the case for that the arbitrators’ award shall be final,
further hearing but was denied. They elevated the unappealable and executory? ARTICLE 2044 OF THE
case via a petition for certiorari to respondent CA CIVIL CODE RECOGNIZES THE VALIDITY OF SUCH
which agreed with RTC. STIPULATION WITHOUT PREJUDICE TO ARTICLES
2038, 2039 AND 2040. Similarly, the CIAL provides
EVOLUTION OF ARBITRATION AS A MODE OF DISPUTE that the arbitral award shall be final and unappealable
SETTLEMENT: except on questions of law which shall be appealable
- The early judges called upon to solve private to the SC.
conflicts were primarily the arbiters, persons
not specially trained but in whose morality, In the case at bar, where the parties agree that the
probity and good sense the parties in conflict decision of the arbitrator shall be final and
reposed full trust. unappealable, it does not necessarily presuppose that
- May be private person designated by the it is beyond the ambit of the court’s power of judicial
parties, by common agreement, or selected review. It is stated explicitly under Art 2044 of the Civil
by them or chosen by lot. Code that the finality of the arbitrators’ award is not
- Arbitration is recognized in the Spanish Civil absolute and without exceptions. Where the
Code, even reinstated in the NCC. conditions described in Articles 2038-2040 are
- Arbitration found a fertile field in the present, the arbitrators’ award may be annulled or
resolution of labor-management disputes in rescinded. Moreover, under Sections 24 and 25 of the
the Philippines. We favor the policy of free Arbitration Law, there are grounds for vacating,
collective bargaining, in general, and resort modifying or rescinding an arbitrators’ award. Thus,
to grievance procedure. This was enunciated when the factual circumstances referred to in the
in the LC. above-cited provisions are present, judicial review of
- A consensual process, it was preferred to the award is properly warranted.
orders imposed by government upon
disputants. Moreover, court litigations Where the courts refuse or neglect to inquire into the
tended to be time-consuming, costly, and factual milieu of an arbitrator’s award to determine
inflexible due to their scrupulous observance whether it is in accordance with law, the proper
of the due process and the strict adherence remedy is certiorari under Rule 65 of the RROC
to rules of evidence. (GADALEJ). It should be stressed too that voluntary
- RA 876 (1953) Arbitration Law arbitrators, by the nature of their functions, act in
- Construction Industry Arbitration quasi-judicial capacity. Their decisions therefore
Commission (CIAC), EO 1008 (1985) should not be beyond the scope of the power of
judicial review of this Court.

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For failing to apply the terms and provisions of the conclusive and not reviewable by this Court on
Construction Agreement and in granting unjustified appeal.
extra compensation to respondent for sever items, EXCEPTIONS: Factual findings of construction
the arbitrator committed a GAD which would have arbitrators may be reviewed by this Court when the
constituted ground for vacating the award under the petitioner proves affirmatively that:
Arbitration Law. 1. The award was procured by corruption,
fraud or other undue means;
2. There was evident partiality or corruption of
C. ARBITRATION UNDER THE CIVIL CODE the arbitrators;
3. The arbitrators were guilty of misconduct in
2042 – the same persons who may enter into a refusing to hear evidence pertinent and
compromise may submit their controversies to one or material to the controversy;
more arbitrators for decision. 4. One or more of the arbitrators were
disqualified to act such;
2043 – the provisions of the preceding chapter upon 5. The arbitrators exceeded their powers.
compromises shall also be applicable to arbitrations.
Other recognized exceptions:
2044 – any stipulation that the arbitrators’ award or 1. GAD amounting to lack or loss of
decision shall be final, is valid, without prejudice to jurisdiction.;
Articles 2038, 2039, and 2040. 2. When the findings of the CA are contrary to
those of the CIAC;
2045 – any clause giving one of the parties power to 3. When a party is deprived of administrative
choose more arbitrators than the other is void and of due process.
no effect.
Uniwide asserts, the CIAC should have applied
2046 – the appointment of arbitrators and the procedural rules with more liberality because it was
procedure for arbitration shall be governed by the an administrative tribunal free from the rigid
provisions of such rules of court as the SC shall technicalities of regular courts. The Rule of Procedure
promulgate. Governing Construction Arbitration promulgated by
the CIAC contains no provision on the application of
the ROC to arbitration proceedings, even in a
D. KINDS OF ARBITRATION suppletory capacity. Such importation of the ROC
provision on amendment to conform to evidence
would contravene the spirit, if not the letter of the
UNIWIDE SALES REALTY & RESOURCES CORP V.
CIAC rules.
TITAN-IKEDA CONSTRUCTION AND DEV CORP

The case originated from an action for a sum of ARBITRATION – an arrangement for taking and
money filed by Titan against Uniwide with the RTC. It abiding by the judgment of selected persons in some
was suspended for it to undergo arbitration. Titan’s disputed matter, instead of carrying it to established
complaint was thus re-filed with the CIAC. An arbitral tribunals of justice, and is intended to avoid the
tribunal consisting of a chairman and two members formalities, the delay, the expense and vexation of
ordinary litigation.
was created in accordance with the CIAC Rules of
Procedure Governing Construction Arbitration. It
VOLUNTARY ARBITRATION – involves the reference of
promulgated a decision. Uniwide filed a petition for
a dispute to an impartial body, the members of which
review with the CA which rendered the assailed
decision. are chosen by the parties themselves, which parties
freely consent in advance to abide by the arbitral
As a rule, findings of fact of administrative agencies award issued after proceedings where both parties
and quasi-judicial bodies are generally accorded not had the opportunity to be heard.
only respect but also finality, especially when
As an arbitration body, the CIAC can only resolve
affirmed by the CA. in particular, factual findings of
issues brought before it by the parties through the
CONSTRUCTION ARBITRATORS are final and
TOR which functions similarly as a pre-trial brief. Thus,

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if Uniwide’s claim for liquidated damages was not Benguet posited that there was no valid ground for
raised as an issue in the TOR or in any modified or the termination of the RAWOP. It also reminded J.G.
amended version of it, the CIAC cannot make a ruling Realty that it should submit the disagreement to
on it. The ROC cannot be used to contravene the spirit arbitration rather that unilaterally terminating the
of the CIAC rules, whose policy and objective is to RAWOP. J.G. Realty filed a Petition for Declaration of
“provide a fair and expeditious settlement of Nullity/Cancellation of the RAWOP before the POA.
construction disputes through a non-judicial process The POA issued a decision and declared the RAWOP
which ensures harmonious and family relations cancelled and without effect. Benguet filed a notice of
between or among the parties.” appeal with the MAB, but was denied hence this
instant petition.
EO 1008 created an arbitration facility to which the
construction industry in the Philippines can have IN THE FIRST PLACE, the instant petition can be
recourse. The EO was enacted to encourage the early denied OUTRIGHT as Benguet resorted to an
and expeditious settlement of disputes in the improper remedy. A decision of the MAB must first be
construction industry, a public policy the appealed to the CA under Rule 43 ROC before
implementation of which is necessary and important recourse to this Court may be had.
for the realization of national development goals.
On the issue of arbitration:
Aware of the objective of voluntary arbitration in the THE CASE SHOULD HAVE FIRST BEEN BROUGHT TO
labor field, in the construction industry, and in any VOLUNTARY ARBITRATION BEFORE THE POA.
other area for that matter, the Court will not assist
one or the other or even both parties in any effort to Sec 11.01 of the RAWOP – “any disagreement xxx be
subvert or defeat that objective for their private referred to a Board of Arbitrators consisting of 3
purposes. The Court will not review the factual members. One to be selected by Benguet, another
findings of an arbitral tribunal upon the artful selected by the Owner and the third selected by the 2
allegation that such body had "misapprehended arbitrators.”
facts" and will not pass upon issues which are, at Sec 11.02 – “”No action shall be instituted in court as
bottom, issues of fact, no matter how cleverly to any matter in dispute as hereinabove stated,
disguised they might be as "legal questions." The except to enforce the decision of the majority of the
parties here had recourse to arbitration and chose the Arbitrators.”
arbitrators themselves; they must have had
confidence in such arbitrators. The Court will not, POA ruling: While the parties may establish
therefore, permit the parties to relitigate before it the stipulations as they may deem convenient, the same
issues of facts previously presented and argued must not be contrary to law and public policy. To state
before the Arbitral Tribunal, save only where a clear that an aggrieved party cannot initiate an action
showing is made that, in reaching its factual without going to arbitration would be tying one’s
conclusions, the Arbitral Tribunal committed an error hand.
so egregious and hurtful to one party as to constitute MAB ruling: denied Benguet’s contention on the
a grave abuse of discretion resulting in lack or loss of ground of Estoppel.
jurisdiction.
J.G. Realty commented that RA 7942 or the Philippine
BENGUET CORP V. DENR-MAB Mining Act is a special law which should prevail over
the stipulations of the parties and over a general law
Benguet and J.G. Realty entered into a RAWOP such as RA 876 and that POA cannot be considered as
wherein J.G. Realty was acknowledged as the owner a “court” as it is already engaged in arbitration.
of 4 mining claims.
On this issue, we rule for Benguet.
However, years later, J.G. Realty, through its
President, then sent a letter to the President of SEC 2 RA 876 states that a submission or a contract
Benguet Corp informing the latter that it was whereby parties agree to settle by arbitration shall be
terminating the RAWOP for violating some of its valid and enforceable.
provisions.

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SEC 32 of RA 9285 or the ADR Act states that domestic parties stipulating that they would submit themselves
arbitration shall still be governed by RA 876. Clearly, to arbitration in a foreign country.
a contractual stipulation that requires prior resort to KOGIES is a Korean corp engaged in the supply and
voluntary arbitration before the parties can go installation of LPG. PGSMC is a domestic corp. They
directly to court is not illegal and is in fact promoted executed a contract in the Philippines. The parties
by the State. It is a valid contractual stipulation and executed, in Korea, an Amendment for the contract
must be adhered to by the parties. with regards to payment.

J.G. Realty’s contention that because POA’s mandate Disagreement: PGSMC issued postdated checks which
is to arbitrate disputes, prior resort to arbitration is were dishonored. PGSMC posited that KOGIE
unavailing is MISPLACED. delivered a different brand of machineries from that
DIFFERENCE BETWEEN VOLUNTARY AND agreed upon. PGSMC informed KOGIES that it was
COMPULSORY ARBITRATION: cancelling their contract. PGSMC filed for Estafa.

Compulsory – arbitrator is a government agency KOGIES argued that it cannot unilaterally rescind their
which has the authority to investigate and make an contract nor dismantle and transfer the machineries
award. and equipment and that their disputes should be
settled by arbitration as agreed upon in ARTICLE 15,
Voluntary – arbitrator is not part of the governmental the arbitration clause of their contract. Hence,
unit KOGIES instituted an Application before the Korean
Commercial Arbitration Board in Seoul, Korea
The arbitration provided by the POA is compulsory, pursuant to Article 15.
while the nature of the arbitration in the RAWOP is
voluntary. KOGIES filed before the RTC a TRO. PGSMC argued
that KOGIES was not entitled to the TRO since ART15
The provision on mandatory resort to arbitration, was null and void for being against public policy as it
freely entered into by the parties, must be held ousts the local courts of jurisdiction over the instant
binding against them. POA HAS NO JURISDICTION. controversy. RTC held Art15 invalid.

However, Benguet is already estopped from KOGIES points out that the arbitration clause under
questioning POA’s jurisdiction. (It participated in the ART 15 was valid under ART2044 NCC and as held in
proceedings before POA, it filed an appeal with the the Chung Fu case. KOGIES filed before the CA a
MAB and participated in its proceedings, filed an MR petition for Certiorari. CA affirmed RTC and declared
with the MAB) Benguet should have immediately the arbitration clause against public policy.
challenged the POA’s jurisdiction by a special civil
action for certiorari when POA ruled that it has THE CORE ISSUE: ART 15 OF THE CONTRACT
jurisdiction over the dispute.
Article 15 of the contract: “xxx settled by arbitration
in Seoul, Korea in accordance with the Commercial
E. POLICY AND OBJECTIVE/S OF ARBITRATION Arbitration Rules of the Korean Commercial
Arbitration Board. The award rendered by the
KOREA TECHNOLOGIES CO V. LERMA arbitration(s) shall be final and binding upon both
parties concerned.”
In our jurisdiction, the policy is to favor alternative
methods of resolving dispute, particularly in civil and RTC AND CA ERRED IN RULING THAT THE
commercial disputes. Arbitration along with ARBITRATION CLAUSE IS NULL AND VOID.
mediation, conciliation, and negotiation, being Lex loci contractus. The law of the place where the
inexpensive, speedy and less hostile methods have contract is made governs. The contract in this case
long been favored by this Court. was perfected here in the Philippines therefore our
laws govern. Nonetheless, Art 2044 sanctions the
The petition before us puts at issue an arbitration validity of mutually agreed arbitral clause or the
clause in a contract mutually agreed upon by the finality and binding effect of an arbitral award.

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The arbitration clause was mutually and voluntarily undetermined at the time of their passage, and are
agreed upon by the parties. It has not been shown to deemed retroactive in that sense and to that extent.
be contrary to any law, or against morals etc etc.
Among the pertinent features of RA 9285 applying
THE ARBITRATION CLAUSE IS NOT CONTRARY TO and incorporating the UNCITRAL Model law are the ff:
PUBLIC POLICY.
1. The RTC must refer to arbitration in proper
The arbitration clause which stipulates that the cases.
arbitration must be done in Seoul, Korea in 2. Foreign arbitral awards must be confirmed
accordance with the Commercial Arbitration Rules of by the RTC.
the KCAB, and that the arbitral award is final and 3. The RTC has jurisdiction to review foreign
binding, is not contrary to public policy. arbitral awards.
4. RTC decision of assailed foreign arbitral
Being an inexpensive, speedy and amicable method award appealable.
of settling disputes, arbitration — along with
mediation, conciliation and negotiation — is Thus, based on the foregoing features of RA 9285,
encouraged by the Supreme Court. Aside from PGSMC must submit to the foreign arbitration as it
unclogging judicial dockets, arbitration also hastens bound itself through the subject contract. While it
the resolution of disputes, especially of the may have misgivings on the foreign arbitration done
commercial kind. It is thus regarded as the "wave of in Korea by the KCAB, it has available remedies under
the future" in international civil and commercial RA 9285. Its interests are duly protected by the law
disputes. Brushing aside a contractual agreement which requires that the arbitral award that may be
calling for arbitration between the parties would be a rendered by KCAB must be confirmed here by the RTC
step backward. Consistent with the above-mentioned before it can be enforced.
policy of encouraging alternative dispute resolution
methods, courts should liberally construe arbitration UNILATERAL RESCISSION IMPROPER AND ILLEGAL
clauses. Provided such clause is susceptible of an Having ruled that the arbitration clause of the subject
interpretation that covers the asserted dispute, an contract is valid and binding on the parties, and not
order to arbitrate should be granted. Any doubt contrary to public policy; consequently, being bound
should be resolved in favor of arbitration. to the contract of arbitration, a party may not
unilaterally rescind or terminate the contract for
RA 9285 INCORPORATED THE UNCITRAL MODEL LAW whatever cause without first resorting to arbitration.
TO WHICH WE ARE A SIGNATORY KOGIES instituted an Application for Arbitration
before the KCAB in Seoul, Korea pursuant to Art. 15 of
In case a foreign arbitral body is chosen by the parties, the Contract as amended. Thus, it is incumbent upon
the arbitration rules of our domestic arbitration PGSMC to abide by its commitment to arbitrate.
bodies would not be applied. As signatory to the
Arbitration Rules of the UNCITRAL Model Law on RTC HAS INTERIM JURISDICTION TO PROTECT THE
International Commercial Arbitration of the United RIGHTS OF THE PARTIES. Even "the pendency of an
Nations Commission on International Trade Law arbitral proceeding does not foreclose resort to the
(UNCITRAL) in the New York Convention on June 21, courts for provisional reliefs. It is thus beyond cavil
1985, the Philippines committed itself to be bound by that the RTC has authority and jurisdiction to grant
the Model Law. interim measures of protection.

While RA 9285 was passed only in 2004, it KOGIES is amply protected by the arbitral action it has
nonetheless applies in the instant case since it is a instituted before the KCAB, the award of which can be
procedural law which has a retroactive effect. enforced in our jurisdiction through the RTC. Besides,
Likewise, KOGIES filed its application for arbitration by our decision, PGSMC is compelled to submit to
before the KCAB on July 1, 1998 and it is still pending arbitration pursuant to the valid arbitration clause of
because no arbitral award has yet been rendered. its contract with KOGIES.
Thus, RA 9285 is applicable to the instant case. Well-
settled is the rule that procedural laws are construed
to be applicable to actions pending and

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OBJECTIVES OF ARBITRATION The model law is actually a product of the work of a

working group of experts, who met in Vienna from
The basic objective of arbitration is to provide a 1982 to 1985, which was submitted to and approved
speedy and inexpensive method of settling disputes by the UNCITRAL in meeting of delegates
by allowing the parties to avoid formalities, delay, representing 32 states before it was submitted to the
expense and aggravation which commonly GA of the United Nations. The additional provisions
accompany ordinary litigation, especially litigation introduced in the ADR act were intended to
which goes through the hierarchy of courts. strengthen international commercial arbitration in
the Philippines.

II. OVERVIEW OF INTERNATIONAL COMMERCIAL Model Law to Apply as Lex Specialis

ARBITRATION
XVI UNCITRAL Yearbook; Secretary-General Report
A. ADR ACT’S ADOPTION OF THE UNCITRAL captioned Analytical Commentary of Various States.
MODEL LAW (ARTICLE 19 OF THE ADR ACT)
Once the Model Law is enacted in a State, "this Law
It says that international commercial arbitration shall applies" as lex specialis, ie. to the exclusion of all other
be governed by the model law on international pertinent provisions of non-treaty law, whether
commercial arbitration, which was adopted by the contained, for example, in a code of civil procedure or
United Nations Commission on the international in a separate law on arbitration. This priority, while
trade law on June 21, 1985. not expressly stated in the Model Law, follows from
the legislative intent to establish a special regime for
Rationale for adopting the UNCITRAL Model Law international commercial arbitration.

The ADR act of 2004 adopted the UNCITRAL model Take note that it is so, only in respect of matters
law on International Commercial Arbitration and by covered by the law. In other words, there are matters
operation of Article 19 of the ADR Act, made the which are not covered by the model law. The Model
Model Law the governing statute for international Law prevails over other provisions only in respect of
commercial arbitration. those subject-matters and questions covered by the
Model Law. Therefore, other provisions of national
The ADR Act of 2004 has previous dealings with legal law remain applicable if they deal with issues which,
representation in international arbitration, though relevant to international commercial
confidentiality of arbitral proceedings, referral of arbitration, have been left outside the Model Law
court action to arbitration, definition and function of (e.g. capacity of parties to conclude arbitration
the appointing authority, the grant of interim agreement, impact of State immunity, consolidation
measures of protection, governing law, and the place of arbitral proceedings, competence of arbitral
and language of arbitration. tribunal to adapt contracts, contractual relations
between arbitrators and parties or arbitration bodies,
Atty’s audio recording: fixing of fees and requests for deposits, security for
In providing in the ADR Act that the commercial fees or costs, period of time for enforcement of
arbitration shall be governed by the model law, our arbitral award).
Congress, the Philippine Congress, sought to achieve
the objective of the United Nations General Substantial changes in the model law may be viewed
Assembly, expressed in its resolution number 4D-72 by other countries as not contributing to the
of December 11 ,1985. For Member States, "to give establishment of a unified legal framework for the fair
due consideration to the model on international and efficient settlement of disputes arising in
commercial arbitration, in view of the desirability of international commercial relations.
uniformity of the law of arbitral procedures in the
specific needs of international arbitration practice. It
is stated that the model is said to reflect a worldwide
consensus on the principles and important issues of
international arbitration practice.

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Matters not covered by Model Law (b) one of the following places is situated outside the
Philippines in which the parties have their places of
B. PHILIPPINES ADOPTED A DUAL SYSTEM OF business:
ARBITRATION (i) the place of arbitration if determined in,
or pursuant to, the arbitration agreement;
(recognize first if it is international or commercial) (ii) any place where a substantial part of the
obligations of the commercial relationship is
Section 19 ADR Act to be performed or the place with which the
subject matter of the dispute is most closely
Adoption of the Model Law on International connected; or
Commercial Arbitration. — International commercial
arbitration shall be governed by the Model Law on (c) the parties have expressly agreed that the subject
International Commercial Arbitration (the "Model matter of the arbitration agreement relates to more
Law") adopted by the United Nations Commission on than one country.
International Trade Law on 21 June 1985 and
recommended for enactment by the General Test of Internationality
Assembly in Resolution No. 40/72 approved on 11
December 1985. Arbitration is international if any of the following
instances occur:
Section 32 ADR Act 1. The parties’ place of business, which at the
time of the conclusion of the arbitration agreement,
Law Governing Domestic Arbitration. — Domestic is in different states;
arbitration shall continue to be governed by Republic 2. The place of arbitration provided in the
Act No. 876, otherwise known as "The Arbitration agreement and in which the parties have their places
Law" as amended by this Chapter. The term of business, is outside the Philippines;
"domestic arbitration" as used herein shall mean an 3. The place where a substantial part of the
arbitration that is not international as defined in obligation is to be performed outside the Philippines;
Article 1(3) of the Model Law. 4. Parties have expressly agreed that the
subject matter of the arbitration agreement relates to
C. WHAT IS INTERNATIONAL COMMERCIAL more than one country.
ARBITRATION (“ICA”)?
An arbitration would be international in any of the
ARTICLE 1.6, Definition of Terms, IRR ADR Act following situations:
Parties' places of business in State X and other
Commercial Arbitration means an arbitration that relevant place in State Y;
covers matters arising from all relationships of a parties' places of business in State Y and other
commercial nature, whether contractual or not. relevant place in State X;
Relationships of a commercial nature include, but are parties' places of business in State Y and other
not limited to, the following commercial transactions: relevant place in State Z.
any trade transaction for the supply or exchange of
goods or services; distribution agreements; The first relevant place is the place of arbitration, as
construction of works; commercial representation or the only arbitration-related criterion. The place of
agency; factoring; leasing; consulting; engineering; arbitration is relevant if determined in, or pursuant
licensing; investment; financing; banking; insurance; to, the arbitration agreement. Where the place of
joint venture and other forms of industrial or business arbitration is specified in the arbitration agreement,
cooperation; carriage of goods or passengers by air, the parties know from the start whether their case is
sea, rail or road. international.

International Arbitration means an arbitration where: Internationality is established if a substantial part of

the obligations of the commercial relationship is to be
(a) the parties to an arbitration agreement have, at performed in a State other than the one where the
the time of the conclusion of that agreement, their parties have their places of business.
places of business in different states; or

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i. PLACE OF BUSINESS agreement, the place of arbitration shall be in Metro

Manila, Philippines.
Based on the Annalytical Commentary:
If a party has two or more places of business, one of iii. PLACE OF PERFORMANCE
which is in the same State as is the other party's place
of business, it is necessary to determine which of his Another test of internationality is whether a
places is relevant. According to paragraph (3), first substantial part of the obligation arises under a
sentence, It is the one which has the closest commercial relationship, which is to be performed in
relationship to the arbitration agreement. An a state other than the ones in which the parties have
instance of such close relationship would be that a their places of business.
contract, including an arbitration clause, is fully
negotiated by the branch or office in question, even if
it is signed at another place (e.g. the principal place of FUNG SANG TRADING V. KAI SUN SEA PRODUCTS AND
business). FOOD COMPANY; SC OF HONG KONG

As indicated in this example, the location of the Facts:

principal place of business (or head office) is
irrelevant. If one were to take the principal place of There is a contract made between the plaintiff as
business as the decisive criterion, one would have a seller and the defendant as buyer. The plaintiffs
somewhat wider application of the Model Law since agreed to sell and the defendants agreed to buy 5,000
it would cover also those cases where the "closely tonnes of Chinese Soybean Extraction Meal.
connected" place of business, but not the principal Shipment was made between December 1-30 1990
place of business, is in the same State as is the other and the place of delivery was stated to be Dalian
party's place of business. Nevertheless, the criterion which is in China. The advising bank was Hong Kong
of "closest connection" was adopted because it was and Shanghai Bank in HK.
thought to reflect better the expectations of the
parties and, in particular, for the sake of consistency The last clause on the contract states that should any
with the 1980 Vienna Sales Convention. dispute arise between the contracting parties, it shall
be settled through friendly negotiation. But if there is
ii. PLACE OF ARBITRATION no agreement to be reached, the case in dispute shall
be submitted for arbitration which shall take place in
Article 20 of the Model Law HONG KONG.
Place of arbitration
(1) The parties are free to agree on the place of The plaintiffs allege that the defendants failed to
arbitration. Failing such agreement, the place of nominate a vessel to take delivery within the period
arbitration shall be determined by the arbitral and to put in place the required Letter of Credit. They
tribunal having regard to the circumstances of the claim damages. Plaintiffs wrote to the defendants
case, including the convenience of the parties. informing them that they had appointed an arbitrator
(2) Notwithstanding the provisions of paragraph (1) of and pointed out that under ARTICLE 10(2) OF THE
this article, the arbitral tribunal may, unless otherwise MODAL LAW, there shall be 3 arbitrators in the
agreed by the parties, meet at any place it considers absence of agreement.
appropriate for consultation among its members, for
hearing witnesses, experts or the parties, or for Plaintiffs’ contentions:
inspection of goods, other property or documents. - The case was an international arbitration to
which the Model Law applied because a
The place of arbitration provided in the agreement substantial part of the obligations of the
and in which the parties have their places of business, commercial relationship was to be
is outside the Philippines performed in China.
- Because the defendants have failed to
Section 30 of the ADR act IS recognizing the general appoint an arbitrator, Article 10(3) comes
rule that the parties are free to agree on the place of into place. (3 arbitrators)
arbitration, but it now provides that failing such - In support of their contention that this is an
international arbitration

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Defendants: D. COVERAGE OF THE IRR PROVISIONS ON ICA

- This is NOT an international arbitration but is
in fact a DOMESTIC one because (1) payment The provisions of the IRR on international arbitration
was to be made in HK; and (2) the breach are default rules, they are applicable only in the
consisted of a failure by the defendants in HK absence of or in default of applicable provisions
to perform its obligations. contained in:
- There was no concluded contract because 1. An agreement, in force between the
the person who signed the contract did not Philippines and other states; and
have legal authority. Thus, an arbitrator did 2. An agreement between the parties on the
not have jurisdiction to rule on whether or applicable rules.
not a contract had been concluded. No
contact, no arbitration clause. Article 4.1. Scope of Application.
(a) This Chapter applies to international commercial
SC of HK: arbitration, subject to any agreement in force
The place where a substantial part of the obligations between the Philippines and other state or states.
of the commercial relationship are to be performed is
not limited to the place where a breach occurs. (b) This Chapter applies only if the place or seat of
Although payment and nomination of the vessel are arbitration is the Philippines and in default of any
important obligations in a contract of this nature, agreement of the parties on the applicable rules.
however, it does not mean that delivery in a sale of
goods contract is insignificant. (c) This Chapter shall not affect any other law of the
Philippines by virtue of which certain disputes may
“SUBSTANTIAL PART OF THE OBLIGATION”. not be submitted to arbitration or may be submitted
Substantial means considerable or big. to arbitration only according to provisions other than
The analytical commentary on the draft text of the those of the ADR Act.
Model Law in 1985 states that internationality is
established if a substantial part of the obligation of Article 4.2. Rules of Interpretation.
the commercial relationship is to be performed in a (a) International commercial arbitration shall be
State other than the one where the parties have their governed by the Model Law on International
places of business. Commercial Arbitration.

I find it clear beyond any doubt that "a substantial (b) In interpreting this Chapter, regard shall be had to
part of the obligations of the commercial the international origin of the Model Law and to the
relationship" was to be performed in a place where need for uniformity in its interpretation. Resort may
the parties did not have their places of business, be made to the travaux preparatoires and the Report
namely in China. of the Secretary-General of the United Nations
Commission on International Trade Law dated March
The plaintiff's obligation under this FOB contract was 1985 entitled, "International Commercial Arbitration:
to deliver the goods on board the vessel named by the Analytical Commentary on Draft Text identified by
defendant at Dalian in China. The defendants' reference number A/CN. 9/264".
obligation was to nominate the vessel to accept
delivery of the goods at Dalian and to open a Letter of (c) Moreover, in interpreting this Chapter, the court
Credit as specified in the contract. shall have due regard to the policy of the law in favor
of arbitration and the policy of the Philippines to
THIS IS AN INTERNATIONAL ARBITRATION TO WHICH actively promote party autonomy in the resolution of
THE MODEL LAW DOES APPLY. disputes or the freedom of the parties to make their
own arrangement to resolve their dispute.
(other points discussed in the case: jurisdiction of the
arbitrator) (d) Where a provision of this Chapter, except the
Rules applicable to the substance of the dispute,
leaves the parties free to determine a certain issue,
such freedom includes the right of the parties to

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authorize a third party, including an institution, to appointing authority as defined in Article 1.6 C1,
make that determination. unless the latter shall fail or refuse to act within thirty
(30) days from receipt of the request in which case
(e) Where a provision of this Chapter refers to the fact the applicant may renew the application with the
that the parties have agreed or that they may agree court. The appointment of an arbitrator is not subject
or in any other way refers to an agreement of the to appeal or motion for reconsideration.
parties, such agreement includes any arbitration rules (b) The functions referred to in paragraph (c) of Article
referred to in that agreement. 4.16 (c) (Competence of Arbitral Tribunal to Rule on its
Jurisdiction), second paragraph of Article 4.34
Article 4.3. Receipt of Written Communications. (Application for Setting Aside an Exclusive Recourse
(a) Unless otherwise agreed by the parties: Against Arbitral Award), Article 4.35 (Recognition and
(i) any written communication is deemed to Enforcement), Article 4.38 (Venue and Jurisdiction),
have been received if it is delivered to the shall be performed by the appropriate Regional Trial
addressee personally or at his/her place of Court.
business, habitual residence or mailing (c) A Court may not refuse to grant, implement or
address; if none of these can be found after enforce a petition for an interim measure, including
making a reasonable inquiry, a written those provided for in Article 4.9 (Arbitration
communication is deemed to have been Agreement and Interim Measures by Court), Article
received if it is sent to the addressee's last 4.11 (Appointment of Arbitrators), Article 4.13
known place of business, habitual residence (Challenge Procedure), Article 4.27 (Court Assistance
or mailing address by registered letter or any in Taking Evidence), on the sole ground that the
other means which provides a record of the Petition is merely an ancillary relief and the principal
attempt to deliver it; action is pending with the arbitral tribunal.
(ii) the communication is deemed to have
been received on the day it is so delivered. E. RULES OF INTERPRETATION

(b) The provisions of this Article do not apply to The following are the rules in the interpretation of the
communications in court proceedings, which shall be ADR Act of 2004, Model Law and IRR:
governed by the Rules of Court. 1. Interpretation of the ADR Act.
2. Interpretation of the Model Law – should be
Article 4.4. Waiver of Right to Object. A party who regard that the said law is of international
knows that any provision of this Chapter from which origin and there is a need for uniformity in its
the parties may derogate or any requirement under interpretation.
the arbitration agreement has not been complied 3. Interpretation of the IRR
with and yet proceeds with the arbitration without
stating the objections for such non-compliance Article 4.2. Rules of Interpretation.
without undue delay or if a time limit is provided (a) International commercial arbitration shall be
therefor, within such period of time, shall be deemed governed by the Model Law on International
to have waived the right to object. Commercial Arbitration.

Article 4.5. Extent of Court Intervention. In matters (b) In interpreting this Chapter, regard shall be had to
governed by this Chapter, no court shall intervene the international origin of the Model Law and to the
except where so provided in the ADR Act. Resort to need for uniformity in its interpretation. Resort may
Philippine courts for matters within the scope of the be made to the travaux preparatoires and the Report
ADR Act shall be governed by the Special ADR Rules. of the Secretary-General of the United Nations
Commission on International Trade Law dated March
Article 4.6. Court or Other Authority for Certain 1985 entitled, "International Commercial Arbitration:
Functions of Arbitration Assistance and Supervision. Analytical Commentary on Draft Text identified by
(a) The functions referred to in paragraphs (c) and (d) reference number A/CN. 9/264".
of Article 4.11 (Appointment of Arbitrators) and
paragraph (c) of Article 4.13 (Challenge Procedure) (c) Moreover, in interpreting this Chapter, the court
and paragraph (a) of Article 4.14 (Failure or shall have due regard to the policy of the law in favor
Impossibility to Act) shall be performed by the of arbitration and the policy of the Philippines to

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actively promote party autonomy in the resolution of (d) Where, under an appointment procedure agreed
disputes or the freedom of the parties to make their upon by the parties,
own arrangement to resolve their dispute. (i) a party fails to act as required under such
procedure, or
(d) Where a provision of this Chapter, except the (ii) the parties, or two arbitrators, are unable
Rules applicable to the substance of the dispute, to reach an agreement expected of them
leaves the parties free to determine a certain issue, under such procedure, or
such freedom includes the right of the parties to (iii) a third party, including an institution,
authorize a third party, including an institution, to fails to perform any function entrusted to it
make that determination. under such procedure,
any party may request the appointing authority to
(e) Where a provision of this Chapter refers to the fact take the necessary measure to appoint an arbitrator,
that the parties have agreed or that they may agree unless the agreement on the appointment procedure
or in any other way refers to an agreement of the provides other means for securing the appointment.
parties, such agreement includes any arbitration rules
referred to in that agreement. (e) A decision on a matter entrusted by paragraphs (c)
and (d) of this to the appointing authority shall be
F. COMPOSITION OF THE IRR PROVISIONS ON immediately executory and not be subject to a
ICA motion for reconsideration or appeal. The appointing
authority shall have in appointing an arbitrator, due
Article 4.10. Number of Arbitrators. The parties are regard to any qualifications required of the arbitrator
free to determine the number of arbitrators. Failing by the agreement of the parties and to such
such determination, the number of arbitrators shall considerations as are likely to secure the
be three (3). appointment of an independent and impartial
arbitrator and, in the case of a sole or third arbitrator,
Article 4.11. Appointment of Arbitrators. shall take into account as well the advisability of
(a) No person shall be precluded by reason of his/her appointing an arbitrator of a nationality other than
nationality from acting as an arbitrator, unless those of the parties.
otherwise agreed by the parties.
A party may bring a petition under this Article before
(b) The parties are free to agree on a procedure of the court in accordance with the Rules of Court or the
appointing the arbitrator or arbitrators, subject to the Special ADR Rules.
provisions of paragraphs (d) and (e) of this Article.
G. DUE PROCESS IN ICA
(c) Failing such agreement:
(i) in an arbitration with three (3) arbitrators, Article 4.18. Equal Treatment of Parties. The parties
each party shall appoint one arbitrator, and shall be treated with equality and each party shall be
the two (2) arbitrators thus appointed shall given a full opportunity of presenting his/her case.
appoint the third arbitrator; if a party fails to
appoint the arbitrator within thirty (30) days H. HEARING AND WRITTEN PROCEEDINGS
of receipt of a request to do so from the other
party, or if the two (2) arbitrators fail to ROBENIOL: The general rule is that the parties in an
agree on the third arbitrator within thirty international commercial arbitration are free to
(30) days of their appointment, the determine the rules that will govern their arbitration
appointment shall be made, upon request of proceedings.
a party, by the appointing authority;
In default, the arbitral tribunal shall apply the
(ii) in an arbitration with a sole arbitrator, if “UNCITRAL Arbitration Rules” adopted by the
the parties are unable to agree on the UNCITRAL on 28th of April 1976, unless the tribunal
arbitrator, he/she shall be appointed, upon finds said rules inappropriate.
request of a party, by the appointing
authority. The procedures in ICA in default of an agreement of
the parties are as follows:

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1. Statement of claims – within the period 6. Conclusion/Closure – an ICA may be

agreed upon by the parties, the claimant concluded or closed in either of two ways:
shall state the facts supporting his claim; the 1. By an award or settlement
issues and relief or remedy sought and shall 2. Termination – tribunal shall issue an
be submit or refer to relevant documents. order for termination of arbitration
2. Statement of Defenses – respondent shall when: 1. The claimant withdraws
state his defenses. his claim unless the respondent
3. Default of the parties – failure of the objects on the basis of legitimate
claimant or respondent to communicate interest in obtaining a final
their statements of claims or defenses settlement; 2. The parties agree to
during the period or their failure to appear at terminate proceedings in writings;
a hearing or to produce documentary or 3. Tribunal finds that the
evidence, results in the default of the failing continuation of the proceedings has
party. Default of the claimant for failure to become unnecessary or impossible.
communicate his statement of claims results
in termination of proceedings. Default of the In both instances, the mandate of the arbitral tribunal
respondent to communicate his statement ends except if the conclusion of the proceedings is by
of defenses shall not terminate the way of an award or settlement, the tribunal’s
proceedings and instead shall proceed mandate extends: 1. To correct and interpret the
without such failure being considered as an award; 2. To set aside an exclusive recourse against
admission of claimant’s allegation. the arbitral award; or 3. When reserved, to the
4. Amendment of claims or defenses – parties quantification of costs and the determination of the
may amend or supplement their claims or party liable therefore, or the division.
defenses as the case may be unless the
tribunal considers amendment The arbitral tribunal retains jurisdiction until the
inappropriate. award becomes final and executory.
5. Hearings – the tribunal shall determine
whether to hold oral hearings only, oral Article 4.23. Statements of Claim and Defense.
arguments only or just require the (a) Within the period of time agreed by the parties or
submission of documents during the determined by the arbitral tribunal, the claimant shall
appropriate stages of arbitral proceedings. state the facts supporting his/her/its claim, the points
1. Court assistance in taking evidence at issue and the relief or remedy sought, and the
– the tribunal or any party with the respondent shall state his/her/its defense in respect
approval of the tribunal, may of these particulars, unless the parties have otherwise
request from the courts assistance agreed as to the required elements of such
in taking evidence. statements. The parties may submit with their
2. Subpoena – the tribunal has the statements, all documents they consider to be
power to issue subpoena in order to relevant or may add a reference to the documents or
compel the attendance of other evidence they will submit.
witnesses and/or the production of
documents. ARBITRAL TRIBUNAL (b) Unless otherwise agreed by the parties, either
DOES NOT HAVE CONTEMPT party may amend or supplement his/her claim or
POWERS. defense during the course of the arbitral proceedings,
3. Expert – the tribunal may appoint unless the arbitral tribunal considers it inappropriate
experts to report to it on specific to allow such amendment having regard to the delay
issues, require the parties to in making it.
provide the expert with relevant
information or access to Article 4.24. Hearing and Written Proceedings.
documents. The expert sought by (a) Subject to any contrary agreement by the parties,
the tribunal is similar to an amicus the arbitral tribunal shall decide whether to hold oral
curiae or friend of the court except hearings for the presentation of evidence or for oral
that the expert’s field of argument, or whether the proceedings shall be
specialization is not limited to law. conducted on the basis of documents and other

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materials. However, unless the parties have agreed a given state shall be construed, unless otherwise
that no hearings shall be held, the arbitral tribunal expressed, as directly referring to the substantive law
shall hold such hearings at an appropriate stage of the of that state and not to its conflict of laws rules.
proceedings, if so requested by a party.
(b)The parties shall be given sufficient advance notice (b) Failing any designation by the parties, the arbitral
of any hearing and of any meeting of the arbitral tribunal shall apply the law determined by the conflict
tribunal for the purposes of inspection of goods, other of laws rules, which it considers applicable.
property or documents.
(c) All statements, documents or other information (c) The arbitral tribunal shall decide ex aequo et bono
supplied to the arbitral tribunal by one party shall be or as amiable compositeur only if the parties have
communicated to the other party. Also, an expert expressly authorized it to do so.
report or evidentiary document on which the arbitral
tribunal may rely in making its decision shall be (d) In all cases, the arbitral tribunal shall decide in
communicated to the parties. accordance with the terms of the contract and shall
take into account the usages of the trade applicable
I. COURT ASSISTANCE IN TAKING OF to the transaction.
EVIDENCE
K. AWARD AND TERMINATION
Article 4.27. Court Assistance in Taking Evidence.
The arbitral tribunal or a party with the approval of Article 4.31. Form and Contents of Award.
the arbitral tribunal may request from a court of the
Philippines assistance in taking evidence. The court (a) The award shall be made in writing and shall be
may execute the request within its competence and signed by the arbitrator or arbitrators. In arbitral
according to its rules on taking evidence. proceedings with more than one arbitrator, the
signatures of the majority of all members of the
The arbitral tribunal shall have the power to require arbitral tribunal shall suffice, provided that the reason
any person to attend a hearing as a witness. The for any omitted signature is stated.
arbitral tribunal shall have the power to subpoena
witnesses and documents when the relevancy of the (b) The award shall state the reasons upon which it is
testimony and the materiality thereof has been based, unless the parties have agreed that no reasons
demonstrated to it. The arbitral tribunal may also are to be given or the award is an award on agreed
require the retirement of any witness during the terms under paragraph (a) of Article 4.20 (Place of
testimony of any other witness. Arbitration).

A party may bring a petition under this Section before (c) The award shall state its date and the place of
the court in accordance with the Rules of Court or the arbitration as determined in accordance with
Special ADR Rules. paragraph (a) of this Article. The award shall be
deemed to have been made at that place.
(This will be thoroughly discussed in Domestic
Arbitration. While the arbitral tribunal has the power (d) After the award is made, a copy signed by the
to summon witnesses, it does not have contempt arbitrators in accordance with paragraph (a) of this
powers. This is why they may want to seek assistance Article shall be delivered to each party.
of the court. )
Article 4.32. Termination of Proceedings.
J. RULES APPLICABLE TO THE SUBSTANCE OF (a) The arbitral proceedings are terminated by the
THE DISPUTE final award or by an order of the arbitral tribunal in
accordance with paragraph (b) of this Article.
Article 4.28. Rules Applicable to the Substance of
Dispute. (b) The arbitral tribunal shall issue an order for the
(a) The arbitral tribunal shall decide the dispute in termination of the arbitral proceedings when:
accordance with such rules of law as are chosen by (i) The claimant withdraws his/her/its claim,
the parties as applicable to the substance of the unless the respondent objects thereto and
dispute. Any designation of the law or legal system of the arbitral tribunal recognized a legitimate

15
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interest on his/her/its part in obtaining a non-convention award as a convention

final settlement of the dispute; award.
(ii) The parties agree on the termination of
the proceedings; (c) The party relying on an award or applying for its
(iii) The arbitral tribunal finds that the enforcement shall file with the Regional Trial Court
continuation of the proceedings has for any the original or duly authenticated copy of the award
other reason become unnecessary or and the original arbitration agreement or a duly
impossible. authenticated copy thereof. If the award or
agreement is not made in an official language of the
(c) The mandate of the arbitral tribunal ends with the Philippines, the party shall supply a duly certified
termination of the arbitral proceedings, subject to the translation thereof into such language.
provisions of Articles 4.33 (Correction and
Interpretation of Award, Additional Award) and (d) A foreign arbitral award when confirmed by a
paragraph (d) of Article 4.34 (Application for Setting court of a foreign country, shall be recognized and
Aside an Exclusive Recourse against Arbitral Award). enforced as a foreign arbitral award and not as a
judgment of a foreign court.
(d) Notwithstanding the foregoing, the arbitral
tribunal may, for special reasons, reserve in the final (e) A foreign arbitral award when confirmed by the
award or order, a hearing to quantify costs and Regional Trial Court, shall be enforced in the same
determine which party shall bear the costs or the manner as final and executory decisions of courts of
division thereof as may be determined to be law of the Philippines.
equitable. Pending determination of this issue, the
award shall not be deemed final for purposes of (f) If the Regional Trial Court has recognized the
appeal, vacation, correction, or any post-award arbitral award but an application for (rejection
proceedings. and/or) suspension of enforcement of that award is
subsequently made, the Regional Trial Court may, if it
L. RECOGNITION AND ENFORCEMENT OF considers the application to be proper, vacate or
AWARDS suspend the decision to enforce that award and may
also, on the application of the party claiming
Article 4.35. Recognition and Enforcement. recognition or enforcement of that award, order the
(a) A foreign arbitral award shall be recognized as other party seeking rejection or suspension to provide
binding and, upon petition in writing to the Regional appropriate security.
Trial Court, shall be enforced subject to the provisions
of this Article and of Article 4.36 (Grounds for Refusing M. APPEAL
Recognition or Enforcement).
(See Art. 4.27, IRR – mao naa sa syllabus)
(b) The petition for recognition and enforcement of
such arbitral awards shall be filed with the Regional Atty’s ADDTL DISCUSSION:
Trial Court in accordance with the Special ADR Rules. You can be represented in ICA by a non-lawyer.
(i) Convention Award - The New York ___________________________________________
Convention shall govern the recognition and
enforcement of arbitral awards covered by III. DOMESTIC ARBITRATION
said Convention. The petitioner shall
establish that the country in which the A. SCOPE OF APPLICATION
foreign arbitration award was made is a
party to the New York Convention. Article 5.1. Scope of Application. (irr)
(ii) Non-Convention Award - The recognition
and enforcement of foreign arbitral awards (a) Domestic arbitration, which is not international as
not covered by the New York Convention defined in paragraph C'8 of Article 1.6 shall continue
shall be done in accordance with procedural to be governed by Republic Act No. 876, otherwise
rules to be promulgated by the Supreme known as "The Arbitration Law", as amended by the
Court. The court may, on grounds of comity ADR Act. Articles 8, 10, 11, 12, 13, 14, 18 and 19 and
and reciprocity, recognize and enforce a 29 to 32 of the Model Law and Sections 22 to 31 of

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the ADR Act are specifically applicable to domestic controversies and to cases which are subject to the
arbitration. jurisdiction of the Court of Industrial Relations or
which have been submitted to it as provided by
In the absence of a specific applicable provision, all Commonwealth Act Numbered One hundred and
other rules applicable to international commercial three, as amended.
arbitration may be applied in a suppletory manner to
domestic arbitration. Atty: A lot of the provisions of the ADR Act may not
be applicable to the modern times. Pay attention to
(b) This Chapter shall apply to domestic arbitration construction dispute. In construction dispute, the
whether the dispute is commercial, as defined in rules are very specific so we really have to look into
Section 21 of the ADR Act, or non-commercial, by an the CIAC rules. Take note of the applicable laws that’s
arbitrator who is a private individual appointed by the already seen in the IRR itself. Generally, you have the
parties to hear and resolve their dispute by rendering Arbitration Law, Model Law, ADR Act, IRR, and others.
an award; Provided that, although a construction
dispute may be commercial, it shall continue to be B. DUE PROCESS IN ARBITRATION
governed by E.O. NO.1 008, s.1985 and the rules
promulgated by the Construction Industry Arbitration Article 5.17. Equal Treatment of Parties. The parties
Commission. shall be treated with equality and each party shall be
given a full opportunity of presenting his/her/its case.
(c) Two or more persons or parties may submit to
arbitration by one or more arbitrators any Administrative due process is applicable in
controversy existing between them at the time of the arbitration. (quasi-judicial)
submission and which may be the subject of an
action; or the parties to any contract may in such EQUITABLE PCI BANK v. RCBC CAPITAL
contract agree to settle by arbitration a controversy
thereafter arising between them. Such submission or Petitioners Equitable PCI Bank, Inc. (EPCIB) and the
contract shall be valid, enforceable and irrevocable, individual shareholders of Bankard, Inc., as sellers,
save upon such grounds as exist at law for the and respondent RCBC Capital Corporation (RCBC), as
revocation of any contract. buyer, executed a Share Purchase Agreement.

Such submission or contract may include questions RCBC claimed that petitioners violated their warranty,
arising out of valuations, appraisals or other as sellers, embodied in Sec. 5 (g) of the SPA.
controversies which may be collateral, incidental,
precedent or subsequent to any dispute between the Following unsuccessful attempts at settlement, RCBC,
parties. in accordance with Sec. 10 of the SPA, filed a Request
for Arbitration dated May 12, 2004 8 with the ICC-ICA.
A controversy cannot be arbitrated where one of the In the request, RCBC charged Bankard with deviating
parties to the controversy is an infant, or a person from, contravening and not following generally
judicially declared to be incompetent, unless the accepted accounting principles and practices in
appropriate court having jurisdiction approved a maintaining their books. It thus prayed for the
petition for permission to submit such controversy to rescission of the SPA, restitution of the purchase
arbitration made by the general guardian or guardian price, payment of actual, legal interest on the
ad litem of the infant or of the incompetent. purchase price until actual restitution, moral
damages, and litigation and attorney's fees. As
But where a person capable of entering into a alternative to rescission and restitution, RCBC prayed
submission or contract has knowingly entered into for damages plus legal interest.
the same with a person incapable of so doing, the
objection on the ground of incapacity can be taken To the Request for Arbitration, petitioners filed an
only in behalf of -the person so incapacitated. Answer denying RCBC's inculpatory averments and
setting up affirmative allegations. Arbitration in the
ARBITRATION LAW RA876 ICC-ICA proceeded. Notably, the tribunal considered
SECTION 3. Controversies or Cases not Subject to the the rescission of the SPA and ASPA as impracticable
Provisions of this Act. — This Act shall not apply to and "totally out of the question". RCBC filed with the

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RTC a Motion to Confirm Partial Award. On the same Partial Award to the RTC, which they in fact did. Later,
day, petitioners countered with a Motion to Vacate petitioners even moved for the reconsideration of the
the Partial Award; RTC confirmed. denial of their appeal. Having been able to appeal and
move for a reconsideration of the assailed rulings,
Petitioners came directly to this Court on a petition petitioners cannot claim a denial of due process.
for review under Rule 45 of the Rules of Court. This is Petitioners' right to due process was not breached.
a procedural miscue for petitioners who erroneously
bypassed the Court of Appeals (CA) in pursuit of its Clearly, the right to cross-examine a witness, although
appeal. a fundamental right of a party, may be waived.
Petitioners themselves admit having had the
The Court will not overturn an Arbitral Award unless opportunity to cross-examine RCBC's witnesses
it was made in manifest disregard of the law. To during the hearings before the tribunal, but declined
justify the vacation of an arbitral award on account of to do so by reserving such right at a later time. Having
"manifest disregard of the law", the arbiter's findings had the opportunity to cross- examine RCBC's
must clearly and unequivocally violate an established witnesses, petitioners were not denied their right to
legal precedent. Anything less would not suffice. due process.

In the present case, petitioners, in a bid to establish Atty: In arbitration, you can agree on how the trial will
that the arbitral award was issued in manifest be conducted, you cannot do that in court. There’s no
disregard of the law, allege that the Partial Award more direct examination in court, because written na
violated the principles of prescription, due process, in a judicial affidavit. But in arbitration, you will decide
and estoppel. whether to have a trial-type hearing. You can also
proceed with deciding the case after submission of
PETITIONERS WERE NOT DENIED DUE PROCESS. To documents. Rules in arbitration are not so rigid.
petitioners, the ICC-ICA's use of such summaries but
without presenting the source documents violates
Administrative due process – in admin agencies, these
their right to due process. Pressing the point,
tribunals do not require hearing.
petitioners had moved, but to no avail, for the
exclusion of the said summaries. Petitioners allege
C. PLACE OF ARBITRATION
that they had reserved the right to cross-examine the
witnesses of RCBC who testified on the summaries,
pending the resolution of their motion to exclude. Article 5.19. Place of Arbitration.
But, according to them, they were effectively denied (a) The parties are free to agree on the place of
the right to cross-examine RCBC's witnesses when the arbitration. Failing such agreement, the place of
ICC-ICA admitted the summaries of RCBC as evidence. arbitration shall be in Metro Manila unless the arbitral
tribunal, having regard to the circumstances of the
In a catena of cases, we have ruled that "the essence case, including the convenience of the parties, shall
of due process is the opportunity to be heard. What decide on a different place of arbitration.
the law prohibits is not the absence of previous notice
but the absolute absence thereof and the lack of (b) The arbitral tribunal may, unless otherwise agreed
opportunity to be heard." by the parties, meet at any place it considers
Were petitioners afforded the opportunity to refute appropriate for consultation among its members, for
the summaries and pieces of evidence submitted by hearing witnesses, experts or the parties, or for
RCBC which became the bases of the experts' inspection of goods, other property or documents.
opinion? The answer is in the affirmative.
D. DELIVERY AND RECEIPT OF WRITTEN
The pleadings reveal that RCBC granted petitioners' COMMUNICATION
requests for production of documents and accounting
records. More so, they had more than three (3) years Article 5.2. Delivery and Receipt of Written
to prepare for their defense after RCBC's submission Communications.
of its brief of evidence. Finally, it must be emphasized (a) Except as otherwise agreed by the parties, a
that petitioners had the opportunity to appeal the written communication from one party to the other

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or to the arbitrator or to an arbitration institution or E. FORM OF ARBITRATION AGREEMENT

from the arbitrator or arbitration institution to the
parties shall be delivered to the addressee personally, Article 5.6. Form of Arbitration Agreement. An
by registered mail or by courier service. Such arbitration agreement shall be in writing. An
communication shall be deemed to have been agreement is in writing if it is contained in a document
received on the date it is delivered at the addressee's signed by the parties or in an exchange of letters,
address of record, place of business, residence or last telex, telegrams or other means of
known address. The communication, as appropriate, telecommunication which provide a record of the
shall be delivered to each party to the arbitration and agreement, or in an exchange of statements of claim
to each arbitrator, and, in institutional arbitration, and defense in which the existence of an agreement
one copy to the administering institution. is alleged by one party and not denied by the other.
The reference in a contract to a document containing
(b) During the arbitration proceedings, the arbitrator an arbitration clause constitutes an arbitration
may order a mode of delivery and a rule for receipt of agreement provided that the contract is in writing and
written communications different from that provided the reference is such as to make that clause part of
in paragraph (a) of this Article. the contract.

(c) If a party is represented by counselor a BF CORPORATION V. CA

representative, written communications for that
party shall be delivered to the address of record of Petitioner BF Corporation and respondent Shangri-la
such counselor representative. Properties, Inc. (SPI) executed an Article of
Agreement for the construction of a shopping mall
(d) Except as the parties may agree or the arbitrator complex. Delay occurred in the construction of the
may direct otherwise, a written communication may mall and caused disagreements between the parties
be delivered by electronic mail or facsimile regarding their respective liabilities. The parties held
transmission or by such other means that will provide a conference but failed to settle. Petitioner then filed
a record of the sending and receipt thereof at the a complaint for collection of the balance due against
recipient's mailbox (electronic inbox). Such SPI and its co-defendants which, however, moved to
communication shall be deemed to have been suspend the proceedings claiming that their contract
received on the same date of its transmittal and provided for an arbitration clause embodied in the
receipt in the mailbox (electronic inbox). Conditions of Contract. The validity of that document
containing the arbitration clause was assailed in that
Atty: There’s a presumption of delivery. First, for the it was only initiated by petitioner's representatives.
convenience of the parties, indicate in the contract The trial court, although finding the existence of an
the address. Second, how do you know that there is a arbitration clause, denied petitioner's motion to
presumed receipt? You go to the postmaster and you suspend proceedings. SPI then filed a petition for
ask for the certification which will tell you that the certiorari with the Court of Appeals which in turn
communication has been received. Why do you have stayed the proceedings in the lower court. The Court
to do that? Because in practice, there’s a time limit. of Appeals, contrary to the findings of the lower court,
found that private respondents were not in default in
You may also receive notices via email. It’s so easy to invoking the provisions of the arbitration clause and
miss emails which is dangerous because the arbitral that the absence of initials of one party or his
tribunal will not remind you. They will assume that representative does not militate against its effectivity
you have consented to receive notices via email where the main contract containing said arbitration
especially that it’s not procedural to write your email clause had been duly signed by the parties. Hence,
ad. What’s worse is not losing the case, but YOU this recourse, petitioner further contending that the
having an administrative case in IBP just cause you order of the lower court denying the motion to
missed an email and caused harm to your client. L suspend is a resolution on the merits that can be
elevated to a higher court in an ordinary appeal and
not by certiorari.

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According to Sec 4 of R.A. 876 a contract to arbitrate agreement of which there are two copies, one signed
a controversy thereafter arising between the parties, by each of the parties, is binding on both to the same
as well as a submission to arbitrate an existing extent as though there had been only one copy of the
controversy, shall be in writing and subscribed by the agreement and both had signed it.
party sought to be charged, or by his lawful agent.
DALE STRICKLAND V. ERNST AND YOUNG
The making of a contract or submission for arbitration
described in section two hereof, providing for (complete facts not included)
arbitration of any controversy, shall be deemed a
consent of the parties of the province or city where Strickland contends that the CA's referral of the
any of the parties resides, to enforce such contract of dispute between EYLLP and Strickland to arbitration is
submission. grave error since EYLLP failed to properly allege and
prove the Partnership Agreement. Absent an
The formal requirements of an agreement to actionable Partnership Agreement, there is no
arbitrate are therefore the following: (a) it must be in existing arbitration clause. We are not persuaded.
writing and (b) it must be subscribed by the parties or
their representatives. There is no denying that the In this case, EYLLP initially only quoted the provision
parties entered into a written contract that was of the Partnership Agreement on Dispute Resolution,
submitted in evidence before the lower court. To including a section on Arbitration. Eventually, it
subscribe means to write underneath, as ones name; submitted a copy of the Partnership Agreement in a
to sign at the end of a document. That word may manifestation. Thus, we agree with the holding of the
sometimes be construed to mean to give consent to CA that EYLLP substantially, and ultimately, complied
or to attest. with the provision given that Strickland himself did,
and does not even deny, the Partnership Agreement
The Court finds that, upon a scrutiny of the records of nor the arbitration clause.
this case, these requisites were complied with in the
contract in question. The Articles of Agreement, Arbitration, as an alternative mode of settling
which incorporates all the other contracts and disputes, has long been recognized and accepted in
agreements between the parties, was signed by our jurisdiction. R.A. No. 876 authorizes arbitration of
representatives of both parties and duly domestic disputes. Foreign arbitration, as a system of
notarized. The failure of the private respondents’ settling commercial disputes of an international
representative to initial the `Conditions of Contract character, is likewise recognized. The enactment of
would therefore not affect compliance with the R.A. No. 9285 on April 2, 2004 further institutionalized
formal requirements for arbitration agreements the use of alternative dispute resolution systems,
because that particular portion of the covenants including arbitration, in the settlement of disputes.
between the parties was included by reference in the
Articles of Agreement. The validity of the contract containing the agreement
to submit to arbitration does not affect the
Petitioners contention that there was no arbitration applicability of the arbitration clause itself. A contrary
clause because the contract incorporating said ruling would suggest that a party's mere repudiation
provision is part of a hodge-podge document, is of the main contract is sufficient to avoid arbitration.
therefore untenable. A contract need not be That is exactly the situation that the separability
contained in a single writing. It may be collected from doctrine, as well as jurisprudence applying it, seeks to
several different writings which do not conflict with avoid.
each other and which, when connected, show the
parties, subject matter, terms and consideration, as in The doctrine of separability, or severability as other
contracts entered into by correspondence. A contract writers call it, enunciates that an arbitration
may be encompassed in several instruments even agreement is independent of the main, contract. The
though every instrument is not signed by the parties, arbitration agreement is to be treated as a separate
since it is sufficient if the unsigned instruments are agreement and the arbitration agreement does not
clearly identified or referred to and made part of the automatically terminate when the contract of which
signed instrument or instruments. Similarly, a written it is a part comes to an end.

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The separability of the arbitration agreement is STEAMSHIP MUTUAL V. SULPICIO LINES

especially significant to the determination of whether (Doctrines only)
the invalidity of the main contract also nullifies the
arbitration clause. Indeed, the doctrine denotes that Steamship contends that the arbitration agreement
the invalidity of the main contract, also referred to as set forth in its Club Rules, which in turn is
the "container" contract, does not affect the validity incorporated by reference in the Certificate of Entry
of the arbitration agreement. Irrespective of the fact and Acceptance of M/V Princess of the World, is valid
that the main contract is invalid, the arbitration and binding upon Sulpicio, pursuant to this Court's
clause/agreement still remains valid and enforceable. ruling in BF Corporation v. Court of Appeals.

We have consistently affirmed that commercial Steamship argues that a referral of the case to
relationships covered by our arbitration laws are arbitration is imperative pursuant to the mandates of
purely private and contractual in nature. Article 1306 Republic Act No. 9285 or the ADR Law.
of the Civil Code provides for autonomy of contracts
where the parties are free to stipulate on such terms Arbitration, as a mode of settling disputes, was
and conditions except for those which go against law, already recognized in the Civil Code. In 1953, Republic
morals, and public policy. In our jurisdiction, Act No. 876 was passed, which reinforced domestic
commercial arbitration is a purely private system of arbitration as a process of dispute resolution. Foreign
adjudication facilitated by private citizens which we arbitration was likewise recognized through the
have consistently recognized as valid, binding, and Philippines' adherence to the United Nations
enforceable. Convention on the Recognition and Enforcement of
Foreign Arbitral Awards of 1958, otherwise known as
The ADR Act defines domestic arbitration negatively the New York Convention. Republic Act No. 9285 sets
by stating that it is one that is not international as the basic principles in the enforcement of foreign
defined in the Model Law. It is obvious then that the arbitral awards in the Philippines.
arbitration sought in the instant case is international
for falling under Article 1(3)(b)(ii) quoted above. The Consistent with State policy, "arbitration agreements
place of business of EYLLP is in the United States of are liberally construed in favor of proceeding to
America. x x x It is here [the Philippines] that the arbitration." Every reasonable interpretation is
services for which [Strickland] seeks remuneration indulged to give effect to arbitration agreements.
were rendered. Thus, courts must give effect to the arbitration clause
as much as the terms of the agreement would allow.
For the Model Law to apply, however, the arbitration "Any doubt should be resolved in favor of
should also be commercial. The explanatory footnote arbitration."
to Article 1(1) of the Model Law explains that "[t]he
term 'commercial' should be given a wide Sulpicio contends that there was no valid arbitration
interpretation so as to cover matters arising from all agreement between them, and if there were, it was
relationships of a commercial nature, whether not aware of it. This Court rules against Sulpicio's
contractual or not." submission.

Atty: why is the CA correct in referring to arbitration? In domestic arbitration, the formal requirements of
First, there is an existing main contract where an an arbitration agreement are that it must "be in
arbitration clause is present. IDK why Strickland did writing and subscribed by the party sought to be
not invoke the argument on separability. But the charged, or by his lawful agent." In international
thing is, arbitrability is one of the arguments of the commercial arbitration, it is likewise required that the
case as to whether the arbitration clause is correct. So arbitration agreement must be in writing. An
takeaway, if a main contract has an arbitration clause arbitration agreement is in writing if it is contained (1)
and a separability clause is also there, repudiating the in a document signed by the parties, (2) in an
contract does not mean repudiating the arbitration exchange of letters, telex, telegrams or other means
clause as well ESPECIALLY when that arbitration of telecommunication which provide a record of the
clause was further referred by the parties in agreement, or (3) in an exchange of statements of
subsequent documents. claim and defense in which the existence of an

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agreement is alleged by a party and not denied by continue as to those who are not bound by such
another. The reference in a contract to a document arbitration agreement.
containing an arbitration clause constitutes an
arbitration agreement provided that the contract is in G. ARBITRATION AS AND IS A CONTRACT
writing and the reference is such as to make that
clause part of the contract. Article 1878. Special powers of attorney are
necessary in the following cases:
A contract may be encompassed in several (3) To compromise, to submit questions to
instruments even though every instrument is not arbitration, to renounce the right to appeal from a
signed by the parties, since it is sufficient if the judgment, to waive objections to the venue of an
unsigned instruments are clearly identified or action or to abandon a prescription already acquired;
referred to and made part of the signed instrument or
instruments. Atty: An arbitration agreement is contractual in
nature – must have the same elements as a contract
Thus, an arbitration agreement that was not (ObliCon).
embodied in the main agreement but set forth in
another document is binding upon the parties, where H. ARBITRATION AND INTERIM MEASURES BY
the document was incorporated by reference to the COURT
main agreement. The arbitration agreement
contained in the Club Rules, which in turn was Article 5.8. Arbitration Agreement and Interim
referred to in the Certificate of Entry and Acceptance, Measures by Court.
is binding upon Sulpicio even though there was no
specific stipulation on dispute resolution in this
(a) It is not incompatible with an arbitration
Certificate.
agreement for a party to request from a court, before
the constitution of the arbitral tribunal or during
F. ARBITRATION AGREEMENT AND arbitral proceedings, an interim measure of
SUBSTANTIVE CLAIM BEFORE THE COURT protection and for a court to grant such measure.

Article 5.7. Arbitration Agreement and Substantive (b) After the constitution of the arbitral tribunal and
Claim Before Court. during arbitral proceedings, a request for an interim
measure of protection, or modification thereof, may
(a) A party to an action may request the court before be made with the arbitral tribunal or to the extent
which it is pending to stay the action and to refer the that the arbitral tribunal has no power to act or is
dispute to arbitration in accordance with their unable to act effectively, the request may be made
arbitration agreement not later than the pre-trial with the court.
conference. Thereafter, both parties may make a
similar request with the court. The parties shall be (c) The following rules on interim or provisional relief
referred to arbitration unless the court finds that the shall be observed:
arbitration agreement is null and void, inoperative or (i) Any party may request that interim or
incapable of being performed. provisional relief be granted against the
adverse party.
(b) Where an action referred to in paragraph (a) of (ii)Such relief may be granted:
this Article has been brought, arbitral proceedings (aa) To prevent irreparable loss or injury;
may nevertheless be commenced or continued, and (bb) To provide security for the performance
an award may be made, while the issue is pending of an obligation; (cc) To produce or preserve
before the court. evidence; or (dd) To compel any other
appropriate act or omissions.
(c) Where the action is commenced by or against (iii) The order granting provisional relief may
multiple parties, one or more of whom are parties to be conditioned upon the provision of
an arbitration agreement, the court shall refer to security or any act or omission specified in
arbitration those parties who are bound by the the order.
arbitration agreement although the civil action may

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(iv) Interim or provisional relief is requested who are not parties to the Agreement to Arbitrate, the
by written application transmitted by case was remanded to the trial court who, however,
reasonable means to the arbitral tribunal declared that it no longer had jurisdiction.
and the party against whom relief is sought,
describing in appropriate detail of the The case was remanded back to the CIAC and
precise relief, the party against whom the proceedings therein continued with the exclusion of
relief is requested, the ground for the relief, the seven officers. The parties then proceeded to
and the evidence supporting the request. finalize and approve the Terms of Reference to settle
(v) The order either granting or denying an the differences of the parties by an Arbitral Tribunal
application for interim relief shall be binding and which was signed and later, the CIAC rendered a
upon the parties. decision in favor of the Cid spouses. Petitioner
(vi) Either party may apply with the court for contested the jurisdiction of the CIAC and assailed its
assistance in implementing or enforcing an decision, but the Court of Appeals upheld the
interim measure ordered by an arbitral jurisdiction of CIAC. Hence, this petition.
tribunal.
(vii) A party who does not comply with the Courts encourage the use of alternative methods of
order shall be liable for all damages, dispute resolution. When parties agree to settle their
resulting from noncompliance, including all disputes arising from or connected with construction
expenses, and reasonable attorney's fees, contracts, the Construction Industry Arbitration
paid in obtaining the order's judicial Commission (CIAC) acquires primary jurisdiction. It
enforcement. may resolve not only the merits of such controversies;
when appropriate, it may also award damages,
(d) Unless otherwise agreed by the parties, the interests, attorney's fees and expenses of litigation.
arbitral tribunal may, at the request of a party, order
any party to take such interim measures of protection Section 4 of Executive Order 1008 expressly vests in
as the arbitral tribunal may consider necessary in the CIAC original and exclusive jurisdiction over
respect of the subject matter of the dispute following disputes arising from construction contracts entered
the Rules in this Article. Such interim measures may into by parties that have agreed to submit their
include but shall not be limited to preliminary dispute to voluntary arbitration.
injunction directed against a party, appointment of
receivers or detention, preservation, inspection of
Here, the parties agreed to arbitrate in the CIAC with
property that is the subject of the dispute in
the issue of exclusion of the seven officers settled.
arbitration. Either party may apply with the court for
Petitioner continued participating in the arbitration
assistance in implementing or enforcing an interim
proceedings and even signed the Terms of Reference.
measure ordered by an arbitral tribunal.
Petitioner was estopped in questioning the
jurisdiction of the CIAC.
I. JUDICIAL REVIEW OF ARBITRATION
Petitioner assails the monetary awards given by the
1. Nature of Voluntary Arbitrators
arbitral tribunal for alleged lack of basis in fact and in
law. The SolGen counters that the basis for
PHILROCK V. CIAC (ty Ms. Izelle Fuentes gwapa for the petitioner's assigned errors with regard to the
digest haha) monetary awards is purely factual and beyond the
review of this Court. Besides, Section 19, EO 1008,
A complaint for damages was filed with the RTC by the expressly provides that monetary awards by the CIAC
Cid spouses against Philrock, Inc. and seven of its are final and unappealable. We disagree with the
officers and engineers in connection with the solicitor general. As pointed out earlier, factual
construction of the former's house. RTC dismissed the findings of quasi-judicial bodies that have acquired
case and referred to the CIAC pursuant to the parties' expertise are generally accorded great respect and
Agreement to Arbitrate with the CIAC. Due to even finality, if they are supported by substantial
disagreements as to whether moral and exemplary evidence.
damages and tort shall be included, breach of
contract and the inclusion of the seven officers therein

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The Court, however, has consistently held that proceeding governed by the ADR Act of 2004, its
despite statutory provisions making the decisions of Implementing Rules and Regulations (IRR) and the
certain administrative agencies "final," it still takes Special Rules of Court on Alternative Dispute
cognizance of petitions showing want of jurisdiction, Resolution (Special ADR Rules)
grave abuse of discretion, violation of due process,
denial of substantial justice or erroneous THE COURT INTERVENTION IS NOT PROPER. Petition
interpretation of the law. Voluntary arbitrators, by is dismissed for failure to observe the rules on court
the nature of their functions, act in a quasi-judicial intervention allowed by RA No. 9285 and the Special
capacity, such that their decisions are within the ADR Rules, specifically Rule 19.36 and Rule 19.37 of
scope of judicial review. the latter, in the pending arbitration proceedings of
the parties to this case.
2. Allowable court intervention
RA No. 9285 declares the policy of the State to
DFA V. BCA CORPORATION INTERNATIONAL & AD actively promote party autonomy in the resolution of
HOC ARBITRAL TRIBUNAL (digest by Izelle tysm <3) disputes or the freedom of the parties to make their
own arrangements to resolve their disputes. Towards
In an Amended Build-Operate-Transfer (BOT) this end, the State shall encourage and actively
Agreement dated April 5, 2002, petitioner DFA promote the use of Alternative Dispute Resolution as
awarded the Machine Readable Passport and Visa an important means to achieve speedy and impartial
Project (MRP/V Project) to respondent BCA justice and declog court dockets.
International Corporation.
Court intervention is allowed under RA No. 9285 in
In the course of implementing the MRP/V Project, the following instances:
conflict arose and petitioner sought to terminate the
Agreement. Respondent opposed the termination (1) when a party in the arbitration proceedings
and filed a Request for Arbitration on April 20, 2006. requests for an interim measure of protection;
The Arbitral Tribunal was constituted on June 29,
2009. (2) judicial review of arbitral awards by the Regional
On October 5, 2013, respondent manifested that it Trial Court (RTC); and
shall file an Amended Statement of Claims so that its
claim may conform to the evidence they have (3) appeal from the RTC decisions on arbitral awards
presented. Petitioner opposed respondent's to the Court of Appeals.
manifestation, arguing that such amendment at the
very late stage of the proceedings will cause undue The extent of court intervention in domestic
prejudice to its interests. However, the Arbitral arbitration is specified in the IRR of RA No. 9285, thus:
Tribunal gave respondent a period of time within
which to file its Amended Statement of Claims and
Art. 5.4. Extent of Court Intervention. In matters
gave petitioner time to formally interpose its
governed by this Chapter, no court shall intervene
objections
except in accordance with the Special ADR Rules.

Petitioner contends that the parties in this case have

Court intervention in the Special ADR Rules is allowed
agreed to refer any dispute to arbitration under the
through these remedies:
1976 UNCITRAL Arbitration Rules and to compel a
party to be bound by the application of a different
rule on arbitration such as the Alternative Dispute (1) Specific Court Relief, which includes Judicial Relief
Resolution (ADR) Act of 2004 or Republic Act (RA) No. Involving the Issue of Existence, Validity and
9285 transgresses such vested right and amounts to Enforceability of the Arbitral Agreement, Interim
vitiation of consent to participate in the arbitration Measures of Protection, Challenge to the
proceedings. Appointment of Arbitrator, Termination of Mandate
of Arbitrator, Assistance in Taking
Evidence, Confidentiality / Protective
Respondent argues that this Court has no jurisdiction
Orders, Confirmation, Correction or Vacation of
to intervene in a private arbitration, which is a special

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Award in Domestic Arbitration, all to be filed with the be made with the arbitral tribunal or to the extent
RTC; that the arbitral tribunal has no power to act or is
unable to act effectively, the request may be made
(2) a motion for reconsideration may be filed by a with the Court. The arbitral tribunal is deemed
party with the RTC on the grounds specified in Rule constituted when the sole arbitrator or the third
19.1; arbitrator, who has been nominated, has accepted
the nomination and written communication of said
(3) an appeal to the Court of Appeals through a nomination and acceptance has been received by the
petition for review under Rule 19.2 or through a party making the request.
special civil action for certiorari under Rule 19.26;
(b)The following rules on interim or provisional relief
shall be observed:
(4) a petition for certiorari with the Supreme Court
(1)Any party may request that provisional
from a judgment or final order or resolution of the
relief be granted against the adverse party.
Court of Appeals, raising only questions of law.
(2) Such relief may be granted:
(i)to prevent irreparable loss or
Order or resolution of the Court of Appeals and only injury;
questions of law may be raised. There have been
(ii)to provide security for the
instances when we overlooked the rule on hierarchy
performance of any obligation;
of courts and took cognizance of a petition for
(iii)to produce or preserve any
certiorari alleging grave abuse of discretion by the
evidence; or
Regional Trial Court when it granted interim relief to
(iv)to compel any other appropriate
a party and issued an Order assailed by the petitioner, act or omission.
considering the transcendental importance of the (3)The order granting provisional relief may
issue involved therein or to better serve the ends of be conditioned upon the provision of
justice when the case is determined on the merits security or any act or omission specified in
rather on technicality. the order.
(4)Interim or provisional relief is requested
However, in this case, the appeal by certiorari is not by written application transmitted by
from a final Order of the Court of Appeals or the reasonable means to the Court or arbitral
Regional Trial Court, but from an interlocutory order tribunal as the case may be and the party
of the Arbitral Tribunal; hence, the petition must be against whom the relief is sought, describing
dismissed. in appropriate detail the precise relief, the
party against whom the relief is requested,
3. Court Intervention under RA 9285 (Sections the grounds for the relief, and the evidence
27, 28, 29, 39, 40, 41, 42 and Chapter 7[B]) supporting the request.
(5)The order shall be binding upon the
SECTION 27. What Functions May be Performed by parties.
Appointing Authority. — The functions referred to in (6)Either party may apply with the Court for
Articles 11(3), 11(4), 13(3) and 14(1) of the Model Law assistance in implementing or enforcing an
shall performed by the Appointing Authority, unless interim measure ordered by an arbitral
the latter shall fail or refuse to act within thirty (30) tribunal.
days from receipt of the request in which case the (7)A party who does not comply with the
applicant may renew the application with the Court. order shall be liable for all damages resulting
from noncompliance, including all expenses,
SECTION 28. Grant of Interim Measure of Protection. and reasonable attorney's fees, paid in
(a) It is not incompatible with an arbitration obtaining the order's judicial enforcement.
agreement for a party to request, before constitution
of the tribunal, from a Court an interim measure of SECTION 29. Further Authority for Arbitrator to
protection and for the Court to grant such measure. Grant Interim Measure of Protection. — Unless
After constitution of the arbitral tribunal and during otherwise agreed by the parties, the arbitral tribunal
arbitral proceedings, a request for an interim may, at the request of a party, order any party to take
measure of protection, or modification thereof, may such interim measures of protection as the arbitral

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tribunal may consider necessary in respect of the arbitral award shall be disregarded by the Regional
subject-matter of the dispute following the rules in Trial Court.
Section 28, paragraph 2. Such interim measures may
include but shall not be limited to preliminary (atty: vacate award, not appeal. This is because rule
injunction directed against a party, appointment of 65 requires that there must be no other sufficient
receivers or detention, preservation, inspection of remedy!!!!; Section 24 – grounds for vacating award)
property that is the subject of the dispute in
arbitration. Either party may apply with the Court for FOREIGN ARBITRAL AWARDS
assistance in implementing or enforcing an interim SECTION 42. Application of the New York Convention.
measure ordered by an arbitral tribunal. — The New York Convention shall govern the
recognition and enforcement of arbitral awards
SECTION 39. Court to Dismiss Case Involving a covered by said Convention.
Construction Dispute. — A Regional Trial Court
before which a construction dispute is filed shall, The recognition and enforcement of such arbitral
upon becoming aware, not later than the pre-trial awards shall be filed with the Regional Trial Court in
conference, that the parties had entered into an accordance with the rules of procedure to be
arbitration agreement, dismiss the case and refer the promulgated by the Supreme Court. Said procedural
parties to arbitration to be conducted by the CIAC, rules shall provide that the party relying on the award
unless both parties, assisted by their respective or applying for its enforcement shall file with the
counsel, shall submit to the Regional Trial Court a court the original or authenticated copy of the award
written agreement exclusively for the Court, rather and the arbitration agreement. If the award or
than the CIAC, to resolve the dispute. agreement is not made in any of the official
languages, the party shall supply a duly certified
DOMESTIC AWARDS translation thereof into any of such languages.
SECTION 40. Confirmation of Award. — The
confirmation of a domestic arbitral award shall be The applicant shall establish that the country in which
governed by Section 23 of R.A. No. 876. foreign arbitration award was made is a party to the
New York Convention.
A domestic arbitral award when confirmed shall be
enforced in the same manner as final and executory If the application for rejection or suspension of
decisions of the Regional Trial Court. enforcement of an award has been made, the
Regional Trial Court may, if considers it proper, vacate
The recognition and enforcement of an award in an its decision and may also, on the application of the
international commercial arbitration shall be party claiming recognition or enforcement of the
governed by Article 35 of the Model Law. award, order the party to provide appropriate
security.
The confirmation of a domestic award shall be made
by the Regional Trial Court in accordance with the 4. Court intervention under the IRR of RA 9285
Rules of Procedure to be promulgated by the
Supreme Court. Article 5.4. Extent of Court Intervention. In matters
governed by this Chapter, no court shall intevene
A CIAC arbitral award need not be confirmed by the except in accordance with the Special ADR Rules.
Regional Trial Court to be executory as provided
under E.O. No. 1008. 5. Court intervention under Special ADR Rules
(Rules 3, 5, 7, 8, 9, 10 and 11)
SECTION 41. Vacation Award. — A party to a
domestic arbitration may question the arbitral award
(super long huhu please refer nalang to A.M. No. 07-
with the appropriate Regional Trial Court in
11-08-SC: SPECIAL RULES OF COURT ON ALTERNATIVE
accordance with rules of procedure to be
DISPUTE RESOLUTION)
promulgated by the Supreme Court only on those
grounds enumerated in Section 25 of Republic Act No.
876. Any other ground raised against a domestic 6. Limits of judicial intervention

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UNIWIDE V. TITAN (refer to Module 1 for the facts) DIFFERENCE BETWEEN VOLUNTARY AND
COMPULSORY ARBITRATION:
EO 1008 created an arbitration facility to which the
construction industry in the Philippines can have Compulsory – arbitrator is a government agency
recourse. The EO was enacted to encourage the early which has the authority to investigate and make an
and expeditious settlement of disputes in the award; Voluntary – arbitrator is not part of the
construction industry, a public policy the governmental unit.
implementation of which is necessary and important
for the realization of national development goals. The arbitration provided by the POA is compulsory,
while the nature of the arbitration in the RAWOP is
Aware of the objective of voluntary arbitration in the voluntary.
labor field, in the construction industry, and in any
other area for that matter, the Court will not assist The provision on mandatory resort to arbitration,
one or the other or even both parties in any effort to freely entered into by the parties, must be held
subvert or defeat that objective for their private binding against them. POA HAS NO JURISDICTION.
purposes. The Court will not review the factual
findings of an arbitral tribunal upon the artful However, Benguet is already estopped from
allegation that such body had "misapprehended questioning POA’s jurisdiction. (It participated in the
facts" and will not pass upon issues which are, at proceedings before POA, it filed an appeal with the
bottom, issues of fact, no matter how cleverly MAB and participated in its proceedings, filed an MR
disguised they might be as "legal questions." The with the MAB) Benguet should have immediately
parties here had recourse to arbitration and chose the challenged the POA’s jurisdiction by a special civil
arbitrators themselves; they must have had action for certiorari when POA ruled that it has
confidence in such arbitrators. The Court will not, jurisdiction over the dispute.
therefore, permit the parties to relitigate before it the
issues of facts previously presented and argued ____________________________________
before the Arbitral Tribunal, save only where a clear
showing is made that, in reaching its factual IV. AD HOC ARBITRATION
conclusions, the Arbitral Tribunal committed an error
so egregious and hurtful to one party as to constitute
A. CONCEPT
a grave abuse of discretion resulting in lack or loss of
jurisdiction.
IRR OF ADR ACT, SECTION D (1)
BENGUET CORPORATION V. DENR-MAB (refer to Ad hoc arbitration is arbitration administered by an
Module 1 for the facts) arbitrator or by the parties themselves. An arbitration
administered by an institution shall be regarded as ad
SEC 2 RA 876 states that a submission or a contract hoc arbitration if such institution is not a permanent
whereby parties agree to settle by arbitration shall be or regular arbitration institution in the Philippines.
valid and enforceable.
IRR OF ADR ACT, ARTICLE 4.21 AND 5.20
SEC 32 of RA 9285 or the ADR Act states that domestic Ad hoc international commercial arbitration is
arbitration shall still be governed by RA 876. Clearly, commenced upon receipt by the respondent of a
a contractual stipulation that requires prior resort to request for that dispute to be referred to arbitration.
voluntary arbitration before the parties can go In ad hoc domestic arbitration, it is commenced upon
directly to court is not illegal and is in fact promoted the delivery to the respondent of a demand for
by the State. It is a valid contractual stipulation and arbitration
must be adhered to by the parties.
B. WHO APPOINTS AD HOC ARBITRATORS
J.G. Realty’s contention that because POA’s mandate
is to arbitrate disputes, prior resort to arbitration is The National President of the IBP is the default
unavailing is MISPLACED. appointing authority in ad hoc arbitrations.

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The parties may generally apply to the Philippine If a party requests a hearing or if the arbitral tribunal
courts to act as the appointing authority if (i) the decides to hold one, the hearing shall be held in
institution fails to perform its duty as appointing person unless the parties agree otherwise (Art. 36,
authority within reasonable time in an institutional par. 3). However, the arbitral tribunal may prescribe
arbitration, and (ii) if the National President of the IBP conditions and adopt appropriate measures where in
or its duly authorized representative fails to act within person hearings are not possible, such as in times of
the allotted period in an ad hoc arbitration (Special crisis, national emergency, or a pandemic. In
ADR Rules, Rule 6.1(a)(b) in relation to ADR Act IRR, appropriate cases, the arbitral tribunal may direct the
article 4.11 (d)). examination of witnesses, including expert witnesses,
by means of telecommunication (such as audio or
Arbitrators in ad hoc arbitrations will have to enter video conference) that do not require their physical
into an arrangement with the parties for the deposit presence at the place of the hearing (Art. 36, par. 4).
for arbitration expenses and arbitrator’s fees subject
to liquidation and return of any balance, if any, after 2. Case management conference
the arbitration is terminated. The PDRCI have on
occasion agreed to provide secretariat services to ad Where a party requests a virtual hearing or the
hoc arbitrations for a fee, which includes fundholding arbitral tribunal decides that a virtual hearing is
services for the deposits of the parties. necessary to provide a fair and efficient process of
resolving the dispute, it shall first issue a procedural
___________________________________________ order inviting the parties to an online case
management conference to consult them on the
V. INSTITUTIONAL ARBITRATION IN THE PHILIPPINES following matters:

A. PDRCI – PHILIPPINE DISPUTE RESOLUTION a. Procedural Timetable or Revised Procedural

CENTER Timetable
b. Terms of Reference or Revised Terms of Reference
Practice Note No. 1, effective August 3, 2020, c. Determination of issues
Guidelines on Online Meetings and Virtual Hearings d. Submission of further written statements, witness
statements, documents, expert reports, and other
evidence
1. Discretion of arbitral tribunal to hold online
e. Particulars of applicable procedural rules other
meetings and virtual hearings
than the Rules
f. Appointment of the arbitral tribunal’s expert, if
The arbitral tribunal under Article 23 of the PDRCI
necessary
Arbitration Rules (“Rules”) may conduct the
g. Authority of arbitral tribunal to act ex aequo et
arbitration in such manner as it considers
bono
appropriate, including holding online meetings and h. Creation of an online case record Practice Note No.
virtual hearings, provided that the parties are treated 1, Guidelines on Online Meetings and Virtual Hearings
with equality and given a reasonable opportunity to
i. Adoption of an expedited proceeding under Art. 52
present their case. Under the same Article, the
of the Rules
arbitral tribunal shall provide a fair and efficient
j. Other relevant matters
process of resolving the dispute, avoiding
unnecessary delay and expense.
The parties may agree in the Terms of Reference (or
in a revised Terms of Reference, if they have agreed
As a general rule, the arbitral tribunal is not required to one) to adopt this Guidelines as part of the
to hold a hearing for the presentation of evidence, arbitration procedure or to further limit the issues to
including expert testimony, or for oral argument be determined at the hearing, among others. The
unless requested by a party (Art. 23, par. 3). In the parties may sign or conform to the Terms of
absence of such a request, the arbitral tribunal may Reference electronically. Where the parties are
decide whether to hold such hearings or whether the unable to sign or conform to the Terms of Reference
proceedings shall be conducted on the basis of within a reasonable time, the arbitral tribunal may
documents and other materials (Id.).

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issue the Terms of Reference in the form of a 3. Further written statements shall be printed single
procedural order. spaced on letter size paper using twelve (12) points
font size, with a one-inch (1”) margin on all sides. The
At the close of the case management conference, the arbitral tribunal may limit the length or pages of the
arbitral tribunal shall issue a procedural order written statements, after consultation with the
confirming the matters agreed upon by the parties, parties. Practice Note No. 1, Guidelines on Online
including the revision of the Procedural Timetable Meetings and Virtual Hearings
and the Terms of Reference, as well as the matters
not agreed upon by the parties but left to the 4. Witness statements shall be in narrative or
discretion of the arbitral tribunal. question-and-answer (“Q&A”) form, signed under
oath or affirmation by the witness(es), and shall
The procedural order shall explicitly state if the discuss each issue separately. The arbitral tribunal
arbitral tribunal will adopt this Guidelines as part of may limit the length of testimony on each issue by
the arbitration procedure. The procedural order shall limiting the number of paragraphs, in case of a
also set the dates and times of the virtual hearings narrative statement, or the number of Q&As per
and state the contact details of the parties, their issue, after consultation with the parties. The witness
representatives, counsel, and the witnesses for statements need not include any legal arguments,
purposes of setting up the virtual hearing room. which may be discussed through further written
statements or in closing memorials that may be
3. Minimum standards for virtual hearings allowed by the arbitral tribunal. No joint witness
statement shall be allowed.
Atty: take note that there is a requirement for the
pixel or DPI. (pics) 5. Claimant’s evidence shall be marked as Exhs. “C,”
“C-1,” “C-2,” et sequentia, while respondent’s
evidence shall be marked as Exhs. “R,” R-1,” “R-2,” et
Where the parties have not agreed on the procedure
sequentia. In case of multiple parties, the arbitral
for conducting the virtual hearing, the parties and the
tribunal may adopt any appropriate marking to
tribunal shall observe the following minimum
distinguish the evidence submitted by the parties.
standards:
Common evidence need not be marked separately.
Witness statements need not be marked as evidence.
1. Within the period stated in the Procedural
Timetable, any further written statements, witness
6. On the first page of their respective bundles of
statements, documents, expert reports, and other
evidence, the parties shall each submit a summary of
evidence shall be submitted to the Secretariat in
their respective evidence, containing the (a) exhibit
electronic form for uploading to the online case
marking, (b) a description of each evidence,
record at least five days before the initial date of the
sufficiently detailed to distinguish it from other
virtual hearings. The parties shall simultaneously
evidence, and (c) if desired, the fact(s) in issue proved
communicate the same documents in electronic form
and the legal issue(s) supported by the evidence. The
to the other parties.
arbitral tribunal shall have the documents paginated
consecutively. It may also require the submission of a
2. Further written statements, witness statements,
common bundle of documents or limit the file size of
expert reports, and black-and white documents shall
electronic documents. Whenever necessary, the
be submitted and communicated in .pdf file format
arbitral tribunal shall give the parties an equal time to
with a resolution of at least 300 dpi. Black-and-white
submit a summary or a revised summary of their
documents with text font sizes smaller than 10 points evidence after the virtual hearing.
shall have a resolution of at least 400 dpi. Colored
documents shall be submitted and communicated in
7. The arbitral tribunal may give the parties’ experts
.pdf file format with a resolution of 600 dpi. Colored
an equal opportunity to respond to each other’s
photographs shall be in .jpg or .png format with a
reports and to submit their rebuttal expert reports at
resolution of 600 dpi.
least five days before their scheduled examination.

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8. Any evidence submitted after the period allowed the arbitral tribunal, the parties, or any other person
by the arbitral tribunal or this Guidelines shall not be except to respond to the examination questions.
considered by the arbitral tribunal, subject to Art. 39,
par. 2 (Closure of Hearings). 7. The arbitral tribunal may exclude or remove from
the virtual hearing any witness or any other person,
Atty: once you submit an e-bundle, that is now the except a party or its representative.
court’s. you cannot just withdraw or change it.
8. Any witness who has no access to adequate
4. Conduct of virtual hearings telecommunications facilities or services may avail of
the virtual hearing services of PDRCI. The party
The virtual hearing shall be conducted in the following offering the witness shall make an advance deposit of
manner: the cost of PDRCI’s virtual hearing services.

1. All online meetings and virtual hearings shall be 9. During oral arguments, unless the arbitral tribunal
recorded by the Secretariat. The recording shall be requires written submissions or responses by the
uploaded to the online case record after each virtual parties, oral submissions and responses shall suffice.
hearing session. Written submissions may be responded to orally or in
writing, while oral submissions shall be responded to
2. The arbitral tribunal and the parties shall have full only orally. Where appropriate, the tribunal may
video and audio access to the witness being allow further oral or written statements such as
examined. position papers or memoranda on any issue raised
during the virtual hearing. A party shall have at least
one day to make written submissions or responses,
3. The arbitral tribunal, the parties, and the witness
when allowed by the arbitral tribunal.
being examined shall have full access to any portion
of the online case record and share it on screen during
the virtual hearing. 10. Hearings not requiring the examination of
documents or witnesses may be conducted by audio
conference. 11. The arbitral tribunal may request the
4. Prior to being examined, the witness shall be sworn
Secretariat to set a practice run at least three days
to an oath or affirmation by the arbitral tribunal or by
before the initial virtual hearing. 12. The arbitral
the file counsel, if there is one.
tribunal may adopt any other appropriate procedure
in consultation with the parties.
5. The witness shall be alone in the examination room
or, if in the presence of any party, counsel, other
5. Cancellation of virtual hearings
witnesses, or authorized persons, shall be at least two
meters away from the party, counsel, other
witnesses, or authorized persons as viewed remotely The parties shall be responsible for their attendance
by the arbitral tribunal with the use of a second and those of their witnesses during the virtual
camera. hearing. The parties and their witnesses shall also be
responsible for the adequacy and stability of their
respective telecommunications connections for the
6. While under examination, the witness may refer to
Practice Note No. 1, Guidelines on Online Meetings
his or her notes or references but shall not be aided
and Virtual Hearings duration of the virtual hearing.
by any person during the testimony. The witness shall
However, in case of interruption of the connection for
participate in the virtual hearing using an electronic
more than one (1) hour, or similar acts or events
device separate from that used by the parties or by
beyond the control of the parties or the tribunal, the
the arbitral tribunal. During the testimony, the
arbitral tribunal may suspend or adjourn the virtual
witness shall not open or use any other electronic
hearing.
device or application apart from the device and
application used to connect to the virtual hearing.
Likewise, while under examination, the witness shall In case of serious illness or death of the party,
not communicate, or attempt to communicate, with witness, or counsel, the arbitral tribunal may cancel,
suspend, or reschedule the virtual hearing, without
prejudice to Art. 38, par. 2 (Default) in case of a

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party’s failure, despite notice, to attend a virtual NOTICE AND CALCULATION OF PERIOD OF TIME
hearing without sufficient cause.
ARTICLE 2
6. Cost of virtual hearings A notice, including a request, communication or
proposal, may be transmitted by any means that
The cost of virtual hearings shall form part of the provides or allows for a record of its transmission.
administrative expenses of the arbitration.
If an address has been designated by a party
7. Online meetings specifically for this purpose or authorized by the
arbitral tribunal, a notice shall be delivered to the
The arbitral tribunal may conduct online meetings in party at such address, and if so delivered shall be
the same manner as virtual hearings. deemed to have been received. Delivery by electronic
means, such as email or facsimile, may only be made
to an electronic address so designated by the party or
MODEL ARBITRATION CLAUSE
authorized by the arbitral tribunal.
SECTION 1. "Any dispute, controversy or claim arising
In the absence of such designation or authorization, a
out of or relating to this contract, or the breach,
notice is:
termination or invalidity thereof shall be settled by
arbitration in accordance with the PDRCI Arbitration
Rules in force at the time of the commencement of 1. received, if it is physically delivered to the
the arbitration." addressee; or
2. deemed to have been received, if it is
delivered at the place of business, habitual
SCOPE OF APPLICATION
residence, or mailing address of the
addressee.
ARTICLE 1.
4. If after reasonable efforts, delivery cannot
These rules shall be known as the PDRCI Arbitration
be made in accordance with paragraphs 2 or
Rules ("Rules"). The PDRCI Guidelines on Fees and its
3 of this Article, a notice is deemed received
Schedules ("Guidelines on Fees"; Annex B of the
if it is sent to the addressee's last-known
Rules), as may be amended by PDRCI from time to
place of business, habitual residence or
time, shall form part of the Rules. By agreeing to
mailing address by registered letter or any
arbitrate under the Rules, the parties are deemed to other means that provides a record of
have accepted the Guidelines on Fees.
delivery or of attempted delivery.
5. A notice is deemed to have been received on
Where parties have agreed that disputes, the day it is delivered in accordance with
controversies or claims ("Disputes") between them paragraphs 2, 3, or 4 of this Article or
shall be referred to arbitration under the Rules, then attempted to be delivered in accordance
such Disputes shall be settled in accordance with the with paragraph 4 of this Article. A notice
Rules, subject to such modification as the parties may transmitted by electronic means is deemed
agree in writing. received on the day it is sent, except a Notice
of Arbitration, which is deemed received on
The Rules shall apply to arbitrations commenced on the day it reaches the party's electronic
or after I January 2015, unless the parties have address.
expressly agreed to apply a particular version of the 6. For purposes of calculating the period of
Rules. time under the Rules, such period shall begin
to run on the day following the day when a
Where any of the Rules is in conflict with a provision notice is received or deemed received. If the
of the law applicable to the arbitration from which the last day of such period is an official holiday
parties cannot derogate, that provision of the law or a non-business day at the residence or
shall prevail. place of business of the addressee, the
period is extended until the first business
day that follows. Official holidays or non-

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 GANGO, KM | EH302 | ADR

business days occurring within the period of RESPONSE/ANSWER TO THE NOTICE TO

time are included in calculating the period. ARBITRATION

NOTICE OF ARBITRATION ARTICLE 5

Within thirty (30) days from receipt of PDRCI's notice
ARTICLE 4 to submit the response to the Notice of Arbitration,
The party or parties initiating recourse to arbitration the respondent shall communicate to the PDRCI a
("Claimant") shall communicate to PDRCI a notice of response to the Notice of Arbitration ("Response to
arbitration ("Notice of Arbitration"). the Notice of Arbitration"), which shall include:
The names, addresses and other contact
The arbitration shall be deemed to commence on the details of each respondent;
date when PDRCI receives the Notice of Arbitration A response to the information set forth in
and the payment of the Filing Fee in accordance with the Notice of Arbitration;
the Guidelines on Fees, whichever is later. A brief description of any counterclaim, or
any other claim for the purpose of set-off,
indemnity or contribution, if any, including
The Notice of Arbitration shall include the following:
an estimate of the principal and alternative
a. A demand that the dispute be referred to
amounts involved, and the reliefs sought;
arbitration; b. The names, addresses and
and
other contact details of the parties; c. A
Proposals regarding the appointment of a
reference to the arbitration clause or
sole arbitrator or an arbitrator referred to in
arbitration agreement; d. A reference to the
Articles 7 (Joinder of Additional Parties) and
contract or legal relationship involved in the
8 (Claims between Multiple Parties).
dispute; e. A brief description of the claim
and an estimate of the amount involved,
The Response to the Notice of Arbitration may also
including any claim in the alternative; f. The
include:
relief sought; g. A proposal as to the number
A plea that an arbitral tribunal to be
of arbitrators (one or three), if the parties
constituted under the Rules lacks
have not previously agreed on such number;
jurisdiction; and The Statement of Defense
and; h. Proposals regarding the appointment
referred to in Article 28.
of a sole arbitrator or an arbitrator referred
to in Articles 7 (Joinder of Additional Parties)
and 8 (Claims between Multiple Parties). The respondent shall pay a Provisional Advance in
accordance with the Guidelines on Fees. Unless the
Provisional Advance on cost is paid by the
The Notice of Arbitration may also include the
respondent, the arbitral tribunal shall not act on any
Statement of Claim referred to in Article 27.
counterclaim, or any other claim or affirmative relief
sought by respondent.
The submission of a Notice of Arbitration shall be
accompanied by payment of a non-refundable Filing
The constitution of the arbitral tribunal shall not be
Fee in accordance with the Guidelines on Fees. The
hindered by any controversy with respect to a
claimant shall also pay a provisional advance on cost
respondent's failure to communicate a Response to
("Provisional Advance") in accordance with the
the Notice of Arbitration, or an incomplete or late
Guidelines on Fees.
Response to the Notice of Arbitration, which shall be
finally resolved by the arbitral tribunal.
PDRCI shall not act on the Notice of Arbitration,
including any proposals for the appointment of
REPRESENTATION AND ASSISTANCE
arbitrators, and the respondent shall not be required
to submit a response to the Notice of Arbitration,
unless the Provisional Advance has been paid. ARTICLE 6
Each party may be represented or assisted by any
person chosen by it. The participation of any person
in the arbitration shall be subject to the discretion of
the arbitral tribunal.

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COMPOSITION OF THE ARBITRAL TRIBUNAL If either party fails to appoint an arbitrator, PDRCI, as
appointing authority, shall appoint the arbitrator for
ARTICLE 11 - Number of Arbitrators that party.
If the parties have not previously agreed on the
number of arbitrators, PDRCI shall determine the If within thirty (30) days after the confirmation of the
number of arbitrators to be appointed, taking into second arbitrator, the two arbitrators have not
account the circumstances of the case. agreed on the choice of the Chair, PDRCI shall appoint
the Chair in the same manner as a sole arbitrator.
ARTICLE 12 - Appointment of Arbitrators
In arbitrations under the Rules, the appointment of ARTICLE 15 - Multiple Parties and Arbitrators,
arbitrators, whether as a sole arbitrator or an arbitral Constitution of Arbitral Tribunal
tribunal, shall be subject to confirmation by PDRCI. By For the purpose of Article 14(1), where there are
accepting their appointment, the arbitrators are multiple parties as claimants or respondents and
deemed to have accepted the Rules and the unless the parties have agreed to another method of
Guidelines on Fees. appointment of arbitrators, the multiple claimants or
the multiple respondents shall jointly appoint an
ARTICLE 13 - Sole Arbitrators arbitrator.
If a sole arbitrator is to be appointed, the parties shall
propose the name of one or more nominees for sole If the parties have agreed that the arbitral tribunal
arbitrator in the Notice of Arbitration or in the shall be composed of a number of arbitrators other
Response to the Notice of Arbitration, or in a than one or three, the arbitrators shall be appointed
subsequent communication within the time allowed according to the method agreed upon by the parties.
by PDRCI.
The arbitral tribunal is deemed constituted when the
If within thirty (30) days from receipt by a party of appointment of the sole arbitrator or of the third
another party's proposal made in accordance with arbitrator, in case of an arbitral tribunal, has been
paragraph 1 of this Article, the parties have not confirmed by PDRCI. PDRCI shall send a notice of the
reached agreement on the choice of a sole arbitrator confirmation to the parties and the arbitral tribunal,
or either party fails to make any proposal, the sole expressly providing for the date of the arbitral
arbitrator shall be appointed by PDRCI. tribunal's constitution.

Unless both parties agree on a procedure for the In case of failure to constitute the arbitral tribunal for
appointment of the sole arbitrator, PDRCI shall any cause under the Rules, PDRCI shall, at the request
determine the appropriate procedure for the case. of any party, constitute the arbitral tribunal and in
doing so may revoke any appointment or
In making the appointment, PDRCI shall ensure the confirmation already made and appoint or reappoint
appointment of a qualified and independent each of the arbitrators and designate one of them as
arbitrator and, when appropriate, it shall appoint an the Chair.
arbitrator of a nationality other than the nationalities
of the parties. ARBITRATION PROCEEDINGS: GENERAL PROVISIONS

ARTICLE 14 - Arbitral Tribunals ARTICLE 23

If three arbitrators are to be appointed, each party Subject to the Rules, the arbitral tribunal may conduct
may propose one arbitrator in the Notice of the arbitration in such manner as it considers
Arbitration and one arbitrator in the Response to the appropriate, provided that the parties are treated
Notice of Arbitration, or in a subsequent with equality and given a reasonable opportunity of
communication within the time allowed by PDRCI. presenting its case. The arbitral tribunal shall provide
Unless the parties agree otherwise, the two a fair and efficient process of resolving the dispute,
arbitrators so appointed, upon confirmation of their avoiding unnecessary delay and expense.
appointments, shall choose the third arbitrator, who
upon confirmation of his appointment, will act as the
Chair of the arbitral tribunal.

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As soon as practicable after its constitution and after contact details of the parties, their representatives
consulting the parties, the arbitral tribunal shall and counsel, if any; the addresses to which notices
establish the procedural timetable of the arbitration. and communications arising in the course of the
The arbitral tribunal may likewise extend or shorten arbitration may be made; a summary of the parties'
any period of time in the procedural timetable or respective claims and of the relief sought by each
prescribed under the Rules, after consulting the party, together with the amounts of such claims,
parties. including, to the extent possible, an estimate of the
value of non-monetary claims; a list of issues to be
If so requested by a party, the arbitral tribunal shall determined; the names, addresses and other contact
hold hearings at an appropriate stage of the details of each of the arbitrators; the place of the
proceedings for the presentation of evidence, arbitration; the particulars of the applicable
including expert testimony, or for oral argument. In procedural rules other than the Rules and, if
the absence of such a request, the arbitral tribunal necessary, reference to the power conferred upon
shall decide whether to hold such hearings or the arbitral tribunal to act as amiable compositeur or
whether the proceedings shall be conducted on the to decide ex aequo et bono; and the parties’
basis of documents and other materials. preference for a file counsel to be assigned to the
case.
All communications between the arbitral tribunal and
the parties, and vice versa, shall at the same time be The Terms of Reference may be in the form of a
communicated by the communicating party or by the procedural order issued by the arbitral tribunal or in
arbitral tribunal to all other parties and PDRCI. Such the form of a joint submission by the parties or in any
communications shall be made at the same time, other form. It shall be issued within fifteen (15) days
except as otherwise permitted by the arbitral tribunal from the date of the receipt of the file by the arbitral
under the applicable law. tribunal. Once issued, the same shall be reviewed and
signed by the parties and the arbitral tribunal.
PLACE OF ARBITRATION
If a party refuses or is unable to sign the Terms of
ARTICLE 24 Reference, the arbitration shall proceed on the basis
If the parties have not previously agreed on the place of the Terms of Reference signed by at least one party
of arbitration, the place of arbitration shall be and the arbitral tribunal.
determined by the arbitral tribunal, having regard to
the circumstances of the case. The award shall be The issues defined under the Terms of Reference may
deemed to have been made at the place of be amended, as the arbitral tribunal may deem
arbitration. appropriate, taking into account the nature of the
claims defined by the parties in their Statements of
The arbitral tribunal may meet at any location it Claim or Statement of Defense.
considers appropriate for deliberations. Unless
otherwise agreed by the parties, the arbitral tribunal STATEMENT OF CLAIM
may also meet at any location it considers
appropriate for any other purpose, including Atty: everything must be included here but not the
hearings. judicial affidavit of the parties.

TERMS OF REFERENCE ARTICLE 27

The claimant shall communicate its statement of
ARTICLE 26 claim in writing ("Statement of Claim") to PDRCI, to
As soon as the arbitral tribunal has received the files respondent and to each of the arbitrators within a
from PDRCI, the arbitral tribunal shall prepare on the period of time to be determined by the arbitral
basis of the parties' submissions and, if appropriate, tribunal. The claimant may elect to treat the Notice of
upon consultation with the parties, a document Arbitration as the Statement of Claim, provided that
defining its terms of reference ("Terms of the Notice of Arbitration also complies with the
Reference"). This document shall include the requirements of paragraphs 2 to 4 of this Article.
following particulars: the names, addresses and other

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The Statement of Claim shall include the following The provisions of Article 27(2) shall apply to a
particulars: The names, addresses and other contact counterclaim and any other claim relied on for the
details of the parties; A statement of the facts purpose of a set-off.
supporting the claim; The points at issue; The legal
grounds or arguments supporting the claim; The Upon the filing of the Statement of Defense and the
value of the claims and the amounts involved, or if the counterclaim, or any other claim, PDRCI shall
relief sought is non-monetary, an estimate thereof; determine the respondent's Final Advance and shall
and The relief sought. require respondent to pay the same, less any
amounts paid by way of Provisional Advance, in
A copy of any contract or other legal instrument out accordance with the Guidelines on Fees.
of or in relation to which the dispute arises and of the
arbitration agreement shall be annexed to the !!!ARTICLE 29!!!
Statement of Claim.
Amendment to the Claim or Defense - In the course
The Statement of Claim shall, as far as possible, be of the arbitral proceedings, a party may amend or
accompanied by all documents and other evidence supplement its claim or defense, including a
relied upon by the claimant, or contain references to counterclaim or any other claim for the purpose of a
them. set-off, unless the arbitral tribunal considers it
inappropriate to allow such amendment or
Upon the filing of the Statement of Claim, PDRCI shall supplement having regard to the delay in making it or
determine the amount of claimant's final advance on prejudice to other parties or any other circumstances.
cost ("Final Advance") and shall require the claimant However, a claim or defense, including a counterclaim
to pay the same, less any amounts paid by way of or any other claim for the purpose of a set-off, may
Provisional Advance, in accordance with the not be amended or supplemented in such a manner
Guidelines on Fees. that the amended or supplemented claim or defense
falls outside the jurisdiction of the arbitral tribunal.
STATEMENT OF DEFENSE
PLACE AS TO THE JURISDICTION OF THE ARBITRAL
ARTICLE 28 TRIBUNAL
Within a period of time to be determined by the
arbitral tribunal, the respondent shall communicate ARTICLE 30
its statement of defense in writing ("Statement of The arbitral tribunal shall have the power to rule on
Defense") to PDRCI, to claimant and to each of the objections that it has no jurisdiction, including any
arbitrators. The respondent may elect to treat the objections with respect to the existence or validity of
Response to the Notice of Arbitration as the the arbitration clause or arbitration agreement, or
Statement of Defense, provided that the Response to concerning whether all of the claims made in the
the Notice of Arbitration also complies with the arbitration may be determined in a single arbitration.
requirements of paragraph 2 of this Article.
An arbitration clause forming part of a contract and
The Statement of Defense shall reply to the that provides for arbitration under the Rules shall be
particulars required by Article 27(2) b to f. The treated as an agreement independent of the other
Statement of Defense shall, as far as possible, be terms of the contract. A decision by the arbitral
accompanied by all documents and other evidence tribunal that the contract is void shall not
relied upon by the respondent, or contain references automatically entail the invalidity of the arbitration
to them. clause.

In the Statement of Defense, or at a later stage upon Atty: There are other grounds in which you can claim
the discretion of the arbitral tribunal, respondent may damages. Provisions on quasi-delict are important.
make a counterclaim, or rely on any other claim for AN ARBITRATION CLAUSE SIMPLY GIVES THE PARTIES
the purpose of a set-off provided that the arbitral THE VENUE. But the substance of the claim is not
tribunal has jurisdiction over it. necessarily contractual in nature.

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A plea that the arbitral tribunal does not have The arbitral tribunal shall rule on a plea concerning its
jurisdiction, or that the claims made in the arbitration jurisdiction, either as a preliminary question or in an
may not be determined in a single arbitration, shall be award on the merits. The arbitral tribunal may
raised not later than in the Statement of Defense or, continue the arbitral proceedings and make an award,
with respect to a counterclaim or any other claim for notwithstanding any pending challenge to its
the purpose of set-off, in the reply thereto. A party is jurisdiction before a court if allowed under the
not precluded from raising such a plea by the fact that applicable law.
it has appointed, or participated in the appointment
of, an arbitrator. A plea that the arbitral tribunal is In cases when the propriety of a single or
exceeding the scope of its authority shall be raised as consolidated arbitration is in issue, PDRCI shall decide
soon as the matter alleged to be beyond the scope of whether and to what extent the arbitration shall
its authority is raised during the proceedings. proceed. The arbitration shall proceed in accordance
However, the arbitral tribunal may admit a later plea with Article 10 (Consolidation of Arbitrations).
if it considers the delay justified.
FURTHER WRITTEN STATEMENTS
Recit: can the arbitral tribunal rule on the motion to
suspend because it has no jurisdiction? Yes. ARTICLE 31
How about validity of contract containing an The arbitral tribunal shall decide which further
arbitration clause? A decision by the arbitral tribunal written statements, in addition to the Statement of
that the contract is void shall not automatically entail Claim and the Statement of Defense, shall be required
the invalidity of the arbitration clause. from the parties or may be presented by them. The
Who has the burden of proof in arbitration arbitral tribunal shall fix the periods of time for
proceedings? In ordinary civpro, it is on whoever communicating such statements.
alleges something. In arbitration, each party
(Article35).
CASE MANAGEMENT CONFERENCE AND
Should the court determine admissibility of evidence?
PROCEDURAL TIMETABLE
The arbitral tribunal shall have the power to
determine the admissibility, relevance, materiality
and weight of a party’s evidence. (Article 34) ARTICLE 34
Recit: What is the effect of failure to file a statement As soon as the Terms of Reference are signed or
of claim? Terminated. issued, and at any time upon the discretion of the
Statement of defense? Is it considered an admission arbitral tribunal, it shall convene the parties to a case
on your part? No. management conference (in person or, in appropriate
cases, by video or audio conference, as the arbitral
What is the duty of the arbitral tribunal? The duty of
tribunal may direct) to discuss, among others, the
PDRCI is to ask the parties if they have further
procedural measures that may be adopted ("Case
evidences to offer or witnesses to present (article 39)
Management Conference"). The arbitral tribunal may
What is the waiver of the right to object? If the PDRCI
invite the parties to submit proposals in advance of
rules are not followed, and you do not object to it,
the Case Management Conference.
deemed waiver. (Article 40)
When should the PDRCI make a decision? Within 1
year (article 42) During or following such conference, the arbitral
Is the final award confidential? GR: confidential; tribunal shall establish the procedural timetable that
EXCEPTION: An award may be made public (a) with it intends to follow for the arbitration ("Procedural
the consent of all parties; or (b) where and to the Timetable"). The Procedural Timetable and any
extent disclosure is required of a party by legal duty, modifications thereto shall be communicated to
to protect or pursue a legal right, or in relation to legal PDRCI and the parties.
proceedings before a court or other competent
authority. (article 43). To ensure continued effective case management, the
How many days in pdrci for correction of the award? arbitral tribunal, after consulting the parties, may
Within thirty (30) days after the parties’ receipt of the adopt further procedural measures or modify the
award. The arbitral tribunal may do it by itself Procedural Timetable.
provided that there is a consent of the parties.

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EVIDENCE AND BURDEN OF PROOF video conference) that do not require their physical
presence at the place of the hearing.
ARTICLE 35
Each party shall have the burden of proving the facts EXPERTS APPOINTED BY THE ARBITRAL TRIBUNAL
relied on to support its claim or defense.
ARTICLE 37
Witnesses, including expert witnesses, who are After consultation with the parties, the arbitral
presented by the parties to testify on any issue of fact tribunal may, upon request of one or both parties,
or expertise may be any individual, notwithstanding appoint one or more experts to report to it, in writing,
that the individual is a party to the arbitration or in on specific issues to be determined by the arbitral
any way related to a party. Unless otherwise directed tribunal. A copy of the expert's terms of reference,
by the arbitral tribunal, statements by witnesses, established by the arbitral tribunal, shall be
including expert witnesses, shall be in writing and communicated to the parties.
signed by them.
Before accepting the appointment, the expert shall
At any time before the close of hearings, the arbitral submit to the arbitral tribunal and to the parties a
tribunal may require the parties to produce oral or description of his or her qualifications and a
written testimony, documents, or other evidence and statement of his or her impartiality and
to allow the inspection and reproduction of such independence. Within the time ordered by the
evidence, upon such terms as it shall determine. arbitral tribunal, the parties shall inform the arbitral
tribunal whether they have any objections as to the
The arbitral tribunal shall have the power to expert's qualifications, impartiality or independence.
determine the admissibility, relevance, materiality The arbitral tribunal shall decide such objections
and weight of a party’s evidence. promptly. After an expert's appointment, a party may
object to the expert's qualifications, impartiality or
HEARINGS independence only for reasons of which the party
became aware after the appointment was made. The
arbitral tribunal shall promptly decide such objection
ARTICLE 36
and what action to take, if any.
In case of an oral hearing, the arbitral tribunal shall
give the parties adequate advance notice of the date,
time and place of such hearing. The parties shall give the expert all relevant
information or produce for his inspection all relevant
documents, information, goods or other evidence
Witnesses, including expert witnesses, may be heard
that he or she may require of them. Any dispute
under the conditions and examined in the manner set
between a party and such expert as to the relevance
by the arbitral tribunal.
of the required information or production shall be
referred to the arbitral tribunal for decision.
Hearings shall be held in camera unless the parties
agree otherwise. The arbitral tribunal may require the
Upon receipt of the expert's report, the arbitral
exclusion of any witness or witnesses, including
tribunal shall communicate a copy of the report to the
expert witnesses, during the testimony of other
parties, who shall be given the opportunity to
witnesses, except that a witness who is a party or a
express, in writing, their opinion on the report. A
party representative to the arbitration shall be
party shall be entitled to examine any document on
entitled to attend the hearings without being
which the expert has relied in his or her report.
excluded.

At the request of any party, the expert, after delivery

The taking of evidence shall be subject to conditions
of the report, may be heard at a hearing where the
as the arbitral tribunal shall prescribe. In appropriate
parties shall have the opportunity to be present and
cases, the arbitral tribunal may direct the
to examine the expert. At this hearing, either party
examination of witnesses, including expert witnesses,
may present expert witnesses in order to testify on
by means of telecommunication (such as audio or
the points at issue. The provisions of Article 36

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(Evidence and Hearings) shall be applicable to such An award shall be signed by the sole arbitrator or by
proceedings. majority of the arbitrators and shall state the date on
which the award was made and the place of
CONFIDENTIALITY OF PROCEEDINGS arbitration. Where there is more than one arbitrator
and any of them fails to sign, the award shall state the
ARTICLE 41 reason for the absence of the signature.
Any information relating to the subject of arbitration,
expressly intended by the source not to be disclosed An award may be made public (a) with the consent of
or obtained under circumstances that would create all parties; or (b) where and to the extent disclosure
such a reasonable expectation on behalf of the source is required of a party by legal duty, to protect or
of the information that it will not be disclosed, shall pursue a legal right, or in relation to legal proceedings
not be disclosed. It shall include statements, before a court or other competent authority.
information, goods, submissions, evidence, and all
other papers filed or submitted in an arbitration or for Original and certified copies of the award signed by
expert evaluation. the arbitrators shall be provided to the parties.

THE AWARD Upon the issuance of the award, the arbitral tribunal
shall become functus officio. It shall have no further
ARTICLE 42 - Awards / Decisions jurisdiction, except to the extent allowed by the Rules
When there is more than one arbitrator, any award or or the applicable law.
decision of the arbitral tribunal shall be made within
one (1) year from constitution of the arbitral tribunal ARTICLE 44 - Applicable Law, Amiable Compositeur
by a majority of the arbitrators. If there is no majority, The arbitral tribunal shall apply the law designated by
unless the parties agree otherwise, the award may be the parties as applicable to the substance of the
made by the Chair of the arbitral tribunal alone. dispute. Failing such designation by the parties, the
arbitral tribunal shall apply the law that it determines
In questions of procedure, when there is no majority to be appropriate.
or when the arbitral tribunal so authorizes, the
presiding arbitrator may decide alone, subject to The arbitral tribunal shall act as amiable compositeur
revision, if any, by the arbitral tribunal. or ex aequo et bono only if the parties have expressly
authorized the arbitral tribunal to do so. However, if
The arbitral tribunal may make a single award or the law applicable to the arbitral procedure permits
several awards in respect of all parties so involved in such arbitration, the parties may agree to waive or
the arbitration under Articles 7 (Joinder of Parties), 8 restrict such authority.
(Claims between Multiple Parties) and 9 (Multiple
Contracts). In all cases, the arbitral tribunal shall decide in
accordance with the terms of the contract, if any, and
ARTICLE 43 - Form and Effect of Awards shall take into account any usage of trade applicable
The arbitral tribunal may make separate awards on to the transaction.
different issues at different times.
ARTICLE 45 - Settlement or Other Grounds for
All awards shall be made in writing and shall be final Termination
and binding on the parties, unless the arbitral tribunal If, before the award is made, the parties agree to
provides otherwise. The parties shall carry out all settle the Dispute, the arbitral tribunal shall either
awards without delay. issue an order terminating the arbitration or, if
requested by both parties and accepted by the
The arbitral tribunal shall state the reasons upon tribunal, record the settlement in the form of an
which the award is based, unless the parties have arbitral award on agreed terms. The arbitral tribunal
agreed that no reasons are to be given. is not obliged to give reasons for such an award.

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The order terminating the arbitration or the award on The interpretation shall form part of the award and
agreed terms, signed by the arbitrators, shall be the provisions of Article 43(2) to (7) shall apply.
communicated by PDRCI to the parties. Where an
award on agreed terms is made, Article 43 (2) to (7) ARTICLE 47 - Correction of Award
shall apply. Within thirty (30) days after the parties’ receipt of the
award, the arbitral tribunal, on its own initiative, or
If the claimant withdraws its claim and the any of the parties, with notice to the other party, may
respondent who has a counterclaim or any other request the arbitral tribunal to, correct in the award
claim objects to the termination of the arbitration, any error in computation, any clerical or
the order terminating the arbitration shall apply only typographical error, or any error or omission of a
to the claim but not to the counterclaim or any other similar nature.
claim. A party is not excused from the payment of
arbitration fees and cost when its claim is withdrawn. If the arbitral tribunal considers the party’s request to
be justified, it shall make the correction within forty-
If, before the award is made, the arbitration five (45) days from receipt of the request.
proceeding becomes unnecessary or impossible for
any reason not mentioned in paragraph 1 of this Such corrections shall be in writing and shall form part
Article, the arbitral tribunal shall notify the parties of of the award. The provisions of Article 43 (2) to (7)
its intention to issue an order for the termination of shall apply.
the proceeding. The arbitral tribunal may hear any
objection before issuing an order of termination. ARTICLE 48 - Additional Award
Within thirty (30) days after the receipt of the
Paragraphs 1 to 4 of this Article shall not apply to the termination order under Article 45 (2) or the award, a
dismissal or withdrawal of one or more but less than party, with notice to the other party, may request the
all of the claims of a party. The exclusion by the arbitral tribunal to make an additional award as to
arbitral tribunal of a party from the arbitration shall claims presented in the arbitral proceedings but not
not be treated as a termination of the proceeding decided by the arbitral tribunal.
covered by this Rule. The arbitral tribunal shall issue
an order directing the dismissal or withdrawal of the If the arbitral tribunal considers the request to be
claim or claims or the exclusion of a party or parties justified, it shall render an additional award or
and continue the arbitration proceeding as to the complete its award within sixty (60) days after the
remaining claims or against the remaining parties. receipt of the request. The arbitral tribunal may
extend, if necessary, the period of time to make the
Grounds for avoiding arbitration such as lack of award.
jurisdiction of the arbitral tribunal, statute of
limitation, bar by prior judgment, or any other ground When such an award or additional award is made, the
then available shall be raised as defenses in the provisions of Article 43(2) to (7) shall apply.
Response to the Notice of Arbitration or in the
Statement of Defense. A request to dismiss or other
B. CIAC – CONSTRUCTION INDUSTRY
similar request shall be treated as a Response to
ARBITRATION COMMISSION
Notice of Arbitration or as a Statement of Defense.
MEMO CIRCULAR NO. 01-2020 (June 10, 2020)
ARTICLE 46 - Interpretation of Award
Within thirty (30) days after the receipt of the award,
AUTHORITY TO CONDUCT ONLINE/VIRTUAL CASE
a party, with notice to the other party, may request
PROCEEDINGS
that the arbitral tribunal give an interpretation of a
The Arbitral Tribunal or Sole Arbitrator shall have full
specific point or part of the award.
authority to decide on, and conduct on-line or virtual
preliminary conferences, hearings, meetings and
If the arbitral tribunal considers the request to be other case proceedings in accordance with these
justified, it shall make the interpretation in writing Guidelines. Failure or refusal of any of the parties to
within thirty (30) days after the receipt of the request. participate in on-line or virtual proceedings ordered

39
 GANGO, KM | EH302 | ADR

by the Arbitral Tribunal/Sole Arbitrator shall not stay must be in a separate room; back up phone, etc)
the proceedings. Failure or refusal of all of the parties that’s why arbitration really is for the affluent.
to participate in on-line or virtual case proceedings
ordered by the Arbitral Tribunal/Sole Arbitrator shall POLICY AND OBJECTIVES
be deemed a submission of the case for decision
without an oral hearing and on the basis of Section 1.1. Statement of policy and objectives. It is
documentary evidence already submitted. the policy and objective of these Rules to provide a
fair and expeditious resolution of disputes as an
Basis for conducting online arbitration is Section 21.2 alternative to judicial proceedings which may restore
– The Arbitral Tribunal shall exercise complete the disrupted harmonious and friendly relationships
control over all proceedings to insure a speedy, between or among the parties.
adequate and justifiable disposition of the disputes
and cases submitted to them for resolution Section 1.2 Applicability of Rules. These Rules are
applicable to proceedings in arbitration before an
Atty: In CIAC, there is a board that decides on matters Arbitral Tribunal of one or more Arbitrator/s.
different from the decision of the arbitral tribunal.
Under the ROC, if CIAC decides, it goes straight to the Section 1.3 Judicial rules not controlling. In any
CA via Rule 65. arbitration proceeding under these Rules, the judicial
rules of evidence need not be controlling, and it is the
The non-submission by any or all of the parties of “e spirit and intention of these Rules to ascertain the
bundle” documents required by the Arbitral facts in each case by every and all reasonable means
Tribunal/Sole Arbitrator shall also be deemed a without regard to technicalities of law or procedure.
failure or refusal to participate in on-line/virtual case
proceedings which shall not stay the proceedings.
JURISDICTION
Atty: If you don’t follow the e-filing, it’s as if you didn’t
participate in the online proceedings. Section 2.1 Jurisdiction. The CIAC shall have original
and exclusive jurisdiction over disputes, which arose
RESTRICTED USE OF CIAC OFFICES from, or is connected with contracts entered into by
A maximum of 3 persons for the small conference parties involved in construction in the Philippines
room and 5 persons for the big conference room whether the dispute arose before or after the
subject to strict observance of social distancing and completion of the contract, or after the abandonment
the wearing of face masks/shields at all times. or breach thereof. These disputes may involve
government or private contracts.
WHEN HEARINGS NOT NECESSARY
Section 11.6 Submission for Decision. No factual 1.1.1. The jurisdiction of the CIAC may include
issue being in dispute, the case may be deemed but is not limited to violation of
submitted for decision without an oral hearing an on specifications for materials and
the basis of documentary evidence already workmanship violation of the terms of
submitted. agreement; interpretation and/or
application of contractual provisions;
Section 13.17 Award or decision on the Pleadings.
amount of damages and penalties;
Instead of a formal hearing, the parties may agree to
commencement time and delays;
submit the issues for resolution after the filing of the
pleadings, evidence, memoranda or draft decisions. maintenance and defects; payment
default of employer or contractor and
Atty: as a matter of right, hearing is necessary. BUT changes in contract cost.
you can waive that. You cannot do that in regular
court.
Atty: There should be an arbitration agreement
Atty chika: In PDRCI, there are specific requirements between the parties, otherwise, they are free to refer
for online hearings like test hearings, submission of to refer it to the courts.
diagrams for rooms (only 1 door; 2 cameras; lawyer

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SECTION 2.2 Coverage. The disputes referred to in the Complaint without prejudice to its
Section 2.1 of Rule 2 shall include those between or refiling upon a subsequent submission.
among parties to, or who are otherwise bound by, an
arbitration agreement, directly or by reference, SECTION 2.4 Jurisdictional challenge – A motion
whether such parties are project owner, contractor, to dismiss based on lack of jurisdiction shall be
subcontractor, fabricator, project manager, design resolved by the appointed arbitral tribunal.
professional, consultant, quantity surveyor,
bondsman or issuer of an insurance policy in a 2.4.1 The Arbitral Tribunal shall have full
construction project. authority to resolve all issues raised in the
Motion to Dismiss for lack of jurisdiction on
2.2.1 The CIAC shall continue to exercise the grounds that the dispute is not a
original and exclusive jurisdiction over construction dispute, or that the
construction disputes although the Respondent was represented by one
arbitration is commercial pursuant to without capacity to enter into a binding
Section 21 of R.A. 9285 or the Alternative arbitration agreement, or that said
Dispute Resolution Act of 2004. agreement or submission is not valid for
2.2.2 Excluded from the coverage of this some other reasons, or does not cover the
Rules are disputes arising from employer- particular dispute sought to be arbitrated, or
employee relationships, which shall other issues of interpretation or
continue to be covered by the Labor Code of nonfulfillment of pre-conditions to
the Philippines. arbitration that are raised therein.

SECTION 2.3 Condition for exercise of jurisdiction - SECTION 2.5 Non-waiver of jurisdictional
For the CIAC to acquire jurisdiction, the parties to a challenge - A party does not waive its right to
dispute must be bound by an arbitration agreement challenge the jurisdiction of CIAC by any of the
in their contract or subsequently agree to submit the following acts:
same to voluntary arbitration. a) participating in the nomination process including
challenging the qualifications of a nominee;
2.3.1 Such arbitration agreement or b) praying for extension of time to file appropriate
subsequent submission must be alleged in pleading/motion to dismiss;
the Complaint. Such submission may be an c) opposing an application for interim relief;
exchange of communication between the d) filing of a motion to dismiss/suspend.
parties or some other form showing that the
parties have agreed to submit their dispute Atty: In court, there is such a thing as voluntary
to arbitration. Copies of such submission to the court’s jurisdiction. Here, it is
communication or other form shall be entirely possible for you to file something and at the
attached to the Complaint. same time contest the jurisdiction of the CIAC.

2.3.2 If the Complaint is filed without the REQUEST FOR ARBITRATION

required arbitration clause or subsequent
submission, the CIAC Secretariat shall within SECTION 3.1 Filing - Any party to a construction
three (3) days from such filing, notify the contract desiring to avail of arbitration shall file its
Respondent that, if he/it is willing to have Request for Arbitration in the prescribed form and
the dispute be resolved by arbitration, such number of copies to the Secretariat of the CIAC.
agreement must be clearly expressed in the
Answer. SECTION 3.2 Preconditions. The claimant against the
government, in a government construction contract,
2.3.3 Respondent’s refusal to Answer the shall state in the complaint/request for arbitration
Complaint or the filing of a Motion to Dismiss that 1) all administrative remedies have been
for lack of jurisdiction shall be deemed a exhausted, or 2) there is unreasonable delay in acting
refusal to submit to arbitration. In either upon the claim by the government office or officer to
case, the Commission (CIAC) shall dismiss whom appeal is made, or 3) due to the application for

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interim relief, exhaustion of administrative remedies 4.1.3 An arbitration agreement or a

is not practicable. submission to arbitration shall be in writing,
but it need not be signed by the parties, as
3.2.1 The Claimant in a private construction long as the intent is clear that the parties
contract has the same obligation as the agree to submit a present or future
above to show similar good faith compliance controversy arising from a construction
with all preconditions imposed therein or contract to arbitration. It may be in the form
exemptions therefrom. of exchange of letters sent by post or by
telefax, telexes, telegrams, electronic mail or
3.2.2 In case of non-compliance with the any other mode of communication.
precondition contractually imposed, absent
a showing of justifiable reasons, exemption, SECTION 4.2 Failure or refusal to arbitrate - Where
or a waiver thereof, the tribunal shall the jurisdiction of CIAC is properly invoked by the
suspend arbitration proceedings pending filing of a Request for Arbitration in accordance with
compliance therewith within a reasonable these Rules, the failure despite due notice which
period directed by the Tribunal. amounts to a refusal of the Respondent to arbitrate,
shall not stay the proceedings notwithstanding the
SECTION 3.3 Request to answer - The CIAC absence or lack of participation of the Respondent. In
Secretariat shall within three (3) days from filing, such case, CIAC shall appoint the arbitrator/s in
transmit to the Respondent a request for his Answer, accordance with these Rules. Arbitration proceedings
attaching thereto a copy of the complaint and the shall continue, and the award shall be made after
Request for Arbitration together with the annexed receiving the evidence of the Claimant.
documents.
4.2.1 In the event that, before award, the
SECTION 3.4 Commencement of arbitral Respondent who had not earlier questioned
proceedings - The date when the Request for the jurisdiction of the Tribunal, appears and
Arbitration is filed with CIAC shall, for all intents and offers to present his evidence, the Arbitral
purposes, be deemed to be the date of Tribunal may, for reasons that justifies the
commencement of the proceedings. failure to appear, reopen the proceedings,
require him to file his answer with or without
EFFECT OF AGREEMENT TO ARBITRATE counterclaims, pay the fees, where required
under these Rules, and allow him to present
SECTION 4.1. Submission to CIAC jurisdiction - An his evidence, with limited right to cross
arbitration clause in a construction contract or a examine witnesses already presented in the
submission to arbitration of a construction dispute discretion of the Tribunal. Evidence already
shall be deemed an agreement to submit an existing admitted shall remain. The Tribunal shall
or future controversy to CIAC jurisdiction, decide the effect of such controverting
notwithstanding the reference to a different evidence presented by the Respondent on
arbitration institution or arbitral body in such evidence already admitted prior to such
contract or submission. belated appearance. (if you had not earlier
questioned the jurisdiction of the CIAC, you
4.1.1 Submission to CIAC Rules – when the can still do that by filing a motion)
parties have agreed to submit the dispute/s
to arbitration by CIAC, they shall be deemed SECTION 4.3. When arbitration cannot proceed -
thereby to have submitted ipso facto to Where the contract between the parties does not
these Rules and any amendments hereto. provide for arbitration and the parties cannot agree
to submit the dispute(s) to arbitration, the arbitration
4.1.2 When a contract contains a clause for cannot proceed and the Claimant/s shall be informed
the submission of a future controversy to of that fact.
arbitration, it is not necessary for the parties
to enter into a submission agreement before
the Claimant may invoke the jurisdiction of
CIAC.

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ANSWER/COUNTERCLAIMS appearing as counsel for any party in any

arbitration case before CIAC for a period not
SECTION 5.1 Time to answer - The Respondent shall, exceeding six (6) months; without prejudice
within fifteen (15) days from receipt of the Request to suspension or disbarment action before
for Arbitration/Complaint, file its answer thereto the Integrated Bar of the Philippines (IBP), at
including such counterclaim/s as it may assert. For the instance of CIAC.
justifiable reason/s, Respondent may apply to CIAC
for an extension of time to file its answer. If 7.2.2 If the violator is a duly licensed and
Respondent fails to do so, the arbitration shall registered professional, administrative/
proceed in accordance with these Rules. disciplinary action before the Professional
Regulation Commission (PRC), at the
Atty: The request for arbitration will of course include instance of CIAC.
damages. You might also realize that in civpro, there
is a counterclaim. It is possible for the one responding QUALIFICATIONS OF ARBITRATORS
to have his own claim for damages. So when you file
your answer, you can include that. So you file an SECTION 8.1 General qualification of arbitrators -
answer with counterclaim. The Arbitrators shall be persons in whom the business
sector, particularly the stake holders of the
SECTION 5. 2 Transmittal of answer - A copy of the construction industry and the government can have
answer shall be transmitted in sufficient copies to the confidence. They shall possess the competence,
Claimant and to CIAC. integrity, and leadership qualities to resolve any
construction dispute expeditiously and equitably. The
SECTION 5.3 Reply to counterclaim - The Claimant Arbitrators shall come from different professions.
shall file a reply to the counterclaim with CIAC and They may include engineers, architects, construction
shall furnish the Respondent a copy thereof within managers, engineering consultants, and businessmen
fifteen (15) days from date of receipt of the answer familiar with the construction industry and lawyers
with counterclaim. who are experienced in construction disputes.

CONFIDENTIALITY MEMORIZE!!!
SECTION 8.2 The Arbitrators must be CIAC-
MEMORIZE THIS!!!! accredited - Only CIAC-accredited arbitrators may be
SECTION 7.1 Confidentiality of proceedings – The nominated by the parties and appointed by CIAC as
arbitration proceedings shall be considered arbitrators. A replacement arbitrator shall likewise be
confidential and shall not be published except (i) with a CIAC-accredited arbitrator. However, as an
the consent of the parties, or (ii) when necessary in exception to this rule, CIAC may appoint to an Arbitral
case resort to the Court is made under the Rules of Tribunal an arbitrator who is not CIAC - accredited
Court. The term “arbitration proceedings” shall PROVIDED that the nominee: 1) is the parties’
include communications to or from CIAC, the common nominee; 2) possesses the technical/legal
pleadings, applications and other papers filed with competence to handle the construction dispute
CIAC, sworn statements, documentary and involved; and 3) has signified his
testimonial evidence, reports and minutes taken of availability/acceptance of his possible appointments.
the proceedings, and other orders, decision, award or
resolution issued by the Arbitrator(s). SECTION 8.3 Undertaking of arbitrator upon the
acceptance of appointment – An arbitrator who
SECTION 7.2 Violation of confidentiality – Any person accepts an appointment as arbitrator undertakes to :
who violates the immediately preceding a) Make himself/herself available at all stages
confidentiality provision shall be subject to the of the arbitration proceedings;
following sanctions: b) Remain independent of the parties and their
counsel or representatives;
7.2.1 If the violator is a lawyer, c) Maintain impartiality on all matters relating
administrative action or proceeding to be to the disputes;
conducted by CIAC, with proper notice and
hearing, for inhibition or prohibition from

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d) Have a continuing duty to disclose any fact of available, CIAC shall return the lists of
circumstance that may arouse justifiable doubts as to nominees to the parties and ask them to
independence or impartiality; and make an agreement on a common
e) Contribute to the fair, expeditious and timely nominee/s within 48 hours. If the parties still
resolution of the dispute. 15 fail to agree on a common nominee, CIAC
may appoint a Sole Arbitrator or an Arbitral
SECTION 8.4 Arbitrators not permanent employees Tribunal. If CIAC decides to appoint a Sole
of CIAC - The Arbitrators shall render service only Arbitrator, it may select an arbitrator who is
when called upon to arbitrate a construction dispute. not a nominee of any one of the parties and
SECTION 8.5 Exemptions from civil liability for who is not disqualified and is available for
official acts - Arbitrators shall not be civilly liable for appointment.
acts done in the performance of their official duties SECTION 9.3 Arbitral Tribunal - Where the parties
except in a clear case of bad faith, malice or gross have agreed that the dispute shall be settled by an
negligence as provided in Section 38 (1), Chapter 9, Arbitral Tribunal, each party shall name not more
Book 1 of the Administrative Code of 1987. than six (6) nominees from the CIAC accredited
arbitrators in the order for their preference for
NOMINATION AND APPOINTMENT OF appointment as Arbitrators. CIAC shall choose and
ARBITRATORS appoint as members of the Tribunal, one Arbitrator
from the claimant’s nominees and another from
SECTION 9.1 Number of arbitrators - A Tribunal of respondent’s nominees. CIAC shall also choose and
one or three Arbitrators may be appointed to settle a appoint the Third Arbitrator and notify the parties
dispute in accordance with the provisions hereunder. thereof for their confirmation in writing within five (5)
working days from receipt of the notice. If no
9.1.1 In the absence of an agreement on the confirmation is received within such period, the Third
number of arbitrators, CIAC taking into Arbitrator appointed by CIAC shall be deemed
consideration the complexities and accepted by the parties. The Third Arbitrator chosen
intricacies of the dispute/s or the sum and appointed by CIAC shall be the Chairman of the
involved, has the option to appoint a Sole Tribunal.
Arbitrator or an Arbitral Tribunal.
MEMORIZE!!!
9.1.2 In case of multiple parties, whether as SECTION 9.4 Conditions for appointment of foreign
Claimant or as Respondent, including three arbitrator - A foreign arbitrator not accredited by
(3) or more parties in the arbitration, where CIAC may be appointed as a co-arbitrator or
all parties are unable to agree to a method chairperson of an arbitral tribunal for a construction
for constitution of the Tribunal within ten dispute under the following conditions:
(10) days from notice, CIAC shall appoint the
arbitrators.17 a) the dispute is a construction dispute in which
one party is an international party i.e. one whose
SECTION 9.2 Sole Arbitrator - Where the parties have place of business is outside the Philippines. For this
agreed that the dispute(s) shall be settled by a Sole purpose, the term international party shall not
Arbitrator, each party shall name not more than six include a domestic subsidiary of such international
(6) nominees from the CIAC- accredited arbitrators in party or a co-venturer in a joint venture with a party
the order of their preference for appointment as Sole which has its place of business in the Philippines.
Arbitrator. If any or both of the parties shall fail to
submit the names of their nominees within the b) the foreign arbitrator to be appointed is not
period/s prescribed by CIAC, a Sole Arbitrator shall be a national of the Philippines and is not of the same
appointed by CIAC. nationality as the international party in the dispute;

9.2.1 CIAC shall appoint as sole arbitrator the 9.4.1 Procedure for appointment of foreign
common nominee of the parties who is arbitrator- The foreign arbitrator must be
available and not disqualified. In the absence nominated by the international party or is
of a common nominee or in cases where the the common choice of the two CIAC-
common nominee is disqualified or is not accredited arbitrators one of whom was

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nominated by the international party. The 9.6.3 The arbitrator concerned shall be given
nomination must be accompanied by a by CIAC an opportunity to be heard. He may,
resume or bio-data of the nominee relevant without admitting the existence of the
to qualifications as a construction arbitrator ground of the challenge, motion or request,
and a signed undertaking of the nominee to choose to inhibit himself but his decision
abide by CIAC arbitration rules and policies. shall be subject to approval by CIAC.

SECTION 9. 5 Disqualification of or non-acceptance 9.6.4 In case the challenged arbitrator is

by nominees - If the nominee(s) of a party shall be allowed to inhibit himself or is removed,
disqualified or fail or refuse to accept the CIAC shall promptly appoint his
appointment, CIAC shall choose and appoint any replacement. If the arbitrator concerned is
qualified arbitrator who is willing to be so appointed. the third member of the Arbitral Tribunal,
the first two members thereof shall select his
SECTION 9.6 Challenge - An Arbitrator may be replacement.
challenged by a party at any time after his
appointment but before the lapse of the original 10- 9.6.5 The decision of CIAC to retain or
day period for submission of memoranda or draft replace an arbitrator shall be final. (Atty: so
decision under Section 13.16, Rule 13 hereof. Any what’s the remedy? CA via Rule 65)
extensions of time to file memoranda or draft
decisions will not EXTEND the 10-day period to file a SECTION 9.7 Disqualification of mediator as
challenge or motion for inhibition. The challenge arbitrator - An Arbitrator who acted as
shall be based upon the following grounds: conciliator/mediator in a case previously brought
a) relationship by blood or marriage within the before him for conciliation/mediation cannot act as
sixth degree of either party to the controversy, or to arbitrator for the same case when brought to
counsels within the fourth degree, computed arbitration, unless both parties consent to his
according to the rules of civil law. appointment in writing.
b) financial, fiduciary or other interest in the
controversy PRELIMINARY CONFERENCE/TERMS OF REFERENCE
c) partiality or bias;
d) incompetence, or professional misconduct. SECTION 11.1 Notice of conference - The
Arbitrator/Arbitral Tribunal shall set the case for
A party may also request the inhibition of an preliminary conference not later than 15 days after
arbitrator upon other just and valid reasons affecting appointment of arbitrator(s) and a notice to the
independence, integrity, impartiality and interest. parties thereof shall forthwith be sent to finalize the
Terms of Reference as provided in Rule 11.4 below, a
9.6.1 A motion for inhibition or a request for draft copy of which is attached thereto and to
the disqualification and replacement of an consider the following, among others:
arbitrator shall be treated as a challenge.
(Atty: THIS IS WHERE CIAC, AS A BOARD, a. possibility of amicable settlement;
STEPS IN!! Because they will determine the b. necessity or desirability of amendments to
fitness or partiality of the arbitrator. The pleadings;
Board can refuse or accept inhibition based c. obtaining stipulations or admission of facts
on 9.6.3) and/or documents to avoid unnecessary proof;
d. limitation of the number of witnesses;
9.6.2 The challenge, motion or request shall e. suggested formulation of issues by the
be in the form of a complaint under oath, parties;
stating distinctly and concisely the facts f. application for interim relief, appointment of
complained of, supported by affidavits, if experts and necessity of site inspection; and
any, of persons having personal knowledge g. such other matters as may aid in the just and
of the facts therein alleged and shall be speedy disposition of the case.
accompanied with copies of such documents
as may substantiate said facts. SECTION 11.2 Introduction of the arbitrators – At the
start of the preliminary conference, the arbitrator/s

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shall introduce themselves to the parties paying signed not later than five (5) days from
particular attention to matters related to professional inception.
training and experience.
SECTION 11.5 Arbitration To Proceed Even Without
SECTION 11.3 Disclosure – During the preliminary TOR. - In the exercise of the sound discretion of the
conference the Arbitrator who had failed to make his Arbitral Tribunal, arbitration shall proceed even
or her written disclosure required in the previous without the TOR on the basis of the issues formulated
section shall disclose any circumstance likely to give by the pleadings filed by the parties.
rise to justifiable doubts as to impartiality or
independence, including financial or personal interest SECTION 11.6 Submission for Decision. – No factual
in the outcome of the arbitration and any existing or issue being in dispute, the case may be deemed
past relationships with any individual or corporate submitted for decision without an oral hearing and on
party together with their respective relatives or the basis of documentary evidence already
principal stockholders/officers or foreseeable submitted.
participant in the proceedings. On the basis of such
disclosure, either party may ask clarificatory VENUE
questions thereon that may lead to a decision to
move for inhibition or accept the appointment. SECTION 12.1 Venue, Date and Time of Hearing - The
venue, date and time of the arbitral proceedings shall
SECTION 11.4 Terms of Reference. - This document be mutually agreed upon by the parties and the
functions like a pre-trial order in judicial proceedings Arbitral Tribunal. In the event of disagreement, the
and controls the arbitration proceedings unless choice of venue made by the Arbitral Tribunal shall
corrected for manifest errors by motion filed not later prevail.
than the hearing date.
ARBITRATION PROCEEDINGS
11.4.1 Contents - The TOR shall include the
following particulars: SECTION 13.1 Order of Proceedings - A hearing shall
a) the full names of the parties, and their be opened by recording of the place, time and date of
respective counsels, if any; hearing, the presence of the Arbitral Tribunal, parties,
b) the addresses and contact numbers of the and witnesses, if any. The names and addresses of all
parties/counsels, to which notifications or witnesses and exhibits in the order received shall be
communications arising in the course of the made part of the record.
arbitration may validly be made;
c) a summary of the parties' respective claims; 13.1.1 Quorum - Two members of a tribunal
d) full statement of admitted facts and shall comprise a quorum for the purpose of
documents; conducting a hearing.
e) the issues to be resolved in question form;
f) the Arbitrators' full names; SECTION 13.2 Briefing on Rules and procedures - At
g) the place where arbitration proceedings the initial hearing, the Arbitral Tribunal shall inform
shall be held; the parties of the general rules and procedures on
h) the breakdown, schedule of payments, and arbitration proceedings, stressing peculiarities from
sharing of arbitration fees; judicial proceedings, its strict adherence to time bars,
i) such other particulars as may be required by its policies against postponements and other matters
the Arbitral Tribunal for the proper and speedy to insure a speedy and fair disposition of the issues.
adjudication of the case.
SECTION 13.3 Order of presentation - It shall be
11.4.2 Signing - The Terms of Reference within the discretion of the Arbitral Tribunal to
(TOR) shall be signed on each and every page determine the order of presentation of evidence.
thereof, by the parties together with their Generally, the party who seeks to enforce a right or
respective counsel and the Arbitral Tribunal establish a claim shall be required to present its
immediately after finalization thereof. In evidence first, followed by the other party.
any case, the TOR must be finalized and

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SECTION 13.4 Expeditious procedures - The Arbitral SECTION 13.7 Examination by the Arbitral Tribunal -
Tribunal shall at all times adopt the most expeditious The Arbitral Tribunal may ask clarificatory questions
procedures for the introduction and reception of of the witnesses at any stage of the proceedings.
evidences, and shall have complete control over the
proceedings, but in any case, shall afford full and SECTION 13.8 Documentary evidence - As a general
equal opportunity to all parties to present relevant rule, no documentary evidence(s) presented and
evidence. offered shall be rejected unless the same is found by
the Arbitral Tribunal to be completely irrelevant.
SECTION 13.5 Evidence - The parties may offer such
evidence as they desire and shall produce such SECTION 13.9 Offer of documents - All documents
additional documents and witnesses as the Arbitral not offered with the Arbitral Tribunal at the hearing
Tribunal may deem necessary to a clear but which are arranged at the hearing subsequently
understanding of facts and issues for a judicious by agreement of the parties to be submitted, shall be
determination of the dispute(s). The Arbitral Tribunal filed within five (5) days from the termination of the
shall act according to justice and equity and merits of hearing. All parties shall be afforded opportunity to
the case, without regard to technicalities or legal examine such documents.
forms and need not be bound by any technical rule of
evidence. Evidence shall be taken in the presence of Atty: Between the submission of the memorandum
the Arbitral Tribunal and all of the parties, except and the closing of hearing, CIAC will require you to
where any of the parties is absent, or has waived his submit an offer of evidence – basically, it’s your e
right to be present. bundle.

Atty: proceedings are closed after the last witness is SECTION 13.10 Site inspection – The Arbitral Tribunal
presented. may, motu proprio after notice to the parties, or upon
motion of a party, conduct a site inspection of any
13.5.1 Order to produce documentary building, place or premises, including any work,
evidence. Upon motion of either or both of material, implement, machinery, appliance or any
the parties, or on its own initiative, the object therein. The Tribunal in deciding on the
Arbitral Tribunal may direct any person, necessity of a site inspection, may consider whether
board, body, tribunal, or government office, a video or pictorial presentation may suffice.
agency or instrumentality, or corporation to
produce real or documentary evidences
necessary for the proper adjudication of the 13.10.1 Costs including transportation,
issues. accommodations, meals, rental fee for the
video/still camera, services, video tape
13.5.2 Order to give testimony. The Arbitral recording, copy of pictures and other
Tribunal may, likewise, direct any person to expenses shall be equally shared by both
give testimony at any proceeding for parties. In special cases upon the order of
arbitration. the Arbitral Tribunal, the party who seeks
this video and will benefit from it shall bear
SECTION 13.6 Affidavit in lieu of direct testimony - the expenses.
The Arbitral Tribunal shall require the simultaneous
submission of affidavits of witnesses in lieu of their SECTION 13.11 Adjournments - The Arbitral Tribunal
direct testimonies attaching thereto pertinent for good cause shown, may adjourn the hearing upon
documents supportive of their respective his/its own initiative or upon the request of one of the
declarations. These documents shall be properly parties. Adjournment shall not be more than five (5)
marked for purposes of identification. working days.

Atty: Judicial affidavit rule. You do not conduct direct 13.11.1 Hearings may be adjourned for more
examination anymore. than five (5) working days when such have
been suspended due to payment defaults of
any or both of the parties. The Arbitral
Tribunal shall order the suspension of

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hearings upon advice by CIAC of non- hearing, or from the filing of additional documents, or
payment of arbitration fees by one or both from the submission date of memoranda, pleadings,
parties. Hearings shall resume upon notice documents or evidences whichever is later.
by CIAC of compliance by the defaulting
party/ies. THE ARBITRATION AWARD

SECTION 13.12 Arbitration in the absence of the SECTION 16.1. Time of award - The award shall be
party - The Arbitration may proceed despite the rendered promptly by the Arbitral Tribunal within
absence of any party who after due notice fails to be thirty (30) days from the time the case is submitted
present or fails to obtain an adjournment. An award, for resolution but not more than six (6) months from
however, shall not be made solely on the default of a the date of signing of the TOR, or in cases where a TOR
party. It shall be made on the basis of evidence is absent, not more than six (6) months from the date
submitted and proven. of the last preliminary conference called for the
purpose of finalizing and/or signing of the TOR. There
SECTION 13.13 Closing of the hearings - After the shall be no extensions of time unless approved by the
submission of the draft decision/final memorandum CIAC.
of arguments and/or the lapse of the period given for
the submission thereof, the proceedings is considered SECTION 16.2 Form of award - The Final award shall
closed and no further pleadings/papers shall be filed be in writing and signed by the Arbitral Tribunal or a
nor accepted for filing. majority of its members. A dissent from the decision
of the majority or a portion thereof shall be in writing
SECTION 13.14 Reopening of hearing - The hearing specifying the portion/s dissented from with a
may be reopened by the Arbitral Tribunal on their statement of the reason/s thereof and signed by the
own motion or upon the request of any party, upon dissenting member.
good cause shown, at any time before the award is
rendered. When hearings are thus reopened, the SECTION 16.3 Contents of the final award - Generally,
effective date for the closing of the hearing shall be the Final Award shall contain the issues involved, a
the date of closing of the reopened hearing. brief statement and discussion of the facts, and the
authority relied upon for the resolution or disposition
SECTION 13.15 Summation - The Arbitral Tribunal of the issues.
may direct the parties to make a brief oral summation
at the end of the oral hearing. SECTION 16.4 Award upon settlement - If the parties
settle their dispute(s) during the course of the
SECTION 13.16 Submission of memoranda or draft arbitration, the Arbitral Tribunal, upon their request,
decisions - If any or both of the parties so desire, may set forth the agreed settlement as an Arbitral
written memoranda or draft decisions may be Award.
submitted not later than ten (10) calendar days from
the termination of the hearing or from the date of the 16.4.1 Settlement as award - A compromise
filing of additional documents as previously agreed agreement settled by mediation in the
upon, whichever is later. course of arbitration or by direct negotiation
between the parties shall be treated as an
13.16.1 If both parties agree to submit arbitral award if so moved by the parties and
memoranda or draft decisions, the filing subject to the approval of the Arbitral
shall be simultaneous. Tribunal, after a summary hearing, that the
same is not contrary to law, morals, good
SECTION 13.17 Award or decision on the pleadings - customs, public order, or public policy.
Instead of a formal hearing, the parties may agree to
submit the issues for resolution after the filing of SECTION 16.5 Decision as to costs of arbitration - In
pleadings, evidence, memoranda or draft decisions. the case of non-monetary claims or where the parties
agreed that the sharing of fees shall be determined by
SECTION 13.18 Period to make a final award - The the Arbitral Tribunal, the Final Award shall, in addition
number of days within which an award shall be made to dealing with the merits of the case, fix the costs of
will start from the date of the termination of the the arbitration, and/or decide which of the parties

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shall bear the cost(s) or in what proportion the cost(s) The motion shall be acted upon by the Arbitral
shall be borne by each of them. Tribunal or the surviving/remaining members.
IMPORTANT!!!!
SECTION 16.6 Termination of jurisdiction – Except for 17.1.1 The filing of the motion for
execution or post-award proceedings, the jurisdiction correction shall interrupt the running of the
of the Arbitral Tribunal over the dispute is terminated period for appeal.
upon the finality of the Final Award or Decision.
Where an appeal is taken from a decision or Final 17.1.2 A motion for correction upon
Award, and the appellate court directs a re-hearing or grounds other than those mentioned in this
a hearing on the merits on any issue arising in the section shall not interrupt the running of the
case, jurisdiction terminates only upon a final period for appeal.
disposition of the case by the appellate court and/or
a final determination of all incidental matters thereto. SECTION 17.2 Motion for reconsideration or new
trial- A motion for reconsideration or new trial shall
SECTION 16.7 Notification of award to parties - Once be considered a prohibited pleading.
a Final Award has been made, provided that the costs
of the arbitration have been fully paid to the Atty: MR is prohibited. If you file for an MR, it will not
Secretariat by the parties or by one of them, the interrupt the running of the appeal period.
Secretariat shall provide the parties through their
respective counsel a copy of the Final Award signed EXECUTION OF FINAL AWARD
by the Arbitral Tribunal.
SECTION 18.1 Execution of Award. - A final arbitral
16.7.1 Additional copies certified true by the award shall become executory upon the lapse of
Executive Director of the Secretariat shall be fifteen (15) days from receipt thereof by the parties.
made available, on request and at any time,
to the parties or their counsel but to no one SECTION 18.2 Petition for review- A petition for
else. review from a final award may be taken by any of the
parties within fifteen (15) days from receipt thereof
SECTION 16.8 Filing of award - The original of an in accordance with the provisions of Rule 43 of the
arbitral award shall be filed with the Secretariat. Rules of Court

POST AWARD PROCEEDINGS SECTION 18.3 Entry of judgment. - If a petition for

review is filed from a final award and a temporary
SECTION 17.1 Motion for correction of final award - restraining order (TRO) is issued by the appellate
Any of the parties may file a motion for correction of court, such award shall become executory only upon
the Final award within fifteen (15) days from receipt the issuance of the entry of judgment of the appellate
thereof upon any of the following grounds: court, or upon the lapse/lifting of the TRO or lifting of
a. an evident miscalculation of figures, a the preliminary injunction.
typographical or arithmetical error;
b. an evident mistake in the description of any party, SECTION 18.4 Effect of petition for review. - The
person, date, amount, thing or property referred to in petition for review shall not stay the execution of the
the award. final award sought to be reviewed unless the Court of
c. where the arbitrators have awarded upon a matter Appeals directs otherwise upon such terms as it
not submitted to them, not affecting the merits of the deems just.
decision upon the matter submitted;
d. where the arbitrators have failed or omitted to SECTION 18.5 Execution/enforcement of awards. -
resolve certain issue/s formulated by the parties in As soon as a decision, order or final award has
the Terms of Reference (TOR) and submitted to them become executory, the Arbitral Tribunal (or the
for resolution;33 and surviving remaining member/s), shall, motu proprio
e. where the award is imperfect in a matter of form or on motion of the prevailing party issue a writ of
not affecting the merits of the controversy. execution requiring any sheriff or proper officer to
execute said decision, order or final award. If there

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are no remaining/surviving appointed arbitrator/s, compliance with the requirements set by the CIAC for
the Commission shall issue the writ prayed for. bond approval.

Notwithstanding the Commission’s disagreement SECTION 18.7 Effect of reversal of award. - Where an
with the substance or merit of the award/decision, if award is partially or totally reversed on appeal, the
execution is ripe or proper under the CIAC Rules, it Arbitral Tribunal (or the surviving/remaining
shall release the writ of execution issued by the members, or the Commission if there are no
arbitrator/s. Hence, once an award/decision becomes remaining/surviving appointed arbitrators) may, on
executory, the release of the writ of execution by the proper motion, issue such order of restitution or
Commission is purely ministerial, regardless of reparation of damages as equity and justice may
whether or not the arbitrator/s considered the warrant under the circumstances.
comments of the Commission, or any of its members,
on points of substance in the award during scrutiny. SECTION 18.8 Executory Powers – The Arbitral
Tribunal (or the surviving/remaining member/s, or
18.5.1 The writ of execution shall direct the the Commission, if there are no remaining/surviving
sheriff or other officer to conduct the sale of appointed arbitrators) shall have the authority and
property on execution in accordance with power to decide matters and issue appropriate orders
Section 15 of Rule 39 of the Rules of Court. which are necessary and related to the execution of
In the case of sale of real property or the Award, including but not limited to the
personal property not capable of manual determination of sufficiency of the bond, approval of
delivery, the auction sale shall be held at the the surety or bonding company, satisfaction of the
office of the sheriff serving the writ. Upon award, quashal of the execution, partial execution,
proper application by the sheriff, with notice issuance of alias writs, assessment of properties
to the parties, CIAC may authorize the sale to levied, appointment of a quantity surveyor or
be held in the place where the property is assessor, examination of, and issuance of subpoena
located. ad testificandum and subpoena duces tecum to
banks, debtors of the judgment debtor and any
SECTION 18.6 Stay of execution pending review. - person holding properties or assets of the judgment
Execution issued under the preceeding Section may debtor.
be stayed upon approval by the Arbitral Tribunal (or
the surviving/remaining member/s), with the ATTY: Once judicial affidavits are submitted, hearings
concurrence of CIAC, of a surety bond posted by the scheduled, etc. IS THAT THE END OF IT? No. You will
petitioner in an amount equal to the award, be asked to admit cost submission. After that, human
conditioned upon the performance of the judgment na. You just wait for the final award.
of the appellate court in case it upholds the award in
whole or in part. Such surety bond shall be posted ---end---
within such period of time, which shall in no case be
less than fifteen (15) days, as may be granted by the
Thanks and pa follow nalang sa tiktok. HAHAHAHAHA
Arbitral Tribunal during the hearing on the motion for
execution and the opposition thereto. The Surety
Company posting the bond must be included in the
latest list of surety companies accredited by the
Supreme Court and must comply with the
requirements set by the CIAC for bond approval,
concurrence, and/or acceptance, such as, but not
limited to, the prescribed ‘Surety Undertaking’ form.
If there are no remaining/surviving appointed
arbitrators, the Commission may approve the
required bond.

The concurrence of the Commission to the approval

by the arbitrator/s of the surety bond to stay
execution is only for the purpose of ensuring

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