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Alt native Dispute Res uti
3C LECTURE NOTES
Judge Selma Alaras
Notes:
1) Those in pink are said by Judge which may be asked in the exam.
2) Those in green are personal case digests/notes for better understanding of the concept.

ADR Mechanisms: arbitration; Court-Annexed Mediation (CAM); Judicial Dispute

Resolution (JDR); Rules 18 and 118 [on pre-trial] of Rules of Court (ROC); Continuous trial in
criminal cases

Importance of ADR: con dentiality and party autonomy

• speedy, impartial justice and de-clog court dockets

• “put an end to a pending litigation through compromise agreement”

• Filing a case is not always the remedy.

Ad hoc: freedom to make your own arrangements - choose your own arbitrator

Administrative innovation: attempts to settle cases based on legal rights and obligations
of parties may not address the real interests and needs of the disputants

Father of ADR in the Philippines: late Alfredo Tadiar— author of Katarungang

Pambarangay Law

FORMS OF ADR
• RA 9285 (2004): ADR Act of 2004

• EO 1008 (1985): Construction Industry Arbitration Law

• Labor Code (CBA and Grievance Machinery)

• RA 7160: LGC (1991) on Katarungang Pambarangay— not jurisdictional; no KP, remand

it to barangay, not dismiss— facilitated by Lupon Tagapamayapa

• RA 6734: Organic Act of the ARMM (Tribal Council)— Muslim Clan Con icts: RIDO; Mt.
Province: Budong

• PD 1083: Code of Muslim Personal Laws of the Philippines— Agama Arbitration Council
(1997) - Divorce/Talaq

• RA 8731: Indigenous Peoples Rights Act (Ancestral Domains)— they own the land
collectively so if you buy from them, you don’t own the property, you only have the
rights to use and enjoy it

• Civil Code (CC)

• Art. 151, Family Code (FC): Family Council— family members who are required to
support each other

• Model Law on International Commercial Arbitration - UN Commission on International

Trade Law (UNCITRAL)— June 21, 1985

• Continuous Trial in Criminal Cases: settlement is with regard to civil aspect; not criminal
— can settle BP22, SSS Law (non-payment of dues), light felonies, PAGIBIG Law

ADR UNDER THE CC

• Art. 2028: A compromise is a contract whereby the parties, by making reciprocal
concessions, avoid a litigation or put an end to one already commenced. - contract is
the law b/w the parties.

• Art. 2029: The court shall endeavor to persuade the litigants in a civil case to agree
upon some fair compromise.

• Art. 2042: The same persons who may enter into a compromise may submit their
controversies to one or more arbitrators for decisions.

• Art. 2043: The provisions of the preceding Chapter upon compromises shall also be
applicable to arbitrations.

• Art. 2044: Any stipulation that the arbitrators’ award or decision shall be nal, is valid,
without prejudice to Arts. 2038, 2039, and 2040.

ADR UNDER THE ROC

• Rule 18: Pre-trial— Sec. 2: possibility of an amicable settlement or of a submission to
alternative modes of dispute resolutions; pre-trial can be before trial or preparatory to
trial [check amendments]

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• Before 2019 amendments: make allegations of material and relevant facts in case to
prove cause of action

• For pre-trial: Judicial A davit (JA)

• 2019 amendments: you don’t just plead factual allegations, attach JA (testimonial in
nature), supporting documents

• Pre-trial brief is not a motion.

• Small claims court: Preliminary conference; mediator v. arbitrator

• If small claims court, no more trial, submit evidence only then for judgment already.

MEDIATION

• Mediation is court-annexed (CAM).

• CAM: to be utilized by CTA (used to have no mediation)

• Appellate Court Mediation in the CA

• Mobile Court Annexed Mediation (MCAM): not a procedure— justice on wheels “on a
bus”; goes to places where there’s heavy load of cases for rst-level courts

• Arbitration— RA 876 or The Arbitration Law: Sec. 2. Persons and matters subject to
arbitration— decisions are nal and executory, and generally unappealable

• Commercial Arbitration: PDRCI (Philippine Dispute Resolution Center, Inc.) and PIArb
(Philippine Institute of Arbitrators) in NCR— institutional arbitration, not ad hoc

COMPROMISE AGREEMENTS— under Art. 2028, CC

• No CAM or JDR in criminal cases (under rule on continuous trial), but ADR only
applicable for civil aspect— does not a ect the guilt of accused

• Compromise agreement is not an admission of guilt, even in a criminal case.

• The admission would come out if the aspect asked is criminal.

• A compromise agreement is a judgment based on the pleadings.

• It is a decision not based on facts and the law, but based on a compromise agreement.

• Purpose is to replace and terminate controverted claims (Landoil Resources Corp. v.

Tensuan).

• Complaint: must not exceed 4 paragraphs; and one sentence must not be paragraph-
long. Short, concise, precise statements, and each paragraph must convey one idea.
Paragraphs must be numbered, but if paragraphs are interconnected— paragraph 1,
paragraph 1.2, and so on. Show jurisdiction. Then go to causes of action.

• How does a respondent respond to the claim? Not by a Motion to Dismiss (MTD),
because an MTD attacks the entire complaint. Eg. Lack of jurisdiction. It must be an
Answer, which must address each and every number and sub-number of the complaint.

• Is an MTD a responsive pleading? No, it questions the nature of the complaint.

Speci c denial— negative defense, and defend yourself by putting up a rmative
defense. If defendant really plans to sue the plainti also, defendant can le a
counterclaim, may be compulsory or permissive. Docket fees for permissive, not
compulsory.

• Controverted claims? Claims denied. Compromise agreements may cover partial

claims only.

• Nature: a party must give up some of the rights that he has, in consideration of the
same act on the part of the other side.

• You enter into a compromise agreement, see what you can’t leave without or
with less. Then look at the claims of the defendant. “‘Di mo hinihingi lahat,
hiningi mo yung kaya mo lang mabigay.”
• If a case has been led and there is an ADR provision in the contract, court will
give way to the ADR provisions and suspend proceedings. Or in the PH, there
is the CAM, which is mandatory. The judge will try to facilitate the dispute.

• Reciprocal Concessions: heart and life of every compromise

• Compromise Agreement: it is an agreement between 2 or more persons, who, for

preventing or putting an end to a lawsuit, adjust their di culties by mutual consent in
the manner which they agree on, and which everyone of them prefers to the hope of
gaining, balanced by the danger of losing.

• A compromise is an agreement to terminate, by means of mutual concession, a

claim which is disputed, in good faith or unliquidated.

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• It is an amicable method of settling or resolving bona de di erences or
uncertainties and is designed to prevent or put an end to litigation.

• If court proceeding, it is subscribed— may be subjected to perjury.

• It involves an agreement that a substituted performance is acceptable instead

of what was previously claimed to be due; thus, each party yields something
and agrees to eliminate both the hope of gaining as much as he previously
claimed and risk of losing as much as the other party previously claimed.

• Related provisions: Art. 1305, 1306 (which is why court approval is needed for it to be
a judgment on the merits)

• If the terms of a contract are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of its stipulations shall control. (Rep. v. Heirs of
Africa)
• Characteristics: consensual, reciprocal, nominate, onerous, accessory (prior con ict
presupposed), binding (once accepted, it is binding on the parties, provided there is no
vitiated consent), it is the settlement of a controversy principally, and is but merely
incidentally, the settlement of a claim.

2 KINDS OF COMPROMISE AGREEMENT

1) Judicial: ends a litigation

• Compromise agreement forged during CAM and JDR or even mid-trial

• Approved by the court

• Enforced through a writ of execution issued by the court

• Judgment on the merits

• Presumption of the law is that the parties will comply with the order of the
court.

• Otherwise, appeal. Identify the errors in the decision.

• When a judge issues a decision, it is based on trial. But if a party does not
agree, it will appeal by assigning errors. But the appellate court, the judge can
decide not only the errors, but also opens the entire case.

• 3 days before the hearing of the Motion, the motion must have been sent to the
adverse party.

• A judicial compromise is a determination of the controversy between the

parties and has the force and e ect of a nal judgment (Chiquita Brands v.
Omelio)— you do not expect an appeal; there can be no assignment of errors

• No 15-day period to le for MR or appeal.

• How do you incorporate the Compromise Agreement into the judgment?

The same way you attach documents to complaints. 2 ways: attachments (eg.
Exhibit A) or copy the contract into the pleading.

• In evidence, unless a photocopy is disputed, it is an original.

• It is both a contract and a judgment on the merits.

• It may neither be disturbed nor set aside except in cases where there is forgery
or when either of the parties’ consent has been vitiated.

2) Extrajudicial: avoids litigation

• Prevents a litigation from commencing

• Amicable settlement

• Kasunduan before the Lupon Tagapamayapa— may be enforced at the

barangay level or through action before the proper rst-level courts

Art. 2036: A compromise comprises only those objects which are de nitely stated
therein, or which, by necessary implication from its terms should be deemed to have
been included in the same.

No compromise under Art. 2035.

Art. 2034: No compromise on criminal aspect, only the civil liability arising from the
criminal act.

Why can’t the criminal aspect be compromised? There is no trial, there can be no
evidence.

Art. 2030: Suspension of proceedings

Compromise need not be unanimous— it may occur during trial.

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CAM is mandatory in civil cases, and in criminal cases mentioned in Rule on
Continuous Trial (light to less grave penalties).

Amicable compounders: those who assist in the mediation; undergo training and
refresher courses

Art. 2031: court may mitigate damages. You can include this in the appeal.

Art. 2037: res judicata

Binding e ect: can only be enforced as against the parties who are signatories to the
agreement; 3rd parties who may be aggrieved by the agreement and who are not
signatory are not bound.

Immutability of judgment: once a judgment on compromise has attained nality, it

cannot be modi ed in any respect, even if the modi cation is meant to correct
erroneous conclusions of fact and law, and whether it be made by the court that
rendered it or by the Highest Court of the Land. Even if there are errors, but your chance
had lapsed.

Remedies: Annulment and Rescission; NOT APPEAL

A compromise may be annulled on the . grounds: mistake, fraud, violence,

intimidation, falsity of documents or undue in uence (Art. 2038 in rel. to Art. 1330)

Vices of Consent: Mistake of Fact v. Mistake of Law

Art. 2038: …one of the parties cannot set up a mistake of fact as against the other if the
latter, by virtue of the compromise has withdrawn from a litigation already commenced.

Art. 2039: discovery of documents

Art. 2040: compromise after a nal judgment— compromise may be rescinded if

unaware of nal judgment

PBCom v. Hon. Juan Echiverri: to regard a compromise as rescinded means to go

back to the court to ask the court to set aside the judgment on compromise and to
proceed with the trial of the case.

Sec. 1, Rule 38
Lawyers’ Responsibilities: Sec. 23, Rule 138 (see Sison v. Camacho)

ALWAYS HAVE A QUITCLAIM, where each party waives any further claim arising from
incident

FEATURES OF ADR
1) ADR is a means used to resolve a dispute or controversy.

2) ADR utilizes means and methods allowed by law.

3) ADR is contractual in nature.

4) ADR avoids court trial.

5) ADR usually involves the participation of a neutral 3rd party.

Liberal interpretation in favor of ADR: courts shall not refuse to refer parties to
arbitration

Kinds of ADR arbitrator: institutional, ad hoc ADR, special

PRINCIPLE OF COMPETENCE-COMPETENCE [KOMPETENZ-KOMPETENZ]—

prevents dilatory tactics by parties who can cause extensive delays in getting a case to
arbitration; competence of tribunal to exist (jurisdiction) and competence to rule upon the
validity

PRINCIPLE OF SEPARABILITY— invalidity of contract does not ipso jure invalidate

arbitration clause

• Labor disputes are not under ADR Law— cognizable by NLRC

• Other ADR Forms (Ch. 3) - Sec. 18, ADR Act

• Singapore Mediation Center is introducing Med-Arb-Med— principle in labor laws/ADR

Model Law: governs international commercial arbitration— UNCITRAL Model

Model Act: a statute drafted by the National Conference of Commissioners in Uniform

State Laws for adoption by state legislatures, modifying it to some extend to meet it
own needs

Civil Procedure is the priority; ADR is an option.

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THEORETICAL ADVANTAGES OF ARBITRATION OVER COURT ADJUDICATION

1) Expertise of the decision maker

2) Finality of decision [Petition to Con rm Arbitral Award]

3) Privacy of proceedings

GR: everything is con dential

XPNs: if with consent of parties; for limited purpose/relevant docs/court case;

protective order [where the action or appeal is pending, may issue such order to
prevent material prejudice in case of disclosure]

4) Procedural Informality [photocopies are admitted, if not contested]

Referral to Arbitration: An arbitration proceeding is not mandatory because it is subj to the

will of the parties to a controversy - strictly consensual.

SEC. 25. INTERPRETATION OF THE ACT.— the policy of the law is in favor of arbitration

• In case some of the parties are not part of the arbitration, the civil action may proceed
as against them

• Who are bound by the arbitration? The parties to it; those who are not have the option
to be bound or not

• Those who are not parties must accede to the limits and spans of the arbitration.

Q: Which case shall be prioritized? The arbitration case or the civil/commercial case?
A: To be instituted simultaneously.

Q: Is the arbitration not a prejudicial question?

A: NO, because the arbitral tribunal is not a court.
• Arbitration is not a ground for suspension of an action.

• Suspension/archiving (under new CivPro Rules): must comply with have

jurisdiction— subject matter, territory or over the person— alive but not terminated
because the jurisdiction is not yet acquired, but the new Rules prevents inde nite
archiving; hence, must continue with the case or dismiss it. Dismissal would mean
forfeiture of ling fees, and must indicate in the Cert. of Forum Shopping (CFS) that it
has been led already before and dismissed. If it is dismissal, then it is with
prejudice, but if it is expressly provided that it is without, it may be re- led.

Q: Can a party refuse to enter into arbitration despite an arbitration agreement on the
ground that arbitration is strictly consensual as compliant with arbitration and the
proceedings are not mandatory?
A: Yes, a party has the right/freedom not to enter into an arbitration agreement, but
you have to justify that before the court.

SEC. 26. APPOINTING AUTHORITY.— Person/institution in the agreement or a regular

arbitration institution under whose rules the arbitration is agreed to be conducted.

Note: If the parties have agreed to submit their dispute to institutional arbitration rules,
unless they have agreed to a di erent procedure, must abide to the rules of such arbitral
body.

Presumption: deemed to have agreed to the procedure

SEC. 27. WHAT FUNCTIONS MAY BE PERFORMED BY APPOINTING AUTHORITY.— in

rel. to Arts. 11(3) and (4), 13(3), and 14(1) of the Model Law

Art. 11, UNCITRAL Model: 3 arbitrators or sole arbitrator

If 3 arbitrators, each party shall appoint 1 arbitrator, and the 2 arbitrators appointed
shall appoint the third one.

What if there are several defendants? Complainant will (and should) not agree to
several arbitrators— outnumbered.

Is 5 arbitrators okay? Yes, if you can pay for it.

1) If a party fails to appoint the arbitrator within 30 days of receipt of a request; or

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2) If the 2 arbitrators fail to agree on the 3rd arbitrator within 30 days from their
appointment, the appointment shall be made, upon request of a party, by the
court or other authority speci ed in Art. 6

NECESSARY MEASURE = INTERIM MEASURE OF PROTECTION (IMP)

Interim measures: aim to protect the parties’ rights before or during arbitration
proceedings, to regulate the terms of an ongoing relation, or to avoid frustration of the
award. Sometimes called, conservatory measures, provisional relief or measures, but it is
always the same procedural mechanism which is considered. (Like interlocutory orders)

Grant of Interim Measure of Protection (IMP): It is not incompatible with an arbitration

agreement for a party to request—
1) before constitution of the tribunal from a Court an interim measure and for the Court to
grant such measure;

2) after constitution of the arbitral tribunal and during arbitral proceedings, a request for
an interim measure, or modi cation thereof, may be made with the arbitral tribunal or to
the extent that arbitral tribunal has no power to act or is unable to act e ectively, the
request may be made by the Court.

Presumption: parties are ready to comply with the rulings of the arbitral tribunal because it
is voluntary.

• If parties refuse, an IMP may be led. This is why even if there is a tribunal already, the
court is still needed. Arbitral tribunal does not have the implementing powers.
• Any party may request that provisional relief be granted against the adverse party,
which may be:

a) to prevent irreparable loss or injury (restraining order);

b) to provide security for the performance of any obligation (attachment);

c) to product or preserve any evidence (search warrants (SW): civil search warrants
in IPL—

1) antonpiller order; - same as SW

2) saiziecontrefacon both)

d) to compel any other appropriate act or omission (mandamus)

• TRO in civil cases is only issued by the Executive Judge— 72-hour TRO [without
hearing] via the Executive Judge or the Clerk of Court
• Normal TRO prevents defendant from acting or reacting— when served to defendant, it
will be with summons and complaint, and the summons is deemed served. Defendant
does not know yet that there is a case. But in ADR, the defendant knows already—
adversarial already, not ex parte.

• An MTD is not a responsive pleading.

• The order granting provisional relief may be conditioned upon the provision of security
or any act or omission speci ed in the order.— bond (security, property, cash)—
answers for whatever damage or prejudice to the property of defendant that was
attached, in case defendant is later on proved to be innocent. (e.g. if car seized is used
in Grab business)

• Interim or provisional relief is requested by written application transmitted by reasonable

means to the Court or arbitral tribunal as the case may be, and the party against whom
the relief is sought, describing in appropriate detail the precise relief, the party against
whom the relief is requested, the grounds for the relief, and the evidence supporting the
request.

Q: May the Court grant an ex parte application and grant of IMP?

A: YES, in cases of extreme urgency and cases in which the very purpose of the
requested interim measure could be jeopardized by giving an advance notice of the
request to the party.
• An ex parte IMP where a party is not noti ed of an application and not given a right to
defend its case at the 1st stage of the proceedings.

• If the arbitral tribunal cannot compel parties, a party may go to court, and one who
does not comply shall be liable for damages, including all expenses.

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PCSO v. DFNN: Di erent uses of IMP— UNCITRAL (Art. 17) and RA 9285; a case may be
moot when due to supervening events that it ceases to present a justiciable controversy or
any resolution on the merits will have no practical e ect or value.

PCSO and DFNN, a publicly listed company engaged in the design, development,
and implementation of wireless personal communication devices, entered into an
Equipment Lease Agreement. Parties agreed to lease the “hardware, software, and
know how” to design a develop a system that would allow the use of personal
communication devices to receive and process bets for its lotto operations. But the
PCSO issued a Board Resolution unilaterally rescinding the Lease Agreement,
allegedly mainly due to DFNN’s failure to secure the conformity of Globe and
Smart, as well as of Philippine Gaming Management Commission and its service
provider.

DFNN sued PCSO for criminal complaints before the OMB. DFNN later on
proposed arbitration, but upon advise, PCSO only agreed to arbitrate if DFNN
would withdraw the complaints led, and if it would comply with the arbitration
clause in the Lease Agreement on a discussion and settlement in good faith before
resorting to arbitration. DFNN supposedly agreed to enter into a compromise with
PCSO, and they agreed to reopen the project, with PCSO’s understanding that
DFNN would no longer question the rescission of the Lease Agreement.

However, in a subsequent meeting, DFNN raised its concern about the legal basis
of the proceedings as PCSO allegedly unilaterally revised the project. DFNN then
led a Petition for [IMP] in Aid of Arbitration — Preliminary Injunction with
Application for Temporary Order of Protection before the RTC-Quezon City against
the PCSO, seeking to restrain the implementation of Resolution [approving the
proposals of Philippine Gaming, in partnership with International Lottery, and
Paci c Online Systems, in partnership with DFNN] pending the commencement of
arbitration proceedings between the parties, per the arbitration clause in the
Agreement.

The RTC issued an Order for the issuance of a TPO, and subsequently granted the
Petition, ruling that the Lease Agreement was not validly terminated because
PCSO failed to substantiate its claim that DFNN was at fault for the cancellation of
the Agreement, and that the PCSO failed to prove that it served DFNN with a
written notice of default for its alleged inability to perform the obligations of the
Agreement. Upon appeal, the CA dismissed it, ruling that the Special ADR Rules
required that the appeal of an order granting an IMP should be by a PetRev, and
not by an ordinary appeal.

On March 21, 2013, PCSO led a PetRev before the SC, but before DFNN could
le its Comment, PCSO led a Manifestation requesting the SC to stay the
proceedings pending the resolution of the arbitration proceedings commenced by
the parties on August 16, 2013. PCSO then led a Reply stating that the Ad Hoc
Arbitration Panel had rendered an Arbitral Award, and that it found that PCSO
improperly terminated the Agreement.

Under the UNCITRAL Model Law and the ADR Act, IMPs serve to protect the
status quo during the pendency of the arbitration proceedings. It is merely ancillary
to the arbitration proceedings.

However, due to the supervening event that the Arbitral Tribunal had already
rendered an Award, the case was now moot; hence, the Motion to Withdraw
Petition was granted.

KINDS OF IMP— through procedural orders

1) Facilitating the conduct of the arbitration proceedings;

2) Avoiding loss or damages and measures aimed at preserving the status quo;

3) Facilitating the enforcement of award

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Busan Universal v. DOT-MRT: Sample of arbitration clause. Does the RTC have the right
to issue TRO? Yes. RA 9285 is a general law applicable to all matters and controversies to
be resolved ADR methods. This law allows RTC to grant interim or provisional relief.

ADR Act, a general law, allows grant of IMP; whereas RA 8975, a special law,
expressly prohibits lower courts from issuing TROs, preliminary injunctions or
preliminary mandatory injunctions against national government infrastructure
projects. The challenged project in this case involves the MRT3, which is a national
project, and as a rule, special laws prevail over general laws. Hence, SC denied the
PetRev under R45 with Application for the Issuance of Status Quo Order and/or
Preliminary Mandatory Injunction.

DFA v. Falcon: Same as Busan case— but failed to prove that it is a national project
(compare with Busan case).

Contrary to the Busan case, the ePassport Project was not proven to be a national
infrastructure project because it does not fall within the de nition of “engineering
works or a service contract” and of “related and necessary activities” under RA
8975. While the ADR Act could supposedly apply to avail of IMPs, the ground of
“irreparable injury” was not su ciently shown. SC held that irreparable injury meant
that it is not susceptible of mathematical computation, and so, cannot be
adequately compensated. In this case, BCA International Corp. even sought for
damages that BCA claims to have su ered by virtue of DFA’s termination of the
Amended Build-Operate-Transfer (BOT) Agreement, which means that the injuries
sustained are determinable in pecuniary terms and can be reasonably estimated.
Pending this case, the arbitration case before the PDRCI was dismissed due to
lack of agreement between the parties to arbitrate. Essentially, this is a Petition for
a provisional remedy ancillary to its Request for Arbitration in the PDRCI. As a rule,
the dismissal of the principal action results in the denial of the prayer for the
issuance of a writ.

PLACE OF ARBITRATION— parties are free to agree on the place

1) upon agreement of the parties

2) Metro Manila

3) discretion of the Arbitral Tribunal

4) Appropriate Place must allow for:

a) consultation

b) hearing for testimonies of witness, parties, experts

c) inspection of goods, property, documents

PREFERRED LANGUAGE OF PROCEEDINGS/DOCUMENTS: per agreement of parties or

English; must be accompanied by translation (preferred: side by side)

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MIDTERM EXAM QUESTIONNAIRE

PART I: TRUE OR FALSE (50 POINTS). Select your Answer rst & then, brie y explain
them. 2 points each number.
1. In case of disagreement with the court’s Judgment on the Merits approving the
compromise agreement, the parties can le a notice of appeal to contest them. 

2. A compromise agreement is strictly limited to the causes of actions alleged in the

Information. 

3. The appointment of arbitrators to an Arbitral Tribunal shall be a subject of an Interim

Measure of Protection

4. The IBP President is the default Appointing Authority in AD HOC Arbitration.

5. Impartial Justice dictates that the Courts’ objectivity shall always prevail over parties’
autonomy because it is in a better position to resolve the dispute.

6. ADR is principally contractual in nature.

7. The court can order a non-party to a contract with an arbitration clause to join/participate
in an arbitration proceeding.

8. ADR oust the court of its jurisdiction over the case.

9. RA 9285 provided for a very strict de nition of Commercial Arbitration

10. A Doctor, Engineer, may be an Arbitrator.

11. RA 9285 the ADR Law of 2004 is patterned under the UNCITRAL Model Law.

12. Arbitration is a special civil action. 

13. Mediation and Arbitration are ADR processes may be combined to resolve a con ict.

14. An arbitral tribunal exercises quasi-judicial power.

15. When the contested contract subject of the Arbitration is questioned, the arbitration
clause therein shall be suspended. 

16. Seat of arbitration is the same as place of arbitration.

17. The parties can question before a court the arbitral tribunal’s decision to defer the
resolution on a question on its jurisdiction. 

18. A party cannot appoint an arbitrator having the same nationality as one of the parties.

19. A non-lawyer cannot represent a party before an arbitral tribunal.

20. The Special ADR Rules automatically govern arbitration proceedings

21. The deliberative process privilege cannot be invoked to reject a subpoena issued by a
court.

22. If the parties fail to agree on the applicable law, the arbitral tribunal will apply the law of
the seat of the arbitration. 

23. Like Court proceedings, all ADR proceedings are open to the public.

24. Courts cannot take cognizance and resolve issues pertaining to the competence/
jurisdiction of an arbitral tribunal.

25. Since the documents and information produced in an arbitration proceeding is

considered con dential, a party cannot disclose such documents and information to a
court. 

PART II: ESSAY (50 POINTS). Explain your answers fully but concisely. A mere yes or
no answer will not merit any point. Always state your legal basis.

1. A and B entered into consultancy contract. The contract was contained in one sheet of
paper with its recitals occupying the front and back side of the paper. The front part of the
contract stated that the contract is subject to the terms and conditions stated on the
reverse-side of the contract.

A  faxed the contract to  B  but inadvertently failed to fax the reverse side of the contract.
Upon receiving the front side of the faxed contract, A signed it and mailed the contract to
back to B, who then signed it.

Sometime after the signing of the contract, a dispute arose between A and B. A sought to

invoke the arbitration clause found on the reverse side of the contract.  B, on the other
hand, argued that he is not bound by the arbitration clause.

Is B bound by the arbitration clause? (10%)

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2. C  led a civil case for collection of a sum of money against  D  for failure to pay a
monetary debt of three hundred- fty million (Php 350,000,000.00) pesos covered by a
contract containing an ADR provision which reads as follows: “The parties agreed that in
case of litigation, they shall submit the con icted issues to Arbitration. S was added to the
contract for solidary liability to ensure compliance. D defaulted in his obligation to C. C  led
a case against D with the Regional Trial Court. Rule & Resolve the following issues:

a. D  led a motion to dismiss on the ground of lack of jurisdiction claiming that the issue
should be resolved through ADR as agreed in their contract. Resolve & brie y explain its
validity. (5%)
b. C  opposed the motion to dismiss claiming that the Arbitration Tribunal may proceed
while the case may continue with the solidary liability of S. Resolve & brie y explain its
validity. (5%)
c. The court, motu proprio issued an interim measure of protection, creating the Arbitral
Tribunal, implementing the Arbitration clause. Resolve & brie y explain its validity. (5%)

3. B, a Filipino citizen, executed a conditional deed of donation (containing an arbitration

clause) in favor of A, an American citizen, wherein B donated to A his one-hectare
agricultural land. In return, A will allow B to lease the land and, in addition, A will sell to B at
a minimal fee farming equipment that B can use to till the land.

Upon the execution of the deed of donation, but before the transfer of the land to A, B was
advised that according to the 1987 Constitution foreign nationals cannot own lands in the
country. Accordingly, he refused to turn over the land to A.

In view of B’s refusal, A initiated an arbitration proceeding before the Permanent Court of
Arbitration in Singapore, pursuant to the arbitration clause.

Unfortunately, the arbitral tribunal ruled against B and found the Conditional Deed of
Donation to be valid.

On the basis of the Award, A now goes to the RTC to have the award con rmed and
enforced.

B reached out to you seeking your opinion on whether there are any ground/s that he can
invoke to compel the RTC to refuse recognition to the arbitral award? (10%)

4. A Co. and B Inc. entered into a consultancy contract containing an arbitration clause.
During the lifetime of the contract, A Co. experienced a nancial crisis and was forced to
lay-o fty percent of its employees.

When the obligation of A Co. to B Inc. became due, A Co. failed to pay its obligation. As it
turned out, Director X and Y coerced the Board of Directors to stop paying B Inc. in order
to save money, in an attempt to rehabilitate A Co.

Upon learning the actions of the Director X and Y, B Inc. served a request for arbitration
impleading A Co. and Director X and Y. Director X and Y questions the move of B Inc.
since they are not privy to the consultancy contract.

Rule on the propriety of B Inc.’s decision to implead the Directors of A Co. in the arbitration
proceedings. (10%)

5. Pablo and Gustavo are cousins engaged in international freight forwarding of goods.
One day, Mateo hired their services to transport a merchandise from Manila to Miami.
Pablo and Gustavo actively negotiated with Mateo which translated to the signing of the
nal agreement which contains an arbitration clause.

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When the shipment of Mateo did not reach Miami, he led a request for arbitration and
impleaded both Pablo and Gustavo.

The arbitration clause reads:

All disagreements, disputes, controversies or claims arising out of or relating to this

Agreement or the interpretation hereof or any arrangements relating hereto or contemplated
herein or the breach, termination or invalidity hereof which cannot be resolved through
consultation and negotiation among the parties hereto shall be nally settled by arbitration
to be administered by the Singapore International Arbitration Centre (SIAC) in accordance
with the arbitration rules of the United Nations Commission on International Trade Law as in
e ect on the date of this Agreement (the “Rules”), except insofar as the Rules con ict with
the provisions of this Agreement. The rights of the parties shall be governed by the laws of
the Republic of the Philippines. Should the laws of the Republic of the Philippines be silent
or de cient, the tribunal may resolve the dispute acting as amiable compositeur.

The venue of the proceedings shall be in Singapore, unless later changed upon the
agreement of the parties.

Identify and brie y explain the: a) Applicable law; b) Applicable rule to the arbitration
proceedings; c) Seat of the arbitration; and d) Venue of the proceedings. (5%)

——- end of midterms ——-


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DOMESTIC ARBITRATION

Fruehauf Electronics v. Technology Electronics: Arbitration is an ADR outside of regular

court system. While it is adversarial in character, arbitration is technically not litigation.

• It is voluntary because it requires consent from both parties in the form of an

arbitration clause that pre-existed the dispute or a subsequent agreement.

• If no consent, court may claim lack of jurisdiction.

• Hearsay v. First-hand witness: There exists leniency in arbitration. Hearsay may be

admitted while in court litigation, it is not allowed.

• Only parties to arbitration can arbitrate, because it is contractual and consensual.

But a third party can voluntarily join if the parties agree to it.

• Arbitration is a purely private mode of dispute resolution, including Records,

evidence, arbitral award are all con dential, unlike court proceedings which are
generally public. Reason: To avoid negative publicity and protect their privacy.

• Due to the contractual nature, parties have substantial autonomy over the
proceedings.

• Parties can appoint arbitrators based on agreement. Legal quali cations: 1) being
of legal age; 2) full-enjoyment of their civil rights; 3) ability to read and write.

• Usually, they do not get lawyers as arbitrators. They get experts from the eld.

Fruehauf leased several parcels of land in Pasig City to Signetics, but the latter was
later on bought by Team Holdings Limited (THL) and thereafter changed its name to
Technology Electronics Assembly and Management Paci c Corp. (TEAM). After
several disagreements, Fruehauf and TEAM agreed to enter into a lease agreement
for 25 years, renewable for another 25 years upon mutual agreement. TEAM then
subleased the property to Capitol Publishing House after notifying Fruehauf.

The master lease expired in June 2003 and TEAM decided not to renew, while the
sublease expired in May 2003. However, Capitol only vacated the premises in
March 2005. Upon Fruehauf’s petition, the RTC directed the parties to comply with
the arbitration clause of the contract.

The arbitral tribunal awarded Fruehauf the balance of the unpaid rent and
damages. TEAM moved for reconsideration but to no avail, so it led a Petition to
Partially Vacate or Modify the Award, alleging that the tribunal failed to properly
appreciate the facts and the terms of the lease contract. The RTC proceeded to
con rm the Award. Upon appeal, the CA reversed and set aside the Award, and
dismissed the arbitral complaint.

The SC held that the neither the Arbitration Law nor the ADR Law allows a losing
party to appeal from the arbitral award. Citing Asset Privatization Trust v. CA— as a
rule, the award of an arbitrator cannot be set aside for mere errors of judgment
either as to the law or as to the facts. Courts are  without power to amend or
overrule merely because of disagreement with matters of law or facts determined
by the arbitrators. They will not review the ndings of law and fact contained in an
award, and  will not undertake to substitute their judgment for that of the
arbitrators, since any other rule would make an award the commencement, not the
end, of litigation.

If the RTC is asked to set aside an arbitral award in a domestic or international

arbitration on any ground other than those provided in the Special ADR Rules, the
court shall entertain such ground for the setting aside or non-recognition of the
arbitral award only if the same amounts to a violation of public policy.

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DISADVANTAGES
1) Since arbitrators do not necessarily have a background in law, they cannot be
expected to have the legal mastery of a magistrate. Greater risk that an arbitrator might
misapply the law or misappreciate the facts.

• Eg. One party objects to the evidence of the other, what will the arbitrator-
doctor say? He won’t be able to say “objection overruled.”

2) In compromise agreement, when the subject of the agreement, and contained in the
judgment on the merits, you do not appeal, you only question based on the vices of
consent because the court simply adopted the arbitral tribunal’s award. Otherwise,
arbitration will be a beginning of litigation, not end.

Note: Court participation is not mandated. Often proceeds independent of a court case.

SEC. 32. LAW GOVERNING DOMESTIC ARBITRATION.— to be governed by RA 876

• If the arbitration is not international, it is considered domestic arbitration.

• There is no domestic commercial arbitration, because subjects usually raised on

international level are commercial disputes (eg. Atty. Anjo’s discussion on ISDS). Or it
may be political in nature (eg. South China Sea— relates to sovereignty).

PURPOSE OF DISTINCTION

1) Available remedies— If domestic, there is always a possibility of relief from the courts,
and not just rely on the tribunal; courts can issue provisional remedies, such as
injunction. If it is international, no court interference. Note: Whether the injunction is
right or wrong, if the court issues it, the parties will follow it.

2) Avoid intervention by domestic/local courts in the various phases of international

tribunal.

WHEN IS IT NOT INTERNATIONAL OR IS DOMESTIC?

1) Domicile/Place of business [not the main o ce] are in one and same state [at the time
of the conclusion of the agreement]

2) Substantial part of the commercial agreement is to be accomplished or concluded int

he domestic state

3) Per agreement of parties, places of business in di erent states:

a) where a party has more than 2 places of business, the place of business is that
which has the closest relationship to the arbitration agreement;

b) if a party does not have a place of business, reference is to be made to his habitual
residence.

Example (true story): BPI has its main o ces in Makati, so they will always le their cases
in Makati, so even if credit cards are claimed from Cebu, they will still le in Makati to the
detriment of their clients. Such as in this pandemic, where there is travel limitations.

Note: see UNCITRAL Model Law (Art. 1) for what constitutes international arbitration. If
not within this Art., it is not domestic.

• IN THE PHILIPPINES (DOMESTIC): Domestic arbitration would most likely be that the
parties to the arbitration agreement have their places of business in the same State, in
this case, the Philippines.

1) Place of Arbitration per Arbitration Agreement = Philippines

2) Obligations: Performance or Substantial Part of the Obligations or Subject Matter:

place is closely connected or relates to more than 1 country = Philippines

3) Several Places of Business: closest relationship to the arbitration agreement =

Philippines

4) No place of business: habitual residence = Philippines

TESTS FOR INTERNATIONALITY— grounds under which you can contest

1) Place of Business

• Grounds for determination: does not cover arbitration of disputes—

a) between or among foreign businessmen with place of business in one

state; or

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b) between nationals of the same state where one or both of them are
controlled and managed by foreign companies (even if the place of business
is in the Philippines);

• Determine the di erent States to which the parties to arbitration belong; place of
business not principal place of business

• Place of Business with the: closest relationship; connection to the arbitration

agreement; relevant to the purpose of the arbitration agreement. If no place of
business, refer to habitual residence.

• Model Law, Art. 1(4): closest relationship and habitual residence

2) Place of Arbitration: common practice not to specify the place of arbitration in the
contract. Di culty in predicting the nature of con ict in the contract. Contentious
issues: leave to the parties the choice of arbitration. Usually, parties do not set the place,
but they set parameters.

• If silent on the place: parties are always free to agree on the place, but if they still
fail to agree (after the arbitration contract), arbitral tribunal will determine.

• UNCITRAL Model Law: just because the place of arbitration chosen by the
tribunal or institution is outside the state, arbitration is not necessarily
international.

• ADR Act, Sec. 30: for domestic arbitration, Place of Arbitration is Metro Manila,
unless the arbitral tribunal shall decide on a di erent place of arbitration. Or may
move from place to place to interview members.

3) Place of Performance: if a substantial part of the obligation or the commercial

relationship is to be performed or is performed in a state other than the one in which the
parties have their places of business. Arbitration should be governed by the Model Law.
XPN: Model Law, Art. 1(3) b(iii)

4) Subject Matter of Arbitration Agreement: the area in which dispute might arise that
was then to be settled by arbitration

Limited/Speci c Arbitration Agreement: those speci cally indicated in the

arbitration agreement, whether to limit the scope or by inference, expand
them. Eg. When it says arbitration is limited to payment (but this still
depends)

Dependent on the Arbitration Agreement (General Arbitration

Agreement): Any controversy, whether contractual or non-contractual,
maybe submitted to arbitration. Such submission or contract may include
questions which may be collateral, incidental, precedent, or subsequent to
any issue between the parties.

Residual Test of Internationality (catch-all provision): when the subject

matter of the arbitration agreement [rather than the arbitration agreement
itself] is related to more than one State.

• Note: The fact that the foreign arbitrators are chosen for a dispute of the choice
by the parties to the dispute of foreign procedural law would not be a test of
arbitration.

• Not subject to arbitration: questions of law

KINDS OF ARBITRATION

A. Binding v. Non-binding

Binding: the arbitral award, when arrived at, is not voluntarily to be performed by the
parties, but needs to be con rmed by the court. Con rmation is subject to
enforcement like a court judgment. Like in a case of a compromise agreement where
court adopts it to be a judgment on the merits.

Non-binding: if the award, by agreement of the parties or by law, is not subject to

con rmation and enforcement. Not usual.

B. Contractual v. Non-contractual (of US application)— important if you want to practise

in the US

Contractual: if the duty to arbitrate is created by contract, then the enforcement of

that duty is unlikely to violate the constitutional right to a jury trial. Courts typically
hold that, by forming a contract to arbitrate, a party waives its right to a trial by jury.

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Non-contractual: the parties to a non-contractual arbitration have rarely waived the
right to a jury trial.

• Generally must be non-binding to avoid violation of this right to a jury trial.

While parties can agree to non-binding arbitration, and courts have generally
enforced such agreements, most non-binding arbitration is court-ordered;
mandatory (Court-Annexed Arbitration).

• Those in a non-contractual setup, they want a right to jury because when there
is a jury, they rule on evidence and based on their feelings, and they can award
more than what is asked for, although the court can mitigate the award or rule a
mistrial.

• The party that loses in arbitration may pursue the case in litigation and the
court will hear the case de novo (from the beginning, as if it’s new, and set
aside arbitrator’s decision), giving no deference to the arbitrator’s decision.

• Most court-ordered arbitration rules impose some disincentive to deter the

losing party from pursuing litigation (ie. Imposing a bond).

KINDS OF ARBITRATION AGREEMENT

1) Compromissoire: an arbitration agreement usually embedded in a contract in e ect

providing that any future controversy arising from such contract shall be subject to
settlement by arbitration. Included in the contract. They can even orally agree to an
arbitration agreement and reduce it into writing.

2) Compromis: an arbitration agreement to submit an existing dispute to arbitration.

FORMAL REQUISITES
1) It must be in writing;

2) It must be subscribed by the parties or their representatives

• if the arbitration agreement or submission to arbitration is signed by an agent, the

law requires that the agent be equipped with a special power (SPA).

• If JA is not subscribed, the court can conduct and administer the oath and
notarize it.

BF Corp. v. CA (GR 120105): Involves Shangri-La Mall, and there was a delay in
construction and defendant wants to arbitrate but plainti says there is no arbitration
agreement in the construction agreement. Arbitration clause was in the Conditions of the
Contract. A contract need not be contained in a single writing but may be encompassed in
several instruments, and although not signed by the parties if it is su cient that the
unsigned instruments be clearly identi ed or referred to and made part of the signed
instrument(s). It was subscribed by parties or their representatives. Arbitration clause may
be included by reference. Requisites were then complied with. Eg. Correspondence of
letters— in e ect, the communication could be a contract not in just one document.

Shangri-La (SPI) engaged BF. Corp. to construct the main structure of the EDSA
Plaza Project, a shopping complex in Mandaluyong. SPI again engaged BF when it
expanded the project. However, BF incurred delay which SPI considered as
“serious and substantial.” Thereafter, a re broke out which damaged Phase I of
the project. BF failed to complete the construction works and abandoned the
project. Disagreements then ensued, and failed to come to an agreement.

BF then sued for collection of money against the SPI and its board of directors
before the RTC-Pasig. SPI led a motion to suspend proceedings alleging that their
contract provided for a clause requiring prior resort to arbitration before judicial
intervention could be invoked in any dispute arising from the contract, but BF
opposed the existence of a formal contract between them, and that their
agreement did not provide for arbitration.

The RTC denied the motion to suspend proceedings, which the CA reversed via
R65. CA ordered to stay the proceedings in the lower court. The SC provided for
the 2 requisites of an arbitration clause— it must be in writing, and it must be
subscribed by the parties or their representatives.

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It was held that all of these requisites are complied with, although the Conditions of
the Contract containing the arbitration clause was not signed by the
representatives of the corporation. The Articles of Agreement, which incorporates
all the other contracts and agreements between the parties, was signed by
representatives of both parties and duly notarized. As a rule, a contract need not
be contained in a single writing, and may be collected from several di erent
writings which do not con ict with each other, and which, when connected, show
that they are in correspondence with each other. BF cannot admit the execution of
the Articles of Agreement while denying the existence of the arbitration clause.

Arbitration does not deprive court of its jurisdiction. Sec. 7, RA 876 provides that
proceedings therein have only been stayed. Only suspension of proceedings.
Arbitration is no longer a special proceeding.

ART. 8. ARBITRATION AGREEMENT AND SUBSTANTIVE CLAIM BEFORE COURT.

1) A court before which an action is brought in a matter which is the subject of an

arbitration agreement shall, if a party so requests not later than when submitting his
rst statement on the substance of the dispute, refer the parties to arbitration, unless
it nds that the agreement is null and void, inoperative, or incapable of being performed.

• We do not have court-annexed arbitration because it is expensive.

• ADR is pre-trial.

• “A court before which an action is brought”: for plainti — upon ling or

complaint, or for defendant— before ling an answer or responsive pleading

• “If a party so requests”: not mandatory

• “Unless it nds that the agreement is null and void, inoperative or

incapable of being performed”: if there are vices of consent

2) Where an action referred to in par. 1 of this Art. has been brought, arbitral proceeds
may nevertheless be commenced or continued, and an award may be made, while the
issue is pending before the court.

• Options: proceed, continue, suspend— with other pending issues during the
pendency of the arbitral proceedings

• Ground for suspension: prejudicial question

ART. 10. NUMBER OF ARBITRATORS. Free to determine, but default is 3.

ART. 11. APPOINTMENT OF ARBITRATORS.

1) No person shall be precluded by reason of his nationality from acting as an arbitrator,

unless otherwise agreed by the parties

2) the parties are free to agree on a procedure of appointing the arbitrator(s).

3) Failure to appoint or failure to appoint the third one, 3 arbitrators, or the IBP will
appoint them.

4) If parties fail on their function, an IMP may be taken such that any party may request
the court or other authority to provide other means to appoint.

5) A decision to entrust to court or other authority is not subject to appeal.

Options: on selections of arbitrators— parties, arbitrators, court - initiated by petition

ART. 12. GROUNDS FOR CHALLENGE.

1) Questions of impartiality, independence, bias, con ict of interests, quali cations/

competence, relationship, neutrality, favoritism, prejudice, gift/favor/loan, con dentiality
— needs immediate disclosure

2) If circumstances exist, it must be based on actual facts, not on caprices. Must not be
arbitrary reasons.

3) Must o er clear evidence.

ART. 13. CHALLENGE PROCEDURE.

1) Freedom to agree on procedure to challenge— autonomy;

2) Failing to agree, a party who intends to challenge, within 15 days after becoming
aware of the constitution of the tribunal or after becoming aware, send a written

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statement of the reasons for the challenge to the tribunal. Unless the challenged
arbitrator withdraws or the other party agrees to the challenge, the tribunal with the
challenged arbitrator decide on the challenge based on kompetenz-kompetenz rule.
Tribunal shall rule within 30 days from receipt, and the decision shall not be subject to
appeal.

• If not satis ed with the tribunal ruling, go to court or IBP president; no appeal

• In interim: status quo— tribunal with challenged arbitrator proceeds with hearing

ART. 14. FAILURE OR IMPOSSIBILITY TO ACT.

1) Arbitrator is unable to perform without undue delay, his mandate terminates by

withdrawal or if parties agree on the termination. Otherwise, party may request the court
to other authority under Art. 6 to decide on the termination, which decision shall not be
subject to appeal.

2) Arbitrator may voluntarily withdraw.

ART. 18. EQUAL TREATMENT OF PARTIES.— full opportunity of each party to present his
case

ART. 19. DETERMINATION OF RULES OF PROCEDURE.

1) Parties are free to agree on the procedure— no need to o er evidence or create doubt
in the case of prosecution; either prosecution or defense may present rst.

2) Absent agreement, the tribunal may conduct in such manner it deems appropriate

Rules of Procedure: Basis of determination— Ad hoc, institutional, special

Powers of Arbitral Tribunal: to rule on— 1) Kompetenz-kompetenz; 2) Procedure; 3)

Admissibility; 4) Relevance; 5) Materiality; 6) Evidence

Note: Fax correspondence is not a form of internet transmission like emails.

ART. 29. DECISION MAKING BY PANEL OF ARBITRATORS.

Majority of Panel: Arbitral Awards/Decisions

Presiding Arbitrator: Procedural Issues (need to appoint a presiding. eg. Sandiganbayan)

ART. 30. SETTLEMENT.

1) Settlement of dispute—

a) Terminate proceedings;

b) Arbitral award on agreed terms issued:

i. Complete: results in the termination of the arbitration proceedings;

ii. Partial: continuation of court proceedings

2) An award on agreed terms shall be made in accordance with Art. 31, and shall state
that it is an award. Such an award has the same status and e ect as any other award on
the merits of the case.

ART. 31. FORM AND CONTENTS OF AWARD. Award must be—

1) Formal, documented, written;

2) Must be signed by majority (absence of signature must be explained);

3) Award shall state reasons upon which it is based, unless parties have agreed that no
reasons are to be given or the award is given on agreed terms;

• Grounds/reasons for agreement, may or may not be stated— documentation

for proper implementation

4) Date and place of arbitration— must include term/lapse/period, and location (venue,
jurisdiction, enforceability)

ART. 32. TERMINATION OF PROCEEDINGS.

1) Arbitral proceedings are terminated by nal award or by order of tribunal

2) Tribunal shall issue order for termination when the claimant withdraws his claim,
parties agree, or impossibility of agreement.

Due to 2019 Rules, ADR provisions are also amended. It is now pending SC approval.

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CONSTRUCTION INDUSTRY ARBITRATION COMMISSION (CIAC)— Arbitration of
construction disputes is mandated by law.

SEC. 34. ARBITRATION OF CONSTRUCTION DISPUTES: GOVERNING LAW.— The

arbitration of construction disputes shall be governed by EO 1008, otherwise known as
Construction Industry Arbitration Law.

EO 1008: CONSTRUCTION INDUSTRY ARBITRATION LAW

SEC. 2. DECLARATION OF POLICY.— State policy to encourage the early and expeditious
settlement of disputes in the Philippine construction industry.

Whereas clauses—
1) The construction industry provides employment to a large segment of the national
labor force and is a leading contributor to the gross national product;

2) It is of vital necessity that continued growth towards national goals shall not be
hindered by problems arising from, or connected with, the construction industry;

3) There is a need to establish an arbitral machinery to settle to such disputes

expeditiously in order to maintain and promote a healthy partnership between the
government and the private sector in the furtherance of national development goals;

4) PD 1746 created the Construction Industry Authority of the Philippines (CIAP) to

exercise centralized authority for the optimum development of the construction industry
and to enhance the growth of the local construction industry;

5) Among the implementing agencies of the CIAP is the Philippine Domestic

Construction Board (PDCB), which is speci cally authorized by PD 1746 to “adjudicate
and settle claims and disputes in the implementation of public and private construction
contracts.

Construction: all on-site works on buildings or altering structures from land clearance
through completing, including excavation, erection and assembly and installation of
components and equipment

Is right to receivable a CIAC case? Determine rst if it is a construction-related issue.

Fort Bonifacio Development Corp. v. Domingo: Construction refers to all on-site works
on buildings or altering structures, from land clearance through completion including
excavation, erection and assembly and installation of components and equipment.
Respondent’s claim is not even construction-related at all. The right to the receivables of
LMM Construction from petitioner under the Trade Contract is not being impugned herein.
What respondent is demanding is that a portion of such receivables amounting to
P804,068.21 should have been paid to him rst before the other creditors of LMM
Construction, which, clearly, does not require CIAC’s expertise and technical knowledge
of construction.

SEC. 4. JURISDICTION.— The CIAC shall have original and exclusive jurisdiction over
disputes arising from, or connected with, contracts entered into by parties involved in
construction in the Philippines, whether the dispute arises before or after the completion of
the contract, or after the abandonment or breach thereof. These disputes may involve
government or private contracts. For the Board to acquire jurisdiction, the parties to a
dispute must agree to submit the same to voluntary arbitration.
The jurisdiction of the CIAC may include, but is not limited to: 1) violation of
speci cation for materials and workmanship; 2) violation of the terms of agreement; 3)
interpretation and/or application of contractual time and delays; 4) maintenance and
defects; 5) payment; 6) default of employer or contractor; and 7) changes in contract cost.
Exclusion: disputes arising from employer-employee relationships, which shall continue to
be covered by the Labor Code.

Jurisdiction: statutory jurisdiction— provided for by law, and not by agreement of parties

Metro Bottled Water Corp. v. Andrada Construction and Development Corp.: The CIAC
was created by EO 1008 or the Construction Industry Arbitration Law, to have original and
exclusive jurisdiction over disputes arising from, or connected with, contracts entered into
by parties involved in construction in the Philippines; or whether the dispute arises 1) before
or 2) after the completion of the contract or 3) after the abandonment or 4) breach thereof.

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CIAC jurisdiction is unconditional. Once parties agree to submit to arbitration, it shall be
under CIAC jurisdiction. If led with the RTC, the court case must be dismissed, unless
all parties expressly manifest their preference for court trial.

Federal Builders v. Power Factors: Formalities of the contract have nothing to do with the
jurisdiction of the CIAC— principle of separability. The jurisdiction of the CIAC is over the
dispute, not over the contract between the parties. CIAC has original and exclusive
jurisdiction over construction disputes, whether such disputes arise from or are merely
connected with the construction contracts entered into by parties, and whether such
disputes arise before or after the completion of the contracts.

CIAC JURISDICTION RE: VOLUNTARY ARBITRATION

Philippine Textile Research Institute v. CA: When a dispute arises from a construction
contract, the CIAC has the exclusive and original jurisdiction. Under EO 1008, CIAC
acquires jurisdiction when the parties to a dispute agree to submit the same to voluntary
arbitration.

STIPULATED VENUE OTHER THAN CIAC— primary forum is CIAC, the stipulated forum
is only secondary. Construed merely as an agreement on an additional forum

Western Minolco Corp. v. CA: Stipulation as to venue becomes relevant only when an
action has to be instituted “based upon the award as obtained” (from the board of
arbitrators), ie., as the mode of enforcement of the award. Stipulations in a contract which
specify a de nite place for the institution of an action arising in connection therewith, do
not, as a rule, supersede the general rules on the matter set out in Rule 4 of the ROC, but
should be construed merely as an agreement on an additional forum, not as limiting venue
to the speci ed place. Thus, when the law provides for a venue, stipulated venue will not
supersede the the general rules on the matter.

CIAC JURISDICTION OVER FOREIGN PARTIES— Art. II (3), CIAC Arbitration Rules

Q: How is jurisdiction secured over a foreign country? Is notice equivalent to

summons? If a foreign party refuses to receive notice, how will the CIAC secure
jurisdiction over the foreign party? It is su cient that respondent receives due notice of
the request for arbitration. The sending of the notice is necessary only to comply with the
requirement of procedural due process and not for the purpose of acquiring in personam
jurisdiction. By entering into a contract provided for settlement of disputes by arbitration, a
foreign party is deemed to have consented to arbitration under the CIAC Arbitration Rules
and agreed to the form of notice provided in such rules.

Q: Does the CIAC have jurisdiction over issues concerning: 1) attorney’s fees; 2)
performance bonds; 3) damages; 4) contracts to sell?
Attorney’s Fees— Licomcen, Inc. v. Foundation Specialists: All that is required for the
CIAC is to acquire jurisdiction is for the parties to agree to submit their dispute to voluntary
arbitration. The mere existence of an arbitration clause in the construction contract is
considered by law as an agreement by the parties to submit existing or future controversies
between them to CIAC jurisdiction, without any quali cation or condition precedent. The
arbitration clause in the construction contract ipso facto vested the CIAC with jurisdiction.
Voluntary arbitration clause covers any dispute of any kind, not only arising out of the
execution of the works, but also in connection therewith. Attorney’s fees and interests
payments are costs directly incidental to the dispute; hence, the scope of the arbitration
clause covers all the disputed items. Hence, the issue is within the jurisdiction of CIAC.
Performance Bond— Prudential Guarantee and Assurance v. Anscor Land: A dispute
must meet 2 requirements in order to fall under the jurisdiction of the CIAC— 1) the dispute
must be somehow connected to a construction contract; 2) the parties must have agreed to
submit the dispute to arbitration proceedings. Performance bond is signi cantly and
substantially connected to the construction contract that there can be no doubt if it is the
CIAC, under Sec. 4 of EO 1008, which has jurisdiction over any dispute arising from or
connected with it.

SEC. 35. COVERAGE OF THE LAW.— Construction disputes which fall within the
original and exclusive jurisdiction of the CIAC shall include those: 1) between or among
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parties to; or 2) who are otherwise bound by, an arbitration agreement, directly or by
reference whether such parties are project owner, contractor, subcontractor, fabricator,
project manager, design professional, consultant, quantity surveyor, bondsman, or issuer
of an insurance policy in a construction project. CIAC shall continue to exercise original
and exclusive jurisdiction over construction disputes although the arbitration is
“commercial“ pursuant to Sec. 21.

Damages— Ang v. De Venecia: CIAC was established to serve as a tribunal which will
expeditiously resolve disputes within the construction industry, and CIAC shall only have
jurisdiction over disputes arising from, or connected with, contracts entered into by parties
involved in construction in the Philippines. This limits the jurisdiction of the CIAC not only as
to subject matter jurisdiction but also as to jurisdiction over the parties. It is erroneous to
consider a suit for damages caused by construction activities on an adjoining parcel of land
as a dispute arising from or connected with a construction contract, because an adjoining
owner is not a party to a construction contract. Otherwise, it would unduly and excessively
expand the scope of CIAC jurisdiction to include cases that are essentially quasi-delictual
or tortious in nature, which are within the exclusive jurisdiction of the trial courts.

Contract to Sell— Camp John Hay Development Corp. v. Charter Chemical and
Coating Corp.: The subject of the contracts to sell still falls within the jurisdiction of the
CIAC because Sec. 4 of the Construction Industry Arbitration Law states that its jurisdiction
includes “payment [and] default of employer or contractor.” Here, the main dispute
concerning the contracts to sell all boils down to the issue of payment of the 2 units for the
services rendered by the respondent. Hence, units’ transfer as payment to respondent still
falls under the jurisdiction of CIAC. The dispute is better left to the expertise of the CIAC, a
quasi-judicial body with the technical expertise to resolve disputes outside the expertise of
regular courts.

FORM OF ARBITRATION AGREEMENT

Hutama-RSEA Joint Operations v. Citra Metro Manila Tollways Corp.: An arbitration
agreement or a submission to arbitration shall be in writing, but it need not be signed by
the parties, as long as the intent is clear that the parties agree to submit a present or future
controversy arising from a construction contract to arbitration. It may be in the form of
exchange of letters sent by post or by telefax, telexes, telegrams or any other modes of
communication. The arbitration clause in the construction contract ipso facto vested the
CIAC with jurisdiction, regardless whether the parties speci cally choose another forum or
make reference to another arbitral body. Since the jurisdiction of CIAC is conferred by law, it
cannot be subject to any condition; nor can it be waived or diminished by the stipulation,
act or omission of the parties, as long as the parties agreed to submit their construction
contract dispute to arbitration, or if there is an arbitration clause in the construction
contract. The parties will not be precluded from electing to submit their dispute to CIAC
because this right has been vested in each party by law.

LM Power Engineering Corp. v. Capitol Industrial Construction Groups: LM Power and

Capitol Industrial entered into a subcontract agreement involving electrical work at the 3rd
Port of Zamboanga. Due to petitioner’s failure to complete the work on schedule,
respondent took over some of petitioner’s work items. Thus, when petitioner completed its
task under the contract, respondent refused to pay petitioner’s billings, and contested the
billable accomplishments. Petitioner sued respondent for collection of sum of money. RTC
ordered respondent to give full payment for the work completed by petitioner, but CA
reversed and ordered the parties to present their dispute to arbitration in accordance with
the arbitral clause provided in their subcontract agreement. The SC a rmed the CA
decision, ruling that any doubt should be resolved in favor of arbitration because aside from
unclogging judicial dockets, arbitration also hastens the resolution of disputes; that the
instant case involves technical discrepancies in the application of their agreement that are
better left to an arbitral body that has expertise in those areas; that under Sec. 1, Art. III of
the new Rules of Procedure, there is no more need to le a request with CIAC to vest it with
jurisdiction to decide a construction dispute. As long as the parties agree to submit to
voluntary arbitration, regardless of what forum they may choose, they may invoke the CIAC
jurisdiction; that parties are expected to abide by the arbitral clause in the agreement in
good faith; and that since petitioner had already led a complaint with the RTC without prior

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recourse to arbitration, the proper procedure is to request the suspension of such action as
provided under the Arbitration Law to enable CIAC to decide on the dispute.

• Voluntary arbitration; arbitration clauses should be liberally construed.— being

an inexpensive, speedy and amicable method of settling disputes, arbitration— along
with mediation, conciliation and negotiation— is encouraged by the SC, because it
hastens the resolution of disputes.

• CIAC has jurisdiction to decide a construction dispute when construction

contract has an arbitral clause.— No need to le a request with CIAC to vest it with
jurisdiction to decide a construction dispute.

• Parties are expected to abide by the arbitral clause in good faith.— The arbitral
clause in the Agreement is a commitment on the part of the parties to submit to
arbitration the disputes covered therein. Because that clause is binding, they are
expected to abide by it in good faith, and so, either of the parties may compel the
other to arbitrate.

SEC. 36. AUTHORITY TO ACT AS MEDIATOR OR ARBITRATOR.— By written agreement

of the parties to a dispute, an arbitrator may act as mediator and a mediator may act as
arbitrator. The parties may also agree in writing that, following a successful mediation, the
mediator shall issue the settlement agreement in the form of an arbitral award.
SEC. 14, EO 1008: A sole arbitrator or 3 arbitrators may settle a dispute.
Sole Arbitrator: Where the parties agree that the dispute shall be settled by a sole
arbitrator, they may, by agreement, nominate him the list of arbitrators accredited by the
CIAC for appointment and con rmation. If the parties fail to agree as to the arbitrator, the
CIAC taking into consideration the complexities and intricacies of the dispute/s has the
option to appoint a single arbitrator or an Arbitral Tribunal.
Arbitral Tribunal: 3 arbitrators. If the CIAC decides to appoint an Arbitral Tribunal— 1) each
party may nominate 1 arbitrator from the list of arbitrators accredited by the CIAC for
appointment and for con rmation; 2) the 3rd arbitrator who is acceptable to both parties
con rmed in writing shall be appointed by the CIAC and shall preside over the tribunal.
Quali cations of Arbitrators: 1) men of distinction; 2) in whom the business sector and the
government can have con dence; 3) they shall not be permanently employed with the
CIAC; 4) they shall render services only when called to arbitrate; 5) for each dispute they
settle, they shall be given fees; 6) undergo training and regular accreditation.
Expert Arbitrators: 1) upon request; 2) with con rmation by the CIAC; 3) parties to
shoulder expenses, deposited with the CIAC Secretariat [but if only 1 party makes a
request, the whole amount covering the expenses must be deposited with the Secretariat.

SEC. 15. APPOINTMENT OF EXPERTS.— upon request of either or both parties; with
nancial consequences

SEC. 37. APPOINTMENT OF FOREIGN ARBITRATOR.— [to accommodate the foreign

party] The CIAC shall promulgate rules to allow for the appointment of a foreign arbitrator
as co-arbitrator or chairman of a tribunal a person who has not been previously accredited
by CIAC, provided, that:

a) the dispute is a construction is dispute in which one party is an international party;

b) the person to be appointed agreed to abide by the arbitration rules and policies of
CIAC;

c) he/she is either co-arbitrator upon the nomination of the international party; or he/she
is the common choice of the two CIAC-accredited arbitrators rst appointed, one of
whom was nominated by the international party; and

d) the foreign arbitrator shall be of di erent nationality from the international party.

CIAC Revised Rules of Procedure Governing Construction Arbitration [June 22, 2019]
— widened scope of international party

• Accredited by CIAC

• Not accredited by CIAC— co-arbitrator/co-chairman

SEC. 9.4. CONDITIONS FOR APPOINTMENT OF FOREIGN ARBITRATOR.— A foreign

arbitrator not accredited by CIAC may be appointed as a co-arbitrator or chairperson of an
arbitral tribunal for a construction dispute under the following conditions:

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a) the dispute is a construction dispute, in which one party is an international party [one
whose place of business is outside the Philippines, and for this purpose, the term
international party shall not include a domestic subsidiary of such international party or
a co-venturer in a joint venture with a party which has its place of business in the
Philippines;

b) the foreign arbitrator to be appointed is not a national of the Philippines and is not of
the same nationality as the international party in the dispute.

9.4.1. PROCEDURE FOR APPOINTMENT OF FOREIGN ARBITRATOR.— The

foreign arbitrator must be nominated by the international party, or is the common
choice of the two CIAC-accredited arbitrators, one of whom was nominated by the
international party. The nomination must be accompanied by a resume or bio-data of
the nominee relevant to quali cations as a construction arbitrator and a signed of the
nominee to abide by CIAC arbitration rules and policies.

SEC. 39. COURT TO DISMISS INVOLVING A CONSTRUCTION DISPUTE.— An RTC

before which a construction dispute is led shall, upon becoming aware, not later than the
pre-trial conference, that the parties had entered into an arbitration agreement, dismiss the
case and refer the parties to arbitration to be conducted by the CIAC, unless both parties,
assisted by their respective counsel, shall submit to the RTC a written agreement
exclusively for the Court, rather than the CIAC, to resolve the dispute.

FINDINGS OF FACTS OF CIAC

First Integrated Bonding and Insurance Co. v. Jobin-Sqm: Factual ndings of the CIAC,
which has acquired expertise in settling disputes relating to the construction industry
because its jurisdiction is con ned to speci c matters, are accorded not only respect but
even nality if they are supported by substantial evidence.

Ang v. De Venecia: 3 requisites for acquisition of jurisdiction by the CIAC are: 1) a dispute
arising from or connected with a construction contract; 2) such contract must have been
entered into by parties involved in construction in the Philippines; 3) an agreement by the
parties to submit their dispute to arbitration.

Exceptions to CIAC = Court Jurisdiction— Shangri-La Properties v. BF Corp.: The

factual ndings of the arbitrators of CIAC, being nal and conclusive, are not reviewable by
this Court on appeal. Note: Mathematical computations as well as the propriety of arbitral
awards are of the nature of factual questions, and as a rule, the Court cannot delve into
factual questions. The rule limiting appeal by petition for review on certiorari to the
consideration and resolution of legal questions admits of several exceptions:

a) when the factual ndings of the CA and the trial court [or arbitrator] are contradictory;

b) when the ndings are grounded entirely on speculation, surmises, or conjectures;

c) when the inference made by the CA from its ndings of fact is manifestly mistaken,
absurd, or impossible;

d) when there is grave abuse of discretion (GAD) in the appreciation of facts;

e) when the CA, in making its ndings, goes beyond the issues of the case, and such
ndings are contrary to the admissions of both appellant and appellee;

f) when the judgment of the CA is premised on a misapprehension of facts;

g) when the CA fails to notice certain relevant facts which, if properly considered, will
justify a di erent conclusion;

h) when the ndings of facts are themselves con icting;

i) when the ndings of fact are conclusions without citation of the speci c evidence on
which they are based;

j) when the ndings of facts of the CA are premised on the absence of evidence but such
ndings are contradicted by the evidence on record.

Metro Bottled Water Corp. v. Andrada Construction and Development Corp.: Arbitral
awards of the CIAC may only be appealed on pure questions of law, though not all will
justify an appeal, given the strict standards for judicial review of arbitral awards.

ADMINISTRATIVE FEES AND EXPENSES UNDER SECS. 16-17, EO 1008— CIAC is

authorized to x the amount to be deposited by the parties which must be equivalent to
expected arbitration expenses. Note: Amounts below are not current values.

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• Filing fees— initial ling fee of P3,000, and deposit of equivalent to 10% of expected
arbitrator’s fees based on the claim, or P5,000 whichever is higher, not to exceed
P50,000, and if the amount of the claim exceeds P1M, 1/10 of 1% amount claimed.
Deposit: treated as claimant’s initial payment of its shares of the special assessment
fee of 1/10 of 1% of the sum in dispute. Filing fees are paid to the Secretariat upon
initiation of arbitration fee [by the party who initiated the arbitration]. Parties can agree
to equally or otherwise share the costs.

• Administrative charges— based on the percentage of the sum in dispute xed

• Arbitrator’s fees— in accordance with the Table of Administrative Charges and

Administrator’s Fees

• Expert Arbitrator’s Fees and Expenses

RULES OF PROCEDURE IN CIAC

1) Filing of Complaint/Request for Arbitration— le with the CIAC Secretariat Request for
Arbitration and attach Contract with Arbitration Agreement. Note: Without arbitration
agreement or willingness to undergo arbitration, CIAC will dismiss the complaint.

2) Answer— within 3 days from ling, Secretariat will transmit to respondent a request for
an answer, with or without counterclaims within 15 days. Note: Failure to le an answer
will not stay proceedings. Jurisdiction is acquired by agreement to arbitrate in the
contract. CIAC will proceed with arbitration, proceedings, receive evidence, render and
award.

3) Reply— led by claimant within 15 days

4) Appointment and acceptance of arbitrators— one/sole or 3 arbitrators as arbitral

tribunals

5) Challenge to Arbitrators— a) Motion for Inhibition [arbitrator might not be an expert on

the eld, or there is a better arbitrator]; b) Request for Disquali cation due to relationship,
nancial or duciary interest, incompetence, professional misconduct, integrity,
independence, impartiality, or interest; c) Opportunity to be Heard.

6) Preliminary Conference and Terms of Reference [Pre-trial Brief]— a) amicable

settlement; b) amendment of pleadings; c) stipulations, admissions of facts; d)
witnesses; e) issues; f) interim relief, appointment of experts/ocular inspection; g) terms
of reference [parties, addresses, contact numbers; summary of claims; admitted facts
and documents; issues; arbitrators; place of arbitration; schedule of payment/breakdown
of fees; signed by the parties]

7) Arbitration proceedings— a) venue, date, time; b) quorum; c) o er of evidence; d) draft

decision or nal memorandum of agreements; e) closing of hearings. Draft decision: in
the nature of construction industry because they are not lawyers or judge, and there is a
possibility that the head of the tribunal is not knowledgeable in making decisions. Only
recommendations. CIAC make draft decisions.
8) Award— rendered within 30 days, not to exceed 6 months; written, nal and executory
after 15 days. Prohibited pleadings: MR and MNT

9) Execution of Award

If place of arbitration is Philippines, it is domestic arbitration.

APPELLATE REMEDIES OF CONSTRUCTION AWARDS

Metro Bottled Water Corp. v. Andrada Construction and Development Corp.: Due to
the highly technical nature of proceedings before the CIAC, and the emphasis on the
parties’ willingness to submit to the proceedings, the Construction Industry Arbitration Law
provides for a narrow ground by which the arbitral award can be questioned in a higher
tribunal.

Exceptions to CIAC = Court Jurisdiction— Philippine Race Horse Trainer’s Association

v. Piedras Negras Construction and Development: Findings of fact of quasi-judicial
bodies, like the CIAC, which have acquired expertise because their jurisdiction is con ned
to speci c matters, are generally accorded, not only respect, but also nality. In particular,
factual ndings of construction arbitrators are nal and conclusive and not reviewable by
the Court on appeal. XPNs: 1) the award was procured by corruption, fraud or other undue
means; 2) there was evident partiality or corruption of the arbitrators or any of them; 3) the
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arbitrators were guilty of misconduct in refusing to hear evidence pertinent and material to
the controversy; 4) one or more of the arbitrators were disquali ed to act as such under
Sec. 9, RA 876 and willfully refrained from disclosing such disquali cations or of any other
misbehavior by which the rights of any party have been materially prejudiced; 5) the
arbitrators exceeded their powers, or so imperfectly executed them, that a mutual, nal and
de nite award upon the subject matter submitted to them was not made; 6) also
considered as an exception is when there is a very clear showing of GAD, when an award is
obtained through fraud or the corruption of arbitrators, when a party is deprived of
administrative due process, or when the ndings of the CA are contrary to those of the
CIAC.


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JUDICIAL REVIEW OF ARBITRAL AWARDS

Chung Fu Industries Phils. v. CA: Awards in international arbitration are subject to judicial
review. Why? Arbitration case is international because the issue/property/thing is abroad; or
the parties are foreigners; business is abroad; BUT venue of arbitration is in the Philippines.
All the arbitration hearings conducted in the Philippines are treated as domestic arbitration,
and as domestic arbitration, they are subject to judicial review. It is within Philippine
jurisdiction.

Chung Fu Industries and Roblecor Philippines entered into a Construction

Agreement, whereby Roblecor will construct and nish Chung Fu’s industrial
complex. In the event of disputes arising from the performance of subject contract,
the issue shall be submitted for resolution before a single arbitrator chosen by
parties. 2 ancillary contracts were also entered into for the construction of a
dormitory, and for the installation of electrical, water and hydrant systems.

Roblecor failed to complete the work despite the time extension given to it, so
Chung Fu took over the construction. Roblecor the led a Petition for Compulsory
Arbitration with TRO before RTC for allegedly unsatis ed account and unpaid
progress billings. After negotiations, parties led to the formulation of an arbitration
agreement which mainly provides that: a) parties mutually agree to abide by the
decision of the arbitrator including any amount that may be awarded to either party,
and b) parties mutually agree that the arbitrator’s decision shall be nal and
unappealable [no further judicial recourse even if either party disagrees in whole or
in part], except to seek judicial assistance to enforce the award. RTC approved it.

The arbitrator ordered Chung Fu to pay Roblecor, and declared that the award was
nal and unappealable, by virtue of the arbitration agreement precluding judicial
review. The RTC then granted Roblecor’s Motion for Con rmation of Award,
entered judgment, and also granted the motion for issuance of a writ of execution.
CA a rmed the RTC ndings, so Chung Fu led a petition for certiorari under R65
before the SC.

SC held that despite the stipulation stating that there shall be no further judicial
recourse even if either of them disagrees with the award, Chung Fu is not estopped
from questioning the award. Art. 2044 of the CC states the the nality of arbitrators’
award is not absolute, such that the same may be annulled or rescinded, and
under the Arbitration Law, it may be vacated, modi ed or rescinded. Judicial review
of the award is then possible under such circumstances.

Further, the proper remedy is certiorari under R65 if the there is clear GAD on the
part of the voluntary arbitrator. Voluntary arbitrators exercise quasi-judicial
functions, so their decisions should not be beyond the scope of the power of
judicial review of the SC. SC granted Chung Fu’s petition, nding that the arbitrator
committed GAD for failing to apply the terms and provisions of the Construction
Agreement and for granting unjusti ed extra compensation to Roblecor for several
times, constituting a ground to vacate the award under Sec. 24(d) of the Arbitration
Law.

Judicial Review: as applied to the determination of a body or person performing what is

known as quasi-judicial function [to make determination/resolution/decision], is the power
to pass upon such determination, although appellate courts have left to interpretation and
application the precise nature of the review to be made; eg. Fiscal deciding whether there is
probable cause and when they conduct a preliminary investigation

GR: It should not be subject to judicial review, because their basis is not solely law.

San Miguel Corp. v. Sec. of Labor: The acts or decisions of administrative agencies
exercising quasi-judicial or legislative powers are within the power of the courts to
scrutinize even though no right of review is given by the statute, in order to keep these
administrative agencies within its jurisdiction and to protect the substantial rights of the
properties a ected by its decision.

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Judicial Review is proper in case of (similar to vices of consent under Compromise
Agreement):

1) lack of jurisdiction;

2) GAD;

3) error of law;

4) fraud or collusion

• May declare an action/resolution of an administrative authority to be illegal because:

1) it violates or fails to comply with some mandatory provision of law; 2) it is corrupt,
arbitrary or capricious.

• Judicial Review is an error of law; otherwise, the issue is focused on the arbitrator.

Purpose of judicial review: to keep the administrative agency within its jurisdiction and
protect the substantive rights of the parties. It is a part of the checks and balances of the
parties which restricts the separation of powers and forestalls arbitrary and unjust
adjudications.

Oceanic BIC Division v. Romero: Arbitrators perform quasi-judicial functions— [Labor

case] A voluntary arbitrator by the nature of her functions in a quasi-judicial capacity.

Korea Technologies Co. v. Hon. Alberto Lerma: The issue is an arbitration clause in a
contract where parties mutually agreed by stipulating that they would submit themselves to
arbitration in a foreign country, which instead of hastening the resolution of their dispute,
the parties prolonged the controversy. The Court held that Foreign Arbitral Awards are—

1) not judgments/decisions of a foreign court [aka quasi-judicial body]— foreign

arbitral awards when con rmed by the RTC are deemed not as a judgment of a
foreign court but as a foreign arbitral award, and when con rmed are enforced as
nal and executory decisions of our courts of law;

2) nal and/or binding, but not immediately executory— the concept of a nal and
binding arbitral award is similar to judgments or awards given by some of our
quasi-judicial bodies, whose nal judgments are stipulated to be nal and binding,
but not immediately executory in the sense that they may still be judicially
reviewed, upon the instance of any party.

• If it is an award, it will not move on its own. Parties must move to recognize it before the
court.

Why is there a judicial review when it is voluntary? If Parties A and B enter into
arbitration and each choose an arbitrator, they [the arbitrators] would agree to arbitrate but
would protect the right of either A or B. Remedy of court is not to conduct a hearing, but to
vacate or modify because it is not the arbitrator.

Insular Savings Bank v. FEBTC: Parties cannot stipulate and cannot deprive the court of
its right to judicial review. The manner by which the power of judicial review may be
exercised may not be modi ed by the parties. Parties cannot by their stipulation, confer
jurisdiction on the RTC to review the award on questions of law. It is inherent with the
courts to do judicial review with their jurisdiction.

• As provided in the Philippine Clearing House Corp. (PCHC) Rules, the ndings of
facts of the decision or award rendered by the Arbitration Committee shall be nal
and conclusive upon all the parties in said arbitration dispute, and under Art. 2044 of
the CC, the validity of any stipulation on the nality of the arbitrators’ award or
decision is recognized. However, under Arts. 2038-3040 applicable to both
compromises and arbitrations, arbitrators’ award may be annulled or rescinded and
the decision of the Arbitration committee is subject to judicial review.

• Judicial Remedies (exclusive per law): has something to do with the question of
law or, of fact based on the misconduct done by arbitrator; not misapplication of law

• Can court intervene in arbitral tribunals? Yes, via IMP and judicial remedies

• Petitioner had several judicial remedies after the Arbitration committee denied
its MR:
1) Petition to vacate the award led as special proceeding with the RTC— petition
to the proper RTC to issue an order vacating the award on the provided for under
Sec. 24 of the Arbitration Law;

SEC. 24. GROUNDS FOR VACATING AWARD.— In any one of the following
cases, the court must make an order vacating the award upon the petition of
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any party to the controversy when such party proves a rmatively that in the
arbitration proceedings:

a) The award was procured by corruption, fraud, or other undue means; or

b) That there was evident partiality or corruption in the arbitrators or any of

them;

c) That the arbitrators were guilty of misconduct in refusing to postpone

the hearing upon su cient cause shown, or in refusing to hear evidence
pertinent and material to the controversy; that one of more of the
arbitrators was disquali ed to act as such under Sec. 9 hereof, and
willfully refrained from disclosing such disquali cations or of any other
misbehavior by which the rights of any party have been materially
prejudiced; or

d) That the arbitrators exceeded their powers, or so imperfectly executed

them, that a mutual, nal and de nite award upon the subject matter
submitted to them was not made.

Where an award is vacated, the court, in its discretion, may direct a new
hearing either before the same arbitrators or before a new arbitrator or
arbitrators to be chosen in the manner provided in the submission or contract
for the selection of the original arbitrator or arbitrators, and any provision
limiting the time in which the arbitrators may make a decision shall be
deemed applicable to the new arbitration and to commence from the date of
the court’s order.

Where the court vacates an award, costs, not exceeding P50,000 and
disbursements may be awarded to the prevailing party and the payment
thereof may be enforced in like manner as the payment of costs upon the
motion in an action.

2) Petition for review under R43 of the ROC with the CA on questions of fact, of
law, or mixed questions of fact and law— under R43, CA and CTA are not co-
equals because CA can rule on decisions of CTA;

3) Petition for certiorari under R65 of the ROC on the ground that the Arbitration
committee acted: i) without or in excess of its jurisdiction (question of law), or ii)
with GAD amounting to lack or excess of jurisdiction (also question of law)

In the petition, always focus on the arbitrator and how he exercised discretion.
Metro Bottled Water Corp. v. Andrada Construction and Development Corp.: Arbitral
awards will not be vacated because the court cannot substitute its judgment for that of
arbitral tribunal due to absence of expertise.

3 basic proceedings: ordinary civil actions; special civil actions (speci c matters—
actions which are greater in e ect); special proceedings (only recognizes a right or
obligation; no personal service of summons; di erent way of acquiring jurisdiction—
publication)

Under the RTC, you can recognize, vacate, implement.

The court cannot render the decision null and void— arbitration is factual and not
decided by courts.

Fruehauf Electronics v. Technology Electronics: Parties cannot implead a 3rd party in the
arbitration proceedings even if latter’s participation is necessary for a complete settlement
of a dispute because arbitration is contractual and consensual. 3rd party must consent to
participate to the arbitration. He must intervene.
• Quasi-judicial bodies can only exercise such powers and jurisdiction as are expressly
or by necessary implication conferred upon them by the enabling statutes because
they are only created by statutes— creatures of law.

• As a contractual and consensual body, the arbitral tribunal does not have any
inherent powers over the parties.

• It has no power to issue coercive writs or compulsory processes, so there is a need

to resort to regular courts for IMP and for the recognition or enforcement of the
arbitral award.

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• The arbitral tribunal acquires jurisdiction over the parties and the subject matter
through stipulation. Upon the rendition of the nal award, the tribunal becomes
functus o cio and save for a few exceptions, ceases to have any further jurisdiction
over the dispute. Arbitral tribunals are creatures of contract.

National Power Corp. v. Legasto: Despite stipulation in an arbitration agreement that the
decision of the arbitrator shall be nal and not subject to appeal and no further judicial
recourse, the award is still subject to the court’s power of judicial review. Judicial review
cannot be removed, limited, or expanded by stipulation.

Oceanic BIC Division v. Romero: Final arbitral awards are subject to judicial review. It may
be exercised even when parties stipulate in an arbitration agreement that it be nal and
unappealable, or even when the law declares the decision of quasi-judicial agencies nal.

Note [Parlade Opinion]:

• An award in an International Commercial Arbitration in the Philippines, referred to as

a Model Law award, is an award in a domestic arbitration, as opposed to an award in
an international foreign arbitration.

• An arbitration is international if it satis es one of the elements of internationality as

de ned in Model Law, Art. 1(3).

• An international award may be either domestic or foreign depending on where the

place of arbitration is. Priority consideration is venue of proceedings.

National ADR Day in the Philippines: Dec. 19 (annually)

HOW ARBITRATION PROCEEDINGS MAY TERMINATE

1) Final Award of Arbitral Tribunal: Life of an arbitral tribunal is dependent on the
contract/document that gave them life (v. Courts which exist whether or not they have
cases to handle or none)

• They shall continue to exist until their: i) mandate express; ii) purpose is impossible
to accomplish; iii) purpose is accomplished and/or; iv) agreement is terminated

• What if the arbitral tribunal did not nish? Then it stops even if the issues were
not [fully] decided upon, but there is an option to extend them.

2) Order of the Arbitral Tribunal terminating the arbitration proceedings— but the
arbitral tribunal may initiate its termination when it becomes nal.

TYPES OF ARBITRAL AWARDS

1) Final (all claims have been decided upon)— arbitral tribunal makes a nal
determination of all the claims submitted to the arbitration that the mandate of the
tribunal terminates;

2) Interim;

3) Interlocutory or Partial

Interim/Interlocutory or Partial: leaves issues which the arbitration cannot resolve. Non-
nal and will not mandate termination of the arbitral tribunal.

Actions possible: withdrawal, correction, vacate

Other arbitral tribunal results (remedies of party who does not like the arbitral award)—
may be led in Recognition or Enforcement of Claim (it does not render the arbitral
tribunal’s decision null and void because if it does, it must give a reason why and there
must be replacement order so you will not to conduct hearing):
1) Withdrawal of the Claim— does not terminate the mandate of the arbitral tribunal;
respondent is entitled to object to such withdrawal of claim if he has a legitimate interest
in obtaining a nal settlement of the dispute;

• Kinds: express (settlement of dispute and tribunal orders the cessation of

proceedings = unnecessary or impossible); or implied (respondent objects to the
jurisdiction of the tribunal, then claimant withdraws his claim)

2) Correction of the Award— errors in the award that may be corrected— computation,
clerical/typographical errors; does not require a review of evidence; errors maybe
corrected by the arbitral tribunal motu proprio or upon request of at least 1 party; remedy

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of appeal or petition (questions relating to the su ciency/weight or evidence or
admissibility or overlooked/ignored);

3) Additional Award— in case of omitted award

Interpretation: grant of request for interpretation— discretionary upon arbitral tribunal; with
nancial consequences

Chung Fu Industries Phils. v. CA: Arbitrator here failed to apply the terms of the
construction agreement, which is a GAD. What if courts refuse or neglect to inquire into
the factual millieu of an arbitrator’s award to determine whether it is in accordance
with law or within the scope of his authority? How may the power of judicial review be
invoked? The proper remedy is certiorari under R65 of the RTC where there is GAD on the
part of the voluntary arbitrator is clearly shown. It must be a question of law to be subject to
judicial review. Remember Art. 2044 of the CC. Also, the Construction Industry Arbitration
Law provides that the arbitral award shall be nal and unappealable, except on questions of
law which shall be appealable to the SC.

Metro Bottled Water v. Andrada Construction: Judicial review of arbitral awards is

permitted only on very narrow grounds. Does not allow an arbitral award to be revisited
without a showing of speci ed conditions. Arbitral awards will not be vacated on the
ground that the arbitral tribunal committed errors of fact, or of law, or of fact and law
because the court cannot substitute its judgment for that of the arbitral tribunal. Parties are
even precluded from ling an appeal or a petition for certiorari questioning the merits of an
arbitral award.

• Arbitral awards by the Construction Industry Arbitration Commission (CIAC) may only
be appealed on pure questions of law, though not all will justify an appeal. Given its
technical expertise, CIAC is given a wide latitude of discretion to resolve all issues.

Shangri-La Properties v. BF Corp. (GR 187552-553 and 187608-09): Construction issue

involves a lots of mathematical computations. R45, S1 [of the ROC] is not a proper remedy;
must be questions of law. Mathematical computations are factual questions.

• XPNs from the rule limiting the appeal by petition for review on certiorari to the
consideration and resolution of legal questions— always fault of the arbitrator:
1) when the factual ndings of the CA and the trial court are contradictory;

2) when the ndings are grounded entirely on speculation, surmises, or

conjectures;

3) when the inference made by the CA from its ndings of facts is manifestly
mistaken, absurd, or impossible;

4) when there is GAD in the appreciation of facts;

5) when the CA, in making its ndings, goes beyond the issues of the case, and
such ndings are contrary to the admissions of both appellant and appellee;

6) when the judgment of the CA is premised on a misapprehension of facts;

7) when the CA fails to notice certain relevant facts;

8) when the ndings of facts are themselves con icting;

9) when the ndings of facts are conclusions without citation of the speci c
evidence on which they are based— when you are writing a decision or a pleading,
you cannot just state something without o ering anything. Eg. If you mention a
contract, cite it either by footnote or endnote, and cite where you can nd it in the
records;

10) when the ndings of fact of the CA are premised on the absence of evidence
but such ndings are contradicted by the evidence on record.

• The factual ndings of construction arbitrators are accorded nality and

conclusiveness, and not be reviewable by the Court on appeal, one recognized
exception occurs when the ndings of the CA are contrary to those of the arbitrators.

WHEN COURT INTERVENTION IS ALLOWED

DFA v. BCA: Court intervention under RA 9285: a) IMP; b) judicial review of arbitral awards
by the RTC; c) appeal from the RTC decisions on arbitral awards to the CA

• The extent of court intervention in domestic arbitration (IRR of RA 9285, Art.

5.3): No court shall intervene except in accordance with the Special ADR Rules.

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• Court intervention in Special ADR Rules is allowed through these remedies to be led
with the RTC:

1) Special Court Relief, which includes judicial relief involving issue of:

a) existence, validity and enforceability of the arbitral agreement;

b) IMP;

c) challenge to the appointment of arbitrator;

d) assistance in taking evidence;

e) con dentiality/protective orders;

f) con rmation, correction or vacation of award in domestic arbitration;

2) An MR may be led by a party with the RTC on the grounds speci ed in Rule
19.1;

3) An appeal to the CA through a petition for review under Rule 19.2 or through a
special civil action for certiorari under Rule 19.26;

4) A petition for certiorari with the SC from a judgment or nal order or resolution of
the CA, raising only questions of law.

• Under the Rule 19.36 of the Special ADR Rules, review by the SC of an
appeal by certiorari is not a matter of right.

• When can the SC exercise discretion on the CA powers and consider it

a question of law?

a) Failed to apply the applicable standard or test for judicial review

prescribed in these Special ADR Rules in arriving at its decision resulting
in substantial prejudice to the aggrieved party;

b) Erred in upholding a nal order or decision despite the lack of

jurisdiction of the court that rendered such nal order or decision;

c) Failed to apply any provision, principle, policy or rule contained in these

Special ADR Rules resulting in substantial prejudice to the aggrieved
party;

d) Committed an error so egregious and harmful to a party as to amount to

an undeniable excess of jurisdiction.

• Grounds are exclusive for setting aside a Model Law Award.

• Note: Grounds for judicial review are predominantly arbitrators’ quali cations,
exercise of discretion, arbitrary action/without basis, procedural lapses; capacity of
parties; public policy (SC is very powerful that it has to right to intervene on this
ground).

SPECIAL ADR RULES: took e ect on Oct. 30, 2009

UNCITRAL Model Law (Art. 34): where Rule 12.4 was based

RULE 12.4. GROUNDS TO SET ASIDE OR RESIST ENFORCEMENT.— The court may 1)
set aside or 2) refuse enforcement of the arbitral award only if:

a) the party making the application furnishes proof that:

i) a party to the arbitration agreement was not valid under the law to which the parties
have subjected it or, failing any indication thereof, under Philippine law;

ii) the party making the application to set aside or resist enforcement was not given
proper notice of an arbitrator or of the arbitration proceedings or was otherwise
unable to present his case;

iii) the award deals with a dispute not contemplated by or not falling within the terms
of the submission to arbitration, or contains decisions on matters beyond the scope of
the submission to arbitration, provided that, if the decisions on matters submitted to
arbitration can be separated from those not so submitted,

1) only that part of the award which contains decisions on matters not submitted to
arbitration may be set aside, or

2) only that part of the award which contains decisions on matters submitted to
arbitration may be enforced;

iv) the composition of the arbitral tribunal or the arbitral procedure was not in
accordance with the agreement of the parties, unless such agreement was in con ict
with a provision of Philippine law from which the parties cannot derogate or failing
such agreement, was not in accordance with Philippine law;

b) the court nds that:

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i) the subject-matter of the dispute is not capable of settlement by arbitration under
the law of the Philippines or;

ii) the recognition or enforcement of the award would be contrary to public policy.

In deciding the petition, the court shall disregard any other ground to set aside or enforce
the arbitral award other than those enumerated above.

The petition to set-aside or a pleading resisting the enforcement of an arbitral award on the
ground that a party was a minor or an incompetent shall be led only on behalf of the
minor or incompetent shall be led only on half of the minor or incompetent and shall allege
that:

a) the other party to arbitration had knowingly entered into a submission or agreement
with such minor incompetent, or

b) the submission to arbitration was made by a guardian or guardian ad litem who was
not authorized to do so by a competent court.

A. DOMESTIC AWARDS

SEC. 40. CONFIRMATION OF AWARD.— Con rmation of a domestic arbitral award is

governed by Sec. 23, RA 876.

A domestic arbitral award when con rmed shall be enforced in the same manner as nal
and executory decisions of the RTC.

The recognition and enforcement of an award in an international commercial arbitration

shall be governed by Art. 35 of the Model Law.

RA 876: ARBITRATION AWARD

SEC. 23. CONFIRMATION OF AWARD.—

1) At any time within 1 month after the award is made;

2) any party to the controversy which was arbitrated;

3) may apply to the court having jurisdiction, as provided in Sec. 28;

4) for an order con rming the award;

5) the court must grant such order unless the award is vacated, modi ed, corrected, as
prescribed herein;

6) notice of such motion must be served upon the adverse party or his attorney as
prescribed by law for the service of such upon an attorney in action in the same court.

SEC. 24. GROUNDS FOR VACATING AWARD.— In any of the following cases, the court
must make an order vacating upon the petition of any party to the controversy when such
party proves a rmatively that in the arbitration proceedings:

Moral Integrity:

a) The award was procured by corruption, fraud, or other undue means;

b) That there was evident partiality or corruption in the arbitrators or any of them; or

Procedural Defect:

c) That the arbitrators were guilty of misconduct in refusing to postpone the hearing upon
su cient cause shown, or in refusing to hear evidence pertinent and material to the
controversy;

Quali cations:
d) that one or more of the arbitrators was disquali ed to act as such under Sec. 9 hereof,
and willfully refrained from disclosing such disquali cations or of any other misbehavior
by which the rights of any party have been materially prejudiced; or

e) that the arbitrators exceeded their powers, or so imperfectly executed them, that a
mutual, nal and de nite award upon the subject matter submitted to them was not
made.

Vacate, not annul because vacation meant you can still do something.

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VACATION OF AWARD [Remedies]: Where an award is vacated, the court, in its
discretion— may direct a new hearing either before the same arbitrators or before a new
arbitrator or arbitrators to be chosen in the manner provided in the submission or contract
for the selection of the original arbitrator or arbitrators, and provision limiting the time in
which the arbitrators may make a decision shall be deemed applicable to the new
arbitration and to commence from the date of the court’s order. Where the court vacates an
award, costs, not exceeding P50,000, and disbursements may be awarded to the prevailing
party and the payment thereof may be enforced in like manner as the payment of costs
upon the motion in an action.

SEC. 25. GROUNDS FOR MODIFYING OR CORRECTING AWARD.— In any of the

following cases, the court must make an order modifying or correcting the award, upon the
application of any of the party to the controversy which was arbitrated:

a) when there was an evident [factual]:

1) miscalculation of gures, or an evident

2) mistake in the description of any person, thing or property referred to in the award;

b) where the arbitrators have:

1) awarded upon a matter not submitted to them,

2) not a ecting the merits of the decision upon the matter submitted; or

c) where the award is

1) imperfect in a matter of form not a ecting the merits of the controversy, and

2) if it had been a commissioner’s report, the defect could have been amended or
disregarded by the court.

The order may modify and correct the award so as to e ect the intent thereof and promote
justice between the parties.

SEC. 26. MOTION TO VACATE, MODIFY OR CORRECT AWARD: WHEN MADE.—

Notice of a motion to vacate, modify or correct the award must be served upon the adverse
party or his counsel within 30 days after the award is led or delivered, as prescribed by law
for the service upon an attorney in an action.

SEC. 27. JUDGMENT.— Upon the granting of an order con rming, modifying or correcting
an award, judgment may be entered in conformity therewith in the court wherein said
application was led. Costs of the application and the proceedings subsequent thereto may
be awarded by the court in its discretion. If awarded, the amount thereof must be included
in the judgment.

Fruehauf Electronics v. Technology Electronics: What are the remedies from a nal
domestic award? The only remedy is to le a petition to vacate or to modify/correct the
award not later than 30 days from the receipt of the award, unless a ground to vacate has
been established, the RTC must con rm the arbitral as a matter of course.
• NOT APPEAL— The right to an appeal is neither a natural right nor an indispensable
component of due process; it is a mere statutory privilege that cannot be invoked in
the absence of an enabling statute. Neither the Arbitration Law nor the ADR Law
allows a losing party to appeal from the arbitral award, which re ects the State's
policy of upholding the autonomy of arbitration proceedings and their corresponding
arbitral awards.
• It was recognized by the Court when it enacted the 2009 Special ADR Rules, under
Rule 2.1 thereof, that courts shall intervene only in the cases allowed by law or the
Special ADR Rules.

• The court cannot substitute their judgment for that of the arbitrators, since any other
rule would make an award the commencement, not the end, of litigation.

• Errors of law and fact, or an erroneous decision of matters submitted to the judgment
of the arbitrators, are insu cient to invalidate an award fairly and honestly made.

• Judicial review of an arbitration is more limited than judicial review.

• Arbitral award is not absolute. Rule 19.10 of the Special ADR Rules [by referring to
Sec. 24 of the Arbitration Law and Art. 34 of the UNCITRAL Model Law] recognizes
exceptions to the autonomy of arbitral awards—

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As a general rule, the court can only vacate or set aside the decision of an
arbitral tribunal upon a clear showing that the award su ers from any of the
in rmities or grounds for vacating an arbitral award under Sec. 24 of RA 876 or
under Rule 34 of the Model Law in a domestic arbitration, or for setting aside an
award in an international arbitration under Art. 34 of the Model Law, or for such
other grounds provided under these Special ADR Rules.

If the RTC is asked to set aside an arbitral award in a domestic or international

arbitration on any ground other than those in the Special ADR Rules, the court
shall entertain such ground for the setting aside or non-recognition of the arbitral
award only if the same amounts to a violation of public policy.

The court shall not set aside or vacate the award of the arbitral tribunal merely on
the ground that the arbitral tribunal committed errors of facts, or of law, or of fat
and law, as the court cannot substitute its judgment for that of the arbitral
tribunal.

• The grounds for vacating a domestic arbitral award under Sec. 24 of the Arbitration
Law contemplate the following scenarios:

a) when the award is procured by corruption, fraud, or other undue means; or

b) there was evident partiality or corruption in the arbitrators or any of them; or

c) the arbitrators were guilty of misconduct that materially prejudiced the rights of
any party; or

d) the arbitrators exceeded their powers, or so imperfectly executed them, that a

mutual, nal and de nite award upon the subject matter submitted to them was not
made.

• The award may also be vacated if an arbitrator who was disquali ed to act as such
willfully refrained from disclosing such disquali cations or of any other misbehavior
by which the rights of any party have been materially prejudiced.

SEC. 28. PAPERS TO ACCOMPANY MOTION TO CONFIRM, MODIFY, CORRECT OR

VACATE AWARD.— The party moving for an order con rming, modifying, correcting, or
vacating an award, shall, at the time that such motion is led with the court for the entry of
judgment thereon, also le the following papers with the Clerk of Court:

a) the submission, or contract to arbitrate; the appointment of the arbitrator or

arbitrators; and each written extension of the time, if any, within which to make the
award;

b) a veri ed copy of the award;

c) each notice, a davit, or other paper used upon the application to con rm, modify,
correct or vacate such award, and a copy of each order of the court upon such
application.

The judgment shall be docketed as if it were rendered in an action.

The judgment so entered shall have the same force and e ect in all respects, as, and be
subject to all the provisions relating to, a judgment in an action; and it may be enforced as if
it had been rendered in the court in which it is rendered.

APOSTILE: THE HAGUE CONVENTION ON PRIVATE INTERNATIONAL LAW

• Apostile is constantly used; hence, the need to know it— method by which domestic
documents are certi ed as correct and authentic by their national government for
submission for international use.

• Apostile is an international document by the Hague Convention which deals with certain
matters, such as children in con ict with the law.

• When you have a document and you want to introduce it in court, bring it to the
consulate, make an oath, and it will be sent to where you need it to be. For Filipinos,
bring it to DFA and have it certi ed (a seal saying that it is an apostile document).

ART. 35. RECOGNITION AND ENFORCEMENT.— An arbitral award, irrespective of the

country in which it was made, shall be recognized as binding and, upon application in
writing to the competent court, shall be enforced subject to the provisions of this article and
of Art. 36.

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The party relying on an award or applying for it enforcement shall supply the duly
authenticated original award or a duly certi ed copy thereof, and the original arbitration
agreement referred to in Art. 7 or a duly certi ed copy thereof. If the award or agreement is
not made in an o cial language of this State, the party shall supply a duly certi ed
translation thereof into such language.

The con rmation of a domestic award shall be made by the RTC in accordance with the
Rules of Procedure to be promulgated by the SC.

A CIAC arbitral award need not be con rmed by the RTC to be executory, as provided
under EO 1008.

The case is led as a special proceeding case in the RTC (summons by publication).

Special proceeding: an application to establish the status or right of a party or a

particular fact or a remedy other than an ordinary suit in a court of justice; commenced
by Application, Petition or Special Form of pleading as may be provided for by the
particular rule or law; publication in a newspaper or periodical of general circulation, of
judicial orders and notices is often required for jurisdictional purposes.

SEC. 41. VACATION AWARD.— A party to a domestic arbitration may question the arbitral
award with the appropriate RTC in accordance with Rules of Procedure to be promulgated
by the SC only on those grounds enumerated in Sec. 25 of RA 876. Any other ground
raised against a domestic arbitral award shall be disregarded by the RTC.

SEC. 25. GROUNDS FOR MODIFYING OR CORRECTING AWARD.— In any of the

following cases, the court must make an order modifying or correcting the award, upon
the application of any party to the controversy which was arbitrated:
a) where there was an evident miscalculation of gures, or an evident mistake in the
description of any person, thing or property referred to in the award;

b) where the arbitrators have awarded upon a matter not submitted to them, not
a ecting the merit of the decision upon the matter submitted; or

c) where an award was imperfect in a matter of form not a ecting the merits of the
controversy, and if it had been a commissioner's report, the defect could have been
amended or disregarded by the court;

d) where the award was procured by corruption, fraud or undue means;

e) where there was evident partiality or corruption in the arbitrators, or either of them;

f) where the arbitrators were guilty of misconduct in refusing to postpone the hearing,
on su cient cause shown, or in refusing to hear evidence pertinent and material to
the controversy; or any other misbehavior by which the rights of any party have been
prejudiced;

g) where the arbitrators exceeded their powers, or so imperfectly executed them that
a mutual, nal, and de nite award upon the subject matter submitted was not made.

The order may modify and correct the award so as to e ect the intent thereof and
promote justice between the parties.

STAGES: PETITION TO SET ASIDE—

1) Special Proceedings: RTC

2) Venue: at the option of the applicant, place where:

a) Arbitration proceedings were conducted;

b) Asset to be attached or levied upon, or the act enjoined is located;

c) Any of the parties to the dispute reside or has his place of business;

d) In the National Judicial Capital Region (NJCR)

3) Who may le petition: under Rule 12.1 of Special ADR Rules [Who May Request
Recognition and Enforcement or Setting Aside], any party to an international commercial
arbitration in the Philippines may petition the proper court to recognize and enforce or
set aside an arbitral award.

4) Period of ling: 3-month period

5) Court cannot review ndings of facts/law:

a) Arbitral award is presumed to have been made in due course of arbitration and
subject to con rmation of the Court.

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b) Party who seeks to set it aside or is resisting enforcement has the burden to
establish a ground setting aside the arbitral award.

c) Options of the Court:

i) Recognize and enforce the awards

ii) Set aside the award, if a ground for setting it aside is fully established

6) Petition and Counter Petition

a) Timely petition : Opposition to petition/

Counter petition Counter petition

b) State the grounds relied upon

c) Allegations must be duly supported by evidence

7) Suspension of Proceedings to Set Aside: either party may le a request to—

a) Suspend court proceedings;

b) Set aside arbitral award;

c) Remit case to Arbitral Tribunal to resume arbitration proceedings;

d) Rule 12.11 of the Special ADR Rules provides for the suspension of
proceedings to set aside, which states that: The court when asked to set aside an
arbitral award may, where appropriate and upon request by a party, suspend the
proceedings for a period of time determined by it to give the arbitral tribunal an
opportunity to resume the arbitral tribunal’s opinion will eliminate the grounds for
setting aside. The court, in referring the case back to the arbitral tribunal may not
direct it to revise its award in a particular way, or to revise its ndings of facts or
conclusions of law or otherwise encroach upon the independence of an arbitral
tribunal in the making of a nal award.

8) Power to rule on its own jurisdiction: Kompetenz-kompetenz doctrine under Rule

12.11 of the Special ADR Rules providing for the suspension of proceedings to set aside
states that— The court when asked to set aside an arbitral award may also, when the
preliminary ruling of an arbitral tribunal a rming its jurisdiction to act on the matter
before it had been appealed by the party aggrieved by such preliminary ruling to the
court, suspend the proceedings to set aside to await the ruling of the court on such
pending appeal or, in the alternative, consolidate the proceedings to set aside with the
earlier appeal.

9) Notice and Hearing

a) Send copies and notice

b) File opposition within 15 days

c) Issues of law— submit briefs/legal arguments

d) Issues of facts— submit judicial a davits with evidence pleaded and attached

e) Oral hearing not required, only when the court nds a need to— ID Judicial A davit
(JA), cross-examination

10) MR, when allowed

a) MR = not a prohibited pleading (not yet included in the amendments)

b) Written

c) May le opposition

d) MR resolved in 30 days

11) Appeal to CA
a) Petition for Review

b) Special ADR Rules— exclusive

12) Appeal by Certiorari

SPECIAL ADR RULES

RULE 12.2. WHEN TO FILE PETITION.—

(A) Petition to recognize and enforce.— The petition for enforcement and recognition
of an arbitral award may be led anytime from receipt of the award. If, however, a timely
petition to set aside an arbitral award is led, the opposing party must le therein and in
opposition thereto the petition for recognition and enforcement of the same award within
the period for ling an opposition.

(B) Petition to set aside.— The petition to set aside an arbitral award may only be led
within 3 months from the time the petitioner receives a copy thereof. If a timely request is
made with the arbitral tribunal for correction, interpretation or additional award, the 3-
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month period shall be counted from the petitioner receives the resolution by arbitral
tribunal of that request.

A petition to set aside can no longer be led after the lapse of the 3-month period.
The dismissal of a petition to set aside an arbitral award for being time-barred shall not
automatically result in the approval of the petition led therein and in opposition thereto
for recognition and enforcement of the same award. Failure to le a petition to set aside
shall preclude a party from raising grounds to resist enforcement of the award.

RULE 12.3. JUDGMENT OF THE COURT— Unless a ground to set aside an arbitral award
under Rule 12.4 above is fully established, the court shall dismiss the petition. If, in the
same proceedings, there is a petition to recognize and enforce the arbitral award led in
opposition to the petition to set aside, the court shall recognize and enforce the award.

In resolving the petition or petition in opposition thereto in accordance with the Special ADR
Rules, the court shall either set aside or enforce the arbitral award. The court shall not
disturb the arbitral tribunal's determination of facts and/or interpretation of law.

SPECIAL CIVIL ACTION FOR CERTIORARI UNDER THE SPECIAL ADR RULES
RULE 19.26. CERTIORARI TO THE CA.— When the RTC, in making a ruling under the
Special ADR Rules, has acted without or in excess of its jurisdiction, or with GAD
amounting to lack or excess of jurisdiction, and there is no appeal or any plain, speedy,
and adequate remedy in the ordinary course of law, a party may le a special civil action for
certiorari to annul or set aside a ruling of the RTC.

A special civil action for certiorari may be led against the following orders of the court:

a) Holding that the arbitration agreement is inexistent, invalid or unenforceable;

b) Reversing the arbitral tribunal’s preliminary determination upholding its jurisdiction;

c) Denying the request to refer the dispute to arbitration;

d) Granting or refusing an interim relief;

e) Denying a petition for the appointment of an arbitrator;

f) Con rming, vacating or correcting a domestic arbitral award;

g) Suspending the proceedings to set aside an international commercial arbitral award

and referring the case back to the arbitral tribunal;

h) Allowing a party to enforce an international commercial arbitral award pending appeal;

i) Adjourning or deferring a ruling on whether to set aside, recognize and or enforce an

international commercial arbitral award;

j) Allowing a party to enforce a foreign arbitral award pending appeal; and

k) Denying a petition for assistance in taking evidence.

B. FOREIGN ARBITRAL AWARDS

SEC. 42. APPLICATION OF THE NEW YORK CONVENTION.— The NY Convention shall
govern the recognition and enforcement of arbitral awards covered by said Convention.

The recognition and enforcement of such arbitral awards shall be led with the RTC in
accordance with the rules of procedure to be promulgated by the SC. Said procedural rules
shall provide that the party relying on the award or applying for its enforcement shall le
with the court the original or authenticated copy of the award and arbitration agreement. If
the award or agreement is not made in any of the o cial languages, the party shall supply a
duly certi ed translation thereof into any of such languages.

The applicant shall establish that the country in which foreign arbitration award was made is
a party to the NY Convention.

If the application for rejection or suspension of enforcement of an award has been made,
the RTC may, if considers it proper, vacate its decision and may also, on the application of
the party claiming recognition or enforcement of the award, order the party to provide
appropriate security.

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SEC. 43. RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS NOT
COVERED BY THE NEW YORK CONVENTION.— The recognition and enforcement of
foreign arbitral awards not covered by the NY Convention shall be done in accordance with
procedural rules to be promulgated by the SC. The Court may, on grounds of comity and
reciprocity, recognize and enforce a non-convention as a convention award.

SEC. 44. FOREIGN ARBITRAL AWARD NOT FOREIGN JUDGMENT.— A foreign arbitral
award when con rmed by a court of a foreign country, shall be recognized and enforced as
a foreign arbitral award and not as a judgment of a foreign court.

A foreign arbitral award, when con rmed by the RTC, shall be enforced in the same manner
as nal and executory decisions of courts of law of the Philippines.

SEC. 45. REJECTION OF A FOREIGN ARBITRAL AWARD.— A party to a foreign

arbitration proceeding may oppose an application for recognition and enforcement of the
arbitral award in accordance with the procedural rules to be promulgated by the SC only on
those grounds enumerated under Art. V of the NY Convention. Any other ground raised
shall be disregarded by the RTC.

SEC. 46. APPEAL FROM COURT DECISIONS ON ARBITRAL AWARDS.— A decision of

the RTC con rming, vacating, setting aside, modifying or correcting an arbitral award may
be appealed to the CA in accordance with the rules of procedure to be promulgated by the
SC.

The losing party who appeals from the judgment of the court con rming an arbitral award
shall be required by the appellate court to post a counterbond executed in favor of the
prevailing party equal to the amount of the award in accordance with the rules to be
promulgated by the SC.

SEC. 47. VENUE AND JURISDICTION.— Proceedings for recognition and enforcement of
an arbitration agreement or for vacation, setting aside, correction or modi cation of an
arbitral award, and any application with a court for arbitration assistance and supervision
shall be deemed as special proceedings and shall be led with the RTC, i) where arbitration
proceedings are conducted; ii) where the asset to be attached or levied upon, or the act to
be enjoined is located; iii) where any of the parties to the dispute resides or has his place of
business; or iv) in the NJCR, at the option of the applicant.

SEC. 48. NOTICE OF PROCEEDING TO PARTIES.— In a special proceeding for

recognition and enforcement of an arbitral award, the Court shall send notice to the parties
at their address of record in the arbitration, or if any party cannot be served notice at such
address, at such party’s last known address. The notice shall be sent at least 15 days
before the date set for the initial hearing of the application.

ADR is not SC-based, but DOJ-based. O ce of the ADR is an attached agency of the
DOJ.

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MEDIATION

Core value: Self-determination “party autonomy”

2019 Amendments to 1997 Rules of CivPro— think of Compromise Agreements

RULE 18: PRE-TRIAL— CAM and JDR

SEC. 8. CAM.— After pre-trial [hearing and before trial] and, after issues are joined, the
court shall refer the parties for mandatory CAM. Note: should be “after the issues are joined
and [after] the termination of the pre-trial thereafter…” The period for CAM shall not exceed
30 calendar days without further extension. [Court-annexed meant this is included in the
Rules; court-referred meant not included.]— ADR used to be part of pre-trial; if CAM is
unsuccessful, it goes back to the original judge for JDR, and if still unsuccessful it goes to
another judge. So the principle of primary jurisdiction is lost. Mediation is like negotiation
without limit.

SEC. 9. JDR.— Only if the judge of the court to which the case was originally ra ed is
convinced that settlement is still possible, the case may be referred to another court for
JDR. The JDR shall be conducted within a non-extendible period of 15 calendar days from
notice of failure of the CAM. If JDR fails, trial before the original court shall proceed on the
dates agreed upon. All proceedings during the CAM and the JDR shall be con dential.—
Any motion to extend shall be denied. Happens after mediation. Discretionary upon the
judge, not the parties. In line with principle of jurisdiction that courts have the jurisdiction
over the case until termination; if CAM is not successful or no compromise agreement
entered into, it will go back to the original judge. During pre-trial, the judge to whom the
case is originally ra ed will refer it to CAM for mediation but if unsuccessful, it may be
ra ed to another judge who will be the JDR judge. JDR judge is like a mediator-judge. If
compromise is successful, it will go back to original judge for trial on the merits, but if not,
original judge will proceed with trial. Any evidence, data, or admission made during
mediation cannot be used as evidence in court, unless presented in a proper manner
of o ering evidence.

ADR: CAM and JDR— both after pre-trial— CAM = mandatory; JDR = discretionary

SEC. 7. SCOPE.— cover voluntary mediation, whether ad hoc or institutional, other than
court-annexed. Mediation shall include conciliation.

ADMU v. Diestro: Mandates the diversion of pending cases both to CAM and JDR to put
an end to pending litigation through compromise agreement of the parties by empowering
them to resolve their own disputes, and thereby help solve the ever-pressing problem of
court docket congestion. Prevents from proceeding directly from pre-trial to trial.

MEDIATION
• A voluntary process in which a mediator, selected by the disputing parties, facilitates
communication and negotiation and assists the parties in reaching a voluntary
agreement regarding a dispute [Sec. 3 (q), Ch. 1, ADR Act].

• Disputing parties work with an impartial 3rd party, the mediator, to negotiate towards a
resolution of their con ict— short-term, structured, task-oriented, participatory,
intervention process.

• Lawyers take secondary responsibility in the mediation. Parties take primary

responsibility.
• A type of assisted negotiation in which a disinterested or neutral 3rd party (mediator)
assists the disputants, with or without their agents and/or advocates, in negotiation a
resolution of their interpersonal con ict. The neutral is not empowered to make a
decision and does not typically press for particular alternative.

• Facilitated negotiation; Non-binding adjudication: negotiation carried out with the

assistance of a 3rd party. The mediator, in contrast to the arbitrator or a judge, has no
power to impose an outcome on disputing parties.— based on what the parties can do,
if they cannot do what they proposed, parties shall proceed to trial.

• Mediator and parties assume that the aim of mediation is settlement, though certainly
not settlement at any cost.

• Mediation is mandatory is CAM.

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UNDER THE 2019 CIVPRO AMENDMENTS

1) CAM and JDR— conducted after termination of the pre-trial hearing

2) CAM— mandatory; JDR— discretion

3) CAM: WHO— conducted by mediators (no change)

4) JDR: WHO—

a) after the conduct of an unsuccessful mediation

b) upon the discretion of the presiding judge [even if parties do not want to go to JDR]

c) the case shall be re-ra ed to a JDR judge for the conduct of JDR proceedings

d) if successful [entry intro a compromise agreement], case shall be returned to

original/trial judge for possible judgment on the merits

e) but if unsuccessful, may be ra ed for JDR.

BENEFITS OF MEDIATION
1) Time and cost savings;

2) Con dentiality and privacy;

3) Self-determination [party autonomy];

4) Encourage exchange of information [provide new information];

5) Authorizing and acknowledging feelings and emotions [help the parties to understand
each other’s views and let them know that their concerns are understood];

6) Deal with di erences in perceptions and interests between negotiators and

constituents [including lawyer and client];

7) Help negotiators realistically assess alternatives to settlement;

8) Potential for creative solutions— parties will know what they can only give to each
other;

9) Stimulate the parties to suggest creative settlements— Caucus: learn (often in

separate sessions with each party, because in court, judge cannot go separately to each
party because that is contentious, but in JDR, the JDR judge could conduct caucus)
about those who interests the parties are reluctant to disclose each other, and invent
solutions that meet the fundamental interests of all parties;

10) Encourage exibility and informality;

11) Shift the focus from the past to the future;

12) Opportunity of preserving relationships (Eg. If between families or if your best friend
ran o with your money)— promote a productive level of emotional expression, enhance
the parties self-determination and party interaction or engagement, and help the parties’
communication so that they understand and appreciate each other’s perspectives;

13) Avoidance of precedence.

Elgar v. Santos, Jr.: Mediatable cases where amicable settlement is possible must be
referred by the trial courts to the Philippine Mediation Center (PMC). DOJ, PMC, CIAC, SC
conduct mediation for O ce of ADR (OADR).

Tan v. Alvarico: Can we conduct mediation and JDR in criminal cases? Yes for
mediation, but in a limited capacity. In criminal cases, mediation is mandatory, but NO JDR.
Do we conduct mediation in civil cases? Yes, for BP22, PAGIBIG, SSS, selected rst-
level criminal cases (under Rule on Continuous Trial). Under Rule 1.04 of the CPR, a lawyer
is encouraged to encourage his clients to settle a controversy if it would admit of a fair
settlement.

KINDS OF MEDIATION STYLES— only rst two are used in Philippine courts

1) Facilitative or interest-based—

• One of the more popular styles and widely used and accepted outside the
courts; default style taught at Singapore Mediation Centre Workshops; the
mediator acts a neutral facilitator to guide the direction of the discussion
towards a win-win solution.

• Mediator can assist to— clarify key interests, exchange information, clear up
miscommunication, generate options. However, mediator will not impose his or
her opinion, and parties are free to decide on the solution of their choice.
Mediation determines options of the parties.

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Use techniques designed to, in their expert opinion, optimize negotiation— lay
•
ground rules for e ective communication; help participants discover their
interests and those of their counterparts; guide the disputants in the steps of
cooperative negotiation; intervene at all stages of the con ict style to keep the
con ict as non-competitive as possible; the strictly facilitative mediator
assiduously avoids any evaluation of the merits or strengths or either
disputant’s case.

2) Evaluative or rights-based—

• Involves elements of adjudication; faster and preferred in commercial disputes

or court-directed mediation; the mediator most often is a legally-trained person
or a subject-matter expert who can analyze the issues and advise on the likely
outcome of the case, should it go to court— by providing a professional
opinion on the strengths and weaknesses of a case, the mediator can help
parties to make an informed decision on whether to settle; and an evaluative
mediator may also suggest possible ways of resolving the dispute.

• Mediator works to narrow the gap between the demands of each disputants by
expressly evaluating the merits, strengths and weaknesses of each disputant’s
position and by strategically communicating these evaluations to the disputants
— it is the process of reducing the optimism of each disputants’ BATNA
assessment: with each disputant’s con dence in his or her alternatives to
negotiated settlement reduced, each is more likely to accept compromise
settlement terms.

BATNA: Best Alternative to a Negotiated Agreement [maximum o er]

WATNA: Worst Alternative to a Negotiated Agreement [minimum o er]

MLATNA: Most Likely Alternative to a Negotiated Agreement

ZOPA: Zone of Potential Agreement

• Evaluation based on the notion that negotiation is a process of positional

bargaining.

• The evaluative mediator attempts to minimize the e ective distances between

the disputants’ position and to creative overlap if possible.

3) Transformative— eg. Collective CBAs

• Focuses on empowering parties [to determine the issues and to nd their own
solutions] and

• Mutual recognition [to see and understand each other’s perspectives]

• Although mediation is always geared towards taking control of your dispute

outcome, the transformative style emphasizes long-term change in parties’
approach towards con ict.

• Take longer but have more long-term impact in community mediation or

disputes with a signi cant history.

SEC. 8. APPLICATION AND INTERPRETATION.— Consideration must be given to the

need to promote candor of parties and mediators through con dentiality of the mediation
process, the policy of fostering prompt, economical, and amicable resolution of disputes in
accordance with the principles of integrity of determination by the parties, and the policy
that the decision-making authority in the mediation process rests with the parties.

SEC. 9. CONFIDENTIALITY OF INFORMATION. — applies to mediation, JDR, and

arbitration because if ADR is unsuccessful, parties cannot choose to use information in trial,
unless o ered in the regular manner provided under ROC. Information obtained through
mediation proceedings shall be subject to the following principles and guidelines:

a) Information obtained through mediation shall be privileged and con dential.— GR:
Privileged information cannot be used in any adversarial proceedings.

b) A party, a mediator, or a nonparty participant may refuse to disclose and may prevent
any other person from disclosing a mediation communication.

c) Con dential information shall not be subject to discovery and shall be inadmissible in
any adversarial proceeding, whether judicial or quasi-judicial. However, evidence or
information that is otherwise admissible or subject to discovery does not become
inadmissible or protected from discovery solely by reason of its use in a mediation.—
Use proper modes of discovery. Arbitration cannot be the shortcut of obtaining evidence.

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

e) The protections of this Act shall continue to apply even if a mediator is found to have
failed to act impartially.

f) A mediator may not be called to testify to provide information gathered in mediation. A

mediator who is wrongfully subpoenaed shall be reimbursed the full cost of his attorney’s
fees and related expenses.

SEC. 10. WAIVER OF CONFIDENTIALITY.— may be waived on record or orally during a

proceedings by the mediator and the meditation parties. A privilege arising from the
con dentiality of information may likewise be waived by a nonparty participant if the
information is provided by such nonparty participant. Nonparty: resource person, or when
you were called in the proceeding. Damages in a separate judicial proceeding, but if it’s
CAM, and there is trial, you can raise the issue in the same proceeding. A person who
discloses or makes a representation about a mediation is precluded from asserting the
privilege under Sec. 9, to the extent that the communication prejudices another person in
the proceeding and it is necessary for the person prejudiced to the representation of
disclosure.

GR: con dentiality

XPN: may be waived

How: recorded or orally

Who: parties or non-parties to the agreed mediation

What (Sec. 9(c)): discovery; inadmissible in evidence [violation— damages]; conduct of

mediation

XPNs TO PRINCIPLE OF CONFIDENTIALITY

SEC. 11. EXCEPTIONS TO PRIVILEGE.—

a) There is no privilege against disclosure under Sec. 9 if mediation communication is:

1) in an agreement evidenced by a record authenticated by all parties to the

agreement— documented;

2) available to the public or that is made during a session of a mediation which is

open, or is required by law to be open, to the public;

3) a threat or statement of a plan to in ict bodily injury or commit a crime of violence

— criminal in nature;

4) intentionally used to plan a crime, attempt to commit, or commit a crime, or

conceal an ongoing crime or criminal activity;

5) sought or o ered to prove or disprove abuse, neglect, abandonment, or

exploitation in a proceeding in which a public agency is protecting the interest of an
individual protected by law; but this exception does not apply where a child protection
matter is referred to mediation by a court or a public agency participates in the child
protection mechanism;

6) sought or o ered to prove or disprove a claim or complaint of professional

misconduct or malpractice led against mediator in a proceeding— professional
demeanor;

7) sought or o ered to prove or disprove a claim or complaint of professional

misconduct or malpractice led against a party, nonparty participant, or representative
of a party based on conduct occurring during mediation— include nonparty;

b) There is no privilege under Sec. 9 is a court or administrative agency, nds, after a

hearing in camera, that the party seeking discovery of the proponent of the evidence has
shown that the evidence is not otherwise available, that there is a need for the evidence
that substantially outweighs the interest in protecting con dentiality, and the mediation is
sought or o ered in:

1) court proceeding involving a crime or felony; or

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2) a proceeding to prove a claim or defense that under the law is su cient to reform
or avoid a liability on a contract arising out of the mediation.

c) A mediator may not be compelled to provide evidence of a mediation communication

or testify in such proceeding.

d) If a mediation communication is not privileged under an exception in subsection (a) or

(b), only the portion of the communication necessary for the application of the exception
for nondisclosure may be admitted. The admission of particular evidence for the limited
purpose of an exception does not render that evidence, or any other mediation
communication, admissible for any other purpose.

SEC. 12. PROHIBITED MEDIATOR REPORTS.— report, assessment, evaluation,

recommendation, ndings, other communications. Mediator reports only says
“unsuccessful” or “possible settlement” or “issues only involve questions of law” because
of con dentiality. XPNs: a) where the mediation occurred or has terminated, or where a
settlement was reached; b) as permitted to be disclosed under Sec. 13.

DISCLOSURES; INHIBITIONS
SEC. 13. MEDIATOR’S DISCLOSURE AND CONFLICT OF INTEREST.— you must be
con dent about the mediator. The mediation shall be guided by the following operative
principles:

a) Before accepting a mediation, an individual who is requested to serve as a mediator

shall:

1) make an inquiry that is reasonable under the circumstances to determine whether

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

2) disclose to the mediation parties any such fact known or learned as soon as is
practical before accepting a mediation.

b) If a mediator learns any fact described in par. (a) (1) of this section after accepting a
mediation, the mediator shall disclose it as soon as practicable. At the request of a
mediation party, an individual who is requested to serve as mediator shall disclose his/
her quali cations to mediate a dispute.

SEC. 14. PARTICIPATION IN MEDIATION.— a party may designate a lawyer or any other
person to provide assistance in the mediation. A waiver of this right shall be made in writing
by the party waiving it. A waiver of participation or legal representation may be rescinded at
any time.— Legal representation or presence of counsel is optional, but parties usually want
their lawyers with them.

BASIC MEDIATION PROCESS

1) Preliminary Arrangements

2) Mediator’s Introductions

3) Agenda Setting

4) Opening Statements by the Parties

5) Ventilation

6) Information Gathering

7) Issues and Interest Identi cation

8) Option Generation

9) Reality Testing

10) Bargaining and Negotiation

11) Impasse: means you both do not want the o er. So from facilitative to evaluative

12) Caucus

13) Agreement

14) Closure: could also mean trial

SEC. 15. PLACE OF MEDIATION.— parties are free to agree on the place, but without any
agreement, the place shall be any place convenient and appropriate to all parties. Party
autonomy and convenience.

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SEC. 16. EFFECT OF AGREEMENT TO SUBMIT DISPUTE TO MEDIATION UNDER

INSTITUTIONAL RULES.— An agreement to submit a dispute to mediation by an
institution shall include an agreement to be bound by the internal mediation and
administrative policies of such institution. Further, an agreement to submit a dispute to
mediation under institutional mediation rules shall be deemed to include an agreement to
have such rules govern the mediation of the dispute and for the mediator, the parties, their
respective counsel, and nonparty participants to abide by such rules.

In case of con ict between the institutional medial rules and the provisions of this Act, the
latter shall prevail.

SEC. 17. ENFORCEMENT OF MEDIATED SETTLEMENT AGREEMENTS.— The

mediation shall be guided by the following operative principles:

a) A settlement agreement following successful mediation shall be prepared by the

parties with the assistance of the respective counsel, if any, and by the mediator.

The parties and their respective counsels shall endeavor to make the terms and
conditions thereof complete and make adequate provisions for the contingency of
breach to avoid con icting interpretations of the agreement.

b) The parties and their respective counsels, if any, shall sign the settlement agreement.
The mediator shall certify that he/she explained the contents of the settlement
agreement to the parties in language known to them.

c) If the parties so desire, they may deposit such settlement agreement with appropriate
Clerk of the RTC of the place where one of the parties resides. Where there is a need to
enforce the settlement agreement, a petition may be led by any of the parties with the
same court, in which case, the court shall proceed summarily to hear the petition, in
accordance with such rules of procedure as may be promulgated by the SC.

d) The parties may agree in the settlement agreement that the mediator shall become a
sole arbitrator for the dispute and shall treat the settlement agreement as an arbitral
award which shall be subject to enforcement under the Arbitration Law, notwithstanding
the provision of EO 1008 for mediated disputes outside of the CIAC.

Note: Tulfo is not a mediator because everything he does is public. No privileged

communication and con dentiality.

MEDIATION, ARBITRATION AND LITIGATION

PROCESS 3RD PARTY ROLE OF 3RD OUTCOME

PARTY
MEDIATION Voluntary, Mediator Facilitates Voluntary
exible, informal communication agreement;
and settlement
negotiations; agreement;
assists the compromise
parties in reach agreement by
an agreement the parties
ARBITRATION Voluntary, less Arbitrator Resolves a Arbitral award
formal than dispute
litigation
LITIGATION Formal, rigid, Judge Adjudicate; Judgment
adversarial makes a ruling

JUDICIAL DISPUTE RESOLUTION

Cruz v. Rep.: JDR is a process whereby the JDR judge employs conciliation, mediation or
early neutral evaluation in order to settle a case at the pre-trial stage.

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• Characteristics: 1) Discretionary, when mediation is unsuccessful; 2) Judge
becomes a mediator— adjudicate only during trial; 3) JDR proceedings are ra ed—
trial judge is prohibited for becoming the JDR judge; XPN: waiver— or if both parties
have agreed to have the trial judge as their JDR judge. If unsuccessful, same trial/
JDR judge will conduct trial. ; 4) Unsuccessful JDR shall proceed to trial.

JDR ON APPEAL (JDRA)

United Dumangas Port Development Corp. v. Philippine Ports Authority: JDRA has
been one of the SC’s programs on judicial reform. With a “Compromise Agreement” on the
line that settles this case with 2 of the principal protagonists emerging winners, and the 3rd
one not prejudiced as regards its rights and should also be therefore happy, this Court can
do no less but approve it and cut-short the instant litigation.

Appellant must le appellant’s brief; if did not le after notice of appeal, the appeal is
denied. If appellee does not submit brief, case submitted for decision. If appellee
submits brief and participates then case is also submitted for decision.

JDR APPEARANCE MANDATORY WHEN RULED— because JDR is still part of pre-trial,
so mandated to attend— can sanction if failed to appear

Pagdadamayan ng Magkakapitbahay sa Concepcion, Malabon (PAMACO) v. Singson:

A party who fails to appear on the date set for the JDR conference may be imposed the
appropriate sanction as provided under Sec. 5, Rule 18 of the ROC. The latter sanction
refers to dismissal, with prejudice.

Koppel v. Makati Rotary Club Foundation: The JDR system is substantially di erent from
arbitration proceedings. The JDR framework is based on the processes of mediation,
conciliation or early neutral evaluation which entails the submission of a dispute before a
“JDR judge” who shall merely “facilitate settlement” between the parties in a con ict or
make a “non-binding evaluation or assessment of the chances of each party’s case.”

• In JDR, the JDR judge lacks the authority to render a resolution the dispute that is
binding upon the parties in con ict; while in arbitration, the dispute is submitted to an
arbitrator or arbitrators— a neutral 3rd person or a group of thereof— who shall have
the authority to render a resolution binding upon the parties.

• The mere submission of a dispute to JDR proceedings would not necessarily render
the subsequent conduct of arbitration a mere surplusage. The failure of the parties in
con ict to reach an amicable settlement before the JDR may, in fact, be
supplemented by their resort to arbitration where a binding resolution to the dispute
could nally be achieved.

• Neither would the summary nature [of ejectment cases] be a valid reason to disregard
the enforcement of the arbitration clause. Notwithstanding the summary nature of
ejectment cases, arbitration still remains relevant as it aims not only to a ord the
parties an expeditious method of resolving their dispute.

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