Alteinative Bispute Resolutions

Septembei 16, 2u1S

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REAB
Aiticles 11S9 anu 1191 of the Civil Coue
RA 928S
0NCITRAL LAW 0F 198S

CASES
Naiia Luisa v Almenuias S88 SCRA 66S (2uu9)
Koiea Technology Limiteu vs Leima S42 SCRA 2 (2uu8)

+!,-./01-23. 42567-. 8.59,7-290 ":5-.;+ means any piocess oi pioceuuie
useu to iesolve a uispute oi contioveisy, othei than by aujuuication of a piesiuing
juuge of a couit oi an officei of a goveinment agency, as uefineu in this Act, in which
a neutial thiiu paity paiticipates to assist in the iesolution of issues, which incluues
aibitiation, meuiation, conciliation, eaily neutial evaluation, mini-tiial, oi any
combination theieof;

Aibitiation is the only foim that is binuing anu enfoiceable to iesolve a
uispute.


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Theie must be an 1?/..;.0- that must contain an 1/@2-/1-290 A,175.B
Theie must be a uispute; the uispute must iefei to aibitiation. Theie must be an
1/@2-/1, 1C1/D then .0E9/A.;.0-B

If theie is 09 1/@2-/1-290 A,175., the paities can now go to the couit.

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Any uispute aiising fiom this contiact can be iesolveu thiough aibitiation.
The paity must invoke the aibitiation clause. If the paities go to the couit, anu one
of the paities invoke the aibitiation clause, the penuing case will be suspenueu. The
paities will go to aibitiation.







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Alteinative Bispute Resolutions


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C0NP0SEB 0F K7D?.L 6.-2-290./ 10D
D.E.0D10-
C0NP0SEB 0F 1/@2-/1-9/L A,12;10-
10D /.5690D.0-
"What they uo in couit, they uo in aibitiation"
1. Piesent eviuence
2. Aibitiatoi ienueis an 1C1/DM }uuge ienuei a juugment

In ,2-2?1-290L C/2- 9E .N.A7-290 is not necessaiy unless the losing paity fails to
comply; it is the same as in the 1/@2-/1-290L the winning paity may file befoie the
couit a ;9-290 E9/ .0E9/A.;.0- 20 A15. 9E 090OA9;6,210A. 9E -P. ,9520? 61/-:
The juuges aie chosen ianuomly thiough
iaffles
The paities have the iight to choose the
aibitiatoi oi the paities can paiticipate
in choosing the aibitiatois. It is a
A905.0571, 1?/..;.0-B No one can
foice someone to sign an aibitiation
clause.

The paities can choose the law that can
govein the uispute; 61/-: 17-909;:
Rules of Couit shall govein the
pioceuuie in couit
The paities may choose the aibitiation
iules such as SIAC, BIRIAC, ICC, LCIA,
ACICA, CIETAC, AAA, PBRCI, CIAC
Some uecisions aie appealable
Final anu not appealable oi no othei
iecouise
Theie is 3.07. 5-267,1-290
Theie is 5.1- 9E 1/@2-/1-290B Theie is
available couits, if the paity is not happy
with the awaiu.

Alteinative Bispute Resolutions
!/-2A,.B QQRSB 0bligations aiising fiom contiacts have the foice of law between the
contiacting paities anu shoulu be complieu with in goou faith. (1u91a)

!/-2A,.B QQSQB The powei to iescinu obligations is implieu in iecipiocal ones, in case
one of the obligois shoulu not comply with what is incumbent upon him.
The injuieu paity may choose between the fulfillment anu the iescission of the
obligation, with the payment of uamages in eithei case. Be may also seek iescission,
even aftei he has chosen fulfillment, if the lattei shoulu become impossible.
The couit shall ueciee the iescission claimeu, unless theie be just cause authoiizing
the fixing of a peiiou.
This is unueistoou to be without piejuuice to the iights of thiiu peisons who have
acquiieu the thing, in accoiuance with Aiticles 1S8S anu 1S88 anu the Noitgage
Law. (1124)

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49A-/20.) The policy is to favoi alteinative methous of iesolving uisputes,
paiticulaily in civil anu commeicial uisputes. This couit has long favoieu aibitiation
along with meuiation, conciliation, anu negotiation, being inexpensive, speeuy anu
less hostile methous.

H1A-5)
1. <.-2-290./ T9/.1 (.AP09,9?2.5 ZT=$#'"[ is a Koiean coipoiation, which is
engageu in the supply anu instillation of the LPu cylinuei manufactuiing
plants; while 8.5690D.0- <1A2E2A $.0./1, "-.., &107E1A-7/20? >9/6B
(PuSNC) is a uomestic coipoiation.
2. PuSNC anu K0uIES executeu a contiact wheieby K0uIES woulu set up an
LPu cylinuei manufactuiing plant in Caimona, Cavite.
a. It was executeu in the Philippines.
b. The amenument was maue in Koiea as iegaius the teims of payment
i. K0uIES will ship the machineiy anu facilities necessaiy foi
manufactuiing of LPu cylinueis foi which PuSNC woulu pay
0S 1,224,uuu
ii. K0uIES woulu install anu initiate the opeiation of the plant foi
which PuSNC bounu itself to pay 0SB Su6,uuu upon plant's
piouuction of the 11kg LPu cylinueis.
iii. T0TAL C0NTRACT PRICE AN00NTEB T0 0SB 1,SSu,uuu
S. PuSNC enteieu into a Contiact of Lease with Woith Piopeities Inc, foi the
use of the lattei's S,u79 squaie metei piopeity with a 4,uS2 squaie metei
waiehouse builuing to house the LPu manufactuiing plant.
a. N0NTBLY RENTAL: PS22, S6u with a 1u% annual inciement clause.
4. Fiom the ceitificate executeu by the paities, aftei the installation of the plant,
the initial opeiation coulu not be conuucteu as PuSNC encounteieu financial
uifficulties.
Alteinative Bispute Resolutions
S. Foi the iemaining balance foi the installation anu initial opeiation of the
plant, PuSNC issueu 2 post-uateu checks. When K0uIES uepositeu the check,
these weie uishonoieu foi the ieason that 61:;.0- 5-966.DB Thus, K0uIES
sent a uemanu lettei, thieatening ciiminal action foi violation of BP 22.
6. PuSNC'S C0NTENTI0N:
a. K0uIES uiu uelivei a uiffeient bianu of hyuiaulic piess
b. It uiu not uelivei seveial equipment paits alieauy paiu
c. The checks aie funueu but the payment was stoppeu foi ieasons
known to K0uIES
7. PuSNC infoimeu K0uIES that the foimei was cancelling theii contiact foi
K0uIES P1D 1,-./.D -P. \710-2-: 10D ,9C./.D -P. \71,2-: 9E -P.
;1AP20./2.5 10D .\726;.0-B
8. PuSNC fileu a complaint foi Estafa against the piesiuent of K0uIES
9. K0uIES' C0NTENTI0N:
a. Cannot unilateially iescinu the contiact noi uismantle anu tiansfei
the machineiies on meie violation
b. #0525-.D -P1- -P.2/ D2567-.5 5P97,D @. 5.--,.D @: 1/@2-/1-290 15
1?/..D 20 !/-2A,. QRL -P. 1/@2-/1-290 A,175. 9E -P.2/ A90-/1A-B
c. <$"&> be iestiaineu fiom uismantling anu tiansfeiiing the
equipment anu machineiy
1u. K0uIES instituteu an application foi aibitiation befoie Koiean Commeicial
Aibitiation Boaiu (KCAB) in Koiea. PuSNC hau aumitteu that the checks aie
not funueu.
11. PuSNC'S ALLEuATI0NS:
a. 0pposeu the TR0; aibitiation clause was null anu voiu foi being
against the public policy 15 2- 975-5 -P. ,9A1, A97/-5 K7/25D2A-290
b. Bas iight to uismantle it since it was alieauy fully paiu anu was not
willing to fuithei shouluei the cost of ienting
12. 8(>) 0iuei the inspection anu uismantling of the equipment; Aibitiation
Clause was invaliu. >!) affiimeu the uecision of the RTC. Aibitiation Clause is
against public policy.

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Whethei oi not the Aibitiation Clause is invaliu because it is against public policy.

U'G4)
No. The Aibitiation Clause is valiu.

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Establisheu in this juiisuiction is the iule that the law of the place wheie the
contiact is maue goveins. G.N G9A2 >90-/1A-75B The contiact in this case was
peifecteu in the Philippines. Thus, Philippine Laws aie ought to govein. Bowevei,
Aiticle 2u44 of the Civil Coue sanctions the valiuity of mutually agieeu aibitial
clause oi the finality anu binuing effect of an aibitial awaiu. Aiticle 2u44 pioviues,
Alteinative Bispute Resolutions
"Any stipulation that the aibitiatois' awaiu oi uecision shall be final, is valiu,
without piejuuice to Aiticles 2uS8, 2uS9 anu 2u4u.
These aiticles may be voiueu but these woulu not uenigiate the finality of the
aibitial awaiu.

The paities mutually anu voluntaiily agieeu upon the aibitiation clause. It has not
been shown to be contiaiy to any law oi against moials, goou customs, public
oiueis oi public policy.

In $90]1,.5 3 >,2;1N &2020?L the submission to aibitiation is a contiact anu that a
clause in a contiact pioviuing that all matteis in uispute between the paities shall be
iefeiieu to aibitiation is a contiact.

The aibitiation clause which stipulates that the aibitiation must be uone I n Seoul
anu the aibitial awaiu is final anu binuing anu is not contiaiy to the public policy.

The policy is to favoi alteinative methous of iesolving uisputes, paiticulaily in civil
anu commeicial uisputes. This couit has long favoieu aibitiation along with
meuiation, conciliation, anu negotiation, being inexpensive, speeuy anu less hostile
methous.

RA 928S incoipoiateu the 0NCITRAL Nouel Law

Bomestic Aibitiation Pioceeuings:
The Philippines has paiticulai agencies to aibitiate uisputes aiising fiom
contiactual ielations. In case the paities choose a foieign aibitial bouyL the
aibitiation clause of the uomestic aibitiation bouies woulu not be applieu.
As signatoiy to the Aibitiation Rules of 0NICITRAL (0niteu Nations
Commission on Inteinational Tiaue) Nouel Law, the Philippines committeu itself to
be bounu by the Nouel Law.

Alteinative Bispute Resolutions
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1.Responuents Samantha anu Pia Almenuias puichaseu fiom NR0 Bevelopment
Coipoiation a iesiuential lot situateu in Cebu City. Responuents fileu with the
Petitionei an application to constiuct a iesiuential house. Bouse was built.

2. 0pon the oculai inspection, NLPAI founu out that the iesponuents violateu the
piohibition against multi uwelling stateu in the Beeu of Restiiction.
Bemanueu to iectify the stiuctuie; otheiwise, it will be constiaineu to foifeit
iesponuents' constiuction bonu anu impose penalties.
o Installation of a seconu watei metei anu tapping the subuivisions
main watei pipeline
o Constiuction of two sepaiate entiances that aie mutually exclusive of
each othei
S. Responuents fileu foi Injunction, Beclaiatoiy Relief, Annulment of Piovisions of
Aiticles anu By-Laws with Piayei foi the Issuance of a TR0.

4.NLPAI moveu foi the uismissal of the complaint on the giounu of lack of
juiisuiction anu E12,7/. -9 A9;6,: C2-P -P. 1/@2-/1-290 A,175. 6/932D.D 20 -P.
@:O,1C5B

S. 8(>) uismisseu the complaint foi lack of juiisuiction; BL0RB has oiiginal anu
exclusive juiisuiction ovei the case. >!) ieveiseu the RTC's uecision.

Petitionei NLPAI contenus that the BL0RB has exclusive juiisuiction ovei the case;
the uispute is between the subuivision association anu a subuivision lot ownei.

Responuents' allegation was the case fileu against NLPAI us one foi ueclaiatoiy
ielief anu annulment of the piovisions of the by-laws; hence, it is outsiue the
competence of the BL0RB to iesolve.


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1. Whethei oi not the tiial couit anu not the BL0RB has a juiisuiction ovei the
case.
2. Biu the paities abiue in the Aibitiation Clause.







Alteinative Bispute Resolutions
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QB UGJ8I has an exclusive anu oiiginal juiisuiction ovei the case.
0iiginally, law with SEC vesteu auministiative supeivision ovei homeowneis'
association. Bowevei, 67/5710- -9 '= %9B RXRL the BIuC assumeu the iegulatoiy
anu aujuuicative functions of the SEC ovei the homeownei's associations


In Sta. Claia v uaston, SC iuleu that the U#$> .N./A25.5 ,2;2-.D K7/25D2A-290 93./
P9;.9C0./5a D2567-.5. (P. ,1C A90E20.5 2-5 17-P9/2-: -9 A90-/93./52.5 -P1-
1/25. E/9; 10: 9E -P. E9,,9C20? 20-/1OA9/69/1-. /.,1-2905: (1) between anu
among membeis of the association; (2) @.-C..0 10: 10D`9/ 1,, 9E -P.; 10D -P.
1559A21-290 9E CP2AP -P.: 1/. ;.;@./5; anu (S) between the association anu the
state insofai as the contioveisy conceins its iight to exist as a coipoiate entity.

b.No. The paities faileu to abiue the aibitiation agieement in the NLPAI by-laws.
0nuei the saiu piovision of the by-laws, any uispute oi claim against the Association
oi any of its officeis anu goveinois 5P1,, @. 5.--,.D 1;2A1@,:B #E 1;2A1@,.
5.--,.;.0- E12,5L the membei to an aibitiation panel foi final settlement shall biing
such uispute.

The teims of Aiticle XII of the NLPAI by-laws cleaily expiess the intention of the
paities to biing fiist to the aibitiation piocess all uisputes between them befoie a
paity can file the appiopiiate action.

(P. 1?/..;.0- -9 57@;2- 1,, D2567-.5 -9 1/@2-/1-290 25 1 A90-/1A-B !5 57APL -P.
1/@2-/1-290 1?/..;.0- @20D5 -P. 61/-2.5 15 C.,, 15 -P.2/ 1552?05 10D P.2/5B
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They, howevei, ;1D. 09 .1/0.5- .EE9/- -9 /.59,3. -P.2/ D2EE./.0A.5 20
1AA9/D10A. C2-P -P. 1/@2-/1-290 A,175. 6/932D.D E9/ 20 -P.2/ @:O,1C5B Neie
exchange of coiiesponuence will not suffice much less satisfy the iequiiement of
aibitiation. Aibitiation being the moue of settlement between the paities expiessly
pioviueu foi in theii by-laws, the same shoulu be iespecteu. 0nless an aibitiation
agieement is such as absolutely to close the uoois of the couits against the paities,
the couits shoulu look with favoi upon such amicable aiiangements.