For the benefit of STM Law School Residents 1

RA 876 – The Arbitration Law 2

RA 9285 – Alternative Dispute Resolution Act of 2004 8

RA 8293 – Intellectual Property Code 17

RA 7160 – Local Government Code: Katarungang Pambarangay 17

B.P. 68 – The Corporation Code of the Philippines 21

P.D. 612 – The Insurance Code of the Philippines 21

R.A. 8791 – The General Banking Law of 2000 21

P.D. 442 – Labor Code 22

R.A. 7942 – Philippine Mining Act of 1995 23

Republic vs. Marcopper Mining 23

Benguet vs. DENR 23

Gonzales vs. Panel of Arbitrators 24

R.A. 8371 – The Indigenous Peoples Rights Act of 1997 25

Maritime Arbitration:

National Union vs. Stolt-Nielsen Philippines 26

Puromines, Inc. vs. CA 26

R.A. 7394 – Consumer Act of the Philippines 27

Others: 28

Civil Code

Special Power of Attorney; Special Power to Compromise

Compromises and Arbitration

City of Zamboanga vs. Mandi

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REPUBLIC ACT NO. 876
AN ACT TO AUTHORIZE THE MAKING OF ARBITRATION
AND SUBMISSION AGREEMENTS, TO PROVIDE FOR THE
APPOINTMENT OF ARBITRATORS AND THE
PROCEDURE FOR ARBITRATION IN CIVIL
CONTROVERSIES, AND FOR OTHER PURPOSES
Section 1. Short Title. - This Act shall be known as "The
Arbitration Law."
Section 2. Persons and matters subject to arbitration. -
Two or more persons or parties may submit to the
arbitration of one or more arbitrators any controversy
existing between them at the time of the submission and
which may be the subject of an action, or the parties to
any contract may in such contract agree to settle by
arbitration a controversy thereafter arising between
them. Such submission or contract shall be valid,
enforceable and irrevocable, save upon such grounds as
exist at law for the revocation of any contract.
Such submission or contract may include question arising
out of valuations, appraisals or other controversies
which may be collateral, incidental, precedent or
subsequent to any issue between the parties.
A controversy cannot be arbitrated where one of the
parties to the controversy is an infant, or a person
judicially declared to be incompetent, unless the
appropriate court having jurisdiction approve a petition
for permission to submit such controversy to arbitration
made by the general guardian or guardian ad litem of the
infant or of the incompetent.
But where a person capable of entering into a submission
or contract has knowingly entered into the same with a
person incapable of so doing, the objection on the
ground of incapacity can be taken only in behalf of the
person so incapacitated.
Section 3. Controversies or cases not subject to the
provisions of this Act. - This Act shall not apply to
controversies and to cases which are subject to the
jurisdiction of the Court of Industrial Relations or which
have been submitted to it as provided by
Commonwealth Act Numbered One hundred and three,
as amended.
Section 4. Form of arbitration agreement. - A contract to
arbitrate a controversy thereafter arising between the
parties, as well as a submission to arbitrate an existing
controversy shall be in writing and subscribed by the
party sought to be charged, or by his lawful agent.
The making of a contract or submission for arbitration
described in section two hereof, providing for arbitration
of any controversy, shall be deemed a consent of the
parties to the jurisdiction of the Court of First Instance of
the province or city where any of the parties resides, to
enforce such contract or submission.
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For the benefit of STM Law School Residents 2
Section 5. Preliminary procedure. - An arbitration shall be
instituted by:
(a) In the case of a contract to arbitrate future
controversies by the service by either party upon
the other of a demand for arbitration in
accordance with the contract. Such demand shall
be set forth the nature of the controversy, the
amount involved, if any, and the relief sought,
together with a true copy of the contract
providing for arbitration. The demand shall be
served upon any party either in person or by
registered mail. In the event that the contract
between the parties provides for the
appointment of a single arbitrator, the demand
shall be set forth a specific time within which the
parties shall agree upon such arbitrator. If the
contract between the parties provides for the
appointment of three arbitrators, one to be
selected by each party, the demand shall name
the arbitrator appointed by the party making the
demand; and shall require that the party upon
whom the demand is made shall within fifteen
days after receipt thereof advise in writing the
party making such demand of the name of the
person appointed by the second party; such
notice shall require that the two arbitrators so
appointed must agree upon the third arbitrator
within ten days from the date of such notice.
(b) In the event that one party defaults in
answering the demand, the aggrieved party may
file with the Clerk of the Court of First Instance
having jurisdiction over the parties, a copy of the
demand for arbitration under the contract to
arbitrate, with a notice that the original demand
was sent by registered mail or delivered in
person to the party against whom the claim is
asserted. Such demand shall set forth the nature
of the controversy, the amount involved, if any,
and the relief sought, and shall be accompanied
by a true copy of the contract providing for
arbitration.
(c) In the case of the submission of an existing
controversy by the filing with the Clerk of the
Court of First Instance having jurisdiction, of the
submission agreement, setting forth the nature
of the controversy, and the amount involved, if
any. Such submission may be filed by any party
and shall be duly executed by both parties.
(d) In the event that one party neglects, fails or
refuses to arbitrate under a submission
agreement, the aggrieved party shall follow the
procedure prescribed in subparagraphs (a) and
(b) of this section.
Section 6. Hearing by court. - A party aggrieved by the
failure, neglect or refusal of another to perform under an
agreement in writing providing for arbitration may
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petition the court for an order directing that such
arbitration proceed in the manner provided for in such
agreement. Five days notice in writing of the hearing of
such application shall be served either personally or by
registered mail upon the party in default. The court shall
hear the parties, and upon being satisfied that the
making of the agreement or such failure to comply
therewith is not in issue, shall make an order directing
the parties to proceed to arbitration in accordance with
the terms of the agreement. If the making of the
agreement or default be in issue the court shall proceed
to summarily hear such issue. If the finding be that no
agreement in writing providing for arbitration was made,
or that there is no default in the proceeding thereunder,
the proceeding shall be dismissed. If the finding be that
a written provision for arbitration was made and there is
a default in proceeding thereunder, an order shall be
made summarily directing the parties to proceed with
the arbitration in accordance with the terms thereof.
The court shall decide all motions, petitions or
applications filed under the provisions of this Act, within
ten days after such motions, petitions, or applications
have been heard by it.
Section 7. Stay of civil action. - If any suit or proceeding
be brought upon an issue arising out of an agreement
providing for the arbitration thereof, the court in which
such suit or proceeding is pending, upon being satisfied
that the issue involved in such suit or proceeding is
referable to arbitration, shall stay the action or
proceeding until an arbitration has been had in
accordance with the terms of the agreement: Provided,
That the applicant, for the stay is not in default in
proceeding with such arbitration.
Section 8. Appointment of arbitrators. - If, in the contract
for arbitration or in the submission described in section
two, provision is made for a method of naming or
appointing an arbitrator or arbitrators, such method
shall be followed; but if no method be provided therein
the Court of First Instance shall designate an arbitrator
or arbitrators.
The Court of First Instance shall appoint an arbitrator or
arbitrators, as the case may be, in the following
instances:
(a) If the parties to the contract or submission
are unable to agree upon a single arbitrator; or
(b) If an arbitrator appointed by the parties is
unwilling or unable to serve, and his successor
has not been appointed in the manner in which
he was appointed; or
(c) If either party to the contract fails or refuses
to name his arbitrator within fifteen days after
receipt of the demand for arbitration; or
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For the benefit of STM Law School Residents 3
(d) If the arbitrators appointed by each party to
the contract, or appointed by one party to the
contract and by the proper Court, shall fail to
agree upon or to select the third arbitrator.
(e) The court shall, in its discretion appoint one
or three arbitrators, according to the importance
of the controversy involved in any of the
preceding cases in which the agreement is silent
as to the number of arbitrators.
(f) Arbitrators appointed under this section shall
either accept or decline their appointments
within seven days of the receipt of their
appointments. In case of declination or the
failure of an arbitrator or arbitrators to duly
accept their appointments the parties or the
court, as the case may be, shall proceed to
appoint a substitute or substitutes for the
arbitrator or arbitrators who decline or failed to
accept his or their appointments.
Section 9. Appointment of additional arbitrators. -
Where a submission or contract provides that two or
more arbitrators therein designated or to be thereafter
appointed by the parties, may select or appoint a person
as an additional arbitrator, the selection or appointment
must be in writing. Such additional arbitrator must sit
with the original arbitrators upon the hearing.
Section 10. Qualifications of arbitrators. - Any person
appointed to serve as an arbitrator must be of legal age,
in full-enjoyment of his civil rights and know how to read
and write. No person appointed to served as an
arbitrator shall be related by blood or marriage within
the sixth degree to either party to the controversy. No
person shall serve as an arbitrator in any proceeding if he
has or has had financial, fiduciary or other interest in the
controversy or cause to be decided or in the result of the
proceeding, or has any personal bias, which might
prejudice the right of any party to a fair and impartial
award.
No party shall select as an arbitrator any person to act as
his champion or to advocate his cause.
If, after appointment but before or during hearing, a
person appointed to serve as an arbitrator shall discover
any circumstances likely to create a presumption of bias,
or which he believes might disqualify him as an impartial
arbitrator, the arbitrator shall immediately disclose such
information to the parties. Thereafter the parties may
agree in writing:
(a) to waive the presumptive disqualifying
circumstances; or
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(b) to declare the office of such arbitrator vacant.
Any such vacancy shall be filled in the same
manner as the original appointment was made.
Section 11. Challenge of arbitrators. - The arbitrators
may be challenged only for the reasons mentioned in the
preceding section which may have arisen after the
arbitration agreement or were unknown at the time of
arbitration.
The challenge shall be made before them.
If they do not yield to the challenge, the challenging party
may renew the challenge before the Court of First
Instance of the province or city in which the challenged
arbitrator, or, any of them, if there be more than one,
resides. While the challenging incident is discussed
before the court, the hearing or arbitration shall be
suspended, and it shall be continued immediately after
the court has delivered an order on the challenging
incident.
Section 12. Procedure by arbitrators. - Subject to the
terms of the submission or contract, if any are specified
therein, are arbitrators selected as prescribed herein
must, within five days after appointment if the parties to
the controversy reside within the same city or province,
or within fifteen days after appointment if the parties
reside in different provinces, set a time and place for the
hearing of the matters submitted to them, and must
cause notice thereof to be given to each of the parties.
The hearing can be postponed or adjourned by the
arbitrators only by agreement of the parties; otherwise,
adjournment may be ordered by the arbitrators upon
their own motion only at the hearing and for good and
sufficient cause. No adjournment shall extend the
hearing beyond the day fixed in the submission or
contract for rendering the award, unless the time so
fixed is extended by the written agreement of the parties
to the submission or contract or their attorneys, or
unless the parties have continued with the arbitration
without objection to such adjournment.
The hearing may proceed in the absence of any party
who, after due notice, fails to be present at such hearing
or fails to obtain an adjournment thereof. An award shall
not be made solely on the default of a party. The
arbitrators shall require the other party to submit such
evidence as they may require for making an award.
No one other than a party to said arbitration, or a person
in the regular employ of such party duly authorized in
writing by said party, or a practicing attorney-at-law,
shall be permitted by the arbitrators to represent before
him or them any party to the arbitration. Any party
desiring to be represented by counsel shall notify the
other party or parties of such intention at least five days
prior to the hearing.
The arbitrators shall arrange for the taking of a
stenographic record of the testimony when such a record
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For the benefit of STM Law School Residents 4
is requested by one or more parties, and when payment
of the cost thereof is assumed by such party or parties.
Persons having a direct interest in the controversy which
is the subject of arbitration shall have the right to attend
any hearing; but the attendance of any other person shall
be at the discretion of the arbitrators.
Section 13. Oath of arbitrators. - Before hearing any
testimony, arbitrators must be sworn, by any officer
authorized by law to administer an oath, faithfully and
fairly to hear and examine the matters in controversy
and to make a just award according to the best of their
ability and understanding. Arbitrators shall have the
power to administer the oaths to all witnesses requiring
them to tell the whole truth and nothing but the truth in
any testimony which they may give in any arbitration
hearing. This oath shall be required of every witness
before any of his testimony is heard.
Section 14. Subpoena and subpoena duces tecum. -
Arbitrators shall have the power to require any person to
attend a hearing as a witness. They shall have the power
to subpoena witnesses and documents when the
relevancy of the testimony and the materiality thereof
has been demonstrated to the arbitrators. Arbitrators
may also require the retirement of any witness during
the testimony of any other witness. All of the arbitrators
appointed in any controversy must attend all the
hearings in that matter and hear all the allegations and
proofs of the parties; but an award by the majority of
them is valid unless the concurrence of all of them is
expressly required in the submission or contract to
arbitrate. The arbitrator or arbitrators shall have the
power at any time, before rendering the award, without
prejudice to the rights of any party to petition the court
to take measures to safeguard and/or conserve any
matter which is the subject of the dispute in arbitration.
Section 15. Hearing by arbitrators. - Arbitrators may, at
the commencement of the hearing, ask both parties for
brief statements of the issues in controversy and/or an
agreed statement of facts. Thereafter the parties may
offer such evidence as they desire, and shall produce
such additional evidence as the arbitrators shall require
or deem necessary to an understanding and
determination of the dispute. The arbitrators shall be the
sole judge of the relevancy and materiality of the
evidence offered or produced, and shall not be bound to
conform to the Rules of Court pertaining to evidence.
Arbitrators shall receive as exhibits in evidence any
document which the parties may wish to submit and the
exhibits shall be properly identified at the time of
submission. All exhibits shall remain in the custody of the
Clerk of Court during the course of the arbitration and
shall be returned to the parties at the time the award is
made. The arbitrators may make an ocular inspection of
any matter or premises which are in dispute, but such
inspection shall be made only in the presence of all
parties to the arbitration, unless any party who shall have
received notice thereof fails to appear, in which event
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such inspection shall be made in the absence of such
party.
Section 16. Briefs. - At the close of the hearings, the
arbitrators shall specifically inquire of all parties whether
they have any further proof or witnesses to present;
upon the receipt of a negative reply from all parties, the
arbitrators shall declare the hearing closed unless the
parties have signified an intention to file briefs. Then the
hearing shall be closed by the arbitrations after the
receipt of briefs and/or reply briefs. Definite time limit
for the filing of such briefs must be fixed by the
arbitrators at the close of the hearing. Briefs may filed by
the parties within fifteen days after the close of the oral
hearings; the reply briefs, if any, shall be filed within five
days following such fifteen-day period.
Section 17. Reopening of hearing. - The hearing may be
reopened by the arbitrators on their own motion or upon
the request of any party, upon good cause, shown at any
time before the award is rendered. When hearings are
thus reopened the effective date for the closing of the
hearings shall be the date of the closing of the reopened
hearing.
Section 18. Proceeding in lieu of hearing. - The parties to
a submission or contract to arbitrate may, by written
agreement, submit their dispute to arbitration by other
than oral hearing. The parties may submit an agreed
statement of facts. They may also submit their respective
contentions to the duly appointed arbitrators in writing;
this shall include a statement of facts, together with all
documentary proof. Parties may also submit a written
argument. Each party shall provide all other parties to
the dispute with a copy of all statements and documents
submitted to the arbitrators. Each party shall have an
opportunity to reply in writing to any other party's
statements and proofs; but if such party fails to do so
within seven days after receipt of such statements and
proofs, he shall be deemed to have waived his right to
reply. Upon the delivery to the arbitrators of all
statements and documents, together with any reply
statements, the arbitrators shall declare the proceedings
in lieu of hearing closed.
Section 19. Time for rendering award. - Unless the
parties shall have stipulated by written agreement the
time within which the arbitrators must render their
award, the written award of the arbitrators shall be
rendered within thirty days after the closing of the
hearings or if the oral hearings shall have been waived,
within thirty days after the arbitrators shall have
declared such proceedings in lieu of hearing closed. This
period may be extended by mutual consent of the
parties.alf-itc
Section 20. Form and contents of award. - The award
must be made in writing and signed and acknowledged
by a majority of the arbitrators, if more than one; and by
the sole arbitrator, if there is only one. Each party shall
be furnished with a copy of the award. The arbitrators in
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For the benefit of STM Law School Residents 5
their award may grant any remedy or relief which they
deem just and equitable and within the scope of the
agreement of the parties, which shall include, but not be
limited to, the specific performance of a contract.
In the event that the parties to an arbitration have,
during the course of such arbitration, settled their
dispute, they may request of the arbitrators that such
settlement be embodied in an award which shall be
signed by the arbitrators. No arbitrator shall act as a
mediator in any proceeding in which he is acting as
arbitrator; and all negotiations towards settlement of the
dispute must take place without the presence of the
arbitrators.
The arbitrators shall have the power to decide only those
matters which have been submitted to them. The terms
of the award shall be confined to such disputes.
The arbitrators shall have the power to assess in their
award the expenses of any party against another party,
when such assessment shall be deemed necessary.
Section 21. Fees of arbitration. - The fees of the
arbitrators shall be fifty pesos per day unless the parties
agree otherwise in writing prior to the arbitration.
Section 22. Arbitration deemed a special proceeding. -
Arbitration under a contract or submission shall be
deemed a special proceeding, of which the court
specified in the contract or submission, or if none be
specified, the Court of First Instance for the province or
city in which one of the parties resides or is doing
business, or in which the arbitration was held, shall have
jurisdiction. Any application to the court, or a judge
thereof, hereunder shall be made in manner provided for
the making and hearing of motions, except as otherwise
herein expressly provided.
Section 23. Confirmation of award. - At any time within
one month after the award is made, any party to the
controversy which was arbitrated may apply to the court
having jurisdiction, as provided in section twenty-eight,
for an order confirming the award; and thereupon the
court must grant such order unless the award is vacated,
modified or corrected, as prescribed herein. Notice of
such motion must be served upon the adverse party or
his attorney as prescribed by law for the service of such
notice upon an attorney in action in the same court.
Section 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 any party to the
controversy when such party proves affirmatively 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; or
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(c) That the arbitrators were guilty of misconduct
in refusing to postpone the hearing upon
sufficient cause shown, or in refusing to hear
evidence pertinent and material to the
controversy; that one or more of the arbitrators
was disqualified to act as such under section nine
hereof, and wilfully refrained from disclosing
such disqualifications 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,
final and definite 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
fifty pesos 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.
Section 25. Grounds for modifying or correcting award. -
In any one 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
figures, or an evident mistake in the description
of any person, thing or property referred to in
the award; or
(b) Where the arbitrators have awarded upon a
matter not submitted to them, not affecting the
merits of the decision upon the matter
submitted; or
(c) Where the award is imperfect in a matter of
form not affecting 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.
The order may modify and correct the award so as to
effect the intent thereof and promote justice between
the parties.
Section 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
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party or his counsel within thirty days after award is filed
or delivered, as prescribed by law for the service upon an
attorney in an action.
Section 27. Judgment. - Upon the granting of an order
confirming, modifying or correcting an award, judgment
may be entered in conformity therewith in the court
wherein said application was filed. 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.
Section 28. Papers to accompany motion to confirm,
modify, correct, or vacate award. - The party moving for
an order confirming, modifying, correcting, or vacating
an award, shall at the time that such motion is filed with
the court for the entry of judgment thereon also file 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 verified of the award.
(c) Each notice, affidavit, or other paper used
upon the application to confirm, modify, correct
or vacate such award, and a copy of each 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
effect 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 entered.
Section 29. Appeals. - An appeal may be taken from an
order made in a proceeding under this Act, or from a
judgment entered upon an award through certiorari
proceedings, but such appeals shall be limited to
questions of law. The proceedings upon such an appeal,
including the judgment thereon shall be governed by the
Rules of Court in so far as they are applicable.
Section 30. Death of party. - Where a party dies after
making a submission or a contract to arbitrate as
prescribed in this Act, the proceedings may be begun or
continued upon the application of, or notice to, his
executor or administrator, or temporary administrator of
his estate. In any such case, the court may issue an order
extending the time within which notice of a motion to
confirm, vacate, modify or correct an award must be
served. Upon confirming an award, where a party has
died since it was filed or delivered, the court must enter
judgment in the name of the original party; and the
proceedings thereupon are the same as where a party
dies after a verdict.
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Section 31. Repealing clause. - The provisions of chapters

one and two, Title XIV, of the Civil Code shall remain in
force. All other laws and parts of laws inconsistent with
this Act are hereby repealed. If any provision of this Act
shall be held invalid the remainder that shall not be
affected thereby.

Section 32. Effectivity. - This Act shall take effect six

months after its approval.

Approved: June 19, 1953

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Republic Act No. 9285 April 2, 2004
AN ACT TO INSTITUTIONALIZE THE USE OF AN
ALTERNATIVE DISPUTE RESOLUTION SYSTEM IN THE
PHILIPPINES AND TO ESTABLISH THE OFFICE FOR
ALTERNATIVE DISPUTE RESOLUTION, AND FOR OTHER
PURPOSES
Be it enacted by the Senate and House of Representatives
of the Philippines in Congress assembled:
CHAPTER 1 - GENERAL PROVISIONS
SECTION 1. Title. - This act shall be known as the
"Alternative Dispute Resolution Act of 2004."
SEC. 2. Declaration of Policy. - it is hereby declared the
policy of the State to actively promote party autonomy
in the resolution of disputes or the freedom of the party
to make their own arrangements to resolve their
disputes. Towards this end, the State shall encourage
and actively promote the use of Alternative Dispute
Resolution (ADR) as an important means to achieve
speedy and impartial justice and declog court dockets. As
such, the State shall provide means for the use of ADR as
an efficient tool and an alternative procedure for the
resolution of appropriate cases. Likewise, the State shall
enlist active private sector participation in the
settlement of disputes through ADR. This Act shall be
without prejudice to the adoption by the Supreme Court
of any ADR system, such as mediation, conciliation,
arbitration, or any combination thereof as a means of
achieving speedy and efficient means of resolving cases
pending before all courts in the Philippines which shall be
governed by such rules as the Supreme Court may
approve from time to time.
SEC. 3. Definition of Terms. - For purposes of this Act, the
term:
(a) "Alternative Dispute Resolution System"
means any process or procedure used to resolve
a dispute or controversy, other than by
adjudication of a presiding judge of a court or an
officer of a government agency, as defined in this
Act, in which a neutral third party participates to
assist in the resolution of issues, which includes
arbitration, mediation, conciliation, early neutral
evaluation, mini-trial, or any combination
thereof;
(b) "ADR Provider" means institutions or persons
accredited as mediator, conciliator, arbitrator,
neutral evaluator, or any person exercising
similar functions in any Alternative Dispute
Resolution system. This is without prejudice to
the rights of the parties to choose nonaccredited
individuals to act as mediator, conciliator,
arbitrator, or neutral evaluator of their dispute.
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Whenever reffered to in this Act, the term "ADR
practitioners" shall refer to individuals acting as
mediator, conciliator, arbitrator or neutral
evaluator;
(c) "Authenticate" means to sign, execute or
adopt a symbol, or encrypt a record in whole or
in part, intended to identity the authenticating
party and to adopt, accept or establish the
authenticity of a record or term;
(d) "Arbitration" means a voluntary dispute
resolution process in which one or more
arbitrators, appointed in accordance with the
agreement of the parties, or rules promulgated
pursuant to this Act, resolve a dispute by
rendering an award;
(e) "Arbitrator" means the person appointed to
render an award, alone or with others, in a
dispute that is the subject of an arbitration
agreement;
(f) "Award" means any partial or final decision by
an arbitrator in resolving the issue in a
controversy;
(g) "Commercial Arbitration" An arbitration is
"commercial if it covers matter arising from all
relationships of a commercial nature, whether
contractual or not;
(h) "Confidential information" means any
information, relative to the subject of mediation
or arbitration, expressly intended by the source
not to be disclosed, or obtained under
circumstances that would create a reasonable
expectation on behalf of the source that the
information shall not be disclosed. It shall
include (1) communication, oral or written,
made in a dispute resolution proceedings,
including any memoranda, notes or work
product of the neutral party or non-party
participant, as defined in this Act; (2) an oral or
written statement made or which occurs during
mediation or for purposes of considering,
conducting, participating, initiating, continuing
of reconvening mediation or retaining a
mediator; and (3) pleadings, motions
manifestations, witness statements, reports
filed or submitted in an arbitration or for expert
evaluation;
(i) "Convention Award" means a foreign arbitral
award made in a Convention State;
(j) "Convention State" means a State that is a
member of the New York Convention;
(k) "Court" as referred to in Article 6 of the
Model Law shall mean a Regional Trial Court;
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(l) "Court-Annexed Mediation" means any
mediation process conducted under the
auspices of the court, after such court has
acquired jurisdiction of the dispute;
(m) "Court-Referred Mediation" means
mediation ordered by a court to be conducted in
accordance with the Agreement of the Parties
when as action is prematurely commenced in
violation of such agreement;
(n) "Early Neutral Evaluation" means an ADR
process wherein parties and their lawyers are
brought together early in a pre-trial phase to
present summaries of their cases and receive a
nonbinding assessment by an experienced,
neutral person, with expertise in the subject in
the substance of the dispute;
(o) "Government Agency" means any
government entity, office or officer, other than a
court, that is vested by law with quasi-judicial
power to resolve or adjudicate dispute involving
the government, its agencies and
instrumentalities, or private persons;
(p) "International Party" shall mean an entity
whose place of business is outside the
Philippines. It shall not include a domestic
subsidiary of such international party or a
coventurer in a joint venture with a party which
has its place of business in the Philippines.
The term foreigner arbitrator shall mean a
person who is not a national of the Philippines.
(q) "Mediation" means a voluntary process in
which a mediator, selected by the disputing
parties, facilitates communication and
negotiation, and assist the parties in reaching a
voluntary agreement regarding a dispute.
(r) "Mediator" means a person who conducts
mediation;
(s) "Mediation Party" means a person who
participates in a mediation and whose consent is
necessary to resolve the dispute;
(t) "Mediation-Arbitration" or Med-Arb is a step
dispute resolution process involving both
mediation and arbitration;
(u) "Mini-Trial" means a structured dispute
resolution method in which the merits of a case
are argued before a panel comprising senior
decision makers with or without the presence of
a neutral third person after which the parties
seek a negotiated settlement;
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For the benefit of STM Law School Residents 9
(v) "Model Law" means the Model Law on
International Commercial Arbitration adopted
by the United Nations Commission on
International Trade Law on 21 June 1985;
(w) "New York Convention" means the United
Nations Convention on the Recognition and
Enforcement of Foreign Arbitral Awards
approved in 1958 and ratified by the Philippine
Senate under Senate Resolution No. 71;
(x) "Non-Convention Award" means a foreign
arbitral award made in a State which is not a
Convention State;
(y) "Non-Convention State" means a State that is
not a member of the New York Convention.
(z) "Non-Party Participant" means a person,
other than a party or mediator, who participates
in a mediation proceeding as a witness, resource
person or expert;
(aa) "Proceeding" means a judicial,
administrative, or other adjudicative process,
including related pre-hearing motions,
conferences and discovery;
(bb) "Record" means an information written on
a tangible medium or stored in an electronic or
other similar medium, retrievable form; and
(cc) "Roster" means a list of persons qualified to
provide ADR services as neutrals or to serve as
arbitrators.
SEC. 4. Electronic Signatures in Global and E-Commerce
Act. - The provisions of the Electronic Signatures in
Global and E-Commerce Act, and its implementing Rules
and Regulations shall apply to proceeding contemplated
in this Act.
SEC. 5. Liability of ADR Provider and Practitioner. - The
ADR providers and practitioners shall have the same civil
liability for the Acts done in the performance of then
duties as that of public officers as provided in Section 38
(1), Chapter 9, Book of the Administrative Code of 1987.
SEC. 6. Exception to the Application of this Act. - The
provisions of this Act shall not apply to resolution or
settlement of the following: (a) labor disputes covered by
Presidential Decree No. 442, otherwise known as the
Labor Code of the Philippines, as amended and its
Implementing Rules and Regulations; (b) the civil status
of persons; (c) the validity of a marriage; (d) any ground
for legal separation; (e) the jurisdiction of courts; (f)
future legitime; (g) criminal liability; and (h) those which
by law cannot be compromised.
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CHAPTER 2 - MEDIATION
SEC. 7. Scope. - The provisions of this Chapter shall cover
voluntary mediation, whether ad hoc or institutional,
other than court-annexed. The term "mediation' shall
include conciliation.
SEC. 8. Application and Interpretation. - In applying
construing the provisions of this Chapter, consideration
must be given to the need to promote candor or parties
and mediators through confidentiality 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. - Information
obtained through mediation proceedings shall be subject
to the following principles and guidelines:
(a) Information obtained through mediation
shall be privileged and confidential.
(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) Confidential Information shall not be subject
to discovery and shall be inadmissible if 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.
(d) In such an adversarial proceeding, the
following persons involved or previously
involved in a mediation may not be compelled to
disclose confidential information obtained
during mediation: (1) the parties to the dispute;
(2) the mediator or mediators; (3) the counsel for
the parties; (4) the nonparty participants; (5) any
persons hired or engaged in connection with the
mediation as secretary, stenographer, clerk or
assistant; and (6) any other person who obtains
or possesses confidential information by reason
of his/her profession.
(e) The protections of this Act shall continue to
apply even of 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.
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SEC. 10. Waiver of Confidentiality. - A privilege arising
from the confidentiality of information may be waived in
a record, or orally during a proceeding by the mediator
and the mediation parties.
A privilege arising from the confidentiality of information
may likewise be waived by a nonparty participant if the
information is provided by such nonparty participant.
A person who discloses confidential information shall be
precluded from asserting the privilege under Section 9 of
this Chapter to bar disclosure of the rest of the
information necessary to a complete understanding of
the previously disclosed information. If a person suffers
loss or damages in a judicial proceeding against the
person who made the disclosure.
A person who discloses or makes a representation about
a mediation is preclude from asserting the privilege
under Section 9, to the extent that the communication
prejudices another person in the proceeding and it is
necessary for the person prejudiced to respond to the
representation of disclosure.
SEC. 11. Exceptions to Privilege. -
(a) There is no privilege against disclosure under
Section 9 if mediation communication is:
(1) in an agreement evidenced by a
record authenticated by all parties to the
agreement;
(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
inflict bodily injury or commit a crime of
violence;
(4) internationally used to plan a crime,
attempt to commit, or commit a crime,
or conceal an ongoing crime or criminal
activity;
(5) sought or offered 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
mediation;
(6) sought or offered to prove or
disprove a claim or complaint of
professional misconduct or malpractice
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filed against mediator in a proceeding;
or
(7) sought or offered to prove or
disprove a claim of complaint of
professional misconduct of malpractice
filed against a party, nonparty
participant, or representative of a party
based on conduct occurring during a
mediation.
(b) There is no privilege under Section 9 if a court
or administrative agency, finds, 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
confidentiality, and the mediation
communication is sought or offered in:
(1) a court proceeding involving a crime
or felony; or
(2) a proceeding to prove a claim or
defense that under the law is sufficient
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. - A mediator may
not make a report, assessment, evaluation,
recommendation, finding, or other communication
regarding a mediation to a court or agency or other
authority that make a ruling on a dispute that is the
subject of a mediation, except:
(a) Where the mediation occurred or has
terminated, or where a settlement was reached.
(b) As permitted to be disclosed under Section 13
of this Chapter.
SEC. 13. Mediator's Disclosure and Conflict of Interest. -
The mediation shall be guided by the following operative
principles:
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For the benefit of STM Law School Residents 11
(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 determinate
whether there are any known facts that
a reasonable individual would consider
likely to affect the impartiality of the
mediator, including a financial or
personal interest in the outcome of the
mediation and any existing or past
relationship with a party or foreseeable
participant in the mediation; and
(2) disclosure to the mediation parties
any such fact known or learned as soon
as is practical before accepting a
mediation.
(b) If a mediation learns any fact described in
paragraph (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
qualifications to mediate a dispute.
This Act does not require that a mediator shall have
special qualifications by background or profession unless
the special qualifications of a mediator are required in
the mediation agreement or by the mediation parties.
SEC. 14. Participation in Mediation. - Except as
otherwise provided in this Act, a party may designate a
lawyer or any other person to provide assistance in the
mediation. A lawyer 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.
SEC. 15. Place of Mediation. - The parties are free to
agree on the place of mediation. Failing such agreement,
the place of mediation shall be any place convenient and
appropriate to all parties.
SEC. 16. Effect of Agreement to Submit Dispute to
Mediation Under Institutional Rules. - An agreement to
submit a dispute to mediation by any 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 international mediation rule 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 conflict between the institutional mediation
rules and the provisions of this Act, the latter shall
prevail.
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SEC. 17. Enforcement of Mediated Settlement
Agreement. - 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 their respective counsel, if any,
and by the mediator.
The parties and their respective counsels shall
endeavor to make the terms and condition
thereof complete and make adequate provisions
for the contingency of breach to avoid conflicting
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 a language known to them.
(c) If the parties so desire, they may deposit such
settlement agreement with the appropriate
Clerk of a Regional Trial Court of the place where
one of the parties resides. Where there is a need
to enforce the settlement agreement, a petition
may be filed 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 Supreme Court.
(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
Republic Act No. 876, otherwise known as the
Arbitration Law, notwithstanding the provisions
of Executive Order No. 1008 for mediated
dispute outside of the CIAC.
CHAPTER 3 - OTHER ADR FORMS
SEC. 18. Referral of Dispute to other ADR Forms. - The
parties may agree to refer one or more or all issues
arising in a dispute or during its pendency to other forms
of ADR such as but not limited to (a) the evaluation of a
third person or (b) a mini-trial, (c) mediation-arbitration,
or a combination thereof.
For purposes of this Act, the use of other ADR forms shall
be governed by Chapter 2 of this Act except where it is
combined with arbitration in which case it shall likewise
be governed by Chapter 5 of this Act.
CHAPTER 4 - INTERNATIONAL COMMERCIAL
ARBITRATION
SEC. 19. Adoption of the Model Law on International
Commercial Arbitration. - International commercial
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For the benefit of STM Law School Residents 12
arbitration shall be governed by the Model Law on
International Commercial Arbitration (the "Model Law")
adopted by the United Nations Commission on
International Trade Law on June 21, 1985 (United
Nations Document A/40/17) and recommended
approved on December 11, 1985, copy of which is hereto
attached as Appendix "A".
SEC. 20. Interpretation of Model Law. - In interpreting
the Model Law, regard shall be had to its international
origin and to the need for uniformity in its interpretation
and resort may be made to the travaux
preparatories and the report of the Secretary General of
the United Nations Commission on International Trade
Law dated March 25, 1985 entitled, "International
Commercial Arbitration: Analytical Commentary on Draft
Trade identified by reference number A/CN. 9/264."
SEC. 21. Commercial Arbitration. - An arbitration is
"commercial" if it covers matters arising from all
relationships of a commercial nature, whether
contractual or not. Relationships of a transactions: any
trade transaction for the supply or exchange of goods or
services; distribution agreements; construction of works;
commercial representation or agency; factoring; leasing,
consulting; engineering; licensing; investment; financing;
banking; insurance; joint venture and other forms of
industrial or business cooperation; carriage of goods or
passengers by air, sea, rail or road.
SEC. 22. Legal Representation in International
Arbitration. - In international arbitration conducted in
the Philippines, a party may be presented by any person
of his choice. Provided, that such representative, unless
admitted to the practice of law in the Philippines, shall
not be authorized to appear as counsel in any Philippine
court, or any other quasi-judicial body whether or not
such appearance is in relation to the arbitration in which
he appears.
SEC. 23. Confidential of Arbitration Proceedings. - The
arbitration proceedings, including the records, evidence
and the arbitral award, shall be considered confidential
and shall not be published except (1) with the consent of
the parties, or (2) for the limited purpose of disclosing to
the court of relevant documents in cases where resort to
the court is allowed herein. Provided, however, that the
court in which the action or the appeal is pending may
issue a protective order to prevent or prohibit disclosure
of documents or information containing secret
processes, developments, research and other
information where it is shown that the applicant shall be
materially prejudiced by an authorized disclosure
thereof.
SEC. 24. Referral to Arbitration. - A court before which
an action is brought in a matter which is the subject
matter of an arbitration agreement shall, if at least one
party so requests not later that the pre-trial conference,
or upon the request of both parties thereafter, refer the
parties to arbitration unless it finds that the arbitration
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 For the benefit of STM Law School Residents 13

agreement is null and void, inoperative or incapable of (1) Any party may request that provision
being performed. relief be granted against the adverse
party:
SEC. 25. Interpretation of the Act. - In interpreting the
Act, the court shall have due regard to the policy of the (2) Such relief may be granted:
law in favor of arbitration. Where action is commenced
by or against multiple parties, one or more of whom are (i) to prevent irreparable loss or
parties who are bound by the arbitration agreement injury:
although the civil action may continue as to those who
are not bound by such arbitration agreement. (ii) to provide security for the
performance of any obligation;
SEC. 26. Meaning of "Appointing Authority.". -
"Appointing Authority" as used in the Model Law shall (iii) to produce or preserve any
mean the person or institution named in the arbitration evidence; or
agreement as the appointing authority; or the regular
arbitration arbitration institution under whose rules the (iv) to compel any other
arbitration is agreed to be conducted. Where the parties appropriate act or omission.
have agreed to submit their dispute to institutional
arbitration rules, and unless they have agreed to a (3) The order granting provisional relief
different procedure, they shall be deemed to have may be conditioned upon the provision
agreed to procedure under such arbitration rules for the of security or any act or omission
selection and appointment of arbitrators. In ad hoc specified in the order.
arbitration, the default appointment of an arbitrator
shall be made by the National President of the Integrated (4) Interim or provisional relief is
Bar of the Philippines (IBP) or his duly authorized requested by written application
representative. transmitted by reasonable means to the
Court or arbitral tribunal as the case may
SEC. 27. What Functions May be Performed by be and the party against whom the relief
Appointing Authority. - The functions referred to in is sought, describing in appropriate
Articles 11(3), 11(4), 13(3) and 14(1) of the Model Law detail the precise relief, the party against
shall be performed by the Appointing Authority, unless whom the relief is requested, the
the latter shall fail or refuse to act within thirty (30) days grounds for the relief, and evidence
from receipt of the request in which case the applicant supporting the request.
may renew the application with the Court.
(5) The order shall be binding upon the
SEC. 28. Grant of Interim Measure of Protection. - parties.

(a) It is not incompatible with an arbitration
agreement for a party to request, before
constitution of the tribunal, from a Court an
interim measure of protection and for the Court
to grant such measure. After constitution of the
arbitral tribunal and during arbitral proceedings,
a request for an interim measure of protection
or modification thereof, may be made with the
arbitral tribunal or to the extent that the arbitral
tribunal has no power to act or is unable to act
effectively, the request may be made with the
Court. The arbitral tribunal is deemed
constituted when the sole arbitrator or the third
arbitrator who has been nominated, has
accepted the nomination and written
communication of said nomination and
acceptance has been received by the party
making request.
(b) The following rules on interim or provisional
relief shall be observed:
(6) Either party may apply with the Court
for assistance in Implementing or
enforcing an interim measure ordered
by an arbitral tribunal.
(7) A party who does not comply with
the order shall be liable for all damages
resulting from noncompliance, including
all expenses, and reasonable attorney's
fees, paid in obtaining the order's
judicial enforcement.
SEC. 29. Further Authority for Arbitrator to Grant
Interim Measure of Protection. - Unless otherwise
agreed by the parties, the arbitral tribunal may, at the
request of a party, order any party to take such interim
measures of protection as the arbitral tribunal may
consider necessary in respect of the subject matter of the
dispute following the rules in Section 28, paragraph 2.
Such interim measures may include but shall not be
limited to preliminary injuction directed against a party,
appointment of receivers or detention, preservation,

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inspection of property that is the subject of the dispute
in arbitration. Either party may apply with the Court for
assistance in implementing or enforcing an interim
measures ordered by an arbitral tribunal.
SEC. 30. Place of Arbitration. - The parties are free to
agree on the place of arbitration. Failing such agreement,
the place of arbitration shall be in Metro Manila, unless
the arbitral tribunal, having regard to the circumstances
of the case, including the convenience of the parties shall
decide on a different place of arbitration.
The arbitral tribunal may, unless otherwise agreed by the
parties, meet at any place it considers appropriate for
consultation among its members, for hearing witnesses,
experts, or the parties, or for inspection of goods, other
property or documents.
SEC. 31. Language of the Arbitration. - The parties are
free to agree on the language or languages to be used in
the arbitral proceedings. Failing such agreement, the
language to be used shall be English in international
arbitration, and English or Filipino for domestic
arbitration, unless the arbitral tribunal shall determine a
different or another language or languages to be used in
the proceedings. This agreement or determination,
unless otherwise specified therein, shall apply to any
written statement by a party, any hearing and any award,
decision or other communication by the arbitral tribunal.
The arbitral tribunal may order that any documentary
evidence shall be accompanied by a translation into the
language or languages agreed upon by the parties or
determined in accordance with paragraph 1 of this
section.
CHAPTER 5 - DOMESTIC ARBITRATION
SEC. 32. Law Governing Domestic Arbitration. -
Domestic arbitration shall continue to be governed by
Republic Act No. 876, otherwise known as "The
Arbitration Law" as amended by this Chapter. The term
"domestic arbitration" as used herein shall mean an
arbitration that is not international as defined in Article
(3) of the Model Law.
SEC. 33. Applicability to Domestic Arbitration. - Article
8, 10, 11, 12, 13, 14, 18 and 19 and 29 to 32 of the Model
Law and Section 22 to 31 of the preceding Chapter 4 shall
apply to domestic arbitration.
CHAPTER 6 - ARBITRATION OF CONSTRUCTION
DISPUTES
SEC. 34. Arbitration of Construction Disputes: Governing
Law. - The arbitration of construction disputes shall be
governed by Executive Order No. 1008, otherwise known
as the Constitution Industry Arbitration Law.
SEC. 35. Coverage of the Law. - Construction disputes
which fall within the original and exclusive jurisdiction of
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For the benefit of STM Law School Residents 14
the Construction Industry Arbitration Commission (the
"Commission") shall include those between or among
parties to, or who are otherwise bound by, an arbitration
agreement, directly or by reference whether such parties
are project owner, contractor, subcontractor, quantity
surveyor, bondsman or issuer of an insurance policy in a
construction project.
The Commission shall continue to exercise original and
exclusive jurisdiction over construction disputes
although the arbitration is "commercial" pursuant to
Section 21 of this Act.
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. 37. Appointment of Foreign Arbitrator. - The
Construction Industry Arbitration Commission (CIAC)
shall promulgate rules to allow for the appointment of a
foreign arbitrator or coarbitrator or chairman of a
tribunal a person who has not been previously accredited
by CIAC: Provided, That:
(a) the dispute is a construction 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 coarbitrator upon the
nomination of the international party; or he/she
is the common choice of the two CIAC-
accredited arbitrators first appointed one of
whom was nominated by the international party;
and
(d) the foreign arbitrator shall be of different
nationality from the international party.
SEC. 38. Applicability to Construction Arbitration. - The
provisions of Sections 17 (d) of Chapter 2, and Section 28
and 29 of this Act shall apply to arbitration of
construction disputes covered by this Chapter.
SEC. 39. Court to Dismiss Case Involving a Construction
Dispute. - A regional trial court which a construction
dispute is filed shall, upon becoming aware, not later
than the pretrial conference, that the parties had
entered into an arbitration to be conducted by the CIAC,
unless both parties, assisted by their respective counsel,
shall submit to the regional trial court a written
agreement exclusive for the Court, rather than the CIAC,
to resolve the dispute.
CHAPTER 7 - JUDICIAL REVIEW OF ARBITRAL AWARDS
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A. DOMESTIC AWARDS
SEC. 40. Confirmation of Award. - The confirmation of a
domestic arbitral award shall be governed by Section 23
of R.A. 876.
A domestic arbitral award when confirmed shall be
enforced in the same manner as final and executory
decisions of the Regional Trial Court.
The confirmation of a domestic award shall be made by
the regional trial court in accordance with the Rules of
Procedure to be promulgated by the Supreme Court.
A CIAC arbitral award need not be confirmed by the
regional trial court to be executory as provided under
E.O. No. 1008.
SEC. 41. Vacation Award. - A party to a domestic
arbitration may question the arbitral award with the
appropriate regional trial court in accordance with the
rules of procedure to be promulgated by the Supreme
Court only on those grounds enumerated in Section 25
of Republic Act No. 876. Any other ground raised against
a domestic arbitral award shall be disregarded by the
regional trial court.
B. FOREIGN ARBITRAL AWARDS
SEC. 42. Application of the New York Convention. - The
New York Convention shall govern the recognition and
enforcement of arbitral awards covered by the said
Convention.
The recognition and enforcement of such arbitral awards
shall be filled with regional trial court in accordance with
the rules of procedure to be promulgated by the
Supreme Court. Said procedural rules shall provide that
the party relying on the award or applying for its
enforcement shall file with the court the original or
authenticated copy of the award and the arbitration
agreement. If the award or agreement is not made in any
of the official languages, the party shall supply a duly
certified 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 New
York Convention.
If the application for rejection or suspension of
enforcement of an award has been made, the regional
trial court may, if it 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.
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 New York
Convention shall be done in accordance with procedural
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For the benefit of STM Law School Residents 15
rules to be promulgated by the Supreme Court. The
Court may, grounds of comity and reciprocity, recognize
and enforce a nonconvention award as a convention
award.
SEC. 44. Foreign Arbitral Award Not Foreign Judgment. -
A foreign arbitral award when confirmed by a court of a
foreign country, shall be recognized and enforced as a
foreign arbitral award and not a judgment of a foreign
court.
A foreign arbitral award, when confirmed by the regional
trial court, shall be enforced as a foreign arbitral award
and not as a judgment of a foreign court.
A foreign arbitral award, when confirmed by the regional
trial court, shall be enforced in the same manner as final
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 Supreme Court only on those
grounds enumerated under Article V of the New York
Convention. Any other ground raised shall be
disregarded by the regional trial court.
SEC. 46. Appeal from Court Decisions on Arbitral
Awards. - A decision of the regional trial court
confirming, vacating, setting aside, modifying or
correcting an arbitral award may be appealed to the
Court of Appeals in accordance with the rules of
procedure to be promulgated by the Supreme Court.
The losing party who appeals from the judgment of the
court confirming an arbitral award shall required by the
appealant court to post 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
Supreme Court.
SEC. 47. Venue and Jurisdiction. - Proceedings for
recognition and enforcement of an arbitration
agreement or for vacation, setting aside, correction or
modification of an arbitral award, and any application
with a court for arbitration assistance and supervision
shall be deemed as special proceedings and shall be filled
with the regional trial court (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 National
Judicial Capital Region, 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
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party's last known address. The notice shall be sent at
least fifteen (15) days before the date set for the initial
hearing of the application.
CHAPTER 8 - MISCELLANEOUS PROVISIONS
SEC. 49. Office for Alternative Dispute Resolution. -
There is hereby established the Office for Alternative
Dispute Resolution as an attached agency to the
Department of Justice (DOJ) which shall have a
Secretariat to be headed by an executive director. The
executive director shall be appointed by the President of
the Philippines.
The objective of the office are:
(a) to promote, develop and expand the use of
ADR in the private and public sectors; and
To assist the government to monitor, study and evaluate
the use by the public and the private sector of ADR, and
recommend to Congress needful statutory changes to
develop. Strengthen and improve ADR practices in
accordance with world standards.
SEC. 50. Powers and Functions of the Office for
Alternative Dispute Resolution. - The Office for
Alternative Dispute Resolution shall have the following
powers and functions:
(a) To formulate standards for the training of the
ADR practitioners and service providers;
(b) To certify that such ADR practitioners and
ADR service providers have undergone the
professional training provided by the office;
(c) To coordinate the development,
implementation, monitoring, and evaluation of
government ADR programs;
(d) To charge fees for their services; and
(e) To perform such acts as may be necessary to
carry into effect the provisions of this Act.
SEC. 51. Appropriations. - The amount necessary to carry
out the provisions of this Act shall be included in the
General Appropriations Act of the year following its
enactment into law and thereafter.
SEC. 52. Implementing Rules and Regulations (IRR). -
Within one (1) month after the approval of this Act, the
secretary of justice shall convene a committee that shall
formulate the appropriate rules and regulations
necessary for the implementation of this Act. The
committee, composed of representatives from:
(a) the Department of Justice;
(b) the Department of Trade and Industry;
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For the benefit of STM Law School Residents 16
(c) the Department of the Interior and Local
Government;
(d) the president of the Integrated Bar of the
Philippines;
(e) A representative from the arbitration
profession; and
(f) A representative from the mediation
profession; and
(g) A representative from the ADR organizations
shall within three (3) months after convening, submit the
IRR to the Joint Congressional Oversight Committee for
review and approval. The Oversight Committee shall be
composed of the chairman of the Senate Committee on
Justice and Human Rights, chairman of the House
Committee on Justice, and one (1) member each from
the majority and minority of both Houses.
The Joint Oversight Committee shall become functus
officio upon approval of the IRR.
SEC. 53. Applicability of the Katarungan
Pambarangay. - This Act shall not be interpreted to
repeal, amend or modify the jurisdiction of the
Katarungan Pambarangay under Republic Act No. 7160,
otherwise known as the Local Government Code of 1991.
SEC. 54. Repealing Clause. - All laws, decrees, executive
orders, rules and regulations which are inconsistent with
the provisions of this Act are hereby repealed, amended
or modified accordingly.
SEC. 55. Separability Clause. - If for any reason or
reasons, any portion or provision of this Act shall be held
unconstitutional or invalid, all other parts or provisions
not affected shall thereby continue to remain in full force
and effect.
SEC. 56. Effectivity. - This act shall take effect fifteen days
(15) after its publication in at least two (2) national
newspapers of general circulation.
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RA 8293. Intellectual Property Code
Section 88. Mandatory Provisions. - The following
provisions shall be included in voluntary license
contracts:
88.1. That the laws of the Philippines shall govern the
interpretation of the same and in the event of litigation,
the venue shall be the proper court in the place where
the licensee has its principal office;
88.2. Continued access to improvements in techniques
and processes related to the technology shall be made
available during the period of the technology transfer
arrangement;
88.3. In the event the technology transfer arrangement
shall provide for arbitration, the Procedure of
Arbitration of the Arbitration Law of the Philippines or
the Arbitration Rules of the United Nations Commission
on International Trade Law (UNCITRAL) or the Rules of
Conciliation and Arbitration of the International
Chamber of Commerce (ICC) shall apply and the venue of
arbitration shall be the Philippines or any neutral
country;
CHAPTER VII
Katarungang Pambarangay
Section 399. Lupong Tagapamayapa. -
(a) There is hereby created in each barangay a
lupong tagapamayapa, hereinafter referred to as
the lupon, composed of the punong barangay, as
chairman and ten (10) to twenty (20) members.
The lupon shall be constituted every three (3)
years in the manner provided herein.
(b) Any person actually residing or working, in
the barangay, not otherwise expressly
disqualified by law, and possessing integrity,
impartiality, independence of mind, sense of
fairness, and reputation for probity, may be
appointed a member of the lupon.
(c) A notice to constitute the lupon, which shall
include the names of proposed members who
have expressed their willingness to serve, shall
be prepared by the punong barangay within the
first fifteen (15) days from the start of his term
of office. Such notice shall be posted in three (3)
conspicuous places in the barangay continuously
for a period of not less than three (3) weeks;
(d) The punong barangay, taking into
consideration any opposition to the proposed
appointment or any recommendations for
appointment as may have been made within the
period of posting, shall within ten (10) days
thereafter, appoint as members those whom he
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For the benefit of STM Law School Residents 17
determines to be suitable therefor.
Appointments shall be in writing, signed by the
punong barangay, and attested to by the
barangay secretary.
(e) The list of appointed members shall be
posted in three (3) conspicuous places in the
barangay for the entire duration of their term of
office; and
(f) In barangays where majority of the
inhabitants are members of indigenous cultural
communities, local systems of settling disputes
through their councils of datus or elders shall be
recognized without prejudice to the applicable
provisions of this Code.
Section 400. Oath and Term of Office. - Upon
appointment, each lupon member shall take an oath of
office before the punong barangay. He shall hold office
until a new lupon is constituted on the third year
following his appointment unless sooner terminated by
resignation, transfer of residence or place of work, or
withdrawal of appointment by the punong barangay with
the concurrence of the majority of all the members of the
lupon.
Section 401. Vacancies. - Should a vacancy occur in the
lupon for any cause, the punong barangay shall
immediately appoint a qualified person who shall hold
office only for the unexpired portion of the term.
Section 402. Functions of the Lupon. - The lupon shall:
(a) Exercise administrative supervision over the
conciliation panels provided herein;
(b) Meet regularly once a month to provide a
forum for exchange of ideas among its members
and the public on matters relevant to the
amicable settlement of disputes, and to enable
various conciliation panel members to share
with one another their observations and
experiences in effecting speedy resolution of
disputes; and
(c) Exercise such other powers and perform such
other duties and functions as may be prescribed
by law or ordinance.
Section 403. Secretary of the Lupon. - The barangay
secretary shall concurrently serve as the secretary of the
lupon. He shall record the results of mediation
proceedings before the punong barangay and shall
submit a report thereon to the proper city or municipal
courts. He shall also receive and keep the records of
proceedings submitted to him by the various conciliation
panels.
Section 404. Pangkat ng Tagapagkasundo. -
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(a) There shall be constituted for each dispute
brought before the lupon a conciliation panel to
be known as the pangkat ng tagapagkasundo,
hereinafter referred to as the pangkat, consisting
of three (3) members who shall be chosen by the
parties to the dispute from the list of members
of the lupon.
Should the parties fail to agree on the pangkat
membership, the same shall be determined by
lots drawn by the lupon chairman.
(b) The three (3) members constituting the
pangkat shall elect from among themselves the
chairman and the secretary. The secretary shall
prepare the minutes of the pangkat proceedings
and submit a copy duly attested to by the
chairman to the lupon secretary and to the
proper city or municipal court. He shall issue and
cause to be served notices to the parties
concerned.
The lupon secretary shall issue certified true
copies of any public record in his custody that is
not by law otherwise declared confidential.
Section 405. Vacancies in the Pangkat. - Any vacancy in
the pangkat shall be chosen by the parties to the dispute
from among the other lupon members. Should the
parties fail to agree on a common choice, the vacancy
shall be filled by lot to be drawn by the lupon chairman.
Section 406. Character of Office and Service of Lupon
Members. -
(a) The lupon members, while in the
performance of their official duties or on the
occasion thereof, shall be deemed as persons in
authority, as defined in the Revised Penal Code.
(b) The lupon or pangkat members shall serve
without compensation, except as provided for in
Section 393 and without prejudice to incentives
as provided for in this Section and in Book IV of
this Code. The Department of the Interior and
Local Government shall provide for a system of
granting economic or other incentives to the
lupon or pangkat members who adequately
demonstrate the ability to judiciously and
expeditiously resolve cases referred to them.
While in the performance of their duties, the
lupon or pangkat members, whether in public or
private employment, shall be deemed to be on
official time, and shall not suffer from any
diminution in compensation or allowance from
said employment by reason thereof.
Section 407. Legal Advice on Matters Involving Questions
of Law. - The provincial, city legal officer or prosecutor or
the municipal legal officer shall render legal advice on
matters involving questions of law to the punong
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For the benefit of STM Law School Residents 18
barangay or any lupon or pangkat member whenever
necessary in the exercise of his functions in the
administration of the katarungang pambarangay.
Section 408. Subject Matter for Amicable Settlement;
Exception Thereto. - The lupon of each barangay shall
have authority to bring together the parties actually
residing in the same city or municipality for amicable
settlement of all disputes except:
(a) Where one party is the government, or any
subdivision or instrumentality thereof;
(b) Where one party is a public officer or
employee, and the dispute relates to the
performance of his official functions;
(c) Offenses punishable by imprisonment
exceeding one (1) year or a fine exceeding Five
thousand pesos (P5,000.00);
(d) Offenses where there is no private offended
party;
(e) Where the dispute involves real properties
located in different cities or municipalities unless
the parties thereto agree to submit their
differences to amicable settlement by an
appropriate lupon;
(f) Disputes involving parties who actually reside
in barangays of different cities or municipalities,
except where such barangay units adjoin each
other and the parties thereto agree to submit
their differences to amicable settlement by an
appropriate lupon;
(g) Such other classes of disputes which the
President may determine in the interest of
Justice or upon the recommendation of the
Secretary of Justice.
The court in which non-criminal cases not falling
within the authority of the lupon under this Code
are filed may, at any time before trial motu
propio refer the case to the lupon concerned for
amicable settlement.
Section 409. Venue. -
(a) Disputes between persons actually residing in
the same barangay shall be brought for amicable
settlement before the lupon of said barangay.
(b) Those involving actual residents of different
barangays within the same city or municipality
shall be brought in the barangay where the
respondent or any of the respondents actually
resides, at the election of the complaint.
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(c) All disputes involving real property or any
interest therein shall be brought in the barangay
where the real property or the larger portion
thereof is situated.
(d) Those arising at the workplace where the
contending parties are employed or at the
institution where such parties are enrolled for
study, shall be brought in the barangay where
such workplace or institution is located.
Objections to venue shall be raised in the
mediation proceedings before the punong
barangay; otherwise, the same shall be deemed
waived. Any legal question which may confront
the punong barangay in resolving objections to
venue herein referred to may be submitted to
the Secretary of Justice, or his duly designated
representative, whose ruling thereon shall be
binding.
Section 410. Procedure for Amicable Settlement. -
(a) Who may initiate proceeding - Upon payment
of the appropriate filing fee, any individual who
has a cause of action against another individual
involving any matter within the authority of the
lupon may complain, orally or in writing, to the
lupon chairman of the barangay.
(b) Mediation by lupon chairman - Upon receipt
of the complaint, the lupon chairman shall within
the next working day summon the
respondent(s), with notice to the complainant(s)
for them and their witnesses to appear before
him for a mediation of their conflicting interests.
If he fails in his mediation effort within fifteen
(15) days from the first meeting of the parties
before him, he shall forthwith set a date for the
constitution of the pangkat in accordance with
the provisions of this Chapter.
(c) Suspension of prescriptive period of offenses
- While the dispute is under mediation,
conciliation, or arbitration, the prescriptive
periods for offenses and cause of action under
existing laws shall be interrupted upon filing the
complaint with the punong barangay. The
prescriptive periods shall resume upon receipt
by the complainant of the complainant or the
certificate of repudiation or of the certification
to file action issued by the lupon or pangkat
secretary: Provided, however, That such
interruption shall not exceed sixty (60) days from
the filing of the complaint with the punong
barangay.
(d) Issuance of summons; hearing; grounds for
disqualification - The pangkat shall convene not
later than three (3) days from its constitution, on
the day and hour set by the lupon chairman, to
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For the benefit of STM Law School Residents 19
hear both parties and their witnesses, simplify
issues, and explore all possibilities for amicable
settlement. For this purpose, the pangkat may
issue summons for the personal appearance of
parties and witnesses before it. In the event that
a party moves to disqualify any member of the
pangkat by reason of relationship, bias, interest,
or any other similar grounds discovered after the
constitution of the pangkat, the matter shall be
resolved by the affirmative vote of the majority
of the pangkat whose decision shall be final.
Should disqualification be decided upon, the
resulting vacancy shall be filled as herein
provided for.
(e) Period to arrive at a settlement - The pangkat
shall arrive at a settlement or resolution of the
dispute within fifteen (15) days from the day it
convenes in accordance with this section. This
period shall, at the discretion of the pangkat, be
extendible for another period which shall not
exceed fifteen (15) days, except in clearly
meritorious cases.
Section 411. Form of settlement. - All amicable
settlements shall be in writing, in a language or dialect
known to the parties, signed by them, and attested to by
the lupon chairman or the pangkat chairman, as the case
may be. When the parties to the dispute do not use the
same language or dialect, the settlement shall be written
in the language known to them.
Section 412. Conciliation. -
(a) Pre-condition to Filing of Complaint in Court.
- No complaint, petition, action, or proceeding
involving any matter within the authority of the
lupon shall be filed or instituted directly in court
or any other government office for adjudication,
unless there has been a confrontation between
the parties before the lupon chairman or the
pangkat, and that no conciliation or settlement
has been reached as certified by the lupon
secretary or pangkat secretary as attested to by
the lupon or pangkat chairman or unless the
settlement has been repudiated by the parties
thereto.
(b) Where Parties May Go Directly to Court. - The
parties may go directly to court in the following
instances:
(1) Where the accused is under
detention;
(2) Where a person has otherwise been
deprived of personal liberty calling for
habeas corpus proceedings;
(3) Where actions are coupled with
provisional remedies such as preliminary
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injunction, attachment, delivery of
personal property and support
pendente lite; and
(4) Where the action may otherwise be
barred by the statute of limitations.
(c) Conciliation among members of indigenous
cultural communities. - The customs and
traditions of indigenous cultural communities
shall be applied in settling disputes between
members of the cultural communities.
Section 413. Arbitration. -
(a) The parties may, at any stage of the
proceedings, agree in writing that they shall
abide by the arbitration award of the lupon
chairman or the pangkat. Such agreement to
arbitrate may be repudiated within five (5) days
from the date thereof for the same grounds and
in accordance with the procedure hereinafter
prescribed. The arbitration award shall be made
after the lapse of the period for repudiation and
within ten (10) days thereafter.
(b) The arbitration award shall be in writing in a
language or dialect known to the parties. When
the parties to the dispute do not use the same
language or dialect, the award shall be written in
the language or dialect known to them.
Section 414. Proceedings Open to the Public; Exception. -
All proceedings for settlement shall be public and
informal: Provided, however, That the lupon chairman or
the pangkat chairman, as the case may be, may motu
proprio or upon request of a party, exclude the public
from the proceedings in the interest of privacy, decency,
or public morals.
Section 415. Appearance of Parties in Person. - In all
katarungang pambarangay proceedings, the parties
must appear in person without the assistance of counsel
or representative, except for minors and incompetents
who may be assisted by their next-of-kin who are not
lawyers.
Section 416. Effect of Amicable Settlement and
Arbitration Award. - The amicable settlement and
arbitration award shall have the force and effect of a final
judgment of a court upon the expiration of ten (10) days
from the date thereof, unless repudiation of the
settlement has been made or a petition to nullify the
award has been filed before the proper city or municipal
court.
However, this provision shall not apply to court cases
settled by the lupon under the last paragraph of Section
408 of this Code, in which case the compromise or the
pangkat chairman shall be submitted to the court and
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For the benefit of STM Law School Residents 20
upon approval thereof, have the force and effect of a
judgment of said court.
Section 417. Execution. - The amicable settlement or
arbitration award may be enforced by execution by the
lupon within six (6) months from the date of the
settlement. After the lapse of such time, the settlement
may be enforced by action in the appropriate city or
municipal court.
Section 418. Repudiation. - Any party to the dispute may,
within ten (10) days from the date of the settlement,
repudiate the same by filing with the lupon chairman a
statement to that effect sworn to before him, where the
consent is vitiated by fraud, violence, or intimidation.
Such repudiation shall be sufficient basis for the issuance
of the certification for filing a complaint as hereinabove
provided.
Section 419. Transmittal of Settlement and Arbitration. -
Award to the Court. - The secretary of the lupon shall
transmit the settlement or the arbitration award to the
appropriate city or municipal court within five (5) days
from the date of the award or from the lapse of the ten-
day period repudiating the settlement and shall furnish
copies thereof to each of the parties to the settlement
and the lupon chairman.
Section 420. Power to Administer Oaths. - The punong
barangay, as chairman of the lupong tagapamayapa, and
the members of the pangkat are hereby authorized to
administer oaths in connection with any matter relating
to all proceedings in the implementation of the
katarungang pambarangay.
Section 421. Administration; Rules and Regulations. - The
city or municipal mayor, as the case may be, shall see to
the efficient and effective implementation and
administration of the katarungang pambarangay. The
Secretary of Justice shall promulgate the rules and
regulations necessary to implement this Chapter.
Section 422. Appropriations. - Such amount as may be
necessary for the effective implementation of the
katarungang pambarangay shall be provided for in the
annual budget of the city or municipality concerned.
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B.P. 68. Corporation Code P.D. 612. The Insurance Code

Section 104. Deadlocks. – Notwithstanding any contrary
provision in the articles of incorporation or by-laws or
agreement of stockholders of a close corporation, if the
directors or stockholders are so divided respecting the
management of the corporation’s business and affairs
that the votes required for any corporate action cannot
be obtained, with the consequence that the business and
affairs of the corporation can no longer be conducted to
the advantage of the stockholders generally, the
Securities and Exchange Commission, upon written
petition by any stockholder, shall have the power to
arbitrate the dispute.
In the exercise of such power, the Commission shall have
authority to make such order as it deems appropriate,
including an order:
Section 243. The amount of any loss or damage for which
an insurer may be liable, under any policy other than life
insurance policy, shall be paid within thirty days after
proof loss is received by the insurer and ascertainment
of the loss or damage is made either by agreement
between the insured and the insurer or by arbitration;
but if such ascertainment is not had or made within sixty
days after such receipt by the insurer of the proof of loss,
then the loss or damage shall be paid within ninety days
after such receipt. Refusal or failure to pay the loss or
damage within the time prescribed herein will entitle the
assured to collect interest on the proceeds of the policy
for the duration of the delay at the rate of twice the
ceiling prescribed by the Monetary Board, unless such
failure or refusal to pay is based on the ground that the
claim is fraudulent.

(1) cancelling or altering any provision contained in the

articles of incorporation, by-laws, or any stockholder’s
agreement; R.A. 8791. The General Banking Law

(2) cancelling, altering or enjoining any resolution or act
of the corporation or its board of directors, stockholders,
or officers;
(3) directing or prohibiting any act of the corporation or
its board of directors, stockholders, officers, or other
persons party to the action;
(4) requiring the purchase at their fair value of shares of
any stockholder, either by the corporation regardless of
the availability of unrestricted retained earnings in its
books, or by the other stockholders;
(5) appointing a provisional director;
Section 22. Strikes and Lockouts. - The banking industry
is hereby declared as indispensable to the national
interest and, notwithstanding the provisions of any law
to the contrary, any strike or lockout involving banks, if
unsettled after seven (7) calendar days shall be reported
by the Bangko Sentral to the secretary of Labor who may
assume jurisdiction over the dispute or decide it or
certify the same to the National Labor Relations
Commission for compulsory arbitration.
However, the President of the Philippines may at any
time intervene and assume jurisdiction over such labor
dispute in order to settle or terminate the same.

(6) dissolving the corporation; or

(7) granting such other relief as the circumstances may

warrant.

A provisional director shall be an impartial person who is

neither a stockholder nor a creditor of the corporation or
of any subsidiary or affiliate of the corporation, and
whose further qualifications, if any, may be determined
by the Commission. A provisional director is not a
receiver of the corporation and does not have the title
and powers of a custodian or receiver. A provisional
director shall have all the rights and powers of a duly
elected director of the corporation, including the right to
notice of and to vote at meetings of directors, until such
time as he shall be removed by order of the Commission
or by all the stockholders. His compensation shall be
determined by agreement between him and the
corporation subject to approval of the Commission,
which may fix his compensation in the absence of
agreement or in the event of disagreement between the
provisional director and the corporation.

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P.D. 442. Labor Code
Title VII-A
GRIEVANCE MACHINERY AND VOLUNTARY
ARBITRATION
Article 260. Grievance machinery and voluntary
arbitration. The parties to a Collective Bargaining
Agreement shall include therein provisions that will
ensure the mutual observance of its terms and
conditions. They shall establish a machinery for the
adjustment and resolution of grievances arising from the
interpretation or implementation of their Collective
Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel
policies.
All grievances submitted to the grievance machinery
which are not settled within seven (7) calendar days from
the date of its submission shall automatically be referred
to voluntary arbitration prescribed in the Collective
Bargaining Agreement.
For this purpose, parties to a Collective Bargaining
Agreement shall name and designate in advance a
Voluntary Arbitrator or panel of Voluntary Arbitrators, or
include in the agreement a procedure for the selection of
such Voluntary Arbitrator or panel of Voluntary
Arbitrators, preferably from the listing of qualified
Voluntary Arbitrators duly accredited by the Board. In
case the parties fail to select a Voluntary Arbitrator or
panel of Voluntary Arbitrators, the Board shall designate
the Voluntary Arbitrator or panel of Voluntary
Arbitrators, as may be necessary, pursuant to the
selection procedure agreed upon in the Collective
Bargaining Agreement, which shall act with the same
force and effect as if the Arbitrator or panel of
Arbitrators has been selected by the parties as described
above.
Article 261. Jurisdiction of Voluntary Arbitrators or panel
of Voluntary Arbitrators. The Voluntary Arbitrator or
panel of Voluntary Arbitrators shall have original and
exclusive jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or
implementation of the Collective Bargaining Agreement
and those arising from the interpretation or enforcement
of company personnel policies referred to in the
immediately preceding article. Accordingly, violations of
a Collective Bargaining Agreement, except those which
are gross in character, shall no longer be treated as unfair
labor practice and shall be resolved as grievances under
the Collective Bargaining Agreement. For purposes of
this article, gross violations of Collective Bargaining
Agreement shall mean flagrant and/or malicious refusal
to comply with the economic provisions of such
agreement.
The Commission, its Regional Offices and the Regional
Directors of the Department of Labor and Employment
shall not entertain disputes, grievances or matters under
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For the benefit of STM Law School Residents 22
the exclusive and original jurisdiction of the Voluntary
Arbitrator or panel of Voluntary Arbitrators and shall
immediately dispose and refer the same to the Grievance
Machinery or Voluntary Arbitration provided in the
Collective Bargaining Agreement.
Article 262. Jurisdiction over other labor disputes. The
Voluntary Arbitrator or panel of Voluntary Arbitrators, upon
agreement of the parties, shall also hear and decide all other
labor disputes including unfair labor practices and bargaining
deadlocks.
Article 262-A. Procedures. The Voluntary Arbitrator or panel of
Voluntary Arbitrators shall have the power to hold hearings,
receive evidences and take whatever action is necessary to
resolve the issue or issues subject of the dispute, including
efforts to effect a voluntary settlement between parties.
All parties to the dispute shall be entitled to attend the
arbitration proceedings. The attendance of any third party or
the exclusion of any witness from the proceedings shall be
determined by the Voluntary Arbitrator or panel of Voluntary
Arbitrators. Hearing may be adjourned for cause or upon
agreement by the parties.
Unless the parties agree otherwise, it shall be mandatory for
the Voluntary Arbitrator or panel of Voluntary Arbitrators to
render an award or decision within twenty (20) calendar days
from the date of submission of the dispute to voluntary
arbitration.
The award or decision of the Voluntary Arbitrator or panel of
Voluntary Arbitrators shall contain the facts and the law on
which it is based. It shall be final and executory after ten (10)
calendar days from receipt of the copy of the award or decision
by the parties.
Upon motion of any interested party, the Voluntary Arbitrator
or panel of Voluntary Arbitrators or the Labor Arbiter in the
region where the movant resides, in case of the absence or
incapacity of the Voluntary Arbitrator or panel of Voluntary
Arbitrators, for any reason, may issue a writ of execution
requiring either the sheriff of the Commission or regular courts
or any public official whom the parties may designate in the
submission agreement to execute the final decision, order or
award.
Article 262-B. Cost of voluntary arbitration and Voluntary
Arbitrator’s fee. The parties to a Collective Bargaining
Agreement shall provide therein a proportionate sharing
scheme on the cost of voluntary arbitration including the
Voluntary Arbitrator’s fee. The fixing of fee of Voluntary
Arbitrators, whether shouldered wholly by the parties or
subsidized by the Special Voluntary Arbitration Fund, shall take
into account the following factors:
Nature of the case;
Time consumed in hearing the case;
Professional standing of the Voluntary Arbitrator;
Capacity to pay of the parties; and
Fees provided for in the Revised Rules of Court.
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R.A. 7942. Philippine Mining Act
CHAPTER XIII
SETTLEMENT OF CONFLICTS
Section 77
Panel of Arbitrators
There shall be a panel of arbitrators in the regional office
of the Department composed of three (3) members, two
(2) of whom must be members of the Philippine Bar in
good standing and one a licensed mining engineer or a
professional in a related field, and duly designated by the
Secretary as recommended by the Mines and
Geosciences Bureau Director. Those designated as
members of the panel shall serve as such in addition to
their work in the Department without receiving any
additional compensation As much as practicable, said
members shall come from the different bureaus of the
Department in the region. The presiding officer thereof
shall be selected by the drawing of lots. His tenure as
presiding officer shall be on a yearly basis. The members
of the panel shall perform their duties and obligations in
hearing and deciding cases until their designation is
withdrawn or revoked by the Secretary. Within thirty
(30) working days, after the submission of the case by the
parties for decision, the panel shall have exclusive and
original jurisdiction to hear and decide on the following:
a. Disputes involving rights to mining areas;
b. Disputes involving mineral agreements or
permits;
c. Disputes involving surface owners, occupants
and claimholders/concessionaires; and
d. Disputes pending before the Bureau and the
Department at the date of the effectivity of this
Act.
Section 78
Appellate Jurisdiction
The decision or order of the panel of arbitrators may be
appealed by the party not satisfied thereto to the Mines
Adjudication Board within fifteen (15) days from receipt
thereof which must decide the case within thirty (30)
days from submission thereof for decision.
-JSP-
For the benefit of STM Law School Residents 23
G.R. No. 137174 July 10, 2000
REPUBLIC OF THE PHILIPPINES
vs.
MARCOPPER MINING CORPORATION
True, in Laguna Lake Development Authority vs. Court of
Appeals, this Court held that adjudication of pollution cases
generally pertains to the Pollution Adjudication Board (PAB)
except where the special law provides for another forum.
However, contrary to the ruling of the Court of Appeals, RA
7942 does not provide for another forum inasmuch as RA 7942
does not vest quasi-judicial powers in the Mines Regional
Director. The authority is vested and remains with the PAB.
Neither was such authority conferred upon the Panel of
Arbitrators and the Mines Adjudication Board which were
created by the said law. The provisions creating the Panel of
Arbitrators for the settlement of conflicts refers to disputes
involving rights to mining areas, mineral agreements or
permits and those involving surface owners, occupants and
claim-holders/concessionaires.
The scope of authority of the Panel of Arbitrators and the
Mines Adjudication Board conferred by RA 7942 clearly
exclude adjudicative responsibility over pollution cases.
Nowhere is there vested any authority to adjudicate cases
involving violations of pollution laws and regulations in
general.
G.R. No. 163101 February 13, 2008
BENGUET CORPORATION vs. DENR
On this issue, we rule for Benguet.
Sec. 2 of RA 876 elucidates the scope of arbitration:
Section 2. Persons and matters subject to
arbitration.––Two or more persons or parties may
submit to the arbitration of one or more arbitrators
any controversy existing between them at the time
of the submission and which may be the subject of
an action, or the parties to any contract may in such
contract agree to settle by arbitration a controversy
thereafter arising between them. Such submission
or contract shall be valid, enforceable and
irrevocable, save upon such grounds as exist at law
for the revocation of any contract.
Such submission or contract may include question[s]
arising out of valuations, appraisals or other
controversies which may be collateral, incidental,
precedent or subsequent to any issue between the
parties. (Emphasis supplied.)
In RA 9285 or the "Alternative Dispute Resolution Act of 2004,"
the Congress reiterated the efficacy of arbitration as an
alternative mode of dispute resolution by stating in Sec. 32
thereof that domestic arbitration shall still be governed by RA
876. Clearly, a contractual stipulation that requires prior resort
to voluntary arbitration before the parties can go directly to
court is not illegal and is in fact promoted by the State. Thus,
petitioner correctly cites several cases whereby arbitration
clauses have been upheld by this Court.21
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 For the benefit of STM Law School Residents 24

Moreover, the contention that RA 7942 prevails over RA 876
presupposes a conflict between the two laws. Such is not the
case here. To reiterate, availment of voluntary arbitration
before resort is made to the courts or quasi-judicial agencies
of the government is a valid contractual stipulation that must
be adhered to by the parties. As stated in Secs. 6 and 7 of RA
876:
Section 6. Hearing by court.––A party aggrieved by
the failure, neglect or refusal of another to perform
under an agreement in writing providing for
arbitration may petition the court for an order
directing that such arbitration proceed in the
manner provided for in such agreement. Five days
notice in writing of the hearing of such application
shall be served either personally or by registered mail
upon the party in default. The court shall hear the
parties, and upon being satisfied that the making of
the agreement or such failure to comply therewith is
not in issue, shall make an order directing the parties
to proceed to arbitration in accordance with the
terms of the agreement. If the making of the
agreement or default be in issue the court shall
proceed to summarily hear such issue. If the finding
be that no agreement in writing providing for
arbitration was made, or that there is no default in
the proceeding thereunder, the proceeding shall be
dismissed. If the finding be that a written provision
for arbitration was made and there is a default in
proceeding thereunder, an order shall be made
summarily directing the parties to proceed with the
arbitration in accordance with the terms thereof.
xxxx
Section 7. Stay of civil action.––If any suit or
proceeding be brought upon an issue arising out of an
agreement providing for the arbitration thereof, the
court in which such suit or proceeding is pending,
upon being satisfied that the issue involved in such
suit or proceeding is referable to arbitration, shall
stay the action or proceeding until an arbitration has
been had in accordance with the terms of the
agreement: Provided, That the applicant, for the stay
is not in default in proceeding with such arbitration.
(Emphasis supplied.)
Comparatively, in Reformist Union of R.B. Liner, Inc.
vs. NLRC, compulsory arbitration has been defined
both as "the process of settlement of labor
disputes by a government agency which has the
authority to investigate and to make an award which
is binding on all the parties, and as a mode of
arbitration where the parties are compelled to accept
the resolution of their dispute through arbitration by
a third party." While a voluntary arbitrator is not part
of the governmental unit or labor department’s
personnel, said arbitrator renders arbitration services
provided for under labor laws.23 (Emphasis supplied.)
There is a clear distinction between compulsory and voluntary
arbitration. The arbitration provided by the POA is compulsory,
while the nature of the arbitration provision in the RAWOP is
voluntary, not involving any government agency. Thus, J.G.
Realty’s argument on this matter must fail.
Gonzales vs. Panel of Arbitrators
Disputes do not go to arbitration unless and until the parties
have agreed to abide by the arbitrator’s decision. Necessarily,
a contract is required for arbitration to take place and to be
binding. R.A. No. 876 recognizes the contractual nature of the
arbitration agreement.
Thus, we held in Manila Electric Co. v. Pasay Transportation
Co.that a submission to arbitration is a contract. A clause in a
contract providing that all matters in dispute between the
parties shall be referred to arbitration is a contract, and in Del
Monte Corporation-USA v. Court of Appeals that "[t]he
provision to submit to arbitration any dispute arising
therefrom and the relationship of the parties is part of that
contract and is itself a contract. As a rule, contracts are
respected as the law between the contracting parties and
produce effect as between them, their assigns and heirs.

In other words, in the event a case that should properly be the

subject of voluntary arbitration is erroneously filed with the
courts or quasi-judicial agencies, on motion of the defendant,
the court or quasi-judicial agency shall determine whether
such contractual provision for arbitration is sufficient and
effective. If in affirmative, the court or quasi-judicial agency
shall then order the enforcement of said provision

xxx

Distinction between compulsory and voluntary arbitration:

J.G. Realty’s contention, that prior resort to arbitration is

unavailing in the instant case because the POA’s mandate is to
arbitrate disputes involving mineral agreements, is misplaced.
A distinction must be made between voluntary and
compulsory arbitration. In Ludo and Luym Corporation v.
Saordino, the Court had the occasion to distinguish between
the two types of arbitrations:

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 For the benefit of STM Law School Residents 25

R.A.8371. The Indigenous Peoples Rights Act irreparable damage to any of the parties to the
case or seriously affect social or economic
CHAPTER IX activity.
JURISDICTION AND PROCEDURES FOR ENFORCEMENT
OF RIGHTS Section 70. No restraining Order or Preliminary
Injunction. - No inferior court of the Philippines shall
Section 65. Primary of Customary Laws and Practices. - have the jurisdiction to issue any restraining order or writ
When disputes involve ICCs/IPs, customary laws and of preliminary injunction against the NCIP or any of its
practices shall be used to resolve the dispute. duly authorized or designated offices in any case, dispute
or controversy to, or interpretation of this Act and other
Section 66. Jurisdiction of the NCIP. - The NCIP (National pertinent laws relating to ICCs/IPs and ancestral
Commission on Indigenous People), through its regional domains.
offices, shall have jurisdiction over all claims and disputes
involving rights of ICCs/IPs; Provided, however, That no
such dispute shall be brought to the NCIP unless the
parties have exhausted all remedies provided under their
customary laws. For this purpose, a certification shall be
issued by the Council of Elders/Leaders who participated
in the attempt to settle the dispute that the same has not
been resolved, which certification shall be a condition
precedent to the filing of a petition with the NCIP.

Section 67. Appeals to the Court of Appeals. - Decisions

of the NCIP shall be appealable to the Court of Appeals
by way of a petition for review.

Section 68. Execution of Decisions, Awards, Orders. -

Upon expiration of the period here provided and no
appeal is perfected by any of the contending parties, the
Hearing Officer of the NCIP, on its own initiative or upon
motion by the prevailing party, shall issue a writ of
execution requiring the sheriff or the proper officer to
execute final decisions, orders or awards of the Regional
Hearing Officer of the NCIP.

Section 69. Quasi-Judicial Powers of the NCIP. - The NCIP

shall have the power and authority:

a. To promulgate rules and regulations governing

the hearing and disposition of cases filed before
it as well as those pertaining to its internal
functions and such rules and regulations as may
be necessary to carry out the purposes of this
Act;

b. To administer oaths, summon the parties to a

controversy, issue subpoenas requiring the
attendance and testimony of witnesses or the
production of such books, papers, contracts,
records, agreements and other document of
similar nature as may be material to a just
determination of the matter under investigation
or hearing conducted in pursuance of this Act;

c. To hold any person in contempt, directly or

indirectly, and impose appropriate penalties
therefor; and

d. To enjoin any or all acts involving or arising

from any case pending therefore it which, if not
restrained forthwith, may cause grave or

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MARITIME ARBITRATION
G.R. No. 87958 April 26, 1990
NATIONAL UNION FIRE INSURANCE COMPANY OF
PITTSBURG, PA/AMERICAN INTERNATIONAL
UNDERWRITER (PHIL.) INC., petitioners,
vs.
STOLT-NIELSEN PHILIPPINES, INC. and COURT OF
APPEALS, respondents.
Stated otherwise, as the subrogee of the SHIPPER, the
INSURER is contractually bound by the terms of the Charter
party.1âwphi1 Any claim of inconvenience or additional
expense on its part should not render the arbitration clause
unenforceable.
Arbitration, as an alternative mode of settling disputes, has
long been recognized and accepted in our jurisdiction (Chapter
2, Title XIV, Book IV, Civil Code). Republic Act No. 876 (The
Arbitration Law) also expressly authorizes arbitration of
domestic disputes. Foreign arbitration as a system of settling
commercial disputes of an international character was likewise
recognized when the Philippines adhered to the United
Nations "Convention on the Recognition and the Enforcement
of Foreign Arbitral Awards of 1958," under the 10 May 1965
Resolution No. 71 of the Philippine Senate, giving reciprocal
recognition and allowing enforcement of international
arbitration agreements between parties of different
nationalities within a contracting state. Thus, it pertinently
provides:
1. Each Contracting State shall recognize an
agreement in writing under which the parties
undertake to submit to arbitration all or any
differences which have arisen or which may arise
between them in respect of a defined legal
relationship, whether contractual or not, concerning
a subject matter capable of settlement by arbitration.
2. The term "agreement in writing" shall include an
arbitral clause in a contract or an arbitration
agreement, signed by the parties or contained in an
exchange of letters or telegrams.
3. The court of a Contracting State, when seized of an
action in a matter in respect of which the parties have
made an agreement within the meaning of this
article, shall, at the request of one of the parties, refer
the parties to arbitration, unless it finds that the said
agreement is null and void, inoperative or incapable
of being performed.
It has not been shown that the arbitral clause in question is null
and void, inoperative, or incapable of being performed. Nor
has any conflict been pointed out between the Charter Party
and the Bill of Lading.
In fine, referral to arbitration in New York pursuant to the
arbitration clause, and suspension of the proceedings in Civil
Case No. 13498 below, pending the return of the arbitral
award, is, indeed called for.
-JSP-
For the benefit of STM Law School Residents 26
G.R. No. 91228. March 22, 1993.
PUROMINES, INC., petitioner, vs. COURT OF
APPEAL and PHILIPP BROTHERS OCEANIC, INC.,
respondents.
6. BILLS OF LADING; ARBITRATION PROVISION THEREOF,
CONSIDERED AND RESPECTED. — Whether the liability of
respondent should be based on the same contract or that of
the bill of lading, the parties are nevertheless obligated to
respect the arbitration provisions on the sales contract and/or
the bill of lading. Petitioner being a signatory and party to the
sales contract cannot escape from his obligation under the
arbitration clause as stated therein. Arbitration has been held
valid and constitutional. Even before the enactment of
Republic Act No. 876, this Court has countenanced the
settlement of disputes through arbitration. The rule now is
that unless the agreement is such as absolutely to close the
doors of the courts against the parties, which agreement
would be void, the courts will look with favor upon such
amicable arrangements and will only interfere with great
reluctance to anticipate or nullify the action of the arbitrator.
As pointed out in the case of Mindanao Portland Cement Corp.
v. McDough Construction Company of Florida 18 wherein the
plaintiff sued defendant for damages arising from a contract,
the Court said: "Since there obtains herein a written provision
for arbitration as well as failure on respondent's part to comply
therewith, the court a quo rightly ordered the parties to
proceed to their arbitration in accordance with the terms of
their agreement (Sec. 6 Republic Act 876). Respondent's
arguments touching upon the merits of the dispute are
improperly raised herein. They should be addressed to the
arbitrators. This proceeding is merely a summary remedy to
enforce the agreement to arbitrate. The duty of the court in
this case is not to resolve the merits of the parties' claims but
only to determine if they should proceed to arbitration or not.
And although it has been ruled that a privolous or patently
baseless claim should not be ordered to arbitration it is also
recognized that the mere fact that a defense exist against a
claim does not make it frivolous or baseless."
7. REMEDIAL LAW; CIVIL PROCEDURE; PLEADINGS;
COMPLAINT; ANNEXES ATTACHED THEREOF, PART OF THE
RECORD. — Petitioner contend that the arbitration provision
in the bills of lading should not have been discussed as an issue
in the decision of the Court of Appeals since it was not raised
as a special or affirmative defense. The three bills of lading
were attached to the complaint as Annexes "A," "B," and "C,"
and are therefore parts thereof and may be considered as
evidence although not introduced as such. Hence, it was then
proper for the court a quo to discuss the contents of the bills
of lading, having been made part of the record.
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 For the benefit of STM Law School Residents 27

R.A. 7394. Consumer Act of the Philippines
CHAPTER III
CONSUMER COMPLAINTS
Article 160. Consumer Arbitration Officers. – The
concerned Department Secretaries shall appoint as many
qualified consumer arbitration officers as may be
necessary for the effective and efficient protection of
consumer rights: Provided, however, That there shall be
not more than ten (10) consumer arbitration officers per
province, including the National Capital Region.
Article 161. Consumer Arbitration Officers;
Qualifications. – The consumer arbitration officer must
be a college graduate with at least three (3) years
experience in the field of consumer protection and shall
be of good moral character.
Article 162. Arbitration Officers; Jurisdiction. – The
consumer arbitration officers shall have original and
exclusive jurisdiction to mediate, conciliate, hear and
adjudicate all consumer complaints, Provided, however,
That this does not preclude the parties from pursuing the
proper judicial action.
Article 163. Investigation Procedure. –
a) The consumer arbitration officer shall conduct
hearings on any complaint received by him or
referred by the Council.
In hearing the complaint, the mediation officer shall use
every and all reasonable means to ascertain the facts in
each complaint speedily and objectively without regard
to strict rules of evidence prevailing in suits before
courts. The complaints shall be decided within fifteen
(15) days from the time the investigation was
terminated.
Article 165. Appeal from Orders. – Any order, not
interlocutory of the Consumer arbitration officer,
becomes final and executory unless appealed to the
Department Secretary concerned within fifteen (15) days
from receipt of such order. An appeal may be
entertained only on any of the following grounds:
a) grave abuse of discretion;
b) the order is in excess of the jurisdiction or
authority of the consumer arbitration officer;
c) the order is not supported by the evidence or
there is serious error in the findings of facts.
Article 166. Decision on Appeal. – The Secretary shall
decide the appeal within thirty (30) days from receipt
thereof. The decision becomes final after fifteen (15)
days from receipt thereof unless a petition for certiorari
is filed with the proper court.

b) Parties to the case shall be entitled to notice

of the hearing, and shall be informed of the date,
time and place of the same. A copy of the
complaint shall be attached to the notice.

c) The department shall afford all interested

parties the opportunity to submit a statement of
facts, arguments, offers of settlements or
proposals of adjustments.

d) The Consumer arbitration officer shall first

and foremost ensure that the contending parties
come to a settlement of the case.

e) In the event that a settlement has not been

effected, the Mediation officer may now
proceed to formally investigate, hear and decide
the case.

f) The Consumer arbitration officer may summon

witnesses, administer oaths and affirmations,
issue subpoena and subpoena duces tecum, rule
upon offers of proof and receive relevant
evidence, take or cause deposition to be taken
whenever the ends of justice would be served
thereby, regulate the course of the hearing, rule
on any procedural request or similar matter and
decide the complaint.

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OTHERS
Civil Code
Article 1878. Special powers of attorney are necessary in
the following cases:
xxx
(3) To compromise, to submit questions to
arbitration, to renounce the right to appeal from
a judgment, to waive objections to the venue of
an action or to abandon a prescription already
acquired;
xxx
Article 1880. A special power to compromise does not
authorize submission to arbitration. (1713a)
TITLE XIV
COMPROMISES AND ARBITRATIONS
CHAPTER 1
Compromises
Article 2028. A compromise is a contract whereby the
parties, by making reciprocal concessions, avoid a
litigation or put an end to one already commenced.
(1809a)
Article 2029. The court shall endeavor to persuade the
litigants in a civil case to agree upon some fair
compromise. (n)
Article 2030. Every civil action or proceeding shall be
suspended:
(1) If willingness to discuss a possible
compromise is expressed by one or both parties;
or
(2) If it appears that one of the parties, before
the commencement of the action or proceeding,
offered to discuss a possible compromise but the
other party refused the offer.
Article 2031. The courts may mitigate the damages to be
paid by the losing party who has shown a sincere desire
for a compromise. (n)
Article 2032. The court's approval is necessary in
compromises entered into by guardians, parents,
absentee's representatives, and administrators or
executors of decedent's estates. (1810a)
Article 2033. Juridical persons may compromise only in
the form and with the requisites which may be necessary
to alienate their property. (1812a)
-JSP-
For the benefit of STM Law School Residents 28
Article 2034. There may be a compromise upon the civil
liability arising from an offense; but such compromise
shall not extinguish the public action for the imposition
of the legal penalty. (1813)
Article 2035. No compromise upon the following
questions shall be valid:
(1) The civil status of persons;
(2) The validity of a marriage or a legal
separation;
(3) Any ground for legal separation;
(4) Future support;
(5) The jurisdiction of courts;
(6) Future legitime. (1814a)
Article 2036. A compromise comprises only those
objects which are definitely stated therein, or which by
necessary implication from its terms should be deemed
to have been included in the same.
A general renunciation of rights is understood to refer
only to those that are connected with the dispute which
was the subject of the compromise. (1815)
Article 2037. A compromise has upon the parties the
effect and authority of res judicata; but there shall be no
execution except in compliance with a judicial
compromise. (1816)
Article 2038. A compromise in which there is mistake,
fraud, violence, intimidation, undue influence, or falsity
of documents, is subject to the provisions of article 1330
of this Code.
However, one of 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. (1817a)
Article 2039. When the parties compromise generally on
all differences which they might have with each other,
the discovery of documents referring to one or more but
not to all of the questions settled shall not itself be a
cause for annulment or rescission of the compromise,
unless said documents have been concealed by one of
the parties.
But the compromise may be annulled or rescinded if it
refers only to one thing to which one of the parties has
no right, as shown by the newly-discovered documents.
(n)
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Article 2040. If after a litigation has been decided by a
final judgment, a compromise should be agreed upon,
either or both parties being unaware of the existence of
the final judgment, the compromise may be rescinded.
Ignorance of a judgment which may be revoked or set
aside is not a valid ground for attacking a compromise.
(1819a)
Article 2041. If one of the parties fails or refuses to abide
by the compromise, the other party may either enforce
the compromise or regard it as rescinded and insist upon
his original demand. (n)
CHAPTER 2
Arbitrations
Article 2042. The same persons who may enter into a
compromise may submit their controversies to one or
more arbitrators for decision. (1820a)
Article 2043. The provisions of the preceding Chapter
upon compromises shall also be applicable to
arbitrations. (1821a)
Article 2044. Any stipulation that the arbitrators' award
or decision shall be final, is valid, without prejudice to
articles 2038, 2039, and 2040. (n)
Article 2045. Any clause giving one of the parties power
to choose more arbitrators than the other is void and of
no effect. (n)
Article 2046. The appointment of arbitrators and the
procedure for arbitration shall be governed by the
provisions of such rules of court as the Supreme Court
shall promulgate. (n)
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For the benefit of STM Law School Residents 29
City of Zamboanga vs. Mandi
As provided for by Article 2038 of the Civil Code, "one of
the parties can not 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," as in
this case, where the Julians had desisted from pursuing
their appeal.
It may be conceded that the City was unaware that the
judgment in the Eminent Domain Case had attained
finality.1âwphi1Ignorance of a judgment, however, is not
a valid ground for attacking a compromise. The course of
action should have been an action for rescission which,
in this case, has not been availed of.
Article 2040 of the Civil Code explicitly provides:
If after a litigation has been decided by a final
judgment, a compromise should be agree upon,
either or both parties being unaware of the
existence of the final judgment, the compromise
may be rescinded.
Ignorance of a judgment which maybe revoked
or set aside is not a valid ground for attacking a
compromise.
The Julians were well within their rights in seeking the
enforcement of the compromise through a Petition
forMandamus on the strength of Article 2041 of the Civil
Code, providing that:
If one of the parties fails or refuses to abide by
the compromise, the other party may either
enforce the compromise or regard it as
rescinded and insist upon his original demand.
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