• “True” arbitration is a creature of contract, not of law.

It is based on the contract principle of party

autonomy or the will of the parties, expressed as freedom of contract in common law legal
systems.

• “Arbitration is privatized justice, funded exclusively by the arbitrating parties and controlled by
the arbitrators, and private arbitral institutions.” (Carbonneau at page 1225).

• Statutory arbitrations are hybrid processes, and not “true” arbitration, in the sense that statutory
arbitrations combine the precepts of litigation and arbitration.

• Hence, statutory arbitrations are more akin to “specialist courts” rather than a “true” arbitration
• That is why statutory arbitrations are really “instrumentalities of the Government”. And that is
why the awards of tribunals in statutory arbitrations are appealable.

• Our Arbitration Law Mutated

• New law is based on the UNCITRAL Model Law on International Commercial Arbitration
(1985).
• The shift was conceptual. New law introduced new concepts that challenged what we learned
when we were in law school and what we practice after becoming lawyers.

• “Sec. 42 in relation to Sec. 45 of R.A. 9285 designated and vested the RTC with specific authority
and jurisdiction to set aside, reject or vacate a foreign arbitral award on grounds provided under
Art. 34 (2) of the UNCITRAL Model Law (in page 18).”

• It is not the Model Law, but the New York Convention, that applies to the enforcement of foreign
arbitral awards (R.A. 9285 Sec. 42)
• Under the Convention, the jurisdiction of our Court over foreign arbitral awards is limited to
rejecting or recognizing and enforcing the award and, in the proper cases, suspending the
enforcement proceedings (Convention Arts. III to VI).
• Our court has no jurisdiction to vacate or set aside the award. Under both the Model Law and the
Convention, only the court in the place of arbitration can do so (Model Law Art. 34; Convention
Art. V.1.e.)

• PARTY AUTONOMY
• The basis is the underlying concept behind the freedom to contract: a party who reached the age of
majority is an adult, and is presumed to have sufficient discretion to make informed decisions.
• He may, therefore, create legal relations by contract.
• In the same manner, he should also have the freedom to make his own arrangements in resolving
his private disputes.
• Creating a private tribunal implies that the parties will have to, among others:
• Appoint their “private judges”;
• Agree on the place;
• Agree on the language they will use;
• Agree on the rules and procedure;
• Agree on the basis of the award;
• Agree on other important categories of choice.

• From the Judicial Element flows the following:

• Requirement to observe due process
• Equality of the parties
• Reasonable opportunity to be heard
• Impartiality of arbitrators
• Arbitral Ethics

• From the Contractual Element

• Capacity of the Parties
• Correlation: The New Civil Code provisions on capacity to act and rules involving agency
• Consent
• No consent, no arbitration
• Consent may be vitiated by the vices of consent

• Rule of Incorporation (of arbitration agreement in another instrument) Under the Model Law:
“The reference is such as to make that clause part of the contract” (MAL Art. 7, last sentence)