(ADR Act of 2004)

Chapters 3 , 4 and 5

 Ch. 3 - Other ADR Forms

 Ch. 4 - International
Commercial Arbitration (ICA)

 Ch. 5 - Domestic
Arbitration (DA)
 ICA DA

- parties, facts or the legal - an arbitration that is NOT

matter relate to MORE international in character,
THAN ONE state as defined in Article 1(3) of the
UNCITRAL Model Law on International
Commercial Arbitration
- defined in Article 1(3) of the
UNCITRAL Model Law on
International Commercial
Arbitration)
 ICA DA
If any of the following The following components
instances occur in of parties’ are located IN
DIFFERENT STATES , the Philippines:
OUTSIDE the Philippines or
relate to MORE THAN ONE
country:

1) Place of business

2) Place of arbitration provided in

the agreement

3) Place of performance of
substantial part of the
obligation

4) Place where the subject matter

of the dispute is most closely
connected
 ICA DA Foreign
Arbitration

- parties, facts or the arbitration NOT

legal matter relate international in
to more than one character;
state

- conducted IN the conducted IN the -international

Philippines under Philippines commercial
ADR Act is BOTH arbitration
international and conducted
domestic in OUTSIDE the
character Philippines
 ICA DA
1) The Arbitration Law
1) The Model Law
2) The Model Law
2) The ADR Act (Articles 8-14; 18-19)

3) The ADR Act

3) The IRR of the ADR Act
(Sec. 23-33)

4) The IRR of the ADR Act

5) All other rules

(suppletory application of ICA)
Q: What is the governing law with regard to
International Commercial Arbitration (ICA)?

A: ICA shall be governed by the

Model Law on International
Commercial Arbitration
adopted by the United Nations Commission on
International Trade Law (UNCITRAL) on June 21, 1985.
Q: May the rules of procedure for ICA
provided for under the ADR Act may
also be applied for ICA conducted
outside the Philippines?

A: Yes. When they are adopted as

the rules of procedures
by the parties in the
exercise of their privilege
of party autonomy and
self-determination.
IRR of the ADR Act
(DEPARTMENT CIRCULAR NO. 98)

 repository of rules implementing not

only the ADR Act but also the Model
Law

 DEFAULT rules
 applicable if no applicable
provisions contained in the
AGREEMENT:
1) b/w the Philippines and other
state/s
2) b/w the parties
Special Rules of Court of ADR
(A.M. No. 07-11-08-SC September 1, 2009)

 enacted by the Supreme Court for

proceedings* under the ADR Act to
be conducted by the courts

*Examples:
o Assistance in taking evidence
o Setting aside an arbitral award
o Recognition and enforcement of the
arbitral award
ADR ACT: The court
shall have due
regard to the policy
of law favoring
arbitration.

MODEL LAW: Should be

understood in the light of
their international usage
rather than their ordinary or
domestic usage

The IRR:
o Same as #1 and #2
o Party autonomy should
be promoted
In implementing
o the Model Law
o the Arbitration Law
o the ADR Act

The IRR has to harmonize their

provisions!
1) General Rule: Agreed upon by
the parties

2) DEFAULT: Conflict of Law rules

- determined by the arbitral tribunal
(taking into account the terms of the contract
and the usages of the trade)
 ICA DA

Covers only disputes Covers BOTH

arising from commercial
relationships of and
commercial nature non-commercial
disputes
 ICA DA

1) shall be determined by the parties

2) default place: Metro Manila

3) arbitral tribunal may decide on a

different place
 ICA DA
1) Parties are free to agree

2) Failing such agreement, 2) Failing such agreement,

the language to be used the language to be used
shall be English shall be English or FILIPINO.

3) Arbitral tribunal may require a TRANSLATION of

documentary evidence (if not in the official language)
 ICA DA
Parties are entitled

1) to be treated equally
2) to be give FULL OPPORTUNITY to
present their sides

e.g.
1) parties given sufficient notice of any
hearing and of any meeting
2) A party is directed to communicate to
the other party all statements,
documents, etc. that will be supplied to
the tribunal
Q: How should the parties be
treated during the arbitral
proceedings?

A: The parties shall be

treated with equality and
each party shall be given a
full opportunity of
presenting his case.
 (ICA) (DA)
When is communication deemed received?
1) GENERAL RULE: rules are provided for the parties

2) DEFAULT: on the date it is DELIVERED* at the addressee's address

of record, place of business, residence or last known address
 (in DA) Written
communications and pleadings
intended for a party
represented by a counsel
should be addressed to his
counsel.
* versus Revised Rules of Court : date of posting

 Use of electronic mail, facsimile transmission or

other electronic means => permitted
 (ICA) (DA)

The following are privileged and shall NOT be published:

 proceedings
 records
 evidence
 the arbitral award

EXCEPTIONS:
1) with the consent of the parties; or

2) for the limited purpose of disclosing

to the courts relevant documents where
resort to court is allowed
Q: Can the court in which the action
or the appeal is pending issue a
protective order or prohibit
disclosure of information?

A: Yes. 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
if it is shown that the applicant shall be
materially prejudiced by an authorized
disclosure thereof.
 (ICA) (DA)

1) Institutional Arb. e.g. the Philippine

- administered by an entity
(registered with SEC) and
engaged in, among others,
arbitration of disputes in the
Philippines on a regular and
permanent basis
Dispute Resolution
Center (PDRC)
- a non-stock, non-profit
organization incorporated
in 1996 out of the
arbitration committee of
the Philippine Chamber of
Commerce and Industry

2) Ad hoc Arb.
-
NOTE: if such an institution is not a
administered by an arbitrator or
permanent or regular arbitration
by the parties themselves
institution in the Philippines  still
“ad hoc”
 (ICA) (DA)

- person or institution under whose

rules the arbitration is agreed to be
conducted

1) MAIN FUNCTION:

- is authorized to make the

DEFAULT appointment of
arbitrator/s
2) ADDITIONAL FUNCTIONS:

a) Decide on a challenge against

an arbitrator
(if arbitral tribunal rejects the challenge)

a) Consider qualifications of an
arbitrator etc.
 (ICA) (DA)

DEFAULT:
parties deemed to have
agreed to the procedure
1) INSTITUTIONAL under the institution's
procedural rules for the
appointment of arbitrators

DEFAULT:
Appointment of arbitrators
2) AD HOC made by IBP’s
President/representative
 ICA DA
GENERAL RULE:
Determined by prior agreement between parties

DEFAULT: DEFAULT: (+) with prior arbitration agreement

(-) no prior arbitration agreement

date on which A REQUEST 1) Institutional (-)

for that dispute to be -> in accordance with the arbitration rules of the
referred to arbitration is institutional arbitrator
RECEIVED by the
respondent
2) Ad hoc (+)
-> upon the delivery of the claimant to the
respondent of a demand for arbitration

Ad hoc (-)
-> the date when the other party agreed to submit
the dispute to arbitration
 Arbitrator = person appointed
to render an award in a dispute
that is subject of an arbitration
agreement

(ICA) (DA)
Q: How many arbitrators are appointed to
resolve a dispute?

A:
1) The parties may agree
--- usually one (sole arbitrator) or
three (panel)

2) DEFAULT : three
 Q: Who may be appointed as arbitrators?

(ICA) (DA)
o Any impartial and An arbitrator must be:
independent individual o of legal age;
may be appointed as o in full enjoyment of his or her
arbitrator
civil rights; and
o An arbitrator may be
o knows how to read and write.
challenged is he does NOT Also:
possess the qualifications o not related by blood or marriage within
agreed to by the parties the sixth degree to either party;
o shall have no financial, fiduciary, or
other interest in the dispute or in the
result of the arbitration
o must have no personal bias that may
prejudice the right of any party to a
fair and impartial award
o may not act as a champion of any
party or to advocate its cause.
 (ICA) (DA)
Q: How is an arbitrator appointed?
A:
1) GENERAL RULE: parties may agree
2) DEFAULT: (see below)
parties deemed to have
agreed to the procedure
1) INSTITUTIONAL under the institution's
procedural rules for the
appointment of arbitrators

Appointment of arbitrators
made by IBP’s
2) AD HOC President/representative
General Procedure for the Appointment of
Arbitrators

(ICA) (DA)
1) APPOINTMENT of arbitrator/s by the parties
(default: by appointing authority)

1) Arbitrator/s ACCEPTANCE of appointment

(through submission of acceptance letter)

3) Arbitrator/s OATH TAKING

Q: What are the GROUNDS FOR CHALLENGE
of an Arbitrator?

(ICA) (DA)
1) circumstances exist that give rise to a justifiable doubt
as to arbitrator’s impartiality or independence

2) he does not possess the qualifications provided for

under the law or agreed to by the parties;
3) he is disqualified to act as an
arbitrator; or

4) he refuses to respond to
questions by a party regarding
the nature and extent of his
professional dealings with party
or his counsel
General Procedure for the Challenge
(ICA) (DA)
GENERAL RULE: Agreed upon by parties
DEFAULT:
1) Challenging party sends written statement providing ground/s
for challenge to the tribunal
2) Challenged arbitrator may either accept or reject the challenge
3) Parties may agree to the challenge and replace the challenged
arbitrator.
4) If not, arbitral tribunal shall decide the challenge
5) Appointing authority decides the challenge
6) Requesting party may renew the request with the court
(NOTE: arbitration proceedings suspended until court has decided)

After a decision (by any of the above):

7) Substitute arbitrator is appointed
 - a sole arbitrator or a panel of arbitrators

Q: When is the arbitral tribunal deemed constituted?

A: The arbitral tribunal is deemed

constituted when

1) the sole arbitrator or the third arbitrator

who has been nominated has accepted
the nomination;

2) and written communication of said

nomination and acceptance has been
received by the party making request.
 ICA DA
Arbitration Agreement
• a contract
• must be in WRITING
• CONSENT to arbitrate may be:
Pre-causal Consent Present causal Consent
(Agreement to submit to (Submission agreement)
arbitration)

-parties agree to settle by when the controversy already

arbitration a controversy that will exists between the parties at the
arise time of the submission to
arbitration
ICA DA

The Doctrine of Separability

= the principle that an
ARBITRATION
AGREEMENT is a separate
contract,
NOT necessarily affected by the
invalidity, ineffectiveness or
non-existence of the MAIN
CONTRACT
<<Details also discussed by
Franz Arzadon’s Group  >>
 ICA DA
1) GENERAL RULE:
Parties are free to agree
2) DEFAULT:
Arbitral tribunal shall
apply the UNCITRAL
Arbitration Rules

3) Arbitral tribunal may conduct the

arbitration in the manner it considers
appropriate
<< c/o Rene Emil Tabangin >>
 Mediation ICA & DA

Limited to waivers of Rules on waiver include

CONFIDENTIALITY NON-COMPLIANCE with the rules or
and PRIVILEGE only requirements

Arbitration is merit or evidence based;

therefore procedurally driven.

Failure to raise within time prescribed

(30 days if no period prescribed)

Objections deemed waived

 ICA DA
 No court shall intervene
EXCEPT in instances provided for under the ADR Act

When is court intervention allowed?

1) when appointing authority fails to

perform functions
2) to request or enforce interim measures
3) assistance in taking evidence
4) arbitration assistance and supervision
5) determination of jurisdiction of arbitral
tribunal
6) setting aside of an arbitral award
7) appointment and challenge to arbitrators
8) in case of failure or impossibility of
arbitral tribunal
Interim Measure Provisional Remedy
Governed by Governed by
Special ADR Rules Rules of Civil Procedure

Can stand by themselves CANNOT exist independently of

despite the pendency of the their principal actions
arbitration of the principal
action before the arbitral
tribunal
 ICA DA
1) Request for grant of interim measures shall be
IN WRITING

2) Relief may be granted for VALID REASONS

(e.g. to provide security for the performance of an obligation)

3) Grant may be CONDITIONED upon provision

of security

4) Order denying or granting order shall be

BINDING upon the parties

5) NON-COMPLIANCE of a party to an order->

liable for damages

6) Interim measures may be requested from

COURT (before constitution of Arbitral Tribunal (AT); or
AT has no power to act)
 ICA DA
COST: determined by the arbitral tribunal
1) In principle, the cost shall be borne by the
unsuccessful party.
2) However, the arbitral tribunal may apportion
the cost if reasonable under the
circumstance of the case

FEES
1) GENERAL RULE: determined by the
agreement of the parties in writing
prior to arbitration
2) DEFAULT: based on applicable rules on
institutional or ad hoc arbitration
SAMPLE Fees under Institutional Arbitration:

The claimant is required to pay:

1) P75,000.00 non-refundable “Filing Fee” = upon
filing of its Notice of Arbitration One Hundred
Thousand

1) P100,000.00 as deposit for Arbitrator’s Fees; and

2) P25,000.00 as deposit for miscellaneous

expenses, to be credited to the claimant’s
Provisional Advance on Cost.

SOURCE: http://www.pdrci.org/about-us/faqs/
 1) By the
Arbitral
Tribunal
Correction/Modification
Grounds: ICA DA
1) Quantification of the costs and
also the determination of which party
bears the cost or the division thereof) yes yes

2) Interpretation (of a specific point

or part of the award) yes yes

3) Correction of typographical and

similar errors initiated either by
o one of the parties yes yes
o by the arbitral tribunal

4) Additional award (as to claims

presented in the arbitral yes yes
proceedings but omitted in the
award)

5) Under the arbitration agreement Not yes

mentioned
 2) By the
Court
Correction/Modification

ICA DA
Grounds:

1) evident miscalculation of figures, or an evident mistake in

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

2) the arbitrators have awarded upon a matter not submitted

to them
not affecting the merits of the decision or controversy *

3) the award is imperfect in a matter of form

not affecting the merits of the decision or controversy *

* Or else, it should be VACATED

 Through courts
ONLY
Grounds for Setting Aside

ICA DA
Based on the MODEL LAW Based on RA 876

1) Subject of the dispute NOT capable of

settlement under the laws of the Republic
of the Philippines; or

2) The award is in conflict with public policy

of the Philippines.
 Through
courts only
Grounds for Setting Aside

ICA DA
Based on the MODEL LAW Based on RA 876

1) Defect in the arbitration 1) Arbitral award was procured by

agreement corruption, fraud or other
(due to an incapacity of a party undue means
or agreement not valid under the
law

2) Lack or excess of 2) Lack or excess of jurisdiction

jurisdiction on the part of on the part of the arbitral
the arbitral tribunal tribunal

3) Violation the arbitration 3) Violation the arbitration

agreement agreement

4) Violation of due process 4) There was evident partiality or

corruption in the arbitral
tribunal
 judicial
affirmation of
a DOMESTIC
Confirmation ward

ICA DA
Q: What is the effect of a
confirmed domestic arbitral
award?
A: A domestic arbitral award when
confirmed shall be enforced
in the same manner as final and
executory decisions
of the Regional Trial Court.
 Confirmation
ICA DA
Q: What court has jurisdiction to
confirm the award?
A:It shall be the Regional Trial Court
where BASIS:
i) arbitration proceedings were
Section 22 of
conducted; R.A. No. 876
ii) the asset to be attached or levied
or the act to be enjoined is
located; Section 47 of
iii) any other parties to the dispute ADR Act of 204
resides or has his place of
business; or
iv) the National Capital Judicial
Region at the option of applicant
 Foreign & ICA DA

Recognition
1) a Philippine court gives
legal acknowledgement a
foreign arbitral award
(FAA); and Confirmation
2) confers upon it the
- judicial affirmation of a
capability to be enforced
DOMESTIC award
under Philippine law
MEANING: said judgment may be
presented as a defense to a local
litigation

Enforcement
-execution and
implementation of the FAA
through the Philippine legal
processes
 Recognition and Enforcement
Foreign
Convention Award Non-Convention Award

 made in a state which  made in a state which is

is a party to the New NOT a party to the New
York Convention York Convention
(governed by NY Convention as
implemented by the IRR)

 When recognized,
enforceable in the
same manner as final
and executory
decision of a
Philippine court
 CANNOT be recognized
or enforced under the
ADR Act
 BUT deemed as
presumptive evidence of
a right as between the
parties
 Recognition and Enforcement
Foreign*
Requisites and Conditions
for Recognition & Enforcement in the Philippines :

1) Proof of the foreign judgment;

2) The judgment must be on a civil or
commercial matter;
3) There must be no lack of jurisdiction, no
want of notice, no collusion, no fraud , no
clear mistake of law or fact;
4) The judgment must not contravene a
sound and established public policy of the
forum
5) The judgment must be res judicata in the
state that rendered it

*In general, applicable to ICA also

 Recognition and Enforcement
Foreign
Grounds* for Refusing Recognition in the Philippines
1) Defect in the arbitration agreement
(due to an incapacity of a party or agreement not valid under the law

2) Lack or excess of jurisdiction on the part of the arbitral

tribunal

3) Violation the arbitration agreement

4) Violation of due process

And the court found that

1) subject of the dispute NOT capable of settlement
under the laws of the Republic of the Philippines; or
2) award is in conflict with public policy of the
Philippines

*similar to grounds in setting aside ICA award

 Recognition and Enforcement
Foreign
General Procedure for Recognition
1) Filing of Application for Recognition
(file original or duly authenticated copy of the award and
arbitration agreement)
=“Recognition”
2) Confirmation (once confirmed becomes enforceable)
-> Consolidation or concurrent hearings (with other related
arbitration proceedings) may also be done

3) Application for rejection or suspension

(party claiming rejection must provide appropriate security)

4) Appeal/s
(appealing party required to post a counter-bond in favor of
the prevailing party)
 Foreign
(Convention Award) ICA DA

Correction,
Interpretation and - Yes Yes
Additional Award

Setting Aside /
Vacating an Award - Yes Yes

Recognition & Yes Yes -

Enforcement
Confirmation
- - Yes