R.A. 9285 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 parties to make their own arrangements to resolve
their disputes.
Parties can choose the mode of resolving their disputes. Variety in the menu.
Basic rule: if the parties have their own agreed procedure, then that procedure shall be followed.
CHOICES
Parties only or involving third parties.
Peaceful (voluntary) procedures or compulsory procedures entailing binding or merely
executory decisions.
Positional (derivative or compromising) or integrative approaches.
Facilitative, evaluative or transformative approaches.
Negotiated or adversary (adversarial or inquisitorial) models.
The procedures / approaches may be combined (see R.A. 9285 Sec. 18).
Parties can create and innovate. They can dissect and analyze the different dispute resolution practices,
refine and combine them, and create and design hybrid procedures to make them suitable for particular
relationships / needs. The spectrum of processes that they can create will be limited only by the extent
of their imagination.
Rule in hybrids: the rules corresponding to the combined procedures will apply mutatis mutandis (see
R.A. 9285 Sec. 18).
Operating Concepts:
1. Disputes are better resolved as soon as they arise, rather than wait until they pile-up and the amounts
involved have bloated.
2. Cash flow is important.
3. In the executory award models: at the end of the construction period there is still enough money to cover
wrong payments.
May be statutory or contractual.
Models: The FIDIC Model, the World Bank Model. Variant is to constitute the adjudication board at
inception of contract.
The variant evolved to also become a dispute prevention mechanism; then application of other
ADR mechanisms.
Procedures record of success resulted to their application to other contracts.
As a rule, parties set the qualifications and disqualifications of their dispute resolvers. Not
dependent on ASEAN agreed standards. No need to undergo processes required for other
professionals to practice within ASEAN.
ADR and Arbitration practitioners are practitioners without borders.
Settlements and decisions of arbitral tribunal enforceable by courts. And the enforcement processes are,
as a rule, summary, hence speedy.
R.A. 9285 Sec. 17, 18, and Chapter 7 provisions.
International arbitral awards are enforceable under the New York Convention of 1958
OTHER REASONS WHY WE SHOULD FAMILIARIZE OURSELVES WITH PRIVATE DISPUTE RESOLUTION
PROCESSES
International commercial parties tend to shy away from public dispute resolution processes. Even local
parties have to contend with the rather abnormal situation in our local Court.
Treaty, FDI and state to state dispute resolution is focused on party autonomy principles. Treaty
arbitrations, FDI (foreign direct investments) arbitrations, state to state arbitrations etc. operate
substantially the same as commercial arbitration.
Some statutes require the insertion of dispute resolution clauses, including arbitration, in contracts
entered into by the Government. E.0. 78 requires dispute resolution clauses in all PPP & BOT
contracts; also joint venture agreements between the National Government and its contracting parties.
Aid organizations (e.g. JICA, WB) have adopted the dispute board concept. No DB, no loan.
DEVELOPMENTS
ADR is now being referred to as Appropriate Dispute Resolution (SG CJ Sundaresh Menon).
It embraces not only ADR as we know it, but also arbitration, statutory adjudications (examples
CIAC, labor and consumer arbitrations) as well as litigation.
Arbitration has become an indispensable part of international commerce. However, it is said
that the future is towards a more inclusive and solid ADR framework.
Paradigm Shift
ADR is becoming part of the justice system and is no longer being viewed as an aid to ease the
problems of the judiciary.
Internationally we have the UNCITRAL Model Law and the New York Convention of 1958
working together to unify the legal regime in arbitration.
Work is in progress to have a Convention on the enforcement of mediated settlements.
In mediation we only know the facilitative kind. Some of us may not even know the name of
what we practice.
Our mediation law needs a lot of fixing.
Problem with our arbitration law: Only In the Philippines Provisions, Examples:
Special Rules Rule 12.2. (B) last sentence: Failure to file a petition to set aside shall preclude a party from
raising grounds to resist enforcement of the award.
The provision mixed-up the supervisory jurisdiction of courts with its enforcement jurisdiction. Choice of
remedies, enshrined in the Model Law, disappeared.
Problem with our arbitration law: Only In the Philippines Provisions, Examples:
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 than the pre-trial conference, or upon the request of both parties
thereafter, refer the parties to arbitration unless it finds that the arbitration agreement is null and void, inoperative
or incapable of being performed. (R.A. 9285 Sec.24).
Rule on waiver ignored.
Arbitration: RCBC V BDO G.R. No. 196171 10 Dec. 2012: two internationally known and well
respected arbitrators were said to be guilty of bias and prejudgment. What they did was to do what they
were supposed to do, pursuant to general rules of arbitration, to avoid using secret evidence.
Arbitration: Korea Technologies v Lerma, G.R. 143581 7 June 2008 classic in the mistakes in
its obiter.
xxx as signatory to the Arbitration Rules of the UNCITRAL Model Law on International Arbitration of the
United Nations Commission on International Trade Law (UNCITRAL) in the New York Convention on
June 21, 1985, the Philippines committed itself to be bound by the Model Law.
The premise is that we are a Model Law Country. So, the eyes of all Model Law countries are on
us because there should be uniformity in the interpretation of the Model Law Provisions.
WHAT IS ARBITRATION?
The law provided no help, either. The definition could include all kinds of arbitration.
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 (R.A. 9285 Sec. 3(d)).
There is no definition in the Convention and in the Model Law. What they defined is an arbitration
agreement.
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 relationship, whether contractual or not, concerning a
subject matter capable of settlement by arbitration. Convention Art. 2 (1).
Inferences:
Contractual method of resolving disputes, that the disputes are either future or existing, and that
the disputes are in respect of a defined legal relationship, whether contractual or not.
Traditionally, in arbitration the resolution of the dispute or disputes is entrusted to one or more
persons and to them alone. Necessarily, this implies that the disputants should have the
opportunity to present their positions before an impartial tribunal.
Burchell v Marsh, 58 U.S. 344, 15 L.Ed. 96 (1854).
Redfern and Hunter: In its origins, the concept of arbitration is a simple one. Parties who are in dispute agree to
submit their disagreement to a person whose expertise or judgment they trust. They each put their respective
cases to this person this private individual, this arbitrator who listens, considers the facts and the arguments,
and then makes a decision. This decision is final and binding on the parties; and it is binding because the parties
have agreed that it should be, rather than because of the coercive action of any state.
Redfern and Hunter on International Commercial Arbitration, Fifth Edition, on pages 1
2.
The French Definition:
Arbitration is a device whereby the settlement of a question, which is of interest for two or more persons,
is entrusted to one or more other persons the arbitrator or arbitrators- who derive their powers from a private
agreement, not from the authorities of a State, and who are to proceed and decide the case on the basis of such
an agreement Fouchard, Gaillard, Goldman on International Commercial Arbitration para 7 citing several
authors.
INFERENCES:
1. Constituent Elements of an Arbitration:
a) It is contractual; and
b) It is judicial.
Thomas E. Carbonneu: Cases and Materials on The Law and Practice of Arbitration, Revised Third Edition
Classification
Ad Hoc do it yourself arbitration.
Institutional administered by an arbitral institution, usually under its own rules.
Born on p. 27; Model Law Art. 19; IRR
Classification as to applicable law
Foreign jurisdictional seat is a country other than the Philippines. Applicable law of arbitration is the
arbitration law of the seat.
If a foreign award were being enforced in the Philippines, the applicable law is the New York Convention of
1958.
Note: Classification of relative application.
Model Law Art. 1 (2); R.A. 9285 Sec. 42; A.M. No. 07-11-08 SC (Special Rules of
Court); R.A. 9285 Secs. 32 and 33.
Local - Philippines is the jurisdictional seat
Domestic without foreign element; defined in the negative. Applicable law is R.A. 876 and Civil
Code Title XIV as amended/modified by R.A. 9285.
International with foreign element. Governing law is the UNCITRAL Model Law (1985) as
modified by R.A. 9285.
Note: Classification of relative application.
R.A. 9285 Secs. 42, 43, 32 & 33, 19; Special Rules 13.2.
Re parties places of business;
Re agreed seat of arbitration in re places of business;
Re place where a substantial part of the obligations is to be performed; place with which the subject
matter of the dispute is most closely connected in re places of business;
Re agreement that the subject matter of the arbitration relates to more than one county.
CONSTITUENT ELEMENTS OF AN ARBITRATION
ARBITRATION IS CONTRACTUAL
Tribunals power arises from contract.
Distinguishes arbitration from litigation and arbitrations based on law.
ARBITRATION IS JUDICIAL
Decides disputes like a judge or collective judges, as the case may be.
Implies the use of an adjudicative procedure which afford each party an opportunity to present
its case.
Distinguishes arbitration from mediation and other ADR forms.
Born on page 4.
CHARACTERISTICS OF AN ARBITRATION
In arbitration the parties by contract create their own tribunal (see Model Law provisions). They appoint,
directly or indirectly, their judges; craft the procedure; agree on several categories of choice. As creators they
own the tribunal; as owners and creators they can shape the tribunal to what they want it to be. As owners and
creators they pay the expenses of the tribunal that they created. The arbitrators are akin to temporary
employees whose job description is to resolve the dispute between the parties.
Other choices. Flexibility.
Certiorari jurisdiction of courts does not apply.
4. Evidentiary
Tribunal cannot use its expertise in deciding the dispute. Secret evidence.
Judicial notice of laws?
No expert witness or inadequate expert testimony.
What if tribunal believes that the basis of the parties presentations were wrong?
Role of party autonomy.
RCBC v BDO; BDO v CA and RCBC, G.R. Nos. 196171 and 199238.
Special Rules, IBA Rules on Taking Evidence Arts. 4 & 5.
5. Mandatory Procedure
Effect of entering into an arbitration agreement.
Role of party autonomy.
They are different, governed by different laws/rules and hence will require different approaches.
Courts
Curial court the court in the seat of arbitration
Non curial court the court in a jurisdiction other than in the seat of arbitration
Basic Rule: In matters governed by this Law, no court shall intervene except where so provided by this
Law. (MAL Art. 5).
In proper cases, the curial court in the exercise of its supervisory jurisdiction can:
Vacate or set-aside an award rendered in the jurisdiction where the curial court is located
Suspend the setting aside proceedings for a period determined by it to give the arbitral tribunal
an opportunity to resume the arbitral proceedings or to take such other action as in the arbitral
tribunals opinion will eliminate the grounds for setting aside.
Time Bar to Invoke the Supervisory Jurisdiction of the Curial Court:
Not after three months have elapsed from the date the applicant had received the award; or
Not after three months have elapsed from the date that the arbitral tribunal had disposed of an
application for correction or interpretation of an award or the issuance of an additional award.
NOTE: The non-curial court has no power to vacate the award. This power is reserved to the curial court
in the exercise of its supervisory jurisdiction.
NOTE: There is no prohibition against filing in different jurisdictions simultaneous petitions for
enforcement, subject to the rule that the applicant cannot recover more than what was awarded.
TIME BARS
Petitions to Enforce: no express provision in the Model Law and the Convention. Opinion is to
follow contractual precepts of the seat unless if expressly provided by law/agreement.
Raising Grounds to Resist Enforcement: the global rule (except in the Philippines) is to wait
and wait and wait until a petition for enforcement were filed.
WARNING: In Special Rules Rule 12.2 (B) last sentence: Failure to file a petition to set aside shall
preclude a party from raising grounds to resist enforcement of the award.
The quoted provision is an only in the Philippines provision. The provision, based on the supervisory
jurisdiction of a curial court, had effectively intruded into the enforcement jurisdictions of both the curial
and non-curial courts not only under the Model Law but also the New York Convention.
The reason for the provision is unknown. Several issues may be raised against the provision, and it is
most likely against the law considering that the grounds to resist enforcement may involve public policy
issues.