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I.
RELEVANT LAWS.
1. NEW CIVIL CODE.
Art. 1308. The contract must bind both contracting parties;
its validity or compliance cannot be left to the will of one of them.
Art. 2028. A compromise is a contract whereby the parties,
by making reciprocal concessions, avoid a litigation or put an end
to one already commenced.
Art. 2029. The court shall endeavor to persuade the litigants
in a civil case to agree upon some fair compromise.
Art. 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.
The duration and terms of the suspension of the civil action
or proceeding and similar matters shall be governed by such
provisions of the rules of court as the Supreme Court shall
promulgate. Said rules of court shall likewise provide for the
appointment and duties of amicable compounders.
Art. 2042. The same persons who may enter into a
compromise may submit their controversies to one or more
arbitrators for decision.
2. PERTINENT SPECIAL LAWS/RULES:
2.1.
R.A. No. 876 THE ARBITRATION LAW
2.2.
E.O. No. 1008 CONSTRUCTION INDUSTRY ARBITRATION LAW
2.3.
CIAC REVISED RULES OF PROCEDURE GOVERNING CONSTRUCTION
ARBITRATION, AS AMENDED
2.4.
R.A. No. 9285 ALTERNATIVE DISPUTE RESOLUTION ACT OF 2004
2.5.
A.M. No. 07-11-08-SC - SPECIAL RULES OF COURT ON ALTERNATIVE
DISPUTE RESOLUTION
2.6.
DOJ DEPARTMENT CIRCULAR NO. 98 - IMPLEMENTING RULES AND
REGULATIONS OF THE ALTERNATIVE DISPUTE RESOLUTION ACT OF
2004.
2.7.
NEW YORK CONVENTION - CONVENTION ON THE RECOGNITION
AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS adopted by the
UNITED NATIONS on 10 JUNE 1958, ratified by the Philippine Senate under
SENATE RESOLUTION No. 71.
2.8.
MODEL LAW - MODEL LAW ON INTERNATIONAL COMMERCIAL
ARBITRATION, adopted by the UNITED NATIONS COMMISSION ON
INTERNATIONAL TRADE LAW (UNCITRAL) on 21 JUNE 1985.
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3.2.
In Private Litigation:
3.1.1. There is private-party autonomy in the resolution of disputes or the
freedom of the parties to make their own arrangements to resolve their
disputes;
3.1.2. 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;
3.1.3. Parties have the freedom to choose either accredited or non-accredited to
act as arbitrator, mediator, conciliator, neutral party evaluator;
3.1.4. Voluntary dispute resolution;
In Public Litigation:
3.2.1. Disputes are resolved pursuant to the application or interpretation of laws
and rules of procedure;
3.2.2. Adjudication of a presiding judge of a court or an officer of a government
agency;
3.2.3. Parties do not choose the adjudicator or hearing officer;
3.2.4. Parties are subjected to the operative force (i.e. jurisdiction, compulsory
processes, etc.) of the court or government agency;
4. MODES OF ADR.
4.1.
Arbitration
4.2.
Mediation
4.3.
Conciliation
4.4.
Negotiation
4.5.
Neutral Early Evaluation/Mini-Trial
5. JUDICIAL DISPUTE RESOLUTION DISTINGUISHED FROM ARBITRATION.
5.1.
In JDR:
5.1.1.
The framework is based on the processes of
mediation, conciliation or early neutral evaluation which entails the
submission of a dispute before a "JDR judge" who shall merely "facilitate
settlement" between the parties in conflict or make a "non-binding
evaluation or assessment of the chances of each party's case."
5.1.2.
The JDR judge lacks the authority to render a
resolution of the dispute that is binding upon the parties in conflict.
5.2.
In Arbitration:
5.2.1. The dispute is submitted to an arbitrator, who is a neutral third person or a
group of thereof;
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2.8.
One or more of the arbitrators are alleged not to possess the required qualification
under the arbitration agreement or law.
3. Where court intervention is allowed under ADR Laws or the Special ADR Rules, courts
shall not refuse to grant relief for any of the following reasons:
3.1.
Prior to the constitution of the arbitral tribunal, the court finds that the principal
action is the subject of an arbitration agreement; or
3.2.
The principal action is already pending before an arbitral tribunal.
4. The Special ADR Rules recognize the principle of competence-competence - which
means that the arbitral tribunal may initially rule on its own jurisdiction, including any
objections with respect to the existence or validity of the arbitration agreement or any
condition precedent to the filing of a request for arbitration.
5. The Special ADR Rules recognize the principle of separability of the arbitration clause
- which means that said clause shall be treated as an agreement independent of the other
terms of the contract of which it forms part. A decision that the contract is null and void
shall not entail ipso jure the invalidity of the arbitration clause.
6. Judicial restraint. In resolving the petition, the court must exercise judicial restraint in
accordance with the policy set forth in Rule 2.4 deferring to the competence or
jurisdiction of the arbitral tribunal to rule on its competence of jurisdiction.
IV. ARBITRATION AGREEMENT.
1. FORMS:
1.1.
Arbitral Agreement or Clause;
1.2.
Submission Agreement;
2. ARBITRAL AGREEMENT OR CLAUSE DISTINGUISHED FROM SUBMISSION.
2.1.
Arbitral Agreement or Clause (Pre-causal consent ) the parties to any contract
agree in such contract to settle by arbitration a controversy thereafter arising
between them.
2.2.
Submission Agreement (Present causal consent) no pre-existing arbitration
agreement, but parties subsequently agree to submit to arbitration any controversy
existing between them at the time of the submission and which may be the subject
of an action.
V. ARBITRATION LAW (under R.A. No. 876).
1. PRELLIMINARY PROCEDURE:
1.1.
IN CASE OF ARBITRAL AGREEMENT/CLAUSE:
1.1.1. Demand/request for arbitration; (Not applicable in controversies covered
by CIAC)
1.1.2. Statement of the nature of the controversy;
1.1.3. Amount involved, if applicable;
1.1.4. Relief sought;
1.1.5. Attached true copy of the contract providing the arbitration;
1.1.6. Demand shall be served in person or registered mail;
1.1.7. Should the contract provides for the appointment of single arbitrator:
a. Indicate the time and date within which the parties shall agree upon such
arbitrator;
1.1.8. Should the contract provides for the appointment of three arbitrators:
a. Indicate the name of the arbitrator appointed;
b. Require the other party within 15 days from notice/receipt to make an
advice in writing the name of the person appointed by the second party;
1.2.
The 2 arbitrators appointed must agree on the third arbitrator within 10 days from
the date of such notice;
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1.3.
In case of default by the other party in answering the demand, aggrieved party
may file, through a verified petition, with the RTC having jurisdiction of the
parties:
1.3.1. A copy of the demand/request for arbitration;
1.3.2. A statement that an original demand was sent and which set forth:
a. The nature of the action;
b. Amount involved, if applicable;
c. Relief sought;
d. Attached true copy of the contract providing for arbitration;
5. CHALLENGE OF ARBITRATOR(S).
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5.1.
The arbitrators may be challenged only for the reasons mentioned in Sec 10, R.A.
No. 876 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 RTC 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 on arbitration
shall be suspended, and it shall be continued immediately after the court has
delivered an order on the challenging incident. (Sec.11, R.A. No. 876)
5.2.
5.3.
4.3.2.
4.3.3.
4.3.4.
4.3.5.
6.3.4. A ruling by the court denying the jurisdiction of the arbitral tribunal may
be the subject of petition for certiorari (under Rule 65).
6.4. ABITRAL TRIBUNAL DEFERING TO RESOLVE THE ISSUE OF ITS
JURISDICTION.
6.4.1. A ruling by the arbitral tribunal deferring resolution on the issue of its
jurisdiction until final award is not subject to a motion for reconsideration,
appeal or a petition for certiorari.
6.5. WHEN TO MAKE REQUEST FOR ARBITRATION BEFORE THE RTC.
6.5.1. FORM
a. Motion
b. With notice of hearing
6.5.2. Should there be an existing arbitration agreement:
a. Before pre-trial, by either party;
b. After pre-trial, by way of agreement by the parties;
6.5.3. In case of submission agreement:
a. At any stage of the proceedings.
6.6. An order referring the dispute to arbitration shall be immediately executory and shall
not be subject to a motion for reconsideration, appeal or petition for certiorari.
6.7. An order denying the request to refer the dispute to arbitration shall not be subject to
an appeal (because it is interlocutory), but may be the subject of a motion for
reconsideration and/or a petition for certiorari.
7. MULTIPLE ACTIONS AND PARTIES.
7.1. Court shall not decline to refer some or all of the parties to arbitration for any of the
following reasons:
7.1.1. Not all of the disputes subject of the civil action may be referred to
arbitration;
7.1.2. Not all of the parties to the civil action are bound by the arbitration
agreement and referral to arbitration would result in multiplicity of suits;
7.1.3. The issues raised in the civil action could be speedily and efficiently
resolved in its entirety by the court rather than in arbitration;
7.1.4. Referral to arbitration does not appear to be the most prudent action; or
7.1.5. The stay of the action would prejudice the rights of the parties to the civil
action who are not bound by the arbitration agreement.
7.2. The court may, however, issue an order directing the inclusion in arbitration of those
parties who are not bound by the arbitration agreement but who agree to such
inclusion provided those originally bound by it do not object to their inclusion. (Rule
4.7.)
8. INTERIM MEASURES OF PROTECTION.
8.1. When to file petition before the RTC:
8.1.1. Before arbitration is commenced;
8.1.2. After arbitration is commenced, but before the constitution of the arbitral
tribunal;
8.1.3. After the constitution of the arbitral tribunal and at any time during arbitral
proceedings but, at this stage, only to the extent that the arbitral tribunal
has no power to act or is unable to act effectively.
8.2. GROUNDS FOR ITS ALLOWANCE (NON-EXCLUSIVE):
8.2.1. Need to prevent irreparable loss or injury;
8.2.2. Need to provide security for the performance of any obligation;
8.2.3. Need to produce or preserve evidence; or
8.2.4. Need to compel any other appropriate act or omission.
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TYPE OF ASSISTANCE:
10.2.1. To comply with a subpoena ad testificandum and/or subpoena duces
tecum;
10.2.2. To appear as a witness before an officer for the taking of his deposition
upon oral examination or by written interrogatories;
10.2.3. To allow the physical examination of the condition of persons, or the
inspection of things or premises and, when appropriate, to allow the
recording and/or documentation of condition of persons, things or
premises
(i.e.,
photographs,
video
and
other
means
of
recording/documentation);
10.2.4. To allow the examination and copying of documents; and
10.2.5. To perform any similar acts. (Rule 9.5)
10.3.
If the evidence sought is not privileged, and is material and relevant, the court
shall grant the assistance in taking evidence requested and shall order petitioner to
pay costs attendant to such assistance. (Rule 9.8)
10.4.
10.5.
If the court declines to grant assistance in taking evidence, the petitioner may file
a motion for reconsideration or appeal. (Ibid.)
13.4.
14. A party, counsel or witness who disclosed or who was compelled to disclose information
relative to the subject of ADR under circumstances that would create a reasonable
expectation, on behalf of the source, that the information shall be kept confidential has
the right to prevent such information from being further disclosed without the express
written consent of the source or the party who made the disclosure. (Rule 10.1.)
15. In resolving the petition or motion, the courts shall be guided by the following principles
applicable to all ADR proceedings:
15.1. Confidential information shall not be subject to discovery and shall be
inadmissible in any adversarial proceeding, whether judicial or quasi-judicial.
15.2. 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 therein.
15.2.1. For mediation proceedings , the court shall be further guided by the
following principles:
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. 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 the mediation:
(1) parties to the dispute;
(2) mediator or mediators;
(3) counsel for the parties;
(4) 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.
d. The protection of the ADR Laws shall continue to apply even if a
mediator is found to have failed to act impartially.
e. 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 fees and related expenses. (Rule
10.8.)
16. CONFIRMATION, CORRECTION OR VACATION OF AWARD IN DOMESTIC
ARBITRATION.
16.1. PERIODS:
16.1.1. Confirmation. - At any time after the lapse of thirty (30) days from receipt
by the petitioner of the arbitral award, he may petition the court to confirm
that award.
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16.1.2. Correction/Modification. - Not later than thirty (30) days from receipt of
the arbitral award, a party may petition the court to correct/modify that
award.
16.1.3. Vacation. - Not later than thirty (30) days from receipt of the arbitral
award, a party may petition the court to vacate that award.
16.1.4. A petition to vacate the arbitral award may be filed, in opposition to a
petition to confirm the arbitral award, not later than thirty (30) days from
receipt of the award by the petitioner. A petition to vacate the arbitral
award filed beyond the reglementary period shall be dismissed.
16.1.5. A petition to confirm the arbitral award may be filed, in opposition to a
petition to vacate the arbitral award, at any time after the petition to vacate
such arbitral award is filed. The dismissal of the petition to vacate the
arbitral award for having been filed beyond the reglementary period shall
not result in the dismissal of the petition for the confirmation of such
arbitral award.
16.1.6. The filing of a petition to confirm an arbitral award shall not authorize the
filing of a belated petition to vacate or set aside such award in opposition
thereto.
16.1.7. A petition to correct an arbitral award may be included as part of a petition
to confirm the arbitral award or as a petition to confirm that award. (Rule
11.2.)
16.2.
16.3.
new or revised award or to direct a new hearing, or in the appropriate case, order the
new hearing before a new arbitral tribunal, the members of which shall be chosen in
the manner provided in the arbitration agreement or submission, or the law. (Rule
11.9.)
17. RECOGNITION AND ENFORCEMENT OR SETTING ASIDE OF AN AWARD IN
INTERNATIONAL COMMERCIAL ARBITRATION.
17.1.
17.2.
17.3.
18.1.1. Any party to a foreign arbitration may petition the court to recognize and
enforce a foreign arbitral award. (Rule 13.1.)
18.2.
PERIOD.
18.2.1. Any time after receipt of a foreign arbitral award before the Regional Trial
Court. (Rule 13.2.)
18.3.
21.2.
VENUE.
21.3.1. Written settlement agreement may be jointly deposited by the parties or by
one party with prior notice to the other party/ies with the Clerk of Court of
the RTC:
a. Where the principal place of business in the Philippines of any of the
parties is located;
b. If any of the parties is an individual, where any of those individuals
resides; or
c. In the National Capital Judicial Region. (Rule 15.3.)
21.4.
(5) Any order resolving the issue of the termination of the mandate of an
arbitrator; and
(6) An order granting assistance in taking evidence. (Ibid.)
22.2.
PERIOD 15 days from notice of the final order, decision, or motion for
reconsideration.
24.3.
GROUNDS:
24.3.1. Granting or denying an interim measure of protection;
24.3.2. Denying a petition for appointment of an arbitrator;
24.3.3. Denying a petition for assistance in taking evidence;
24.3.4. Enjoining or refusing to enjoin a person from divulging confidential
information;
24.3.5. Confirming, vacating or correcting/modifying a domestic arbitral award;
24.3.6. Setting aside an international commercial arbitration award;
24.3.7. Dismissing the petition to set aside an international commercial arbitration
award even if the court does not decide to recognize or enforce such award;
24.3.8. Recognizing and/or enforcing an international commercial arbitration
award;
24.3.9. Dismissing a petition to enforce an international commercial arbitration
award;
24.3.10.
Recognizing and/or enforcing a foreign arbitral award;
24.3.11.
Refusing recognition and/or enforcement of a foreign arbitral
award;
24.3.12.
Granting or dismissing a petition to enforce a deposited mediated
settlement agreement; and
24.3.13.
Reversing the ruling of the arbitral tribunal upholding its
jurisdiction. (Rule 19.12.)
GROUNDS:
25.4.1. When the Regional Trial Court, in making a ruling under the Special ADR
Rules, has acted:
a. without jurisdiction;
b. in excess of its jurisdiction, or
c. with grave abuse of discretion amounting to lack or excess of jurisdiction,
and there is no appeal or any plain, speedy, and adequate remedy in the
ordinary course of law, a party may file a special civil action for certiorari
to annul or set aside a ruling of the Regional Trial Court.
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25.5. A special civil action for certiorari may be filed against the following orders of
the court.
25.5.1. Holding that the arbitration agreement is inexistent, invalid or
unenforceable;
25.5.2. Reversing the arbitral tribunals preliminary determination upholding its
jurisdiction;
25.5.3. Denying the request to refer the dispute to arbitration;
25.5.4. Granting or refusing an interim relief;
25.5.5. Denying a petition for the appointment of an arbitrator;
25.5.6. Confirming, vacating or correcting a domestic arbitral award;
25.5.7. Suspending the proceedings to set aside an international commercial
arbitral award and referring the case back to the arbitral tribunal;
25.5.8. Allowing a party to enforce an international commercial arbitral award
pending appeal;
25.5.9. Adjourning or deferring a ruling on whether to set aside, recognize and or
enforce an international commercial arbitral award;
25.5.10.
Allowing a party to enforce a foreign arbitral award pending
appeal; and
25.5.11.
Denying a petition for assistance in taking evidence. (Rule 19.26.)
26. APPEAL BY CERTIORARI TO THE SUPREME COURT.
26.1. WHERE Supreme Court
26.2.
26.3.
26.4.
GROUNDS:
The following, while neither controlling nor fully measuring the court's
discretion, indicate the serious and compelling, and necessarily, restrictive
nature of the grounds that will warrant the exercise of the Supreme Courts
discretionary powers, when the Court of Appeals:
26.4.1. Failed to apply the applicable standard or test for judicial review
prescribed in these Special ADR Rules in arriving at its decision resulting
in substantial prejudice to the aggrieved party;
26.4.2. Erred in upholding a final order or decision despite the lack of jurisdiction
of the court that rendered such final order or decision;
26.4.3. Failed to apply any provision, principle, policy or rule contained in these
Special ADR Rules resulting in substantial prejudice to the aggrieved
party; and
26.4.4. Committed an error so egregious and harmful to a party as to amount to an
undeniable excess of jurisdiction.
The mere fact that the petitioner disagrees with the Court of Appeals
determination of questions of fact, of law or both questions of fact and law,
shall not warrant the exercise of the Supreme Courts discretionary power.
The error imputed to the Court of Appeals must be grounded upon any of the
above prescribed grounds for review or be closely analogous thereto.
A mere general allegation that the Court of Appeals has committed serious
and substantial error or that it has acted with grave abuse of discretion
resulting in substantial prejudice to the petitioner without indicating with
specificity the nature of such error or abuse of discretion and the serious
prejudice suffered by the petitioner on account thereof, shall constitute
Page 18 of 25
sufficient ground for the Supreme Court to dismiss outright the petition. (Rule
19.36)
VII. REMEDIES RE: DOMESTIC ARBITRAL AWARDS:
1. CONSTRUCTION INDUSTRY ARBITRATION COMMISSION (CIAC [E.O. No.
1008])
1.1.
Original and exclusive jurisdiction over:
1.1.1. disputes arising from, or connected with, contracts entered into by parties
involved in construction in the Philippines, whether the dispute arises:
a. before or after the completion of the contract, or
b. after the abandonment or breach thereof.
1.1.2. Violation of specifications for materials and workmanship;
1.1.3. Violation of the terms of agreement;
1.1.4. Interpretation and/or application of contractual time and delays;
1.1.5. Maintenance and defects;
1.1.6. Payment, default of employer or contractor and changes in contract cost.
1.2.
These disputes may involve government or private contracts.
1.3.
For the Board to acquire jurisdiction, the parties to a dispute must agree to submit
the same to voluntary arbitration.
1.4.
Jurisdiction of a court is determined by the law in force at the time of the
commencement of the action.
1.5.
Jurisdiction of CIAC is over the dispute, not the contract.
1.6.
As long as the parties agree to submit to voluntary arbitration, regardless of what
forum they may choose (ad hoc or institutional), their agreement will fall within
the jurisdiction of the CIAC, such that, even if they specifically choose another
forum, the parties will not be precluded from electing to submit their dispute
before the CIAC because the right has been vested upon each party by law, i.e.,
E.O. No 1008. (NIA vs. Court of Appeals, 318 SCRA 255).
1.7.
When a contract contains a clause for the submission of a future controversy to
arbitration, it is not necessary for the parties to enter into a submission agreement
before the claimant may invoke the jurisdiction of the CIAC.
1.8.
1.9.
ARBITRATOR(S).
1.8.1. A sole arbitrator:
a. Parties, by agreement, nominate him from the list of arbitrators accredited
by the CIAC for appointment and confirmation.
b. If the parties fail to agree as to the arbitrator, the CIAC taking into
consideration the complexities and intricacies of the dispute/s, has the
option to appoint a single arbitrator or an Arbitral Tribunal.
1.8.2. Three arbitrators:
a. If the CIAC decides to appoint an Arbitral Tribunal, each party may
nominate one (1) arbitrator from the list of arbitrators accredited by
the CIAC for appointment and for confirmation.
b. The third arbitrator who is acceptable to both parties confirmed in
writing shall be appointed by the CIAC and shall preside over the
Tribunal. (Sec. 14)
As soon as a decision, order or award has become final and executory, the
Arbitral Tribunal or the single arbitrator with the occurrence of the CIAC shall
motu propio, or on motion of any interested party, issue a writ of execution
requiring any sheriff or other proper officer to execute said decision, order or
award. (Sec. 20)
2. COURT OF APPEALS.
1.1.
15 days from receipt of notice of the assailed final arbitral award, petition for
review under Rule 43, either on questions of fact, of law, or of fact and law.
Ground: errors of arbitral award (judgment). (Sec. 18.2, CIAC Revised Rules of
Procedure Governing Construction Arbitration)
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1.2.
60 days from receipt of notice of the assailed final arbitral award, special civil
action for certiorari or petition for certiorari under Rule 65 (N.B.: Hierarchy of
Courts must be observed, as the remedy is an original and concurrent jurisdiction
with the Supreme Court). Ground: errors of jurisdiction.
2. SUPREME COURT.
2.1.
15 days from receipt of notice of the assailed judgment or denial of motion for
reconsideration by the Court of Appeals, ordinary appeal of petition for review on
certiorari under Rule 45. Ground: errors of judgment.
2.2.
Concurrent jurisdiction with the Court of Appeals on Petition for Certiorari under
Rule 65. Hierarchy of courts must be observed. (Note: the petition for certiorari
[writ of certiorari] under Rule 65 is an original action).
3. REMEDIES FROM INTERNATIONAL COMMERCIAL ARBITRATION.
3.1. Petition for confirmation, recognition and enforcement of foreign arbitral award
before the Regional Trial Court;
3.1.1. Attach the original or authenticated copy of the arbitral award or the
arbitration agreement.
3.1.2. The award or agreement must be made in any of the official languages
(English), if not the party shall supply a duly certified translation thereof
into any of such languages.
3.1.3. The country in which the foreign arbitration award was made must be a
party to the New York Convention.
3.1.4. When confirmed by RTC it shall be enforced in the same manner as final
and executory decisions of courts of law of the Philippines.
3.1.5. If the application for rejection or suspension of enforcement of an award
has been made, the RTC 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.
4. The recognition and enforcement of foreign arbitral awards not covered by the New York
Convention shall be done in accordance with procedural 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. 43)
5. 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. (Sec. 44)
6. A foreign arbitral award, when confirmed by the RTC, shall be enforced as a foreign
arbitral award and not as a judgment of a foreign court.
7. A foreign arbitral award, when confirmed by the RTC, shall be enforced in the same
manner as final and executory decisions of courts of law of the Philippines.
VIII. CASES.
A. Tuna Processing, Inc., vs. Philippine Kingford, Inc., G.R. No. 185582, February
29, 2012.)
1. A foreign corporation not licensed to do business in the Philippines, but which
collects royalties from entities in the Philippines, have legal capacity to sue for the
recognition and enforcement of foreign arbitral award in accordance with the
provisions of the Alternative Dispute Resolution Act of 2004 [R.A. No. 9285] .
2. When a party enters into a contract containing a foreign arbitration clause and, in
fact, submits itself to arbitration, it becomes bound by the contract, by the
Page 20 of 25
arbitration and by the result of arbitration, conceding thereby the capacity of the
other party to enter into the contract, participate in the arbitration and cause the
implementation of the result. (Ibid.)
3. The New York Convention shall govern the recognition and enforcement of
arbitral awards covered by the said Convention. (Sec. 42, R.A. No. 9285)
4. Also, international commercial arbitration is governed by the Model Law on
International Commercial Arbitration (the Model Law) adopted by the United
Nations Commission on International Trade Law (UNCITRAL) on 21 June 1985.
5. Exclusive grounds for opposition in the application for recognition and
enforcement of arbitral award.
Article V
1. Recognition and enforcement of the award may be
refused, at the request of the party against whom it is invoked, only
if that party furnishes to the competent authority where the
recognition and enforcement is sought, proof that:
(a) The parties to the agreement referred to in article II
were, under the law applicable to them, under some incapacity, or
the said agreement is not valid under the law to which the parties
have subjected it or, failing any indication thereon, under the law
of the country where the award was made; or
(b) The party against whom the award is invoked was not
given proper notice of the appointment of the arbitrator or of the
arbitration proceedings or was otherwise unable to present his case;
or
(c) The award deals with a difference not contemplated by
or not falling within the terms of the submission to arbitration, or it
contains decisions on matters beyond the scope of the submission
to arbitration, provided that, if the decisions on matters submitted
to arbitration can be separated from those not so submitted, that
part of the award which contains decisions on matters submitted to
arbitration may be recognized and enforced; or
(d) The composition of the arbitral authority or the arbitral
procedure was not in accordance with the agreement of the parties,
or, failing such agreement, was not in accordance with the law of
the country where the arbitration took place; or
(e) The award has not yet become binding on the parties, or
has been set aside or suspended by a competent authority of the
country in which, or under the law of which, that award was made.
2. Recognition and enforcement of an arbitral award may
also be refused if the competent authority in the country where
recognition and enforcement is sought finds that:
(a) The subject matter of the difference is not capable of
settlement by arbitration under the law of that country; or
(b) The recognition or enforcement of the award would be
contrary to the public policy of that country. (New York
Convention)
B. National Irrigation Administration (NIA), vs. Honorable court of Appeals [4th
Division], Construction Industry Arbitration Commission, and Hydro
Resources Contractors Corporation , G.R. No. 129169. November 17, 1999.
1. The Construction Industry Arbitration Commission (CIAC) has original and
exclusive jurisdiction over disputes arising from, or connected with contracts
entered into by parties involved in construction in the Philippines, whether the
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dispute arises before or after the completion of the contract, or after the
abandonment or breach thereof.
2. Jurisdiction of a court is determined by the law in force at the time of the
commencement of the action.
3. The disputes may involve government or private contracts.
4. As long as the parties agree to submit to voluntary arbitration, regardless of what
forum they may choose, their agreement will fall within the jurisdiction of the
CIAC, such that, even if they specifically choose another forum, the parties will
not be precluded from electing to submit their dispute before the CIAC because
this right has been vested upon each party by law, i.e., E.O. No. 1008.
C. LM Power Engineering Corporation vs. Capitol Industrial Construction
Groups, Inc., G.R. No. 141833, March 26, 2003.
8.
9.
2.
3.
Domestic arbitral award, not falling under CIAC, shall be confirmed by way
of a petition for such an order within 30 days before the RTC. (Sec. 23 in
relation to Sec. 28, Arbitration Law [R.A. No. 876])
4.
5.
E. Koppel, Inc. vs. Makati Rotary Club Foundation, Inc., G.R. No. 198075,
September 4, 2013.
Page 22 of 25
1.
2.
Even the very party who repudiates or assails the validity of such contract
may invoke the arbitration clause.
3.
The operation of the arbitration clause is not at all defeated by the failure of
the party to file a formal "request" or application therefor. The filing of a
"request" pursuant to Section 24 of R.A. No. 9285 is not the sole means by
which an arbitration clause may be validly invoked in a pending suit.
Section 24 of R.A. No. 9285 reads:
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 agreement is null and void, inoperative or incapable
of being performed.
The "request" referred to in the above provision is, in turn, implemented
by Rules 4.1 to 4.3 of A.M. No. 07-11-08-SC or the Special Rules of Court on
Alternative Dispute Resolution (Special ADR Rules):
RULE 4: REFERRAL TO ADR
Rule 4.1.Who makes the request. A party to a pending
action filed in violation of the arbitration agreement, whether
contained in an arbitration clause or in a submission agreement,
may request the court to refer the parties to arbitration in
accordance with such agreement.
Rule 4.2. When to make request. (A) Where the
arbitration agreement exists before the action is filed. The
request for referral shall be made not later than the pre-trial
conference. After the pre-trial conference, the court will only act
upon the request for referral if it is made with the agreement of all
parties to the case.
(B) Submission agreement. If there is no existing
arbitration agreement at the time the case is filed but the parties
subsequently enter into an arbitration agreement, they may request
the court to refer their dispute to arbitration at any time during the
proceedings.
Rule 4.3. Contents of request. The request for referral
shall be in the form of a motion, which shall state that the dispute
is covered by an arbitration agreement.
Apart from other submissions, the movant shall attach to
his motion an authentic copy of the arbitration agreement.
The request shall contain a notice of hearing addressed to
all parties specifying the date and time when it would be heard.
The party making the request shall serve it upon the respondent to
give him the opportunity to file a comment or opposition as
provided in the immediately succeeding Rule before the hearing.
Attention must be paid, however, to the salient wordings of Rule
4.1. It reads: "[a] party to a pending action filed in violation of the
arbitration agreement . . . may request the court to refer the parties
to arbitration in accordance with such agreement."
In using the word "may" to qualify the act of filing a "request" under Section 24 of
R.A. No. 9285, the Special ADR Rules clearly did not intend to limit the invocation of an
Page 23 of 25
arbitration agreement in a pending suit solely via such "request." After all, noncompliance with an arbitration agreement is a valid defense to any offending suit and, as
such, may even be raised in an answer as provided in our ordinary rules of procedure.
4.
In this case, it is conceded that petitioner was not able to file a separate
"request" of arbitration before the MeTC. However, it is equally conceded
that the petitioner, as early as in its Answer with Counterclaim, had already
apprised the MeTC of the existence of the arbitration clause in the 2005 Lease
Contract and, more significantly, of its desire to have the same enforced in
this case. This act of petitioner is enough valid invocation of his right to
arbitrate.
5.
The fact that the parties already underwent through JDR proceedings before
the RTC, will not make the subsequent conduct of arbitration between the
parties unnecessary or circuitous. The JDR system is substantially different
from arbitration proceedings.
6.
JUDICIAL
DISPUTE RESOLUTION
DISTINGUISHED
FROM
ARBITRATION.
The JDR framework is based on the processes of mediation, conciliation
or early neutral evaluation which entails the submission of a dispute before a
"JDR judge" who shall merely "facilitate settlement" between the parties in
conflict or make a "non-binding evaluation or assessment of the chances of each
party's case." Thus in JDR, the JDR judge lacks the authority to render a
resolution of the dispute that is binding upon the parties in conflict.
In arbitration, on the other hand, the dispute is submitted to an
arbitrator/s a neutral third person or a group of thereof who shall have the
authority to render a resolution binding upon the parties.
9.
7.
8.
Doctrine of COMPETENCE-COMPETENCE.
Rule 2.4. Policy implementing competence-competence
principle. - The arbitral tribunal shall be accorded the first
opportunity or competence to rule on the issue of whether or not it
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