(l) "Court-Annexed Mediation" means any mediation process
INTERNATIONAL COMMERCIAL ARBITRATION
PROF. LOUIE T. OGSIMER
INTEGRATED CODALS
WITH COMMENTS FROM BORN AND REDFERN & HUNTER
PART I
(Please read with caution; odds are some points are missed. Cases not cited)
Before we discuss arbitration, let’s first discuss what is an Alternative
Dispute Resolution System:
Republic Act No. 9285
Alternative Dispute Resolution Act of 2004
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;
Since the different modes of Alternative Dispute Resolution have already
been discussed above, let’s now define what these modes are as provided by
the same Sec. 3 of RA 9285
SEC. 3. Definition of Terms. - For purposes of this Act, the 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;
(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.
Types:
Thea L. Magallanes International Commercial Arbitration – Prof. Louie T. Ogsimer (2nd Semester of 2014-2015)
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;
(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;
Unfortunately, RA 9285 does not define conciliation. But it’s okay! Father B’s
got an answer for us. Yey!
Conciliation is a more formal technique whereby the parties agree to refer
controversies to an individual, a group of individuals or an institution to
make findings of fact and recommendations. As a rule, parties do not agree to
be bound by recommendations. But this clears the air. (Bernas, 269)
What is Arbitration?
RA 9285 SEC. 3. Definition of Terms. - For purposes of this Act, the
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;
COMMENTS
1. Definition. Arbitration is a process by which parties consensually submit a
dispute to a non-governmental decision-maker, selected by or for the parties
to render binding decision resolving a dispute in accordance with neutral,
Page 1 of 17
 adjudicatory procedures affording each party an opportunity to present its
case.
2. Elements of Arbitration:
i. Consensual means to Resolve Disputes [it is a creature of contract]
ii. Submission of Disputes to Non-governmental decision-maker
selected by or for the parties.
iii. Arbitration produces a final and binding decision and award, (that
can be coercively enforced against the unsuccessful party or its
assets) and is subject only to limited grounds for challenge in
national courts.
iv. Use of impartial adjudicative procedures, which afford each party
the opportunity to present its case.
3. Distinction. In contrast, forum selection agreements provides for resolution
of disputes by litigation in a national court.
4. Alternative Dispute Resolution – or mechanisms for resolution of disputes
outside of national courts.
5. Types.
a. Mediation and Conciliation* – where a mediator or conciliator
simply discusses and negotiated with the parties in an effort to
persuade them to reach a mutually agreeable resolution of the
dispute.
b. Expert Determination – involves a resolution of disputes by an
expert selected by or for the parties and authorized to render
binding decision on issue but unlike arbitration, expert
determination does not necessarily require use of adjudicative
procedures but instead entails only the decision-maker’s own
investigation and use of existing expertise; e.g. accounting, quality
assessment by an industry expert etc.
c. Mini-trial – involves relatively brief presentation of each party’s
case to a judge(s), who are authorized to make an advisory
decision or otherwise encourage settlement.
d. Neutral Evaluation – similar to mini-trial in which a third party
hears the parties’ presentation, on either their dispute or selected
issues, and provides neutral assessment of the strength and
weaknesses of each parties’ position.
e. Baseball or Final Offer Arbitration – refers to a process where , at
the conclusion of the parties’ submission of disputes, each side
submits its final or best offer in a sealed envelope; and the tribunal
is then authorized only to select one party’s offer, rather making an
independent determination. (GB, pp. 4-8)
Thea L. Magallanes International Commercial Arbitration – Prof. Louie T. Ogsimer (2nd Semester of 2014-2015)
*Unfortunately, neither RA 9285 nor Gary Born defines conciliation. But it’s
okay! Father B has an answer for us. Yey!
Conciliation is a more formal technique whereby the parties agree to refer
controversies to an individual, a group of individuals or an institution to make
findings of fact and recommendations. As a rule, parties do not agree to be
bound by recommendations. But this clears the air. (Bernas, 269)
What are the Philippines’ primary sources of international
commercial arbitration?
To emphasize the difference between, I added the governing laws for domestic
arbitration; this does not yet include CIAL or Construction Industry
Arbitration Law, though]
I suggest you just get an idea of these laws first; we’ll get into the specifics in a
bit.
Republic Act No. 9285
Alternative Dispute Resolution Act of 2004
CHAPTER 1 - GENERAL PROVISIONS
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. 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.
Civil Code of the Philippines
Title XIV Compromises and Arbitrations
[aside from the provisions under the Arbitration, the Code also provides
that...]
Page 2 of 17
Article 2043. The provisions of the preceding Chapter upon compromises Explanatory Note by the UNCITRAL secretariat on the 1985 Model
shall also be applicable to arbitrations. (1821a) Law on International Commercial Arbitration as amended in 2006

[The Civil Code also provides that...] 1. (…) The Model Law was amended by UNCITRAL on 7 July 2006, at
the thirty-ninth session of the Commission (see below, paragraphs 4,
Article 2046. The appointment of arbitrators and the procedure for 19, 20, 27, 29 and 53). The General Assembly, in its resolution
arbitration shall be governed by the provisions of such rules of court as 61/33 of 4 December 2006, recommended “that all States give
the Supreme Court shall promulgate. (n) favourable consideration to the enactment of the revised articles
of the UNCITRAL Model Law on International Commercial Arbitration,
or the revised UNCITRAL Model Law on International
[Which brings us to...] Commercial Arbitration, when they enact or revise their laws (…)”.
2. (…)
A.M. No. 07-11-08-SC 3. (…)
4. The revision of the Model Law adopted in 2006 includes article 2 A,
Special Rules of Court on Alternative Dispute Resolution which is designed to facilitate interpretation by reference to
internationally accepted principles and is aimed at promoting a
uniform understanding of the Model Law. Other substantive
RULE 1: GENERAL PROVISIONS amendments to the Model Law relate to the form of the arbitration
agreement and to interim measures. The original 1985 version of the
Rule 1.1. Subject matter and governing rules.-The Special Rules of Court on provision on the form of the arbitration agreement (article 7) was
Alternative Dispute Resolution (the "Special ADR Rules") shall apply to and modelled on the language used in article II (2) of the Convention on
govern the following cases: the Recognition and Enforcement of Foreign Arbitral Awards (New
York, 1958) (“the New York Convention”). The revision of article 7 is
intended to address evolving practice in international trade and
a. Relief on the issue of Existence, Validity, or Enforceability of the Arbitration technological developments. The extensive revision of article 17 on
Agreement; interim measures was considered necessary in light of the fact that
b. Referral to Alternative Dispute Resolution ("ADR"); such measures are increasingly relied upon in the practice of
c. Interim Measures of Protection; international commercial arbitration. The revision also includes an
d. Appointment of Arbitrator; enforcement regime for such measures in recognition of the fact that
e. Challenge to Appointment of Arbitrator; the effectiveness of arbitration frequently depends upon the
f. Termination of Mandate of Arbitrator; possibility of enforcing interim measures. The new provisions are
g. Assistance in Taking Evidence; contained in a new chapter of the Model Law on interim measures
h. Confirmation, Correction or Vacation of Award in Domestic Arbitration; and preliminary orders (chapter IV A).
i. Recognition and Enforcement or Setting Aside of an Award in International
Commercial Arbitration; When is arbitration “commercial?”
j. Recognition and Enforcement of a Foreign Arbitral Award;
k. Confidentiality/Protective Orders; and
l. Deposit and Enforcement of Mediated Settlement Agreements. RA 9285

- SEC. 3. Definition of Terms (g) "Commercial Arbitration" An

From here on, I will be also citing the Model Law. But which Model Law? The
1985 as expressly adopted by the Congress in Sec. 19 of the RA 9285 or the
2006 Revised Version as adopted by the UNCITRAL and as mentioned in the
footnote of the KOGIES Case. For our purposes, I will be quoting both,
particularly where 2006 amends the 1985 version.
Please be guided by excerpts from UNCITRAL’s Explanatory Note in the
Revised Model Law
arbitration is "commercial if it covers matter arising from all
relationships of a commercial nature, whether contractual or not;
- 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

Thea L. Magallanes International Commercial Arbitration – Prof. Louie T. Ogsimer (2nd Semester of 2014-2015) Page 3 of 17
 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.
Model Law
Article 1 (1) Footnote 2 The term “commercial” should be given a wide
interpretation so as to cover matters arising from all relationships of a
commercial nature, whether contractual or not. Relationships of a
commercial nature include, but are not limited to, the following
transactions: any trade transaction for the supply or exchange of goods
or services; distribution agreement; commercial representation or
agency; factoring; leasing; construction of works; consulting;
engineering; licensing; investment; financing; banking; insurance;
exploitation agreement or concession; joint venture and other forms of
industrial or business cooperation; carriage of goods or passengers by
air, sea, rail or road.
New York Convention
Article 1 (3.) When signing, ratifying or acceding to this Convention, or
notifying extension under article X hereof, any State (...) may also declare
that it will apply the Convention only to differences arising out of legal
relationships, whether contractual or not, which are considered as
commercial under the national law of the State making such declaration.
Revised Model Law
(Same as above)
COMMENTS
1. Definition. Neither the New York Convention nor its predecessor the
Geneva Protocol attempted to define 'commercial'. Instead, they left it to
any contracting State which enters the commercial reservation to decide for
itself what is meant by 'commercial'. R&H 1.35
[On the other hand,] the draftsmen of the Model Law considered defining
the word, but gave up the attempt. Instead, they stated in a footnote
[mentioned above]. R&H 1.36
[While] In practice, the term 'commercial' is usually construed widely, so as
Thea L. Magallanes International Commercial Arbitration – Prof. Louie T. Ogsimer (2nd Semester of 2014-2015)
to include all aspects of international business. Id.
2. Importance; Commercial Reservation Declarations of States. [However] It
may be important to know whether the legal relationship out of which the
arbitration arose was or was not a commercial relationship. If, for example,
it becomes necessary to seek recognition or enforcement of a foreign
arbitral award in a State that has adhered to the New York Convention, but
has entered the commercial reservation, it will be necessary to look at the
law of the State concerned to see what definition it adopts of the term
'commercial'. (See New York Convention, Art I (3).) Id.
3. Investment Covered by the term Commercial. t is interesting to see that the
Model Law includes 'investment' within the definition of the term
'commercial', since in practice a separate regime for investment disputes has
tended to develop, particularly where a State or State entity is concerned:
see Ch 8 for investor/State disputes. Id.
When is arbitration “international?”
Model Law
Article 1. Scope of application
(3) An arbitration is international if:
(a) the parties to an arbitration agreement have, at the time of the
conclusion of that agreement, their places of business in different
States; or
(b) one of the following places is situated outside the State in which
the parties have their places of business:
(i) the place of arbitration if determined in, or pursuant to, the
arbitration agreement;
(ii) any place where a substantial part of the obligations of the
commercial relationship is to be performed or the place with
which the subject-matter of the dispute is most closely
connected; or
(c) the parties have expressly agreed that the subject matter of the
arbitration agreement relates to more than one country.
(4) For the purposes of paragraph (3) of this article:
Page 4 of 17
 (a) if a party has more than one place of business, the place of RA 9285 SEC. 32. Law Governing Domestic Arbitration. - Domestic
business is that which has the closest relationship to the arbitration shall continue to be governed by Republic Act No. 876 (...)
arbitration agreement; The term "domestic arbitration" as used herein shall mean an arbitration
(b) if a party does not have a place of business, reference is to be that is not international as defined in Article (3) of the Model Law.
made to his habitual residence.
COMMENTS
Revised Model Law
1. Each State has its own test for determining whether an arbitration award is
(Same as above) 'domestic' or, in the language of the New York Convention, 'foreign'.

New York Convention 2. {Usually the meaning of international may depend on two common criteria
adopted by domestic laws or by institutional rules, that is, based on:}
Article 1 (1). This Convention shall apply to the recognition and a. the nature of the dispute e.g. ICC
enforcement of arbitral awards made in the territory of a State other than b. the parties, this involves reviewing the nationality, place of residence,
the State where the recognition and enforcement of such awards are or place of business of the parties to the arbitration agreement. e.g.
sought, and arising out of differences between persons, whether physical European Convention R&H 1.23 & 5
or legal. It shall also apply to arbitral awards not considered as domestic
awards in the State where their recognition and enforcement are sought.
3. [While] The New York Convention defines 'foreign awards' as awards
which are:
COMMENTS
a. made in the territory of a State other than the State where the
Why is arbitration widely regarded as the preferred means of resolving recognition and enforcement of such awards are sought, and arising out
international commercial disputes? of differences between persons, whether physical or legal; or
b. not considered as domestic awards in the State where their recognition
For the following reasons: and enforcement are sought. [New York Convention, Art 1(1).] R&H
1.29
1. Neutrality
2. Centralized Dispute Resolution 4. [Model Law approached as adopted by the Philippines] the definition
3. Enforceability of Agreements and Awards adopted in the Model Law [Model Law, Art 1(3).] combines the two criteria
4. Commercial Competence and Expertise mentioned earlier.
5. Finality of Decisions
6. Party Autonomy and Procedural Flexibility 1. The first criterion of internationality is related to the parties, arising
7. Cost and Speed from their having places of business in different States. Art 1(3)(a). or
8. Confidentiality or Privacy of Dispute Resolution 2. There is the alternative criterion of the internationality of the dispute
9. Arbitration involving State and State-Entities
itself in that, for instance, the place with which the subject-matter of
International Arbitration provides for a neutral, speedy and expert dispute
the dispute is most closely connected may be foreign to the parties. Art
resolution process, largely subject to the parties’ control, in a single, 1(3)(b)(ii).
centralized forum, with internationally enforceable dispute resolution 3. Finally, there is the element of internationality that may arise from the
agreements and decisions. choice of a foreign place of arbitration or, it would seem, from an
agreement between the parties that the subject-matter of the arbitration
agreement is international. Art 1(3)(b)(i) and (c). R&H 1.30

When is arbitration “domestic?” When is an ad hoc arbitration? An institutional one?

Thea L. Magallanes International Commercial Arbitration – Prof. Louie T. Ogsimer (2nd Semester of 2014-2015) Page 5 of 17
Model Law 1.
Article 2. Definitions and rules of interpretation For the purposes of
this Law:
(a) "arbitration" means any arbitration whether or not administered
by a permanent arbitral institution;
(b) "arbitral tribunal" means a sole arbitrator or a panel of
arbitrators;
(c) "court" ...
(d) where a provision of this Law, except article 28 [Rules applicable
to substance of dispute], leaves the parties free to determine a
certain issue, such freedom includes the right of the parties to
authorize a third party, including an institution, to make that
determination;
(e) where a provision of this Law refers to the fact that the parties
have agreed or that they may agree or in any other way refers to
an agreement of the parties, such agreement includes any
arbitration rules referred to in that agreement;
Revised Model Law
(Same as above)
New York Convention
Article 1(2). The term “arbitral awards” shall include not only awards
made by arbitrators appointed for each case but also those made by
permanent arbitral bodies to which the parties have submitted.
RA 9285
2.
SEC. 26. Meaning of "Appointing Authority.". - "Appointing Authority"
as used in the Model Law shall mean the person or institution named in
the arbitration agreement as the appointing authority; or the regular
arbitration arbitration institution under whose rules the arbitration is
agreed to be conducted. Where the parties have agreed to submit their
dispute to institutional arbitration rules, and unless they have agreed to
a different procedure, they shall be deemed to have agreed to procedure
under such arbitration rules for the selection and appointment of
arbitrators. In ad hoc arbitration, the default appointment of an
arbitrator shall be made by the National President of the Integrated Bar
of the Philippines (IBP) or his duly authorized representative.
COMMENTS
Thea L. Magallanes International Commercial Arbitration – Prof. Louie T. Ogsimer (2nd Semester of 2014-2015)
Ad hoc Arbitration – is conducted pursuant to rules agreed by the parties
themselves or laid down by the arbitral tribunal.
a. Parties to an ad hoc arbitration may establish their own rules of
procedure.
b. Alternatively, and more usually, the parties may agree that the
arbitration will be conducted (without involving an arbitral
institution) according to an established set of rules, such as the
UNCITRAL Rules. This ensures a sensible framework within
which the Tribunal and the parties can devise detailed rules; and it
saves spending time and money in drafting a special set of rules.
R&H 1.153
Advantage. A distinct advantage of an ad hoc arbitration is that it may be
shaped to meet the wishes of the parties and the facts of the particular
dispute. R&H 1.155
For example, there is much to be said in favour of ad hoc arbitration where
the sums at stake are large- and in particular, perhaps, where a State or
State entity is involved, and issues of public policy and sovereignty are
likely to arise, since in an ad hoc arbitration, it is possible for an
experienced tribunal and counsel to devise a procedure which is sensitive to
the particular status and requirements of the State party, whilst remaining
fair to both parties. R&H 1.156
Disadvantage. The principal disadvantage of ad hoc arbitration is that it
depends for its full effectiveness on cooperation between the parties and
their lawyers, backed up by an adequate legal system in the place of
arbitration. It is not difficult to delay arbitral proceedings--for instance
(...).R&H 1.157
Institutional arbitration - is administered by a specialist arbitral institution,
under its own rules of arbitration. R&H 1.158
Advantages.
Automatic incorporation of an established book of rules, which generally
have proved to work well in practice; and which will have undergone
periodic revision in consultation with experienced practitioners, to take
account of new developments in the law and practice of international
arbitration
Most arbitral institutions provide trained staff to administer the arbitration,
that will ensure that the arbitration is run as smoothly as possible, e.g. that
Page 6 of 17
 the arbitral tribunal is appointed, that advance payments are made in respect
of the fees and expenses of the arbitrators, that time limits are kept in mind.
Where the institution itself reviews the arbitral tribunal's award in draft
form, before it is sent to the parties. Such a review, serves as a measure of
'quality control'.
The assistance an arbitral institution can give to the parties and their counsel
in the course of the arbitral proceedings. R&H 1.161-5
Disadvantages. Under some institutional rules, the parties pay a fixed fee in
advance for the 'costs of the arbitration'.
The time limits imposed by institutional rules are often unrealistically short.
A claimant is unlikely to be troubled by this, since a claimant usually has
plenty of time in which to prepare its case before submitting it to the
respondent or to the relevant arbitral institution, and so set the clock
running. However, a respondent is likely to be pressed for time, particularly
in a case (such as a dispute under an international construction contract)
which involves consideration of voluminous documents and where the
claim that is put forward may, in fact, prove to be a whole series of claims
on a series of different grounds. R&H 1.161-7
What is an arbitration agreement? (Compare definitions in different
primary sources and reference)
Model Law
Chapter II.
Arbitration Agreement
Article 7. Definition and form of arbitration agreement
(1) "Arbitration agreement" is an agreement by the parties to submit
to arbitration all or certain disputes which have arisen or which
may arise between them in respect of a defined legal relationship,
whether contractual or not. An arbitration agreement may be in
the form of an arbitration clause in a contract or in the form of a
separate agreement.
Revised Model Law
Thea L. Magallanes International Commercial Arbitration – Prof. Louie T. Ogsimer (2nd Semester of 2014-2015)
Chapter II.
Arbitration Agreement
Option I
Article 7. Definition and form of arbitration agreement (As adopted by
the Commission at its thirty-ninth session, in 2006)
(1) "Arbitration agreement" is an agreement by the parties to submit
to arbitration all or certain disputes which have arisen or which
may arise between them in respect of a defined legal relationship,
whether contractual or not. An arbitration agreement may be in
the form of an arbitration clause in a contract or in the form of a
separate agreement.
Option II
Article 7. Definition of arbitration agreement (As adopted by the
Commission at its thirty-ninth session, in 2006)
"Arbitration agreement" is an agreement by the parties to submit to
arbitration all or certain disputes which have arisen or which may arise
between them in respect of a defined legal relationship, whether
contractual or not.
New York Convention
Article II
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. (...)
COMMENTS
Page 7 of 17
1. According to Gary Born, there are seven (7) jurisdictional requirements for
an agreement to be subject to the New York Convention, namely:
i. An agreement to arbitrate (Arbitration Agreement Requirement);
ii. A difference arising out of commercial relationship (Commercial
Relationship Requirement);
iii. A dispute or difference (Dispute or Differences Requirement);
iv. An agreement to arbitrate differences which have arisen or which may
arise (Existing or Future Disputes Requirement);
v. An agreement in respect to a defined legal relationship, whether
contractual or not (Defined Legal Relationship Requirement);
vi. An international arbitration agreement or alternatively, an agreement
that would produce a foreign or non-domestic award (Foreign or
International Requirement); and
vii. Showing that any reciprocity must be satisfied (Reciprocity
Requirement).
For Reciprocity Requirement, the Convention provides,
New York Convention
Article I (3). When signing, ratifying or acceding to this
Convention, or notifying extension under article X hereof, any
State may on the basis of reciprocity declare that it will apply
the Convention to the recognition and enforcement of awards
made only in the territory of another Contracting State. (...)
Article XIV
A Contracting State shall not be entitled to avail itself of the
present Convention against other Contracting States except to
the extent that it is itself bound to apply the Convention.
{FOR THE PHILIPPINE REPUBLIC:
Octavio L. MALOLES
The Philippine delegation signs ad referendum this Convention
with the reservation that it does so on the basis of reciprocity
and declares that the Philippines will apply the Convention to
the recognition and enforcement of awards made only in the
territory of another Contracting State pursuant to article I,
paragraph 3, of the Convention.}
Thea L. Magallanes International Commercial Arbitration – Prof. Louie T. Ogsimer (2nd Semester of 2014-2015)
Article I (3) permits Contracting States {e.g. the Philippines} to make
reciprocity reservations, thus undertaking the Convention’s
obligations only towards other Contracting States. In addition,
Article XIV contains a separate more general reciprocity provision,
limiting a Contracting State’s rights under the Convention only to
those {rights, the Contracting State’s itself is bound to apply. GB p.
47
Principles of the Arbitration Agreement: What is the Separability
Presumption?
Special ADR Rules
Rule 2.2. (B) 3rd paragraph. 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.
Model Law
CHAPTER IV. JURISDICTION OF ARBITRAL TRIBUNAL
Article 16. Competence of arbitral tribunal to rule on its
jurisdiction
(1) The arbitral tribunal may rule on its own jurisdiction, including
any objections with respect to the existence or validity of the
arbitration agreement. For that purpose, an arbitration clause
which forms part of a contract shall be treated as an agreement
independent of the other terms of the contract. A decision by the
arbitral tribunal that the contract is null and void shall not entail
ipso jure the invalidity of the arbitration clause.
Revised Model Law same as above
COMMENTS
Separability Presumption. – provides that an arbitration agreement, even
though included in and related closely to an underlying contract award, is
presumptively a separate autonomous agreement. {This is adopted in the Phil.
Special ADR Rules}
Page 8 of 17
 Ratio. The parties’ agreement to arbitrate consists of promises that are
independent from the underlying contract; and for practicality’s sake, the
presumption insulates the arbitration agreement and arbitrator’s jurisdiction
from challenges to the underlying contract.
Consequences. The vital consequences of the separability presumption are:
i. Invalidity of the underlying contract does not necessarily invalidate the
arbitration agreement and vice-versa;
ii. Law governing the underlying contract is not necessarily the same as the
law governing the arbitration agreement; and
iii. Different form requirements for the underlying contract and the arbitration
agreement.
Illustration. X from State Y, and A from State B entered into a JVA with an
agreement to arbitrate in State C. X claims damages , alleging breach of the
JVA for non-performance of A’s obligations. Notwithstanding the termination
of the JVA, the separability presumption of the arbitration agreement subsists
despite the JVA’s termination.
Principles of the Arbitration Agreement:
What is the Competence-Competence Doctrine
Model Law
CHAPTER IV. JURISDICTION OF ARBITRAL TRIBUNAL
Article 16. Competence of arbitral tribunal to rule on its jurisdiction
The arbitral tribunal may rule on its own jurisdiction, including any
objections with respect to the existence or validity of the arbitration
agreement. (...)
Special ADR Rules
Rule 2.2. (B) 2nd 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.
COMMENT
Thea L. Magallanes International Commercial Arbitration – Prof. Louie T. Ogsimer (2nd Semester of 2014-2015)
Definition. In practice, the competence-competence doctrine means that if a
party argues against the arbitral tribunal that it lacks jurisdiction (i.e. because
the agreement to arbitrate is invalid, the tribunal {nonetheless} has the
authority to consider and rule upon such jurisdictional challenge, subject at
least a measure of subsequent judicial review.
Principles of the Arbitration Agreement:
What is the Competence-Competence Doctrine
Allocation of Competence to Decide Jurisdictional Disputes
between the Court and the Tribunal.
Model Law
Article 8. Arbitration agreement and substantive claim before court
(1) A court before which an action is brought in a matter which is
the subject of an arbitration agreement shall, if a party so
requests not later than when submitting his first statement on
the substance of the dispute, refer the parties to arbitration
unless it finds that the agreement is null and void, inoperative
or incapable of being performed.
Special ADR Rules
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 has the competence or jurisdiction
to decide a dispute submitted to it for decision, including any objection
with respect to the existence or validity of the arbitration agreement.
When a court is asked to rule upon issue/s affecting the competence or
jurisdiction of an arbitral tribunal in a dispute brought before it, either
before or after the arbitral tribunal is constituted, the court must
exercise judicial restraint and defer to the competence or jurisdiction of
the arbitral tribunal by allowing the arbitral tribunal the first
opportunity to rule upon such issues.
Where the court is asked to make a determination of whether the
arbitration agreement is null and void, inoperative or incapable of being
performed, under this policy of judicial restraint, the court must make
no more than a prima facie determination of that issue.
Page 9 of 17
Unless the court, pursuant to such prima facie determination, concludes
that the arbitration agreement is null and void, inoperative or incapable
of being performed, the court must suspend the action before it and
refer the parties to arbitration pursuant to the arbitration agreement.
has arisen, it is possible to spell out in some detail what the dispute is about and
how the parties propose to deal with it. R &H 1.39
What are the essential elements of an arbitration agreement?

COMMENTS
Art. 1318. There is no contract unless the following requisites concur:
There are two (2) common approaches to the allocation of competence problem,
namely:
(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of
1. Prima Facie Determination - if a jurisdictional objection is raised in court, the contract;
the court will refer the parties to arbitration unless the putative arbitration (3) Cause of the obligation which is established.
agreement is manifestly null.... See 3rd Paragraph of Rule 2.4 (1261)

2. Interlocutory Judicial Determination - if a party seeks to refer claim, SECTION 1. - Consent

asserted in litigation to arbitration, a the court will ordinarily make a final
decision whether the claim is subject to a valid arbitration agreement, if the
court finds the agreement to be invalid, the parties will instead allow
litigation to proceed. (This is followed in the US)
Born also observes that the plain meaning of Article 8(1) of the Model Law
suggests that that court’s mission includes making a final finding whether the
agreement is valid.
Art. 1319. Consent is manifested by the meeting of the offer and the
acceptance upon the thing and the cause which are to constitute the
contract. The offer must be certain and the acceptance absolute. A
qualified acceptance constitutes a counter-offer.
According to Gary Born, the critical elements of international agreement
are:

But several jurisdictions like ours adopt the prima facie inquire approach.... See 1. Agreement to arbitrate
3rd Paragraph of Rule 2.4 2. Scope of disputes
3. Applicable arbitration rules
4. Seat of arbitration or arbitral seat
5. Arbitrators
What are the types of an arbitration agreement? Arbitration Clause and
Submission Agreement  Number
 Qualifications
 Procedure for appointment or selection
 Replacement

COMMENTS
6. Language of Arbitration
7. Governing Law
An arbitration clause (or clause compromissoire, as it is known in the civil law)
relates to disputes that might arise between the parties at some time in the future.  Governing Law of the Contract/Merits of Parties' Dispute(s)
It will generally be short and to the point.  Governing Law of Arbitration Agreements
 Procedural Law Governing the Arbitral Proceeding. (Syllabus)
While the submission agreement is made after a dispute has actually arisen; it
will usually be more detailed than an arbitration clause--because once a dispute According to Redfern & Hunter, the key elements of an international agreement
are:

Thea L. Magallanes International Commercial Arbitration – Prof. Louie T. Ogsimer (2nd Semester of 2014-2015) Page 10 of 17
1. the agreement to arbitrate;
2. the need for a dispute;
3. starting an arbitration: the appointment of an arbitral tribunal;
4. the arbitral proceedings;
5. the decision of the tribunal;
6. enforcement of the award. R &H 1.37
COMMENTS
1. The foundation stone of modern international arbitration is an agreement by
the parties to submit to arbitration any disputes or differences between
them. Before there can be a valid arbitration, there must first be a valid
agreement to arbitrate. This is recognised both by national laws and by
international treaties.
For example, under both the New York Convention [The New York
Convention, Art V.] and the Model Law, [The Model Law, Art 35.]
recognition and enforcement of an arbitral award may be refused if the
parties to the arbitration agreement were under some incapacity, or if the
agreement was not valid under its own governing law. [New York
Convention, Art V(1)(a); Model Law Art 36(1)(a)(i).] R &H 1.38
2. The arbitration agreement fulfils several important functions.
a. In the present context, the most important function is that of making it
plain that the parties have consented to resolve their disputes by
arbitration. This consent is essential. Without it, there can be no valid
arbitration. R &H 1.52
Once parties have validly given their consent to arbitration, that
consent cannot be unilaterally withdrawn. Even if the arbitration
agreement forms part of the original contract between the parties and
that contract comes to an end, the obligation to arbitrate survives. It is
an independent obligation separable from the rest of the contract {take
note of the doctrine of autonomy of the arbitration agreement = to be
discussed} R &H 1.53
In this connection, take note of the ruling in Korea Technologies Co.,
Ltd. v. Lerma 542 SCRA 1
this Court held in University of the Philippines v. De Los
Angeles and reiterated in succeeding cases, that the act of
treating a contract as rescinded on account of infractions by
Thea L. Magallanes International Commercial Arbitration – Prof. Louie T. Ogsimer (2nd Semester of 2014-2015)
the other contracting party is valid albeit provisional as it can
be judicially assailed, is not applicable to the instant case on
account of a valid stipulation on arbitration. Where an
arbitration clause in a contract is availing, neither of the
parties can unilaterally treat the contract as rescinded
since whatever infractions or breaches by a party or
differences arising from the contract must be brought first
and resolved by arbitration, and not through an
extrajudicial rescission or judicial action.
b. An arbitration agreement does not merely serve to establish the
obligation to arbitrate. It is also a basic source of the powers of the
arbitral tribunal. R &H 1.57
c. Finally, it is the arbitration agreement that establishes the jurisdiction
of the arbitral tribunal. R &H 1.5
What is the scope of the arbitration agreement?
COMMENTS
1. Critical to any arbitration clause it is scope, that is, the categories of the
dispute that will be subject to arbitration.
2. As a general rule, parties draft arbitration clauses broadly to cover all
disputes having any connection with the parties’ dealings. But the parties
may exclude disputes that one party does not want submitted to arbitration
p. 36.
Is there a prescribed form for an arbitration agreement to be valid?
For International
Model Law
Article 7. Definition and form of arbitration agreement
(1) "Arbitration agreement" (...)
(2) The arbitration agreement shall be in writing. An agreement is in
writing if it is contained in a document signed by the parties or in
an exchange of letters, telex, telegrams or other means of
telecommunication which provide a record of the agreement, or in
Page 11 of 17
 an exchange of statements of claim and defence in which the
existence of an agreement is alleged by one party and not denied by
another. The reference in a contract to a document containing an
arbitration clause constitutes an arbitration agreement provided
that the contract is in writing and the reference is such as to make
that clause part of the contract.
Revised Model Law
Chapter II.
Arbitration Agreement
Option I
Article 7.Definition and form of arbitration agreement (As adopted by
the Commission at its thirty-ninth session, in 2006)
(1) "Arbitration agreement" (...)
(2) The arbitration agreement shall be in writing.
(3) An arbitration agreement is in writing if its content is recorded in
any form, whether or not the arbitration agreement or contract
has been concluded orally, by conduct, or by other means.
(4) The requirement that an arbitration agreement be in writing is
met by an electronic communication if the information contained
therein is accessible so as to be useable for subsequent reference;
"electronic communication" means any communication that the
parties make by means of data messages; "data message" means
information generated, sent, received or stored by electronic,
magnetic, optical or similar means, including, but not limited to,
electronic data interchange (EDI), electronic mail, telegram, telex
or telecopy.
(5) Furthermore, an arbitration agreement is in writing if it is
contained in an exchange of statements of claim and defence in
which the existence of an agreement is alleged by one party and
not denied by the other.
(6) The reference in a contract to any document containing an
arbitration clause constitutes an arbitration agreement in writing,
provided that the reference is such as to make that clause part of
the contract.
New York Convention
Article II
Thea L. Magallanes International Commercial Arbitration – Prof. Louie T. Ogsimer (2nd Semester of 2014-2015)
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.
COMMENTS
For Domestic
RA 876 The Arbitration Law
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.
BF Corporation v. CA 288 SCRA 267
Under RA 876, [for domestic arbitration] the formal requirements of an
agreement to arbitrate are therefore the following:
(a) it must be in writing and
(b) it must be subscribed by the parties or their representatives.
To “subscribe” means to write underneath, as one’s name; to sign at the end of a
document. That word may sometimes be construed to mean to give consent to or
to attest.
A contract need not be contained in a single writing. It may be collected from
several different writings which do not conflict with each other and which, when
connected, show the parties, subject matter, terms and consideration, as in
contracts entered into by correspondence.
A contract may be encompassed in several instruments even though every
instrument is not signed by the parties, since it is sufficient if the unsigned
instruments are clearly identified or referred to and made part of the signed
instrument or instruments. Similarly, a written agreement of which there are
two copies, one signed by each of the parties, is binding on both to the same
Page 12 of 17
extent as though there had been only one copy of the agreement and both had
signed it.
What are the default rules in an arbitration agreement? If the
parties fail to stipulate how may they do away with the default
rules?
Seat of Arbitration
RA 9285
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.
But outside Philippine jurisdiction the general rule is...
Model Law
Article 20. Place of arbitration
(2) The parties are free to agree on the place of arbitration. Failing such
agreement, the place of arbitration shall be determined by the
arbitral tribunal having regard to the circumstances of the case,
including the convenience of the parties.
(3) Notwithstanding the provisions of paragraph (1) of this article, 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.
Revised Model Law
(Same as above)
Arbitrators
Thea L. Magallanes International Commercial Arbitration – Prof. Louie T. Ogsimer (2nd Semester of 2014-2015)
RA 9285 SEC. 26. Meaning of "Appointing Authority."– (...). In ad hoc
arbitration, the default appointment of an arbitrator shall be made by
the National President of the Integrated Bar of the Philippines (IBP) or his
duly authorized representative.
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.
Model Law
Chapter III.
Composition of Arbitral Tribunal
Article 10. Number of arbitrators
(1) The parties are free to determine the number of arbitrators.
(2) Failing such determination, the number of arbitrators shall be
three.
Article 11. Appointment of arbitrators
(1) No person shall be precluded by reason of his nationality from
acting as an arbitrator, unless otherwise agreed by the parties.
(2) The parties are free to agree on a procedure of appointing the
arbitrator or arbitrators, subject to the provisions of paragraphs
(4) and (5) of this article.
(3) Failing such agreement,
(a) in an arbitration with three arbitrators, each party shall appoint
one arbitrator, and the two arbitrators thus appointed shall
appoint the third arbitrator; if a party fails to appoint the
arbitrator within thirty (30) days of receipt of a request to do so
from the other party, or if the two arbitrators fail to agree on the
third arbitrator within thirty days of their appointment, the
appointment shall be made, upon request of a party, by the court
or other authority specified in article 6;
Page 13 of 17
 (b) in an arbitration with a sole arbitrator, if the parties are unable to
agree on the arbitrator, he shall be appointed, upon request of a
party, by the court or other authority specified in article 61.
(4) Where, under an appointment procedure agreed upon by the
parties,
(a) a party fails to act as required under such procedure, or
(b) the parties, or two arbitrators, are unable to reach an
agreement expected of them under such procedure, or
(c) a third party, including an institution, fails to perform any
function entrusted to it under such procedure,
any party may request the court or other authority specified in
article 6 to take the necessary measure, unless the agreement on
the appointment procedure provides other means for securing the
appointment.
(5) A decision on a matter entrusted by paragraph (3) or (4) of this
article to the court or other authority specified in article 6 shall be
subject to no appeal. The court or other authority, in appointing
an arbitrator, shall have due regard to any qualifications required
of the arbitrator by the agreement of the parties and to such
considerations as are likely to secure the appointment of an
independent and impartial arbitrator and, in the case of a sole or
third arbitrator, shall take into account as well the advisability of
appointing an arbitrator of a nationality other than those of the
parties.
Article 13. Challenge procedure
(1) The parties are free to agree on a procedure for challenging an
arbitrator, subject to the provisions of paragraph (3) of this article.
(2) Failing such agreement, a party who intends to challenge an
arbitrator shall, within fifteen (15) days after becoming aware of the
constitution of the arbitral tribunal or after becoming aware of any
1
Article 6.
Court or other authority for certain functions of arbitration assistance and supervision
The functions referred to in articles 11(3), 11(4), 13(3), 14, 16(3) and 34(2) shall be performed by ... [Each State
enacting this model law specifies the court, courts or, where referred to therein, other authority competent to
perform these functions.]
RA 9285 Sec. 3 (k) "Court" as referred to in Article 6 of the Model Law shall mean a Regional Trial Court;
Thea L. Magallanes International Commercial Arbitration – Prof. Louie T. Ogsimer (2nd Semester of 2014-2015)
circumstance referred to in article 12(2), send a written statement of
the reasons for the challenge to the arbitral tribunal. Unless the
challenged arbitrator withdraws from his office or the other party
agrees to the challenge, the arbitral tribunal shall decide on the
challenge.
(3) If a challenge under any procedure agreed upon by the parties or
under the procedure of paragraph (2) of this article is not successful,
the challenging party may request, within thirty days after having
received notice of the decision rejecting the challenge, the court or
other authority specified in article 6 to decide on the challenge,
which decision shall be subject to no appeal; while such a request is
pending, the arbitral tribunal, including the challenged arbitrator,
may continue the arbitral proceedings and make an award.
Article 14. Failure or impossibility to act
(1) If an arbitrator becomes de jure or de facto unable to perform his
functions or for other reasons fails to act without undue delay, his
mandate terminates if he withdraws from his office or if the parties
agree on the termination. Otherwise, if a controversy remains
concerning any of these grounds, any party may request the court or
other authority specified in article 6 to decide on the termination of
the mandate, which decision shall be subject to no appeal.
(2) If, under this article or article 13(2), an arbitrator withdraws from
his office or a party agrees to the termination of the mandate of an
arbitrator, this does not imply acceptance of the validity of any
ground referred to in this article or article 12(2).
Article 15.Appointment of substitute arbitrator
Where the mandate of an arbitrator terminates under article 13 or 14 or
because of his withdrawal from office for any other reason or because of
the revocation of his mandate by agreement of the parties or in any other
case of termination of his mandate, a substitute arbitrator shall be
appointed according to the rules that were applicable to the appointment
of the arbitrator being replaced.
Revised Model Law
(Same as above)
Language of Arbitration
RA 9285
Page 14 of 17
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.
Model Law
Article 22. Language
(1) The parties are free to agree on the language or languages to be
used in the arbitral proceedings. Failing such agreement, the
arbitral tribunal shall determine the 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.
(2) 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 by the arbitral
tribunal.
Revised Model Law
Article 17 Language
1. Subject to an agreement by the parties, the arbitral tribunal shall,
promptly after its appointment, determine the language or
languages to be used in the proceedings. This determination shall
apply to the statement of claim, the statement of defence, and any
further written statements and, if oral hearings take place, to the
language or languages to be used in such hearings.
2. The arbitral tribunal may order that any documents annexed to the
statement of claim or statement of defence, and any supplementary
documents or exhibits submitted in the course of the proceedings,
delivered in their original language, shall be accompanied by a
Thea L. Magallanes International Commercial Arbitration – Prof. Louie T. Ogsimer (2nd Semester of 2014-2015)
translation into the language or languages agreed upon by the
parties or determined by the arbitral tribunal
What are Other Significant Clauses in an Arbitration Agreement
- Sharing of costs
- Discovery
- Currency of awards and interests
- Monetary thresholds
- Bifurcation of proceedings
- Finality of award
- Confidentiality. (Syllabus)
How is an arbitration agreement interpreted?
RA 9285 SEC. 25. Interpretation of the Act. - In interpreting the Act,
the court shall have due regard to the policy of the law in favor of
arbitration. Where action is commenced by or against multiple parties,
one or more of whom are parties who are bound by the arbitration
agreement although the civil action may continue as to those who are not
bound by such arbitration agreement.
In line with this, RA 9285 also provides:
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.
What are the effects/consequences of an arbitration agreement?
Model Law
Page 15 of 17
Article 5. Extent of court intervention In matters governed by this
Law, no court shall intervene except where so provided in this Law.
Article 8. Arbitration agreement and substantive claim before court
(1) A court before which an action is brought in a matter which is the
subject of an arbitration agreement shall, if a party so requests not
later than when submitting his first statement on the substance of
the dispute, refer the parties to arbitration unless it finds that the
agreement is null and void, inoperative or incapable of being
performed.
(2) Where an action referred to in paragraph (1) of this article has been
brought, arbitral proceedings may nevertheless be commenced or
continued, and an award may be made, while the issue is pending
before the court.
Article 9. Arbitration agreement and interim measures by court It is not
incompatible with an arbitration agreement for a party to request, before
or during arbitral proceedings, from a court an interim measure of
protection and for a court to grant such measure.
Revised Model Law (same)
- Source of Obligation: Article II (1) of New York Convention
requiring Contracting States to recognize agreements by which
parties have undertaken to submit to arbitration specified
disputes; Article 7 (!) of Model Law defines an arbitration
agreement as an agreement by the parties submit to arbitration
all or certain disputes, while Article 8 requires that agreements
to arbitrate be enforced by referring the parties to arbitration
{See also Sec. 24, RA 9285}
- Remedies see above
3. The negative effect: the obligation not to litigate
- Remedies for breach:
i. Stay or Dismissal of Litigation or in the US, Antisuit
Injunction;
ii. Damages for Breach of Obligation not to litigate;
iii. Non-recognition of Judgments
What are arbitrable disputes?
The Model Law and the New York Convention does not enumerate any dispute
that may be arbitrated, rather both defer the power to determine what
disputes may not be arbitrated to the country where the award is sought [See
also previous discussion on when is arbitration commercial.]

New York Convention Model Law

Article II 3. The court of a Contracting State, when seized of an action in CHAPTER VII.
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, RECOURSE AGAINST AWARD
refer the parties to arbitration, unless it finds that the said agreement is
null and void, inoperative or incapable of being performed. Article 34. Application for setting aside as exclusive recourse against
arbitral award.
RA 9285 SEC. 24. Referral to Arbitration. - A court before which an
action is brought in a matter which is the subject matter of an (1) …
arbitration agreement shall, if at least one party so requests not later
(2) An arbitral award may be set aside by the court specified in
that the pre-trial conference, or upon the request of both parties
article 6 only if:
thereafter, refer the parties to arbitration unless it finds that the
arbitration agreement is null and void, inoperative or incapable of being
(a)
performed.
(b) the court finds that:
(i) the subject-matter of the dispute is not capable of
COMMENTS settlement by arbitration under the law of this
State; or
1. A valid arbitration agreement produces important legal effects both (ii) the award is in conflict with the public policy of
this State.
positive and negative.
2. The positive effect: the obligation to arbitrate in good faith.
New York Convention

Thea L. Magallanes International Commercial Arbitration – Prof. Louie T. Ogsimer (2nd Semester of 2014-2015) Page 16 of 17
Article II (6) Future legitime. (1814a)

1. Each Contracting State shall recognize an agreement in writing under Who determines arbitrability?
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.

Article V

1. (...)

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.

What disputes cannot be arbitrated?

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.

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;

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