ATTERilTTTIVE DTSFU.

:rE

e,F
IARB|TRATTON, MED|ATTON AND CONC|LIAT|ON
UNDER REPUBLTC ACT NO. 92e51

2005 Edition

REYNALDO B. ARALAR
 TABLE OF CONTENTS

REPUBLIC ACT NO. 9285

AN ACT TO INSTITUTIONALIZE THE USE OF AN

ALTERNATIVE DISPUTE RESOLUTION SYSTEM IN THE
PHILIPPINES AND TO ESTABLISH THE OFFICE FOR
ALTERNATIVE DISPUTE RESOLUTION, AND FOR OTHER
PURPOSES

CHAPTER 1- GENERAL PROVISION

Section 7. Title 1

Section 2. Declsration of Policy 1

The Alternative Dispute Resolution Act of 2004 2
Party autonomy in dispute resolution explained ......... 2
How the State shall achieve alternative dispute
resolution 2
The case of Magellan Capital Management
Corporation vs. Zosa (355 SCRA 1,57).......,........... 3

Section 3. Definition of Terms B

Alternative Dispute Resolution System defined 12
Arbitration defined and explained ........... .. 13
ADR provider defined 13
Commercial arbitration defined 1,4
Arbitrator defined 1.4

Section 4. Electronic Signatttres in Global and

E-Commerce Act .......... 1.4
Effect of Signatures in Global and E-Commerce Act.... 1,4
Electronic Signature defined 1,4

Section 5. Liability of ADR ProaiderslPractitioners 15

Liability of ADR providers / practitioners ...................... 15
 St't'tiorr l), ('lraptt.r r), lJook l, l{evist.rl
3l.t(
St't'tiorr 15. l'ltt ol Mtlitliot ................. 26
Aci rn i rr istra ti ve Code
15 l'l.tt't' of ntt'd iation 26

Section 6. Exception to the Apptication of this Act ...

15 Scctiorr 16. L)ffcct ofAgreement to Submit Dispute
Non-applicability of Republic Act No. 92g5 1,6 to Me dia t ion under lns t itutional Rul es ............ 26
"Model Law" on mediation .............. 26
CHAPTER 2 _ MEDIATION Effect of submission to mediation by institution.......... 27
Section 7. Scope
L7 Section 17. Enforcement of Mediated Settlement Agreements ... 27
Scope of Chapter 2, Republic Act No. 92gS
L7 Deposit of mediated settlement agreement ................... 28
Mediation defined 77
Mediation-Arbitration defined Enforcement if mediator is sole arbitrator 28
L7 Award defined 28
Section 8. Application and Interpretation Convention state defined 29
77
Considerations in applying and construing The case of Metro ConstructiorL Inc. vs. Chatham
mediation provisions Properties, Inc. (365 SCRA 697)........... 29
18
Integrity defined 18
CHAPTER 3 - OTHER ADR FORMS
Section 9. Confidentiality of lnformation
18
Confidentiality defined and explained Section 78. Referral of Dispute to Other ADR Forms 36
79
Privileged communication defined ...... Other forms of ADR defined 36
20

Section 70. Waiaer of Confidentiality CHAPTER 4 - INTERNATIONAL COMMERCIAL

20
Waiver defined and waiver of confidentiality ARBITRATION
explained 21
Section 79. Adoption of the Model Law on
Section 77. Exceptions to priailege Int er nat ional Commercial Arb itration ............. J/
21.
Instances when there is no privilege against "Model Law" on international commercial
disclosure mediation 37
23

Section 12. Prohibited Mediator REorts Section 20.lnterpretation of Model Law 3/

23 "Model Act" defined and distinguished from
Prohibited mediation r"po.ir .....
23 "Model Law" 38
Section 13. Mediator's Disclosure and Conflict of Interest,....... How to interpret "Model Law" 38
24
Mediator's disclosure and confl ict of interest ............ -. - 24 Section 2'1.. Commercial Arbitr ation ............. 38
Commercial arbitration defined 39
Section '1.4. Participation in Mediation
25
Designation of lawyer or non-lawyer to assist in Section 22. Legal Representation in lnternstional
mediation 25 Arbitration 39
Rescind and rescission defined and explained Representation in international arbitration 39
25

vi vii
 Sct'tiorr 23. ('ott.l'idutIidiIy oI ArliInrtiott 1,,"(t(,((tIilrs............ 3e Ayltlitbililry lo l)ortrtslir Arlrilruliotr
St'r'lirrrr .l.l. 5tt
llule on confidentitrlity of arbitratior-r Applit'ability ol'Modcl l,aw arrd l{epublic Act
proceedings ................. 40 No. 92t15 to domestic arbitration 58

Section 24. Referral to Arbitration .............. 40 CHAPTER 6 _ ARBITRATION OF

Court referral to arbitration proceedings........... 41
CONSTRUCTION DISPUTES
No referral of arbitration allowed 41
Scction 34. Arbitration of Construction Disputes:
Goaerning Laut ............ 59
Section 25.Interpretation of the Act 41
Interpretation of Republic Act No. 9285 Governing law on construction arbitration
41.
disputes.... 59
The case of Philrock, Inc. vs. Construction Industry
Effect of decisions of voluntary arbitrators ................. 59
Arbitration Commission (359 SCRA 633) 42
Section 35. Coaerage of the Law 59
Section 26. Meaning of "Appointing Authority', .......... 51 Matters included in exclusive original jurisdiction
Appointing authority defined and explained ............. 51 of CIAC 60

Section 27.IMat Functions may be Performed by Section 36. Authority to Act as Mediator or Arbitrator 60
Appointing Authority 51 Authority defined 6-1.

Function defined 52
Section 37. Appointment of Foreign Arbitrator 61.

Section 28. Grant of Interim Measure of protection International party defined 6L

52
Court may grant interim measure Who shall appoint foreign mediator... 62
54
Interim defined 54 Section 38. Applicability to Construction Arbitration .............. 62
When arbitral tribunal deemed constituted 54 Applicability to construction arbitration 62
Construction Industry Arbitration Commission
Section 29. Further Authority for Arbitrator to
(CIAC) jurisdiction 62
Grant Interim Measure of protection 54
Interim measures of protection by arbitrator .............. 55 Section 39. Court to Dismiss Case Inaolaing a
Construction Dispute 63
Section 30. Place of Arbitration 55 General rule is dismissal of construction arbitration
Rules on place of arbitration 55 dispute 63

Section 31. Language of the Arbitration 56 CHAPTER 7 - IUDTCTAL REVTEW OF

Language or languages of arbitration ......... 56 ARBITRAL AYARDS

CHAPTER 5 - DOMESTIC ARBITRATION A. DOMESTIC AWARDS

Section 32. Law Goaerning Domestic Arbitration Section 40. Confirmation of Award ............. 64
58
Domestic Arbitration defined Section 22, Republic Act No. 876 governs
58
domestic awards 64

vlll 1X
 st't'liorr 23. ('rtrtf'ilttttiulirtl o.l' Arbitruliott I)rot,t,r,tlit,ts.... St't't iorr'.1i. iufu il i I y I o I )orttt'sl ic Arbi I ru I iot, ........
A1t1il 5n
Itulc orr confidentiality of arbitration Applit'ability of Modcl l,arw and ltepublic Act
proceedings No. 92tt5 to domestic arbitration

Section 2a. Referral to Arbitration ......... 40 CHAPTER 6 - ARBITRATION OF

Court referral to arbitration proceedings 47 CONSTRUCTION DISPUTES
No referral of arbitration allowed 41
Section 34. Arbitration of Construction Disputes:
Section 25. lnterpretation of the Act Goaerning Law
47
Interpretation of Republic Act No. 92g5 Governing law on construction arbitration
41
The case of Philrock, Inc. vs. Construction Industry disputes 59
Arbitration Commission (359 SCRA 6gg).......... Effect of decisions of voluntary arbitrators ....... 59

Section 35. Coaerage of the Law

Section 26. Meaning of "Appointing Authority,, ............ 51 Matters inclu ded in exclusive original jurisdiction
Appointing authority defined and explained 51 of CIAC 60

Section 27.IMat Functions may be performed by Section 36. Authority to Act as Mediator or Arbitrator 60
Appointing Authority ........ 51 Authority defined 67
Function defined 52
Section 37. Appointment of Foreign Arbitrator ......... 61
section 28. Grant of Interim Measure of protection International party defined 61,
52
Court may grant interim measure Who shall appoint foreign mediator............. 62
54
Interim defined 54 Section 38. Applicability to Construction Arbitr ation .............. 62
When arbitral tribunal deemed constituted 54 Applicability to construction arbitration ......... 52
section2eFirtheril:*::;:lf#,ir;:,iiiii,nr, Construction Industry Arbitration Commission
(CIAC) jurisdiction.........
54
Interim measures of protection by arbitrator 55 Section 39. Court to Dismiss Case Inaolaing a
Construction Dispute
Section 30. Place of Arbitration 55 General rule is dismissal of construction arbitration
Rules on place of arbitration 55 dispute 63

Section 37. Language of the Arbitration 56 CHAPTER 7 - IUDICIAL REVIEW OF

Language or languages of arbitration 56 ARBITRAL AI^ARDS

CHAPTER 5 - DOMESTIC ARBITRATION A. DOMESTIC AWARDS

Section 32. Law Goaerning Domestic Arbitration Section 40. Confirmation of Award 64
58
Domestic Arbitration defined Section 22, Republic Act No. 876 governs
58
domestic awards ............. 64

v111 1X
 l;irral arrcl cxccutory judgment explairrecl ......... 65 Set'tiorr 47. Vnrut utttl jurisdit'ttott .........
Corrfirmation defined 65 Vt,r'rut'and jurisdiction for recognition etc. of an
Iru nction of ordering execution of judgment ............... 66 arbitral award 77
The case of Del Monte Corporation-USA vs. Venue and jurisdiction distinguished 78
Court of Appeals (351 SCRA 373)
Section 48. Notice of Proceeding to Parties ............ 78
Section 41. Vacation award ............ 71 Notice defined and explained 78
Section 25, Republic Act No. 876 on grounds for Notice of proceedings to parties............ 79
vacating domestic awards ............ 77
Methods of vacating an award ........... 71 CHAPTER 8 - MISCETLANEOUS
PROVISIONS
B. FOREIGN ARBITRAL AWARDS
Section a9. Office for Alternatiae Dispute Resolution ..............
Section a2. Application of the New York Conaention ............... 72 Office of Alternative Dispute Resolution
New York Convention defined 72 established ..........
Application of the New York Convention ........ 73 Objectives of the Office for Alternative Dispute
Vacate defined and explained 73 Resolution..........

Section 43. Recognition and Enforcement of Foreign Section 50. Powers and Functions of the Office
Arbitral '\wards not Coaered by the
for Alternatiae Dispute Resolution ................ 81
New York Conaention .......... 73 Power defined 81
Recognition defined 74 Functions of the Office of Alternative Dispute
Enforcement defined 74 Resolution explained 81
Recognition and enforcement of non-New Formulation of standards for ADR training 82
York Convention awards Certification defined 82
Comity and "ju dicial comity" defined and
explained 74 Section 57. Appropriations 82
lleciprocity defined and explained 75 Appropriation defined 82
Appropriation for Republic Act No. 9285 83
St't'lion 44. Foreign Arbitral Award not Foreign
ludgment ............ 75 Section 52. lmplementing Rules and Regulations (/RR) 83
liffect of a foreign arbitral award............ 75 Rules and regulations defined and explained 84
Functus oficio defined 84
St'ction 45. Rejection of a Foreign Arbitral Award 76
I low foreign arbitral award rejected 76
Section 53. Applicability of the Katarungang Pambarangay ....
Katarungang Pambarangay provisions not
Scction 46. Appeal from Court Decisions on repealed
Arbitral Autards 76
Appeal defined 77 Section 54. Repealing clause .......... 85
Appeal from decisions on arbitral awards 77 Repealing clause defined 85

XI
Section 55. Separability clause
Separability clause defined ...........
Separability clause in Republic Act No. 9285
Section 56. Effectiuity
APPENDICES
Appendix " A" - Republic Act No. 9285 (An Act to
Institutionalize the Use of an
Alternative Dispute Resolution
System in the Philippines and to
Establish the Office for Alternative
Dispute Resolution, and For
Other Purposes) ..........
Appendix "8" - Executive Order No. 1008
(Creating an Arbitration
Machinery in the Construction
Industry of the Philippines)
Appendix "C" - Republic Act No. 876 (An Act to
Authorize the Making of
Arbitration and Submission
Agreements, to Provide for the
Appointment of Arbitrators and
the Procedure for Arbitration
in Civil Controversies, and
For Other Purposes) .........
Appendix "D" Republic Act No. 8792 (An Act
- and declog court dockets. As such, the State shall
Providing for the Recognition
and Use of Electronic Commercial
and Non-Commercial Transactions,
Penalties for Unlawful Use thereof,
and For Other Purposes) ..........
Appendix "E" - Rules on Electronic Evidence .................
Appendix "F" - Uncitral Model Law on International
Commercial Arbitration ........
xil
85
85
85
REPUBLIC ACT NO. 9285
AN ACT TO INSTITUTIONALIZE THE USE OF AN
ALTERNATIVE DISPUTE RESOLUTION SYSTEM IN
THE PHILIPPINES AND TO ESTABLISH THE OFFICE
FOR ALTERNATIVE DISPUTE RESOLUTION, AND FOR
OTHER PURPOSES
87
CHAPTER 1
GENERAL PROVISION
105
SECTION 1. fifle. This Act shall be known as
-
the "Alternative Dispute Resolution Act of 2004."
SEC. 2. Declaration of Policy.
- It ispromote
declared the policy of the State to actively
hereby
party autonomy in the resolution of disputes or the
freedom of the parties to make their own arrange-
ments to resolve their disputes. Towards this end, the
State shall encourage and actively promote the use
110
of Alternative Dispute Resolution (ADR) as an im-
portant means to achieve speedy and impartial iustice
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
121 active private sector participation in the settlement
of disputes through ADR. This Act shall be without
165 preiudice to the adoption by the Supreme Court of
any ADR system, such as mediation, conciliation,
arbitration, or any combination thereof as a means of
173 irchir.vinti specdy :rnd efficient means of resolving
 Anrnrunrvr Drspurr Rrsolurroru Acr or 2004
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,
The Alternative Dispute Resolution Act of 2OO4.
The Alternative Dispute l{esolution Act of 2004 (ADR) is
Republic Act No. 9285.It was approved on April 2,2004, Republic
Act No. 9285 is entitled "An Act to Institutionalize the Use of an
Alternative Dispute l(esolution System in the Philippines and to
Establish the Office for Alternative Dispute Resolution and For
Other f'urposes."r
Party autonomy in dispute resolution explained.
Autonomv means the state of independence. It is a declared
policy of the State "to actively promote party autonomy in the
resolution of disputes for the freedom of the parties to make their
own arrangements to resolve their disputes. Towards this end,
the State shall encourage and promote the use of Alternative
Dispute Resolution (ADR) as an important means to achieve
speedy and impartial justice and declog court dockets."2
How the State shall achieve alternative dispute resolution.
The State shall use the alternative dispute resolution as an
important means and efficient tool "to achieve speedy and
impartial justice and alternative procedure for the resolution of
appropriate cases" by:
(1) Enlisting the active private sector participation in the
settlement of disputes through ADR.
(2) Without prejudice to the adoption by the Supreme
Court of any ADR system such as mediation,
conciliatiory arbitration or any combination thereof as
a means of resolving cases pending before all courts in
rSee
title and Sectron l, Republic Act No. 9'285.
)lbid.
Rrpusl_rc Acr No. 9'285
Chapter I -- Cieneral prcvi.sion
the Philippines which shall be governecl by such rules
as the supreme court may approve from time to time.
The case of Magellan capitat Management corporation vs.
Zosa (355 SCRA tSTl.
In this case, the supreme Court heLJ that ,,under Act No.
876, otherwise known as the Arbitration Law, it is the Regional
Trial Court which exercises jurisdiction on questions relatlng to
arbitrati on." Moreover, "arbitration proceedingr are desigrr"d to
level the playing field among the parties in pursuit of mltually
acceptable solution to their conflicting claims, and any
arrangemenf or scheme that would give undue advantage to a
party in the negotiating table is anathema to the very puriose of
arbitration and should be resisted.." portions or [r,L dlcision
follows.
We rule against the petitioners.
It is error for the petitioners to claim that the case should
fall under the jurisdiction of the securities and Exchange
Crmmission (SEC, for brevity). The controversy does not in
.rnyway involve the election lapporntment of officers of
1-rctitioner MCHC, as claimed by petitioners in their assignment
of errors. Respondent zosa's amended complaint focusesl-reavily
on the illegality of the Employment Agriement's ', Atbitration
(llause" initially invoked by him ir-r seeking his termination
bt'nefits under section 8 of the employment contract. And under
Itepublic Act No. 876, otherwise known as the ,,Arbitration
l,aw," it is the regional trial court which exercises jurisdiction
()v('|r cluestions relating to arbitration. we thus advert
to the
followirrg discussions made by the Court of Appeals, speaking
llu'u Justice Minerva P. Gonzaga-Reyes, in c.a.-c.n. b.p. No.
43059, uiz.:
"As regards thc fourth assigned error, asserting that
jrlriscliction lics with thc SEC, which is raised for tlrc first tlme i'
llris prt'liliolr, stlffict'it to stittt'thtrt tlrc Amt'nclccJ (ltllrprlai't
s(lltiln'ly 1'rul irr issur. lllr.tlucslion wht'llrt'r llrt'Ar-[ritr-ittiorr (]lirtrst.
,I
 REpueuc Acr No. 9285
\nrnrunrvg Dtspure ResolurtoN Acr or 2004
Chapter I Provision
-General
August II,1997 and withdrawal of intention to file petition
is valid and effective between the parties. Although the
of for review on certiorari, the Court Resolved to DECLARE
co.rtrorrersy which spawned the action concerns the validity
officer, the issue on THIS CASE TERMINATED and DIRECT the Clerk of Court
the termination of th^e service of a corporate
to INFORM the parties that the judgment sought to be
the validity and effectivity of the arbitration clause is determinable
reviewed has become final and executory, no appeal
by the ,"gulu, courts, and do not fall within the exclusive and
therefore having been timely perfected.'
oiiginat jurisdiction of the SEC."
"The determination and validity of the agreement is not a and that the same has, on September 17, t997, become final and
matter intrinsically connected with the regulation and internal executory and is hereby recorded in the Book of Entries of
affairs of corporations (see Pereyra as. lAC,181 SCRA244; Sales fudgments."
us. sEC,169 SCR A7ll);it is rattrer an ordinary case
to be decided
Petitioners, therefore, are barred from challenging anew,
in accordance with the general laws, and do not require any
(Viray as' through another remedial measure and in any other forum, the
particular expertise or triining to interpret and apPly
authority of the regional trial court to resolve the validity of the
cA, r91. SCRA 308)."3
arbitration clause, lest they be truly guilty of forum-shopping
Furthermore, the decision of the court of Appeals in CA- which the courts consistently consider as a contumacious practice
G.R. s.P. No. 43059 affirming the trial court',s assumPtion
of
which that derails the orderly administration of justice.
jurisdiction over the case has b"ecome the "law of the case"
Equally unavailing for the petitioners is the review by this
now binds the petitioners. The "law of the case" doctrine has been
when an Court, via the instant petitiory of the factual findings made by
clcfincc-l as "a i".* applied to an established rule that
remands the cause to the trial court that the composition of the panel of arbitrators
.rprpclliltt' court passes on a question and
would, in all probability, work injustice to respondent Zosa. We
tlrt' lowt'r court for furth", pro."edings, the question there settled
have repeatedly stressed that the jurisdiction of this Court in a
lx,t.ont(.s tltt. law tlf the caie uPon subsequent appeal"' To note'
petition for review on certiorariunder Rule 45 ofthe Revised Rules
tlrt'('A's clt,cisi.n in CA-G.R. SP No.43059 has already attained
of Court is limited to reviewing only errors of law, not of fact,
finality as t viclt,ncc.l by a Rcsolution of this Court ordering entry
unless the factual findings complained of are devoid of support
tlf juclgnrcrlt tlf si.ricl case, to wit:
by the evidence on record, or the assailed judgment is based on
misapprehension of facts.a
"Entry of judgement
Even if procedural rules are disregarded, and a scrutiny of
This is to certify that on September 8, 1997 a decision/ the merits of the case is undertakery this Court finds the trial
resolution rendered in the above-entitled case was filed in this ctlurt's observations on why the composition of the panel of
Office, the dispositive part of which reads as follows: arbitrators should be voided, incisively correct so as to merit our
.lpprovals. Thus,
,G.R. No. 129615 (Magellan Capital Management "From the memoranda of both sides, the Court is of the view
Corporation, et al. vs. Court of Appeals, Rolando zosa, et lhat thr. defendants [petitioner] MCMC and MCHC represent the
al.). Considering the petitioner's manifestation dated silmc intercst. Thcrc is ncl cluarrel thatboth defendants are entirely
-
rLoevillo C. Agustin vs. Court of Appeals and Filinvest Finance Corpor'ttit-.rtt' 217 'r( or,, ol llrl licltrpor ol lltr,Vltr;ltr M,rty vs (A. )')l \( llA lfl'r Ilg..tl)
1,,,, 1,,t,,,, I rs
scRA 457 (t9e7l.
r-)
 AnrRrunrvE Drspure Rrsolurroru Acr or 2004
. n,f ',ii',' $ |"?;, ??j;,
" "
two different corporations with personalities distinct and separate "From thg foregoing arbitration clause, it appears
that the
from each other and that a corporation has a personality distinct two (2) defendants [petiiioners] (MCMC and MCircl have
one
and separate from those persons composing the corporation as (1) arbitrator each tocomporu ih" paner
of three (g) uJitrators.
well as from that of any other legal entity to which it may be As the defendant MCMC is the Minager of defendant
MCHC,
related. its decision or vote in the arbitratiott prJ."eding would
naturally
und
"Butas the defendants [herein petitioner] represent the same ::{ainly be in favor of its employlr and theiefendant MCHC
interest, it could never be expected, in the arbitration proceedings, would have to protect and preserve its own interesu hence,
the
that they would not protect and preserve their own interest, much two (2) votes of both defendants (MCMC and MCHC)
would
less, would both or either favor the interest of the plaintiff. The certainly be against the lone arbitrator for the plaintifi
defendantl. Hence, apparently, plaintiff [herein
arbitration law, as all other laws, is intended for the good and [defendant] wouli never
welfare of everybody. In fact, what is being challenged by the get or receive justice and fairness in the arbitration
proceedings
plaintiff herein is not the law itself but the provision of the frg- the panel of arbitratoi's as provided in th" ii"r"quoted
Employment Agreement based on the said law, which is the arbitration clause. In fairness and justice to the plaintiff
arbitration clause but only as regards the composition of the panel [defendant], the two defendants (MCMC and MCHCi
[herein
of arbitrators. The arbitration clause in question provides, thus: petitionersl which represent the same interest should be
considered as one and should be entitled to only one
'In the event that any dispute, controversy or claim arise arbitrator to
represent them in the arbitration proceedings. Accordingly,
out of or under any provisions of this Agreement, then the the
arbitration clause, insofar a9 t]re compositlon of the pi'et
parties hereto agree to submit such dispute, controversy or of
arbitrators is concerned should be declared void and
claim to arbitration as set forth in this Section and the of no effect,
because the law r?Ir, "Any clause giving one of
determination to be made in such arbitration shall be final the parties power
to choose more arbitrators than th;the; is void and
and binding. Arbitration shall be effected by a panel of three of no effect.,,
(Article 2045, Civil Code).
arbitrators. The Manager, Employee, and Corporation shall
dlspute or controversy between the defendants (MCMC
designate one (1) arbitrator who shall in turry nominate and 1Tt
and- MCHC) thggejn petitionersJ and the plaintiff
elect as who among them shall be the chairman of the iherein
committee. Any such arbitration, including the rendering of defendantJ should be iettred in the arbitration proceeding
in
an arbitration award, shall take place in Metro Manila. The
.ccordance with the EmploymentAgreemen! but,rrrd".
the panel
arbitrators shall interpret this Agreement in accordance with of three (3) arbitrators, otr"it) arbitiator to represent
the plaintiff,
the substantive laws of the Republic of the Philippines. The .ne (1) arbitrator to represent both defendants (MCivtc ana
arbitrators shall have no power to add to, subtract from or MCHC) [herein_petitioners] and the third arbitrator
to be chosen
otherwise modify the terms of this Agreement or to grant by the plaintiff [defendant Zosa] and defendants (petitioners).
injunctive relief of any nature. A.y judgment upon the award "xxx XXX XXX,,
of the arbitrators may be entered in any court having In this connection, petitioners' attempt to put respondent
jurisdiction thereof, with costs of the arbitration to be borne in
t'stoppel in assailing the arbitration clause must be struck
equally by the parties, except that each party shall pay the down.
li.r.ne, this issue of estoppel, as likewise noted by the Court of
fees and expenses of its own counsel in the arbitration.' Appcals, f.und it,s way for the first time only on'upp"al-
(Emphasis supplied) well-
st'ltlt'cl is tht' rtlle tlrat issttt's/ not raisr.ci betow carrlr.t
ba rcs,tved
 AnrRNntvE Dtspurr RrsolurtoN Acr or 2004 Rrpueuc Acr No. 9285
Chapter I General Provision
-
on review in higher courts.s Secondly, employment
agreements a presiding iudge of a court or an officer of a govern-
such as the onJ at bar are usually contracts of adhesion'
Aty ment agency/ as defined in this Act, in which a neutral
the party third party participates to assist in the resolution of
ambiguity in its provisions is generally resolved against
relatively re5e{ case of issues, which includes arbitration, mediation, conci-
who irafi"d the document. Tius, in ihe
Phit. Federation of Credit Cooperatiaes,lnc. @FCCI)
and Fr' Benedicto liation, early neutral evaluation, mini-trial, or any
Abril,6 we had the occasion to stress combination thereof;
layomaus. NLRC and Victoria of
that "where a contract of employment' being a contract (b) 'ADR Provider" means institutions or
adhesion, is ambiguous, any ambiguity therein should be persons accredited as mediator, conciliator, arbitrator,
construed stricily ag"ainst the party who prepared it'"
And, finally' neutral evaluato+ or any person exercising similar
proceedings (as
respond entZo,sirrib*itt"a himsetf to aibitiation functions in any Alternative Dispute Resolution
of the panel
there *u, .or," yet) before bewailing the composition system. This is without prejudice to the rights of the
"arbitration
of arbitrators. ie in fact,lost no time in assailing the parties to choose nonaccredited individuals to act as
clause" upon realizing the inequities thatmay mar the
arbitration mediatoq, conciliator, arbitrato1" ot neutral evaluator
proceedings if the Jxisting iit't"-np of arbitrators remained of their dispute.
unchecked. Whenever referred to in this Act, the term "ADR
we need only to emph asize in closing t_hil arbitration practitioners" shall refer to individuals acting as
among the
proceedings are designed io level the playing field mediator, conciliator, arbitrator or neutral evaluator;
parties in pursuit oi a mutually acceptable solution
to their (c) "Authenticate" means to sigR, execute oradopt
ionflictir.g .lui-s. Any arrangement or scheme that would
give
a symbol, or encrypt a record in whole or in part intended
undue advantage to a'party ii the negotiating table.is anathema
to identify the authenticating party and to adopt, accept
to the very p.r?por" 3f uiUittation ind should, therefore,
be
or establish the authenticity of a record or term;
resisted. (d) " Arbittation" means a voluntaty dispute
WHEREFORE, premises considered, the petitig"- it_l"reby resolution process in which one or more arbitrators,
18' 1997
DISMISSED and the decision of the trial court dated Inly appointed in accordance with the agreement of the
is AFFIRMED. parties, or rules promulgated pursuant to this Act,
SO ORDERED. resolve a dispute by rendering an award;
(e) "Arbitrator" means the person appointed to
SEc.s.DefinitionofTetms._Forpurposesof render an award, alone or with others, in a dispute
this Act, the term: that is the subiect of an arbitration agreemenf
(a) "Alternative Dispute Resolution System" (f) " Award" means any partial or final decision
means any Process or procedure -used to resolve
a
by an arbitrator in resolving the issue in a controversy;
dispute oi controversy, otn"t than by adiudication of (S) "Commercial Arbitration" An arbitration is
"commercial" if it covers matter arising from all rela-
sCasolita, Sr. vs' Court of Ap peals,27SSCRA 257 (1997|; Manalilivs. Court of Appeals, tionships of a commercial nature, whether contractual
280 SCRA 400 l9e7l rlr nol;
6300 SCRA 72 (t998)

()
 AlrrRruarve DtspurE Rrsolurtoru Acr or 2004
(h) "Confidential information" means any
information, relative to the subiect of mediation or
arbitration, expressly intended by the source not to
be disclosed, or obtained under circumstances that
would create a feasonable expectation on behalf of
the source that the information shall not be disclosed'
It shall include (L) communication, oral or written,
made in a dispute resolution proceedings, including
any memoranda, notes or work product of the neutral
party or non-party participant, as defined in this Acu
iZ) oral or written statement made or which occurs
"tt
during mediation or for purposes of considering
conduiting, participating, initiating, continuing or
reconvening mediaiion or retaining a mediatol, and
(3) pleadings, motions, manifestations, witness
statements, reports filed or submitted in an arbitration
or for expert evaluation;
(i) "Convention Award" means a foreign
arbitral award made in a Convention State;
(i) .,,Convention State'' means a State that is a
member of the New York Convention;
(k)"Coutt"asreferredtoinArticle6ofthe
Model Law shall mean a Regional Trial Cour!
(l) "Court-Annexed Mediation" means any
mediation process conducted under the auspices of
the court, alter such court has acquired iurisdiction
of the dispute;
(m)"Court'ReferredMediation"meansmedia-
tion ordered by to be conducted in accordance
^court
with the Agreement of the Parties when an action is
prematurely commenced in violation of such agree-
menf
(n) "Early Neutral Evaluation" means an ADR
process wherein parties and their lawyers are brought
iogether early in a pre-trial phase to present sum-
10
REpusr-rc Acr No. 9285
Chapter I General Provision
-
maries of their cases and receive a nonbonding
assessment by an experienced, neutral person, with
expertise in the subiect in the substance of the dis-
pute;
(o) "Government Agency" means any govern-
mental entity, office or officeq, other than a court, that
is vested by law with quasi-iudicial power or the
power to resolve or adjudicate disputes involving the
government, its agencies and instrumentalities, or
private persons;
(p) "International Party" shall mean an entity
whose place of business is outside the Philippines.
It shall not include a domestic subsidiaty of such
international party or a co-venturer in a joint ven-
ture with a party which has its place of business in
the Philippines. The term foreign arbitrator shall
mean a person who is not a national of the Philip-
pines;
(q) "Mediatiorr" means a voluntary process in
which a mediatol, selected by the disputing parties,
facilitates communication and negotiation, and assists
the parties in reaching a voluntary agreement
regarding a dispute;
(r) "Mediator" means a person who conducts
mediation;
(s) "Mediation Party" means a person who
participates in a mediation and whose consent is
necessary to resolve the dispute;
(t) "Mediation-Arbitration" or Med-Arb is a
two'step dispute resolution process involving both
mediation and arbitration;
(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 <lr without the presence of a neutral third
il
 AlrrRrunrvr Dtspurr RrsolurloN Acr or 2004
person after which the parties seek a negotiated
settlemenf
(v) "Model Law" means the Model Law on
International Commercial Arbitration adopted by the
united Nations Commission on International Trade
Law on 21 fune 1985;
(w)"NewYorkConvention"meanstheUnited
Nations Convention on the Recognition and
Enforcement of Foreign Arbitral Awards apProved in
L958 and ratified by the Philippine Senate under
Senate Resolution No. 71;
(x) "Non-Convention Award" means a foreign
arbitral award made in a state which is not a
Convention State;
(y) "Non-Convention State" means a State that
is not a member of the New York Convention;
(zl "Non-Party Particip ant" means a person'
other than a party or mediato{, who participates in a
rnediation proceeding as a witness' resource Person
or exper!
(aa) "Procee ding" means a iudicial, adminis-
trative, or other adiudicative process, including
related pre-hearing or post-hearing motions' con-
ferences and discover/i
(bb) "Records" means an information written on
a tangible medium or stored in an electronic or other
similir medium, retrievable in a perceivable form; and
(cc) "Roster" means a list of persons qualified
to provide ADR services as neutrals or to serve as
arbitrators.
Alternative Dispute Resotution system defined.
An Alternntiae Dispute Resolution System means " uny process
or procedure used to resolve a dispute or controversy, other than
t2
Rrpueuc Acr No. 9285
Chapter I Provision
-General
by adjudication of a presiding judge or officer of a government
agencyt" as defined in Republic Act No. 9285 , "inwhich a neutral
third party participates to assist in the resolution of issue, which
includes arbitration, mediation, conciliation, early neutral
evaluation, mini-trial or any combination thereof ."7 The
arbitratiory mediation, contemplated in Republic Act No. 9285 is
different from similar amicable settlement processes envisioned
in Republic Act No. 7160, in the lupon or pangkat.
Arbitration defined and explained.
Arbitration meatts 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
l{epublic Act No. 9285, resolve a dispute by renderingt an award.
lJefore Republic Act No. 9285, arbitratiory in its broad sense, is
understood to mean a substifution, by consent of the parties, of
another tribunal or the tribunals provided by the ordinary
processes of law. It is a domestic tribunal, as contradistinguished
from regularly organized court proceeding according to the course
of the common law, depending upon the voluntary act of the
parties disputant in the selection of the judges of their own choice.e
ADR provider defined.
An " ADR proaider" means institutions or persons accredited
irs medi atot, conciliator, neutral evaluator, or any person
cxercising similar functions in any Alternative Dispute Resolution
system. This is without prejudice to the rights of the parties to
choose non-accredited individuals to act as mediato(, conciliator
arbitrator or neutral evaluator. Non-accredited individuals,
therefore, who are chosen by the parties to a dispute themselves
are also considered by law as "ADR providers."ro
/\r.t.\t.r tron l[.r1. f?erpublir Act No. 9285
"\t'r'\r'r ttort i(rlJ, llrirl
')( lr,rrr l rnrlc vr l.rw l llrtott & lior k lnsur,tnr a, 4)- Pl-ttl.'tt>l>
r"')('(' ltot t l{lrf , h'r'1 rt tl rltr Ar I No '/,/tl',
"('r
l3
 AnEnrunrve Drspurr RrsoLurtoru Act or 2004 REpuaLrc Acr No. 9285
Chapter I Provision
-General

Comme rcial arbitration defined. or electronic document. For purposes of the Rules on Electronic
Evidence, an electronic signature includes digital signafures.rs
An arbitration is "commercial" if it covers matters arising
from all relationships of a commercial nature, whether contractual
or not.ll
Liability of ADR Providers I Pr actitioners.
SEC. 5.
ADR providers and practitioners shall have
-theThe
same civil liability f or acts done in the
Arbitrator defined.
performance of their duties as that of public officers
" Arbitrator" means the person appointed to render an award,
as provided in Section 38(1), Chapter 9, Book I of the
alone or with others, in a dispute subject to an arbitration Administrative Code of L987.
agreernent.l2 He is a neutral person who resolve disputes between
the parties, especially by means of formal arbitration.l3 Liability of ADR provide rslpractitioners.
The ADR providers and practitioners shall have the same
SEC. 4. Electronic Signatures in Global and E-
The provisions of the Electronic civil liability for acts done in the performance of their public duties
Commerce Act.
-
Signatures in Global and E-Commerce Act, and its
asthat of public officers in Section 38(1). Chapter 9, Book I of the
Administrative Code of 1987.16
Implementing Rules and Regulations shall apply to
proceedings contemplated in this Act.
Section 38f ll, Chapter 9, Book l, Revised Administrative
Code.
Effect of Signatures in Global and E-Commerce Act.
The liability of ADR providers and practitioners are similar
The provisions of the Electronic Signatures in the Global and
to the liability of superior public officers as set forth in Section
E-Commerce Act, and its implementing rules and regulations,
38(1), Chapter 9, Book I of the Administrative Code of 7987
shall apply to proceedings contemplated in Republic Act No. 9285.
pertinently provides that:
This is because of advances in electronic communications and E-
commerce.la "(1) A public officer shall not be civilly liable for acts
done in the performance of his official duties, unless there is
Electronic signature defined. a clear showing of bad faith, malice or gross negligence."
" Electronic signature" refers to any distinctive mark,
SEC. 6. Exception to the Application of this Act.
characteristic andlor sound in electronic form, representing the
identity of a person and attached to and logically associated with
The provisions of this Act shall not apply to
-resolution or settlement of the following: (a) labor
an electronic date message, or electronic document or any
methodology or procedure employed or adopted by uperson and
disputes covered by Presidential Decree No. 442,
otherwise known as the "Labor Code of the Philip-
executed or adopted by such Person, with the intention of
authenticating, signing, or apProving an electronic data message
pines," as amended and its Implementing Rules
and Regulations; (b) the civil status of persons; (c)
rrSee Section 3(g), lbid.
i2See Section 3(e), lbid.
l3Black3 Law Dictionary, 7th Edition, p. I 00. r"\r,r'\r'r lrolr l(1), llLrlt'./. lltrk'ort Ek'r"tronic Fvtrlenct', A.M O l OT'01, )uly l /, )0Ol
raSee l''\r.r, \r'r lrolr 'r, h'r'1 rt tlrltr Ar t Nt t '))tltt
Section 4. Republic Act No. 9285

t4 t5
 '2004
ALrERrunrve DrspurE ResolurrorlAcr or

the validity of marriage; (d) any ground for legal

separation; (e) the iurisdiction of courts; (f) future
legitime; ($ criminal liability; and (h) those which
by law cannot be compromised. CHAPTER 2
MEDIATION
Non-applicability of Republic Act No. 9285.
The provisions of Republic Act No. 9285 "shall not apply to
provisions of this Chapter
resolution or settlement of the following: (1) labor disputes
SEC. 7. Scope.
- The
shall cover voluntary mediation, whether ad hoc or
covered by Presidential Decree No. 442, otherwise known as the
"Labor Code of the Philippines," as amended and its institutional, other than court-annexed. The term
implementing Rules and Regulations; (2) the civil status of "mediation" shall include conciliation.
persons; (3) the validity of marri age; (4) any ground for legal
Scope of Chapter 2, Republic Act No. 9285.
separation; (5) the jurisdiction of the courts; and (5) future legitime;
(7) criminal liability; and (8) those which by law cannot be The provisions of Chapter 2, Republic Act No. 9285, shall
compromised. Republic Act No. 9285 does not apply to non- cover voluntary mediation, whether adhoc or institutional, other
compromiseable cases, because the law prohibits it.17 than court annexed. The term mediation shall include
conciliation. Mediation is aoluntary rf. mutually agreed upon by
the parties.l

Mediation defined.
"Medistion" means a voluntary process in which a mediatot
sclected by the disputing parties, facilitates communication and
rrcgotiation, and assists the parties in reaching a voluntary
irgreement regarding a dispute.2 "Mediator" means a person who
t'onducts mediation.3

Mediation-Arbitration defined.
Mediation-arbitration is a two-step dispute resolution
[)rocess involving both mediation and arbitration.a

SEC. 8. Application and Interpretation. In

applying and construing the provisions of- this

'\,r' \,\ ti,)rr, Rr,lrulrlrr Act No 9285.

''\r,r'\r'r trotr l(r1). llrirl
'\('('',r'r ltotr l(tf, llrtrl
rTSee r',(,(",(,r lrrrrr t(l),
Section 6, Republic Act No 9285. ll rrrl

16 t7
 AnERrunrvr Drspurr Rrsorurroru Acr or 2004
Chapter, consideration must be given to the need to
promote candor of parties and mediators through
confidentiality of the mediation process, the policy
of fostering prompt, economical, and amicable
resolution of disputes in accordance with principles
of integrity of determination by the parties, and the
policy that the decision-making authority in the
mediation process rests with the parties.
Considerations in applying and construing mediation
provisions.
In applying and construing mediation provisions,
consideration must be given: (L) to the need to promote candor
of the parties and mediators through confidentiality of the
mediation process; (2) the policy of fostering prompt, economical
and amicable resolutions of disputes in accordance with the
principles of integrity of determination by the parties; and (3) the
policy that the decision-making authority in the mediation process
rests with the parties.s
lntegrity defined.
Integrity means the soundness of moral principles and
character of a public officer in the discharge of the trust reposed
in such officer.6
SEC. 9. Confidentiality of lnformation.
Information obtained through mediation proceedings-
shall be subiect to the following principles and
guidelines:
(a) Information obtained through mediation
shall be privileged and confidential.
(b) A party, a mediatol, or a non-party partici-
pant may refuse to disclose and may prevent any
sSee Section 6, Republic Act No. 9285
'Dizon vs. Dollete, I 20 SC-I?A 456.
l8
Rrpusuc- Acr No. 9285
Chapter 2 Mediation
-
other person from disclosing a mediation communi-
cation.
(c) Confidential information shall not be
subject to discovery and shall be inadmissible in any
adversarial proceeding, whether judicial or quasi-
judicial. 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 in a mediation.
(d) 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 me-
diation: (1) the parties to the dispute; (2) the mediator
or mediators; (3) the counsel for the parties; (4) the
non-party participants; (5) any persons hired or
engaged in connection with the mediation as secretary,
stenographer, clerk or assistan! and (5) any other
person who obtains or possesses confidential
information by reason of his/her profession.
(e) The protections of this Act shall continue
to apply even if a mediator is found to have failed to
actimpartially.
(f) A mediator may not be called to testify to
provide information gathered in mediation. A
mediator who is wrongfutly subpoenaed shall be
reimbursed the full cost of his attorney's fees and
related expenses.
Confidentiality defined and explained.
ConfidentialitU means secrecy, the state of having the
rlissemination of certain information restricted. The guidelines
orr confidentiality of information ohtained in mediation proceedings
rtrc sct forth irr Scction c), Rcpublic Act No. 9285.In the law on
t'v i cl crrcr', thcy il r(' c()nsi cl t'rt.cl pri v i lt'gt'd c() nl m u n i ca tiotr.
l()
 AnERrumvr Dtspurr Rrsorurtoru Acr or 2004
Privileged communication defined.
Priaileged communication is a doctrine that utterances made
in the course of judicial proceedings, including all kinds of
pleadings, petitions and motions belong to the class of
io-tttnttications that are absolutely privileged, if the same are
relevant, pertinent, or material to the cause at hand or subject of
inquiry.T lt is communication which in the context of legal or other
recognized professional confidentiality. The fact that certain
communication is termed privileged allows the speakers to resist
legal pressures to disclose its contents.
A privilege
SEC. 70.Waiaer of Confidentiality.
arising from the confidentiality of -
information may
be waived in a record, or orally during a Proceeding
by the mediator and the mediation parties.
A privilege arising from the confidentiality of
information may likewise be waived by a non-party
participant if the information is provided by such non-
party participant.
A peison who discloses confidential information
shall be precluded from asserting the privilege under
Section 9 of this Chapter to bar disclosure of the rest
of the information necessary to a complete under-
standing of the previously disclosed information. If
a person suffers loss or damage as a result of the
disclosure of the confidential information, he shall
be entitled to damages in a iudicial proceeding against
the person who made the disclosure.
A person who discloses or makes a rePre-
sentation about a mediation is precluded from
asserting the privilege under section 9, to the extent
that the communication prejudices another person in
the proceeding and it is necessary for the person
/See Black3 Law Dictionary, Tth Edition, p l2B5
20
Rrpueuc Acr No. 9285
Chapter 2 Mediation
-
preiudiced to respond to the representation of dis-
closure.
Waiver defined and waiver of confidentiality explained.
Waiaer means the voluntary relinquishment or abandon-
ment, express or implied of a right.8 In Section 10, Republic Act
No. 9285, a privilege arising from the confidentiality of
information may be waived in a record, or orally during a
proceeding by the mediator and the mediation parties. Howeveq,
a privilege arising from the confidentiality of information may
likewise be waived by a non-party participant if the information
is provided by the non-party participant.e
SEC. ll.
Exceptions to Privilege.
-
(a) There is
no privilege against disclosure under Section 9 if
mediation communication is:
(1)
in an agreement evidenced by record
^
authenticated by all parties to the agreemen!
(2) available to the public or that is made
during a session of a mediation which is open,
or is required by law to be open, to the public;
(3) a threat or statement of a plan to inflict
bodily injury or commit a crime of violence;
(4) intentionally used to plan a crime,
attempt to commit, or commit a crime, or conceal
an ongoing crime or criminal activity;
(5)
sought or offered to prove or disprove
abuse, neglect, abandonment, or exploitation in
a proceeding in which a public agency is protec-
ting the interest of an individual protected by
law; but this exception does not apply where a
child protection matter is referred to mediation
'f\er' []l,rcks l,rw l)iclrorr.rry, 7lh Fclilion. p 1574
''\r'r' lrl ,rtrrl /tll.l 1t,u,r(lr,rl rl rs. \r'r ltotr lO, lit'1 lt tlllt< Ar I No '/,/tJtr
2l
 ArrnruRrve Dlspure Rrsorurotrt Acr or 2004
by court or public agency participates in the
" protection mediation;
child
(6) sought or offered to prove or disprove
a claim or complaint of professional misconduct
or malpractice fited against mediator in
proceeding; or
(71 sought or offered to prove or disprove
aclaim or complaint of professional misconduct
or malpractice filed against a party, nonparty
participant, or representative of a party based on
conduct occurring during a mediation.
(b) There is no privilege under Section 9 if a
court or administrative agency, finds, after a hearing
in camera, that the party seeking discovery of the
proponent of the evidence has shown that the
evidence is not othenryise available, that there is a need
for the evidence that substantially outweighs the
interest in protecting confidenti ality, and the
mediation communication is sought or offered in:
(1) a court proceeding involving a crime or
felony; or
(21 a proceeding to prove a claim or
defense under the law is sufficient to reform or
avoid a liability on a contract arising out of the
mediation.
(c) A mediator may not be compelled to provide
evidence of a mediation communication or testify in
such proceeding.
(d) If a mediation communication is not
privileged under an exception in subsection (a) or (b),
only the portion of the communication necessary for
the application of the exception for non-disclosure
may be admitted. The admission of particular
evidence for the limited purpose of an excePtion does
22
Rrpusl-rc Acr No. 9285
chapter 2 Mediation
-
not render that evidence, or any other mediation
communication, admissible for any other purpose.
lnstances when there is no privilege against disclosure.
a Section L1(a), Republic Act No. 9285 enumerates the instances
when there is no privilege against disclosure. In those instances,lO
the privilege can be used as shield against the law itself which is
against public policy. A law cannot be used against the law. Section
l1(a) enumerates the instances when allowing disclosure
outweighs the reasons for existence of the privilege.ll
SEC. 12. Prohibited Mediator Reports. A
-
mediator may not make a report, assessment, evalua-
tion, recommendation, findin g, or other communi-
cation regarding a mediation to a court or agency or
other authority that may make a ruling on dispute that
is the subject of a mediation, except:
a) where the mediation occurred or has termi-
nated, or where a settlement was reached.
b) as permitted to be disclosed under Section
13 of this Chapter.
Prohibited mediation reports.
A mediator may not make a report, assessment, evaluatiory
r('commendatiory finding, or other communication regarding a
lrtt.diation to a court or agency or other authority that may make
rr finding on a dispute that is the subject of a mediatiory except:
(l) where the mediation occurred or has terminated, or where
llrt' scttlement was reached; and (2) as permitted to be disclosed
tttrtler Section L3 of Republic Act No. 9285.12
"'\r\,\r'r lron I I(,r), llt'Jltrltlrr Ar t No gTBr>
rr\r'r' \r,r lrorr I l (lr), llrrrl
I '(,1 ' (rr'(
'1 lt( )t I I /, h'r'1 rt tlrltr Ar I No t,),/ll',
23
 AneRrunrvE Dlspure ResoruloN Acr or 2004 Rrpuslrc Acr No. 9285
Chapter Z _ Mediation

SEC. 13. Mediator's Disclosure and Conflict of determine whether there are any known facts
lnterest The mediation shall be guided by the that a reasonabre
individual would consider likely to affect trru imfu;"irry
following- operative principles: mediatiory including the financial interest in
of the
the outcome of the
(a) Before accepting a mediation, an individual mediation and any existing or past relationship
with a party o.
who is requested to serve as a mediator shall: fores.eeable participant in t-he mediation;
and (2) disclose to the
(1) make an inquiry that is reasonable under mediation parties any such fact known or learned
as soon as
the circumstances to determine whether there are practical before accepting a mediation.13 The
purpose of this
any known facts that a reasonable individual provision is transparency on the part of the mediator
to convince
would consider likely to affect the impartiality of theparties that he has .,o p".ronul ug"r-,da to pursue
in the course
the mediatory including a financial or personal of the mediation.
interest in the outcome of the mediation and any
existing or past relationship with a party or sEC. 14. participation in Mediation.- Except
as
foreseeable participant in the mediation; and otherwise provided in this Act, a party may
desiglate
a lawyer or any other person to piovide
(2) disclose to the mediation parties any the mediation. A waiver of this right shall
assistan"ce ir,
such fact known or learned as soon as is practical be made in
writing by t_h" party waiving it. A-waiver of participa-
before accepting a mediation.
tion or legal representation may be rescinded at
G) If a mediator learns any fact described in time.
iny
paragraph (a)(1) of this section after accepting a
mediation, the mediator shall disclose it as soon as Designation of lawyer or non-tawyer to assist
in mediation.
practicable. A lawyer
. or a non-lawyer may be designated to provide
At the request of a mediation party,an individual trssistance in the mediation, as otherwise provided in
who is requested to serve as mediator shall disclose "*.upi
Itepublic Act No. 929s. A waiver or thi, right shall'be .r,ua" ir.,
his/her qualifications to mediate a dispute. writing by thep u:ty waiving it. A waiver of"legal
,"pr"r"r-,ration
This Act does not require that a mediator shall may be rescinded at any time.la
have special qualifications by background or profes-
sion unless the special qualifications of a mediator Rescind and rescission defined and exprained.
are required in the mediation agreement or by the To rescind means to abrogate, annul, avoid
mediation parties. trrntract.ls Rescission is aparty's.rnilut".ul
or cancel a
unmaking of a contract
for a legally sufficient reisory such as the other
pJay;, ;;erial
Mediator3 disclosure and conflict of interest. lrreach. Rescissio,Le.is generally available as
a remedy or defense
At the request of a mediation party, an individual who is frrr a nondegaliting party and restores the
parties to their
requested to serve as a mediator shall disclose his/her prt'con tractu aI positions. 16
qualifications to mediate a dispute. But before accepting a , i(i',-s,, r-it .t. tt,1l rtrlrr Ar I No 9)t)5
mediatiory an individual who is requested to be a mediator shall: rr\r,( , ,,r,r llott 14, rltr Ar I No ,/,/{J,r
lir,1 rr tl
(1) make an inquiry that is reasonable under the circumstances to '"l,tl tl lr,tyv., Wr,,,l ( o,rsl lrlt,lrrsrtr,l)((,(,. rrl l,l,l 3tj.
r'lll,lr li, l, rw I )tr lror r,tty, /ltr r,r lrlror r.
1r I j()lt
24
2,5
 Rrpueuc Acr No. 9285
AlrrRrunrvr Dlspurr Rrsolurtoru Acr or 2004
Chapter 2 Mediation
-
Effect of submission to mediation by institution.
SEC. L5- Place of Mediati
An agreement to submit a dispute to mediation by an
freetoagreeonthept"."ofmediation.Failingsuch institution shall include an agreement to be bound by the internal
agreement,theplaceofmediationshallbeanyplace
mediation and the administrative policies of such institution
cJnvenient anilappropriate to all parties'
including the rules thereof.le In case of conflict between the
institutional mediation rules and Republic Act No. 9285, the latter
Place of mediation'
of the parties' shall prevail.2o
The place of mediation shall be by agreement
of mediation shall
In case of airugr"-"trll;t of the parties, ih" ptut" SEC. 17. Enforcement of Mediated Settlement
to all parties' This place
be any place convenient and upptoptiate
shall alio be bY the Parties'l7
Agreements.
- The mediation
following operative
shall be guided by the
principles:

SEc.t6.EffectofAgreementtoSubmitDisputeto
(a) A settlement agreement following succes-
An a gre ement sful mediation shall be prepared by the parties with
Me ati o n un iir rnsiltiti o n al Rule s.
di - the assistance of their respective counsel, if any, and
tosubmitadisputetomediationbyaninstitution by the mediator.
shall include an agreement to be bound by the internal
-"att ittistrative policies of such The parties and their respective counsels shall
mediation and
institution.Further'anagreementtosubmitadispute endeavor to make the terms and condition thereof
shall
tomediation under instit-utional mediation rules complete and make adequate provisions for the con-
bedeemedtoincludeanagreementtohavesuchrules tingency of breach to avoid conflicting interpretations
govern the mediation oi th" dispute and for
the of the agreement.
mediator,theparties,theirrespectivecounsel,and (b) The parties and their respective counsels, if
non-party participants to abide by such rules' anlr shall sign the settlement agreement. The mediator
In case of conflict between the institutional shall certify that he/she explained the contents of the
the
mediation rules and the provisions of this Act, settlement agreement to the parties in a language
latter shall Prevail' known to them.
(c) If the parties so desire, they may deposit
"Model La\A/" on mediation' such settlement agreement with the appropriate Clerk
The ,,Model Law,, on mediation means the
Model Law on of a Regional Trial Court of the place where one of
International Commercial Arbitration adopted
bv^Jl" United the parties resides. Where there is a need to enforce
Nations Commission on International Trade
Law on11 fune 1983' the settlement agreement, a petition may be filed by
nations such
International Agreements are agreements between any of the parties with the same court, in which case,
as treati"r, .orr.i"ntions and protocols'18 the court shall proceed summarily to hear the petition,

l''ll,notn l.rw I)rr ttolt.uy, )OO I I r,hliort,

1t. )Gt>
lSee Section 16. Republic Act No' 9285' /,'\r'r. \r.r ltott I(r, \uf )t,I
rsSee Section 3{v}, Republic Act No' 9285

27
 Aurnru,qrvr Drspure Rrsorurroru Acr or 2004
in accordance with such rules of procedure as may be
promulgated by the Supreme Court.
(d) The parties may agree in the settlement
agreement that the mediator shall become a sole
arbitrator for the dispute and shall treat the settlement
agreement as an arbitral award which shall be subiect
to enforcement under Republic Act No. 875, otherwise
known as the " Arbitration Lawi'notwithstanding the
provisions of Executive Order No. L008 for mediated
disputes outside of the CIAC.
Deposit of mediated settlement agreement.
If the parties so desire, they may deposit the mediated
settlement agreement with the appropriate Clerk of the Regional
Trial Court of the place where one of the parties resides. Where
there is need to enforce the settlement agreement, a petition may
be filed by any of the parties with the same court, in which case,
the court shall proceed summarily to hear the petition, in
accordance with such rules of procedure as may be promulgated
by the Supreme Court.21
Enforcement if mediator is sole arbitrator.
The parties may agree in the settlement agreement that the
mediator shall become a sole arbitrator for the dispute and treat
the mediation agreement as an arbitral award which shall be subject
to enforcement under Republic Act No. 876, otherwise known as
the "Arbitration Law," notwithstanding the provisions of
Executive Order No. L000 for mediated disputes outside of the
CIAC.22
Award defined.
Award means any partial or final decision by an arbitrator in
resolving the issue in a controversy.23An arbitral awardis an award
2rSee Section l7 (cl, Republic Act No. 9285
22See Section l7 (d), Republic Act No. 9285
i rSee Section 39(fl, Republic Act No 9285
28
Rrpust_rc Acr No. 9285
Chapter 2 Mediation
-
resulting from arbitration or mediation. ,'Conoention Awqrd,,
means a foreign arbitral award in a Convention state.2a
Convention state defined.
Conaention state means a state that is a member of the New
York Convention.2s
The case Metro construction, lnc. vs. chatham properties,
lnc. f365 SCRA 697t.
In this case, the supreme Court held that: ,,Executive order
(E.o.) No. 1008 vests upon the cIAC original and exclusive
jurisdiction ove,r disputes arising from, or connected with,
contracts entered into by the parties involved in construction in
the Philippines, whether the dispute arises before or after the
completion of the contract, or ifter abandonment or breach
thereof." Moreovel, "Circular No. 1-91 covers the CIAC. A quasi-
judicial agency or body has been defined as ar-, orgin of
governmenf other than a court and other than a legislafure,"which
affects the rights of the parties through adjudication or rule-
making." Portions of the decision foilo*.
In sum, under Circular No. 1-19, appeals from the arbitral
nwards of the CIAC may be brought to the Court of Appeals, and
to the supreme Court alone.ln" grounds for the appeal ure
1yt
likewise broadened to include appeali on questions of facts and
nppeals involving mixed questions of fact and law.
The jurisdiction of the Court of Appeals over appeals from
_
final orders or decisions of the CIAC is further fortiiied by the
rrmendments to B.P F.Lg.729, as introduced by R.A. No. 7902.
with
lhe amendments, the Court of Appeals is vlsted with appellate
u risdiction over all final judgments, decisions,
f resolutions,trders
or awards of Regional Trial courts and quasi-judicial agencies,
irrstrumentalities, boards or commissions, except,,those"within
llrt'appellate iurisdiction of the supreme Court in accordance with
''"r,r',,r, f,,,i,- )(tl. IltttI
'"'',r,(,.,('r Itorr I(1f. llrtrI
?()
 furrRrunrvr Dtspurr RrsolurtoN Acr or 2404
the Constitution, the Labor Code of the Philippines under
presidential Decree No. 442, as amended, the provisions of this
Act, and of subparagraph (1) of the third Paragraph and
subparagraph (a) of tf,e fburth paragraph of Section 17 of the
judiciary Act of L948."
While, agairy the CIAC was not specifically namgd in said
provision, its inclusion therein is irrefutable. The CIAC was not
fxpressly covered in the exclusion. Further, it is a quasi-judicial
uglrr.y or instrumentality. The decision inLuzonDeaelopment Bank
,i. Lrron Deaelopment Bank Employees26 sheds light on the mattel,
thus:
Assumin garguendo thatthe voluntary arbitrator or the panel
of voluntary uibitiutors may not strictly be considered as a quasi-
judicial ugut.y, board or commission, still both he and the panel
ur" .o*frehlnded within the concept of a 'quasi-judicial
instrumentality.' It may even be stated that it was to meet the
very situation present"a uy the quasi-judicial functions of the
voluntary arbitrators here, as *elfas the subsequent arbitt-atot f
arbitral iribunal operating under the Construction Industry
Arbitration Commission, that the broader term'instrumentalities'
was purposely included in (Section 9 of B.P. Blg.129 as amended
by R.A. No. 7902).
An'instrumentality' is anything used as a means or agency'
Thus, the terms governmental'agency' or'instrumentality' are
synonymous in tf,e sense that either of them is a means by which
a government acts, or by which a certain government act or
fuiction is performed. The word 'instrumentality,' *it! respect
to a state, contemplates an authority to which the state delegates
goverrunental Power for the performance of a state function'
Aty remaining doubt on the procedural mutation of the
provisions on upp"it in E.O. No. 1008, ais-a-ais Circular No. 1-91
and R.A. No. ZSOZ, was completely removed with the issuance
by the Supreme Court of Revised Administrative Circular No. L-
95 and the 1997 Rules of Civil Procedure. Both categorically
26249 SCP'A t62 (19951.
30
Rrpuauc Acr No. 9285
Chapter 2 Mediation
-
include the CIAC in the enumeration of quasi-judicial agencies
comprehended therein. Section 3 of the former and Section 3, Rule
43 of the latteq, explicitly expand the issues that may be raised in
an appeal from quasi-judicial agencies or instrumentalities to the
Court of Appeals within the period and in the manner therein
provided. Indisputably, the review of the CIAC award may
involve either questions of fact, of law or of fact and law.
In view of all the foregoing, we reject MCI's submission that
Circular No. L-91, B.P. Blg.l29, as amended by R.A. 7902, Revised
Administrative Circular L-95, and Rule 43 of the 1997 Rules of
Civil Procedure failed to efficaciously modify the provision on
appeals in E.O. No. 1008. We further discard MCI's claim that
these amendments have the effect of merely changing the forum
for appeal from the Supreme Court to the Court of Appeals.
There is no controversy on the principle that the right to
appeal is statutory. Howeve{, the mode or manner by which this
right may be exercised is a question of procedure which may be
altered and modified provided that vested rights are not impaired.
The Supreme Court is bestowed by the Constitution with the
power and prerogative, inter alia, to promulgate rules concerning
pleadings, practice and procedure in all courts, as well as to review
rules of procedure of special courts and quasi-judicial bodies,
which, however, shall remain in force until disapproved by the
Supreme Court.27 This power is constitutionally enshrined to
enhance the independence of the Supreme Court.28
The right to appeal from judgments, awards, or final orders
of the CIAC is granted in E.O. No. 1008. The procedure for the
cxercise or application of this right was initially outlined in E.O.
No. 1008. While R.A. No. 7902 and circulars subsequently issued
by the Supreme Court and its amendments to the 1,997 Rules on
Procedure effectively modified the manner by which the right to
appeal ought to be exercised, nothing in these changes impaired
//Arti< k'Vlll. Serction 5 of the l987 Constitution.
/rr5({, F ( lrer;,tr.ry vs Secrctary of Justice, 301 SCRA 96 (19991: See arlso GSIS vs. Court
r rl z\1r1 tr',{s. ) ) ) S( liA t'rti'r ( I
(/(/ l)
3l
 AnrRrunrvr Dtspurr Rrsolurtoru Acr or 2004
vested rights. The new rules do not take away the right to appeal
allowed in E.O. No. L008. They only prescribe a new procedure
to enforce the right.2e No litigant has a vested right in a particular
remedy, which may be changed by substitution without impairing
vestedrights; hence, he can have none in rules of procedure which
relate to remedy.3o
The foregoing discussion renders academic MCI's assertion
on the binding effect of its stipulation with CHATHAM in the
TOR that the decision of the CIAC shall be final and non-
appealable except on questions of law. The agreement merely
adopted Section L9 of E.O. No. 1008, which, as shown above, had
been modified.
The TOR, any contract or agreement of the parties cannot
amend, modify, limit, restrict or circumscribe legal remedies or
the jurisdiction of courts. Rules of procedure are matters of
public order and interest and unless the rules themselves so
allow, they cannot be altered, changed or regulated by agree-
ments between or stipulations of the parties for their singular
convenience.3l
Having reSolved the existence of the authority of the Court
of Appeals io review the decisions, awards, or final orders of the
CIAC, the Court shall now determine whether the Court of
Appeals erred in rendering the questioned decision of 30
Septemb er L999.
Settled is the general rule that the findings of facts of the
Court of Appeals are binding on us. There are reco gnized
exceptions to the rule, such as when the findings are contrary to
those of the trial court, as in this case. Hence, we have to take a
closer re-examination of this case.
The CIAC is certain that the evidence overwhelmingly
tended to prove that the manner by which CHATHAM took
charge in the procurement of materials, fielding of labor, control
2eSee Fabian vs. Desierto, 295 SCRA 470 {1998}.
30lbid.
3rsee Republic of the Philippines vs. Hernandez, 253 SCRA 509 (19961
32
Rrpueuc Acr No. 9285
Chapter 2 Mediation
-
of MCI engineers and the subcontracting of various phases of the
work, constituted an implied takeover of the project. The CIAC
then concludes that the cut-off date for delineating the fiscal
liabilities of the parties is 23 May 1996 when CHATHAM
evaluated MCI's work accomplishment at 94.72% and then
suspended all further progress payments to MCI. For these
reasons, the CIAC found it trifling to determine whether MCI
was in delay based on the Overall Schedule. Howeveq, the CIAC
discovered that MCI was in-as-in delay for 294 days in the
concreting milestone and held the latter liable for liquidated
damages in the amount of P3,062,498.78.
The Court of Appeals made a contrary conclusion and
declared that MCI was in delay for 193 days based on the overall
schedule of completion of the project and should incur liquidated
damages in the amount of P24,1,25,000.00.
It is undisputed that the CIAC and the Court of Appeals
found MCI liable for liquidated damages but on different
premises. Based on the CIAC's assessment, MCI's responsibility
was anchored, on its delay in the concreting milestone, whlle the
Court of Appeals' evaluation concentrated on MCI's delay in
completing the project based on the oaerall schedule of work. The
variance in the evaluation spells a staggering difference in the
party who should ultimately be held liable and the net amount
involved.
A study of the final computation of the net amount due in
both the final disquisitions of the CIAC and the Court of Appeals
shows that all the other figures therein are constant, save for the
.trnount of liquidated damages for which MCI should be
rrccountable. If this Court concurs with the CIAC's conclusions,
MCI's responsibility for liquidated damages is, as already stated,
l'3,062,498.78. Setting this off against CHATHAM's overall fiscal
lt'cotrntability would bring the latter's total liability to MCI to
l'16,126,922.91. If the Court of Appeals is correct, MCI would be
Itt.lcl liable for a much higher P24,125,000 liquidated damages.
St'tlirrg tlris off agarinst Cf {ATFIAM's monetary responsibilities,
M('l w()ultl still hitvt' to 1-ray ('I lnTHn M l'4,935,575.31.
 ALrgRrunrvr Dtspuru Rrsorurton Act ot' 2004 Rrpueuc Acr No. 9285
Chapter 2 __ Mediation

After painstakingly combing through the voluminous setting aside the order directing Metro Constructiory Inc. to pay
records, we affirm the findings of the CIAC. The evidence taken Chatham Properties, Inc. the amount of P4,935,578.37. The arbitral
as a whole or in their totality reveals that there was an implied award of the Construction Industry Arbitration Commission in
takeover by CHATHAM on the completion of the project. The CIAC Case 1,0-98, promulgated on 19 October 7998, directing
evidence that appears to accentuate the Court of Appeals' decision Chatham Properties, Inc. to pay Metro Constructiory Inc. the sum
ironically bolstered the CIAC's conclusion. The testimonies of tIf SIXTEEN MILLION ONE HUNDRED TWENTY-SIX
Engr. Kapunary Engr. Bautista ,Dr.Lar, and the letter of Engr. Ruiz, THOUSAND NrNE HUNDRED TWENTY-TWO & 91 / rOO
acknowlbdging the "temporary takeover" by CHATHAM of the (P 76,126,922.91) PESOS, is accordingly REINSTATED.
project, underscore the palpable fact that there was indeed a No pronouncement as to costs.
iakeover. We confer particular credit to Dr. Lai's testimony that
SO ORDERED.
as of 15 Febru ary 1,995, MCI was relieved of bill control of the
construction operations, that it was relegated to a mere supplier
of labot, materials and equipment, and that the alleged interim
takeover actually extended through the completion of the project.
Even CHATHAM admits the takeover but sugarcoated the same
with words like "interim" and "charging the costs to MCI."32 With
these glaring admissions, we can even consider that the takeover
was not implied but blatant.
Exhibits "4," "4-Ai' "4-ci' "BA/' "8," "4-D," "3," "3-1.," "3-
M," "Nr " "3-W-Li', "3-Xi', "3-Y," "3-Zi', "5," "s-A:', "s-Bi', "S-Cr"
"S-Di' "5-E;' "5-F," "s-Oi' "C-7i' "E-g/' etc., relied upon by the
Court of Appeals when considered by themselves and singly,
seemingly and initially evince MCI's control over the project.
HoweveA they eventually lose evidentiary puissance to support
the Court of Appeals' conclusion when reckoned against the
totality of the evidence that CHATHAM took charge of the
completion of the project, particularly, the fact that CHATHAM
suspended all progress billing payments to MCI. The continued
presence and participation of MCI in the proiect was, as found by
ine CnC, a matter of mutual benefit to and convenience of the
parties.
WHEREFORE, IN VIEW OF ALL THE FOREGOING, thc
assailed 30 September 7999 decision of the Court of Appeals in
CA-G.R. SP No. 49429 is hereby PARTIALLY MODIFIED by
32litorlua vs. Court of Appeals, 286 SCRA I 36 (l c/98); Rosario vs. Court of Appeals,
ll0 SCRA 464 (l9cl9); Republic vs. Court of Appeals, 314 SCRA 230 (1991)1.

34 :15
 CHAPTER 3 CHAPTER 4
OTHER ADR FORMS
SEC. 18. Referral of Dispute to Other ADRForms.
The parties may agree to refer one or more or all
-issues arising in a dispute or during its pendency to
other forms of ADR such as but not limited to: (a) the
evaluation of a third Person' or (b) a mini-trial, (c)
mediation-arbitration, or a combination thereof.
For purposes of this Act, the use of other ADR
forms shall be governed by Chaptet 2 of this Act
except where it is combined with arbitration in which
case it shall likewise be governed by Chapter 5 of this
Act.
Other forms of ADR defined.
There are other forms of AD& namely: (1) Evaluation of third
person; (2) Mini-trial; (3) mediation-arbitration; or @) a
combination thereof. Mini-trial means 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.l Mediation-arbitration or Med-Arb is a
two-step dispute resolution process involving both mediation and
arbitration.2
rSee Section 3(u|, RepublicAct No. 9285.
ZSee Section 3{t), lbid.
36
I NTE RNATI ONAL COM M E RCI..AL
ARBITRATION
SEC. 19. Adoption of the Model Law on Inter-
national Commercial Arbitration. International
-
commercial arbitration shall be governed by the
Model Law on International Commercial Arbitration
(the "Model Law"l adopted by the United Nations
Commission on International Tiade Law on 21]une
L985 (United Nations Document A/40117) and
recommended f or enactment by the General
Assembly in Resolution No. 40172 approved on L1
December 1985, copy of which is hereto attached as
Appendix " A."
"Model Law" on international commercial mediation.
International commercial arbitration shall be governed by
the Model Law on International Commercial Arbitration, the
"Model Law" adopted by the United Nations Commission on
lnternational Trade Law on27 fune 1985 and recommended for
cnactment by General Assembly Resolution No. 10 172 on 17
December 1985.1
SEC. 20. Interpretation of Model Law. In
interpreting the Model Law, regard shall be had -to its
international origin and to the need for uniformity in
its interpretation and resort may be made to the
traasux preparatories and the report of the Secretary
General of the United Nations Commission on
International Trade Law dated 25 March 1985 entitled,
r\r'r'\r'r ltott lll, lit'1 rrtlrltt Ar I No '/,/lJrr
37
 AnrRrunrvr DrspurE RgsolurroN Acr or 2004
"International Commercial Arbitration: Analytical
Commentary on Draft Text identified by reference
number A/CN 91264J'
"Model Act" defined and distinguished from "Model Law."
AModeI Act is statute drafted by the National Conference of
Commissioners in Uniform State Laws and proposed as
guidelines for legislation for the states to borrow from or adapt
to suit their individual needs. It is different from "Model Law" as
defined here.2
How to interpret "Model faw."
Interpreting the Model Law, regard shall be had to its
international origin and to the need for uniformity in the
I
interpretation and regard may be had to the traaaux preparatories
11l and the report of the Secretary General Commission on
International Trade Law dated 25 March 1985 entitled,
I
l International Commercial Arbitration: Analytical Documentary
on Draft Text identified by reference number AICN 9 lZi+.t
Arbitr ation.- An arbitration
SE C. 21. C ommerci al
is "commercial" if it covers
matters arising from all
relationships of a commercial nature, whether contrac-
tual or not. Relationships of a commercial nature
include, but are not limited to, the following tran-
sactions: any trade transaction for the supply or
exchange of goods or services; distribution agree-
ments; construction of works; commercial repre-
sentation or agency; factoring; leasing; consulting
engineeritg licensing; investmenf financing; banking
insurance; ioint venture and other forms of industrial
or business cooperation; carriage of goods or
passengers by ait, sea, rail or road.
I
2See Black3 Law Dictionary, 7th Edition, p. I 919.
rSee Section 20. Republic Act No. 9285.
i
38
-
chapter
- H:,'":1,:[,Tffi 3,.?,u,
^,.o,,ra
ri on
Commercial arbitration defined.
An arbitration is "commercial" if it covers matters arising
from all relationships of a commercial nafure, whether contracfual
or not. Relationships of a commerciar nafure include, but are not
limited to the following transactions: (1) any trade transaction
for the supply or exchange of goods or services; (2) distribution
agreements, construction
9f works, engineering, licensing,
investmenf financing; (3) banking and insuiance; (a)",oint venture
and other forms of industrial oi business corporuiiorr; and (5)
carriage of goods or passengers by air, sea, rail or road.a
sEc. 22. Legal Representation in rnternational
Arbitrati In international arbitration conducted
in the nnifgnil"r, a pary may be represented by any
person of his choice: proaided, That such representa-
tive, unless admitted to the practice of law in tlie philip-
pines, shall not be authorized to appear as counsel in
any Philippine court, or any other quasi-judicial body
whether or not such appearance ii in relation to thl
arbitration in which he appears.
Representation in internationar arbitration.
_ Rupresentation in international arbitration could be by a
lawyer or non-lawyer. In international arbitration conducted in
the Philippines, a party may be represented by any person of his
choice: Proaided, 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 quasi-judicial'body
whether or not such appeatance is in relation to the arbitration in
which he appears.s
sEC- zg. Confidentiarity of Arbitration
Pro c e e ding
s.
- The arbitration
the records, evidence
proceedings, including
and the arbitral awird, shail bI
'r\r'r'\r'r lrnt ) l, llt'Jrr rltlir Arl No (),2llrj
"\r'r, \rt lrnr / /, lir,1rrrlrlrt Ar I Nr t,))gt,
3()
 ArrRru,qrvr Dtspurr RrsorulotlAcr or 2004
considered confidential and shall not be published
except (1) with the consent of the parties, or (2) for
the iimited purpose of disclosing to the court of
relevant documents in cases where resort to the court
is allowed herein: Prooided, howeaer, That the court
in which the action or the appeal is pending may issue
a protective order to prevent or prohibit disclosure of
documents or information containing secret processes,
developments, research and other information where
it is sho*tt that the applicant shall be materially
prejudiced by an authorized disclosure thereof.
Rule on confidentiality of arbitration proceedings.
Arbitration proceedings are confidential because arbitration
is more of an amiiable settlement proceeding rather than a judicial
process where discussions and records are privileged_commu-
nications. It has to be recorded for practical reasons. Thus, the
arbitration proceedings, including the records, evidence and the
arbitral awird shall be considered confidential and shall not be
published, except (1) with the consent of the partieg, 9r (2) fot
ih" ti*ited purpose of disclosing to the court in which the action
or appeal is pending may issue a protective order to prevent or
p.ohitit disciosure of documents or information containing secret
pro."rr"s, developments, research and other information where
it is shown that thg applicant shall be materially preiudiced by
an auth orrzed, disclosure thereof. For instance trade secrets
revealed by any of the parties in an arbitration Proceeding is
highly confidential.6
Arbittati
SEC. 24. Refeffal to
which an action is brought in a matter which is the
subject matter of an arbitration agreement shall, if at
least one party so requests not later than the pre-trial
conferet ce, or upon the request of both parties
6See Section 23, Republic Act No. 9285
40
cha prer o
- fi in'"',fil T: J;3,.?,u, ^,o,,rarion
thereafter, refer the parties to arbitration nnless it
finds that the arbitration agreement is null 6nd void,
inoperative or incapable of being performed.
Court referral to arbitration proceedings.
Arbitration proceedings are not mandatory but subject to
the will of the parties to a controversy. Strictly, it is consensual.
F{owever, "d court before which an action is brought in a matter
of an arbitration agreement shall, if at least one pafiy so requests
not later than the period of the pre-trial conference, or upon
request of both parties thereafte r, refer the parties to ?n arbitration
unless it finds that the arbitration agreement is null and void,
inoperative or incapable of being performed."T
No refercal of arbitration allowed.
In instances when the arbitration agreement is null and aoid,
inoperatiae or incapable of being performed, at the determination of
the court, no referral to arbitration is allowed. For instance, if the
subject of the arbitration agreement is prohibited by 1aw.8
- [n to the
SEC. 25. Interpretation of the Act. inter-
preting the Act, the court shall have due regard
policy of the law in favor of arbitration. Where action
is commenced by or against multiple parties, one or
more of whom are parties to an arbitration agfeement,
the court shall refer to arbitration those 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.
lnterpretation of Republic Act No. 9285.
lrr irrterpreting Republic Act No. 9285, the court shall have
tltrt' regarcl to the policy of the law in favor of arbitration. Where
'(r('('(r( 'rllttt )4, lir,1 rr tl rltr Ar I No ,/,/litr
"llrlr I
,l I
 AnrRNnrvr Dtspurr RrsoruloN Acr or 2004
- fii::jf,f[
chaprer - T:#3,?,,, Arb*rarion

action is commenced by or against multiple parties, one of whom
are parties to an arbitration agreement, the court shall refer to
arbitration those parties who are bound by the arbitration
agreement although the civil action may continue as those who
are not bound by such arbitration agreement.e
The case of Philroc[ lnc. vs. Construction lndustryArbitration
Commission 1359 SCRA 6331.
In this case, the Supreme Court ruled that: "The Supreme
Court will not countenance the effort of any patry to subvert or
defeat the objective of voluntary arbitration." Moreoveq "by the
nature of their functions, acts in a quasi-judicial capacity, such
that their decisions are within the scope of judicial review."
Portions of the decision follow.
rhe petitioneq, in its ::::^ndum, raises the following
issues:
,,A.
Whether or not the CIAC could take jurisdiction over the
case of Respondent Cid spouses against Petitioner Philrock
after the case had been dismissed by both the RTC and the
CIAC.
"8,
Whether or not Respondent Cid sPouses have a cause of
action against Petitioner Philrock.
interest thereon at the rate of 6% fuom26 September 1995 is
ProPer.
"D.
whether or not the awarding of the amount of p65,000.00 as
retrofitting costs is proper.
"8.
whether or not the awarding of the amount of p'1,,340,454
for the value of the delivered but the allegedly unworkable
concrete which was wasted is proper.
"F.
whether or not the awarding o[f] moral and nominal
damages and attorney's fees and expenses of litigation in
favor of respondents is proper.
Whether or not Petitioner Philrock should be held liable for
the payment of arbitration fees."
In sum, petitioner imputes reversible error to the CA: (1) for
upholding the jurisdiction of the CIAC after the latter had
dismissed the case and referred it to the regular courf (2) for ruling
that respondent spouses had a cause of aition against petitioneq,
and (3) for sustaining the award of damages.
This Court's Ruling
The Petition has no merit.

"c. First Issue:

lurisdiction
Whether or not the awarding of the amount of. P23,276.75
for materials ordered by Respondent Spouses Cid plus I'etitioner avers that the CIAC lost jurisdiction over the
irrlril.rati()t] casc aftcr botlr parties had withdrawn their consent
eSee Section 25, Republic Act No. 9285

42 4i
 r
Ar-rrRNnrvr Drspurr Rrsorurroru Acr or 2004
to arbitrate. The ]une 73,1995 RTC Order remanding the case to
the CIAC for arbitration was allegedly an invalid mode of
referring a case for arbitration.
We disagree. Section 4 of Executive Order 1008 expressly
vests in the CIAC original and exclusive jurisdiction over disputes
arising from or connected with construction contracts entered into
by parties that have agreed to submit their dispute to voluntary
arbitration.
It is undisputed that the parties submitted themselves to the
jurisdiction of the Commission by virtue of their Agreement to
Arbitrate dated Novemb er 24,1993. Signatories to the Agreement
were Attys. Ismael |. Andres and Perry Y. Uy (president of
Philippine Rock Products, Inc.) for petitioneq, and Nelia G. Cid
and Atty. Esteban A. Bautista for respondent spouses.
Petitioner claims, on the other hand, that this Agreement
was withdrawn by respondents on April 8, 1994, because of the
exclusion of the seven engineers of petitioners in the arbitration
case. This withdrawal became the basis for the April 13,1994 CIAC
Order dismissing the arbitration case and referring the dispute
back to the RTC. Consequently, the CIAC was divested of its
jurisdiction to hear and decide the case.
This contention is untenable. First, private respondents
removed the obstacle to the continuation of the arbitration,
precisely by withdrawing their obiection to the exclusion of the
seven engineers. Second, petitioner continued participating in the
arbitration even after the CIAC Order had been issued. It even
concluded and signed the Terms of References on Augu st27,7995,
in which the parties stipulated the circumstances leading to the
dispute; summarizedtheir respective positions, issues, and claims;
and identified the composition of the tribunal of arbitrators. The
document clearly confirms both parties' intention and agreement
to submit the dispute to voluntary arbitration. In view of this
f.act, we fail to see how the CIAC could have been divested of its
jurisdiction.
Finally, as pointed out by the solicitor general, petitioner
maneuvered to avoid the RTC's final resolution of the clisptrte by
chaprer--T;i:,'j::,H,T#;3,?,,,Arbitration
arguing that the regular court also lost jurisdiction after the
arbitral tribunal's April rg, 1,994 order referring the case Back
to the RTC.
section 4. lurisdiction. The CIAC shall have original
and exclusive- jurisdiction -over disputes arising from, or
connected with, contracts entered into by partieJ involved
in construction in the philippines, whethei the dispute arises
before or after the completion of the contract, or after the
abandonment or breach thereof. These disputes may involve
government or private contracts. For the Board to acquire
jurisdiction, th_e parties to a dispute must agree to submit
the same to volun tary arbitration.
"The jurisdiction of the CIAC may include but is not
limited to violation of specifications for materials and
workmanship; violation of the terms of agreement;
interpretation and I or application of contractual"provisions
amount of damages and penalties; commencement time and
delays; maintenance and defects; payment; default of
employer or contractor and changes in contract cost.
"Excluded from the coverage of this law are disputes
arising froT employer-employee relationships whichshall
continue to be covered by the Labor Code of thL philippines.,,
(EO 1008)
In so doing, petitioner conceded and estopped itself from
further questioning the jurisdiction of the CIAC. The Court will
not countenance the effort of any party to subvert or defeat the
objective of voluntary arbitration-for itr o*n private motives.
After submitting itself to arbitration proceedings and actively
participating thet"T, petitioner is estbpped froir assailing thl
jurisdiction of the CIAC, merely because the latter rendered
an
nciverse decision.lo
r"\r't'\1x)u\('\ vs ( or lrt ()f nl)[ x\
lJ('rrrrt.z tls, )(/t \(r].A )4).l,rrrrr,rry l(t, l<)g/
4s
 r
AueRNnrvr Dtspurr Rrsor-urtoru Aci or 2OO4
Second Issue:
Cause of Action
Petitioner contends that respondent spouses were negligent
in not engaging the services of an engineer or architect who should
-tn"i.lonstruction, in violation of Section 308 of the
oversee
National Building Code. It adds that even if the concrete it
delivered was defective, resPondent sPouses should bear the loss
arising from their illegal operation. In short, it alleges that they
had no cause of action against it.
We disagree. Cause of action is defined as an act or omission
by which a party violates the right of another.ll A complaint is
dlemed to have itut"d a cause of action provided it has indicated
the following: (1) the legal right of the plaintiff, (2) the correlative
obligation of"the defendant, ind (3) the act or the omission of the
defendant in violation of the said legal right.l2 The cause of
action against petitioner was clearly established. Respondents
were pr.It"hasers of ready-mix concrete from petitioner. The
.o.r.rdt" delivere d by the latter turned out to be of substandard
quality. As a result, respondents sustained damages when the
siructures they built using such cement developed cracks and
honeycombs. Co.s"qrrently, the construction of their residence
had to be stopped.
Furthel the CIAC Decision clearly spelled out respondents'
cause of action against petitioner, as follows:
,,Accordingly, this Tribunal finds drat the mix was of
the right proporiior,s at the time it left the plant. This,
howevef, doeJ not necessarily mean that all of the concrete
mix delivered had remained workable when it reached the
jobsite. It should be noted that there is no evidence to show
llCamara vs. Court of Appeals, 310 SCRA 608, 6lB, )uly 20, 1999; Delos Reyes vs.
Courr of Appeats, 285 SCRA B l, 85, January 27 , l99B: Leberman Realty Corporation vs.
Typingco, 293 SCRA 316, 327, )uly 29, l99B-
r2Baluyot vs. C^urt of Appeals, 3l I SCRA 29, 45, July 22, 1999;Vergara vs. Court of
Appeals. 319 SCRA 323, 327, November 26, 1999, Leberman vs. Typinco, ibid , trt 328
46
Rrpuauc Acr No. 9285
Chapter 4 lnternational Commercial Arbitration
-
that all the transit mixers arrived at the site within the
allowable time that would ensure the workability of the
concrete mix delivered.
"On the other hand, there is sufficiently strong evidence
to show that difficulties were encountered in the pouring of
concrete mix from certain transit mixers necessitating the
[addition] of water and physically pushing the mix,
obviously because the same [was] no longer workable. This
Tribunal holds that the unworkability of said concrete mix
has been firmly established.
"There is no dispute, howeveq, to the fact that there are
defects in some areas of the poured structures. In this regard,
this Tribunal holds that the only logical reason is that the
unworkable concrete was the one that was poured in the
defective section s." \3
Third Issue:
Monetary Awards
Petitioner assails the monetary awards given by the arbitral
tribunal for alleged lack of basis in fact and in law. The solicitor
general counters that the basis for petitioner's assigned errors
with regard to the monetary awards is purely factual and beyond
the review of this Court. Besides, Section1.9, EO 1008, expressly
provides that monetary awards by the CIAC are final and
unappealable.
We disagree with the solicitor general. As pointed out earlieq,
fnctual findings of quasi-judicial bodies that have acquired
t xpertise are generally accorded great respect and even finality,
if they are supported by substantial evidence.la The Court,
Iroweveq, has consistently held that despite statutory provisions
'CIAC Decisions dated September 24, 1996; CA rollo for G.R. SP No. 42443. p. 12.
|
laVillitflor vs. Court of Appeals. 280 SCRA 297,33O, October 9, 1997; Philippine
Mt.rrlr,rrrt M.rrinc School, lnc. vs Court of Appeals, 224 SCav4.77O.785, June 2, 1995;
( ( X ( )l I l) vs Ir,rj,rno. /41 S('lil 261, )(rtl. Fr.t;ru.rry i'5, l99ti
47
 r
AnrRNnrvr Drspurr Rrsolurtoru Acr or 2004
making the decisions of certain administrative agencies " final,"
it still takes cognizance of petitions showing want of jurisdiction,
grave abuse of discretion, violation of due process, denial of
substantial justice or erroneous interpretation of the law.ls
Voluntary arbitrators, by the nature of their functions, act in a
quasi-judicial capacity, such that their decisions are within the
scope of judicial review.16
Petitioner protests the award to respondent spouses of
P23,276.25 as excess payment with six percent interest beginning
September 26, L995.It alleges that this item was neither raised as
an issue by the parties during the arbitration case, nor was its
justification discussed in the CIAC Decision. It further contends
that it could not be held liable for interest, because it had earlier
tendered a check in the same amount to respondent spouses, who
refused to receive it.
Petitioner's contentions are completely untenable.
Respondent Nelia G. Cid had already raised the issue of
overpayment even prior to the formal arbitration. In paragraphg
of the Terms of Reference, she stated:
"9. Clairnants were assured that the problem and her
demands had been the subject of several staff meetings and that
Arteche was very much aware of it, a memorandum having been
submitted citing all the demands of [c]laimants. This assurance
was made on July 3L, 1,992 when Respondents Secillano,
Martillano and Lomibao came to see Claimant Nelia Cid and
offered to refundP23,276.25, [t]he difference between the billing
by Philrock's Marketing Department in the amount of P725,586.25
and the amount charged by Philrock's Batching Plant Department
in the amount of only P'1,02,586.25, which claimant refused to
accept by saying' Saka na lang.'
rsVillaflor vs. CA, ibid., De Ysasi lll vs. National Labor Relations Commission. 231
SCRA 173, lB5, March 11,1994.
r6Chung Fu lndustries
{Phils.), lnc. vs. Court otAppeals. 206 SCRA 545, 556, February
25, 1992.
Chaprer--fi i:;'::,ffi ,T"",t;3,?,,,Arbirrarion
The same issue was discussed during the hearing before the
arbitration tribunal on Decemb er 19,lggi.It was also-mentioned
in that tribunal's Decision dated septemb er 24, 1996.
The payment of interest is based on Article 2209 of the Civil
Code, which provides that if the obligation consists of the payment
of a sum of money, and the debtor incurs delay, the inde*rrity ro,
damages shall
!e the payment of legal interest which is six percent
par annum, rn the absence of a stipulation of the rate.
Awards for Retrofitting Costs. Wasted
L I nworkable But D eliaered
()oncrete, and Arbitration Fees
Petitioner maintains that the defects in the concrete structure
were due to respondent spouses'failure to secure the services of
iln engineer or architect to supervise their project. Hence, it claims
that the award for retrofitting cost was wiihout legal basis. It also
denies liability for the wasted unworkable but delivered concrete,
frrr which the arbitral court awarded p1g,404.54. Fin ally, it
trrmplains against the award of litigation expenses, inasmuc"h as
tlre case should not have been institutea at att haj ,espondents
complied with the requirements of the National Building Code.
we are unconvinced. Not only did respondents disprove the
contention of petitioner; they also showed that they sustained
tlirmages due to the defective concrete ithad delivered. These were
llt'ms of actual damages th"y sustained due to its breach of contract.
Mornl and Nominal Damageq
Atlorney's Fees and Costs
Petitioner assails the award of moral damages, claiming no
trrnlicc or bad faith on its part.
we disagree. Respondents were deprived of the comfort and
.
lrt'
I fety of a house and were exposed tb the agony of witnessing
sa
llrt' wastage and the decay of the structure r* *br" than seven
y('lrs. ln lrcr Mcmorandum, Respondent Nelia G. Cid describes
Itlt' l'arrtily's strffcrings arising fiom the unrcasgnabp. clclay in
4()
 r
AnEnNnrvr Dtspurr Rrsorurtoru Acr or 2004
-
c ha pte r
- T; i:,Tj;,lll,T?J; :,:, ", Arb i tra ri o n

the construction of their residence, as follows: "The family lives
separately for lack of space to stay in. Mrs. Cid is staying in a
small dingy bodega, while her son occupies another makeshift
room. Their only daughter stayed with her aunt from 1992 until
she got married rn1.996. x x x. The Court also notes that during
the fendency of the case, Respondent Vicente Cid died without
seeing the completion of their home.17 Under the circumstances,
the award of moral damages is proper.
Petitioner also contends that nominal damages should not
have been granted, because it did not breach its obligation to
respondent spouses.
if no actual
Nominal damages are recoverable only
substantial damages resulted from the breactU or no damage was
or can be showt . Sit't." actual damages have been proven by
private respondents for which they were amply compensated,
they are no longer entitled to nominal damages.
Petitioner protests the grant of attorney's fees, arguing that
respondent spouses did not engage the services of legal counsel.
Also, it contends that attorney's fees and litigation exPenses are
awarded only if the opposin g patty acted in gross and evident
bad faith in refusing to satisfy plaintiff's valid, just and
demandable claim.
We disagree. The award is not only for attorney's fees, but
also for expenses of litigation. Hence, it does not matter if
respondents represented themselves in court, because it is obvious
that they incuired expenses in pursuing their action before the
CIAC, as well as the regular and the appellate courts. We find no
reason to disturb this award.
WHEREFORE, the Petition is DENIED and the assailed
Decision AFFIRMED; howeve{, the award of nominal damages
ts DELETED for lack of legal basis. Costs against petitioner.
SO ORDERED.
rTGovs. lntermediateAppellateCourt, 197 SCRA22,28-29, May 13, l99l;Ventenilla
(
vs. Centeno. I SCRA 215, 220, January 28, l96l; Robes-Francisco Realty vs. otrrt of First
lnstance. B(, SCRA 59, 65-66, October 30, l97B
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 institution under whose rules
the arbitration is agreed to be conducted. where the
parties have agreed to submit their dispute to insti-
tutional arbitration rules, and unless they have agreed
to a different procedure, they shall be deemed to have
agreed to the procedure under such arbitration rules
for the selection and appointment of arbitrators. In
or 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
authorize d representative.
Appointing authority defined and explained.
In arbitratiory the "Appointing Authority" is by agreement
rrf the parties. Thus, in the
Model Law, appointing authority shall
mean the person named in the arbitration agreement as the
rrppointing authofity; or the regular institution under whose rules,
nnd unless they have agreed to a different procedure, they shall
lre deemed to trave ug."Jd to the procedur".rrld"r such arbiiration
rules for the selection and appointment of arbitrators. In ad hoc
nrbitration, the default appointment of an arbitrator shall be made
by the National President of the Integrated Bar of the Philippines
(lltP) or his duly authorized representative.ls The appointing
rtuthority, therefore of the National President of the Ir*egrated
llirr of the Philippines may be delegated.le
SEC. 27. What Functions May be performed by
Appointing Authority. functions referred to in
- The
Articles 1L(3), t't(4),13(3) and 14(1) of the Model Law
shall be performed by the Appointing Authority,
'i's,'" i." i,, tn /(t, Ii,1 rrrl rlir Ar I No g)11,,.
r''(r( ,( ,
l, l\l \( ,t
tl ( 't tr r ,, ll rtr I

50 tit

AlrrRnnrtvr Dtspure Rrsolurtoru Acr or 2004
Chapter 4
unless the latter shall fail or refuse to act within thirty
(30)daysfromreceiptoftherequestinwhichcase
the apilicant may renew the application with the
Court.
Function defined-
a particular
Functionmeans an activity that is appropriate to
business or profession.20 The functions of the
"Appointing
No' 9285'
Authori ty" aieenumerated in Section 27,Republic Act
sEc. 28. Grant of lnterim Measure of Protection.
-(a)Itisnotincompatiblewithanarbitration
agreementforapartytorequest,beforeconstitution
of the tribunal, iro," a Court an interim measure of
protectionandfortheCourttograntsuchmeasure.
After constitution of the arbitral tribunal and during
arbitral proceedings, a request for an interim measure
of protection, or riodificition thereof' may be made
with the arbitral tribunal or to the extent that the
arbitral ftibunal has no Power to act or is unable to
act effectively, the request may be made with
the
Court. The arbitral tritunal is deemed constituted
when the sole arbitrator or the third arbitrator, who
has been nominated, has accepted the nomination
and
written communication of said nomination and
acceptancehasbeenreceivedbythepartymakingthe
request.
(b)Thefollowingrulesoninterimor
provisional relief shall be observed:
(1) Any Party may request that provisional
reliei be granted against the adverse
partY.
Ql Such relief may be granted:
/('See Section 27, RePublic Act No 9285
52
REpusllc Acr No. 9285
lnternational Commercial Arbitration
-
(i) to prevent irreparable loss or
injury;
(ii) to provide security for the perfor-
mance of any obligation;
(iii) to produce or preserve any evi-
dence; or
(iv) to compel any other appropriate
act or omission.
(3) The order granting provisional relief
may be conditioned upon the provision
of security or any act or omission speci-
fied in the order.
(4) Interim or provisional relief is re-
quested by written application trans-
mitted by reasonable means to the Court
or arbitral tribunal as the case may be
and the party against whom the relief is
sought, describing in appropriate detail
the precise relief, the party against
whom the relief is requested, the
grounds for the relief, and the evidence
supporting the request.
(s) The order shall be binding upon the
parties.
(6) Either party may apply with the Court
for assistance in implementing or
enforcing an interim measure ordered
by an arbitral tribunal.
(71 A party who does not comply with the
order shall be liable for all damages
resulting from non-compliance, in-
cluding all expenses/ and reasonable
attorney's fees, paid in obtaining the
order's iudicial enforcement.
 furERrunrve DrspurE Resolurroru Acr or 200+
Court may grant interim measure.
It is not incompatible with an arbitration agreement for a
party to request, before constitution of the tribunal, to request from
a Court an interim measure. After constitution of the arbitral
tribunal and during arbitral proceedings, a request for an interim
measure of protection, or modification thereof, may be made with
the arbitral tribunal or to the extent that the arbitral tribunal has
no power to act for an interim measure of protectiory the request
may be made with the Court.2l
lnterim defined.
lnterim means in the meantime.22 An interim order is a
temporary orde4, made until another or final order takes its place
or final event occurs.23
When arbitral tribunal deemed constituted.
The arbitral tribunal is deemed constituted when the sole
arbitrator or the third arbitratoq, who has been nominated, has
accepted the nomination and written communication of said
nomination has been received by the party making the request.2a
SEC. 2g.FurtherAuthority for Arbitrator to Grant
lnterim Measure of Protection.
- Unless otherwise
agreed by the parties, the arbitral tribunal may, at the
request of apafty, order any party to take such interim
measures of protection as the arbitral tribunal may
consider necessary in respect of the subject-matter of
the dispute following the rules in Section 28,
paragraph 2. Such interim measures may include but
shall not be limited to preliminary injunction directed
against aparty, appointment of receivers or detention,
preservation, inspection of property that is the subiect
2lSee Section ZB(a), Republic Act No. 9285.
22Bouvier3 Law Dictionary, citing 2 Bell Comm. 265, p. 1649.
zrBarron3 Law Dictionary, 20O3 Edition, p. 254.
7a3rd sentence, Section
Z9lal, Republic Act No. 9285.
54
chaprero-fi i:,'"'"',,til,T"".t;3,?,",Arbirrarion
of the dispute in arbitration. Either pafty may apply
with the court for assistance in implementing or
enforcing an interim measure ordered by an arbitral
tribunal.
lnterim measures of protection by arbitraton
An arbitral tribunal may grant interim measures of protection
as it may consider necessary,in respect of the subject matter in
dispute, unless otherwise agreed upon by the parties. It shall
include but shall not be limited to: (1) pieliminary injunction
directed against aparty; (2) appointment of receivers or detention;
(3) preservatiory inspectior"t oi the property that is the subject
of
the dispute in arbitration. Either party m ay appry with the Court
for assistance in the implementingbr enforcing aninterim measure
ordered by the arbitral tribunal.2s
sEC. 30. Place of Arbitration
- Therining
free to agree on the place of arbitration.
parties are
such
agreement, the place of arbitration shail be in Metro
Manila, unless the arbitral tribunal, having regard to
the circumstances of the case, includirlg the
convenience of the parties shall decide on a different
place of arbitration.
The arbitral tribunar may, unless otherwise
agreed by the parties, meet at any prace it considers
appropriate for consultation among its members, for
hearing witnesses, experts or the parties, or for
inspection of goods, other property oi documents.
Rules on place of arbitration.
. The parties
a1e 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
tlf thc case, including the conveniur,"" of the parties shall decide
"'\t,r,\rtlt<nt /().lit'1 lrrltlrr Ar I No ()
)Il1,
55
 ALTERi'rcrrvE Drspurr REsoLurroN Acr or 2004
-
Chapter
- fiifl':l,ff: T:,t;:,?,u, o.o,,rar.n
on a different place of arbitration. The arbitral tribunal may, unless may order that any documentary evidence
shall be accompanied
otherwise agreed by the parties, meet at any place it considers by u translation.into.the_language or languages
agreed upon by
appropriate for consultation among its members, for hearing the parties or determined in u..oidunce
wlth paragraph 1, section
witnesses, experts or the parties, or for the inspection of goods, 31, Republic Act No. 92g5.22
other property or documents.26

SEC. 31. Langunge 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 agree-
ment or determination, unless otherwise specified
therein, shall apply to any written statement by a
parfir any hearing and any award, decision or other
communication by the arbitral tribunal.
The arbitral tribunal may order that any docu-
mentary evidence shall be accompanied by trans-
^
lation into the language or languages agreed upon by
the parties or determined in accordance with Para-
graph 1 of this Section.

Language or languages of arbitration,

As a general rule, 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 and Eilipino tn domestic
arbitr ati o n, unle ss the arbitr al 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 hearing and any award, decision or
other communication by the arbitral tribunal. The arbitral tribunal

26See Section 32. Republic Act No. 9ZB5

56
57
 CHAPTER 5 CHAPTER 6
DOMESTIC ARBITRATION
SEC.S2.LawGoaerningDomesticArbitration._
Domestic arbitration shafilontinue to be governed,,The
by Republic Act No. 875, otherwise known as
Arbitration Law " as arnended by this chapter. The
term,,domestic arbitration" as used herein shall mean
an arbitration that is not international as defined in
Article 1(3) of the Model Law'
Domestic Arbitration defined'
No'
The term "domestic arbitration" asused in Republic Act
g2gs,shall mean an arbitration that is not international as defined
in Article 1(3) of the Model Law. Domestic arbitration shall
continue to bg governed by Republic Act No. 876, otherwise
known as "The"Arbitration Law," as amended by Chapter 5,
Republic Act No. 9285.1
sEc. 33. Applicability to Domestic Arbittation.
8, L0',LL,L2,lg,l4,Lgand 19 and'29 to 32 of
-theArticles
Model Law and sections 22 to 31 of the preceding
chapter 4 shall apply to domestic arbitration.
Applicability of Model Law and Republic Act No. 9285 to
domestic arbitration'
There are certain provisions of the Model Law and Republic
Act No. 9285 which, by virtue of section 33, Republic Act No'
They are
9285 are expressly appiicable to domestic arbitration'
enumerated in that provision of law'2
lsee Section 32, Republic Act No' 9285'
2See Section 32, Republic Act No 9285'
ARBITRATION OF CONSTRUCTION
DISPUTES
SEC. 34. Arbitration of Construction Disputes:
Goaerning Law.
- The arbitration of construction
disputes shall be governed by the Executive Order No.
1-008, otherwise known as the "Construction Industry
Arbitration Law."
Governing law on construction arbitration disputes.
The arbitration of construction disputes shall be governed
by Executive Order No. 1008, otherwise known as the
"Construction Industry Arbitration Law."l Executive Order No.
1008 vests upon the Construction Industry Arbitration
Commission (CIAC) original and exclusive jurisdiction over
disputes arising from, or connected with contracts entered into
by the parties involved in construction in the Philippines.2
Effect of decisions of voluntary arbitrators.
While under the law decisions of voluntary arbitrators are
irccorded finality, the same may still be subject to judicial review
such as where there was a violation of a party's right to due
process and to be heard.3
SEC. 35. Coaerage of the Law. Construction
-
disputes which fall within the original and exclusive
iurisdiction of the Construction Industry Arbitration
Commission (the "Commission") shall include those
l\r,r'\<'r tion 14. licptrtrlir Act No. 9285
"\t'r'Mclro ( on\lru(lr()tt. lttr vs. ( h,rth.tnt Propcrticr, Inr., l(t'.i SCRA (rcl7
't Jtrtr t,rll ltrrlttslttr'., lnl('l lt,rlton,rl ( r)rlx)t.rll()t )v\ ( olrrl ol /\1 rl rr',tl\, l',', S( [{A l',',
5()
 AnrRrunrvr DrspurE Rrsolurroru Acr or 2004
between or among parties to/ or who are otherwise
bound by, an arbitration agreement, directly or by
reference whether such parties are proiect owner,
contractoq, subcontractol, fabricatol, proj ect managel,
design professional, consultant, quantity surveyor,
bondsman or issuer of an insurance policy in a cons-
truction project.
The Commission shall continue to exercise
original and exclusive iurisdiction over construction
disputes although the arbitration is "commercial"
pursuant to Section 2L of this Act.
Matters included in exclusive original jurisdiction of CIAC.
Construction disputes which fall within the exclusive
original jurisdiction of the CIAC shall include those between or
among the parties, or who are otherwise bound by, anarbitration
agreement, directly or by reference, whether such parties are
project owner, contractor, subcontractor, fabricator, project
manageq, design professional, consultant, quantity surveyor,
bondsman or issuer of an insurance policy in a construction
project.a The Commission shall continue to exercise original and
exclusive jurisdiction over construction disputes although
arbitration is "commercral" pursuant to Section 21 of Republic
Act No. 9285.5
SEC. 36. Authority to Act as Mediator or Arbi-
trator.
- By written agreement of the parties to a dis-
pute, an arbitrator may act as mediator and a mediator
may act as arbitrator. The parties may also agree in
writing that, following a successful mediation, the
mediator shall issue the settlement agreement in the
form of an arbitral award.
4see Section 35, Republic Act No. 9285
slbid.
Chaprer._X':ryii:,ii'"il;,1",,,,.:1,,ono,,0,,",
Authority defined.
Authority is the permission or power delegated to another.
Jhis Tuy be express or implied. If express, it is usually embraced
in a document called apower of attoriey.6
sEC. 37. Appointment of Foreign Arbitrator.
The Construction Industry Arbitration commission -
(cIAc) shall promulgate rules to allow for the
appointment of a foreign arbitrator as co-arbitrator
or chairman of a tribunal a person who has not been
previously accredited by GIAC: proaided, That:
(a) the dispute is a construction dispute in
which one party is an international partli
(b) the person to be appointed agreed to abide
by the arbitration rules anilpolicies of CIAQ
(c) he/she is either co-arbitrator upon the
nomination of the international partlior he/she is the
common choice of the two clAc-accredited arbitrators
first appointed, one of whom was nominated by the
international party; and
(d) the foreign arbitrator shall be of different
nationality from the international party.
lnternational party defined.
"International qarty-" shall mean an entity whose
place of
business is outside the Philippines. It shall not include
a domestic
subsidiary of such internation-al party or co-venfurer in a joint
venture with a party which hai its place of business in the
f 'hilippines. The b-rTforeign arbitrator
shall mean a person who
is not a national of the Philippines.T
''ll,rtorrs l,rw l)lr lrorr,rry, )00 I I tlrtrorr, 1,l 40
'\r'r'\t'r trorr l(1rf, lir'1 rrrlrlrr Ar I No (/./lli,
(rl
 furrRrunrvr Dtspurr Rrsolurtoru Acr or 2004
C ha pter . -i'|l,',,.::,ff '"i3; l,,,2.,.?,?,, on o* 0,,",

Who shall appoint foreign mediator?
The Construction Industry Arbitration Commission (CIAC)
shall promulgate rules to allow for the appointment of a foreign
arbitrltor as co-arbitrator or chairman of a tribunal a person who
has been previously accredited by CIAC: Proaided, That: (1) the
dispute is a construction dispute in which one Party is an
international party; (2) the Person to be appointed agreed to abide
by the arbitrition rules and policies of the CIAC; (3) he / she is
either co-arbitrator upon the nomination of the international part!,
or he, she is the common choice of the two CIAC accredited
arbitrators first applied, one of whom was nominated by the
international party| and (4) the foreign arbitrator shall be of
different nationality than the international Party.8
SEC. 35. Applicability to Construction Arbi'
tration.- The provisions of Sections l7(d, of Chapter
2, and, Sections 28 and 29 of this Act shall apply to
arbitration of construction disputes covered by this
Chapter.
Applicability to construction arbitration.
The provisions of section 17(d) and sections 28 and 29,
Republic Act No. 9285 shall apPly to arbitration of construction
disputes.e
SEC. 39. Court to Dismiss Case Inaolaing a
Construction Dispute. A Regional Trial Court before
which a construction- dispute is filed shall, upon
becoming aware, not later than the pre-trial con-
ference, that the parties had entered into an arbitration
agreement, dismiss the case and refer the parties to
arbitration to be conducted by the CIAC, unless both
parties, assisted by their respective counsel, shall
submit to the Regional Trial Court a written agreement
exclusively for the Court, rather than the CIAC, to
resolve the dispute.
General rule is dismissal of construction arbitration dispute.
A regional trial court before which a construction dispute is
filed shall, upon becoming aware, not later than the pre-trial
conference, thatthe parties entered into an arbitration agreemenf
dismiss the case and refer the parties to arbitration to be conducted by
the CIAC unless both parties, assisted by their respective counsef
shall submit to the regional trial court, a written agreement
exclusively rather than the CIAC, to resolve the dispute. Because
the CIAC has exclusive original jurisdiction over11 disputes arising
from or connected with in construction in the Philippines, whether
the dispute arises before or after completion if the contract, or
ufter abandonment or breach thereof.l2

Construction lndustry Arbitration Commission (ClACl

jurisdiction.
Section 4 of Executive Order No. 1008 expressly vests in the
Construction Industry Arbitration Commission (CIAC) original
and exclusive jurisdiction over dispute arising from or connected
with construction contracts entered into by parties that have
agreed to submit their dispute to voluntary arbitration.lO
I

BSee Section 37, lbid.

eSee Section 38, Republic Act No. 9785. llSr:t' 5t.r tion 39, Repubhc Act No 9285
roPhilrock, lnc. vs. Construction lndustryArbitration Commission. 3t,(/ \( RA l{12 r/Mt.lro ( orrslrtrr lron. lrrr vs ( h,tth,rrrr l'l<lpt.rltt's. lrtr l5(r S('tlA /r(,)/

62 63

CHAPTER 7
JUDICIAL REVIEW OF
ARBITRAL AWARDS
A. DOMESTIC AWARDS
sEc.40.ConfirmationofAward,-Theconfir.
mation of a domestic arbitral award shall be governed
by Section 23 of the R.A- No. 876'
A domestic arbitral award when confirmed shall
be enforced in the same manner as final and executory
decisions of the Regional Trial Court'
The recognition and enforcement of an award in
an international commercial arbitration shall be
governed by Article 35 of the Model Law'
The confirmation of a domestic award shall be
made by the Regional Trial Court in accordance with
the Ruies of Piocedure to be promulgated by the
Supreme Court.
A CIAC Arbitral award need not be confirmed by
the Regional Trial Court to be executory as provided
under E.O. No. 1008.
Section 22, Republic Act No. 87 6 governs domestic awards'
The confirmation of a domestic award shall be governed by
section 23, Republic Act No. 876. A domestic award when
confirmed shali be enforced in the same manner as final and
executory decisions of the Regional Trial Court' The recognition
of an international commerciil arbitration shall be governed by
Article 35 0f the Model Law. The confirmation of domestic award
shall be in accordance with the Rules of Procedure as promulgated
jTff''::"1-':ffi
Cha pter r :r'f;irra r Awa rds
by the Supreme Court. But a CIAC award shall not be confirmed
as final and executory as provided in EO No. L008.1
Final and executory judgment explained.
"Fir:ral" in the phrase "judgments and final orders" found in
Section 49 ofthe Rules of Court has two accepted interpretations.
ln the first sense, it is an order that one can no longer appeal
because the period to do so has expired, or because the order has
been affirmed by the highest possible tribunal involved. In the
second sense, it connotes that it is an order that leaves nothing
else to be done, as distinguished from that which is interlocu tory.2
Final judgments on the merits rendered by a court of competent
jurisdiction is conclusive on the rights of the parties and their
privies and constitutes an absolute bar to subsequent actions
involving the same claim, demand or cause of action.3 A final
decision rendered by a competent court can no longer be
relitigated.a
Once a decision becomes final and executory, it is removed
from the power or jurisdiction of the Court which rendered it to
further amend, much less revoke it to further amend, much less
rcvoke it.5 A judgment becomes final and executory by operation
of law.6 Finality of judgment becomes a fact upon the lapse of the
pcriod for appeal if no appeal is perfected.T
Confirmation defined.
Confirmation is the act of giving formal approval.s
('orrfirmation by the Regional Trial Court, therefore, of a domestic
rtward means court approval thereof.
rSee Section 40, Republic Act No. 9285.
/Macahilig vs. Heirs of Grace M. Magalit. 344 SCRA B3B.
'l)cvelopment Bank of the Philippines vs. Court of Appeals. 357 SCRA 626
rlbiri
"Al,rtr.rns,rs vs lntermediate Appellate Court, 204 SCRA 304.
''( rly ol M,rrril,r vs ('orrrt of Aprlrr'.rls. ?04 SCRA 367
.
/llnl
"lfl, rr l.', l, rw I )tr liotr, rty, /llr I rliltotr, p ltl)
(r5
 AnERrumvr Drspurr Rrsolurroru Acr or 2004
Function of ordering execution of judgment.
The function of ordering execution of judgment being
judicial, devolves upon the judge whereas the act of issuing a
writ of execution may be performed by another person, like the
clerk of court.e The court loses jurisdiction upon finality of the
decision, except to order its execution. A final judgment or order
becomes "final and executory" upon expiration <lf the periodlO
for appeal therefrom where t o upp*al his been duly perfected
oI, an appeal therefrom having been takery the judgment of the
appellate court becomes final-it is called "final and executory
judgment because execution at such point issues as a matter of
right.11 Execution pending appeal is the only exception to the
general rule that only a final judgment may be executed, thus the
existence of "good reasons" for it is what confers discretionary
power to issue a writ of execution pending appea1.12
The case of Del Monte Corporation-USA vs. Court of Appeals
(3sr scRA 3731.
In this case, the Supreme Court held that: "Even before the
enactment of Republic Act No. 876, the Supreme Court has
countenanced the settlement of disputes through arbitration; Unless
the agreement is such as absolutely to close the doors of the courts
against the parties, which agreement would be void, the courts
will look with favor upon such amicable arrangement and will
only interfere with great reluctance to anticipate or nullify the action
of the arbitrator." Moreove{, "Only parties to the Agreement, their
assigns or heirs have the right to arbitrate or could be compelled to
arbitrate ." FinalLy, "Where the issue before the Court could not be
speedily and efficiently resolved in its entirety if simultaneous
arbitration proceedings and trial, or suspension of trial pending
arbitration" is allowed, the trial court should hear and adjudicate
the case in a single proceeding." Portions of the decision follow.
eCasaje vs. Cabalite, 331 SCRA 508.
toLizardo, Sr. vs. Montano, 332 SCRA 163.
rrlntramuros Tennis Club vs. Philippine Racing Authority, 341 S( Iln lio
t)lbid
jT,.-,J,l:,1-':ffi
C ha p re r' 3 X!o,,, rds
^,Awa
The crux of the controversy boils down to whether the
dispute between the parties warrants an order compelling them
to submit to arbitration.
Petitioners contend that the subject matter of private
respondent's causes of action arises out of or relates to the
Agreement between petitioners and private respondents. Thus,
considering that the arbitration clause of the Agreement provides
that all disputes arising out of or relating to thJAgr""-J1t
or the
parties' relationship, including the termination tf,ereol shall
be
resolved by arbitration, they insist on the suspension of
the
lroceedings in civil Case No. 2632-MN as mandut"a by sec.7 of
I{A 976.13
sec. 7. stay of Ciail Action.
hrought.rpgr an issue arising out_of- If any suit or proceeding be
an ugr""*unt providing for
nrbitration thereof, the courtin which rrrlh suit or proceediig is
pending, uPon being satisfied that the issue involved in such
Juit
or proceeding is referable to arbitration, shall stay the action or
proceeding until an arbitration has been had in accordance
with
thc terms of the agreeme nt. prouided, That the uppli.u^t ior the
ntay is not in default in proceeding with such arbiiration.
Private respondents claim, on the other hand, that their cause
rrf action are rooted i'Arts.20,2L and2J of the civil code, the
tlt'tcrmination of which demands a full blown trial, as correctly
f.'ld bythe Court of Appeals. MoreoveS they claim that the issues
ht'frre the trial court were'ot joined so thaithe Honorull"
|udge
wns not given the opportunity to satisfy himself that the issue
lnv.lved in the case was referable to arbitration. They submit
thnt, apparently, petitioners filed a motion to suspend proceedings
lnstcad of sending a written demand to private respondents
to
arlritrate because petitioners were not sureihether thl case
could
lrt' n subject of arbitration. They maintain that had petitioners
done
xo lnd private_responclents failed to answer the demand,
Pt'litione''rs could have filed with the trial court their demand for
nrlritration that would warrant a determination by the juclge
' 'llrr, Ar lrrlr, rlror r I , rw
67
 AnrnN,qrrvr Drspurr Rrsoluroru Acr or 2004
whether to refer the case to arbitration. Accordingly,private
respondents assert that arbitration is out of the question.
Private respondents further contend that the arbitration
clause centers more on venue rather than on arbitration. They
finally allege that petitioners filed their motion for extension of
time to file this petition on the same datela petitioner DMC-USA
filed a petition to compel private respondent MMI to arbitrate
before the United States District Court in Northern California,
docketed as Case No. C-98 -4446. They insist that the filing of the
petition to compel arbitration in the United States made the
petition filed before this Court an alternative remedy and, in a
way, an abandonment of the cause they are fighting for here in
the Philippines, thus warranting the dismissal of the present
petition before this Court.
There is no doubt that arbitration is valid and constitutional
in our jurisdiction.ls Even before the enactment of RA 876, this
Court has countenanced the settlement of disputes through
arbitration. Unless the agreement is such as absolutely to close
the doors of the courts against the parties, which agreement would
be void, the eourts will look with favor upon such amicable
arrangement and will only interfere with great reluctance to
anticipate or nullify the action of the arbitrator.l6 Moreover, as
RA 876 expressly authorizes arbitration of domestic disputes,
foreign arbitration as a system of settling commercial disputes
was likewise recognized when the Philippines adhered to the
United Nations " Cont)ention on the Recognition and the Enforcement
of Foreign Arbitrnl Awards of 1958" under the 10 May 1965
Resolution No. 77 of the Philippine Senate, giving reciprocal
recognition and allowing enforcement of international arbitration
agreements between parties of different nationalities within a
contracting state.17
ra
lB November 1998.
r5Chapter 2, Title XIV Book lV New Civil Code of the Philippines.
l6Puromines, lnc. vs. Court of Appeals, G.R. No. 91228,22 March 1993, 220 SCIIA
7Bt.
rTNational Union Fire lnsurance Company of Pittsburg vs. Stolt-Nielst'n. PhiIpprnt's
lnc., G.R. No. 87958, 26 Aprrl 1990, I 84 SCRA 682.
jT,T,::"i-'Jffi
chaprer r 3,.'ff iffatAwards
A careful examination of the instant case shows that the
arbitration clause in the Distributorship Agreement between
petitioner DMC-usA and private respond"r,i MMI is valid and
the dispute between the puiti"r is arbiirable. HoweveL this
Court
must deny the petition.
The Agreement between petitioner DMC-USA and private
respondent MMI is a contract. The provision to submit to
arbitration any-part
dispute arising therefrom and the relationship of
the parties is of that contract and is itself a contract. As a
rule, contracts are respected as the law between the contracting
partie_s and produce effect as between them, their assigns
and
heirs.l8 Clearly, only parties to the Agreem ent, i.e., petltioners
DMC-usA and its Managing Director for Export sales paul E.
Derby, Jr., ury| private respondents MMI uttd itr Managing
l)irector LILY SY are bound 6y the Agreement and its arbitration
c'lause as they are the only signatoriei thereto. Petitioners Daniel
Collins and Luis Hidalgo, attd private respondent sFI, not parties
to- rlr" Agreement and cannot u,run be considered
assigns o. h"i6
rf the parties, are not bound by the Agreement and the arbitration
c'lause therein. Consequently, referril to arbitration in the
state
of California pursuant to the arbitration clause and the suspension
of the proceedings in Civil Case No. 2637-MN pending thf return
trf the arbitral award could be called forle but oilyas to"petitioners
DMC-usA and Paul E. Derby, Jr., and private tbrporrdents MMI
nnd LILY sY and not as to the other parties in this case, in
rtccordance with the recent case of Heirs oy augusto L. Salas,lr. as.
l.!!1:!il Realty corporation,2o which r.rp"rr"-dea ihat of Toyota' Motor
Ithilippines Corp. us. Court of Appeals.il
rn Toyota, the Court ruled that ',[t]he contention that the
nrlritration clause has become dysfunctional because of the
Jtrcscnce of third parties is untenable ratiocinating that [c]ontracts
r"Art I J I I, Nc'w Crvll Code of the phrlippines.
r''\r't' Nott'
l(-l.
''"(r l{ Nr) I .l') l(,). I I l)t'rr,rrrlrt,r l()()(), l)O SCRA6l0
''rt r li Nr t l(l)tltll, / l)t'tOilrlX,r l,),)). ) 11, \( liA,/ J1r
('r()
 furrRN,crrvE DrspurE Rrsolurtoru Acl or 2004
are respected as the law between the contracting parties22 and
that "[a]s such, the parties are thereby expected to abide with
good faith in their contractual commitments.23 Howeveq, in Salas,
lr., only parties to the Agreement, their assigns or heirs have the
right to arbitrate or could be compelled to arbitrate. The Court
went futher by declaring that in recognizing the right of the
contracting parties to arbitrate or to compel arbitration, the
splitting of the proceedings to arbitration as to some of the parties
on one hand and trial for the others on the other hand, or the
suspension of trial pending arbitration between some of the
parties, should not be allowed as it would, in effect, result in
multiplicity of suits, duplicitous procedure and unnecessary
delay.2a
The object of arbitration is to allow the expeditious
determination of a dispute.2s Clearly, the issue before us could
not be speedily and efficiently resolved in its entirety if we allow
simultaneous arbitration proceedings and trial, or susPension of
trial pending arbitration. Accordingly, the interest of justice would
only be served if the trial court hears and adjudicates the case in
a single and cemplete proceedi.g.t'
WHEREFORE, the petition is DENIED. The Decision of the
Court of Appeals affirming the Order of the Regional Trial Court
of Malabory Metro Manila, in Civil Case No. 2637-MN, which
denied petitioners' Motion to Suspend Proceedinss, is AFFIRMED.
The Regional Tiial Court concerned is directed to proceed with
the hearing of Civit Case No. 2537-MN with dispatch. No costs.
SO ORDERED.
zzCiting Mercantile lns. Co. vs. Felipe Ysmael, Jr. & Co., lnc., G.R. No. 43862. l3
January 1989, | 69 SCRA 66.
23ciring Ouillian vs. Court of Appeals. G.R. No. 55457,20 January 1989, 169
279.
24lbid.
zsCoquia, Jorge R., Annotation, Arbitration as a Means of Reducing Court Congestion,
29 Juty t977, 78 SCRA l2l.
26See Note 20.
70
Repuauc Acr No. gZB5
Chapter 7 Judicial Review of ArbitralAwards
-
sEC. 41. vacation Autard.- A party to a domestic
arbitration may question the arbitral award with the
appropriate Regional Trial court in accordance with
rules of procedure to be promulgated by the supreme
Court or.ty on those grounds enumerated in section
25 of Republic Act No. g76. A.y other ground raised
against a domestic arbitral award shall be disregarded
by the Regional Trial Court.
section 25, Republic Act No. gr6 on grounds for vacating
domestic awards.
_ In any one of the following cases, the court must make an
order modifying or correctingthe award, upon application of any
party to the controversy which was arbitrited:
(a) where there was an evident miscalculation of figures,
or an evident mistake in the description of any person, thi"ng
or
property referred to in the award; or
(b) where the arbitrators have awarded upon a matter not
submitted to them, not affecting the merits of the decision upon
the matter submitted; or
(c) where the award is imperfect in a matter of form not
affecting the merits of the coniroversy, and if it had been a
commissioner's report, the defect could have been amended or
disregarded by the court.
The order may modify and correct the award so as to effect
the intent thereof and promote justice between the parties.,
Methods of vacating an award.
A party to a domestic arbitration may question an arbitral
ruward with the appropriate Regional Triai Cburt in accordance
SCR with rules of procedure to be promulgated by the s,rpr"*" Court
orrlv on those grounds enumerated in siction is oy n pLwi, Act
No.
/\r.r ltrlrr /',, lir'1 rr rlrlrr Ar t Nr t ll/(,
7t
 AnrRxRrve Drspure Rrsolurroru Acr or 2004
876. Any other ground raised against a domestic arbitral award
shall be disregarded by the Regional Trial Court.28
B. FOREIGN ARBITRAL A\YARDS
SEC. Application of theNew York Conaention.
42.
The New York Convention shall govern the
-recognition and enforcement of arbitral awards
covered by said Convention.
The recognition and enforcement of such arbitral
awards shall be filed with the Regional Trial Court in
accordance with the rules of procedure to be promul-
gated by the Supreme Court. Said procedural rules
shall provide that the party relying on the award or
applying for its enforcement shall file with the court
the original or authenticated copy of the award and
the arbitration agreement. If the award or agreement
is not made in any of the official languages, the party
shall supply a duly certified translation thereof into
any of such.languages.
The applicant shall establish that the country in
which foreign arbitration award was made is a party
to the New York Convention.
If the application for reiection or suspension of
enforcement of an award has been made, the Regional
Trial Court fitalr if 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.
New York Convention defined.
New York Convention means the United Nations Con-
vention on the Recognition and Enforcement of Foreign Arbitral
285ee Section 41, Republic Act No. 9285.
72
I
i
Chapter 7
-
Repueuc Acr No. 9285
Judicial Review of ArbitralAwards
i Awards approved in 1958 and ratified by the Philippine Senate
under Resolution No. 72.2e
I Application of the New York Convention.
The New York Convention shall govern the recognition and
enforcement of awards by said Convention. The recognition and
e'nforcement of such arbitral awards shall be filed with the
Regional Trial Court in accordance with rules of procedure to be
promulgated by the Supreme Court. Said procedural rules shall
provide that the party relying on the award or applying for its
t'nforcement shall file with the court the original or authenticated
copy of the award and the arbitration agreement. If the award or
irgreement is not made in any of the official languages, the party
shall apply a duly certified translation thereof in any of such
languages. The applicant shall establish that the country in which
the foreign arbitration award was made a party to the New York
Convention. If the application for rejection or suspension of the
rrward has been made, the Regional Trial Court rr.ay, if it considers
it propeq, 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.30
Vacate defined and explained.
Vacqte means to render void; to set aside.31 It is a fundamental
precept that a final decision cannot be amended or corrected
t'xcept for clerical errors, mistakes or misprisions. Because the
t'ourt loses jurisdiction upon the finality of its decisiory except to
orcler its decision within its lifetime.32 An award, being merely a
i
partial or final decision of an arbitrator in resolving the issue in
i
t'orrtroversy is not a final decision of a court.
i
i
SEC. 43. Recognition and Enforcement of Foreign
l
i
Arbitral Awards Nof Coaered by the New York Con-
''l\t'r lton t(w). lk'pLrbltr Act No. 9285
"'\r'r lrr tt 4). lltttl.
rrll, ltoli, l,rw l)tr ltottny, /OO I I rlitton. tt4(;
1t
' l t,r,nt lrr ',1 v', MoI tl, u to I l.) 'r( lin I/, I
t 73
 Anrnrunrvr Drspurr Rrsolurott Acr or 2004
z)ention The recognition and enforcement of
-
foreign arbitral awards not covered by the New York
Convention shall be done in accordance with proce-
dural rules to be promulgated by the Supreme Court.
The Court malr on grounds of comity and reciprocity,
recognize and enforce a non-convention award as a
convention award.
Recognition defined.
Recognition is a confirmation that an act done for another
person was authorized. It is the formal admission that a person,
entity or thing has a particular status.33
Enforcement defined.
Enforcement is the act or process of compelling compliance
with a law, mandate or command.3a Enforcement can be done
extrajudicially or by means of legitimate law enforcement
agencies.
Recognition and enforcement of non-New York Convention
awards.
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, on grounds of comity and
reciprocity, reco gnize and enforce a non-convention award as a
convention award.3s
Comity and "judicial comity" defined and explained.
Comity is a rule of courtesy by which one court defers to the
concomitant jurisdiction of another. "fudicial comity is not a rule
of law, but one of practical convenience and expediency" based
33Black3 Law Dictionary, Tth Edition, p. 1277
34lbid.
35See
Section 43. Republic Act No. 9285.
74
jT,T'::"mffi
cha prer r 3if;irra r Awa rds
on the theory that a court which first asserts jurisdiction will not
be interfered with in continuance of its assertion of another court...
unless it is desirable that one give way to the other.36
Reciprocity defined and explained.
Reciprocity, is generally a relationship between persons,
states or countries whereby favors or privileges granted by one
are returned by the other. Thus, if state " A" certifies engineers
already certified by state "8" to work in state " A," reciprocity
exists when state "B" similarly certifies engineers certified by state
" A." Reciprocity does not involve a vested right but would exist
without it.37
SEC. 44. Foreign Arbitral Award Nof Foreign
fudgment.-A foreign arbitral award when confirmed
by court of a foreign country, shall be recognized
and"enforced as a foreign arbitral award and not as a
judgment of a foreign court.
A foreign arbitral award, when confirmed by the
Regional Trial Court, shall be enforced in the same
manner as final and executory decisions of courts of
law of the Philippines.
Effect of a foreign arbitral award.
A foreign arbitral award when confirmed by a court of a
foreign country shall be enforced as a foreign arbitral award and
not as a judgment of a foreign court. As such foreign arbitral
award, it can be vacated by a regional trial court in the Philippines.
Howevet when aforeign arbitral award has been confirmed by the
regional trial court, the same shall be enforced as a final and
executory decisions of courts of law in the Philippines.3s The effect
of confirmation by uregional trial court of a foreign arbitral award
'nBarronls Law Dictionary, 2003 Edition, p BB, citing 177 U.S. 485. 4BB
t/lbttl , rrtrrrr; 100 S.E 2rl705. ?,O8.
frf\t.r. St'< lt<'tt't 44, llt.1lrrtllir Ar t No 9?85
75
 fureRrunrve Dtspurr RrsolurtoN Acr or 2004
is to clothe themwith the force and effect of a final and executory
court decision in the Philippines.
SEC. 45. Reiection of a Foreign Arbitral Autard.
A party to a foreign arbitration Proceeding may
-oppose an application for recognition and enforce-
ment of the arbitral award in accordance with the
procedural rules to be promulgated by the Supreme
Court only on those grounds enumerated under
Article V of the New York Convention. Any other
ground raised shall be disregarded by the Regional
Trial Court.
How foreign arbitral award rejected.
A party to a foreign arbitration proceeding may oppose an
application for recognition and enforcement of the arbitral award
in accordance with the procedural rules to be promulgated by
the Supreme Court only on those grounds enumerated under
Article V of the New York Convention. A.y other ground raised
shall be disregarded by the regional trial court.3e
SEC. 46. Appeal from Court Decisions on Arbitral
Regional Trial Court
Awards.
- Avacating,
confirming,
decision of the
setting aside, modifying or
correcting an arbitral award may be appealed to the
Court of Appeals in accordance with the rules of
procedure to be promulgated by the Supreme Court.
The losing party who appeals from the judgment
of the court confirming an arbitral award shall be
required by the appellate court to post a counterbond
executed in favor of the prevailing party equal to the
amount of the award in accordance with the rules to
be promulgated by the Supreme Court.
3eSection
45, Republic Act No 9285.
76
Rrpueuc Acr No. 9285
Chapter 7 Judicial Review of ArbitralAwards
-
Appeal defined.
Appeal is a resort to a higher court for the purpose of
obtaining a review of a lower court decision and a reversal of the
lower court's judgment or the granting of new trial.ao
Appeal from decisions on arbitral awards.
A decision of the Regional Trial Cour! confirming, vacating,
setting aside or modifyirg or correcting an arbitral award may
be appealed to the Court of Appeals in accordance with the rules
of procedure to be promulgated by the Supreme Court. Flowever,
the losing parry who appeals from the judgment of the court
confirming an arbitral award shall be required by the appellate court
to post a counterbond executed in favor of the prevailin g party
equal to the amount of the award in accordance with the rules to
be promulgated by the Supreme Court.al
SEC. 47. Venue and lurisdiction. Proceedings
for recognition and enforcement of -an arbitration
agreement or for vacation, setting aside, correction or
modification of an arbitral award, and any application
with a court for arbitration assistance and supervision
shall be deemed as special proceedings and shall be
filed with the Regional Trial Court (i) where arbi-
tration proceedings are conducted; (ii) where the asset
to be attached or levied upon, or the act to be enioined
is located; (iii) where any of the parties to the dispute
resides or has his place of business; or (iv) in the
National fudicial Capital Region, at the option of the
applicant.
Venue and jurisdiction for recognition etc. of an arbitral
award.
Proceedings for recognition and enforcement of an
arbitration agreement or for vacatiorL setting aside, correction or
aoB.rror)\ l..rw Dir-tiorvtry, 7OO3 Edition, p. 2B
arSct ltott 4/r, llcJrttlllir Ar I No 9)8';
77
 \-rrRNRtvr Dtspure Rrsolurtoru Acr or 2004
cha pter,
jT,Tni-i#; 3ffi ,uu, Awa rds
must be heard before he is condemned.$ The requirement of due
modification of an arbitral award, and any application with a court
process is satisfied as long as a party is given a reasonable
for arbitration assistance and supervision ihall be filed with the
Regional Trial Court: (1) where arbitration proceedings are opportunity to explain his side, even if he chooses not to
or participate in the proceedings when his request for posponement
coriduct ed,; (2) where the asset to be attached or levied uPon/
the act to be enioined is located; (3) where any parties to is denied.ae
9!the
the dispute resihes; or (a) in the National ]udicial Capital Region
at the option of the aPPlicant.a2
Notice of proceedings to parties.
In special proceedings for recognition and enforcement of
Venue andjurisdiction distinguished' an arbitral award, the Court shall send notice to the parties at
a case, their address of record in the arbitration or if any party cannot be
furisdiction implies the Power of a court to decide served notice at such address, at such party's last known address.
while venue is the piu.u of the action.a3 Venue is procedural, not
jurisdictional, hence may be waived.4 Thus, the court m1y dismiss The notice shall be sent at least fifteen (15) days before the date
subject set for initial hearing of the application.s0
an action motu proprioin case of lack of jurisdiction over the
litis p endentia,' r es' iudicata, and prescription but not for improper
venue.as ]urisdiction is conferred by law and not by mere
policy
of any court or tribunal.a6

SEc.4s.NoticeofProceedingtoParties.-Ina
special proceeding for recognition and enforcement
oi aibitral awird, the Court shall send notice to
the"tpartiei at their address of record in the arbitration,
or if any party cannot be senred notice at such address,
at such i^rty'E last known address. The notice shall
be sent at leas[ fifteen (15) days before the date set for
the initial hearing of the application'

Notice defined and exPlained.

Notice comes from the Latin "notitin," beirtg known or
knOWled ge, "nOtLtS," known and "nocefe." It meanS infOrmatiOn
actually ieceived by the Person to whom it is intended to be
impartld.aT Procedural drre process simply means that a Person
a2Section 47, Republic Act No' 9285.
a3Sulo ng Bayan vs. Gregorio Araneta, lnc', 72 SCRA 352'
4'rtJniversity of the lmmaculate Concepcion vs. U.l.C Teaching and Non-Teaching
44Heirs oJ Pedro Lopez vs. De Castro, 324 SCRA 591 '
asRudolf Lists Holdings, lnc. vs. Registry of Deeds. Parafraque ciry, 344 SCRA 380 It,rsortneland Employees Union. 362 SClFu4.242.
4'llbid.
a6Arranza vs. BF Homes. lnc.' 333 SCRA 799'
aTEnriquez vs. Bautista,79 Phil- 234' "oSt.c St.r'tron 4f). Rt'prtrl>ilc Act No. 9285

78 79
 Rrpusuc Acr No. 9295
Chapter B Miscellaneous provisions
-
the ADR in the private and public sectors; and (2)
To assist the
government to monito[, study and evaluate the
use by the public
and private sectors of the AD& and recommend
CHAPTER 8 tb Congress
needful statutory changes to develop, strengthen
ar,a improve
M ISCELI.AN EOUS PROVISIONS ADR practices in accordance with world standards.2

sEC. s0. powers and Functions of the office

SEC. a9. Office for Alternatiae Dispute Resolution.
There is hereby established the Office for
-Alternative
Dispute Resolution, as an attached agency
to the Department of justice (DOD, which shall have
a Secretariat, headed by an Executive Director. The
Executive Director shall be appointed by the President
of the Philippines.
The objectives of the Office are:
(a) To promote,develop and expand the use of
ADR in the private and public sectors; and
(b) To assist the government to monitor, study
and evaluate the use by the public and the private
sector of ADR, and recommend to Congress needful
statutory changes to develop, strengthen and improve
ADR practices in accordance with world standards.
Alternatiue Dispute Resolution.- The bffice r* for
aliur-
native Dispute Resolution shall have the foflowing
powers and functions:
(a) To formulate standards for the training of
the ADR practitioners and service providers; v
G) To certify that such ADR practitioners and
ADR service providers rrave under:gone the profes-
sional training provided by the Offi"ce;
(c) To coordinate the development, implemen-
tation, monitoring and evaluation of go.r".rr*"it
ADR programs;
(d) To charge fees for their services; and
(e) To perform such acts as may be necessary to
carry into effect the provisions of this Act.

Office of Alternative Dispute Resolution established. Power defined.

An office of Alternative Dispute Resolution (ADR) is Power is thl authority granted to by one
person to another
established under Republic Act No. 9285, as an agency of the Io do in his behalf the same thitrg which he
would do himself in
Department of fustice (DOI). It shall have a secretariat headed by the' premises. The powers and, aithe same
time, functionsof the
an executive director who shall be appointed by the President of office for Alternative Dispute Resolution is granted
by law.3
the Philippines.l
Functions of the office of Atternative Dispute
Resolution
Objectives of the Office for Alternative Dispute Resolution. explained.
The objectives of the Office for Alternative Disputt' when an office is engaged in the performance of
the duties
Resolution are as follows: (1) To promote, develop and expancl rf lris office, he is said to iitihis functions. Thus, when the office
.;. Z*f tmqraph, tbrrl.
rSee lst paragraph, Section 49 Republic Act No. 9285 'lrplorr vs Arrrltrr,z,r. r, f,lrrl 4g0

80 8l
 Alrenx,atve Dtspurg Rrsolurtoru Acr or 2004
for Alternative Dispute Resolution engages in the performance
any of its powers and functions, as enumerated in Section
50,
Republic Act No. 9285, that office is engaged in the performance
of its powers and functions.a
Formulation of standards for ADR training'
Formulation of standards for training of the ADR
practitioners and service providers means the establishment
of
iraining guidelines for enn practitioners and service providers'
Certification defined.
A certification is a written statement legally authenticated
by which
on the accomplishment of something. It is also a writing
testimony is given that fact has or has not taken place' CertiJication
or
may atso be"a writing that a thing has or has not been done'
the fact exist or does not exist.s
sEc.Sl.AppropriationS._Theamountneces.
sary to carry o.,t thu provisions of this Act shall be
inciuded in the Geniral Appropriations Act of the
year following its enactment into law and thereafter'
Appropriation defined.
Appropriatian is an authority fP* the legislature given
at
the proper time and legal form io the ProPer officer to apply
a
,,r- of honey out of that which may be used in the treasury in a It is
given year inspecified objects or demand against the State'6
ih" u.iof the tegistature setting apart or assigning_to a particular
use the paymen"t of debt or duJs fiom its creditors.
It is the setting
apart Uy fu* of a certain sum from the public revenue for a
specified purPose.T
4See Section 50, Republic Act No. 9286'
sBoard of Election lnspectors vs. Piccio. 8l Phil' 580'
6Dajao vs. Padilla, 124 ?nn. 6.
TBengson vs. Secretary of Justice, 67 Pnil' 916'
82
Repusuc Acr No. 9285
Chapter B Miscellaneous Provisions
-
Appropriation for Republic Act No. 9285.
Appropriations "to catry out the provisions" of Republic Act
No. 9285 "shall be included the General Appropriations Act of
the year following its enactment into law and thereafter."s
SEC. 52. Implementing Rules and Regulations
(IRR).
- Within one (1) month after the approval of
this Act, the Secretary of justice shall convene a
Committee that shall formulate the appropriate rules
and regulations necessary f.ot the implementation of
this Act.
The Committee, composed of representatives
from:
(a) the Department of ]ustice;
(b) the Department of Trade and Industry;
(c) the Department of the Interior and Local
Governmenf
(d) the President of the Integrated Bar of the
Philippines;
(e) a representative from the arbitration
profession;
(f) a representative from the mediation
profession; and
(g) a representative from the ADR organizations;
shall, within three (3) months after convening submit
the IRR to the Joint Congressional Oversight
Committee for review and approval. The Oversight
Committee shall be composed of the Chairman of the
Senate Committee on |ustice and Human Rights,
Chairman of the House Committee on fustice, and one
(1.) member each from the Maiority and Minority of
both Houses.
'\ilr, Sr\lr,rn l, lleJltrtrlic Acl No. 9)85.
83
 Anenrunrve DrspurE Rrsolurroru Acr or 2004
c r,u p rulilff *:,,}"?ol,i ?1"
"o,. ",
The joint Oversight Committee shall become known as the "Local Government
functus officio upon approval of the IRR. ,lrtr'irlro'otherwise Code of

Rules and regulations defined and explained. SEC. 54. Repealing Clause._
AII laws,
Rule is a prescribed for action or conduct, regulation or executive orders, rulei and regulations, decrees,
inconsistent *itl the provisionsif
which are
principle.e Regulations are rules or other directives issued by this Act, are hereby
administrative agencies that must have specific authorization repealed, amended oi modified
accordingly.
to issue directives and upon such authorization must usually
follow prescribed conditions, such as prior notification of the Repealing clause defined.
proposed action in a public record and an invitation for public A repealing clause is a sratutory
provision
comment.lo earlier statute' It is also called uyrlit;;;.t"h that repeals an
act abrogating an earlier law. #;iative ffi
Functus oficio defined. effected by specific declaration in .thir ,";";i may be express if
the .L* statute. It is implied
lf it is effected by irreconcilable conftict
Functus oficio means "having performed his office," it is
without further authority or legal c-ompetence because the duties the new law.13 ii'* u.a u"r*l"i;;fi
and functions of the original commission have been fully
accomplished.ll sEC' 55. Separab,ity crause.-
If for any reason
or reasons' any portion or provision
of this Act shali
SEC. 53. Applicability of the Katarungang be held unconstiturional oi invalil;
other parts
Pambarahgoy. This Act shall not be interpreted to provisions not affected sharl thereby"ii continue or
-
repeal, amend or modify the jurisdiction of the remain in fuII force and effect. - - , to
Katarungang Pambarangny under Republic Act No.
Tl:h0,otherwise known as the "LocalGovernment Code teparab ility clause defined.
of 1991.;' separability clause rs a provision
that keeps the remaining
provisions of a contract or Jtut.rt"
in force if any t;;ti"";f that
Katarun gang pambarangay provisions not repealed. c'ntract or statute is declared void or
rrr*.stitutional. It is also
The katarungang pambarangay provisions in the Local cn I led severability clause. la

Government Code of 1991 also has provisions on arbitration,

mediation and conciliation on cases within the jurisdiction of the Scparabirity crause in Repubric Act
No. 92g5.
lupong tagapamayapa. Section 53, Republic Act No. 9285 provides Republic Act No. 92g5 contains
a separability crause in
that "This Act shall not be interpreted to repeal, amend, or modify st'ction 55 thereof. It provides th;ililt;"",
the jurisdiction of the Katarungang Pambarangay in Republic Act reason or reasons
Itly provision of this Act shail be herd .tt
"orrrtitutional invalid,
or
F ----
eBarrons Law Dictionary, 2003 Edition, pp. 454-455. r/\rt -

St,rtion bJ, llepulllir Art No. g2BS.

rolbid., p. 431. lr\t'r'\r,r lr\ttt4,
rrBlack3 Law Dictionary, 7th Edition. p. 682. Rr,1 rrrl rlir Arl No ?,r{}!
l'llll, rr k\
l, rw I )lr llor r, rry. /llr I rltf uttr.
1.t I I /<)
84
r{5
 AlrERrunrvr DrspurE Rgsollrlror.r Acr or 2004

all other parts or provisions not affected shall continue in full

force and effect.ls

SEC. 56. Effectioity. This Act shall take effect

fifteen (15) days after its-publication in at least two
(2) national newspapers of general circulation.

Approved,

(Sgd.) loSE DE VENECIA, JR. (Sgd.) FRANKLIN M. DRILON

Speaker of the House President of the Senate
of Representatiaes

This Act which is a consolidation of Senate Bill No. 2671 and

House Bill No. 5654 was finally passed by the Senate and the
House of Representatives on February 4,2004.

(Sgd.) ROBERTO P. NAZARENO (Sgd.) OSCAR G. YABES

Secretary General Secretary of the Senate
House ofRepresentatiues

Approved. Apr. 2,2004

(Sgd.) GLORIA MACAPAGAL-ARROYO

President of the Philippines

r5See Section 55, Republic Act No. 9285.

86