CHAPTER 5 if adopted by the parties, in the exercise of their privileges
of party-autonomy and self-determination.
International Commercial Arbitration (ICA) Under
the ADR Act of 2004 and its Implementing Rules and
Regulations
ADR Act of 2004
⁃ adopted the UNCITRAL Model on ICA
⁃ legal representation in international arbitration,
confidentiality of arbitral proceedings, referral of court
action to arbitration, definition and functions of the
appointing authority, the grant of interim measures of
protection, governing law, and the place and language of
arbitration
Model Law
⁃ became the governing statute for international
commercial arbitration pursuant to Article 19 of the ADR
Act
International Commercial Arbitration
Arbitration is international if ANY of the following
instances occur:
1. The parties’ place of business, which at the time of
the conclusion of the arbitration agreement, is in
different states;
2. The place of arbitration provided in the arbitration
agreement and in which the parties have their places
of business, is outside the Philippines;
3. The place where a substantial part of the obligation is
to be performed or the place with which the subject
matter of the dispute is most closely connected, and
in which the parties have their places of business, is
outside the Philippines; or
4. The parties have expressly agreed that the subject
matter of the arbitration agreement relates to more
than one country.
Arbitration is commercial if it covers matters arising from
all relationships of a commercial nature, whether
contractual or not.
If seat of international commercial arbitration is with the
Philippines, ADR Act and its IRR will govern.
If seat is outside, then it is a foreign arbitration even if the
place of arbitration is in the Philippines. The ADR Act
and its IRR will apply only insofar as the recognition and
enforcement of a foreign arbitral award is concerned.
Coverage of IRR Provisions on ICA
Rules of Procedure for ICA under the ADR Act and its
IRR may also be applied for ICA outside the Philippines
Provisions of the IRR on ICA are default rules, which
means they are applicable only in the absence or in default
of applicable provisions contained in:
1. An agreement in force between the Philippines snd
other state or states; and
2. An agreement between the parties on the applicable
rules.
Rules of Interpretation
Interpretation of the ADR Act
 have due regard to the policy of the law favoring
arbitration
Interpretation of the Model Law
 should be understood in the light of their international
usage rather than their ordinary domestic or local
usage
Interpretation of the IRR
 same as with ADR Act and Model Law
 promote party autonomy
 parties have the right to authorize a third party (person
or institution) to make the determination
 rules on claims shall also apply to counterclaims, and
defenses with defenses against counterclaims
Rules on Receipt of Written Communication in ICA
 Governed by those provided by the parties in their
arbitration agreement. In default thereof,
communication is deemed received if:
1. Delivered to the addresses personally or at his
place of business, habitual residence or
mailing address
2. If none, must be delivered by registered letter
or any other means which provide a record of
the attempt to deliver it, to the last known
pace of business, habitual residence or
mailing address.
Written communication is deemed on the day it is
“delivered” and not on the day the mail is posted with the
post office.
Waiver of the Right to Object in ICA
Arbitration is different from mediation in that the latter is
not merit or evidence based and, therefore, not
procedurally driven. Hence, the application of the rules on
waiver in mediation proceedings are limited to waivers of
confidentiality and privilege only.

In the case of ICA, the IRR expanded the application of
the rules of waiver to include non-compliance with the
rules or requirements.
Objections to non-compliance with the rules or any
requirements under the arbitration agreement must be
raised without undue delay or within the time prescribed
therefor, otherwise it is deemed waived pursuant to the
doctrine of estoppel.
Estoppel in pais
 when one, by his acts, representations or admissions,
or by his own silence when he ought to speak out,
intentionally or through his culpable negligence,
induces another to believe certain facts to exist and
such other person relies and acts on such belief in a
manner that he will be prejudiced if the former is
permitted to deny the existence of such facts
 the act, omission or silence must be unequivocal and
intentional
 i.e., proceeding with the arbitration despite non-
compliance, failure to timely raise an objection
Confidentiality in ICA
The proceedings, records, evidences, and arbitral award
shall not be disclosed except:
1. With the consent of the parties; or
2. For the limited purpose of disclosing to the court
relevant documents in cases where resort to the court
is allowed.
Due Process in ICA
Reasonable opportunity to be heard
 does not require actual presentation of a party’s side
Due process
 is complied with if a party is given an opportunity to
present his side even without actual presentation
 cannot be invoked if meant only to delay or prevent
the procedure
The arbitral tribunal must give notice to the parties of any
hearing or meeting, and the parties must communicate
with each other all statements, documents, or information
which he will supply to the tribunal.
Note: Matters which state that the same may be agreed
upon by the parties are pursuant to the principle of party
autonomy and self-determination.
Place or Venue of ICA
 that determined by the parties
 default place of arbitration shall be in Metro Manila
unless the tribunal decides otherwise
Commencement of ICA Proceedings
 date as determined by the parties
 default date is that on which a request for that dispute
to be referred to be received by the respondent
Language in ICA
 as determined by the parties
 the tribunal may order that any documentary evidence
be accompanied by a translation in a language to be
used in the proceedings
 default language is English
Applicable Law in ICA
 parties may agree on the law to be applied
 if none, the arbitral tribunal shall decide what to
apply, pursuant to conflict if law rules
The law applicable to the dispute is the substantive law
under which the rights and obligations of the parties will
be determined.
Substantive law
 the law or legal system applicable to the complete
resolution of the case
Conflicts of law or private international law
 that part of municipal law of a state which directs
courts and administrative agencies, when confronted
with a legal problem involving a foreign element,
whether or not they should apply foreign law
 set of domestic laws that determines which between
the domestic laws of two or more states should apply
to the resolution of a dispute involving foreign
elements
The law applicable to the arbitral proceedings is that
which shall govern such proceedings and will vest
jurisdiction to the arbitrator or arbitral tribunal.
Appointing Authority in ICA
Appointing Authority
 person or institution names in the arbitration
agreement as such, or the regular arbitration
institution under whose rules the arbitration is agreed
to be conducted, authorized to make the default
appointment of arbitrator/s
Additional functions:
1. Appoint an arbitrator in case the one previously
appointed fails to perform his functions or that
authorized to appoint fails to do so
2. Decide on the challenge against an arbitrator if the
arbitral tribunal rejects the challenge
3. Consider the qualifications of the arbitrator (i.e.,
impartiality, independence)
If the parties agreed to submit to institutional arbitration
rules, they are deemed to have agreed as well to the
appointment of arbitrators. Thus, no need to designate an
appointing authority.
In ad hoc arbitration, the appointment of an arbitrator
shall be made by the National President of the Integrated
Bar of the Philippines or his duly authorized
representative, unless the parties agreed on a different
procedure.
Arbitrators and Arbitral Tribunals in ICA
 parties may agree on the number of arbitrators and the
procedure for their appointment
 default number is three (3)
Default procedure for appointment of arbitrators:
1. In case of three arbitrators, each party shall appoint
one arbitrator, and both appointed arbitrators shall
appoint the third arbitrator, failure of which shall be
made by the appointing authority.
2. In case of a sole arbitrator, appointment shall be
made by the appointing authority, upon the request of
a party.
If under the appointment procedure agreed by the parties,
a party or institution fails to perform its function resulting
in the non-appointment of an arbitrator, the arbitration
agreement shall govern. If none is provided therein, any
party may request the appointing authority to appoint an
arbitrator, and such appointment shall be immediately
executory and not subject to MR or appeal.
The appointing authority shall consider the following:
1. Qualifications required by the agreement of the
parties
2. Considerations as are likely to secure the appointment
of an independent and impartial arbitrator
3. In case of a sole or third arbitrator, the advisability of
appointing an arbitrator of a nationality other than
those of the parties (to avoid bias or “hometown
decisions”)
Any party may file a petition in court challenging the
appointment of an arbitrator on the following grounds:
1. Impartiality
2. Qualifications
A party who appointed an arbitrator is estopped from
challenging his appointment, unless the act was done
without knowledge of actual facts.
The arbitral tribunal (sole or three) is deemed constituted
upon the acceptance of the nomination and written
communication of said nomination and acceptance has
been received by the party making the request.
A person approached for possible appointment as
arbitrator has the duty to disclose any circumstance likely
to raise doubts about his impartiality or independence.
Procedure for the Challenge in ICA
 that agreed upon by the parties
In default thereof, the following shall apply:
1. The challenging party shall send a written statement
of the reasons for the challenge to the arbitral tribunal
within 15 days after becoming aware if the
constitution of the arbitral tribunal or after becoming
aware of the circumstance constituting the ground for
the challenge. Thereafter, the tribunal shall decide the
challenge.
2. If the challenge before the tribunal is not successful,
the challenging party may request the appointing
authority within 30 days from notice of the decision
rejecting the challenge, to decide the challenge, which
decision shall be immediately executory, and not be
subject to MR or appeal.
The same may be questioned in court and the Special
Rules on ADR shall apply.
If the challenge is successful, a substitute arbitrator shall
be appointed under the same rules as with that replaced.
If an arbitrator in an ICA becomes de jure (by law or right,
i.e., appointment to a government post prohibiting
exercise of profession) or de facto (by fact or
circumstance, i.e., mental or physical incapacity to
discharge functions) unable to perform his functions or
fails to act without undue delay, his mandate terminates:
 if he withdraws
 if the parties agree on the termination
The withdrawal does not carry with it an implied
acceptance of the existence or veracity of the ground for
the termination.
Jurisdiction if Arbitral Tribunal in ICA
Jurisdiction
 right to act or the power and authority to hear and
determine a cause
 as applied, it is the authority by virtue of which a
tribunal can resolve disputes by rendering an award
Jurisdiction over the subject matter
 conferred by the ADR Act
Two instances when a court, quasi-judicial agency or
tribunal acts without jurisdiction:
1. Lack of jurisdiction - when it has no jurisdiction in
the first place
2. Excess of jurisdiction - when it goes beyond its
jurisdiction which it had in the first place
The jurisdiction of an arbitration tribunal includes the
authority to rule on matters as to:
 existence or validity of the agreement
 existence of a condition precedent to the filing of a
request for arbitration
 determine the admissibility, relevance, materiality
and weight of evidence
 issuance of subpoena
The arbitration clause is independent and separate from
the container clause, such that invalidity of the latter does
not automatically result in the nullity of the former.
It is only in the event that the arbitration agreement or
clause is itself void, inexistent or inoperative that the
arbitral tribunal’s jurisdiction may be questioned.
A challenge against the jurisdiction of an arbitral tribunal
in an ICA should be raised not later than the submission
of the statement of defense in the answer or in a motion to
dismiss. Otherwise, the objection is deemed waived.
In case there is excess of jurisdiction, a party may raise
the objection as soon as the exercise of jurisdiction over a
mater beyond the scope of its authority becomes apparent.
Otherwise, the objection is deemed waived, unless the
delay is justified.
The decision of a court of quasi-judicial agency, or the
arbitral award of an arbitral tribunal which has no
jurisdiction is null and void ab initio.
Rule 43 (Petition for Review) and Rule 65 (Petition for
Certiorari) are not available in arbitral awards.
The arbitral tribunal whose acts are challenged for lack or
excess of jurisdiction may either:
1. Consider the challenge as a preliminary question or a
threshold issue and render a ruling thereon before
conducting the arbitration (preliminary ruling may be
elevated to the RTC whose decision shall be
immediately executory and not subject to MR or
appeal) (arbitration proceedings shall continue unless
a TRO is issued).
2. Defer the resolution thereof until the rendition of the
arbitral award and the resolution of the jurisdictional
issue shall form part thereof especially in instances
when the jurisdictional challenge does not appear to
be indubitable (order of deferment shall not be
susceptible to judicial review).
The jurisdiction of an arbitral tribunal over the person of
the parties in an arbitration is conferred by the consent of
the parties to submit to arbitration.
 Agreement to submit to arbitration (pre-causal
consent)
o entered at the time of the execution of an
arbitration agreement with an arbitration
clause
 Submission agreement (present causal consent)
o no arbitration agreement with an arbitration
clause but nonetheless submit an existing
dispute to arbitration
Interim Measures in ICA
Procedure:
1. After the arbitral tribunal has been constituted, any
party may request for the grant of interim measures
from the arbitral tribunal against the adverse party -
in writing - must state specific relief, ground, and
evidence
2. The relief may be granted in order to prevent
irreparable loss; to provide security for the
performance on an obligation; to produce or preserve
evidence; or compel any other appropriate act or
omission
3. The grant of the interim measure may be conditioned
upon the provision of security or any act or omission
specified in the order
4. The order either granting or denying the request for
interim measures shall be binding upon the parties
and either party may apply with the courts for
assistance in implementing or enforcing it
5. A party who refuses to comply with the order for an
interim measure shall be liable for damages resulting
from non-compliance (may be cited for indirect
contempt)
6. Before the constitution of the arbitral tribunal, or to
the extent that the arbitral tribunal already constituted
has no power to act effectively, the interim measure
may be requested from the courts in accordance with
the Special Rules on Court on ADR
Legal Representation in ICA
In an ICA conducted in the Philippines, a party may be
represented by a person of his choice even if a non-
lawyer. However, if a non-lawyer is so appointed, he shall
not be authorized to appear as a counsel in any Philippine
court or to any quasi-judicial body even if such
appearance is in relation to the arbitration in which he
appears.
Rules of Procedure in ICA
GR: The parties may determine what rule will govern.
In default thereof, the UNCITRAL Arbitration Rules will
apply, unless found inappropriate by the tribunal.
Procedure in default of an agreement:
1. Statement of claims. Within the period agreed upon
by one parties or determined by the arbitral tribunal,
the claimant shall state the facts supporting his claim,
the issues and relief or remedy sought, and shall
submit therewith or refer therein to relevant
documents
2. Statement of defenses. Respondent shall state his
defenses and submit or refer to relevant documents.
3. Default of the parties. The failure of the claimant or
respondent to communicate his statement of claims or
defenses during the period therefor, or his failure to
appear at a hearing or to produce documentary
evidence, results in the default of the failing party.
Failure to communicate his statement of claims will
terminate the proceedings, while failure to
communicate his statement of defenses will not.
Failure to appear or submit documents will be deemed
a waiver or such right.
4. Amendment of claims or defenses. The parties may
amend the same, unless found inappropriate by the
tribunal.
5. Hearings. The tribunal shall determine whether to
hold (a) oral hearings only, (b) oral arguments only,
(c) just require submission of documents.
The tribunal can avail of the following prerogatives in
taking evidence:
 Court assistance in taking evidence.
 Subpoena - ad testificandum/duces tecum
 In case of non-compliance, the party may seek
judicial intervention to compel compliance, and
failure to comply with the court order will result
in contempt. It is noted that a tribunal does not
have contempt powers.
 Expert
 called upon by the tribunal itself to provide
assistance to the tribunal
 Similar to an amicus curiae
 does not refer to the expert witness called upon
by the parties to testify
6. Conclusion/closure.
May be closed in two ways:
1. By an award or settlement
 If more than one arbitrator, decision shall be by
majority of the tribunal
 Arbitral award on agreed terms - form of award
in cases where during during the proceedings, the
parties agree to settle their dispute and the same
is without the objection of the tribunal - same
form as a regular award
2. Termination
Order of termination may be issued when:
 The claimant withdraws his claim, unless the
respondent objects thereto on the basis of a legitimate
interest in obtaining a final settlement if the dispute
 The parties agree to terminate the proceedings
 The tribunal finds that the continuation of the
proceedings has become unnecessary or impossible
Upon conclusion/closure, the mandate of the tribunal
ends.
XPN: When made by way of award or settlement, the
tribunal’s mandate extends:
 to correct and interpret the award
 to set aside an exclusive recourse against the arbitral
award
 when reserved, to the quantification of the costs and
the determination of the party or liable or the division
The arbitral award becomes final and executory after:
a) The rendition of the judgment
b) The hearing on the quantification of the costs and the
determination of the party liable therefor or the
division thereof between the parties, provided that a
reservation for such hearing and quantification has
been made by the arbitral tribunal
c) The expiration of the periods for correction and
interpretation of the award, or for making an
additional award, without any party or the tribunal
availing of said remedies
d) If the said remedies are availed of by the parties or the
tribunal, within the same periods stated above
counted from the date of the receipt of or issuance of
the arbitral award
Costs in ICA
 must take into consideration the:
o amount in dispute
o complexity of the subject matter
o time spent by the arbitrators
o other matters.
Costs include:
1. Fees of the arbitral tribunal
2. Travel and other expenses
3. Cost of expert advice
4. Travel and other expenses of witnesses
5. Costs for legal representation and assistance
6. Fees and expenses of the appointing authority
GR: Costs shall be borne by the unsuccessful party.
XPN: The arbitral tribunal may apportion the costs if
reasonable under the circumstances
Example: SC held that where the petitioner instituted the
action believing that he was entitled to his claim, and the
respondent cannot be faulted for defending himself for
perceived wrongful acts and conditions, it is only fitting
that both parties should share in the burden of the costs of
the arbitration on a pro rata basis.
Correction and Interpretation of ICA Award
An arbitral award may be amended by the tribunal in any
of the following manners:
1. Agreement of the parties
2. Quantification of the costs and determination of the
party liable therefor, or the division thereof between
the parties
 a reservation for such hearing and quantification
must be made
3. Correction of typographical and similar errors
initiated by a party
 must be made within 30 days from receipt of the
award and with notice to the other party
In regular courts, a final judgment may no longer be
modified except:
 Correction of clerical errors
 Nunc pro tunc entries which cause no prejudice
to any party
 Void judgments
4. Correction of typographical error initiated by the
arbitral tribunal
 within 30 days from the date of the award
5. Interpretation of the award
 request by a party must be within 30 days from
receipt of the award
 tribunal also has 30 days from receipt of the
request to act
6. Additional award
 request must be within 30 days from receipt of the
award and with notice to the other party
 tribunal has 60 days from receipt of the request to
make the additional award if justified
An ICA award cannot be corrected by the courts. The
courts can only set them aside, extend recognition to
them, or refuse to recognize them.
Setting Aside an ICA Award
An ICA award may be set aside through the RTC
provided that:
1. The petitioner furnishes proof that there was:
 defect in the arbitration agreement (i.e.,
incapacity of a party)
 Violation of due process (i.e., not given notice)
 Lack or excess of jurisdiction on the part of the
arbitral tribunal (subject to the doctrine of
severability/separability)
 The arbitration agreement was violated
2. Or the court finds that:
 the subject of the dispute is not capable of
settlement under PH laws
 the award is in conflict with public policy of the
PH
As to venue, it shall be in the RTC:
a) where the arbitration proceedings took place
b) where the asset to be attached or levied upon, or the
act to be enjoined is located (real actions or actions
quasi in rem)
c) where any of the parties to the dispute resides or has
his place of business (personal actions)
d) in the National Capital Judicial Region
 The choice shall be at the option of the applicant.
 Considered special proceedings and are summary in
nature (except in case of appeal).
The petition for setting aside must be filed within 3
months from the date on which the party making the
application received the award, or from the date on which
a request for correction, interpretation, or additional
award has been disposed of by the arbitral tribunal.
Recognition and Enforcement of ICA and Foreign
Arbitral Awards
Recognition
- the means by which a Philippine court gives legal
acknowledgement to a foreign arbitral award and
confers upon it the capability to be enforced under
Philippine law through Philippine legal processes
- our courts will allow said foreign judgment to be
presented as a defense to a local litigation
Confirmation
- the judicial affirmation of a domestic arbitral award
Enforcement
⁃ means the execution and implementation of the foreign
arbitral award through Philippine legal processes
Foreign arbitral award
- one made in a country other than the Philippines
(Special Rules of Court on ADR)
- one rendered in an arbitration whose seat is outside
the Philippines
- an ICA whose seat is outside the Philippines is
considered a foreign arbitral award
- must go through recognition to be enforceable
Domestic arbitral award
- must go through confirmation prior
implementation
Philippine ICA awards must go through recognition, not
just confirmation per the Special Rules of Court on ADR.
Philippine ICA award is susceptible of vacation or setting
aside by a Philippine court while a foreign ICA award is
not, it may only be recognized or refused recognition
(since it is similar to a foreign arbitral award).
A foreign arbitral/ICA award, when recognized, is
deemed a final and executory decision of Philippine
courts.
Jurisdiction
- vested with the RTC
- recognition, enforcement, vacating or setting or
setting aside, application for arbitration assistance
Venue
- see enumeration on setting aside an ICA award
Notice
- in case of recognition and enforcement of ICA and
foreign arbitral awards, the court shall send notice to
the parties at their addresses on record in the
arbitration, or if any party cannot be served with
notice at such address, at such party’s last known
address.
- notice shall be sent at least 15 days before the date set
for the hearing
*Grounds for Refusing Recognition and Procedure for
Recognition of Convention and As-in Convention
Awards
Requisites for the recognition and enforcement of foreign
judgments in the Philippines:
1. Proof of the foreign judgment
2. The judgment must be in a civil or commercial matter
3. There must be no lack of jurisdiction, no want of
notice, no collusion, no fraud, no clear mistake of law
or fact
4. The judgment must not contravene a sound and
established public policy of the forum
5. The judgement must be res judicata in the state that
rendered it
Convention award
- foreign arbitral award made in a state which is a party
to the New York Convention
- governed by the New York Convention and its IRR
to Non-convention award
- foreign arbitral award made in a state which is not s
party to the New York Convention
- cannot be enforced under the ADR Act but m ay be
deemed as a presumptive evidence if a right as
between the parties
As-in convention award
- made in a state which is not a party to the New York
Convention but which by reason of comity and
reciprocity, may be recognized and enforced as if it is
a convention award

Grounds for refusing recognition and enforcement to

convention and as-in convention awards:

1. Defect in the arbitration agreement

2. Violation of due process
3. Lack or excess of jurisdiction on the part if the tribunal
4. Violation of the arbitration agreement
5. Defect in the award

Note: Also see grounds for ICA award, same lang.